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Musk, Twitter ‘fireworks’ may come at annual shareholders’ meeting: analyst

A Wall Street analyst expects “fireworks” between Tesla CEO Elon Musk and Twitter’s board at the social media giant’s upcoming annual shareholders’ meeting on Wednesday.

“Twitter will hold its annual shareholders’ meeting this Wednesday and is guaranteed to kick off a little more fireworks between Musk and the Twitter board,”[ads1]; Wedbush Securities analyst Dan Ives wrote in a note to clients Monday night. “The elephant in the room at the Twitter shareholders’ meeting will clearly be the Musk award of $ 44 billion for the company, with shareholders urged by the board to vote in favor of this illustrated agreement.”

Ticker Safety Last Change Change%
TWTR TWITTER INC. 35.88 -2.02 -5.33%

Although Twitter’s board has accepted Musk’s offer of $ 54.20 per share to take the company privately, the deal is now temporarily pending as the billionaire has asked the company to show how it calculates an internal estimate that spam and fake accounts are less than 5% of the platform’s users.

Musk, who has said that the agreement “can not proceed” until transparency is given, has estimated that spam and fake accounts can make up at least 20% of the platform’s users.


Twitter chief Parag Agrawal said in a thread on May 16 that it would be difficult to conduct an external review to determine the percentage of spam and fake accounts on the platform “given the critical need to use both public and private information.”

“Our estimate is based on several human estimates (in replicate) of thousands of accounts, sampled randomly, consistently over time, from * accounts we count as mDAUs *. We do this quarterly, and we have done this for many years. , “remarks Agrawal. “Every human review is based on Twitter rules that define spam and platform manipulation, and uses both public and private data (eg IP address, phone number, geolocation, client / browser signatures, what the account does when active). .) to make a decision on each account. “

IN first quarter 2022Twitter’s revenue-generating daily active user base (mDAU) grew by 15.9% year-over-year to 229 million, including 39.6 million daily active users in the United States and 189.4 million international daily active users.


Though Musk’s Twitter acquisition is at the moment expected to close in 2022, the stock is currently trading well below his offer.

He said during the All In Tech conference in Miami earlier this month that a viable deal for Twitter at a lower price would not be “inappropriate”. However, Twitter has stated that it “undertakes to complete the transaction at the agreed price and terms as soon as practicable.”

Musk, Twitter ‘fireworks’ may come at annual shareholders’ meeting: analyst

Tesla CEO Elon Musk Speaks at Tesla Giga Texas Production “Cyber ​​Rodeo” Grand Opening Party in Austin, Texas, April 7, 2022. (Photo by SUZANNE CORDEIRO / AFP via Getty Images) (SUZANNE CORDEIRO / AFP via Getty Images / Getty Images)

“If the deal is renegotiated behind closed doors, the actual deal price of $ 54.20 is likely to be significantly lower in the middle of $ 40 in the eyes of the street,” Ives predicts. “That said, we believe shareholders will clearly address this hot button issue at this week’s meeting as the Twitter Board’s firm view is that the agreement has been implemented and is subject to regulatory and shareholder approval.”


If Musk were to withdraw from the deal, he would have to pay a $ 1 billion breach fee and could be subject to further damages actions.

“We think at the moment there is a 60% chance that Musk will try to use this spam account problem as a scapegoat to get out of the agreement and a 40% chance that Twitter’s board and Musk will reach a new agreement price in the coming years. weeks, “Ives added.

He stressed that accepting a lower bid from Musk would be a better option than stand-alone status, citing strong market pressure for technology stocks combined with Snap’s recent “disaster” quarter. In addition, he noted that the Twitter agreement has been a “big overhang” on Tesla’s shares, and that Musk must quickly make a decision on whether to go away, renegotiate or follow up on the current agreement as the investor’s patience begins to thin.

Ticker Safety Last Change Change%
TSLA TESLA INC. 628.16 -46.74 -6.93%

Wedbush Securities currently has a “neutral” rating on the Twitter share, with a 12-month price target of $ 54 per share, and an “outperform” rating on the Tesla share, with a 12-month price target of $ 1000 per share.

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