Over the past four weeks, Elon Musk has seen potential gains of $1.1 billion wiped out as Twitter’s stock has plummeted.
According to Bloomberg, before agreeing to buy the company outright on April 14, he owned 73 million shares at an average price of $36.16. Twitter shares hit $51.70 on April 25 – which would have represented a $1.1 billion profit for Musk. But they’ve since fallen 31% to below $36 – turning that billion-dollar gain into a $40 million loss.
On Tuesday, Twitter fell 6% after Snap announced it would miss its second-quarter revenue target. It’s fallen 28% in the last month and 18% so far this year.
The electric vehicle manufacturer Tesla, also fell 6% Tuesday, dropping well below its S&P 500 inclusion price of $695. Wedbush managing director Dan Ives said Musk’s Twitter losses have likely worsen Tesla’s fall. “Musk is facing a fork-in-the-road situation in which he has to decide his next step in this soap opera, as Tesla investor patience is wearing thin.” he said in a note on Monday.
Musk does have the right to walk away from the deal – but he would have to pay Twitter a $1 billion breakup fee.
Source - cache | Page ID - 863