Musk, Twitter ‘fireworks’ could come at annual shareholder meeting: analyst

One Wall Street analyst is expecting “fireworks” between Tesla CEO Elon Musk and Twitter’s board at the social media giant’s upcoming annual shareholder meeting on Wednesday.

“Twitter will be holding its annual shareholder meeting this Wednesday and will surely kick off some more fireworks between Musk and the Twitter Board,” Wedbush Securities analyst Dan Ives wrote in a note to clients on Monday evening. “The elephant in the room at the Twitter shareholder meeting will be clearly the Musk’s $ 44 billion deal price for the company with shareholders encouraging the board to vote in favor of this inked deal.”

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

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

Musk, who said the deal “can’t move forward” until transparency is given, has estimated that spam and fake accounts could make up at least 20% of the platform’s users.


Twitter CEO Parag Agrawal said in a May 16 thread 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 multiple human reviews (in replicate) of thousands of accounts that are sampled at random, consistently over time, from * accounts we count to MDAUs *. We do this every quarter, and we’ve been doing this for many years, “Agrawal noted. “Each 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 it is active …) to make. Make a determination on each account. “

In the First quarter of 2022Twitter’s monetizable daily active user (mDAU) base grew 15.9% year-over-year to 229 million, including 39.6 million daily active users in the US and 189.4 million international daily active users.


Though Musk’s Twitter acquisition is currently expected to close In 2022, the stock is currently trading well below its offer.

He said during the All In Tech conference in Miami earlier this month that a lower price on Twitter for a viable deal would not be “out of the question.” However, Twitter has said its “committed to completing the transaction at the agreed price and terms as promptly practicable.”

Tesla CEO Elon Musk speaks at Tesla Giga Texas manufacturing “Cyber ​​Rodeo” grand opening party in Austin, Texas, on April 7, 2022. (Photo by SUZANNE CORDEIRO / AFP via Getty Images) (SUZANNE CORDEIRO / AFP via Getty Images / Getty Images)

“If the deal does get renegotiated behind closed doors the actual deal price of $ 54.20 will likely be significantly lower than in the mid- $ 40’s in the eyes of the street,” Ives predicts. “That said, we believe shareholders will clearly raise this hot button issue at this meeting this week as Twitter Board’s firm views the deal is done and its subject to regulatory and shareholder approval.”


If Musk were to walk away from the deal, he would have to pay a $ 1 billion breakup fee and could be subjected to additional litigation for damages.

“We believe there is currently a 60% chance that Musk will try and walk and use this spam account issue as a scapegoat to get out of the deal and a 40% chance of Twitter’s board and Musk coming to a new deal price over the coming weeks,” Ives added.

He emphasized that accepting a lower bid from Musk would be a better alternative than standalone status, citing major market pressure for tech stocks coupled with Snap’s recent “disaster” quarter. In addition, he noted that the Twitter deal has been a “major overhang” on Tesla’s stock and that Musk needs to come to a decision quickly to walk away, renegotiate or follow through on the current deal as investor patience wears thin.

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

Wedbush Securities currently has a “neutral” rating on Twitter stock, with a 12-month price target of $ 54 per share, and an “outperform” rating on Tesla stock, with a 12-month price target of $ 1,000 per share.

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