(Bloomberg) — Investors currently don’t think much of Elon Musk’s offer to buy Twitter Inc, but the growing army of day traders and Tesla Inc. fans could change all that.
So far, institutional investors are underwhelmed. Musk offered Twitter’s board $54.20 per share in cash, valuing Twitter at about $43 billion. The social media company’s shares erased earlier gains and fell as much as 1.4% on the day to about $45.21. Not a good sign.
One shareholder is getting vocal. Saudi Prince Alwaleed bin Talal said he rejects Musk’s offer as not coming “close to the intrinsic value” of Twitter “given its growth prospects.”
But Twitter was also the most-purchased stock on Fidelity’s platform Thursday, with its ticker trending on Reddit’s WallStreetBets and Stocktwits. When Musk disclosed his 9% stake in Twitter last week, retail investors helped fuel record trading volume on Monday for Twitter and have pushed $423.9 million into the stock since the disclosure.
It’s hard to tell whether Musk will call on retail investors to help support his bid. Musk has made it clear — as much as it can be — that $54.20 is his final price. “I am not playing the back-and-forth game,” he said in a U.S. securities filing revealing his bid.
That could mean if Twitter’s board rejects his offer, he might consider going hostile, and ask shareholders directly if they want to accept his bid. If he gets enough support — 51% — then Musk can do whatever he wants, in theory.
Musk has a history of moving markets via Twitter, where he’s one of the biggest personalities with over 80 million followers. In January 2021, after Musk professed his love for Etsy Inc., the company’s value jumped by more than $2 billion. One the same day, the one word “Gamestonk!!” helped send shares in GameStop Corp. up 92%.
Read More: A Brief History of Elon Musk’s Recent Market-Moving Tweets
If Musk chooses, he may be able to turn Twitter into a so-called meme stock. Last year firms like AMC Entertainment Holdings Inc. and GameStop exploded, after retail investors flooded social media forums, causing shares to go haywire.
And Twitter is arguably the meme-ish of all stocks. It’s where most of them are made.
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