Tesla bull and Wedbush analyst Dan Ives said that Elon Musk’s sale of his automaker’s stock to fund the Twitter takeover is like “giving away caviar to buy a $2 slice of pizza.”
Ives, who has been a skeptic of Musk’s decision to buy Twitter due to overhand on Tesla stock, was quick to continue this narrative during an interview with the BBC yesterday. Musk, who did a 180-degree spin yesterday and decided to avoid a lengthy and much-publicized court case involving the Twitter buyout, ultimately decided to move forward with the purchase of the social media platform for the original price of $54.20 per share.
“Writing was on the wall he could not win in Delaware and this saves both sides a long and ugly court battle ahead,” Ives said yesterday after Twitter stock was halted following rumors that Musk would ultimately move forward with the deal. “Musk will now own the Twitter platform as an end to this saga and soap opera that began in April.”
Musk confirmed last evening that he would move forward with the purchase, indicating Twitter would help launch X, the company that was established to fund the buyout.
Ives’ point comes from the potential of Tesla stock (NASDAQ: TSLA), which has had high regard in Ives’ eyes and has for some time. Ives holds a $360 price target on Tesla stock while issuing a ‘Buy’ rating on the stock, which was reiterated on October 1 following the automaker’s lackluster Q3 delivery figures, which were a company record but missed analyst expectations. Ives also holds a $54.20 price target on Twitter stock, based on Musk’s offer, which he reiterated on October 3. Ives has a ‘Hold’ rating on Twitter shares.
Twitter shares (NYSE: TWTR) surged to $52 to per share, an over 22 percent rise, after rumors of Musk’s buyout were established throughout media reports. The stock was halted for several hours and eventually resumed trading.
Tesla shares, on the other hand, rebounded 2 percent after a brutal Monday session that saw losses of around 9 percent. After Twitter shares were halted and reports circulated of Musk’s purchase, Tesla stock dropped over 5 percent from Tuesday’s highs before recovering and finishing up 2.9 percent.
Disclosure: Joey Klender is a TSLA Shareholder but does not own TWTR shares.
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