Twitter's market capitalization evaporated 9 billion USD

Twitter's stock price continuously fell after Elon Musk determined to buy this social media platform. Some investors worry that the deal will go nowhere.

According to CNBC, Twitter's share price has fallen nearly 13% since peaking in late April. Closing the session on May 12, the ticker closed at $45.08 per share, much lower than at $54.2/share that Tesla CEO Elon Musk agreed to pay on April 27.

This caused the company's market capitalization to evaporate by $9 billion.

Twitter's board of directors approved the acquisition, but the two parties still need months to complete the transaction and there's no guarantee that the deal will succeed.

Twitter and billionaire Musk will have to pay a termination fee of $ 1 billion if they give up the $ 44 billion acquisition.

Dan Ives - an analyst at Wedbush Securities - thinks there is a 90% chance, or higher, Musk and Twitter will close the deal. But he pointed to three reasons that put pressure on stocks.

First, Twitter stock would only be valued at around $20 if the platform remained a public company. Second, Mr. Ives thinks legal issues are standing in the way of the deal.

In the end, Musk pledged Tesla stock to pay for Twitter, which can be risky.

Elon Musk is trying to address financial concerns. According to Bloomberg, the billionaire negotiated to increase equity and priority financing so that he would not have to borrow $ 6.25 billion in Tesla shares.

Meanwhile, Twitter may be looking to bolster its balance sheet, in case Musk abandons the deal due to a tech market crash due to inflationary pressures.

The company confirmed that the majority of hiring has been halted. Two top executives - Mr. Kayvon Beykpour and Mr. Bruce Falck - will leave the company.

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