Elon Musk’s $44 billion deal to buy Twitter is expected to officially close Friday morning, and analysts at Wedbush are, to put it mildly, not expecting the Tesla CEO to deliver growth.
“The easy part for Musk was buying Twitter, the difficult part and Everest-like uphill battle looking ahead will be fixing this troubled asset,” Wedbush analysts wrote in a note Thursday. “The $44 billion price tag for Twitter will go down as one of the most overpaid tech acquisitions in the history of M&A deals on the Street in our opinion. With fair value that we would peg at roughly $25 billion, Musk buying Twitter remains a major head scratcher that ultimately he could not get out of once the Delaware Courts got involved.
Ultimately, Wedbush’s price target is precisely the price Musk paid: $54.20 per share, no more no less. The firm also maintained a rating of Neutral.
READ: Elon Musk visits Twitter headquarters as buyout nears completion
The firm questioned what changes Musk would make to the platform, something which has been the subject of much musing from Musk on Twitter himself and speculation from others. Reports have suggested that Musk plans to cut 75% of Twitter’s employees, although the social media company moved quickly to dismiss this.
“Once Musk takes over Twitter on Friday major questions will remain around changes to the platform, monetization efforts, headcount cuts on the horizon, and the long term strategy around the ‘X’ App,” Wedbush analysts said, referring to Musk’s floated idea of an “app for everything” that could resemble China’s WeChat, according to media reports.
For the moment, Musk has signaled readiness to take on such challenges by carrying a porcelain sink into Twitter’s San Francisco headquarters and changing his Twitter bio to read, “Chief Twit.”
Entering Twitter HQ – let that sink in! pic.twitter.com/D68z4K2wq7
— Elon Musk (@elonmusk) October 26, 2022
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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