Elon Musk is a pioneer in manned space travel. He’s also done all these things:

1. MadeAn American penis joke. Congressman.
2. Suggested that concern about a potentially lethal disease, Covid-19, was “dumb.”
3. By initiating a hostile takeover Filing the wrongSEC document which instead stated that he wasn’tStart a hostile takeover
4. MadeThis is a joke about Bill Gates.
5. Suggested a takeover of Coca-Cola to “put the cocaine back in.”
6. ComparableA Canadian prime minister for Hitler.

You Elon! You can be serious one moment, but not the next. He’s guy who likes to have fun—and we should all have more fun, he told us as recently as Wednesday at 9:53 p.m.

But some people seemingly don’t like fun. Or at least not the uncertain, Musk-type fun, and their skepticism about him and whether he’ll seriously finish his $44 billion deal Twitter to be privatizedThe stock is still in his hands. That’s why there remains a persistently large gap between his board-approved offer ($54.20 a share) and Twitter’s current share price ($49.11 at Thursday’s close). “The market sees a possible concern as to his mercurial nature,” says David P. Brown, a University of Wisconsin professor who studies securities markets. “Even if he is doing his due diligence.”

As any M&A concludes, it’s pretty common to see a spread between an offer price and a stock price. The process of closing a deal can be complicated. Sometimes they don’t go through. They usually do. But sometimes, things go wrong.

There’s an easy gauge for investor confidence in a transaction’s successful conclusion: How big is the gap between the offer and stock prices as a deal winds to completion? Deals where the acquirer is well-known and trusted will often have a spread of 2% to 3.3%. “Like when Warren Buffett and Berkshire Hathaway close on something,” says David Stowell, a finance professor at Northwestern University’s Kellogg School of Management.

After closing at about 9%, Thursday saw a spread of as high as 11% between Musk’s stock price and Twitter stock. Investors are saying they think the Musk-Twitter deal is three to four times more uncertain than your average piece of M&A. And given who is doing the A in this case—Musk, that goof—such trepidation may not be wholly unreasonable. Is he really joking about Coke investing? Yes, probably? But the market thrives on clarity, less so on joke-y ambiguity, and once you make it a defining characteristic of yours, the market has trouble weighing what’s going on.)

E

verything still points to Musk being able to successfully conclude the deal—publicly committed bank financing, board approval—and you’ll be hard pressed to find someone on Wall Street or in …read more

Source:: Social Media Explorer

Author: Aaron