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Wall Street investment bank downgrades Twitter rating: "Musk farce" threatens to plunge stock price by 18%

via:新浪科技     time:2022/4/15 13:02:57     readed:185

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Editor/Junzhi Huang

Mark Kelley, an analyst at Stifel, a Wall Street investment bank that successfully predicted a bottoming out of U.S. stocks last March, said Thursday that Tesla CEO Elon Musk's intention to buy Twitter for $43 billion represented a farce. He downgraded the social media company.

The bank downgraded Twitter from "neutral" to "sell" and reiterated its $39 price target, meaning the company could fall about 18 percent from its current level. As of Thursday's U.S. stock close, Twitter shares were down 1.68 percent and up 3.5 percent after hours.

On Thursday, Musk offered to take Twitter private at $54.20 per share. Just a few weeks ago, he disclosed that he owned 9.2 percent of the company.

"We believe that this [Musk's purchase price] sets a short-term cap on the stock price, takes the company out of fundamentals, and creates significant downside risks if Musk decides to abandon the takeover offer or reduce his stake," Kelley said. ”

Given that Musk made it clear in his filing with the U.S. Securities and Exchange Commission (SEC) that $54.20 per share was his "best and final offer," the possibility of Musk abandoning the Twitter merger is real if Twitter doesn't work with Musk to close the deal.

Kelly explains, "Either the company goes private for $54.20 so you get a 15% premium, or the bid is rejected and Musk sells his stake and the stock goes down sharply." ”

In addition to Musk's dramatic move, Stifel believes there is still a risk that Twitter will be able to meet its set goal of monthly daily active users.

In the farce that Musk initiated, Stifel's judgment on Twitter's stock price was the exact opposite of what Wedbush analyst Dan Avis had expected. Ives believes a deal could be struck between Twitter and Musk that, if not, could prompt the company to seek a sale to someone else.

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