Business Case Studies & Business Publications

Twitter, Inc.: Deal on Hold

Andrasko, Joe, Coc...

Case

Twitter, Inc.: Deal on Hold

Andrasko, Joe; Cocke, Chas; Maiden, Stephen E.

QA-0965 | Published January 3, 2025 | 10 pages Case

Collection: Darden School of Business

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This case puts students in the shoes of Chas Cocke, founder and portfolio manager of investment fund LB Partners (LB) as he evaluates the risks around investing in Twitter, Inc. (Twitter), stock in mid-May of 2022. Shares at that time were trading at a 35% discount to the purchase price that billionaire Elon Musk had offered (and that the Twitter board of directors had accepted) just 18 days earlier. That “spread” was due to Musk’s May 13 statement that the deal was “temporarily on hold,” which raised the likelihood in investors’ minds that the acquisition would fall through. Cocke must decide whether that risk is worth taking in exchange for a potentially quick positive return for LB investors.

- Understand how to use a decision tree to structure a decision - Gain experience using a decision tree for insight into various options - Evaluate expected values when analyzing options