Short-seller Hindenburg Research warned on Monday that Elon Musk's US$44-billion offer to take Twitter private could get repriced lower if the the world's richest person walked away from the deal.
"Musk holds all the cards here," Hindenburg, which has a short position on Twitter, said in a report. "If Elon Musk's bid for Twitter disappeared tomorrow, Twitter's equity would fall by 50 per cent from current levels. Consequently, we see a significant risk that the deal gets repriced lower."
Shares of the social media platform were down as much as 4 per cent amid a broader market decline and touched US$47.76, their lowest level since Musk made his US$54.20 per share offer in April, calling it "best and final".
Twitter declined to comment.
"Interesting. Don't forget to look on the bright side of life sometimes!" Musk tweeted in a light-hearted response, to which the short-seller said it expects Tesla shareholders will thank him if the deal is done at a "more reasonable price".
Hindenburg said the deal has seen a number of developments, from financing to board approval, which could have weakened Twitter's position.
"We are supportive of Musk's efforts to take Twitter private and see a significant chance the deal will close at a lower price," Hindenburg said.
The short-seller said Tesla chief executive could walk away paying the US$1 billion breakup fee and has an incredible leverage to renegotiate if he chooses to.
Last month, Twitter secured a US$44-billion cash deal to sell itself to Musk, who received over US$7 billion in funding from high-profile investors, including Oracle's co-founder Larry Ellison and Sequoia Capital.
Angelo Zino, analyst at CFRA Research, said there is a high probability that the deal would close at the stated offer price, except if Musk has a change of heart.