If there’s one story that’s dominated this news-driven market over the past two weeks, it’s the saga of Elon Musk and Twitter Inc. (NASDAQ: TWTR).
I wrote about this when the initial news broke, but so much has happened since then that I think it’s important to discuss what’s going on.
Pretty much everything Musk does causes traders to pay attention…
But the Twitter move — an attempt to take over one of the most important tech companies on the planet — is catching the entire world’s attention.
So … Why should you care?
Because you can’t afford to fall behind on the news in this market. If you do, you could miss a huge trade (or ruin one you’re already in).
And you may be wondering … where do I get my news? That’s easy…
I use StocksToTrade’s Breaking News Chat because it’s FAST and RELIABLE! Click here now to try it out for yourself.
Bottom line: The outcome of the Musk-Twitter saga could potentially change the face of a massive company and send ripples throughout the entire stock market.
Let’s break down what’s happened since we talked about this last…
Early Timeline of Events
Before we get into what happened last week, here’s a brief timeline of events for anyone who needs a refresher…
April 4 — Musk announces he’s purchased a surprise 9.2% stake in Twitter. The stock surges 30% on the news…
April 5 — Musk says he’s taking a board seat. TWTR stock moves up another 7%…
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April 6 — Musk reveals that he paid an average price of $36.13 per share, meaning he’s already profited over $1 billion since announcing his stake two days prior…
This story has gotten a lot crazier since Musk announced his initial stake. Let’s go over the major changes in the story that happened last week…
Musk Offers to Buy Twitter Outright
On Thursday, April 14, Musk made an offer to buy Twitter outright for $54.20 per share (a whopping $43 billion).
In typical Elon fashion, he tweeted his offer to his 80 million+ followers:
I made an offer https://t.co/VvreuPMeLu
— Elon Musk (@elonmusk) April 14, 2022
In a letter to Twitter’s chairman, Musk wrote “I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy…Twitter has extraordinary potential. I will unlock it.”
Twitter Board Takes ‘Poison Pill’
The higher-ups at Twitter were quick to respond…
The next day, April 15, Twitter’s board of directors voted unanimously to adopt a ‘poison pill’ strategy.
The poison pill allows current Twitter shareholders to buy more shares at a discount. This would effectively dilute Musk’s stake in the company and make it more challenging for him to swing a majority of shareholder votes in favor of his takeover bid.
Musk Hints at Possible Tender Offer
On Saturday, April 16, Musk sent a cryptic tweet that could be hinting at his next move in this wild game of economic chess…
🎶 Love Me Tender 🎶
— Elon Musk (@elonmusk) April 16, 2022
Some may see this as a simple nod to Elvis Presley.
But keen observers of Musk’s tweets have pointed out that he could be implying the possibility of making a tender offer for Twitter.
A tender offer is when an investor asks all shareholders to tender their stock for sale during a certain time and at a specific price.
And If anyone could pull this off, it’s Musk. The guy has a superpower when it comes to swaying the masses online.
Final Thoughts
I haven’t traded TWTR yet, but if I do I’ll probably change up my usual style and buy calls. The chart is 15% off its highs now so I wouldn’t be buying puts here.
Regardless of whether you trade it, you should pay attention to how this saga unfolds.
If Elon Musk succeeds in a hostile takeover of Twitter, it would be a piece of stock market history … and many incredible trading opportunities could arise because of it.
