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Will Twitter Stock Go Up?
Despite a recent plunge in price, Twitter‘s shares are up again and are back near the $39 per share mark. Tesla and SpaceX CEO Elon Musk have expressed interest in Twitter, and Twitter has undergone a dramatic board shakeup. CEO Jack Dorsey stepped down and shareholders voted not to re-elect Silver Lake co-CEO Egon Durban. Moreover, Twitter has settled a privacy lawsuit that has cost it tens of millions of dollars.
Elon Musk’s buyout of twitter
If Elon Musk’s buyout of Twitter is true, it will send Twitter’s stock price up by around 25 percent, possibly more. The price was spiking as soon as Twitter announced Musk would join the board. This may interest you : How to Mass Unfollow Twitter. But Twitter CEO Parag Agrawal later tweeted that Musk would not join the board. That could mean a big price drop for Twitter stock this week.
The deal is backed by a $34 billion debt and equity commitment from the world’s richest person, Elon Musk. If Musk walks away from the deal, he could be liable for a breakup fee of $1 billion. However, this would be a small percentage of the total deal price and would still be far less than the savings from a lower price.
The tweets that went viral are likely to be the result of Elon Musk’s efforts. The former SpaceX and Tesla CEO has over 83.6 million followers. His tweets are frequently critical of the companies’ management and products. However, a recent SEC investigation into Musk’s business practices led to charges of securities fraud. Since then, Musk has been trying to get out of the settlement agreement.
Elon Musk’s share-based compensation
Elon Musk’s latest tweets hint that the company’s CEO will be able to make changes to the company’s business model. He plans to eliminate the salaries of Twitter’s board of directors, which could save the company $3 million annually. Twitter’s stock-based compensation for the 12 months ending Dec. 31, 2021, totaled $630 million, up 33% from 2020. Twitter’s share-based compensation is far lower than those of rival companies, including Facebook and Pinterest. However, Musk’s net worth is $246 billion, according to Forbes.
In addition, Musk is putting enormous demands on Twitter’s cash flow. Twitter faces debt servicing costs of $1.5 billion a year, which are likely to rise even further if he doesn’t pay his employees cash. Business Insider’s Linette Lopez estimates that Musk will have to pay Twitter employees $900 million this year. To see also : How to Delete a Suspended Twitter Account. That means he’s putting $2.5 billion of demands on Twitter’s cash flow, while the company doesn’t make much money. Moreover, its EBITDA for the past 12 months was only $547 million.
If Elon Musk reneges on the deal
The recent news that Elon Musk is considering selling his stake in Twitter to another company has sparked a lot of uncertainty in the stock market. The social media company is currently trading at about $54 per share and could fall to as low as $25 this week if Musk backs out of the deal. Read also : How to See How Many Accounts Blocked You on Twitter. Elon Musk has repeatedly denied any intentions of reneging on the deal and has vowed to continue operating as CEO.
One option would be to sue the former CEO for breach of contract, and Twitter would owe the money to the old shareholders. Another possibility is that Musk could take Twitter to court and force it to fulfill the loan. The court may appoint a special representative to sue the banks. Then, Twitter stock would go down as Musk’s debts are paid off.
Should you invest in twitter stock
To buy Twitter shares, you’ll first need to create an account with an online brokerage. After registering, you can input the number of shares you want to purchase. This will initiate a purchase order. There are two types of buy orders: limit order and market order. Limit orders specify a certain price at which you can buy a specific number of shares. Once you’ve entered all of your information, click the buy button to create a Twitter stock position.
Investing in Twitter shares is not without risk. The company is trying to raise more money through a private placement, so you need to be ready to make a big risk. Twitter is a hot topic for the IPO, but it’s worth considering if you’re interested in the company’s growth. Currently, shares are trading for around $40 apiece. Some brokers allow you to invest in fractional shares, but not all. You should consider spreading your investment dollars over a variety of companies to protect your investments.
