The most overpaid technology acquisitions in history? List starts with Elon Musk’s $44 billion Twitter purchase, analyst says

0

The “will-they-won’t-they-want” saga between Twitter (TWTR) and Elon Musk seems on the verge of finally being resolved.

After a judge ruled earlier this month that the deal must be done by October 28 or a trial would take place, Musk appears to have chosen not to spend a day in court after widely thought he would probably lose the case.

Musk has now signaled that he is ready to complete the deal which will see him shell out $44 billion to buy Twitter, as previously agreed between the two parties.

With Cinderella “finally getting the glass slipper that’s right for her,” Wedbush analyst Daniel Ives thinks the new shoes are on the expensive side.

“The $44 billion price tag for Twitter will, in our view, be one of the most overpaid technology acquisitions in the history of high street M&A deals,” the analyst said. “With a fair value we would peg at around $25 billion, Musk buying Twitter remains a major headache that he ultimately couldn’t get out of once the Delaware courts got involved.”

Musk has yet to find the money for the deal, which Ives believes he secured by selling some of his Tesla stock this week, a move that should finally remove the “overhang” on Tesla for his frustrated investors.

Buying the microblogging platform is the easy part, Ives says. A bigger problem is the “hard battle at Everest” needed to fix the “struggling asset”.

What needs to be done? Reports have recently surfaced that Musk has said he intends to cut his workforce by up to 75%. On a less blunt note, Ives thinks big questions will remain around “platform changes, monetization efforts, and long-term strategy around the ‘X’ app,” once Musk takes over. Twitter Friday.

Overall, Ives maintains a neutral rating on the stock, while its price target is the trade price of $54.20, suggesting the stock will remain range-bound for the foreseeable future. (To see Ives’ track record, Click here)

To find great stock trading ideas at attractive valuations, visit TipRanks’ Best Stocks to Buy, a recently launched tool that brings together all of TipRanks’ stock information.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The Content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

Share.

Comments are closed.