Gain insight into Elon Musk, Twitter, and Tesla stock with this comprehensive guide.

• Elon Musk announced his intentions to buy Twitter back in April 2022.
• Since then, the deal has been held up numerous times, for various reasons.
• The stock prices of both Twitter and Tesla have fluctuated broadly as details of the deal change.

It seems like every time Elon Musk open his mouth( or in utmost cases, his Twitter app), serious fiscal counteraccusations follow. The Tesla CEO lately made captions when he blazoned intentions to buy Twitter. The buy fee for the social media network? A cool$ 43 billion bones . Since also, there’s been a series of twists and turns in the saga. The stock price of Twitter went up. And also down. also Tesla’s stock also started to move, thanks to a chain response.
Actually, the whole thing can be hard to follow. It can feel like Musk changes his mind on a diurnal base which is fine, except his veritably public opinions hack beget deep fiscal ramifications. That’s what happens when you let the world’s richest man constantly scream into the void that's the ultramodern internet.
still, you ’re not alone, If you ’re floundering to make sense of it all. Then’s everything you need to know about Musk’s plans to buy Twitter, and how they're impacting a sprinkle of associated stocks.

Musk Buys Twitter 

In late April, Musk blazoned his intentions to buy Twitter. Since the social media network is formerly a intimately traded company, Musk needs to buy the shares of all the current possessors, both big and small. His offer came with a set price of$54.20 per share. That’s kind of what the charge of Twitter stocks had been buying and selling for on the time.
Current shareholders might have the option to retain a nonage stake in the new Musk- possessed Twitter. else, they would admit a cash payout for every stock they hold. Unfortunately, a deal of this size does n’t come together snappily. A lot has changed since April, utmost notable the value of Twitter shares.

Twitter’s Stock Price

Shortly after Musk blazoned his intentions to buy Twitter, its stock price started to drop. A couple weeks latterly, it was trading around$ 48 a share. Not a huge change, but clearly not the$54.20 that Musk agreed upon. Roughly a month latterly, it was down to$ 36 a share. That clearly presented a problem.
Did Musk overrate the company by agreeing to pay nearly$ 43 billion? At moment’s price, the request capitalization of Twitter is only a bit further than$ 30 billion. Imagine paying$ 15 billion further for commodity than it’s actually worth.

Why Did Twitter’s Stock Price Drop? 

Then’s where effects start to get murky. After firstly twittering about his intentions to buy Twitter, Musk sounded to annul. Shortly latterly, he reflected that the deal was on hold. He wanted evidence from Twitter’s directors that the number of fake or bot accounts was below 5 of druggies. With the accession putatively over in the air, Twitter’s stock price dropped further.
What gives? If the buyer and dealer both agreed that the company was worth$54.20 per share, how has the value dropped by further than 25 in such a short time?

Is Musk deliberately folding The Price?

The purchase detention, along with a select number of interesting Musk tweets, have caused some to presume that Musk is deliberately trying to tank the price ofTwitter.However, he may essay to talk the deal entirely, If the stock drops low enough. After all, would you want to pay$ 43B for an asset that’s only worth$ 30B now?
There are reports that Musk could be hit with serious penalties if he backs out of the deal. There’s allegedly a billion bone charge just for backing out entirely. Trying to pay a lower price could also be met with significant redundant freights or penalties. still, some introductory calculation still results in a net palm for Musk. After all, paying
30B plus a billion or so in penalties would still be cheaper than the original$ 43B deal.

How Is Elon Musk Paying For Twitter? 

Musk might be worth roughly$ 270 billion, but a lot of that wealth only exists on paper. The vast maturity of his wealth( about$ 170B) is actually tied to his substantial stake of Tesla stock, the electric vehicle company he owns. That plutocrat is n’t available in hard cash, unless he sells the stock. To make a long story short, Musk does n’t have$ 43B in cash laying around to buy Twitter.
Musk is actually adopting the plutocrat to finance to Twitter deal. He’s taken out$25.5 billion from colorful banks. He also secured$ 7B in backing from independent investors like Larry Ellison, the Qatar state investment fund, and a large cryptocurrency exchange. The catch, and it’s a big catch, is that these loans are substantially backed by Musk’s Tesla shares as collateral. That means if the deal fails, the lenders may be suitable to claim a large portion of Musk’s Tesla stock as payment.

