Florida hedge fund could reap around $200 million from big arbitrage bet on Twitter
Jakub Porzycki | Nurphoto | Getty Images
Among the big winners in Elon Musk’s agreement to follow through with his deal to buy Twitter is an activist hedge fund based in a coastal Florida city that was just wrecked by Hurricane Ian.
Pentwater Capital, a 15-year-old firm with close to $5 billion in assets, bought a 2.4% stake in Twitter during the second quarter. The purchase of 18.1 million shares cost Pentwater roughly $725 million.
At $54.20, the price Musk has agreed to pay for Twitter, Pentwater’s stake would be worth about $980 million. The stock closed up 22% on Tuesday at $52, which is still below the acquisition price, signaling that Wall Street isn’t entirely convinced the deal will close.
The Tesla and SpaceX CEO said on Tuesday that he’d sent Twitter a letter informing the company of his intent to stick to the terms of the April agreement after previously trying to back out. The two sides were scheduled in court in two weeks, and part of Musk’s latest proposal involved putting an end to the litigation. Twitter has said it received the letter and intends to close the transaction at $54.20, but did not comment on the litigation.
When Pentwater jumped into Twitter, the social media company was in a holding pattern. The stock was languishing as Musk was putting out critical tweets about the company’s bot and spam problem, hinting at a sense of buyer’s remorse. The stock dropped as low as $32.55 on July 11, just after Musk officially tried to terminate the deal.
Pentwater was taking advantage of what the firm saw as a clear arbitrage opportunity. There was a signed contract on the table and a bunch of money to be made as long as the deal reached its logical conclusion.
“In my 23-year career doing this, I’ve never seen an acquirer walk away without any reason,” said Matthew Halbower, Pentwater’s founder, in an interview on Tuesday after Musk’s filing landed with the SEC. “The probability of him being able to walk away was very low.”
Halbower said the only two reasons that Musk would have to tear up the deal would be if there was fraud in Twitter’s financial statements or if there was a material event that changed the value of the company. Neither of those issues were at play, Halbower said.
Greenlight Capital also jumped in during the second quarter, paying an average of $37.24 for the stock. In an investor letter, Greenlight’s David Einhorn said there’s was $17 per share in upside rewards if the deal closed and an equal amount in losses if it collapsed.
“So we are getting 50-50 odds on something that should happen 95%+ of the time,” he wrote.
While Pentwater instantly made Twitter one of its top holdings when it purchased shares in the second quarter, the firm hedged its bet with a hefty investment in puts in case the stock dropped in value. So a portion of the gains from its equity investment will pay for the puts.
Pentwater has made other bets in and around the social media space. The firm is one of the top investors in Digital World Acquisition Corp., the special purpose acquisition company that’s been trying to take former President Donald Trump’s media company public, though the deal is being investigated by the SEC and the company recently missed a key deadline to hold onto $1 billion in funding. Trump’s app, Truth Social, was created after the ex-president was booted from Twitter following the events of Jan. 6.
Halbower said Pentwater has 44 employees, with just seven or so in its office in Naples, Florida. The firm also has locations near Chicago and in New York, Minneapolis and London.
The Naples office had its power restored on Sunday, four days after Hurricane Ian slammed into the west coast of Florida as a Category 4 storm. The office reopened on Monday, Halbower said.
Across the state, roughly 380,000 homes and businesses were without power as of Tuesday afternoon, down from a peak of 2.6 million on Thursday, according to PowerOutage.us. Collier County, which includes Naples, remains one of the counties with the most outages.
Pentwater isn’t the only investor that’s set for a big payday should the Musk deal close.
Longtime shareholder Saudi Prince Alwaleed bin Talal owns 39.95 million shares, worth $2.17 billion at the acquisition price. Jack Dorsey, Twitter’s co-founder and former CEO, owns 18.04 million shares, valued at close to $1 billion. Among institutions, the only investors with a bigger stake than Pentwater are Vanguard, BlackRock, SSgA and Fidelity.
The letters AI, which stands for “artificial intelligence,” stand at the Amazon Web Services booth at the Hannover Messe industrial trade fair in Hannover, Germany, on March 31, 2025.
Julian Stratenschulte | Picture Alliance | Getty Images
Amazon said Wednesday that its cloud division has developed hardware to cool down next-generation Nvidia graphics processing units that are used for artificial intelligence workloads.
Nvidia’s GPUs, which have powered the generative AI boom, require massive amounts of energy. That means companies using the processors need additional equipment to cool them down.
