Twitter Stock Advances on Possible Deal With Elon Musk

Twitter Inc. shares climbed in premarket trading, buoyed by expectations that the company could complete a deal to sell itself to

Elon Musk

as soon as Monday.

Shares of the social-media company advanced 4.8% to $51.28 in premarket trading, pointing to possible gains when the market opens Monday. Twitter’s stock has swung wildly this month as investors have followed the twists and turns of Mr. Musk’s bid to buy the San Francisco-based company.

The Wall Street Journal reported that the two sides met Sunday to discuss the proposal from Mr. Musk, the chief executive of

Tesla Inc.

TSLA -2.36%

and one of Twitter’s most popular and vocal users. The parties worked through the night on a deal that would be valued at $54.20 a share. The sides are in advanced discussions and could finalize a deal Monday, the Journal reported.

The advanced talks mark a dramatic turnaround from earlier this month, when Twitter was expected to rebuff Mr. Musk’s offer. That changed after Mr. Musk said he had lined up $46.5 billion to fund his bid for the company.

Mr. Musk had said from the start that his $54.20-a-share offer is his “best and final.” worked through the night on a deal that would be valued at $54.20 a share. The sides are in advanced discussions and could finalize a deal Monday, the Journal reported.

With its $51.28 premarket price, the stock is trading about 5% below Mr. Musk’s proposed price. If Twitter shares maintain their premarket gains when the U.S. stock market opens Monday, it would bring the price closer to Mr. Musk’s proposed price, a sign that shareholders are growing more optimistic that a deal will happen.

Since Mr. Musk disclosed a roughly 9% stake in the company in early April, Twitter shares have climbed 24%, based on Friday’s closing price. That has pushed Twitter higher on a year-to-date basis, outpacing other technology companies and the broader market. The S&P 500 is down 10% for the year.

As Elon Musk attempts to buy Twitter, WSJ looks back at Twitter’s past suitors, like Salesforce, Disney and Alphabet. Tech reporter Tim Higgins explains why those past conversations fell through and what’s different this time. Illustration: Nikki Walker

Twitter is expected to report first-quarter earnings Thursday. Analysts expect the company to report a boost in revenue, but a decline in net income compared with the year before, FactSet data show.

Mr. Musk has indicated he wants to make substantial changes to Twitter, saying the company should shift toward a business model that relies more on subscriptions. He has also said Twitter should soften its stance on content moderation.

Mr. Musk’s bid for the platform has been popular among individual investors, who have poured a net $747 million into the stock in April, according to Vanda Research data through Friday. That is nearly 10 times the average monthly purchase by the group in 2021. As CEO of Tesla, Mr. Musk has built a loyal following of retail investors. Shares of the electric-car maker edged down 2.1% in premarket trading Monday.

Write to Caitlin McCabe at caitlin.mccabe@wsj.com

Source link