Shares of Twitter Inc (NYSE: TWTR) are down 10% on Friday after Elon Musk said his $44 billion agreement to take over the social network was “temporarily” on hold.
Toni Sacconaghi reacts to the news
According to Musk, he’s awaiting further insight into the number of fake accounts on Twitter before he moves ahead with the deal. He, however, confirmed in a succeeding tweet that he remains committed to buying the microblogging company.
Remember that the CEO of Tesla will have to pay $1.0 billion to Twitter in breakup fee if he walks aways from the buyout. Discussing the development on CNBC’s “Squawk Box”, Bernstein’s Toni Sacconaghi said:
This is probably a negotiation tactic on behalf of Elon Musk. The market has come down a lot. So, he’s probably using the guise of true active users as a negotiation ploy.
How does it all affect Tesla Inc?
Tesla shares are down roughly 35% versus the start of the year 2022, which, as per the senior research analyst at Bernstein, is “partially” related to Musk’s $44 billion deal to buyout Twitter.
Tesla generally trades inversely to his involvement in the deal. Part of it is that folks are worried about financing and whether he’d have to sell more shares. But also, if his energy and attention is focused on something else, that’s a distraction for Tesla investors.
Elon Musk is set to temporarily serve as the CEO of Twitter upon completion of the transaction.
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