If the stock was flat while Elon was buying almost 10% of the company, it probably would have declined quite a bit if he hadn't been buying, because the people who sold the shares Elon bought would have been looking for other buyers.
Someone can do a basic quantitative analysis. He started buying March 1 (?) I believe. This date is public in last filing. You can estimate the historical beta, and get TWTR return and market return in March.
My quick analysis was that in the absence of any other news, his buying really had no serious impact.
I think he started March 14th based on trading volume. Goes from ~15M/day to 35M/day for the next few days before settling down. (Made another comment elsewhere on this)
Ok so assuming march 14 to April 1. The market was up 8% over that time and TWTR was up 19%. Beta is 1.3 so with a beta adjustment the excess return from musk's buying is about 19-(8*1.3)=8.6%.
Is this a lot or a little impact for buying close to 10 percent of a large cap stock? It's hard to say. I'd say it's a bit lower than i would have expected. Nonetheless, it provides somewhat of a floor if musk decides to sell his stake.
Want to write a contract for where it'll be at close of market the first trading day after he announces he'll pull out? We can have break-even at Twitter being 19% down from now. You can appropriately hedge beta risk elsewhere and I'll put in $100 to induce participation. I'd prefer max $10k exposure for my side.
In the months before Musk started buying, Twitter stocked declined by about 40% while the S&P was up slightly. Is it reasonable to assume that TWTR would have followed the market from Jan 31 to April 1 without Musk?
Good observation. Market impact is notoriously hard to measure - especially over a 2-month period like this one. You have to build a more complex model - which includes fundamentals.