How Does This Impact Tesla’s Stock? 

Tesla shareholders are n’t thrilled right now. The stock was trading close to$ 1,000 per share when Musk first blazoned his intentions to buy Twitter. Once the finance details were revealed, Tesla’s stock declined roughly 35. They hit a six- month low of$ 628 by the end of May, before bouncing back slightly to the$ 700- to-$ 750 range.
While it might make sense for Musk to use his current means to help him acquire new bones , it surely causes a ripple effect. Tesla shareholders did n’t subscribe up for the company to be abused against the trade of a social media company. Add to the fact that Twitter has notoriously plodded to turn it’s massive userbase into profit, and you can see why investors are concerned. The prices are dropping consequently.

Why Does Elon Musk Want To Own Twitter Anyway? 

Why would anyone want to enjoy Twitter, really? It had a major problem with bots, fake accounts, profitability, detest speech monitoring, and is subject to foreign governments using it to undermine American republic. Musk does n’t feel to watch important any of that.
He's a tone- described “ free speech absolutist. ” In short, he believes that Twitter should act like a “ city forecourt, ” where anyone can spout off any opinion they feel like, without consequence. Of course, this goes against the current Twitter Terms of Service, which saw a certainex-president tossed from the platform for inciting his sympathizers to violence. It’s also worth nothing that Musk’s love of free speech does n’t feel to apply when said speech is critical of himself or his business dealings.

Mid-June Update! 

As we were literally writing this composition, a major update passed. It seem greater and much more likely that Musk desires to returned out of the deal entirely. He's professing that Twitter traduced the terms of their deal by refusing( or being unfit?) to give evidence on the number of bot accounts versus factual real druggies. Musk is claiming a “ clean fabric breach, ” which he insists can sink the deal entirely.
For their part, Twitter released a statement saying they've been collaborative with participating any information. They also mentioned they've full intentions of forcing the sale to close, as they've a fiduciary duty to their shareholders to accept the original terms of the deal.

So Now What Happens? 

No bone really knows. What, exactly, is Musk’s windup then? Does he really want to enjoy Twitter? Or was that just a arbitrary impulse he could n’t control, and now it’s too late to back out? perhaps he still wants to complete the deal, but has regrets over the price he firstly agreed to pay. formerly again, if he can save$ 15B in purchase costs while losing a billion or two in penalties or suits, he still wins.
still, Twitter will nearly clearly sue to controversial CEO, If Musk tries to back out of the deal fully. In fact, Twitter shareholders are formerly suing Musk over a different issue, claiming he’s designedly working to tank the company’s stock price.
UPDATE In July, Musk “ sought to terminate ” the acquisition settlement entirely. Twitter will now probably sue for damages.

The Bottom Line 

What a mess, honestly. Twitter is a fascinating social media point, able of participating information astronomically and with inconceivable speed. It’s also largely limited, creating worrisome( and frequently dangerous)sub-communities where spiteful or violent ideals are spouted, believed, and acted upon regularly. To be fair, Twitter has tried to more moderate the further revolutionist shoes recently.
Will Musk end up retaining Twitter? It feels like a50/50 shot right now. Indeed if the trade is forced, what does a Musk- possessed Twitter indeed look like? Will it truly be limited free speech for everyone, no matter how vile? Will the famously banned bills unexpectedly reappear again?
maybe most intriguing( to those of us that run a finance point, anyway), is what will be to the stock prices of Twitter and Tesla over the coming many months? We wish we know for sure. also again, so do investors each over theworld.However, we ’d each be rich formerly, If it were that easy to prognosticate the future.