After Musk terminated Twitter’s $44 billion acquisition agreement, Twitter’s shares opened lower on Monday (11th), falling nearly 10% at one point. Wall Street analysts generally believe that Twitter’s stock price will fall in free fall, with investment bank Jefferies expecting Twitter’s stock price to fall to $22 per share, which means a 40% drop from Friday’s closing price.
Before the deadline, Twitter’s (TWTR-US) stock price fell 8.79% during the session, with a tentative price of $33.58 per share, with a market value of $25.676 billion.
Wall Street analysts agree that if Musk’s takeover bid falls through, Twitter’s stock price could continue to tumble, even below $30 a share.
Wall Street investment bank MKM Partners believes: “If investors start to think that this merger may fail, Twitter’s share price may be supported at around $24 to $26 per share.” This means that compared with last Friday’s weekly closing price down 35%.
Bloomberg argued that Musk’s letter failed to make a compelling case for terminating the contract and, given Twitter’s legal advantage, estimated Musk could have to pay between $500 million and $8 billion to settle and end.
Another investment bank, Jefferies, believes that if the final acquisition fails, Twitter’s share price will not be surprised to fall to $23.5 per share, saying that today’s scenario will make Twitter’s share price fall to $22 per share when the new crown outbreak broke out. That would imply a 40.3% drop in Twitter shares from Friday’s close.
Jefferies analyst Brent Thill believes that Musk’s intention to end the merger was more based on the recent market sell-off than the proportion of fake accounts on Twitter that failed to meet his demands.
“The market’s attention on Twitter will turn to core fundamentals that we believe have been disrupted by the Musk acquisition and the current struggles with online advertising,” Thill said.
Truist Securities believes that if Twitter fails to complete the acquisition, the share price could fall to $25 to $30 per share, saying it is “extremely unlikely” that Musk wants to get out of the deal.
Investment bank Baird said the current situation means that 90% of the acquisition will not happen, although Twitter will get some compensation that could boost the stock price.