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Wedbush Analyst Sees Musk Buying Twitter at a Renegotiated Price

Wedbush Analyst Sees Musk Buying Twitter at a Renegotiated Price

© Reuters. Wedbush Analyst Daniel Ives Sees Musk Buying Twitter (TWTR) at a Renegotiated Price

By Sam Boughedda

Ahead of the Twitter (NYSE:) and Elon Musk trial on October 17 in the Delaware Court of Chancery, a Wedbush analyst provided his thoughts on what he believes could be the outcome.

The analyst, who has a Neutral rating and $50 per share price target on Twitter, told investors in a research note that “yesterday both Musk and Twitter CEO Parag Agrawal did not depose in the ongoing litigation as scheduled in another unusual twist heading into this major court battle,” which will decide the fate of the potential $44 billion takeover by the Tesla (NASDAQ:) CEO.

“There is a lot riding on the testimony on each individual combined with the Zatko wild card which remains another key variable in this upcoming trial,” the analyst wrote.

He added that up until the Zatko whistleblower development, which he described as a “potential Pandora’s box,” the Street was factoring in Twitter to have a clear win. However, he now sees a range of possibilities.

The analyst outlined four potential outcomes that could play out, including the deal ending with Musk paying the $1 billion breakup fee, Musk being ordered to acquire Twitter for the agreed-upon price, Musk needing to settle or pay significant damages to Twitter, or Musk wins and pays no breakup fee.

“We continue to believe a likely scenario is Musk still buying Twitter at a lower renegotiated price in the $50 range (our price target) and taking a brutal Game of Thrones battle in Delaware for both sides off the table before it kicks off. Once the case kicks off in Delaware Musk is likely in a weak legal position to defend his case to abandon this Twitter deal in our opinion,” he concluded.

What do you think?

Written by biedexadmin

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