Twitter shares fell Friday after Bloomberg reported about increased scrutiny from the federal government into its pending sale to Elon Musk, dropping to nearly their lowest level since Musk said earlier this month he’d move ahead with his $44 billion acquisition.
In two weeks, Twitter shares may close below $50 as it answers new questions … [+]
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The Key Facts
Twitter shares declined 4.4% Friday to $50.17 as the overall market rose, and the market threatened to close under $50 for the first-time since October 7.
Citing anonymous sources, Bloomberg reported late Thursday the Biden Administration is mulling placing Musk’s business dealings under a national security review due to Musk apparently cozying up to the Kremlin and securing financing for the Twitter deal from Saudi Arabia and Qatar.
Dan Ives, Wedbush analyst called the report a “major wild card” for Wall Street’s interpretation of the likelihood Musk’s Twitter acquisition going through as expected.
Other Thursday night news also weighed down Twitter stock: The Washington Post reported on internal documents of Musk’s plans to fire about 75% of Twitter’s employees, which Ives called “way too aggressive” in a Friday note to clients, and a brutal Thursday earnings report from fellow social media giant Snap, Snapchat’s parent company.
The Key Background
National Security Council spokesperson Adrienne Watson told CNN Friday the agency doesn’t “know of any such conversations” taking place about examining Musk’s business dealings. Recent scandals surrounding SpaceX CEO and Tesla have focused on several instances where he appeared to be in a friendly relationship to the Russian government. This includes proposing that Ukraine give territory to Russia, and apparently speaking with Vladimir Putin regarding the war just a few weeks back. Musk had disclosed that he owned a 9.9% stake in Twitter, and SpaceX accepted the unsolicited offer later in the month. But the partnership soon soured. Musk filed for bankruptcy in July. Twitter sued Musk to force through the deal, but Musk told the company October 3 he’d move ahead with the original terms, two weeks before the trial between Musk and Twitter was slated to begin.
54.220 per share That’s how much Musk agreed to pay for Twitter, a 38% premium from the company’s stock before he disclosed his position in the firm. Between July and October, Twitter shares were near $40. Then they shot up to more than 20% to $50.
Musk is worth approximately $212 billion. This figure represents about $60 billion higher than any other person.
The Crucial Quote
“,” Musk replied to a comment on the Bloomberg report of the potential national security review calling it “hysterical if the government stopped Elon from over paying for Twitter.”
Snap shares plunged 31% Friday to $7.50, and shares of Facebook parent Meta fell 2.5% Friday to $128.18.
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Title: Twitter Stock Down 4% Over Possible Biden Security Review Of Musk
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Published Date: Fri, 21 Oct 2022 17:57:42 +0000