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Twitter Dividends and Buybacks
Dividend criteria checks 0/6
Key information
n/a
Dividend yield
6.0%
Buyback Yield
| Total Shareholder Yield | 6.0% |
| Future Dividend Yield | 0% |
| Dividend Growth | n/a |
| Next dividend pay date | n/a |
| Ex dividend date | n/a |
| Dividend per share | n/a |
| Payout ratio | n/a |
Recent dividend and buyback updates
No updates
Recent updates
Seeking Alpha • Oct 30
Elon Musk said to have ordered imminent Twitter layoffs
Billionaire Elon Musk is said to have ordered layoffs at Twitter (NYSE:TWTR) as soon as Saturday, just days after he took over the social media behemoth. The Tesla (TSLA) chief, who completed his $44 billion acquisition of Twitter on Thursday, is said to have planned for cuts across the company, with some areas to be impacted more than others, according to a New York Times report, which cited people familiar. The scope of the reductions wasn't immediately known. Twitter has about 7,500 employees. The layoffs are expected to come before Tuesday, when the employees were expected to receive stock grants as part of their compensation, according to the NYT report. The report comes after a Washington Post story earlier this month said that Musk planned to cut 75% of the Twitter (TWTR) workforce after he took over, a report that was later denied by the social media company. Also see from earlier Saturday, Musk, Trump, Zuckerberg: Twitter buy signals new stage in the social media wars.Seeking Alpha • Oct 21
Twitter: Government Highly Unlikely To Block Deal
Summary Twitter is down big in pre-market trading on a Bloomberg report about unhappy government officials. I have no doubt there are government officials that are unhappy with Elon Musk's conduct on Twitter and elsewhere. I can understand government entities wanting to look into the billionaire's geopolitical ties and wheeling and dealing. Odds seem low that this will ultimately derail the deal at $54.20 between Twitter shareholders and Elon Musk. Twitter, Inc. (TWTR) is down massively in pre-market trading as there's been a Bloomberg report saying: "Biden administration officials are discussing whether the US should subject some of Elon Musk's ventures to national security reviews, including the deal for Twitter Inc. and SpaceX's Starlink satellite network." In my opinion, this opens up an opportunity to add to a Twitter position at very low prices. These discussions seem to have borne out of Elon Musk's recent meddling in Russia's war on Ukraine. Officials are (according to Bloomberg) worried about his pro-Russian stance. In addition they are worried about (the money quote): They are also concerned by his plans to buy Twitter with a group of foreign investors. The deal for Twitter is funded by Elon Musk, a group of equity investors, and a debt package from a group of banks. The equity portion of the deal includes the parties government officials are worried about, according to Bloomberg: "Prince Alwaleed bin Talal of Saudi Arabia, Binance Holdings Ltd. -- a digital-asset exchange founded and run by a Chinese native -- and Qatar's sovereign wealth fund." To offer some perspective, Musk is putting up $33.5 billion. This latter group of investors is putting up $7.1 billion. This group includes Saudi Prince Alwaleed bin Talal Al Saud, who is rolling over his current stake worth $1.9 billion. Note that he already owned Twitter before this deal came to fruition. This is not a new thing. Note that I'm not a lawyer or law professional. Having said that, according to the merger agreement, Musk is on the hook for the entire equity portion. If pieces of the equity financing fall through, Musk needs to find a way to cover the shortfall. Maybe he's already trying to get some new investors in as he seemed to be back to the promoter playbook on the most recent Tesla's earnings call. The Bloomberg article talks a lot about SpaceX as well. I can imagine the U.S. government wants to put Elon Musk under some scrutiny or put some informal pressure on him not to mess with U.S. geopolitics. Some people will argue Elon Musk is trying to deliberately blow up his Twitter deal through his Russia/Ukraine shenanigans and even by more prominently talking about China. Under this theory, he would hope to get some kind of enemy of the state label making him unfit to own a social media outfit like Twitter. Per Bloomberg: The discussions are still at an early stage, the people familiar said on condition of anonymity. Officials in the US government and intelligence community are weighing what tools, if any, are available that would allow the federal government to review Musk's ventures.Seeking Alpha • Oct 10
Twitter V. Musk: What Could Go Wrong
Summary How did we get here? What next? Two possible routes to the end. How we got here 2022 has been the golden age for merger arb with many wide deal spreads, but the widest of them all is Twitter (TWTR). In April, Elon Musk signed a definitive agreement to buy Twitter. At the time, he said that, Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated. I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans. Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it. In his own words, he bought Twitter in part to defeat bots and authenticate humans; demonstrably, this was a problem that he knew existed and that he planned to fix. The next month, Musk suffered from buyer’s remorse. In his own words, it was due to his concerns over Putin’s aggression in Ukraine and the threat of World War III. He also grew increasingly agitated over Tesla’s (TSLA) poor stock performance, which would increase the cost of Twitter in terms of the number of Tesla shares he’d have to sell. Musk’s problem was that neither his real macro concerns nor his specific problems with Tesla-driven wealth destruction were outs under the merger agreement. They were problems, but they were his problems. They were excellent examples of things he should have thought of ahead of time. They could have potentially allowed him to pay something in the $30s per share instead of the contractual