Elon Musk May Be FORCED To Buy Twitter.. Here's Why
Elon Musk May Be FORCED To Buy Twitter.. Here's Why
Welcome back to Tech Recall. Here’s some news for you about Elon Musk. Hedge funds including David Einhorn’s Greenlight Capital and Pentwater Capital Management are wagering that Elon Musk won’t get his way this time. Musk, the world’s richest person and a renowned sparring partner with regulators over securities laws, is trying to back out of his agreement to buy Twitter Inc. for $44 billion. Several hedge funds have purchased stock, options, or bonds -- speculating that Musk will lose a trial scheduled to begin Oct. 17 in Delaware Chancery Court.
The law is clear, Einhorn told investors in a letter last month. And “if it were anyone other than Musk, we would handicap the odds of the buyer wiggling out of the deal to be much less than 5%,” he said. That could be a bright spot for a type of hedge fund having a tough year. So-called event-driven funds, which often bet on mergers and acquisitions, are down 4% on average, according to research firm PivotalPath. The money manager, whose firm bought Twitter shares at an average price of $37.24, dismissed speculation that the court would rule in Musk’s favor to avoid embarrassment should the man commanding a net worth of more than $250 billion simply choose to ignore its decision. An attorney for Musk and a Twitter spokesperson declined to comment. Pentwater, led by Matthew Halbower, bought more than 18 million Twitter shares in the second quarter, making his firm the seventh-biggest owner with a 2.4% stake. He told CNBC in July that he expected Musk, who offered to buy Twitter for $54.20 a share, to be forced to complete the purchase. In related news, A Tesla Megapack battery caught fire this morning at the local utility company PG&E’s Elkhorn Battery Storage facility in Monterey County, California, as reported by local news stations KSBW Action News 8 and KRON4. The fire started at around 1:30 AM this morning, according to PG&E’s operations comm manager, Jeff Smith. No injuries were reported at the scene.
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