- 31.8 billion is Twitter’s market cap.
- Down 2.3% from the start of this year.
That sounds bad, but a fast comparison.
Facebook’s market cap
430 billion dollars
Down 53% this year.
Snapchat’s market cap
16.3 billion
Down 78% this year.
Google’s market cap
1.5 trillion
Down 20% this year.
Facebook, Snapchat and Google are all tech companies, two being primarily social networks and one owning one with YouTube, which have lost way more value this year over Twitter.
The reason this is important is at this point, it’s very clear Elon Musk will not be buying Twitter, but it’s interesting to see if this is a loss for Twitter shareholders.
When Elon jumped in, buying a 9% stake and announcing plans to acquire the company, the stock jumped up, peaking at about 39 billion in market cap.
For those who bought in during that peak, which lasted for three weeks, they are currently at a loss of about 20-26% of their money depending on the day.
There is an argument Elon Musk should be sued, because him not buying Twitter will cause a massive drop in the stock price.
At this point, I believe if people were surveyed, the majority of the public and shareholders don’t see this acquisition happening, which would suggest Twitter’s market cap would reflect that.
Currently, Twitter’s market cap is actually about 1-4% higher over the week before Elon Musk purchased it.
So, should Elon Musk be sued?
Absolutely!
He clearly wasn’t serious about buying Twitter, tried backing out when he realized how he could lose his Tesla equity and made a very lame excuse to bail.
The damages on the company itself are also insane, where in a multi billion dollar company, with 7,500 employees, everything was restructured over Elon’s sense of humor.
- New products
- Promotions
- Hirings
- Raises
- Changes to tech
Anything in development was completely paused, which could cause serious long term damage and now the company is in a limbo over it.
But that being said, this is actually going to help long term Twitter shareholders.
The reason is this.
Institutional investors and Wall Street bets types are gambling on the idea the court makes Elon Musk buy Twitter for 44 billion.
That will keep Twitter stock at a floor, for potentially years with people waiting on a result to the lawsuit.
- Snapchat
There is a visible drop in tech/social stocks going on now, which Twitter isn’t part of, largely due to this hope for a buyout.
The benefit is for Twitter shareholders, it might buy them a year or two of having the stock behave semi normally, until the economy recovers and Twitter becomes one of the rare tech stocks to not have issues.
Which Elon Musk still deserves to be sued and screwed over a massive amount of people, but there’s a small bright side here.