Elon Musk’s Twitter Buyout Was A Billion Dollar Windfall For These 13 Hedge Funds

11/25/2022 5:30:00 PM

Elon Musk’s Twitter Buyout Was A Billion Dollar Windfall For These 13 Hedge Funds

Elon Musk’s Twitter Buyout Was A Billion Dollar Windfall For These 13 Hedge Funds

Wall Street billionaires Carl Icahn, Ken Griffin, Israel Englander and Daniel Loeb can thank Elon Musk for what might be 2022’s easiest money trade.

considered waging a proxy fight if the deal fell through.Full Transcript This transcript was prepared by a transcription service.late last week.public remarks aimed at app stores.

Icahn told the audience at New York’s Historical Society that he made a profit of around $250 million by investing in Twitter this summer.But he was far from the only one to benefit.Speaker 1: Is everybody here? We're all about to get fired from Twitter.Regulatory filings show that billionaire-led hedge funds including Citadel Advisors, Millennium Management, D.Musk gutted the company at a time when it should be preparing an initial assessment—due to be filed with the agency in January—describing in detail how Twitter is in meeting the order's requirements.E.Speaker 1: I've been nine years and nine months now.Shaw and Third Point built large positions in Twitter in the second and third quarters, as well as other firms like Pentwater Capital and Farallon Capital.Or Twitter could go further, like Netflix, which stopped offering subscriptions through Apple entirely in 2018.

Musk signed a merger agreement to buy Twitter for $54.How long were you here? Speaker 3: Four years.Twitter is required to carry out vulnerability testing every four months, privacy and security risk assessments every year, and get an independent security audit every two years for a decade.20 per share in April, but the stock was trading as low as $32.65 by July when he tried to terminate the deal.Kate Linebaugh: At 5:00 PM they were supposedly going to be out of a job.That created an arbitrage opportunity for as much as a 66% return for investors who doubted Musk had much of a chance in the Delaware Court of Chancery to back out.“This is one of those cases where, if there’s an additional order, there will be personal responsibility for Musk,” Vladeck says.Icahn’s with the SEC shows that he owned 12.Kate Linebaugh: About a day earlier, these employees had gotten an email from their new boss, Elon Musk.And Apple has detailed rules about what apps can link to when telling users about alternative ways to pay.

5 million Twitter shares as of September 30.He said at the Forbes summit he bought in the mid-$30s–if he bought at an average price of $35 per share and made a $19.So if you are up for that, click this link.20 profit on each one when the deal closed at the original price of $54.20 per share on October 28, he would have netted a $240 million profit.Alexa Corse: And if you don't, goodbye.The only fund that made a bigger bet than Icahn was Naples, Florida-based Pentwater Capital Management, founded by Matthew Halbower in 2007.S.

It bought 18.Kate Linebaugh: Look in the mirror and tell me, are you hardcore? Alexa Corse: Basically, I mean, this was an ultimatum for sure.1 million shares during the second quarter and added another 5.3 million shares as of the end of the third quarter.Since then, thousands of its 7,500 employees have been laid off, fired or decided to leave the company.If it bought those 24 million shares at Twitter stock’s median closing price of $40.16 in the first quarter and $41.I'm Kate Linebaugh.If app store-related problems strike Twitter, it could be "catastrophic," according to the former Twitter head of trust and safety Roth.

05 in the second quarter and held them through the completion of the acquisition in October, it would have made $324 million in profit, though its 13-F filing shows it hedged some of those gains by buying put options as well.Pentwater didn’t respond to a request for comment.Coming up on the show, the layoffs at Elon Musk's Twitter and what they could mean for the platform.In all, Forbes found 13 hedge funds that spent upwards of $100 million adding to their Twitter stakes between the end of the first quarter and the end of the third quarter this year.We reached out to each fund to ask for average purchase prices, and estimated that they bought at Twitter’s median closing price in each quarter if more precise information wasn’t available.Is that your dog? Melissa Engel: That is my dog.These funds cumulatively purchased more than 10% of the company in the six months leading up to September 30 and likely made well over $1 billion in profits on the deal.There's precedent for a complete ban.

TWITTER WINNERS These hedge funds added the most to their Twitter positions this spring and summer and likely minted profits if they held on through Elon Musk's purchase.She lives in San Francisco with her two kids and her dog.These numbers don’t include any additional shares the firms may have purchased in October, when the margins were slimmer while Musk finalized the acquisition, and don’t include possible trading that took place within each quarter.13-F filings show a simple snapshot of each firm’s long stock holdings on the last day of each quarter and don’t provide enough information to pin down exact gains and losses, but often represent the most thorough picture of what funds are buying and selling.Kate Linebaugh: Biscuit.The biggest winners included Hong Kong-based Segantii Capital Management, founded by British investor Simon Sadler, and Farallon Capital, the San Francisco-based firm founded by Thomas Steyer in 1986 and now run by Andrew Spokes.David Einhorn’s Greenlight Capital initiated a position of 4.Melissa Engel: The one thing I love about dogs is that they're blissfully unaware of any of our human drama.In Apple's case, the decision to ban high-profile apps is made by a group called the Executive Review Board, which is led by Schiller — the Apple executive who deleted his Twitter account over the weekend.

3 million shares in the third quarter, his 13-F filing shows, and he wrote in a letter to investors viewed by Forbes that the average purchase price was $37.24 per share.She wrote algorithms to look for political misinformation in elections around the world.He expected that the Delaware Court of Chancery would be wary of inviting future buyer’s remorse suits if it let Musk walk away.“The case law on this is quite clear.I think it's this absolutely unique experience and I've been using it since 2009 and I've seen it evolve over the years from being like the TikTok of its day.If it were anyone other than Musk, we would handicap the odds of the buyer wiggling out of the deal to be much less than 5%,” Einhorn wrote in the letter prior to the completion of the deal.Apple and Google have been careful while banning apps like Parler, pointing to specific guideline violations like screenshots of the offending posts, instead of citing broad political reasons or pressure from lawmakers.

“At this price there is $17 per share of upside if TWTR prevails in court and we believe about $17 per share of downside, if the deal breaks.And so when I saw the position come up, I jumped at the chance to get an opportunity to work there.So, we are getting 50-50 odds on something that should happen 95%+ of the time.” Musk saw the writing on the wall and reversed course in October, agreeing to pay the full price as these investors expected.He was specifically opposed to our content moderation policies.His first weeks as Twitter’s owner have been marked by confusion and complaints after he opened verification to anyone willing to pay $8 per month, causing a wave of “verified” parody accounts, and laid off 3,700 employees, almost half of its staff.He has that “bankruptcy is not out of the question,” but if his $44 billion equity investment goes up in smoke, the hedge funds he paid that cash to will be laughing all the way to the bank.We were just worried about the direction of the company, and there'd been texts that had been leaked that showed that he wanted to lay off large numbers of employees.Future features could also irk Apple and Google and prompt a closer look at the platform's current operations.

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Flattered by your interest but am committed to existing talks so must decline A hedge fund is a pooled investment fund that trades in relatively liquid assets.

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