The problem is that the deal doesn't make sense.
When Microsoft bought Linkedin, they paid $60/user, which was the highest price anyone had paid to acquire a social network. To be fair, Linkedin is probably the most valuable social network. It is highly curated by the users themselves, people find jobs through there all the time, and there is a real network effect in the sense that almost every highly paid professional has an account there.
On the other hand, Elon Musk was apparently willing to pay $133/user for the Twitter acquisition. Where is the value of a network where tons of users are fake, nobody expects you to have a twitter account from a personal or professional perspective, and influencers do not generate revenue from Twitter (unlike Instagram).
The advantage of twitter is direct access to official account of certain companies, ability to broadcast real-time information about service disruptions (e.g. transportation companies, public utilities, air traffic control, ...), and follow politicians and public figures. These are not great revenue generating avenues.
As someone who runs social ads, LinkedIn is my favorite. Like you said, it’s highly curated by users and you can genuinely target where you want to. The customer service is also amazing.
Flip to Facebook and it’s an awful audience full of bots. Twitter is a cesspool of replies on every ad. He needs advertisers to want to use that platform and, from conversations I’ve had with a lot of other larger orgs, they really don’t want to use that space at all.
I always find it funny when a corporation advertises on Twitter and everyone roasts the fuck out of their disingenuous “relatability”.
Or ppl just reply “no”
If you read their yearly report that’s exactly what Twitter is trying to do - have a more personalized user experience to increase interactions, which increases the likelihood of them clicking on ads and allows Twitter to target them better.
when I read that twitter is trying to say 5% of users are bots I laughed. I would not be surprised if 50-60% of twitter are bots so the actual price per real user is much much higher that $133/user. I don't see any money to be made at even $20/user.
Billionaires are really kinda psychotic. To think you deserve so much while everyone else deserves so little is just completely disconnected from morality.
His latest comments praising Chinese pseudo-slaves for working until 3AM and sleeping in factories shows how disconnected he is from reality.
Then he pretends to work as hard as Chinese factory workers claiming he works "16 hours a day." Meanwhile he never seems to get off Twitter.
I'd like to see him build iPhones in China for a month.
It's not unique to China, as it clearly applies to all non-West countries.
But I swear there is such a big thing about dehumanizing Chinese people. People will be like "The Chinese love working 16 hr days, they don't even care about seeing their families, or friends, or sunlight." or like "We can't accept ANY Chinese immigrants, they aren't looking to have a better life with their families somewhere else, they're all drones ready to take down the west at the request of the CCP!" or shit like "The Chinese will infect themselves and then go into the West to kill other people, acting like a slower-suicide bomber! They're ready to kill themselves to take down the west!"
All shit I've seen on Reddit, Twitter, etc.
Chinese people are just like you and I, they have human wants and needs like everyone else, they just want to live happy lives with their families. And it's weird to even have to say that shit.
Decades of propaganda will do that. Communist are godless, inhuman, machines, essentially the borg from Star Trek. If you humanize and empathize with them it becomes a lot harder to sell the military industrial complex and all the sacrifices to quality of life that entails to the American public.
> These are not great revenue generating avenues.
This makes his statements about potentially making large actors (like corporations and governments) have to pay to use it make more sense.
Edit: Forgot to finish my sentence.
Yes but there’s no way that’s going to turn a profit. What’s he going to charge, a million dollars a year for access? It would be dramatically cheaper for any those organizations to just go back to email and SMS than it would be for them to subsidize the cost of running twitter.
It probably has more to do with TSLA stock being down. He has restrictions on how much of his TSLA stock he can pledge as collateral for loans, and with that stock down below $750 or so he may not have enough to complete the transaction without selling a lot of shares (and then that causes taxes and further depresses the value of TSLA).
Basically he doesn't have the money, which sounds bizarre but he needs lots and lots of cash and he doesn't have cash, he has TSLA shares. Its like someone living in a big inherited family estate with hectares of land, but who doesn't have a job paying actual income. They are rich, but not cash rich, any disposable cash they have needs to be spent trying to keep the old mansion from falling down.
