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As a plan to save Twitter stock from the possible sell-off, the company reached an agreement with Elliott Management to buy back its stocks worth $2 billion.
Twitter Inc (NYSE: TWTR) stock closed Monday’s trading session 4.57% down at $39.47. However, some of yesterday’s losses had been recovered during the after-hours trading session as the social media stock was 1.11% up. The volatility in Twitter stock can be attributed to several market fundamentals that investors have been closely watching.
Among them was the CEO Jack Dorsey case that has been going on for months. Finally, Dorsey has a sigh of relief after the company’s board committee unanimously approved his leadership. Jack was being formally reviewed after investor activist Elliott Management Corp. and private equity firm Silver Lake requested the process.
In addition, the volatility in Twitter stock can be attributed to the United States election that significantly affects tech stocks precisely from Facebook stocks and also Twitter due to their huge online influence.
Twitter Stock and Notable Fundamentals
Twitter stock has done considerably well during the pandemic. However, in the past few days, the shares have turned red. According to metrics provided by MarketWatch, Twitter stock has gained approximately 23.15% year to date but has dropped approximately 23.02% in the past five days.
Notably, 37 credible Wall Street analysts have on average given Twitter stock a Hold rating. Thereby indicating there are several uncertainties that both analysts and investors are not sure of with TWTR shares. Twitter has a market valuation of $32.71 billion with approximately 784.63 million outstanding shares.
Having dropped below the weekly support, around $45, twitter stock is looking at a further drop in the coming days before any possible recovery. As a plan to save Twitter shares from the possible sell-off, the company reached an agreement with Elliott Management to buy back its stocks worth $2 billion. Apparently, part of the funding will come from the private firm Silver Lake.
As it is a relief for Dorsey to retain his leadership position in the company, it is also a huge relief to the crypto industry as he is a well-known supporter of Bitcoin.
Concerns had been raised on Dorsey’s ability to deliver while sharing his time with Square Inc, a mobile payment company he founded over a decade ago. However, he satisfied the committee in his delivery and will continue with his role as indicated.
“The committee expressed its confidence in management and recommended that the current structure remain in place […] The board will continue to evaluate company and management performance according to a range of factors, including the company’s operating plan and established milestones,” the filling reads.
Investors anticipate the volatility in Twitter stock to stabilize after the U.S. presidential election is over.