It appears the drama surrounding Elon Musk and Twitter (NYSE:TWTR) may be coming to a close. That is, if reports that Musk’s offer to buy Twitter at its original $54.20 price are confirmed. In this afternoon’s session, shares of TWTR stock are soaring, up more than 12% at the time of writing.
Interestingly, shares of Twitter are not actually trading right now. A halt, which was put in place early this afternoon on pending news, froze the company’s stock price at $47.95. Whether this news will ultimately corroborate that a price closer to $54.20 should be accepted by the market remains to be seen. That said, it’s clear investors are on the edge of their seats, waiting for official word on whether these reports are accurate.
Indeed, this turn of events has shocked many in the market. Musk is known for changing his mind, but this is a big potential turn of events.
Let’s dive into what this means for those intrigued by this ongoing saga.
TWTR Stock Soars as Investors Price in Elon Musk’s Offer
I have to admit, this news caught me by surprise. The fact that Twitter was trading higher this morning appeared to be the result of a market-wide rally in tech stocks.
Alas, it appears Elon Musk has capitulated with his lawsuit, agreeing to fork over his previous offer of $54.20 per share for the social media company. Whether this is a result of Musk’s legal team suggesting his legal footing wasn’t solid, or Musk choosing to avoid questioning in an upcoming deposition, is unclear. That said, for shareholders in TWTR stock, this is clearly welcome news.
Perhaps more perplexing is the fact that Musk did not ask for concessions in dropping his lawsuit. Indeed, one might have thought that some negotiation would come along with his agreement to drop the lawsuit.
That being said, it will be interesting to see what price Twitter ultimately lands at when it resumes trading. Right now, the price is around $48 per share. Knowing Musk, there’s likely going to be some risk of the deal falling through priced in. We’ll just have to wait and see.
On the date of publication, Chris MacDonald did not have (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.