Traders Doubt Twitter Takeover by Elon Musk? Here is why | Tech News

Traders Doubt Twitter Takeover by Elon Musk? Here is why

Traders are the most skeptical they’ve ever been about whether Elon Musk will actually complete his proposed purchase of Twitter Inc.

By:BLOOMBERG
| Updated on: Aug 22 2022, 12:11 IST
Elon Musk
Wall Street's belief on whether the Twitter takeover by Elon Musk will go through seems to be dwindling.  (REUTERS)

Traders are the most skeptical they've ever been about whether Elon Musk will actually complete his proposed purchase of Twitter Inc.

The spread on the deal, which offers an indication of how much Wall Street believes the takeover will be completed, jumped to $6.94 on Tuesday -- the widest since the billionaire launched his bid and almost twice where it was last week when he announced a roughly $7.1 billion financing commitment. Twitter shares closed Tuesday at $47.26, while Musk has offered to purchase the social media platform for $54.20.

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Investors were left scratching their heads Tuesday over comments he made during an interview at the Financial Times Future of the Car summit that seemed to hedge his plans.

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“I don't own Twitter yet, so this is not like a thing that will definitely happen,” Musk said, referring to his intention to reinstate former President Donald Trump's Twitter account if he buys the company. “What if I don't own Twitter?”

At current levels, Twitter's merger arbitrage spread is among the widest of all pending US transactions, according to Bloomberg data. It represents a 14.7% gross return if the take-private plan goes through, compared with 8.36% in Nielsen's take private deal, according to Bloomberg data.

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First Published Date: 11 May, 15:54 IST
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