On Thursday, Elon Musk yet again took over front pages across the media universe.
He offered to buy Twitter with an unsolicited $43 billion hostile takeover bid which would take the social media giant private. So, the real question is: Is he serious? Maybe. He has retained Morgan Stanley to advise him in the process, and the investment bank certainly has experience with hostile takeover.
However, the offer itself suggests that Musk is doing at least some trolling. Musk put $54.20 per share on the table, a clear reference to “420,” a symbol of marijuana culture. While he did offer a premium over Twitter’s current value ($45.08 at press time), the number is still well below what Twitter traded at last year. Wall Street, it appears, think this is all yet another Musk stunt. If the bid was seen as credible, the stock would have surged and likely would have ended the day near Musk’s offer. However, Twitter’s stock (TWTR) fell a bit on Thursday.
Yet, it is apparent that Musk can raise the money to get this done. Tesla’s valuation alone gives him nearly unlimited buying power. This type of situation – where a class of super-wealthy individuals have the ability to buy literally anything they want – has happened before, but it’s quite rare in history (or, at the very least, its duration is rare).
Also in financial news, jobless claims again came in below 200,000, which shows that the super tight labor market endures. Retail sales were also quite strong, and a higher-than-expected import price index indicates that there is still no sign that inflation is slowing down.