CNBC reports that Elon Musk’s decision to turn away from Twitter’s board has opened up the possibility of a takeover and could lead to larger swings in the social network’s share price.
Musk’s decision not to join Twitter means he’s no longer bound to own just 14.9% of the company. For now, many analysts say the Tesla CEO will likely consolidate his stake and eventually try to take control.
“The fact that Musk is not on the board can save the company from having to deal with the trouble related to the company’s board-level discussions being posted on social media. However, the downside of this is that Twitter has to dealing with an extremely unpredictable investor who already owns more than 9% of the company and has the resources to buy the remaining 91%. “We can’t see such a set of scenarios happening in a short period of time. Or maybe we never see them. The risk of being taken over is definitely a concern for Twitter right now,” according to Mr. Don Bilson. from Gordon Haskett Research Advisor.
Bilson pointed out that Twitter CEO Parag Agrawal, when announcing Musk would no longer be on the company’s board, warned employees of a future “disorder”. Bilson told CNBC that the company’s message could suggest it’s “a bad omen.”
Ultimately, Twitter may decide to get a “poison pill” or a shareholder rights plan to oppose a possible takeover. However, Bilson writes that such a measure comes with the risk that it “will anger Musk”.
Analyst Dan Ives also made a similar forecast: “This is clearly an unfavorable situation. Instead of Musk being on the board and just saying no or yes in discussions, I think the coming days will come. , we’ll start to see him more hostile, more aggressive.”
Twitter stock has seen its best session since its IPO after Musk announced he owns more than 9% of the company. Shares of the company jumped 2% after Musk went on to say he was on the board. Experts predict that the company’s stock will continue to be volatile and unpredictable this week.
“While it’s still unclear what Musk’s priorities are, we think his tweets will get more attention and could push Twitter stock further.”
Gene Munster – from Loup Ventures said: “The main part of this drama is over”.
Munster believes that if Musk was going to take over, he would have done it from the start. He argues that acquiring Twitter is simply not something Musk wants to spend his time doing.
“You have to understand what’s important to him around free speech and I think he just wants to move forward. Some say he sees it as an opportunity like electric cars and space travel. . However, in the end I think acquisitions are not something Musk is interested in.”