price in the $50s. So Musk was forced to turn to one thinly-veiled pretext after another to see if anything could stick. It didn’t. The buyer is erratic and conducted much of his disclosure via crazy tweets. We have been active shareholders, including writing an open letter to Twitter’s board immediately following Musk’s first of several purported deal terminations, encouraging the board to fight for the original deal. Fight they did. Meanwhile, Musk’s constant stream of tweets badly damaged his legal case. My confidence is in the iron-clad Twitter definitive merger agreement, in Wachtell Lipton’s ability to uphold it, in Chancellor McCormick’s ability to judge, and in the Delaware court and rule of law generally. That's why TWTR is one of my three biggest positions and best ideas for 2022 along with Renren (RENN) and Amplify (AMPY). YCharts The deal has a number of conditions including HSR approval as well as sign offs from the UK CMA, NSI, and Twitter shareholders. Each of those have been secured. Then in early October, Musk made a conditional offer to close the deal this month on the original $54.20 per share terms. Twitter responded, The intention of the Company is to close the transaction at $54.20 per share. The prospects for a price cut appear to have substantially diminished. Following his most recent change of heart, he’s been sounding more positive about Twitter on Twitter and said to the FT that, I’m not doing Twitter for the money. It’s not like I’m trying to buy some yacht and I can’t afford it. I don’t own any boats. But I think it’s important that people have a maximally trusted and inclusive means of exchanging ideas and that it should be as trusted and transparent as possible. As of this writing, there remains a $5.00 net spread between the market price and the original deal price. What Could Go Wrong The reasonably likely downside is for Musk’s erratic behavior to date to continue unabated throughout the course of this month. He can change his mind yet again. He can nuke his financing (indirectly through his irreparable damage to Twitter or directly through additional contact with the banks asking them again to slow or stop the debt financing process). He can fail to line up equity financing. He can refuse to sign or have signed the solvency agreement. He can attempt to pay the oft quoted but rarely understood $1 billion parent termination fee. What Could Go Wrong with What Could Go Wrong The Honorable Chancellor Kathaleen St. J. McCormick (DE C of C) No matter how much chaos Elon Musk creates in October and whether or not he’s able to spread it to Morgan Stanley (MS) and others contractually committed to financing this deal, the chaos will abruptly end at 5 PM Oct. 28, 2022. The brief and pointed stay is worth reading for its substance and tone: DE Court of ChancerySeeking Alpha • Oct 04
Musk deposition in Twitter case set for end of week
With deadlines closing in on the trial of Twitter (NYSE:TWTR) v. Musk et al., the delayed deposition of Elon Musk is now set to take place on Thursday and Friday. Court filings indicate the private questioning of the billionaire will happen at a law office in Austin, the home of Musk's automaker Tesla. His attorney, Alex Spiro, is set for deposition on Sunday, following his own postponed deposition. Twitter (TWTR) CEO Parag Agrawal was scheduled to be deposed on Monday, after his own deposition was previously postponed - and there's little room for any more delays as more pretrial deadlines arrive. The end of Wednesday brings the deadline for final witness lists for each side. The five-day trial to settle the case is set to begin Oct. 17 in Delaware's Court of Chancery.Seeking Alpha • Sep 26
Tesla CEO Elon Musk to face deposition with Twitter ahead of October trial
Tesla (NASDAQ:TSLA) CEO Elon Musk is scheduled to spend the next few days with lawyers for Twitter (NYSE:TWTR), answering questions ahead of an October trial that will determine whether he must carry through with his $44B pact to acquire the social platform after attempting to back out of the deal. The deposition, planned for Monday, Tuesday and a possible extension on Wednesday, will not be public. As of Sunday evening it was not clear whether Musk will appear in person or by video. The trial is set to begin October 17 in Delaware Chancery Court, where it's scheduled to last just five days. With Twitter's shareholders having approved the deal (with 98.6% of votes cast in favor), any settlement of the case would need to be resubmitted for another lengthy approval process. Last week, Wells Fargo sees more conviction on successful Twitter-Musk sale after expert call.Seeking Alpha • Sep 19
Former Twitter CEO Dorsey faces Tuesday deposition in Musk case
Former Twitter (NYSE:TWTR) CEO Jack Dorsey will be deposed Tuesday as part of the company's lawsuit against Elon Musk, in conjunction with a new filing from the billionaire. Musk has purported to terminate a $44B deal to acquire Twitter and take it private, and is now less than a month away from a five-day trial in Delaware's Court of Chancery where Twitter is looking to compel Musk to complete the deal. Both sides of Twitter v. Musk will get to question Dorsey, though Musk has been pressing to get him under oath as Dorsey had been a strong backer of the takeover bid from Musk, a longtime friend. In his recently amended counterclaim, Musk is leaning heavily on the public revelations of whistleblower (and former Twitter security chief) Peiter "Mudge" Zatko to get the deal canceled.Seeking Alpha • Sep 12
Early votes show Twitter cruising toward OK of Musk buyout - WSJ
