Elon Musk turning Twitter deal into 'circus show' with hold: Wedbush

Musk says he is 'still committed' to completing the acquisition, which would take Twitter private at $54.20 per share

Elon Musk's latest tweet is not going over well with Wall Street. 

Wedbush Securities analysts Dan Ives and John Katsingris say Elon Musk's "bizarre" tweet putting his $44 billion Twitter acquisition on hold has turned the entire deal into a "circus show."

Shares sank on the news. 

Ticker Security Last Change Change %
TWTR TWITTER INC. 37.16 +1.40 +3.91%

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On Friday, Musk said his deal to take Twitter private at $54.20 per share would be paused pending details supporting calculations that spam and fake accounts represent less than 5% of the social media platform’s users. 

The Tesla chief executive has previously vowed to crack down on spam bots to improve the user experience on Twitter. The self-described "free speech absolutist" has also expressed interest in open sourcing Twitter's algorithm to increase transparency and said he would overturn former President Donald Trump's ban. 

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Ives and Katsingris said in a note to clients on Monday that Wall Street will view the implications of the tweet as either the deal falling apart, Musk negotiating for a lower deal price, or Musk walking away entirely with a $1 billion break up fee.

"If Musk does decide to still go down the deal path a clear renegotiation is likely on the table, which calls into question a number of topics (financing path, leverage of Tesla stock, prior financing partners, employee reaction)," they said. 

"Many will view this as Musk using this Twitter filing/spam accounts as a way to get out of this deal in a vastly changing market," the note continues. "The nature of Musk creating so much uncertainty in a tweet (and not a filing) is very troubling to us and the Street and now sends this whole deal into a circus show with many questions and no concrete answers as to the path of this deal going forward."

Ticker Security Last Change Change %
TSLA TESLA INC. 658.80 +30.64 +4.88%

The analysts expect the initial reaction to the tweet to be positive for Tesla shares, as now Wall Street will "view the chances of a deal as less than 50%." 

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Prior to Musk's tweet on Friday, Twitter said the deal was expected to close in 2022, subject to shareholder and regulatory approval and the satisfaction of customary closing conditions. 

A spokesperson for Twitter did not immediately return FOX Business' request for comment. Musk said in a follow-up tweet that he is "still committed" to completing the acquisition.