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Musk offers to buy Twitter, earns another round of news

Thursday, Elon Musk again made the headlines in the media world.

He offered to buy Twitter with an unsolicited $43 billion hostile takeover bid that would take the social media giant private. So the real question is: is he serious? Perhaps. He has retained Morgan Stanley to advise him in the process, and the investment bank certainly has experience with hostile takeover bids.

However, the offer itself suggests that Musk is at least doing some trolling. Musk put $54.20 per share on the table, a clear reference to “420”, a symbol of marijuana culture. Although it offered a premium over Twitter’s current value ($45.08 at press time), the number is still well below what Twitter traded last year. Wall Street, it seems, thinks the whole thing is yet another Musk stunt. If the offer was considered credible, the stock would have surged and likely ended the day near Musk’s offer. However, Twitter (TWTR) stock fell slightly on Thursday.

Still, it’s obvious that Musk can raise funds to do just that. Tesla’s valuation alone gives it almost unlimited purchasing power. This type of situation – where a class of super-rich individuals have the ability to buy literally anything they want – has happened before, but it’s pretty rare in history (or, at at the very least, its duration is rare).

Also in financial news, unemployment insurance claims are again below 200,000, showing that the extremely tight labor market continues. Retail sales have also been quite strong and a higher than expected import price index indicates that there are still no signs of slowing inflation.


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