Twitter shares in limelight after Musk's bid

Deal In Progress

- Musk's bid for stake acquisition will close later this year

- It's subject to acceptance by Twitter shareholders

- It also needs SEC approval

- As per new SEC filing, Musk would potentially owe Twitter $1 bn if his financing falls through

- Similarly, Twitter will owe Musk $1 bn if the shareholders reject the offer or find a more attractive buyer

Mumbai: Elon Musk's bid for buying Twitter sees a sudden spark of interest among investors. Vested Finance, an investment platform, has seen a sudden spark of interest amongst investors on its platform. The stock has jumped from Rank 570 to Rank 4, gaining position amongst the top 5 stocks.

Elon Musk's tweets have always grabbed more headlines than other news about his innovation, but the whole world is stunned now that Musk's bid of buying Twitter has been accepted. This has led to a sudden rise in interest of Indian Investors wanting to invest in Twitter stocks.

Talking to Bizz Buzz, Viram Shah, co-founder & CEO, Vested Finance, says: "On our platform, we have noticed some interesting trends that coincided with the developments that set into motion to enable Elon Musk acquire Twitter."

On April 4 (when Elon Musk announced he will be buying 9.2 per cent of Twitter shares), on April 15 when he offered to buy Twitter, and on April 25 when the bid was accepted, there was more than 100 per cent rise in net volume of transactions of Twitter shares on the Vested platform. This shows a definite interest of Indian investors in Twitter stock in light of these developments.

Also, over all till April 25, 3.37 per cent of net volume (of total transactions on the Vested platform) was in Twitter shares compared to only 0.13 per cent in March. On April 25, after Twitter accepted the bid, this number went up to 6.68 per cent.

In terms of popularity, Twitter was among the top 5 stocks on the Vested platform on the 18th and 19th April. Post 19th April, it fell out of the Top-100 in ranking and it was back to Rank 4 between April 22 and April 25. Last month, it was not in the top 100.

When looking at the Twitter stock, one needs to understand that unlike other social media giants like Google or Meta, Twitter has only one platform for engagement. If wecompare Meta with Twitter, we are comparing apples to oranges. Meta operates with an MAU of over 3.5

billion accounts, while Twitter operates with just over 250 million accounts. So, both can't be compared. They are different platforms, different media.

Apart from this, there is a concern over monetization too. Unlike Meta, Twitter is not profitable at a net level.

Social media platforms can drive the narrative. Now since Twitter has accepted Elon Musk's bid, it will be interesting to see how Musk addresses two issues he raised initially – a) freedom of speech (as he mentioned that there's a lack of it on Twitter), and b) algorithm (Elon Musk has suggested that he will open-source Twitter's algorithms). However, the opinion is divided on whether this will have the intended consequence, as making the code open source may expose it to potential vulnerabilities.

All said and done, the deal will most probably close later this year. However, it is subject to acceptance by Twitter shareholders. Most importantly, it needs approval by the Securities and Exchange Commission (SEC). According to a new SEC filing, Musk would potentially owe Twitter $1 billion if his financing falls through. On the other hand, Twitter will owe Musk $1 billion if the shareholders reject the offer and/or find a more attractive buyer.