Some analysts downgrade Twitter stock on ‘full Elon Circus’.
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As speculation about Elon Musk’s $43 billion bid to buy Twitter continues to circulate, more Wall Street analysts are downgrading the social media company’s stock and are still skeptical of the takeover offer, warning the stock could fall.
Uncertainty over Musk’s Twitter takeover offer is “a downside risk,” according to experts.
Here are some key facts:
Stifel analyst Mark Kelley downgraded Twitter stock to a sell rating and said Musk’s recent move was “a complete Elon circus” and would lead to a massive sale of the stock if the social media company went private or cashed out.
Speculation on Musk’s takeover offer “presents significant downside risk,” Kelley argues, and could put the company in a difficult position if Musk sells about 9% of the stake it acquired earlier this month.
Shares on Twitter have recently risen nearly 15% to about $45 a share since Elon Musk took a large stake in the company on April 4, but analysts at KeyBanc predicted that the uptrend would be reversed and moved the stock to “hold” the stock. downgraded. “from” to “buy” rating.
According to KeyBanc analyst Justin Patterson, Musk’s takeover offer “will be delayed.”[s] To see the Twitter board accept this offer given the stock traded for around $73 last year.”
But if the board rejects Musk’s offer, he risks losing Tesla’s billionaire as a shareholder and Twitter “potentially gets more criticism” of its products, Patterson argues.
Although Twitter stock’s rating has recently declined, according to FactSet data, only a small percentage of Wall Street analysts are optimistic about Twitter’s outlook. According to FactSet data, only 23% have a ‘buy’ rating, with the majority maintaining a ‘hold’ rating.
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Stiffel analyst Mark Kelley said Musk’s move to acquire Twitter “places a short-term cap on the stock, separates the company from fundamentals, and presents significant downside risks.” He said in his latest memo.
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Twitter shares fell nearly 2% on Thursday after Musk made a $43 billion offer to buy the company. The stock is usually on the news of the takeover offer, but Twitter fell lower, closing at around $45 per share. That’s well below the $54.20 per share suggested by Musk. With the Twitter board due to review Musk’s offer, the Tesla billionaire said later Thursday that he has a “plan B” if his first offer is rejected. Musk claimed at a TED conference in Vancouver that he had “sufficient assets” to buy a social media company, but he’s not sure if he “will actually be able to buy it.”
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