The soap opera surrounding Tesla ( TSLA ) boss Elon Musk's agreement to buy Twitter ( NYSE: TWTR ) moved back into the spotlight during Friday's premarket action. Shares of the social media giant dropped following reports that indicated that the deal was once again on the rocks.
Earnings news also provided a catalyst for premarket trading. WD-40 ( WDFC ) dropped on a disappointing quarter. Meanwhile, Levi Strauss ( LEVI ) gained ground as the company was able to absorb inflationary pressures and deliver Street-topping results.
In other news, American Airlines ( AAL ) ticked lower after an analyst turned skeptical about the company's ability to handle higher costs.
Decliners
Twitter ( TWTR ) lost ground in premarket trading on reports that Elon Musk's deal to buy the social media company was in "serious jeopardy." TWTR dropped about 4% on the news, falling to $37.28 -- well below the $54.20 contemplated in the Musk bid.
A report in the Washington Post pointed to ongoing concerns from Musk's camp about spam accounts. The skepticism comes despite TWTR's recent assurance that the number of bots is well under 5% of the platform.
Meanwhile, influential Wedbush analyst Dan Ives lowered his price target on TWTR to $43. Ives argued that the $54.20 purchase price included in the current Musk deal is "essentially out the window," with a roughly 35% chance that the Tesla boss walks away from the deal entirely.
WD-40 ( WDFC ) also made the list of premarket decliners, with a weak earnings report sparking a decline of nearly 9%. The maker of mechanical lubricant missed expectations with its Q3 results and lowered its full-year forecast.
Commenting on the results, CEO Garry Ridge said: "Unfortunately, we continue to face a challenging inflationary environment and our third quarter gross margin came in at 48% reflecting significant increases to our cost of products sold."
Elsewhere, American Airlines ( AAL ) stumbled in premarket action as well. The stock slipped 1% after receiving a downgrade from Argus. The firm cut its rating on the airline to Hold from Buy, citing high debt and cost pressures, especially from pilot salaries and fuel prices.
Gainer
The release of earnings news prompted buying in Levi Strauss ( LEVI ). The jeans and clothes maker topped expectations with its Q2 results, with revenue that climbed 15% from last year.
The company acknowledged the impact of inflation pressures but was able to maintain margins with more direct-to-consumer sales and lower promotions. Bolstered by the quarterly results, LEVI climbed almost 4% before the opening bell.
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Hot Stocks: TWTR slides as Musk deal in jeopardy (again); WDFC, LEVI move on earnings; AAL downgrade