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Opinions John O'Connell, CFA
Twitter, IncTWTRCOMMENTJun 09, 2015
$35.88
Stock price when the opinion was issued
$53.70
As of Oct 27, 2022. Market Open.
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Twitter, Inc. is the best and fastest place to see whats happening and what people are talking about all around the world. From breaking news and entertainment to sports and politics, from big events to everyday interests. If its happening anywhere, its happening first on Twitter. Twitter is where the full story unfolds with all the live commentary and where live events come to life unlike anywhere else. Twitter is available in more than 40 languages around the world. The service can be accessed at Twitter.com, on a variety of mobile devices and via SMS. Social media mentions are up 367% in the past 24h.
BUY ON WEAKNESS
He sold it over the summer and didn't get back in, because he expected shares to come back down to $35. It's one of the worst-run social media companies. He doesn't know why Elon Musk didn't negotiate for lower, but accepted the higher price. He hopes Musk cleans house--it's a horrible company. He sold it earlier and missed an opportunity.
BUY
Musk doesn't have a case. He will lose. Look at the evidence. This was a hostile takevover, after all, so he can't now play hard to get. The judge will award Twitter damages. One way or another, money will go to Twitter. Why should Twitter anything less than the share price Musk had offered? Twitter did nothing wrong; Musk showed bad faith. Whatever happens, Twitter is a buy.
BUY
There's big potential here, because it doesn't serve small businesses in America which equal 66% of digital ad spending which is going to Facebook and Google instead. This platform serves only large brands, but that's a smaller part of the market. Twitter has been miserable for investors and has seen a revolving door of CEOs. The fair price of the Elon Musk deal is $30/share. Musk will never find out the data he wants about bots because it would break privacy laws. It's at an impasse. Twitter should take the deal, but all this wrangling exposes what a mess there is in management there, and is scaring away large customers.
COMMENT
Musk pulls out of Twitter deal today It's ridiculous that Musk says that they Twitter board is withholding any information. Also, any buyer should do his due diligence. Let Musk figure this out. At the same time, the board must get this deal done for the sake of the company and its shareholders. The court is smart, will do its job and enforce the law. Musk either litigates this for a long time and ultimately buy a vastly depleted Twitter or negotiate to buy Twitter now at a lower price, but fair to both sides.
DON'T BUY
Last week, Elon Musk announced that he will layoff staff because he feels unconfident about the economy, but today he reversed himself. Shares have been bouncing. Musk has a disclosure problem and needs a lawyer to run statements by. Twitter shares sank under 2% today. He loves Elon, but has Elon ennui.
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COMMENT
If Elon Musk wants to buy Twitter, he will, and he'll do it buy raising his price offer, like $60. Either way, part of the Twitter userbase will feel alienated, whether he buys it or not. Name a platform as politically divisive as Twitter. This has to be a private company in order to increase their free cash flow.
BUY
options Last Thursday, there was a buyer of 10,000 of the October 55 calls for $3.70. That person feels the Musk impasse will somehow end. He bought the October 50 calls and sold the 55 calls to give him a little room to the downside.
Pete NajarianOwned
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2 things have to happen. They have been struggling on the execution and the roll out and enhancement of their services. Their subscriber growth has been slowing and has not been responsive and executing well on their business plan. They have interesting platforms, but they have a problem executing. It would make a lot of sense for Google (GOOGL-Q) to acquire this company.