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

Zinger Key Points
  • Gary Black says Elon Musk may raise his Twitter buyout bid to $69 per share.
  • Black adds that a $58.008 per share offer looks more reasonable.

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, 

Related Link: EV Week In Review: Tesla Investors Lose Sleep Over Musk's Divided Attention, Ford F-150 EV Truck Has Release Date, GM Stitches Battery Material Deal And More

Photo: Courtesy of Heisenberg Media on Flickr

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
date
ticker
name
Price Target
Upside/Downside
Recommendation
Firm
Posted In: Analyst ColorM&ANewsAnalyst RatingsMediaElon MuskGary Black
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!