“It May Trade As Low As $24”: Wall Street Reacts To Musk’s Pulled Twitter Bid

Twitter shares are plunging as much as 9% to $33.48 in premarket trading on Monday before paring losses to trade down 5%, with analyst consensus emerging that the price will likely drop below $30 if Elon Musk’s takeover offer falls through. The billionaire is trying to end his agreement to buy the company for $44 billion and take it private, alleging that it misrepresented user data. Courtesy of Bloomberg, here is a snapshot of several analyst views on where the price could drop.

MKM Partners  

• “TWTR shares would likely find support around $24 to $26 per share, if investors start to assign a greater probability that this merger will not happen”

Bloomberg Intelligence

• Musk’s letter fails to make a compelling case to end the contract

• “Given Twitter’s advantage, we estimate Musk would probably need to pay $5-$8 billion to settle and walk away”

Jefferies (hold, PT $40)

• In the absence of a deal, wouldn’t be surprised to see the stock find a floor at $23.50

• Jefferies’ scenario would bring TWTR near to its closing low of $22 during the early days of the pandemic

• Musk’s intentions to terminate the merger are more based on the recent market sell-off than the percentage of fake accounts on Twitter or its failure to comply with his requests, according to analysts led by Brent Thill

• “Attention turns to core fundamentals which we believe have been rattled by this process and headwinds facing the online ad industry”

Truist Securities (hold, PT $50)  

• “If Twitter fails to bring this acquisition to completion, we would see the base case for the shares as trading in the high $20s”

• A scenario where Musk terminates the transaction and walks away unscathed is “highly unlikely”

Baird Equity Research (neutral, PT $33)

• Revised price target reflects a 90% probability of no takeover, but with some compensation. Baird previously had a PT of $45: Bloomberg data

• Expect Twitter to receive at least some compensation or a revised offer, although a failed takeover would leave the company in a less desirable position