tesla

Twitter has sued Tesla’s CEO Elon Musk after he backed out of the deal to acquire the company. Meanwhile, as the drama over Musk’s Twitter acquisition drags, analysts have been turning bullish on Tesla stock.

Tesla is set to report its second-quarter earnings this week, and so is Twitter. The tussle between the two parties is getting uglier by the day. While Twitter wants the court to decide the case on priority, Musk wants the trial to be delayed to 2023. Musk backed out of the deal citing the alleged fake accounts on Twitter and the company’s decision to fire some executives without his approval.

Twitter on the other hand wants Musk to honor his commitment and buy the company for $44 billion as originally planned. Notably, it was Musk who was keen to buy Twitter initially despite the company’s board turning down his offer. As part of the agreement, any party that walks out of the deal needs to pay a penalty of $1 billion. Twitter however has sued Musk for “specific performance” and wants him to acquire the company.

Musk offered $54.20 per share for Twitter which was a steep premium to the microblogging company’s then prevailing stock price. The price has “420” in it which is a reference to cannabis. US cannabis stocks have been quite volatile over the last week amid the chatter over the marijuana legalization bill making headway in Congress.

Deutsche Bank sees Tesla stock as a buy

Several analysts have been apprehensive about Tesla amid the Twitter acquisition drama. Many believe that it would be a distraction for Musk. The slowing economy is also making some analysts cautious about Tesla and even Adam Jonas of Morgan Stanley, who is arguably the face of Tesla stock bulls on Wall Street, also lowered his target price.

Deutsche bank meanwhile sounds bullish on the stock heading into the earnings and added Tesla to its short-term buy list. The brokerage believes that the company would reiterate its delivery guidance during the earnings call. The EV (electric vehicle) maker reported a fall in its second-quarter production amid the lockdowns in China. It also took planned downtime this month.

Notably, Tesla, which has held the crown of the world’s largest EV company, lost the title to Chinese company BYD Motors. The latter reported a four-fold rise in deliveries in the first half of 2022 and delivered 641,350 new energy vehicles which were far ahead of the 564,743 that Tesla delivered.

Twitter Stock Has Been Weak after Musk Declined to Buy the Company

Twitter stock crashed after Musk walked out of the deal to buy the company. However, DWAC, the SPAC (special purpose acquisition company) that is taking Donald Trump’s TMTG (Trump Media & Technology Group) public, rose after the announcement. DWAC is facing multiple investigations, inlcuidng from the US SEC.

TMTG has launched its social media platform called Truth Social, which is live on the Apple app store. Truth Social has been trying to capitalize on Trump’s popularity. Trump’s Twitter account was suspended in 2020 following the Capitol Hill violence. Truth Social has gained some traction among conservatives but otherwise, many have been complaining about the user experience of the Twitter-lookalike. On his part, Musk offered to restore Trump’s Twitter account, but the former President turned down the offer.

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