Early voting suggests that Twitter (NYSE:TWTR) is set to gain approval of its $44B deal to be acquired and taken private by billionaire Elon Musk, the WSJ reports - not too surprising, as Twitter's $41.41 share price still sits at a near-24% discount to Musk's $54.20 per share offer. Twitter's formal vote arrives Tuesday morning. But the early indications are that the deal will pass by a wide margin, according to the report. Meanwhile, Musk himself hasn't voted his 9.6% stake - and after trying multiple avenues to get out of the deal, it would be awkward for him to vote his stake against his own takeover - and the transaction requires him to vote his share in favor of the deal - but moreso if he voted for the deal he's been trying to cancel by any means necessary. He's likely to vote present, which cedes power on that stake to the board (which also supports the transaction). Other big shareholders, including index-fund managers, are set to support the deal, the WSJ noted. Twitter stock (TWTR) is up 0.5% after hours. Earlier, Wedbush went over potential scenarios for Twitter v. Musk and concluded there's a high possibility of a negotiated settlement before the scheduled October trial.Seeking Alpha • Sep 06
Twitter ticks higher as judge criticizes Musk lawyer over discovery process
Twitter (NYSE:TWTR) quickly ticked higher, hitting session highs, after a judge criticized Elon Musk's attorneys at a hearing over the aborted takeover. Chancellor Kathaleen McCormick criticized Musk's lawyers about some document discovery. The hearing is being held as Musk's attorneys seek to delay a trial scheduled for next month. Last Tuesday Musk's legal team asked to move his trial over his Twitter (NYSE:TWTR) merger deal to November, from its planned October start, in a new rack of filings aimed at amending his counterclaims in the case. Also see from last month Twitter, Musk clashed in hearing over data requests tied to acquisition deal. Developing story ...Seeking Alpha • Aug 30
Twitter, Musk battle gets more complex with whistleblower situation, Wedbush says
The ongoing legal battle between Twitter (NYSE:TWTR) and billionaire Elon Musk over control over the embattled social network has gotten more complex after a former executive alleged the company lied about its bots situation, investment firm Wedbush Securities said on Tuesday. Analyst Dan Ives, who rates Twitter (TWTR) shares neutral, noted that Wall Street saw the company as having a "clear win" in court against Musk when it goes to trial in October. However, allegations made by former security chief and Twitter executive Peiter "Mudge" Zatko could give the world's richest man "a much needed small victory." "There is also a number of other legal back and forths going on in this Twitter case, but ultimately the Zatko development and timing is a huge potential win for Musk which could complicate the Twitter case," Ives wrote in a note to clients. As such, there could be a number of ways this situation plays out, including a settlement between the parties, the breakup fee being paid, an enforcement of the deal or a "myriad" of other outcomes. Nonetheless, Ives still believes that there are two scenarios that are most likely to occur once the trial ends: The court enforces "specific performance" and Musk is forced to pay $54.20 per share in cash for Twitter (TWTR), which has already been agreed upon. Musk needs to settle and winds up paying "significant" damages to Twitter (TWTR) ranging between $5B and $10B, based on the court's ruling.Seeking Alpha • Aug 23
Twitter drops following report of whistleblower lawsuit
Twitter (NYSE:TWTR) fell 3.5% in premarket trading after a report about a whistleblower complaint that accuses the social media giant about "lying about Bots to Elon Musk." The former head of security at Twitter filed a whistleblower complaint in July with regulators, including the Securities and Exchange Commission, according to a Washington Post report, which was obtained by the newspaper. Former security Chief Peiter Zatko also alleged that Twitter (TWTR) deceived regulators about its defenses against hackers. Developing story ....Seeking Alpha • Aug 15
Twitter Stock Is A Sell Again
Twitter’s shares have revalued 36% higher since Elon Musk announced in July that he didn’t want to buy Twitter anymore. Revaluation gains are entirely unjustified and indicate misplaced optimism regarding a potential closure of the merger deal. Shares of Twitter are overvalued again. After Elon Musk announced that he was backing out of the proposed $44B deal to acquire social media company Twitter, Inc. (TWTR), the stock initially dropped heavily. However, in recent weeks, Twitter stock has developed some new momentum which has driven the share price back to where it was in May. Since Twitter in the meantime also submitted its Q2'22 earnings card, which continued to show weakening fundamentals, the recovery may be an opportunity to sell Twitter stock into the strength! TWTR data by YCharts Twitter's share price recovery fundamentally unjustified I was previously bullish on Twitter, in large part because the company was growing its number of users consistently. Moderate average daily user growth and a strong rebound in advertising revenues in FY 2021 indicated to me that Twitter faced improving prospects for free cash flow growth as well. Then came Elon Musk. The billionaire's acquisition offer valued Twitter at $44B. The ensuing debate over Twitter's bot accounts, however, changed the risk analysis for me profoundly. While Elon Musk has tried to back out of the deal due to growing concerns over the actual number of bot accounts on the Twitter platform, the social media company's lawyers insist that the deal will be completed based on the agreed-upon merger agreement. After the take-over offer was submitted, I recommended investors to sell the news and secure what was left of the deal premium at the time. However, in recent weeks, optimism has returned to the Twitter trade and the stock has moved up to $44.26, showing a nearly 36% gain since July 11 which is when Elon Musk spoke out against the acquisition of Twitter. I believe there is no fundamental reason for the upside revaluation in recent weeks since the likelihood of the deal closing has not improved and Twitter's Q2'22 results, which were released in the meantime, showed that macroeconomic headwinds are starting to affect the social media business. Weakening business fundamentals in Q2'22 indicate a struggling advertising business While Twitter's second-quarter average monetizable daily active users increased 