As usual, offering surprises and treating business deals like movie shows, Elon Musk announced that he is ready to go ahead with the acquisition of Twitter for $54.20 per share, or about $44 billion, after a tense legal battle between him and the social networking platform.
The sudden decision comes just two weeks before the two parties are due to appear in court.
A Twitter spokesperson has already announced that the company has received an official letter, adding that "the company's intention is to conclude the transaction at the agreed price."
The announcement sent Twitter shares up more than 20% to more than $52 per share.
But the value remained below the acquisition price, indicating that investors remained skeptical about the completion of the deal.
As of Wednesday's close, Twitter's share price reached $51.30, an increase of 22.2% from the close of October 4, which amounted to $42.54.
And if you invested $1,000 in Twitter a year ago, your investment would now be worth about $890 based on the value of the stock on the October 4th session, according to CNBC calculations.
Whereas if you invested $1,000 in Twitter 5 years ago, the value of your investment has nearly tripled and will reach about $2,929 by the close of the October 4th session.
And if you invested $1,000 in Twitter when the company first went public in 2013, at the offer price of $26 per share, your investment would be worth nearly $2,000 by the close of the October 4th trading session.
The biggest acquisition in history
According to data published by Deal Room - a global data platform for intelligence on startups, innovation, and high-growth companies - Twitter's $44 billion deal is the second most valuable among the most popular leveraged acquisitions on Twitter. extent of history.
Leverage is defined as a strategy in which an investor uses debt or borrowed money to invest in certain financial products to increase the potential return on investment.
The trader was able to use this temporary loan to open a larger position with a smaller amount of the invested capital.
finance puzzle
Elon Musk, who is 50, said he would save $13 billion by taking out a loan guaranteed by the social media company, and another $12.5 billion backed by mortgaging part of his $170 billion stake in Tesla, but he did not disclose details about How to finance the rest of the transaction amount.
According to Bloomberg estimates, there are still limited doubts about Musk's ability to manage the amount, in the end he is the richest person in the world, and his fortune is estimated at 257 billion dollars, but despite this, Musk has liquidity and semi-liquid assets of nearly 3 billion. dollars only.
Selling stakes in Tesla
It seems that Musk decided to resort to selling part of his stake in "Tesla", which is considered the most valuable in his vast fortune.
Tesla shares closed at $240.81 per share by closing yesterday's session down about 32% in 2022.
Musk's cash flow estimate is based on the deposit accounts of his traded stocks, but there is great ambiguity about his own financial resources.
For example, Musk said last July that he owns “Bitcoin”, “Ethereum” and “Dogecoin”, and although it is not clear the value of the coins he owns, or how long he has owned them, the first two cryptocurrencies gained 720% and approximately 2,600%, respectively, since March 2020, which is a much greater profit than the rise of the “Standard & Poor’s 500” index of approximately 90%, while the price of “Doge Coin” rose by almost 30%, yesterday, Wednesday, after approving the Musk's acquisition of Twitter.