Elon Musk's surrender on buying Twitter could deliver a $255 million profit to a Florida hedge fund, report says
A hedge fund in Florida could make a profit of more than $250 million as Elon Musk revives his Twitter buyout.
Pentwater Capital bought 18.1 million Twitter shares for roughly $725 million in the second quarter, according to CNBC.
That stake would be worth about $980 million if Musk completes the deal at the previously agreed-upon price of $54.20 per share.
A Florida hedge fund is set to make more than $200 million as Elon Musk revives his takeover of Twitter, according to a report from CNBC.
Pentwater Capital, which was founded in 2007 and oversees $5 billion in assets under management, bought a 2.4% stake in Twitter in the second quarter and became one of the company's biggest shareholders. The purchase of 18.1 million shares came at a cost of about $725 million.
If the deal between the Tesla CEO and Twitter is finalized at the original bid price of $54.20 per share, Pentwater's stake would be worth about $980 million, yielding a $255 million profit.
Pentwater purchased its stake in Twitter when shares were falling as Musk was showing signs of buyer's remorse. Shares fell as low as $32.55 in early July after Musk signaled he was walking away from the deal.
But earlier this week, Musk said he sent a letter of intent to move forward with his takeover of Twitter at the agreed-upon price of $54.20. That could avoid a legal battle as both Twitter and Musk were set to appear in court over litigation stemming from fallout of the original deal.
Shares of Twitter soared 22% on Tuesday to $52 and dipped 1.3% to $51.29 on Wednesday, still below Musk's bid price and a sign that Wall Street isn't fully convinced the deal will be finalized.
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