What Is the Hart-Scott-Rodino Waiting Period and Why Is TWTR Stock Up Today?

  • The Hart-Scott-Rodino waiting period expired yesterday for Elon Musk's acquisition of Twitter (TWTR).
  • The waiting period occurs after companies notify government agencies of pending acquisitions.
  • TWTR stock is up about 1% on the news that it has overcome this regulatory hurdle.
TWTR stock - What Is the Hart-Scott-Rodino Waiting Period and Why Is TWTR Stock Up Today?

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Shares of Twitter (NYSE:TWTR) are in the green after the Hart-Scott-Rodino (HSR) waiting period expired at 11:59 P.M. yesterday. The waiting period was a condition to the closing of Elon Musk’s TWTR stock acquisition.

Musk’s bid for the social media platform remains at $54.20. There is widespread conjecture that he will try to lower the price due to the current state of the market. Other investors are speculating that he may back out of the deal completely.

If the latter happens, Musk would be forced to pay a $1 billion break-up fee and face potential litigation from Twitter and its shareholders. However, there is no still confirmation of what Musk will do next.

With that in mind, let’s go over the details of the HSR waiting period.

What the Hart-Scott-Rodino Waiting Period Means for TWTR Stock

The HSR Act was passed in 1976 and requires parties to notify the Federal Trade Commission (FTC) and the U.S. Department of Justice antitrust division of any large transactions, like acquisitions. The deal cannot close until the waiting period has passed, unless the government grants an early termination for the waiting period.

With the waiting period in the rearview mirror, the acquisition is still subject to Twitter shareholder approval, customary closing conditions and other regulatory reviews.

Meanwhile, it certainly seems as if Musk is trying to lower his bid. The Tesla (NASDAQ:TSLA) CEO has repeatedly mentioned that Twitter’s bot count is understated. The company has disclosed that fewer than 5% of its user base can be attributed to bots.

On the other hand, independent researchers have stated that the bot figure could be as much as three times higher than Twitter’s estimate. The researchers estimated that 9% to 15% of the platform’s users are either automated accounts or bots. Dan Brahmy, CEO of the Israeli tech company Cyabra, seems to think the same, estimating that 13.7% of Twitter users are bots. Cyabra identifies fake accounts with machine learning.

Last month, Musk tweeted that “this deal cannot move forward” until Twitter provides evidence for its 5% bot figure.

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/2022/06/what-is-the-hart-scott-rodino-waiting-period-and-why-is-twtr-stock-up-today/.

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