Pump and Dump Part II
Today a letter was released from the Musk parties stating basically they want to go back to Square One. As per my understanding it doesn't say Musk will unconditionally buy Twitter, it basically says they are standing their ground and they're abiding by the original acquisition terms, which back then stated there should be transparency with the "bots" and other issues that made Musk withdraw the offer. So it is basically conditioning the acquisition to the original terms if Twitter dismisses the lawsuit. The circumstances that motivated Musk to back off are still there and the circumstances that initiated the lawsuit are still there, so there's no real advance in the negotiation, but smoke and mirrors.
Musk must have a very good team of technical trader advisors who have been giving a perfect timing for the tweets and announcements. In this case, we can see that after the drama shown on the initial offer there was nothing happening and the market lost interest in the acquisition, taking the stock from the 54 level back to 32, making a series of Lower Highs and Higher Lows (triangular consolidation) today it is at the tip of the triangle, and it's a technical point where a range break out is about to happen. There is a coiling negatively divergent momentum, and low volume, heading to the bear side. it only needed the triggering element, The "nothing burger" letter.
The timing in the market is also another factor to consider, in a wink of an eye in a one minute bar the stock spiked and it was halted the minute after when it started to go down. Then all the media started to stir this up over and over and over and over, until all finance and non finance news outlets and even social media had already spread the news as "Elon goes ahead with the acquisition at the originally proposed price" ... however, the Devil is in the details.
Another timing element that strikes my attention is that important announcements are never given in the open market, and it happened in the middle of the day, at lunch time, o'clock the stock went from 43 to 47, and the minute after the trading was halted after it started to sell from 50 until 48, it resumed trading until 3:35 pm EST, 25 minutes before market close. This looks like an open invitation to gather as many bag holders as possible who are pressured by the "Missing Out the boat" syndrome.
Although the Musk team confirmed the original $54.20 acquisition price, the market didn't stabilized at that level, like it happens when there's a serious acquisition, it was bouncing below that level, which makes it look more like a staged acquisition to draw liquidity for those who want to exit the market at that level.
In the after market the stock didn't react to the upside, it is sliding to the down side and right at this point in time it is at 51.34.
The two sections of the letter that make this a "Nothing Burger" are :
1) "... provided that the Delaware Chancery Court enter an immediate stay of the action, Twitter vs. Musk, et al. (C.A. No. 202-0613-KSJM) (the “Action”) and adjourn the trial and all other proceedings ..."
2) The Musk Parties provide this notice without admission of liability and without waiver of or prejudice to any of their rights, including their right to assert the defenses and counterclaims pending in the Action
How this story may unravel, since this is not a commitment to proceed with the merger, but a condition to proceed with the merger, this doesn't take the deal out of the swamp where it has been for a while. They can be entangled again and Twitter can just go ahead with the deal the way it was before the letter release, turning this situation into a Twitter Legal Pump and Dump part II.
It is not the first time that "rumors" of a Twitter acquisiton have been spread, it looks like it is a sport when liquidity is needed. The difference is that it involves a celebrity of the financial market, pretty much the way Livermore's Wife was used back in the day for a Pump and Dump schema.
This is a Verbatim copy from the letter:
Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, CA 94304-1050
Attn: Marty W. Korman
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017
Attn: Alan Klein
Gentlemen:
On behalf of X Holdings I, Inc., X Holdings II, Inc. and Elon R. Musk (the “Musk Parties”), we write to notify you that the Musk Parties intend to proceed to closing of the transaction contemplated by the April 25, 2022 Merger Agreement, on the terms and subject to the conditions set forth therein and pending receipt of the proceeds of the debt financing contemplated thereby, provided that the Delaware Chancery Court enter an immediate stay of the action, Twitter vs. Musk, et al. (C.A. No. 202-0613-KSJM) (the “Action”) and adjourn the trial and all other proceedings related thereto pending such closing or further order of the Court.
