Twitter's 'mounting' ad pressures mean stock could be in mid-teens without support from Musk deal

Twitter Inc. shares could be trading in the mid-teens without Tesla Inc. Chief Executive Elon Musk's contentious $54.20/share deal for the company helping to prop up the name, according to MoffettNathanson analyst Michael Nathanson. His comments come in the wake of Twitter's Friday morning earnings report, in which the company sported a revenue decline and pointed to advertising-market challenges. The stock closed Friday at $39.84. "We think Elon Musk's deal to acquire Twitter at $54.20 is looking better for shareholders by the day, especially with Twitter's ad revenue growth precipitously falling under pressure from macro headwinds," Nathanson wrote. "As such, it would be an incredible win, to say the least, if Twitter can close this deal in court." Musk said earlier in July that he intended to terminate the deal, but an October trial is expected to determine whether he will be required to move forward with the acquisition. Nathanson noted that the company didn't hold an earnings call that would have offered more information about what was driving the revenue pressure, so investors are left to look at what ad-driven peer Snap Inc. shared in its own disappointing report. "Snap's ad growth has further decelerated into 3Q, so we expect a similar trend for Twitter as well," he wrote. "We expect Twitter's advertising growth to remain depressed over the next several quarters as it contends with mounting macroeconomic pressures."

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