elon musk twitter deal

Twitter stock is posting small gains this morning despite a market-wide rout that has pushed the value of the tech-heavy Nasdaq 100 index nearly 4% lower thus far in the session ahead of a meeting between Elon Musk and the company’s employees that is set to occur later today.

The gathering is scheduled to take place today and involves all of the employees of the parent company of the popular social media platform. Musk will be answering questions that have been previously submitted by Twitter’s personnel for about an hour.

This is the first time that the head of Tesla (TSLA) will be addressing employees directly after his $44 billion bid for the company founded by Jack Dorsey.

Earlier this month, the billionaire founder of SpaceX threatened to terminate the deal if Twitter’s management did not provide the required information about data concerning the presence of bots within the platform and the impact that they may have in its operating metrics.

“This is a clear material breach of Twitter’s obligations under the merger agreement and Mr. Musk reserves all rights resulting therefrom, including his right not to consummate the transaction and his right to terminate the merger agreement”, Musk’s lawyers wrote in a letter addressed to the Chief Legal Officer of the tech company.

The Board of Directors ultimately agreed to the request and has effectively provided access to a “firehose” of data consisting of over 500 million tweets posted every day, a person familiar with the matter told The Washington Post.

Tech experts believe that it may take a lot of time and resources to process such data while there is an ongoing debate in regards to how a bot can be identified by using this kind of information.

Your capital is at risk.

What Are Bots and Why Are They an Issue of Debate?

Bots are accounts created by anonymous individuals that post information on social media following certain directions from their creators. Regulators around the world and other groups believe that these accounts can be used to systematically create fake narratives, spread misinformation, and push trending topics that serve the interest of the parties behind the fake accounts.

Just this morning, social media companies including Meta Platforms, Twitter, and Google signed up to comply with a new rulebook pushed forward by the European Commission to deal with online misinformation.

The 2022 Code of Practice Disinformation outlines a set of guidelines and best industry practices to avoid the issue including transparency in political advertising, a reduction in manipulative behavior used to spread misinformation – such as the use of bots – and more assistance to researchers who are actively studying this phenomenon.

Twitter Stock Is Trading Below Musk’s Bid Price

twitter price chart
Twitter (TWTR) price chart – Source: TradingView

Analyst Dan Ives from Wedbush Securities commented today that the meeting between Musk and Twitter’s employees was a “clear step in the right direction”.

Ives is viewing the meeting as more than just a traditional town hall as there have been many “twists and turns” since the deal was announced. In this regard, Musk’s involvement might be interpreted by the market as a sign that he is committed to moving forward with the acquisition.

Twitter stock is trading at $37.92 per share today. This figure is nearly 43% lower than Musk’s bid price of $54.20 per share and indicates that the market is not entirely sure that the deal will go through.

According to data compiled by MarketBeat, the consensus recommendation from analysts at the moment for Twitter stock is hold with a total of 22 out of 30 analysts currently rating the stock as such.

Meanwhile, the consensus price target is standing at $48.61 per share resulting in a 28.20% upside potential if that target is hit. In addition, the highest price target is sitting at $70 and the lowest and $30.

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