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Can Elon Musk Renegotiate A Lower Price For His Twitter Deal?

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Can Elon Musk Renegotiate A Lower Price For His Twitter Deal?

(CTN News) – Since Twitter agreed to sell itself to Elon Musk for $44 billion on April 25, its shares have plunged to their lowest level, raising questions about whether Elon Musk will try to renegotiate the deal.

Twitter’s shares fell below $46.75 on Tuesday, dropping below the 50% implied probability of the deal closing at the agreed price for the first time. That is halfway between the deal price and the price of the shares before Elon Musk disclosed his stake in the social media company on April 4.

Shares of the company closed at $47.26, giving it a market value of $36 billion.

The news that Elon Musk would lift a ban on former President Donald Trump’s Twitter account was significant politically, but it did not move the stock.

As investors fretted over inflation and a possible economic slowdown, Twitter shares plummeted along with technology stocks. According to short-seller Hindenburg Research, Elon Musk might try to negotiate a lower deal price before closing.

Musk has not indicated that he will reopen negotiations, and his representatives have declined to comment on it.

Must Read: Musk’s Big Plans For Twitter

Why would Elon Musk want to renegotiate the deal?

According to Forbes, Elon Musk has a net worth of almost $240 billion, yet most of his wealth is tied to the shares of Tesla, the electric car maker he leads.

Musk has already begun raising cash for the acquisition of Twitter. Tesla shares were sold for $8.5 billion and he took out a $12.5 billion margin loan secured by Tesla stock. He reduced that margin loan to $6.25 billion last week after bringing in co-investors. Musk said in a filing that he may seek more funding for the deal.

Musk has said he does not care about the economics of buying Twitter, but some investors think the 27% decline in Tesla shares since Elon Musk revealed his stake could be due to concerns that he will have to sell more shares. Tesla’s stock would be less pressured if Musk could negotiate a lower acquisition price. If co-investors are concerned about overpaying, they may encourage him.

Related CTN News:

Musk Breaks Silence On Polarisation In US
Elon Musk Becomes Twitter Owner After $44 Billion Bid
Musk Secured $46.5 Bn In Funding For Twitter Bid
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