Twitter (NYSE:), announced yesterday that it had been purchased by Tesla (NASDAQ;) CEO Elon Muss for $54.20 each share. This transaction is valued at approximately $44 billion.

Musk claimed that he has secured $46.5 Billion in financing. The $25.5B of fully committed debt, margin loan financing, and $21.0B in equity commitment was part of Musk’s earlier statement.

Musk said in a press statement that free speech was essential to a democracy functioning. Twitter, however, is the virtual town square where important issues are discussed.

This is what 8 Street analysts think about this deal.

Wedbush’s Daniel Ives: “It all came down to no other bidders or white knights emerging in the M&A process and Twitter’s Board back was against the wall once Musk detailed his $46 billion in financing last week to get pen to paper on this deal. As this soap opera ends, we don’t expect there to be any regulatory obstacles that prevent the deal from moving forward. The Board got some extra time with the poison pill but ultimately had to get to the negotiation table with Musk to get this deal done as the clock struck midnight on Twitter’s history as a public company.”

Stifel’s Mark Kelley: “From here, we’re keenly focused on any changes to the business model, as Mr. Musk has suggested that perhaps the platform should focus on subscriptions rather than relying heavily on advertising, or maybe no advertising at all. If Twitter were to exit the advertising industry altogether, we would view that as a slight positive for the rest of our coverage, as the roughly $7bn in advertising dollars Twitter was likely on track to generating in 2023 would shift to other platforms and, given that Twitter is still considered a fairly niche platform by many in the advertising industry, we believe those budgets would mostly work their way into other relatively early or niche platforms, such as Snap (NYSE:), Pinterest (NYSE:), and TikTok.”

KeyBanc’s Justin Patterson: “While we were skeptical a deal would get done, it appears Mr. Musk’s desire to own the asset outweighed risks from a slowing brand advertising environment and increased regulation of user-generated content. We suspect that the Board is under more pressure than ever due to the lack of bids and the above-mentioned challenges. The key questions going forward: how quickly can Mr. Musk improve Twitter’s product and how much turnover will occur in the interim?”

Truist’s Youssef Squali: “We believe that $54.20/share is a fair price, translating into ~7x EV/Revenue and ~26x EV/EBITDA on our FY22 estimates. We note that this compares to FB (Buy) at 3.8x and 8x, and GOOGL (Buy) at 5x and 12x, respectively.”

Piper Sandler’s Thomas Champion: “For Twitter, this may portend an uncomfortable reality. The analyst day’s ’23 user/financial targets set a year ago seems unlikely to be met. While it was possible that there had been an engagement advantage recently due to world events the 1Q results could have come out weaker than anticipated. Furthermore, the White Knight counter-offer was not accepted by management. With management and the board likely to face withering criticism in the face of a lost Musk bid, management and the board realized this was the best alternative.”

Wolfe Research’s Deepak Mathivanan: “While we highlighted TWTR as a potential M&A target in our 2022 outlook report, we didn’t foresee Elon Musk as the buyer. Mr. Musk’s take private of TWTR is a unique situation, but we do believe the pullback in Internet valuations over the past several months lends itself to potential M&A activity in our space. As we highlighted previously, we see PINS, PTON, WIX, GDDY, and TRIP as potential M&A targets within our coverage.”

JMP’s Andrew Boone: “With ~85% of Twitter’s revenue generated through brand advertising and as free speech is a priority for Mr. Musk, advertisers may shift budgets to other channels given brand safety concerns. While it remains very early, we believe potential beneficiaries could include YouTube (GOOGL, MO, $3,300 PT), Snap (SNAP, MO, $50 PT), Reels on Facebook (NASDAQ:) and Instagram (FB, MO, $265 PT), and TikTok.”

Mizuho’s James Lee: “We originally thought the Board would resist the offer due to philosophical differences. Musk, for example, stated that social media platforms should move away from advertising. Furthermore, they could be concerned about the limited time that Mr. Musk has to focus on Twitter as he is CEO of various technology companies, including Tesla (TSLA, Buy, $1,300PT, covered by Vijay Rakesh), SpaceX and The Boring Company.”

By Senad Karaahmetovic