The activist hedge fund Elliott Management sold its entire equity stake in Twitter in the second quarter, a period during which the social media company’s shares rallied dramatically after agreeing a $44bn takeover by Elon Musk in April.
A securities filing on Monday showed that Elliott had no
common stock in Twitter as of June 30, down from 10mn shares that were worth
$387mn on March 31.
Tesla chief executive Musk offered to buy Twitter at $54.20
a share in cash on April 14, a deal agreed by the company less than two weeks
later.
Elliott declined to comment on when it sold the stock.
Twitter’s share price rose as high as $51.70 in late April before falling to
$37.39 on June 30, after Musk had tried to walk away from the deal. Twitter
shares closed on Monday at $44.50.
The $56bn hedge fund founded by billionaire Paul Singer,
which had been silent about Musk’s takeover bid, played a role in steering
Twitter’s direction and leadership before exiting its position.
In early 2020, Elliott built a large stake in Twitter and
participated alongside private equity firm Silver Lake in a $1bn convertible
debt offering that the social media company used to repurchase shares.
Jesse Cohn, a partner at Elliott who oversees the firm’s
technology investments, joined Twitter’s board alongside Silver Lake co-chief
executive Egon Durban. As part of their investment, Elliott and Silver Lake
helped set up succession plans for Twitter co-founder and chief executive Jack
Dorsey.
In June 2021, Cohn stepped down from Twitter’s board of
directors, while Silver Lake’s Durban maintained his seat. Elliott remained a
large shareholder, supporting the company’s naming of Parag Agrawal to replace
Dorsey last November.
In July, Musk said he was ending his bid for Twitter and
accused the company of disclosing “false and misleading” information about the
number of fake and spam accounts on the social network. Twitter sued Musk to
enforce the deal. A trial is set to take place in a Delaware court in October.
Filings indicated that Elliott also cut its other exposure
to Twitter.
Elliott held call options on 2mn Twitter shares and 50mn in
shares underlying its convertible bond position, as of the end of the first
quarter. The filings showed that Elliot continued to hold 40mm in the shares of
its convertible bond position, but no call options, as of June 30.
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