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The stock made a huge jump when he announced he purchased a large stake on April 4, and now it's back to $34 which is ~5% above its mid-March low point. Most ot

by cactus2093 4y ago

The stock made a huge jump when he announced he purchased a large stake on April 4, and now it's back to $34 which is ~5% above its mid-March low point. Most other tech stocks are down in that time frame, e.g. FB is down 13%. Doesn't seem like Musk did any obvious damage.

paxys 4y ago
That's because the possibility of an acquisition is still being priced in. If Twitter announced tomorrow that they were letting Musk off the hook it would take a much greater dive.
- cactus2093 4y ago
  If true isn't that alone a pretty strong signal? That would mean a shrinking possibility of an already bungled acquisition going through is better than the status quo. Seems like Musk has kind of done Twitter a favor by shaking things up. Regardless of the acquisition, it has become clear that the market thinks there is a lot of potential here that's being wasted.
  - karpierz 4y ago
    The market isn't pricing whether Elon will improve Twitter. The market is pricing in the fact that if the acquisition goes through, each stock you hold gets converted into 52.40$, regardless of what happens to Twitter after it's acquired.
  - game-of-throws 4y ago
    The market just thinks there's a chance he'll be forced into paying more than the company is worth. It needn't have anything to do with the company's potential. If I made a credible $100B offer for the Campbell Soup company and waived due diligence, the stock price would shoot up, but it's not because they're wasting their potential.
  - initplus 4y ago
    The only thing it's a signal of is that $54.20 is much higher than the "true" stock price.
  - paxys 4y ago
    > That would mean a shrinking possibility of an already bungled acquisition going through is better than the status quo It is objectively better for investors because they get $54.20 a share instead of the current ~$34. It isn't a signal for anything else. Shareholders don't care what happens to Twitter as a company after that, because they have already sold their shares.
simonswords82 4y ago
Twitter will be worth about $5bn by 2026. It's a nonsense platform with no intrinsic value.
pfraze 4y ago
There's been some employee attrition and negative effects on company morale. I also think the brand-reputation damage of this episode will take time to show itself.

paxys 4y ago

That's because the possibility of an acquisition is still being priced in. If Twitter announced tomorrow that they were letting Musk off the hook it would take a much greater dive.

cactus2093 4y ago
If true isn't that alone a pretty strong signal? That would mean a shrinking possibility of an already bungled acquisition going through is better than the status quo. Seems like Musk has kind of done Twitter a favor by shaking things up. Regardless of the acquisition, it has become clear that the market thinks there is a lot of potential here that's being wasted.
- karpierz 4y ago
  The market isn't pricing whether Elon will improve Twitter. The market is pricing in the fact that if the acquisition goes through, each stock you hold gets converted into 52.40$, regardless of what happens to Twitter after it's acquired.
- game-of-throws 4y ago
  The market just thinks there's a chance he'll be forced into paying more than the company is worth. It needn't have anything to do with the company's potential. If I made a credible $100B offer for the Campbell Soup company and waived due diligence, the stock price would shoot up, but it's not because they're wasting their potential.
- initplus 4y ago
  The only thing it's a signal of is that $54.20 is much higher than the "true" stock price.
- paxys 4y ago
  > That would mean a shrinking possibility of an already bungled acquisition going through is better than the status quo It is objectively better for investors because they get $54.20 a share instead of the current ~$34. It isn't a signal for anything else. Shareholders don't care what happens to Twitter as a company after that, because they have already sold their shares.

simonswords82 4y ago

Twitter will be worth about $5bn by 2026. It's a nonsense platform with no intrinsic value.

pfraze 4y ago

There's been some employee attrition and negative effects on company morale. I also think the brand-reputation damage of this episode will take time to show itself.