Elon Musk $44 Billion Deal for Twitter – ODP’s Reed Phillips Quoted

Twitter Is Stuck With Musk’s $44 Billion Deal

Source: Barron’s

…But just because they were interested in Twitter doesn’t mean private equity would invest in it, industry sources said. Twitter was unprofitable in 2021, reporting $221 million in losses mainly tied to the settlement of a shareholder lawsuit. For the quarter ended Dec. 31, Twitter produced $181.7 million in income, or 21 cents a diluted share. That rose to 33 cents a share on an adjusted basis.

Reed Phillips, CEO of Oaklins DeSilva+Phillips, a media investment bank, also doesn’t think anyone will pay the premium Musk is offering for Twitter. Musk’s $54.20-a-share bid represents a 38% premium to Twitter’s closing stock price of $39.31 on April 1, which was the day before Musk revealed his near-9% stake in the social media company.

“Musk believes Twitter has been poorly managed and has convinced investors [of this], partly by putting his own money where his mouth is, that he can quickly make it profitable. Based on his track record, that is probably a good bet,” Phillips said.

Twitter is scheduled to report first-quarter results on Thursday. It expects total revenue of between $1.17 billion and $1.27 billion and GAAP operating losses of between $175 million to $225 million, according to a Feb. 10 statement.

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