WSJ News Exclusive | Carl Icahn, Others Clean Up on Musk’s Twitter About-Face

Twitter shares jumped 22% to $52 Tuesday. Mr. Icahn paid in the mid-$30s a share for the stake, the people said, meaning the estimated profit for his Icahn Enterprises LP could exceed $250 million.

Other big-name investors including D.E. Shaw Group and

Daniel Loeb’s

Third Point LLC also placed bets on Twitter shares in recent months and could notch sizable gains of their own, other people familiar with the matter said.

Mr. Musk offered overnight Monday to close his acquisition of Twitter on the terms he originally agreed to this spring, as a trial to settle the matter approached. It was an abrupt and surprising about-face after he waged a monthslong campaign to get out of the deal.

Mr. Icahn made the investment on the belief the billionaire

Tesla Inc.

chief wouldn’t go through a trial that he looked likely to lose, some of the people said. Mr. Icahn also believed that the stock was worth close to the mid-$30s anyway in the long term, meaning the downside would be limited even if Mr. Musk prevailed at trial.

Twitter is the latest in a list of canny investments the octogenarian activist investor has made in recent years, such as in

Netflix Inc.

and

Apple Inc.

Mr. Musk’s move to follow through with the transaction after all vindicated the belief of many so-called merger-arbitrage investors that it would close at the $54.20-a-share price he had agreed to pay. The shares for much of the spring and summer traded for less than $40, before rallying somewhat recently, providing a tantalizing opportunity for those willing to bet against the world’s richest person.

Write to Cara Lombardo at [email protected]