Elon Musk is Out, But Should You Be In Twitter Stock?

Social networking platform Twitter (NYSE: TWTR) The stock has had a tumultuous year since Tesla (NASDAQ: TSLA ) CEO Elon Musk pulled his $54.20 per share, $44 billion takeover offer. There is a lot of speculation that Musk could still be interested in the social media giant, but at a cheaper price. The company has sued Musk over the withdrawn takeover offer which is scheduled for a five-day trial starting on October 17, 2022. Elon Musk has also countersued Twitter. Twitter claims to have spent $33 million in transaction costs and is still scheduled to vote on shareholders on September 13, 2022. Musk’s offer was able to keep Twitter’s share price up and relatively unscathed only (-2.5%) during the year. Meanwhile, peers like Snap (NASDAQ: SNAP ) and Pinterest (NASDAQ: PINS ) saw their shares tumble (-78%) and (-46%), respectively, in the tech bear market. Twitter’s Q2 2022 earnings report was mostly negative, but the positive balance was a 16.6% increase in monetizable daily active user (mDAU) to 237.8 million . Due to the pending acquisition of Twitter by an affiliate of Elon Musk, the company has declined to hold an earnings conference call, a shareholder letter or provide guidance. Cautious investors may consider opportunistic pullbacks to gain exposure on this popular social media platform.

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Publication of results for the fourth quarter of the 2021 financial year

On July 22, 2022, Twitter released its fiscal second quarter 2022 results for the quarter ending June 2022. The company reported an adjusted earnings per share (EPS) loss of (-0 $.08) excluding non-recurring items compared to consensus analyst estimates. for a profit of $0.14, missing estimates by ($-0.22). Revenue fell (-1.2%) year-over-year (YOY) to $1.18 billion, missing analyst estimates for $1.34 billion. Average monetizable daily active users (mDAU) increased 16.6% year-over-year to 237.8 million. Average US mDAU increased 14.2% to 41.5 million and international mDAU increased 17% to 196.3 million.

Company statement

There was no conference call or forwarding guidance. The company issued a statement: “As announced on April 25, 2022, we entered into a merger agreement, pursuant to which Twitter agreed to be acquired by an entity wholly owned by Elon Musk, for $54.20 per share in cash. transaction, Twitter will become a private company. On July 8, 2022, representatives of Mr. Musk delivered a notice that they intended to terminate the merger agreement. Twitter believes that the alleged Mr. Musk’s termination is invalid and unlawful, and the merger agreement remains in effect.. On July 12, 2022, Twitter initiated litigation against Mr. Musk and certain of its affiliates to specifically perform their obligations under the merger agreement and to consummate the closing in accordance with the terms of the merger agreement. On July 19, 2022, Twitter’s request for an expedited trial was granted and the trial is scheduled for October 2022. The adoption of the merger agreement by our stockholders is l ‘the only condition of approval or regulation remaining to complete the merger under the merger agreement. The exact timing of the completion of the merger, if at all, cannot be predicted because the merger is subject to ongoing litigation, the adoption of the merger agreement by our stockholders and the satisfaction of the closing conditions remaining”.

Forced acquisition

Elon Musk terminated his acquisition deal with Twitter mainly on the grounds that the company was lax in cracking down on fake accounts. However, Twitters claims that Musk had no interest in understanding Twitter’s sampling process as provided to him. The company claims there was no material misrepresentation to Musk. Twitter will begin an accelerated trial on October 17, 2022 to force Musk to stick with the original merger agreement at $54.20 per share. The investor may be buying the rumor to sell the news.

Elon Musk is out, but should you be on Twitter?

TWTR Opportunistic Retracement Levels

Using the rifle charts on the weekly and daily timeframes provides an accurate view of the landscape playing field for TWTR stock. The weekly rifle chart bottomed at the $32.42 Fibonacci (fib) level. The 5-period weekly moving average (MA) is rising to $38.85 towards the 15-period MA at $41.17. The 200 period weekly MA is at $42.61 and the 50 period MA is at $45.73. The weekly lower Bollinger Bands (BB) is at $30.59 and the upper BB is at $51.86. The low of the weekly market structure (MSL) was activated on the break up to $39.05. The daily rifle chart triggered a bullish breakout with a rising 5-period MA at $40.19, followed by support from the 15-period MA at 38.35 overlaying the 50-period MA at $38.45. The 200 period daily MA resistance is at $42.61. The weekly stochastic triggered a mini bullish band higher through the 90 band. Cautious investors can watch for opportunistic pullbacks at $39.25 fib, $37.33, $35.80 fib, $35.05 fib, $34.00 fib, $32.42 fib, $31.30 and the level of $29.76 fib. The upward trajectories range from $45.56 fib to $58.10 fib level.

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