Is Thoma Bravo a Hurdle for Elon Musk’s Twitter Bid?

Thoma Bravo is considering a buyout bid for Twitter (TWTR), according to a Reuters report. The private-equity firm, whose fortune is estimated at more than $103 billion, could challenge Tesla (TSLA) CEO Elon Musk for the social media company. 

Musk has offered to acquire Twitter for about $43 billion, but Twitter’s board is resisting. The board has adopted a so-called poison pill measure to make it harder for Musk to complete a hostile takeover of the social media company.

How much Thoma Bravo would bid for Twitter or whether the board would accept its offer is not known. The private-equity firm mostly invests in software businesses, and its portfolio companies include McAfee, Medallia, and Landesk.

Musk Hints At Contest for Twitter

In an online poll, Musk asked whether Twitter’s board or shareholders should decide whether his bid is acceptable. The vast majority of the people responding to the poll said the matter should be up to shareholders to decide. In a weekend tweet, Musk hinted that a tender offer for Twitter shareholders. Musk appears to have Jack Dorsey, a former Twitter CEO and a major shareholder in the company, on his side. 

Wall Street’s Take

The stock has a Hold consensus rating based on 20 Holds, five Buys, and three Sells. The average Twitter price target of $45.57 implies 1.1% upside potential to current levels.

News Sentiment

TipRanks data shows that the News Score for Twitter is currently Neutral based on 513 articles published over the past seven days. Notably, 57% of the articles have a Bullish Sentiment compared to a sector average of 63%, while 43% of the articles have a Bearish Sentiment compared to a sector average of 37%.

Takeaway for Investors

A contest between Musk and Thoma Bravo or another investor to acquire Twitter could be great for Twitter shareholders. The competition could result in the social media platform selling at a steep premium.

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