Twitter market cap has dropped to $9 billion below Musk purchase price
As Elon Musk pursues ownership of Twitter, shares of the social media company are dropping, suggesting some concern among investors that the deal won’t reach the finish line.
Twitter has slid about 12% since reaching its high for the year in late April. As of mid-day on Thursday, the stock was trading at around $46, well below the $54.20 that Musk agreed to pay on April 27. The difference represents about $9 billion in market value.
Though Twitter’s board approved the purchase, it could still take months for the deal to close, and there’s no guarantee that it will. Musk would have to pay a $1 billion breakup fee should he choose to walk away. The Tesla CEO is worth over $220 billion.
“The market is having marginally less confidence that the deal will go through due to regulatory challenges,” Mark Mahaney, an analyst at Evercore ISI, said in an email, adding that this is his “very quick interpretation” of the stock movement.
Before Musk made his bid to buy Twitter outright, he failed to disclose a more than 9% stake in the company within the SEC’s mandatory 10-day window.
The Information reported that the Federal Trade Commission is probing the timing of Musk’s disclosure. Bloomberg later reported the FTC is separately reviewing the acquisition itself, though many experts don’t expect the deal to raise antitrust concerns.
The FTC doesn’t disclose ongoing investigations, and an FTC spokesperson declined to comment.
Dan Ives, an analyst at…