Shares of Twitter Inc (NYSE: TWTR) shot up 15% this afternoon on a report that Elon Musk no longer wanted to pull out of his buyout deal with the social network.
Dan Ives reacts to the news
Citing anonymous sources, Bloomberg said the billionaire has written a letter to Twitter, proposing to go through with the agreement at the agreed upon price of $54.20 a share.
The news arrives just days before Twitter and Musk were scheduled to face off in Delaware Chancery Court on October 17th. Reacting to it on CNBC’s “Halftime Report”, Wedbush Securities’ Dan Ives said:
Now, it’s a done deal. Musk recognised the writing was on the wall. He needed to get this done. Otherwise, it was going to be a long and ugly court battle at the end of which, he was going to have to own it for $54.20 anyway.
The reversed course could end all litigation and make Musk the owner of Twitter within days.
Twitter shares have been halted following the sharp surge.
What does it mean for Tesla Inc?
Musk had tried to withdraw from the $44 billion deal citing inability to estimate the number of bots on Twitter. (link)
The change of heart has resulted in a 5.0% hit to Tesla Inc (NASDAQ: TSLA) on Tuesday (so far). Still, Ives does not see today’s news as a meaningful “overhang” for the electric vehicles manufacturer.
I think a lot of the stock he was going to sell; he’s already sold. I don’t view it as much of an overhang there. I think most of the Tesla stockholders are just glad that this soap opera is over now.
Ives now expects Twitter shares to soon trade near the deal price.
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