This Fund Manager Thinks Musk Will Make a Sweetened Bid For Twitter On 4/20

Tesla, Inc. CEO Elon Musk's hostile offer for Twitter, Inc. TWTR has been met with resistance from the board of the social media platform.

Following this adversarial encounter, several rumors have been floating around regarding Musk's potential moves and Twitter's likely responses.

Although Musk said in the letter to Twitter's board and in the filing that his $54.20 per share offer is the "best and final" proposal, he could raise it to $69 per share on April 20, that's according to Gary Black, co-founder and managing partner of Future Fund, an investment advisory firm.

Incidentally, Tesla is scheduled to report its first-quarter results after the market close on Wednesday, April 20.

Black noted that Twitter shares were trading below $40 ahead of Musk's disclosure of his passive stake in Twitter. This was about $5 less than the closing price of the stock in its debut session as a public company, he noted.

If Musk were to raise his bid to $69 per share, the total deal value will be about $55 billion, the analyst said. This would be a 5.5 times multiple of the estimated 2025 revenue, based on the new Twitter management's communicated revenue target for 2023, he added.

A $58.008 per share offer looks more reasonable, according to Black. That way, the Twitter management might feel Musk is at least meeting them partway, while Musk can take over his favorite publishing platform at a "meta-joke" price, he added. Black, referring to what the offer number spells out when it's turned upside down, 

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Photo: Courtesy of Heisenberg Media on Flickr