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Musk’s Twitter Deal Is No Sure Thing

This looks like a hole you could drive a Cybertruck through, but Wall Street is rightfully wary.

Elon Musk’s agreement to buy Twitter for $54.20 a share is leaving a lot of money on the table for anybody willing to ride his coattails. The social-media company’s shares are currently about 12% below the agreed-upon price. Assuming the deal closes in late October, the annualized return of owning the shares between now and then comes to about 26%. That is the sort of merger arbitrage spread one typically sees when there are serious antitrust concerns or if an uncertain shareholder vote will determine a deal’s fate.