There’s been a new twist in the seemingly endless saga of Elon Musk’s Twitter takeover offer, which has now created gripping suspense, reports Wccftech. Musk disclosed his initial 9.2% stake in Twitter on April 4 — about 10 days after crossing the 5% stake disclosure threshold. The Hart-Scott-Rodino Act requires timely disclosure when any individual or entity acquires at least 5% of a public company.
Meanwhile, Musk has also been sued by Twitter investors for delaying the disclosure of his more than 5% stake in the social media giant beyond a specified time frame.
The U.S. Federal Trade Commission (FTC) and the U.S. Securities and Exchange Commission (SEC) are now investigating Musk’s strategic delays in filing the necessary documents, a move that could have saved him millions as investors remain unaware of his connection to Twitter-related ambitions.
In mid-April, Musk proposed to take Twitter private for $43 billion. In addition, Tesla’s CEO is also expected to serve as the social media giant’s interim CEO once the deal is financially closed.
Short-selling agency Hindenburg Research revealed its short position on Twitter earlier this week, citing valuation concerns, Musk’s strong negotiating power and the deal’s impact on Tesla’s stock price, which led to the transaction being closed. renegotiated or even abandoned.
Crucially, Hindenburg Research believes that if the deal goes through in its current form, Twitter would be leveraged as much as 8.6 times its EBITDA when the acquisition closes. That will make Twitter’s financial health recovery more challenging.
As a result, the research house is betting on a renegotiation of the deal, where Musk could use his enormous leverage to negotiate more aggressively with Twitter’s board. Twitter’s fair value is currently around $31.4, according to Hindenburg Research. This means that Musk’s current purchase price of $54.2 is overvalued by as much as 72%.