Shares of Twitter (NYSE:TWTR) are in the green this morning after it was announced that Elon Musk would be joining the board of directors. During his term, and 90 days after, Musk will not be allowed to own more than 14.9% of all common stock outstanding. He currently owns 9.2%. Furthermore, Musk’s term will expire in 2024.
Yesterday, TWTR stock rose by more than 27% following Musk’s 9.2% stake disclosure. That was the stock’s highest single-day return since its initial public offering (IPO) in 2013.
Twitter CEO Parag Agrawal marked the occasion on Twitter, tweeting the news: “I’m excited to share that we’re appointing @elonmusk to our board! Through conversations with Elon in recent weeks, it became clear to us that he would bring great value to our Board.”
Despite filing a 13G form, which indicates a passive position, Musk already seems to be advocating for change on the platform. Yesterday, the Tesla (NASDAQ:TSLA) CEO tweeted out a poll asking users they want an “edit” button.
The retail crowd seems to be in favor of Musk taking a stake in the social media platform. However, let’s pivot over to Wall Street and see how the analysts feel about TWTR stock.
Is TWTR Stock a Buy Right Now?
- Bank of America has a price target of $54. Analyst Justin Post believes that Musk’s stake will attract retail investors to TWTR stock. He adds that the addition of increased retail activity could possibly trigger a short squeeze. Finally, he adds that Musk’s involvement with Twitter could potentially drive positive changes for the platform.
- MKM Partners has a price target of $49. Analyst Rohit Kulkarni is “intrigued” by Musk’s move to buy a Twitter stake. However, he adds that “near-term risk/reward is fairly balanced at current levels.” Over the long term, Kulkarni believes that Twitter will remain a unique platform that will be “hard to replicate.” For 2023, the analyst states that Twitter’s monthly daily average user estimate is too high at 315 million users. Kulkarni’s estimate lies around 290 million users.
- Jefferies has a price target of $48. Analyst Brent Thill raised his price target from $40 to $48 this morning. Thill cautioned investors to not “bet against Musk.” However, the analyst also stated that “we wonder about the rationale behind his investment.” Thill added that investors should focus on Twitter’s revenue and daily user targets.
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.