16.6% year over year to 237.8M, the social media company's revenues actually declined 1% year over year to $1.18B due to persistent headwinds in the macro environment and deal uncertainty that caused advertisers to take a more cautious approach to ad campaign spending. Meta Platforms (META), Snap (SNAP) and to some extent even Alphabet (GOOG, GOOGL) experienced the same topline headwinds in the second quarter, so they are not unique to the Twitter platform. What was concerning to me was that Twitter's profitability regarding free cash flow nosedived in Q2'22 and the social media company has so far reported negative free cash flow of $158.6M for the current fiscal year. And I don't expect Twitter to generate positive free cash flow in this environment in the short term either which could start to weigh on Twitter's valuation. The social media company's cash flow margins have also turned negative in FY 2022, indicating profound profitability challenges to which Twitter has not yet found a solution.Seeking Alpha • Aug 09
Twitter working to fix outage affecting some users
Twitter (NYSE:TWTR) says it's working on a fix that's preventing some users from accessing the service. Reports of a likely outage began to pile up in the last half hour from a wide number of users. "Twitter may not be loading for some of you –– we're working on a fix to get you back to your timelines ASAP," the company says (on Twitter).Seeking Alpha • Aug 03
Musk issues subpoenas to Twitter's deal advisers as document showdown continues
Elon Musk has subpoenaed records from Twitter (NYSE:TWTR) advisers Goldman Sachs (NYSE:GS) and JPMorgan Chase (NYSE:JPM) in another day of pretrial action ahead of an October showdown to decide the fate of Musk's $44B acquisition deal for Twitter. Musk's team is seeking documents and communications about their analysis of the proposed merger, as well as anything involving discussions "with or about other potential purchasers of Twitter" other than Musk, Bloomberg reports. That's part of what is becoming an intense quest for documents and records from both sides of the case. After a Friday deadline that formally established a five-day trial set for October, Twitter (TWTR) issued a flood of subpoenas and document requests to a wide number of members of Silicon Valley Who's Who, including Musk associates and figures not previously linked to the deal: investors Chamath Palihapitiya, David Sacks, Steve Jurvetson, Marc Andreessen, Jason Calacanis and Keith Rabois. That brought a vocal reaction from Musk associate Joe Lonsdale, who called it a "giant harassing fishing expedition."Seeking Alpha • Jul 26
What Is Twitter Stock's Outlook After Elon Musk Backs Off?
Elon Musk has decided to abandon the proposed deal to acquire Twitter based on five major reasons. There are six possible outcomes from the legal battle between Twitter and Elon Musk, and Twitter stock will react differently to each of these scenarios. Everything is not about this legal battle either; investors need to evaluate the long-term prospects for Twitter. Elon Musk is known for many things, including his consistency in creating controversies. I'm not sure whether that should be looked upon as a good thing or a bad thing, but what I do know is that both investors and Mr. Musk himself have faced difficulties because of these controversies. From smoking weed on the Joe Rogan Podcast to Tweeting about taking Tesla, Inc. (TSLA) private, Elon Musk has been making headlines for all the wrong reasons in addition to all the right reasons such as turning Tesla profitable. On April 14, Elon Musk announced a deal to acquire Twitter, Inc. (TWTR) for approximately $44 billion, and this announcement came on the back of Mr. Musk acquiring just over 9% of Twitter shares publicly in the weeks that led to this announcement. With the aim of privatizing the company, Twitter's Board of Directors accepted this offer on April 25. Twitter stock surged from less than $40 to over $50 in April with this development, but this momentum was soon lost when the market realized that the deal could come under pressure not just because of regulatory scrutiny but also because of Mr. Musk's track record of controversies. Confirming these fears, Elon Musk sent a letter to the Board of Directors of Twitter on July 8 stating his decision to back off on the proposed acquisition. As a shareholder of Twitter or even as an investor who has been waiting on the sidelines monitoring these developments, it's understandable to be in a confused state about the future of Twitter. In this article, I will focus on addressing some of the questions raised by investors. Why Did Elon Musk Cancel The Twitter Deal? Elon Musk decided to abandon the proposed deal because of an apparent failure by Twitter to provide him with data related to spam accounts on the platform. The letter sent by Mr. Musk's lawyer discusses this problem in detail. Below are the main reasons that led Elon Musk to abandon the deal. Not complying with Elon Musk's repeated, documented requests to provide information related to Twitter's process for auditing the inclusion of spam and fake accounts in mDAU. Not providing sufficient information related to Twitter's process for identifying and suspending spam and fake accounts. Not providing daily measures of mDAU for the past eight quarters. Not providing access to Board materials related to Twitter's mDAU calculations. Not providing materials related to Twitter's financial condition. In this letter, Elon Musk's lawyer goes on to claim that initial findings revealed Twitter's claim of fewer than 5% of its mDAU are fake/spam accounts to be entirely false and asserts that the real fake/spam account count is "wildly higher" than these reported numbers. Based on these preliminary findings, Mr. Musk's lawyer claims that Twitter has reported materially misleading information, which is a breach of merger terms. How Will Elon Musk's Deal Cancellation Impact Twitter Stock? Soon after Elon Musk's decision to pull out of the proposed deal, Twitter, on July 12, filed a lawsuit against Mr. Musk in the