Re:Twitter board adopts poison pill after Musk’s $43B bid to...
by bscphil on Friday April 15, 2022 @10:10PM
(#31048559)
Correct, and furthermore, Musk's offer was made after he announced his stake in the company, which is what caused the price of the stock to rise. Him offering to buy it outright barely affected the share price:
> The social media company’s shares were little changed at $45.81 in New York on Thursday, a sign there’s skepticism that one of the platform’s most outspoken users will succeed in his takeover attempt. -- Bloomberg
So while the news of a major stakeholder with the power to join the board and affect how things are run did cause a significant blip in Twitter's stock price, the attempt to buy it outright doesn't seem to have affected things much. Even if we (incorrectly) assumed that all of the rise from ~$40 to ~$45 is associated with the possibility of Musk paying $54 a share, that suggests the market assigns only a ~36% chance of the deal going through.
Re:Twitter board adopts poison pill after Musk’s $43B bid to...
by stupandaus on Friday April 15, 2022 @09:37PM
(#31048278)
yes, there are many factors that can influence a valuation. and in different price ranges, different factors will have different weights. since the price is not $0 today and is relatively close to the potential transaction price, the % likelihood of a transaction has much more influence.
Re:Twitter board adopts poison pill after Musk’s $43B bid to...
by ironSkillet on Friday April 15, 2022 @09:59PM
(#31048464)
I think the comment is more about the fact that your calculation of 83% doesn't make sense. However, I agree with you that likelihood of the deal going through is definitely impacting the short term valuation.
This assumes the price without the transactions goes to $0.00!