Musk, Twitter ‘fireworks’ could come at annual shareholder meeting: analyst

A Wall Street analyst expects “fireworks” between Tesla CEO Elon Musk and the Twitter board during the social media giant’s upcoming annual shareholder meeting.

“Twitter is holding its annual shareholders’ meeting this Wednesday and is sure to set off some more fireworks between Musk and the Twitter Board,” Wedbush Securities analyst Dan Ives wrote in a note to clients Monday night. “The elephant in the room at Twitter’s shareholder meeting will clearly be Musk’s $44 billion deal price for the company with shareholders encouraged by the board of directors to vote for this inked deal.”

ticker Safety Last Change Change %
TWTR TWITTER INC. 35.88 -2.02 -5.33%

While the Twitter board has accepted Musk’s offer of $54.20 a share to take the company private, the deal has now been put on hold as the billionaire has asked the company to show how it calculates an internal estimate that spam and fake accounts make up less than 5% of the platform’s users.

Musk, who has said the deal “cannot go any further” until transparency is given, estimates that spam and fake accounts could make up at least 20% of the platform’s users.


Twitter CEO Parag Agrawal said in a May 16 thread that it would be difficult to conduct an external assessment to determine the percentage of spam and fake accounts on the platform “given the critical need to maintain both public and private information to use”.

“Our estimate is based on multiple human assessments (in replica) of thousands of accounts, which are randomly and consistently sampled over time from *accounts we count as mDAUs*. We do this quarterly and we’ve been doing this for many years, Agrawal noted. “Every human assessment is based on Twitter rules that define spam and platform manipulation, and uses both public and private data (e.g. IP address, phone number, geolocation, client/browser signatures, what the account does when active…) a provision on each account.”

In the first quarter of 2022Twitter’s earnable daily active users (mDAU) grew 15.9% year over year to 229 million, including 39.6 million daily active users in the US and 189.4 million daily active users internationally.


Although Musk’s Twitter acquisition is currently expect to close in 2022, the stock is currently trading well below its bid.

He said earlier this month at the All In tech conference in Miami that a viable deal for Twitter at a lower price would be “not out of the question.” However, Twitter has said it has “committed to complete the transaction as soon as possible at the agreed price and terms”.

Tesla CEO Elon Musk breathes air

Tesla CEO Elon Musk speaks at the grand opening party of the Tesla Giga Texas production “Cyber ​​Rodeo” in Austin, Texas, on April 7, 2022. (Photo by SUZANNE CODEIRO/AFP via Getty Images) (SUZANNE CORDEIRO/AFP via Getty Images/Getty Images)

“If the deal is renegotiated behind closed doors, the real deal price of $54.20 in the eyes of the street will likely be significantly lower in the mid-$40s,” Ives predicts. “That said, we believe shareholders will raise this hot button issue clearly at this week’s meeting as Twitter’s board of directors firmly believes the deal is closed and subject to scrutiny. regulatory and shareholder approval.”


If Musk were to abandon the deal, he would have to pay a $1 billion rescission fee and could be subject to additional lawsuits for damages.

“We think there is currently a 60% chance that Musk is trying to use this spam account problem as a scapegoat to get out of the deal and a 40% chance that Twitter’s Board and Musk will come to a new deal price in the coming weeks. .” Ives added.

He stressed that accepting a lower offer from Musk would be a better alternative to a standalone status, citing significant market pressure for technology stocks coupled with Snap’s recent “disaster” quarter. In addition, he noted that the Twitter deal has been a “big overhang” for Tesla’s stock and Musk needs to make a quick decision on whether to walk away, renegotiate or push through the current deal as investors’ patience is running out.

ticker Safety Last Change Change %
TSLA Tesla Inc. 628.16 -46.74 -6.93%

Wedbush Securities currently has a “neutral” rating on Twitter stocks, with a 12-month price target of $54 per share, and an “outperform” rating on Tesla stock, with a 12-month price target of $1,000 per share.

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