Wall Street financial institution Wedbush said it is increasingly likely that the world’s richest man will eventually buy social platform Twitter. After Elon Musk, CEO of the world’s richest man, Tesla, once again dumped nearly $7 billion worth of Tesla (TSLA.US) shares, Wall Street financial institution Wedbush said it is increasingly likely that the world’s richest man will eventually buy social platform Twitter (TWTR.US), WisdomTree App learned.
Interestingly, Musk had previously promised in April this year that he would no longer dump shares in the electric car maker.
Wedbush tech stock analyst Dan Ives noted that the sale, which was completed late Tuesday, raises the likelihood that the deal will finally fall into place, perhaps in time for a court hearing scheduled to begin in October. Ives also raised his price target on Twitter (TWTR.US) to $50 from $30 to reflect the “increased likelihood that the deal will be finalized,” he said, stressing that the move was interpreted by Wall Street as Musk preparing cash for the acquisition.
Dan Ives is understood to have previously proposed four scenarios for a final settlement between Musk and Twitter, and regardless of which scenario holds, he believes Musk will provide at least $5 billion to $10 billion in “settlement funds” to Twitter.
In a report to clients, Ives wrote: “Wall Street and virtually all legal experts agree that Twitter has a ‘strong upper hand’ in the Delaware courtroom ‘showdown’ this fall. This fiasco and nightmare for Musk has been going on for months since April of this year.”
Ives added, however, that there will likely be a “fierce court battle” with the number of fake accounts and spam being the “top priority,” but that ultimately the Twitter board will stick to the agreed-upon price and force Musk to complete the deal. Ives said Musk’s countersuit would be seen as “background noise.
Earlier this month, media reports said Twitter was pursuing a series of legal claims against Musk in an attempt to get him to honor his agreement to buy the company for $44 billion.
Twitter shares rose more than 4 percent at one point in U.S. pre-market trading, rising 3.32 percent to $44.25 at press time. The acquisition price is $54.20 per share, worth a total of about $44 billion.
