Famed activist investor Carl Icahn is said to have amassed a well over $500 million stake in social media Twitter (NYSE:TWTR) that paid off Tuesday when Elon Musk decided he would go through with his $44 billion Twitter purchase.
Twitter shares surged 22% on Tuesday on the news that billionaire Tesla CEO wanted to complete his purchase of Twitter (TWTR) on his original $54.20/share deal. Icahn paid in the mid $30s for his stock, which means profit for his Icahn Enterprise LP (NASDAQ:IEP) may be over $250 million, according to a WSJ report, which cited people familiar.
Other notable hedge funds including D.E. Shaw and Dan Loeb’s Third Point also took stakes in Twitter (TWTR) in recent months and are expected to make some nice gains, the WSJ reported.
Twitter stock (TWTR) was halted at midday Wednesday for news amid reports that Musk had sent the company a letter saying he wanted to conditionally complete his agreed $54.20/share buyout deal at the previously agreed price.
Icahn is said to have made the Twitter (TWTR) investment because he believed that Musk wouldn’t got to trial that he would likely lose and he thought that the social media company had an intrinsic value in the mid $30s, according to the WSJ.
Musk and Twitter later confirmed the offer, which was conditioned on Twitter staying its litigation forcing Musk to go through with the deal, and on receiving debt financing.
“Buying Twitter is an accelerant to creating X, the everything app,” Musk tweeted Tuesday evening – referring to his previous idea for creating something of a Twitter rival using his currently inactive X.com Internet domain.
Image and article originally from seekingalpha.com. Read the original article here.