Antisocial Media


Visit: Finimize

What’s going on?

Twitter accepted Elon Musk’s offer to buy the social media giant earlier this week, whether you like it or not.

What does this mean?

We’ve all been where Elon’s been: bought a stake in one of the world’s biggest social media platforms, rejected an offer of a board seat, then offered to buy the company outright. So you must’ve felt for the guy when Twitter tried to scupper the move with a poison pill tactic, hoping to put him off by diluting his ownership and driving up the price of the deal.

Breathe easy: some of Twitter’s largest shareholders bombarded the company with calls urging it to accept, forcing the company to come to the negotiating table. So while your bids on major companies might’ve fallen through, Elon’s didn’t: Twitter agreed to sell to the world’s richest man for around $44 billion – 38% more than it was worth at the start of the month.

Why should I care?

For markets: Rob Tesla, pay Paul.

Banks are prepared to lend Elon almost $26 billion to pay for the deal, but he’ll need to cover the rest himself. That leaves two options: find investors to buy the company with him, or – more likely – sell some of his stake in, say, Tesla. That might be why the EV maker’s stock has fallen 9% since he announced his takeover ambitions earlier this month.

The bigger picture: Leave Elon alone.

Elon’s been explicit about his intent: he wants Twitter to be a bastion of free speech, where everyone – disgruntled men, disgruntled presidents, and disgruntled billionaires alike – can finally tell the world what they really think after having been silent – on podcasts, on network television, and on the world stage – for far too long. But analysts have pointed out that Elon has used the platform to influence his personal business interests before, and they cynically argue that he could use his new position to do it again. Okay, snowflakes…

Originally Posted April 26, 2022 – Antisocial Media

Disclosure: Interactive Brokers

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Finimize and is being posted with permission from Finimize. The views expressed in this material are solely those of the author and/or Finimize and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

In accordance with EU regulation: The statements in this document shall not be considered as an objective or independent explanation of the matters. Please note that this document (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and (b) is not subject to any prohibition on dealing ahead of the dissemination or publication of investment research.

Any trading symbols displayed are for illustrative purposes only and are not intended to portray recommendations.