By
Svetlana Soroka
April 18th, 2024
Pentwater purchased a 2.44% stake in Twitter in Q2 2022, which equals 18.1 million shares.
During the second quarter, the capital market company Pentwater Capital Management LP became a major stakeholder in Twitter (NYSE: TWTR). With its recent acquisition, the hedge fund is one of the big winners in Musk’s buyout deal with the social media service providers. The latest development on the agreement between Musk and Twitter indicates that the deal could happen anytime soon. Also, many investors are about to amass gains as Elon Musk renews the bid to buy Twitter at the original price.
According to a regulatory filing on the 3rd of October, the Tesla CEO is ready to pay the initially proposed price of $54.20 per share for Twitter. Meanwhile, the blue app also confirmed the receipt of a letter of intent from the businessman. Musk has really put an end to the conflict between the two parties, which was gradually escalating. Notably, Twitter and Musk were to meet in court in a few weeks as the company moved to force the billionaire to continue with the takeover bid. Many analysts have predicted possible outcomes ahead of the court date on the 17th of this month. Dan Ives of Wedbush Securities believes that Twitter has a better case over the Tesla Chief executive. The analyst tagged Musk’s chances of winning the legal battle as “highly unlikely.” However, after news of the bid renewal, Ives wrote:
“Being forced to do the deal after a long and ugly court battle in Delaware was not an ideal scenario and instead accepting this path and moving forward with the deal will save a massive legal headache.”
Pentwater Set to Cash Out as Musk Moves Forward in Acquiring Twitter
Pentwater purchased a 2.44% stake in Twitter in Q2 2022, which equals 18.1 million shares for about $725 million. At the time, TWTR was down due to different degrading comments from the Tesla CEO. He talked about the company’s bots and spam challenges and challenges, adding that Twitter has more bots than disclosed. As expected, Musk’s statements have a powerful influence on stocks and buyers’ decisions. Twitter began to plunge due to the tweets about bots and spam. On the 11th of July, the social media service provider dipped as low as $32.55. Pentwater evidently saw an opportunity to invest in Twitter, and the capital market company took it. Now that Musk has agreed to pay Twitter at$54.20 per share, Pentwater is about to see its stake rise to $980 million.
In reaction to Musk’s SEC filing on his Twitter offer, the founder of Pentwater, Matthew Halbowe, commented:
“In my 23-year career doing this, I’ve never seen an acquirer walk away without any reason. The probability of him being able to walk away was very low.”
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