Delaware Court of Chancery, and the company promised to hold Elon Musk true to the original deal that was proposed in April. Twitter stock had already come under pressure due to macroeconomic challenges when Mr. Musk's decision to break up the deal came to light, and since then, TWTR stock has traded sideways. To understand the impact of this deal cancellation on Twitter stock, we need to first understand the possible outcomes of this decision. Below are the outcomes that I can think of. Scenario 1: Elon Musk could be ordered to pay the stipulated breakup fee of $1 billion to Twitter and the deal will be canceled. Scenario 2: Elon Musk and Twitter could reach some middle ground that involves a settlement of a different amount than the agreed-upon breakup fee. Scenario 3: The two parties might agree to go ahead with the deal at a different price instead of the proposed $54.20 per share price tag in April. Scenario 4: The judge could order Elon Musk to stick to the original deal terms and acquire Twitter for $44 billion. Scenario 5: Elon Musk could walk away from the deal without any repercussions. Scenario 6: Elon Musk changes his mind yet again and decides to buy Twitter at the original price without going into a legal battle with the company. Twitter stock will feel the impact of any of these outcomes, and as things stand today, it seems like shareholders/potential investors have a tough decision to make today. The below table summarizes my expectations for Twitter stock under each of these scenarios. Scenario The expected impact on Twitter stock Scenario 1 Twitter stock is likely to crash as investors are banking on a privatization deal - not just $1 billion in the form of a fee. Scenario 2 Twitter stock is likely to crash as investors are banking on a privatization deal - not just $1 billion in the form of a fee or any other amount for that matter. Scenario 3 The deal price will still be meaningfully above the current market price and therefore, Twitter stock is likely to gain. Scenario 4 This is a win for Twitter shareholders and the stock will surge. Scenario 5 Twitter stock is likely to crash, and the expected impact is likely to be more severe than Scenarios 1 and 2. Scenario 6 This is the best-case scenario for Twitter shareholders as such a U-turn will boost the confidence of investors rather than if Elon Musk is forced to go ahead with the transaction. Twitter stock will surge.Seeking Alpha • Jul 20
Twitter may disclose $100M revenue miss for Q2 - report
Twitter (NYSE:TWTR) may report a $100 million revenue miss when it reports Q2 results on Friday. Elon Musk and his advisors understand that Twitter expects to report a revenue miss of about $100 million for Q2, CNBC's David Faber reported, citing a redacted part of Musk's response to Twitter's lawsuit, that was listed in an exhibit. Twitter (TWTR) shares were initially weaker on the report, though they have now ticked up 0.7%. The latest news comes after Musk received a setback in his plans to terminate his $44 billion purchase of the social media giant Monday when a judge said a trial would start in October rather than the February start that Musk's legal team had requested.Seeking Alpha • Jul 14
Options Traders' Consensus Favors Positive Outcomes For Twitter
Twitter is down almost 50% over the past year. The shares are in turmoil in response to Elon Musk's actions. The Wall Street consensus rating is neutral, with modest upside relative to the risks. The market-implied outlook (derived from options prices) is tilted to favor a good outcome for the company in its current battle with Mr. Musk. Twitter (TWTR) is much in the news in recent days as a result of Elon Musk backing out of his acquisition and Twitter suing Musk to force him to complete the deal. The drama around the acquisition has occurred against a backdrop of a collapse in Twitter’s share price over the past year. Last I analysed Twitter was in May 2021. TWTR is down more than 47% over the past 12 months, as compared to a price decline of 21.2% for the NASDAQ 100 (QQQ) and a decline of 13.26% for the S&P 500 (SPY). While the shares spiked upwards in early April on news of Musk buying a 9% stake. On April 25th, Twitter announced that it had entered into a deal to be acquired by Musk at $54.20 per share. TWTR closed at $51.70 on April 25th but has subsequently declined 29% and currently trade at $36.80. Seeking Alpha 12-Month price history and basic statistics for TWTR (Source: Seeking Alpha) TWTR’s earnings history is so volatile that it is impossible to detect any long-term trend. The company has a history of reporting earnings in individual quarters that are either far above or far below expectations. The instability of the historical earnings make me rather skeptical about the usefulness of forward earnings estimates. Consider, for example, that the trailing 12-month P/E is 140.7 (Source: E-Trade), vs. the forward P/E (using estimated future earnings) of 20.45. E-Trade Trailing 4-year and estimated future quarterly EPS for TWTR. Green (red) values are amounts by which EPS beat (missed) the consensus expected value (Source: E-Trade) Perhaps the biggest question in looking at Twitter is how one discounts the odds on the acquisition going through. This may, in fact, matter more than the fundamentals. Mr. Musk set an anchor price of about $54 per share, but the shares have traded in the mid-to-high $30’s in the months prior to Mr. Musk’s offer and as the deal has unraveled. I last wrote about TWTR on May 3, 2021, at which time I assigned a bearish / sell rating. At that time, the Wall Street consensus rating on the shares was either bullish or neutral, depending on the source of the consensus. E-Trade’s calculation of the Wall Street consensus rating was bullish and Seeking Alpha’s was neutral. Both had consensus 12-month price targets that were far above the share price at that time (+33% for E-Trade and +27% for Seeking Alpha). By contrast, the consensus view implied by options prices, the market-implied outlook, was decidedly bearish. Considering the high valuation, the large spread in