In just over two months, short seller Hindenburg Research has pulled a 180 and changed its thesis on social media platform Twitter Inc TWTR in the battle against Tesla Inc TSLA CEO Elon Musk.
What Happened: Noted short seller Hindenburg Research has been one of the most recognized names when it comes to betting against stocks. The firm issued a bearish take on Twitter in May due to Musk holding all the cards.
On Wednesday, Hindenburg announced a change of opinion, which coincides with Twitter formally suing Musk to complete the $44 billion acquisition of the social media platform at a price of $54.20 per share.
“We have accumulated a significant long position in shares of Twitter. Twitter’s complaint poses a credible threat to Musk’s empire,” Hindenburg Research tweeted.
While the lawsuit filing from Twitter included Chuck Norris memes, poop emojis and screenshots of text messages, Hindenburg must also see enough of a legal case to force Musk to have to acquire Twitter.
In May, Hindenburg argued investors should be skeptical of the buyout with the price of Twitter falling after the acquisition was announced and a disclosure that the company’s user count had been overstated.
“As indicated by Musk, the platform is flooded with bots, spam, and scam accounts that likely inflate its genuine user metrics even further,” Hindenburg said.
Hindenburg argued that the only penalty for Musk walking away was a $1 billion breakup fee, giving him leverage to negotiate a lower…
