One of the more dramatic stories of 2022 is closing -- Elon Musk is terminating his deal to buy Twitter (NYSE: TWTR) . News of this sent Twitter's stock about 6% after hours to $34, still well short of the $54.20 per share Musk was offering.
While Musk may be through, is this an opportunity for investors to take a position in Twitter? After all, Twitter is one of the most popular social media companies.
First, it may be good to understand why Musk terminated the deal. The biggest sticking point for the deal was Twitter's refusal to provide complete data on fake or spam bots. This data is critical, as it determines how many of its users can be monetized. Most of Twitter's revenue is derived from advertising (93% during the first quarter). If Twitter can't guarantee that most ad viewers are humans, then the price companies are willing to spend on ads is substantially reduced.
For further details see:
What's Next in The Elon Musk and Twitter Saga?