Flipping The Bird: Elon Vs Twitter

[Bijan]

15 minutes ago, NSXCIGAR said:

I'm not suggesting Twitter is or isn't worth any given value. All I know is the experts called it overvalued at $40B and when he made his claim of high bot counts the value was estimated to be $20B. 

If he made the whole thing up then it's moot. 

My theory and it's only a theory, is that there's what he considers fair market value X billion, and what he could buy it for given his financial constraints (whatever he paid for it $20B or $40B or whatever).

And then there's what he actually wants, which is being chief meme officer.

Another metaphor is Citizen Kane, where Kane runs his newspaper that loses money for his own personal/political motives:

"Kane : You're right, I did lose a million dollars last year. I expect to lose a million dollars this year. I expect to lose a million dollars *next* year. You know, Mr. Thatcher, at the rate of a million dollars a year, I'll have to close this place in... sixty years."

I guess I'm due to watch it again.

[NSXCIGAR]

3 hours ago, Bijan said:

And then there's what he actually wants, which is being chief meme officer.

There's no doubt he wanted it for personal reasons. But there's no reason he would need or want to overpay for it. It's not like anyone else was interested in Twitter. 

I just don't understand the dynamic of offer fair price, claim Twitter made material misrepresentations, get stuck because your contract didn't address said issues, cause the company's value to drop by half before you even close on it.

Again, the only thing I can think of is that it was a ploy to keep his short-term financers in longer and the user data he "discovered" must be either false or insignificant. That's the only logical explanation as to why he didn't do something about it beforehand (publicly disclosing the knowledge of the actual data before the offer or writing some protection into the contract) and why he would come out publicly before closing but after the financing and point of no return. 

[Bijan]

7 hours ago, NSXCIGAR said:

There's no doubt he wanted it for personal reasons. But there's no reason he would need or want to overpay for it. It's not like anyone else was interested in Twitter. 

If it's a reasonable investment and he is contractually obligated against his will, then he can more easily get away with selling Tesla shares (and also as you point out get it financed).

If it is a distressed company that he is clearly buying for personal reasons, then it's more difficult to do so.

Also the shareholders of Twitter are happy to get bought out at the high price. At the low price it would likely have been a hostile takeover.

Anyways this reminds me of the funding secured tweet of his, when he tweeted he was taking Tesla private at $420 a share. That ended up working out and the stock went up way higher not too long after.

Edit: not clear this ego trip will work out so well, but it's the same sort of manipulation, and it was not so clear at the time the $420 tweet would not be a disaster either.

[Chibearsv]

Yep, he’s sure in a pickle now post-Twitter purchase. Garage sale coming I’ll bet 😁

Elon Musk

CEO, Tesla

$186.6B

 

$97M (0.05%)

Real Time Net Worth

as of 5/25/23

#2 in the world today

[MrBirdman]

12 hours ago, NSXCIGAR said:

I'm not suggesting Twitter is or isn't worth any given value. All I know is the experts called it overvalued at $40B and when he made his claim of high bot counts the value was estimated to be $20B. 

If he made the whole thing up then it's moot. 

Whatever its true value, I think it’s pretty clear some of the diminution is due to the brand damage Musk has done. It’s not irrecoverable by any means, not yet at least, but we’ll see how they fair in the coming years. His “poll” about whether to stay in charge was a clever marketing ploy in my opinion - he knew how it would turn out, and also knew he needed to get back to actually running Tesla to get the board off his back. His best bet is to let the company do its thing and try keeping his mouth shut as much as he can. 

[NSXCIGAR]

10 hours ago, Bijan said:

If it's a reasonable investment and he is contractually obligated against his will, then he can more easily get away with selling Tesla shares (and also as you point out get it financed).

Yes, but why just sell Tesla shares to flush them down the toilet? It just doesn't make sense that he would pay that much if he didn't have to which makes me think he had to. I think that supposed "true" data was just a bunch of grabage he made up after the fact for some reason and the only one I can think of is pinning in his current financers. Not even he is capable of failing to protect himself in a contract like that. 

8 hours ago, MrBirdman said:

His “poll” about whether to stay in charge was a clever marketing ploy in my opinion

I don't think there's any doubt about that. He was going to bow out anyway at some point so why not do a pointless poll for attention. 

[Bijan]

1 hour ago, NSXCIGAR said:

Yes, but why just sell Tesla shares to flush them down the toilet?

I think he can better afford to spend $50 billion in Tesla stock and debt, than to spend $5 billion of cash.

So even if he could have cleverly pushed down the price of Twitter to $5 billion he wouldn't have been able to buy it in cash. 

The Twitter folks would not be eager to be bought out at that price. And it would be a full time job to pursue that acquisition via hostile takeover.

[NSXCIGAR]

2 hours ago, Bijan said:

I think he can better afford to spend $50 billion in Tesla stock and debt, than to spend $5 billion of cash.

So even if he could have cleverly pushed down the price of Twitter to $5 billion he wouldn't have been able to buy it in cash. 

The Twitter folks would not be eager to be bought out at that price. And it would be a full time job to pursue that acquisition via hostile takeover.

Sure, but he didn't need Twitter to be worth $44B to sell $5B in Tesla stock. 

As far as "cleverly" pushing the price down it wouldn't need to be clever at all. If he had just put the user data verification in the contract, once it was publicly revealed, Twitter's value would have taken a hit and Musk could have backed out and revised the offer which would be just as fair as the initial offer.

The crux of the whole thing is him failing to address the user data issue in the contract. If he simply dropped the ball (which I have a very hard time believing) that's the end of it and it's just a $20B oopsie. 

What makes more sense to me is that he did address it in the contract or didn't care because it wasn't a serious issue and his claims about being mislead about the user data before the deal closed are just a ploy. Which also means the value is probably closer to what he paid than $20B. What was the ploy for? As I said, the only thing I can think of is to try and convince his investors it's worth closer to $20B so they won't have anyone willing to take over the debt as it looks like they're overleveraged. In fact, they may not be. 

13 hours ago, MrBirdman said:

Whatever its true value, I think it’s pretty clear some of the diminution is due to the brand damage Musk has done.

I don't know how much impact that has had on the value but from what I recall the perception of value went from $44B to $20B after his user data "revelation" mid way through the deal. I'm starting to think that was overblown and the value on closing day was actually closer to what he paid. 

If the value/brand has taken a hit because of Musk's personal behavior that is obviously a non-technical reason and something that will recover. 

[MrBirdman]

6 hours ago, NSXCIGAR said:

If the value/brand has taken a hit because of Musk's personal behavior that is obviously a non-technical reason and something that will recover. 

Not if it changes user behavior and engagement. We’ll see if it does. 

[NSXCIGAR]

18 hours ago, MrBirdman said:

Not if it changes user behavior and engagement. We’ll see if it does. 

Indeed. Of course he claims Twitter use is off the charts since he bought it (which is not surprising) but I'm not aware of anything that suggests otherwise. Unless I'm mistaken he doesn't have to share any of his data publicly. 

[MrBirdman]

6 hours ago, NSXCIGAR said:

Unless I'm mistaken he doesn't have to share any of his data publicly. 

Nope, and we have no way to corroborate his claims about the company either. We’ll only really learn how the investment has done if and when he sells Twitter or takes it public again.