Apollo Global May Back Elon Musk. What Does That Mean for TWTR Stock?

 Twitter (NYSE:TWTR) is once again in the spotlight after The Wall Street Journal reported that Apollo Global Management may be weighing in on a bid for the social media platform. Let’s take a closer look at what’s going on with TWTR stock lately.

Twitter (TWTR) app being shown on a phone screen held in a person's hand.
Source: Worawee Meepian / Shutterstock.com

After Twitter’s board enacted a poison pill plan over the weekend, investors are reasoning that they will soon reject Musk’s offer of $54.20 per share. This opens the door for an increased bid from Elon Musk with help from other parties, or another bidder altogether. In order for Musk to fund his offer individually, he would likely need to sell Tesla (NASDAQ:TSLA) stock or borrow against it.

Twitter has confirmed that it will report Q1 earnings on April 28 before the market opens, so more details will likely be revealed then.

TWTR Stock: Apollo May Back Musk

According to anonymous sources close to the matter, Apollo is considering providing Musk or another bidder with debt or equity to support an offer. Furthermore, Apollo, which owns Yahoo, has been internally discussing potential synergies between the two companies. The private equity firm is known for acquiring companies in a wide range of sectors. In addition, Apollo frequently invests in a company’s capital structure by providing preferred equity, debt or a complete buyout. As of Q3 of 2021, Apollo had $481 billion in assets under management (AUM), which has grown by more than 600% in the past 10 years.

Meanwhile, other sources state that Apollo is not interested in participating in a consortium to bid for Twitter. Any financing that the firm provides “would likely come in the form of preferred equity.”

Thoma Bravo Expresses Interest In Twitter

However, Apollo isn’t the only private equity firm that has expressed interest in Twitter. Thoma Bravo has reportedly contacted Twitter and expressed interest in making a bid for the company as well. The bid would be individual and rival Musk’s offer. However, no details were disclosed on the size of the potential bid. A source close to the matter also cautioned that there is a possibility that the bid will not materialize.

Thoma Bravo is a technology-centric firm that has “historically relied almost exclusively on private-credit financing for its deals.” As of Q4, the firm had more than $103 billion in AUM.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.


Article printed from InvestorPlace Media, https://investorplace.com/2022/04/apollo-global-may-back-elon-musk-what-does-that-mean-for-twtr-stock/.

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