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Musk effect on Wall St? Twitter sinks over 9%, Tesla jumps more than 5% at open


Tesla chief and SpaceX founder Elon Musk took the US stock markets by thunder on Friday. On one hand, Musk’s tweet on halting Twitter $44 billion buyout deal temporarily led to the sinking of micro-blogging site’s shares by over 10 per cent, and on the other hand, pushed Tesla’s stock more than 5 per cent during early trade hours.

At 10:23 am ET, Twitter shares tanked 10.10 per cent, or 4.56 points to trade at $40.54, while Tesla shares gained 5.46 per cent or 39.76 points at $767.76.

Meanwhile, Wall Street’s main indexes opened higher on Friday at the end of a bumpy week marked by rising concerns over tighter monetary policy and slowing economic growth.

The Dow Jones Industrial Average rose 492.18 points, or 1.55 per cent at $32,222.48.

The S&P 500 traded higher by 90.12 points, or 2.29 per cent, at 4,020.20, while the Nasdaq Composite gained 389.07 points, or 3.42 per cent, to 11,760.03.

Musk had earlier today tweeted that his $44-billion cash deal for Twitter Inc is “temporarily on hold” while he waits for the social media company to provide data on the proportion of its fake accounts.

“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users,” Musk told his more than 92 million Twitter followers.

Reuters had on May 2 reported that Twitter estimated in a filing that false or spam accounts represented fewer than 5 per cent of its monetisable daily active users during the first quarter.

Spam or fake accounts are designed to manipulate or artificially boost activity on services like Twitter. Some are tied to improve commercial results, while others are designed to create an impression that something or someone is more popular.

After the tweet, Twitter shares initially fell more than 20 per cent in premarket trading, but after Musk sent a second tweet saying he remained committed to the deal they regained some ground. The stock was off 12 per cent in heavy volume ahead of the market open as investors fretted over the takeover.

Musk, the world’s richest person, decided to waive due diligence when he agreed to buy Twitter on April 25, in an effort to get the San Francisco-based company to accept his “best and final offer” of $54.20 per share.

Since then, technology stocks have plunged amid investor concerns over inflation and a potential economic slowdown.

(With inputs from Reuters)

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