Amazon considered erecting data centers that could accommodate widespread liquid cooling to make the most of these power-hungry Nvidia GPUs. But that process would have taken too long, and commercially available equipment wouldn’t have worked, Dave Brown, vice president of compute and machine learning services at Amazon Web Services, said in a video posted to YouTube.
“They would take up too much data center floor space or increase water usage substantially,” Brown said. “And while some of these solutions could work for lower volumes at other providers, they simply wouldn’t be enough liquid-cooling capacity to support our scale.”
Rather, Amazon engineers conceived of the In-Row Heat Exchanger, or IRHX, that can be plugged into existing and new data centers. More traditional air cooling was sufficient for previous generations of Nvidia chips.
Customers can now access the AWS service as computing instances that go by the name P6e, Brown wrote in a blog post. The new systems accompany Nvidia’s design for dense computing power. Nvidia’s GB200 NVL72 packs a single rack with 72 Nvidia Blackwell GPUs that are wired together to train and run large AI models.
Computing clusters based on Nvidia’s GB200 NVL72 have previously been available through Microsoft or CoreWeave. AWS is the world’s largest supplier of cloud infrastructure.
Amazon has rolled out its own infrastructure hardware in the past. The company has custom chips for general-purpose computing and for AI, and designed its own storage servers and networking routers. In running homegrown hardware, Amazon depends less on third-party suppliers, which can benefit the company’s bottom line. In the first quarter, AWS delivered the widest operating margin since at least 2014, and the unit is responsible for most of Amazon’s net income.
Microsoft, the second largest cloud provider, has followed Amazon’s lead and made strides in chip development. In 2023, the company designed its own systems called Sidekicks to cool the Maia AI chips it developed.
WATCH: AWS announces latest CPU chip, will deliver record networking speed
The logo of the cryptocurrency Bitcoin can be seen on a coin in front of a Bitcoin chart.
Silas Stein | Picture Alliance | Getty Images
Bitcoin hit a fresh record on Wednesday afternoon as an Nvidia-led rally in equities helped push the price of the cryptocurrency higher into the stock market close.
The price of bitcoin was last up 1.9%, trading at $110,947.49, according to Coin Metrics. Just before 4:00 p.m. ET, it hit a high of $112,052.24, surpassing its May 22 record of $111,999.
The flagship cryptocurrency has been trading in a tight range for several weeks despite billions of dollars flowing into bitcoin exchange traded funds. Bitcoin purchases by public companies outpaced ETF inflows in the second quarter. Still, bitcoin is up just 2% in the past month.
Bitcoin climbs above $112,000
On Wednesday, tech stocks rallied as Nvidia became the first company to briefly touch $4 trillion in market capitalization. In the same session, investors appeared to shrug off the latest tariff developments from President Donald Trump. The tech-heavy Nasdaq Composite notched a record close.
While institutions broadly have embraced bitcoin’s “digital gold” narrative, it is still a risk asset that rises and falls alongside stocks depending on what’s driving investor sentiment. When the market is in risk-on mode and investors buy growth-oriented assets like tech stocks, bitcoin and crypto tend to rally with them.
Investors have been expecting bitcoin to reach new records in the second half of the year as corporate treasuries accelerate their bitcoin buying sprees and Congress gets closer to passing crypto legislation.
Dado Ruvic | Reuters
Perplexity AI on Wednesday launched a new artificial intelligence-powered web browser called Comet in the startup’s latest effort to compete in the consumer internet market against companies like Google and Microsoft.
Comet will allow users to connect with enterprise applications like Slack and ask complex questions via voice and text, according to a brief demo video Perplexity released on Wednesday.
The browser is available to Perplexity Max subscribers, and the company said invite-only access will roll out to a waitlist over the summer. Perplexity Max costs users $200 per month.
“We built Comet to let the internet do what it has been begging to do: to amplify our intelligence,” Perplexity wrote in a blog post on Wednesday.
Perplexity is best known for its AI-powered search engine that gives users simple answers to questions and links out to the original source material on the web. After the company was accused of plagiarizing content from media outlets, it launched a revenue-sharing model with publishers last year.
In May, Perplexity was in late-stage talks to raise $500 million at a $14 billion valuation, a source familiar confirmed to CNBC. The startup was also approached by Meta earlier this year about a potential acquisition, but the companies did not finalize a deal.
“We will continue to launch new features and functionality for Comet, improve experiences based on your feedback, and focus relentlessly–as we always have–on building accurate and trustworthy AI that fuels human curiosity,” Perplexity said Wednesday.
WATCH: Perplexity CEO on AI race: The market of providing answers to questions will become a commodity
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