I see 3 forces at play on Monday
1. For people who betted on the deal going through, it is bad news and they might sell out of fear, or to trim position.
2. For people who betted on the deal not going through, this removes the uncertainty which might allow them to move forward
3. Haters and shorts will continue to do what they have always been doing – spread FUD and short during time of uncertainty
Pushing a privatization plan that eventually fails could be disruptive and negatively impact share price, so it is natural for people afraid of the consequence to sell in anticipation of the eventual failure. Based on the price action of the last 3 weeks, where we had an initial jump followed by mostly declines, my guess is that the second group far outnumbers the first.
I think the price action will be dominated by what people in the second group would do on Monday. Since these people sold due to fear of failed plan, let’s look at what these fears might have been:
1. Elon pushing the plan against reasons and in the process destroying board/investor trust and disrupting norm operation
2. Elon exposing his character and mental defects
3. Elon losing credibility
Elon making a quick decision yesterday largely eliminated the fear #1 and #2 – his action and well-written letter showed that he was rational and clear minded, listens to others, and willing to do the right thing when called for. The only damage was that he lost a little bit of credibility by starting something he couldn’t finish
Based on this, I would not be surprised to see some initial drop in share price (due to group #1 and #3) on Monday and then followed by buying (due to group #2.) We could easily get back to pre-tweet price of $340-350 by end of week.
