Carl Icahn Scores $250-M Gain On Twitter Stock After Calling Musk's Bluff
Carl Icahn has scored an estimated $250 million gain on Twitter stock by calling Elon Musk's bluff and investing $500 million in recent months, Business Insider and The Wall Street Journal reported.
Photo Insert: Icahn bought the shares in the mid-$30s, sources told the newspaper, suggesting he purchased around 14 million shares or close to 2% of the business.
Icahn bought the shares in the mid-$30s, sources told the newspaper, suggesting he purchased around 14 million shares or close to 2% of the business.
Tesla CEO Elon Musk agreed to buy Twitter for $54.20 a share in April, sending its stock price toward that level. However, he tried to back out of the deal over the next few months, prompting a lawsuit and sending Twitter shares down again. As a result, Icahn was able to buy them at a steep discount on Musk's offer.
Twitter's stock surged 22% to $52 on Wednesday, after Musk relented and offered to complete his buyout of Twitter at the originally agreed terms. Icahn's stake, assuming he hasn't sold it yet, is now worth about $750 million on paper — a 50% gain in a few short months.
Icahn bought into Twitter because he doubted Musk would proceed with a court battle he appeared likely to lose, Journal reported. The activist investor also pegged Twitter's long-term share value in the mid-$30s, and therefore felt his downside was limited, the newspaper said.
DE Shaw, Dan Loeb's Third Point, and other high-profile investors have also bet on Twitter stock in recent weeks, positioning them to benefit from Musk buying the company, sources told the newspaper. Icahn has made several lucrative bets on technology stocks over the years, including Apple and Netflix.
However, he missed out on pocketing as much as $40 billion by selling his stakes in both of those companies several years ago.