The Musk Parties provide this notice without admission of liability and without waiver of or prejudice to any of their rights, including their right to assert the defenses and counterclaims pending in the Action, including in the event the Action is not stayed, Twitter fails or refuses to comply with its obligations under the April 25, 2022 Merger Agreement or if the transaction contemplated thereby otherwise fails to close.
The Letter filed with SEC The Letter filed with SEC
Musk must have a very good team of technical trader advisors who have been giving a perfect timing for the tweets and announcements. In this case, we can see that after the drama shown on the initial offer there was nothing happening and the market lost interest in the acquisition, taking the stock from the 54 level back to 32, making a series of Lower Highs and Higher Lows (triangular consolidation) today it is at the tip of the triangle, and it's a technical point where a range break out is about to happen. There is a coiling negatively divergent momentum, and low volume, heading to the bear side. it only needed the triggering element, The "nothing burger" letter.
The timing in the market is also another factor to consider, in a wink of an eye in a one minute bar the stock spiked and it was halted the minute after when it started to go down. Then all the media started to stir this up over and over and over and over, until all finance and non finance news outlets and even social media had already spread the news as "Elon goes ahead with the acquisition at the originally proposed price" ... however, the Devil is in the details.
Another timing element that strikes my attention is that important announcements are never given in the open market, and it happened in the middle of the day, at lunch time, o'clock the stock went from 43 to 47, and the minute after the trading was halted after it started to sell from 50 until 48, it resumed trading until 3:35 pm EST, 25 minutes before market close. This looks like an open invitation to gather as many bag holders as possible who are pressured by the "Missing Out the boat" syndrome.
Although the Musk team confirmed the original $54.20 acquisition price, the market didn't stabilized at that level, like it happens when there's a serious acquisition, it was bouncing below that level, which makes it look more like a staged acquisition to draw liquidity for those who want to exit the market at that level.
In the after market the stock didn't react to the upside, it is sliding to the down side and right at this point in time it is at 51.34.
The two sections of the letter that make this a "Nothing Burger" are :
1) "... provided that the Delaware Chancery Court enter an immediate stay of the action, Twitter vs. Musk, et al. (C.A. No. 202-0613-KSJM) (the “Action”) and adjourn the trial and all other proceedings ..."
2) The Musk Parties provide this notice without admission of liability and without waiver of or prejudice to any of their rights, including their right to assert the defenses and counterclaims pending in the Action
How this story may unravel, since this is not a commitment to proceed with the merger, but a condition to proceed with the merger, this doesn't take the deal out of the swamp where it has been for a while. They can be entangled again and Twitter can just go ahead with the deal the way it was before the letter release, turning this situation into a Twitter Legal Pump and Dump part II.
It is not the first time that "rumors" of a Twitter acquisiton have been spread, it looks like it is a sport when liquidity is needed. The difference is that it involves a celebrity of the financial market, pretty much the way Livermore's Wife was used back in the day for a Pump and Dump schema.
This is a Verbatim copy from the letter:
Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, CA 94304-1050
Attn: Marty W. Korman
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017
Attn: Alan Klein
Gentlemen:
On behalf of X Holdings I, Inc., X Holdings II, Inc. and Elon R. Musk (the “Musk Parties”), we write to notify you that the Musk Parties intend to proceed to closing of the transaction contemplated by the April 25, 2022 Merger Agreement, on the terms and subject to the conditions set forth therein and pending receipt of the proceeds of the debt financing contemplated thereby, provided that the Delaware Chancery Court enter an immediate stay of the action, Twitter vs. Musk, et al. (C.A. No. 202-0613-KSJM) (the “Action”) and adjourn the trial and all other proceedings related thereto pending such closing or further order of the Court.
The Musk Parties provide this notice without admission of liability and without waiver of or prejudice to any of their rights, including their right to assert the defenses and counterclaims pending in the Action, including in the event the Action is not stayed, Twitter fails or refuses to comply with its obligations under the April 25, 2022 Merger Agreement or if the transaction contemplated thereby otherwise fails to close.
The Letter filed with SEC The Letter filed with SEC
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