Twitter stock won’t ‘fall a whole lot’ if Musk walks away

Twitter Inc (NYSE: TWTR) shares have come down sharply ever since Elon Musk said the takeover deal was “temporarily on hold”, inciting Ryan Jacob to consider loading up on the stock.

Jacob’s remarks on CNBC’s ‘TechCheck’

The Chairman and CEO of Jacob Asset Management says TWTR is underappreciated and the risk-to-reward ratio following the recent sell-off warrants adding to it. On CNBC’s “TechCheck”, he said:

I always felt that Twitter was underappreciated. Yes, they’ve been unsuccessful in monetizing their subscriber base well. And above $50, risk-reward wasn’t that positive. But now that the stock is in the mid-30, risk-reward is steering the other way.

Late last month, the social media company reported better-than-expected subscriber growth and income for the fiscal first quarter. Still, the stock has tanked nearly 30% in one month.

Twitter stock has been de-risked

Despite recent events, Jacob is convinced Elon Musk will ultimately takeover Twitter. However, he doesn’t expect a massive hit to the stock even if the $44 billion deal falls apart.

We’re considering adding to our Twitter position. I think the stock is well more than discounted where it is today. I’m not sure it’ll fall a whole lot from current levels even if Elon Musk were to walk away.

Earlier this week, a Bloomberg report said Twitter told its employees that the buyout deal was “NOT” on hold; it’s proceeding as planned and the company will not renegotiate the price with Elon Musk.

The post Twitter stock won’t ‘fall a whole lot’ if Musk walks away appeared first on Invezz.

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