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Stock Analyst Update

Twitter Grants Musk His Wish to Take the Firm Private

Its board has unanimously given Musk the OK to take the company private in an all-cash transaction for $54.20 per share, slightly below our $58 fair value estimate.

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After adopting a poison pill last week, indicating that Twitter (TWTR) and its board might reject Tesla CEO Elon Musk’s acquisition bid, Twitter said in an April 25 press release that its board has unanimously given Musk the OK to take the company private in an all-cash transaction for $54.20 per share, slightly below our $58 fair value estimate but 18% above the FactSet consensus price target of $46. Musk has secured financing for this nearly $44 billion transaction via debt, a margin loan, and an equity commitment, according to a filing last week and the Twitter press release. Twitter expects the deal to close later this year. We expect Musk to face some scrutiny in the media and from regulators regarding his plans to significantly ease content moderation on the platform. While the deal is likely to go through, the market may be pricing in such a risk, as the stock is trading around 5% below the announced acquisition price.

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Ali Mogharabi does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.