Tesla (TSLA) CEO Elon Musk suddenly went quiet on Twitter (TWTR) after receiving a massive trove of data that he demanded from the social media company to help him assess the extent of fake accounts on the platform. After 11 days of unusual Twitter absence amid wild speculation, Musk resurfaced on July 2, posting a photo of himself and four of his sons with Pope Francis.
The photo made it clear that the Tesla boss took a break from social media to meet the Pope. What exactly the electric vehicle (EV) billionaire and the pontiff discussed remains a mystery. However, the meeting comes at a time when Musk is finalizing his $44 billion Twitter buyout deal. With nearly 19 million followers on his English language profile alone, the pope is among the most prominent figures on Twitter.
Overwhelming Data & a $1 Billion Breakup Bill
Musk finally received the data he demanded to help him prove his claims that there are more fake accounts on Twitter than the company has disclosed. While Twitter maintains that less than 5% of its accounts may be fake, Musk thinks more than 20% of the accounts are fake. Experts have argued that analyzing the data to prove Twitter wrong regarding phony accounts presents a herculean task for Musk’s side in the buyout deal.
Musk had threatened that the transaction would not proceed until Twitter had released the data he wanted. Under certain circumstances, Musk could be on the hook for a $1 billion breakup fee if the Twitter deal falls through. Twitter stock has dropped almost 30% from Musk’s buyout price of $54.20 per share.
Wall Street’s Take
On July 1, Piper Sandler analyst Thomas Champion maintained a Hold rating on Twitter with a price target of $54, which implies 41% upside potential.
The stock has a Hold consensus rating based on one Buy and 24 Holds. The average Twitter price target of $51.10 implies 38.2% upside potential to current levels.
TipRanks data shows that financial blogger opinions are 67% Bullish on TWTR, compared to a sector average of 65%.
Key Takeaway for Investors
Musk joins the list of key technology executives who have met the pope. These include Meta Platforms’ (META) Mark Zuckerberg and Apple’s (AAPL) Tim Cook. Apple’s business has continued to flourish since Cook’s 2016 meeting with the pope.
However, a meeting with the pope in the middle of a major project does not always guarantee success. For example, Meta Platforms went on to suspend its Aquila drone-based internet project not long after Zuckerberg met the pontiff and even presented him a toy of the Aquila drone. It remains to be seen what comes out of the Twitter buyout deal after Musk’s Vatican tour.
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