analyst price targets (which reduces confidence in the usefulness of the consensus), I discounted the Wall Street consensus and assigned a bearish overall rating on the shares. Seeking Alpha Previous analysis of TWTR and subsequent performance vs. the S&P 500 (Source: Seeking Alpha) For readers who are unfamiliar with the market-implied outlook, a brief explanation is needed. The price of an option on a stock is largely determined by the market’s consensus estimate of the probability that the stock price will rise above (call option) or fall below (put option) a specific level (the option strike price) between now and when the option expires. By analyzing the prices of call and put options at a range of strike prices, all with the same expiration date, it is possible to calculate a probabilistic price forecast that reconciles the options prices. This is the market-implied outlook. For a deeper explanation and background, I recommend this monograph published by the CFA Institute. With TWTR reporting Q2 results on July 20th, along with all of the uncertainty around the acquisition, I have calculated an updated market-implied outlook for TWTR to early 2023 and I compare this with the current Wall Street consensus outlook, as in my previous post. Wall Street Consensus Outlook for TWTR E-Trade calculates the Wall Street consensus outlook by combining the views of 25 ranked analysts who have published ratings and price targets over the past 3 months. The consensus rating for TWTR is neutral, as it has been for most of the past year, and the consensus 12-month price target is 19.7% above the current share price. E-Trade Wall Street analyst consensus rating and 12-month price target for TWTR (Source: E-Trade) Seeking Alpha’s version of the Wall Street consensus outlook is based on ratings and price targets from 36 analysts who have published their views over the past 3 months. The consensus rating is neutral and the consensus 12-month price target is 21.7% above the current share price, very close to E-Trade’s results. Seeking Alpha Wall Street analyst consensus rating and 12-month price target for TWTR (Source: Seeking Alpha) One of the obvious limitations to interpreting the consensus results is that some of the ratings will have been issued before the most recent news emerged (Musk saying he doesn’t want to buy Twitter and Twitter suing Musk). For this reason, I put limited weight on the Wall Street consensus outlook in revisiting my rating. Market-Implied Outlook for TWTR I have calculated the market-implied outlook for TWTR for the 6.2-month period from now until January 20, 2023, using the prices of call and put options that expire on this date. Options trading on TWTR is quite heavy, and especially for the options expiring in January, adding confidence in the representativeness of the market-implied outlook. By contrast to the Wall Street analyst consensus, which includes somewhat stale information, the market-implied outlook represents the up-to-date consensus view implied by the market prices of options. The standard presentation of the market-implied outlook is a probability distribution of price return, with probability on the vertical axis and return on the horizontal. Geoff Considine Market-implied price return probabilities for the 6.2-month period from now until January 20, 2023 (Source: Author’s calculations using options quotes from E-Trade) The first thing to note in this market-implied outlook is the presence of 2 peaks (a bi-modal distribution), implying that there are two distinct outcomes that are most probable. The highest peak (highest probability) corresponds to a price return that is 36% above the current share price. The secondary lower-probability peak corresponds to a price return of -38%. The expected volatility calculated from this distribution is 58%, which is high for a large-cap stock--but of course this makes sense. The bi-modal distribution in the market-implied outlook is very unusual, but makes sense in this situation. TWTR’s future performance hinges on whether or not Musk is able to walk away from the acquisition. If he manages to do so, the price performance over the next six months is likely to be substantially negative. If he is required to proceed by the courts, TWTR shares will be worth $54.20. The high positive mode corresponds to a share price of $50. The negative mode corresponds to a price of $23. The market-implied outlook suggests that if Must is able to walk away, the share price is likely to take a big hit. The only time that I have seen a bi-modal market-implied outlook before, in all of the many cases that I have run, was for Activision Blizzard (ATVI) at the end of May. ATVI is also in the midst of being acquired. As I stated in that piece, “What this outlook is showing is that the market anticipates two distinct possible outcomes—one in which the acquisition is on track to close and the share price rises, and one in which the acquisition has failed or been substantially delayed and the share price declines.” For TWTR, the consensus view of the options market is that the most-probable outcome is for the shares to be at around $50 in the middle of January of 2023. This is somewhat encouraging. Looking at the percentiles of price return (the cumulative probability distribution) is also helpful.Seeking Alpha • Jul 07
Twitter jumps as it says bots are well under 5% of platform
Twitter (NYSE:TWTR) stock is jumping, up 2.6% just before midday Thursday, as it kicked off a media event to address the high-profile skirmish with proposed buyer Elon Musk over spam/bot accounts on the platform. Twitter looked to address questions about its policy on automated accounts, and said it uses both human reviews and internal data to get its estimate of bot accounts. Musk has disputed Twitter's perpetual disclaimer that spam/bot activity makes up less than 5% of accounts, suggesting in some tweets that it's closer to 90%. But Twitter says now that the number of spambots is "well under" an estimate of 5%, according to Bloomberg.Seeking Alpha • Jun 22
Can Twitter Stock Rebound To $50?
