Financial Associated Press (Shanghai, editor Xiaoxiang) news, people once described Musk's followers as "fanatical religious team." And now, when the "coin circle god" who frequently calls for wind and rain in the online world, he has set his next goal on Twitter Inc. At that time, his "believers" were also blowing the rallying cry!
Shortly after the world's richest man and Tesla boss offered to buy Twitter for $43 billion on Thursday, retail investors bought Twitter stocks. Although Musk himself later expressed doubts about the success of the deal that caused a sensation in global financial markets, it did not serve as a deterrent to non-professional retail investors.
According to social media tracking service SwaggyStocks, Tesla and Twitter have been the two most mentioned stocks in WallStreetBets, the home base of U.S. retail investors, in the past 24 hours.
Among them, Twitter became the stock with the most buy and sell orders from investors on The Fidelity platform on Thursday, with a total of 12,000 buy orders and about 7,400 sell orders. Tesla ranked second, with 8,000 buy and 3,700 orders, respectively.
In fact, since Musk first disclosed his 9.2 percent stake in Twitter on April 4, retail investors have driven Twitter's record trading volume. As of Wednesday's close, they had invested about $423.9 million in Twitter.
However, institutional investors have reacted less aggressively to the offer, although they will be key to Musk's direct presentation to shareholders about the success of the acquisition. Twitter shares closed down 1.7 percent to $45.08 on Thursday, well below Musk's $54.20 bid.
Follow Musk to "eat spicy"?
Short-term traders and Musk fans have seen a surge of interest in the billionaire's movements, largely because they have witnessed the huge influence of the influential figure "shaking his arms and scattering", which may have made Twitter one of the most popular meme stocks among retail investors.
Interestingly, Musk has historically influenced the market in the form of "inducing tweets" on Twitter. With more than 80 million followers on the platform, he is one of the most influential people on the platform.
In January 2021, when the meme trading boom peaked, Musk tweeted that "I kind of fell in love with Etsy," and the online craft market's stock market value subsequently jumped by more than $2 billion.
On the same day, Musk posted another tweet with only a short word of "Gamestonk!" ", then the share price of the game station rose by 92%." "Stonk" is a Wall Street slang term that refers to stock prices that can rise without a reason.
Nick Colas, co-founder of DataTrek Research, said, "For years, retail investors have been on the lead by Musk, and he has made a lot of money for them. ”
Patrick Questembert, a 57-year-old retail trader, has long been reading the news on Twitter and interacting with other investors to learn about market conditions. On Thursday morning, local time, just after Musk issued a buyout offer for Twitter, he bought 10,000 shares.
"(Twitter) There's more value to be unleashed, and Musk believes the stock is worth well over $54. I tend to agree with that. The changes he wants to make to Twitter will be good for shareholders, so I'm sure he'll stick with it," Questembert said.
Questembert, who added his holdings to Twitter on Thursday, has already made a lot of profits in the deal that followed Musk. He said he started buying Twitter stock last month because it was at a low of $30 at the time, not much higher than the price the company had when it went public in 2013. After the news of Musk's stake broke, Questembert sold his 11,000 shares for more than $50 per share.
"It was close to my birthday, so I told myself that it was a birthday present from Musk," Questembert said, "and we all liked Musk, he was a maverick." He sometimes seems childish, but he always gets things done. ”
The jury is still out on whether the acquisition will materialize
Of course, for retail investors who can't wait to follow Master and buy Twitter, the biggest risk is undoubtedly that the acquisition offer is still full of possibilities of eventual failure.
Twitter CEO Parag Agrawal said at a full-staff meeting on Thursday that the company was not "hijacked" by news of Musk's acquisition of Twitter, according to people familiar with the matter. The board is still evaluating Musk's offer to buy and take the company private.
People who did not want to be identified said that during a plenary session Thursday afternoon, employees asked questions about a variety of potential possibilities, and Agrawal responded in a neutral tone.
Agrawal did not hint at the board's intentions, only that it was a strict procedure to determine what was most in the interests of shareholders, the people familiar with the matter said. Other people familiar with the matter said earlier that the company's board of directors held an emergency meeting Thursday morning to discuss a potential response to Musk's proposal — including poison pill measures commonly used to prevent hostile takeovers.
At least one of Twitter's major shareholders has publicly expressed their opposition to Musk's takeover. Saudi Prince Alwaleed bin Talal said on Thursday that the offer did not match Twitter's intrinsic value given Twitter's growth prospects.
In fact, Musk himself admits that he's not sure if he's "really able to buy" Twitter. Musk said it was his best and last offer, but he also noted that he had a B plan for his bid.
That could mean that if Twitter's board rejects his offer, he may consider taking greater hostile action and ask shareholders directly if they would be willing to accept his offer. But it will need to incentivize the institutional investors and retail investors who hold shares in Twitter. Since Musk's stake was disclosed, $423.9 million in influx of money from retail investors is equivalent to about 1.2% of Twitter's current market capitalization.
After the U.S. stock market closed on Thursday, Musk conducted an inquiry on Twitter, asking whether shareholders, not the board, should decide on the takeover offer. As of press time, about 84 percent of respondents answered yes.
Rational investors are still reluctant to place heavy bets
The above series of uncertainties has also made some relatively rational investors reluctant to bet heavily.
Andy Strachwsky, a retail investor in Florida, has expressed skepticism about Twitter's future. After Musk previously refused to join the company's board, the 45-year-old retired commercial photographer sold all of his Twitter stakes — worth $30,000.
"The only reason I bought Twitter before was because Musk took a stake," he said. "I want to make some money with him. But as soon as he declined the board's invitation, I thought he would try to buy it all, but twitter's board would never let him do it. ”
Wall Street "bull market queen" Cathie Wood is also less enthusiastic about Twitter, selling 185,900 shares of Twitter stock from her own Ark Next Generation Internet ETF after Musk took a stake in the social media giant. She said she was concerned about "Twitter management distractions" when Twitter co-founder Jack Dorsey resigned earlier.