The Twitter (TWTR) vs. Elon Musk saga has taken another turn. Whistleblower Peiter “Mudge” Zatko, Twitter’s former head of security and a renowned hacker, has painted a dire picture of the inner workings at the microblogging platform, claiming there are serious privacy and security issues which could not only put users at risk but also pose a danger to national security.
More closely correlated to the Twitter vs. Musk case, Zatko has alleged that the company has no idea how many spam and fake bot accounts are actually on its platform.
This is like manna from heaven for Musk, whose reneging on the $44 billion deal to buy Twitter is based on the claim there are far more spam accounts on the platform than the company will admit. Following the allegations, both Musk’s and Twitter’s legal teams have subpoenaed the whistleblower.
With the case due in court in October, until now the odds looked stacked in Twitter’s favor. However, the latest revelation could be something of a game-changer.
Wedbush’s Daniel Ives says the latest development and timing is a “huge potential win for Musk which could complicate the Twitter case.”
With the revelations potentially creating a “Pandora’s box” situation for Twitter, it could bring both sides to the negotiating table so to resolve the issue before the trial goes ahead.
Of all the possible outcomes, Ives thinks the one involving both parties hammering out a new deal is the most probable. “We continue to believe a likely scenario is Musk still buying Twitter at a lower renegotiated price in the $50 range (our price target) and taking a brutal Game of Thrones battle in Delaware for both sides off the table before it kicks off,” the 5-star analyst opined.
For now, Ives remains on the sidelines. He rates Twitter shares a Neutral, while his $50 price target implies ~30% gains from current levels. (To watch Ives’ track record, click here)
Like Ives, most other analysts recommend sitting this one out; the stock garners two Buy ratings but with an additional 16 Holds, it receives a Hold (i.e. neutral) consensus rating. The average target currently stands at $40.49, suggesting the stock will stay rangebound for the foreseeable future. (See Twitter stock forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