Twitter has been in the news recently, but for all the wrong reasons. Fake news and political mayhem resulted in President Trump being banned from the platform. Jack Dorsey, the man who conceptualized Twitter and twice served as its CEO dramatically quit and left the company. The share price collapsed and is currently trading below its 2013 IPO price, despite a top line CAGR of 29% over that period. Elon Musk has acquired a 10% stake and is attempting a take-over. But what is really going on? Is Twitter a good investment opportunity? We’ll answer all of these questions and more.Seeking Alpha • Jun 14
Arb's Golden Age: Elon Musk And Twitter
Time to put money to work. Merger arb spreads are wide. Here’s what you can buy today.Seeking Alpha • Jun 06
Twitter: Watch The Circus From The Sidelines
Elon Musk is having second thoughts about buying Twitter given an alleged lack of transparency in the number of spam/fake accounts on the platform. Twitter's stock has given up all its gains since Musk's initial disclosure of a 9.2% stake in the company. Shares remain vulnerable to headlines and speculation, making a case for staying on the sidelines amidst shaky fundamentals.Seeking Alpha • May 31
Is Now A Good Time To Buy Twitter Stock? Yes, Even If Elon Musk's Acquisition Fails
The $54.20 offering price is very close to the average of $53.91 Twitter had traded over the past year until 1 April 2022, the day before Musk's Twitter stake disclosure. There has been plenty of “will he, will he not” drama twists since Musk formally made the buyout offer but his official filings suggest he intends to complete the acquisition. Twitter stands to pocket $1 billion if Musk reneges on the deal, which it can invest further into R&D or conduct more bolt-on acquisitions to help boost business growth. Twitter’s historical financial performance and innovation record leave much to be desired, but it also means the company has low expectations to meet and could surprise on the upside. With the previously distracted leader, Jack Dorsey, out of the picture, and CTO-turned-CEO Parag Agrawal showing his decisive self in revamping the management team, we may see Twitter change for the better at a quicker pace.Seeking Alpha • May 25
Twitter: Don't Worry Too Much About The Snap Implosion
Elon Musk doesn't gain any additional leverage because Snap is performing badly or because the macro economy is deteriorating. "A deal is a deal," and the Snap news did not take anything away from that. The Snap implosion does likely impact the standalone Twitter price IF the deal were to break. At this time, it seems unlikely to me the deal ultimately isn't consummated.Seeking Alpha • May 16
Twitter: Musk Walking Or Obtaining A Price Cut Seem Like Unlikely Outcomes
Elon Musk suggests Twitter deal is on hold. Most commentators suggest Musk wants a price cut. It is not a certainty Musk is angling for a price cut. It seems very unlikely Musk can get a price cut or walk away from the deal.Seeking Alpha • May 10
If Twitter Stock Goes Private, Are Other Social Media Stocks Good Buys?
The Twitter Take Private deal rumbles on, with the stock having climbed to only three dollars shy of the agreed sale price. Corporate acquisitions are done and dusted only when the vendor has the money and the buyer has the shares - the Musk / Twitter deal is no exception. As it stands we believe the deal is likely to complete, though this is a moving feast and can change on a whim - this being Elon Musk after all. In this note we ask whether the sale of Twitter has implications for other social media stocks. We rate Twitter at Sell; Meta Platforms at Buy.Seeking Alpha • May 02
Merger Arbitrage Mondays: The Twitter-Musk Saga Unfolds
Elon Musk's acquisition of Twitter announced last Monday was the largest deal announced last week. The spread on the Twitter-Musk deal is 10.57%, indicating that investors are concerned about the deal being consummated. The merger agreement includes a termination fee of $1 billion, which is payable both ways depending on which party terminates the deal.Seeking Alpha • Apr 26
Twitter Agrees To $44 Billion Takeover From Elon Musk: What To Know, And What To Do
It's official: Twitter has agreed to a $54.20 per share takeout offer from Elon Musk. Should shareholders be upset by the poor stock performance over the past 9 years? To the contrary: shareholders should thank Elon Musk for this unexpected gift. I discuss whether the 4.8% arbitrage yield is worth reaching for in the current market.Seeking Alpha • Apr 18
Twitter: Elon Musk Unlocks Trouble
Elon Musk just made a best-and-final offer to take Twitter private. I expect Twitter to reject the deal for a few reasons. Holding on to the stock simply because of Musk may not be the best investment thesis.Seeking Alpha • Apr 12
Is Elon Musk's Buy-In Good For Twitter Stock Investors?
