Home Investing Expert on Musk’s Twitter deal: there’s a 35% chance now

Expert on Musk’s Twitter deal: there’s a 35% chance now


Tesla (NASDAQ: TSLA) CEO Elon Musk’s chances of closing a deal for Twitter (NYSE: TWTR) are now below 50%, says Gene Munster, the managing partner at research-driven fund manager Loup.

His comments come on the day Musk filed another letter terminating his Twitter bid, put in at $44 billion in April but which he put on hold in May citing bot and spam issues.

According to Munster, it’s clear Musk ‘doesn’t want to buy Twitter.”

35% chance Musk buys Twitter

The fund manager believes this to be the case given the Tesla chief’s reference to comments by Peiter Zatko, a former Twitter exec. Musk’s legal team sent subpoenas to Zatko, aka “Mudge” and cited his comments in the second notice seeking to call off the deal.

Per the notice and as cited from the whistleblower, Twitter “under reported” on the contentious issue of number of bots.

“This legal move was to be expected, and underscores Musk doesn’t want to buy Twitter,” Munster noted.

So what are the chances of Musk completing this deal? According to Munster, it was 50/50 before the Zatko comments. With the new notice, the chances are now about 35%, he tweeted on Tuesday.

As for the “will he be forced to buy Twitter” guessing game; I now think there is a 35% chance he buys it. Before the comments from Zatko, I had the odds at 50/50.

— Gene Munster (@munster_gene) August 30, 2022

On what this might mean for the Tesla stock, he notes:

“Either way, Tesla is in a good place. Long term $TSLA stock will move on deliveries and gross margin. I believe they can grow that at 40% plus over the next 5-10 years. The energy bill is a material positive for Tesla on both autos and solar.”

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