3 FTSE 100 companies Elon Musk could buy instead of Twitter!

Elon Musk’s hostile takeover of Twitter has hit a few bumps. Instead of buying the social media site, I’d buy these three cheap UK companies instead.

2022 new year concept image

Image source: Getty Images

The past month has been one of the liveliest in global stock markets for a few years. US share prices have plunged, especially among over-valued tech stocks. Over the past 30 days, the S&P 500 index has lost 8.4% of its value, while the Nasdaq Composite slumped by 11.6%. And against the backdrop of crumbling market confidence, mega-billionaire Elon Musk made an audacious bid to buy Twitter.

The ‘Technoking’ bids for Twitter

By any measure, Elon Musk is one of the most social media-savvy individuals on the planet. And with a net worth of $232.5bn, he’s the richest person on Earth. Also, as the self-styled ‘Technoking’ of electric vehicle maker Tesla, he has a horde of fanatical fans. As a result, Musk has over 93m followers on Twitter.

5 Stocks For Trying To Build Wealth After 50

One notable billionaire made 99% of his current wealth after his 50th birthday. And here at The Motley Fool, we believe it is NEVER too late to start trying to build your fortune in the stock market. Our expert Motley Fool analyst team have shortlisted 5 companies that they believe could be a great fit for investors aged 50+ trying to build long-term, diversified portfolios.

Click here to claim your free copy now!

But when Musk announced on 14 April that he’d made a $43.4bn hostile takeover bid for Twitter, I immediately wondered whether he was being reckless. By offering $54.20 per Twitter share, Musk would have to risk a fair slice of his personal wealth. On 22 April, he revealed a $46.5bn financing package that included $25.5bn in debt, including a margin loan of $12.5bn against his Tesla shares. At most, Elon might have to personally stump up $33.5bn to take control of Twitter. To me, this smells like a ‘top of the market’ deal akin to the most disastrous buyouts of 2007-08.

Three FTSE 100 companies I’d buy instead of Twitter

One big worry for Musk is that Tesla shares have crashed lately. On 4 April, Tesla stock closed at $1145.45. On Friday, they closed at $769.59, down over $375. That’s a collapse of almost a third (-32.8%) in under six weeks. Yikes.

Right now, I think it would be very risky indeed for Elon Musk to bid for Twitter, given market volatility. Indeed he tweeted on Friday that the deal was temporarily on hold, pending an investigation into bogus Twitter accounts.

Instead of betting mega-bucks on a perpetually loss-making tech firm, if I happened to be Elon Musk, I’d check out the deep value on offer from FTSE 100 shares. Up 0.5% in 2022, the Footsie has avoided the market meltdown seen in the US and elsewhere. Thus, here are three cheap shares I’d gladly buy instead of Twitter. All three are priced below the £35.9bn Musk would pay for Twitter.

CompanySectorShare price (p)12-month changeMarket value (£bn)P/EEarnings yieldDividend yieldDividend cover
Vodafone GroupTelecoms118.1-16.1%33.56.4%
Lloyds Banking GroupBank43.8-9.2%30.45.917.0%4.6%3.7
TescoSupermarket281.221.8%21.414.37.0%3.9%1.8

If Elon Musk wants to own another tech firm, why not buy telecoms behemoth Vodafone Group, with a current price tag of £33.5bn? I would. Vodafone’s dividend yield of 6.4% a year would easily cover his financing costs. Or if he wanted to acquire 30 million British customers, he could buy leading retail bank Lloyds Banking Group for £30.4bn. Again, Lloyds’ earnings yield of 17% a year would easily cover his debt interest. That’s another one I’d buy. Finally, if Musk wanted the seize #1 spot in the UK grocery market, he could have Tesco for a mere £21.4bn. But I can’t see the Technoking wanting to become a boring old grocer! I’d be happy to though.

Our 5 Top Shares for the New “Green Industrial Revolution"

It was released in November 2020, and make no mistake:

It’s happening.

The UK Government’s 10-point plan for a new “Green Industrial Revolution.”

PriceWaterhouse Coopers believes this trend will cost £400billion…

…That’s just here in Britain over the next 10 years.

Worldwide, the Green Industrial Revolution could be worth TRILLIONS.

It’s why I’m urging all investors to read this special presentation carefully, and learn how you can uncover the 5 companies that we believe are poised to profit from this gargantuan trend ahead!

Access this special "Green Industrial Revolution" presentation now

Cliffdarcy has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group, Tesco, Tesla, Twitter, and Vodafone. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services, such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool, we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Social media and digital online concept, woman using smartphone
Investing Articles

Apple stock: Buffett is long, Burry is short. What should I do?

Our author thinks about whether following Warren Buffet into Apple stock might be a good addition to his portfolio –…

Read more »

Close-up of British bank notes
Investing Articles

5 ‘no-brainer’ dividend shares to buy today

Is there an easy way to narrow down the list of FTSE 100 dividend shares? I try one approach, with…

Read more »

Close-up of British bank notes
Investing Articles

£5,000 to invest? 2 dividend-paying penny stocks I’d hold to 2030

I think these high-yielding penny stocks could help cushion the impact of high inflation on my returns. Here's why I'd…

Read more »

Renewable energies concept collage
Investing Articles

2 green stocks that I think are no-brainer buys for the future

Jon Smith explains two of his favourite green stocks at the moment, one for growth and the other for income…

Read more »

An airplane on a runway
Investing Articles

The Rolls-Royce Share price may be set for take-off!

After an upbeat Civil Aerospace Investor Day, here's why I think the Rolls-Royce share price could be set for take-off…

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

2 beaten-down growth stocks to buy as inflation rises

Despite inflationary pressures and recession concerns, I am looking at some top growth stocks to solidify my portfolio over the…

Read more »

Stack of British pound coins falling on list of share prices
Investing Articles

Is the IAG share price too good to miss at current levels?

Jabran Khan delves deeper into the current state of play with the IAG share price and decides if now is…

Read more »

Young woman working at modern office. Technical price graph and indicator, red and green candlestick chart and stock trading computer screen background.
Investing Articles

5 of the highest-paying income stocks compared! Which one is best for my portfolio?

Income stocks are certainly in vogue right now amid sky-high inflation. But which of these big dividend payers is the…

Read more »