Twitter stock soared 30% on news that Elon Musk had purchased a 9.2% stake in the company. The purchase cost Musk $2.6 billion, representing around 1% of his net worth. Twitter stock is trading at the same levels as it did when it came public in 2013. Elon Musk may be the missing ingredient needed for change. I discuss what Elon Musk's purchase means for investors and analyze the stock at current levels.Seeking Alpha • Apr 04
Twitter Doesn't Need Elon Musk Now - Don't Buy The Hype
TWTR stock gained almost 30% at writing, as investors bought into the Elon Musk hype train. But we don't think Twitter needs Musk on board right now. It could potentially disrupt the balance of the team. We discuss why we revise our rating from Buy to Hold.Seeking Alpha • Mar 22
Twitter: The Bleeding Is Nearing An End
Shares of Twitter look appealing after a 40% fall over the past twelve months. The company continues to grow monetizable DAUs, particularly in the U.S. where growth suddenly slipped into a decline earlier this year. Twitter is building into its niche as a news platform and is spending heavily on product development. The company also reaffirmed its long-term FY23 targets of $7.5 billion in revenue (~50% greater than current scale) and 315 million in mDAUs. Valuation looks cheap at ~4x forward revenue.Seeking Alpha • Feb 25
Twitter: Significant Upside Likely In 2 Years
Twitter’s implementation of the organizational restructuring and monetization initiatives is expected to help the company deliver growth as promised. Twitter is trading cheaper than its social media peers, which offers an incredible long/short opportunity. Recent selloff is pricing Twitter at 3.5% annual growth for 2022 compared to the 20.8% consensus expected by analysts. Twitter's 5% junk-bond yield issuance to fund its $4 billion repurchase program showcases investors' confidence in the company's ability to generate cash.Seeking Alpha • Feb 18
Twitter: Waiting To See Tangible Benefits
Increase in monetizable daily active usage. A good set of results, but still bearing the weight of the previous management. New management focussed on increasing company efficiency.Seeking Alpha • Feb 05
Twitter: An Asymmetric Risk-Reward Bet Poised For Outperformance
We view becoming bullish on TWTR as almost a rite of passage in covering the tech sector and internet more broadly. Everyone does it at some point. After eight and a half years of post-IPO floundering, TWTR has been disregarded as a place to watch your money do nothing as an investor, perpetually fluctuating. We borrow a Cathie Wood saying that speaks volumes to us when it comes to TWTR in this present day: "The longer the base, the bigger breakout/breakdown." With new and focused product-oriented management at the helm, we think TWTR is poised to expand its business at a rate faster than what the consensus is modeling. While we do not see them hitting their 2023 usage goals, we think that their revenue target is more than achievable. We're upgrading TWTR from a Hold rating to a Buy rating. We've lowered our PT from $59 to $49. Bear case of $25. Bull case of $64.Seeking Alpha • Jan 26
This Is The Time To Buy Twitter
The tech sell-off is creating an abundance of low-priced bargains. Among those bargains is Twitter which is expanding internationally and benefiting from a rebound in ad spending. Twitter’s sales growth has become even more discounted lately.Seeking Alpha • Jan 05
Turning Bullish On Twitter
TWTR has been consistently pummeled in the past several months. Earnings estimates have moved lower, but the valuation has improved immensely. With critical support just below today's price, I'm turning bullish on Twitter, provided it can hold support.Seeking Alpha • Dec 06
Twitter Is Trying To Stick A Landing
Jack Dorsey surprised the market by resigning from the CEO position at Twitter. In a further surprise, he plans to resign from the board at the end of his term. His successor is an 11-year veteran of Twitter and the company’s CTO, Parag Agrawal. Twitter shares reversed a brief 11% spike as market participants questioned the potential catalyst. Twitter is now down 47% from its all-time high in February 2021 and is nearing strong, long-term technical support levels. The sustainable revenue growth trajectory looks to be in the range of 15%, preceding the daily active user spike and subsequent monetization following COVID. Twitter’s platform business model combined with the untapped potential of non-advertising, subscription-based revenue growth should place it on the watchlist of all growth investors.Stability and Growth of Payments
Fetching dividends data
Stable Dividend: Insufficient data to determine if TWTR's dividends per share have been stable in the past.
Growing Dividend: Insufficient data to determine if TWTR's dividend payments have been increasing.
Dividend Yield vs Market
| Twitter Dividend Yield vs Market |
|---|
| Segment | Dividend Yield |
|---|---|
| Company (TWTR) | n/a |
| Market Bottom 25% (US) | 1.4% |
| Market Top 25% (US) | 4.2% |
| Industry Average (Interactive Media and Services) | 0.3% |
| Analyst forecast (TWTR) (up to 3 years) | 0% |
Notable Dividend: Unable to evaluate TWTR's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.
High Dividend: Unable to evaluate TWTR's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.
Earnings Payout to Shareholders
Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: Unable to calculate sustainability of dividends as TWTR has not reported any payouts.
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Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2022/10/27 04:17 |
| End of Day Share Price | 2022/10/27 00:00 |
| Earnings | 2022/06/30 |
| Annual Earnings | 2021/12/31 |
Data Sources
The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.
| Package | Data | Timeframe | Example US Source * |
|---|---|---|---|
| Company Financials | 10 years |
| |
| Analyst Consensus Estimates | +3 years |
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| Market Prices | 30 years |
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| Ownership | 10 years |
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| Management | 10 years |
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| Key Developments | 10 years |
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* Example for US securities, for non-US equivalent regulatory forms and sources are used.
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more.
Analysis Model and Snowflake
Details of the analysis model used to generate this report is available on our Github page, we also have guides on how to use our reports and tutorials on Youtube.
Learn about the world class team who designed and built the Simply Wall St analysis model.
Industry and Sector Metrics
Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on Github.
Analyst Sources
Twitter, Inc. is covered by 45 analysts. 31 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.
| Analyst | Institution |
|---|---|
| Richard Kramer | Arete Research Services LLP |
| James Kelleher | Argus Research Company |
| Colin Sebastian | Baird |