Oct 06, 2022 TradeUP Thursday Latest news and bulletin updates
Dow Jones 30,206(-0.45%)
S&P 500 3,753(-0.40%)
(Opening price as of 10/06/2022 compared to last close)
Job openings plunged by 10% in August
OPEC+ to raise oil prices with supply cut
Peloton to cut 12% of workforce in 4th round of layoffs this year
Credit Suisse reportedly eyes outside money for investment bank spinoff
Share Your Thoughts:
Why is Musk buying Twitter again?
On Tuesday, Musk sent a letter to Twitter announcing that he would resume his buyout deal at the original price of $54.20/share. At first, he bought a 9.2% stake in Twitter on March 14th (and has since become Twitter’s largest shareholder). On April 25th, Musk made his initial offer to buy Twitter. He subsequently tried to withdraw from this deal by calling attention to Twitter bots, possibly due to limitations in financing. Later, on July 9th, Musk announced his intent to terminate the buyout agreement. Twitter shares rose 22% on Wednesday, closing at $52/share.
Musk and Twitter have fought with each other—in and out of court— for the past several months. It’s surprising for Musk to bring up his original offer right now, especially at an unreduced price. However, some possible explanations for this decision can be uncovered from the Wall Street Journal’s Tuesday reports.
Billionaire, activist, and investor Carl Icahn has reportedly held a $500+ million stake in Twitter over the past few months and has made a sizable profit after its share price shot up after news of Musk’s intent to resume the buyout. Icahn is a fundamental analyst, and investors like him would further investigate the outcome of the Musk-Twitter trial. When Musk bailed on his offer in July, most people concluded that he would end up with a $10 billion breakup fee for backing out of the deal. However, investors like Icahn likely consulted various lawyers to analyze the probability of Musk walking out of the original deal. They may have reached the conclusion that the court would order Musk to complete his deal at its original price.
Musk took an extended break from tweeting, which could be another sign that he will probably be ordered by the court to fulfill the original deal. Even though his 5-day trial against Twitter is scheduled to begin on October 17th, the court and the legal teams from both sides have been in constant communication. It’s possible that Musk’s legal team has reached the conclusion that the court’s verdict will be unfavorable.
Icahn and Musk’s teams may have both reached this conclusion, but will Musk actually complete the purchase deal?
In Musk’s letter, he writes, “provided that the Delaware Chancery Court enter an immediate stay of the action, Twitter vs. Musk, et al. (C.A. No. 202-0613-KSJM), and adjourn the trial and all other proceedings related thereto pending such closing or further order of the court,” which means that once the trial ends, he will resume the purchase deal. Hence it is possible that Musk is playing a waiting game and published this letter just to end the hearing. Meanwhile, Twitter’s legal team will likely urge the court to expedite its procedure, and demand interest payments on any postponement of the purchase. Musk and Twitter’s battle in court might not end just yet.
Do you think Musk will finally close his deal with Twitter?
A.Yes, he will close the deal at the original price of $54.20/share
B.No, some other issues might come up during the procedure
C.Too early to call
Share your thoughts with us for a chance to win a free stock!
#1. Job openings plunged by 10% in August
• US job openings dropped the most in nearly 2.5 years in August, falling 1.1mm to 10.053mm, suggesting that the labor market is starting to cool with higher interest rates dampening demand and taming inflation.
• The Fed has used multiple euphemisms to describe the potential impact on jobs, from economic “pain” to “unfortunate costs” and a “softening labor market.” Powell said in the September FOMC meeting that job openings need to drop significantly to cool inflation.
#2. OPEC+ to raise oil prices with supply cut
• OPEC+ agreed on Wednesday to reduce oil production by 2mm barrels per day starting in November, which represents about 2% of global oil production.
• Biden administration described the supply cut as a “shortsighted” decision and hinted that Congress would soon seek to rein in OPEC’s influence over energy price.
#3. Peloton to cut 12% of workforce in 4th round of layoffs this year
• The fitness equipment maker is cutting another 500 jobs after multiple layoff rounds this year.
• McCarthy said the company now must prove its recent spate of strategy changes, including equipment rentals and partnerships with Amazon and Hilton, can help it grow.
#4. Credit Suisse reportedly eyes outside money for investment bank spinoff
• Bloomberg reported that the bank is considering a boutique model for advisory and dealmaking. It is trying to bring in an outside investor to inject money into a spinoff of its advisory and investment banking businesses.
• The bank is also reportedly exploring a sale of the Mandarin Oriental Savoy in Zurich, which could be worth around 400mm Swiss francs.
Enjoy the app? Tell us what you think!
TradeUP Securities Inc.: TradeUP Securities, Inc. (“TradeUP Securities”) is a registered brokerage firm at SEC (CRD: 18483; SEC: 8-36754), a member of FINRA/SIPC and a member of DTC/NSCC, regulated by the US Securities and Exchange Commission and Financial Industry Regulatory Authority. Check the background on the firm on FINRA’s BrokerCheck (https://brokercheck.finra.org).
Qualifying comments will be reviewed to select the winner of a share of free stock worth $10-15. In order to receive the free stock, the commentor must have a funded TradeUP account. The winner will be contacted via private message through our social media account for detailed information on claiming their reward. Not Advice: The information contained in this material is for informational purposes only and is not intended to provide professional, investment or any other type of advice or recommendation, or to create a fiduciary relationship. TradeUP Securities does not make any representation or warranty, express or implied, regarding the accuracy, reliability, completeness, appropriateness or sufficiency for any purpose of any information included in this material. Certain information may have been provided by third-party sources and, while believed to be reliable, has not been independently verified by TradeUP Securities, and its accuracy or completeness cannot be guaranteed. You should not make an investment decision in reliance on this material, which is based on information that is likely to change without notice.
Not An Offer or Solicitation: Nothing contained in this material is, or should be construed as, an offer, a solicitation of an offer or an invitation to buy or sell any security or derivative, and it is not intended for distribution in any jurisdiction where such distribution would be contrary to law.
Risk of Loss. Securities and derivatives transactions involve risk of loss, including loss of principal. You should weigh potential benefits against the risks. Past performance is no guarantee of future results.
Not a Valuation: This material is not an official valuation of any security or derivative mentioned herein. Any pricing information provided is indicative only and does not reflect a level at which TradeUP Securities may be prepared to execute a trade; nor is it intended to demonstrate actual results that may be achieved by any transaction.
Electronic Trading: Electronic trading poses unique risks to investors. System response and access times may vary due to market conditions, system performance, and other factors. Market volatility, volume, and system availability may delay account access and trade executions.
If you no longer wish to receive notifications like this, you can unsubscribe any time.