Elon Musk gains influence as Snap-inspired decline takes Twitter 33% below deal price

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Twitter (NYSE: TWTR) fell nearly 4% in Tuesday’s premarket trading, dragged down by shock advice from rival Snap (SNAP). With the drop, TWTR is now nearly 33% below the price included in Elon Musk’s original agreement to buy the company, giving Tesla (TSLA) boss extra leverage as he tries to renegotiate the terms of the deal.

Musk initially agreed to buy TWTR for $54.20 per share. However, since the deal was struck last month, the billionaire has put the deal on hold, despite a potential $1 billion break-up fee if the deal fails.

Meanwhile, Twitter has steadily lost ground over the past few weeks. From a close of $50.36 on May 5, the stock is poised to open Tuesday’s trading around $36.56.

This would represent a drop of around 27% in less than three weeks. It also puts the stock about 33% below Musk’s ask price.

The final step down came following weak Snap (SNAP) tips. The rival social media platform said deteriorating economic conditions had led it to expect revenue and EBITDA below the low of its previous guidance. The firm had released its previous prediction about a month ago.

SNAP plunged nearly 35% in premarket action. The sale also spilled over to the rest of the digital advertising space. Along with TWTR, Pinterest (PINS) and Meta Platforms (FB) were among the notable decliners.

TWTR’s slide provides additional leverage for Musk, who has hinted that he would like to renegotiate the buyout deal at a lower price. So far, the billionaire has widely questioned fake TWTR accounts and spam emails to explain his cooling enthusiasm for the purchase.

Meanwhile, the Wall Street community is starting to see a lower price as a distinct possibility. Top Wedbush analyst Dan Ives speculated that Musk could be looking at a price in the “mid-$40s”.

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