Research Firm: Twitter Is at Elon Musk’s Mercy

According to an investment firm betting against Twitter shares, Tesla CEO Elon Musk could end up paying less than the $44 billion he offered last month to purchase the social media platform. According to Hindenburg Research: “Musk holds all the cards here. If Elon Musk’s bid for Twitter disappeared tomorrow, Twitter’s equity would fall by 50% from current levels. Consequently, we see a significant risk that the deal gets repriced lower.”

The New York Post reports that Elon Musk’s purchase of Twitter could cost him less than the $44 billion he has offered, according to the investment firm Hindenburg Research. The firm specialized in activist short-selling and says that Musk currently has enough leverage to threaten to walk away from the deal and convince Twitter’s board to agree to a lower purchase price.

In a report, Hindenburg which has a short position on Twitter, said: “Musk holds all the cards here. If Elon Musk’s bid for Twitter disappeared tomorrow, Twitter’s equity would fall by 50% from current levels. Consequently, we see a significant risk that the deal gets repriced lower.”

Shares of Twitter traded down 2.67 percent as of noon on the East Coast, costing $47.76 per share. This is the lowest share price since musk made his offer at $54.20 per share last month.

Hindenburg commented: “We are supportive of Musk’s efforts to take Twitter private and see a significant chance the deal will close at a lower price.”

Breitbart News previously reported that according to a recent regulatory filing, Musk has received letters committing approximately $7.14 billion from 19 investors, including Sequoia Capital, Oracle Corp. co-founder Larry Ellison and VyCapital.

Musk noted in the filing that as a result of the new financing, the $12.5 billion margin loan he had received to purchase Twitter would be reduced to $6.25 billion and the takeover will be financed by $27.27 billion in equity and cash. Commitments reportedly range from $1 billion from Oracle co-founder Larry Ellison to $5 million from Honeycomb Asset Management.

Read more at the New York Post here.

Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan or contact via secure email at the address lucasnolan@protonmail.com