“It May Trade As Low As $24”: Wall Street Reacts To Musk’s Pulled Twitter Bid

Twitter shares are plunging as much as 9% to $33.48 in premarket trading on Monday before paring losses to trade down 5%, with analyst consensus emerging that the price will likely drop below $30 if Elon Musk’s takeover offer falls through. The billionaire is trying to end his agreement to buy the company for $44 billion and take it private, alleging that it misrepresented user data. Courtesy of Bloomberg, here is a snapshot of several analyst views on where the price could drop.

MKM Partners  

“TWTR shares would likely find support around $24 to $26 per share, if investors start to assign a greater probability that this merger will not happen”

Bloomberg Intelligence

Musk’s letter fails to make a compelling case to end the contract

“Given Twitter’s advantage, we estimate Musk would probably need to pay $5-$8 billion to settle and walk away”

Jefferies (hold, PT $40)

In the absence of a deal, wouldn’t be surprised to see the stock find a floor at $23.50

Jefferies’ scenario would bring TWTR near to its closing low of $22 during the early days of the pandemic

Musk’s intentions to terminate the merger are more based on the recent market sell-off than the percentage of fake accounts on Twitter or its failure to comply with his requests, according to analysts led by Brent Thill

“Attention turns to core fundamentals which we believe have been rattled by this process and headwinds facing the online ad industry”

Truist Securities (hold, PT $50)  

“If Twitter fails to bring this acquisition to completion, we would see the base case for the shares as trading in the high $20s”

A scenario where Musk terminates the transaction and walks away unscathed is “highly unlikely”

Baird Equity Research (neutral, PT $33)

Revised price target reflects a 90% probability of no takeover, but with some compensation. Baird previously had a PT of $45: Bloomberg data

Expect Twitter to receive at least some compensation or a revised offer, although a failed takeover would leave the company in a less desirable position