Twitter Shares Wobble as Elon Musk Unveils Plan to Fold Platform Into Super-App ‘X’

Twitter shares wobbled Thursday, reflecting what one analyst called “a wild 24 hours” for the social media company.

Hours after Elon Musk agreed to terms with the company to purchase it at the original price of $44 billion, following months of attempting to back down from the deal, the Tesla and SpaceX CEO shared his vision for a super-app called “X”, which appears to be a Western version of the all-in-one Chinese app WeChat.

The vision accompanied the formation of three holding companies with variations of the name “X Holdings,” Bloomberg reported.

Twitter shares slipped 18 cents to $51.12 in late morning trading after dropping as much as 84 cents after the opening bell on Thursday.

Also Read:
Roku and Disney Stocks Inch Up While Most of Entertainment and Media Follow Broader Market Decline

Shares were halted midday Tuesday as word of a breakthrough leaked. Once trading resumed following the announcement that the deal would go forward, the stock soared 22%, to close at $52.

In Wednesday’s session, shares gave back a portion of the gains, closing at $51.30. Both days saw extraordinary volume in the stock as traders tried to profit from the news.

“It’s been a wild 24 hours for the Twitter/Musk saga with the deal now green lighted from the Musk camp at the original $44 billion/$54.20 price tag,” wrote Wedbush analyst Daniel Ives in a note to clients.

But Ives, who has a “neutral” rating and $54.20 price target on the stock, saw “one slight problem” in the news.

“The Street and Musk are waiting patiently for the Twitter camp now to officially reach an agreement to end their litigation (could come at any time) in Delaware and clear the path for this deal to get inked possibly by next week,” Ives wrote. “There is naturally massive distrust between the Musk and Twitter sides, given this nightmare soap opera since April, therefore a deeper dive on all scenarios/angles once the lawsuit is removed is clearly being looked at closely by the Twitter legal team.”

Also Read:
Fast Company Back Online After Lewd, Racist Hack Attack Forces 8-Day Shutdown

Bloomberg reported that Musk’s scheduled deposition in the suit was postponed after the volatile executive reversed course.

Ives said the the Delaware Court of Chancery said the parties had not filed paperwork to end the lawsuit Twitter brought when Musk tried to scrap the buyout.

“Front and center here could be the condition out of the Musk agreement that the deal closing was pending the receipt of the necessary $12.5 billion debt financing,” Ives wrote. “On this point, we have been getting many investor questions on this topic, and it’s important to note that the banks are essentially cemented to this Twitter debt deal and we see no way out despite the very tough debt markets today.”

Ives said he does “not see this debt situation falling apart” which would give Musk “a way out” of the Twitter deal without having to pay a $1 billion breakup fee.

“We continue to believe the deal gets done smoothly despite some late night poker moves from the Twitter camp with the Delaware Court case around the corner (set to begin October 17th) and ongoing depositions,” Ives wrote.

Facebook and Instagram parent Meta Platforms shares, meanwhile, slipped $1.56 to $137.42.

Also Read:
Elon Musk Reveals Plan to Fold Twitter Into ‘X,’ a Super-App Modeled After China’s WeChat