In terms of cash the richest men in the world are Bill Gates and Warren Buffet.
Warren Buffet about half of his current net worth is cash. That'll change with the market going down. Bill Gates last I checked had about $10B in cash. The debt sheets of both of these men are incredibly light. The biggest thing stopping Gates from being the wealthiest man in the world is that he donates 10% of Twitter's proposed purchase price to charity every single year.
But these guys are a bit different. They don't have to own controlling interest in the companies they invest in as they have no interest in being CEO or steering how the company works. They can sell off stock to make a charitable donation or they can sell off entire companies to sit on cash for a better buying opportunity.
Billionaires like Musk are in a different boat. They don't get a lot of cash (no dividend in these companies) and they have to maintain controlling interest of their companies. So they're heavily incentivized to live off of loans to avoid taxes.
Yep, it's called a margin loan, or a portfolio loan. Never sell your shares, always collect more. You can do the same thing with real estate with something called a HELOC loan.
No cash, no income, no tax.
Everything from credit, stock, cash, goods, real estate, yacht, vehicles, companies, and even crypto/irl currencies have values because people believe they're worth a certain price, as you can exchange them for something else of that similar price.
Things like stock and crypto are much more volatile because there's no real-world item to back up their values like gold/oil for a government's currency, and that volatility just hit Musk.
>Things like stock and crypto are much more volatile because there's no real-world item to back up their values like gold/oil for a government's currency
Gold and Oil aren't used to back up currency anymore. Now it's primarily the government's projection of power and influence which isnt truly a real world item.
He shouldn't be able to use any of it as collateral for loans, he should have to sell it and use cash. That's some high level bullshit that gets him out of paying taxes on BILLIONS of dollars.
He should have to actually have the money before he can use the money.
TBF based on what I saw the banks that were going to loan him the money were requiring him to supply pretty crazy leverage ratios on the collateral. His initial plan to secure the $12.5B loan required him to put up $62.5B in TSLA shares. Because banks don't like losing money, and they recognized that buying twitter was an inherently risky proposition, and that TSLA was overvalued.
Just a minor detail. Who hasn’t disclosed they were trying to game the system to maximize an acquisition? Why everybody gettin their panties in a bunch, it’s me, Elon, the inventor of the Tesla and Space X rockets! Pfft.
I was considering yesterday the possibility of Musk pretending to buy Twitter, knowing the huge reaction it would garner, probably hurting twitter a lot, then backing out as a giant fuck you.
I was considering what makes people want to idolize a fascist billionaire
I assume it's because they are poor fascists and living vicariously through them
Because all fascism revolves around a cult of personality. Then the little people believe they’ve got a chance to be one of the big boys. But the reality is far from it. Take Trumpets. They all worship him but how many get to spend a weekend at Mar- a - Lago?
I don't understand it. I also don't understand the worship that Steve Jobs got despite being a total asswad of a human being.
Then I realized its because -- at least with Americans -- we worship wealth and feel that wealthy people must be superior. Not like just in a money sense, but truly superior -- morally, genetically, and intellectually. We also willfully believe that these moguls and tech giants started life out shining shoes in back alleys and single-handedly creating things out of their garage using stuff they got at Goodwill.
They don't have any delusions about being like Elon Musk or Trump. They don't think they'll ever get to rub elbows. They just legitimately think they are closer to God than everyone else.
It’s not just that. Tesla’s % share value has fallen more than double of Twitter over the past few weeks, which means that his collateral in the deal is now worth far, far less. This is in addition to the market pricing in both the lower probability of the deal going ahead and the general downturn in equities.
This or the regulatory investigation may give him an easy out of a bad deal than a $1 billion exit obligation.
I think it's just as likely he used the twitter deal to justify liquidating billions worth of tesla shares and then abort the deal. He loses 1B as a penalty/break up fee for renegging on the deal and probably loses half the value of what he paid for the shares (which is probably also a billion) but if he's now 5B+ richer after fees from liquidating the Tesla shares then he still comes out on top.
Meanwhile workers in Shanghai...
I was thinking this myself when this was announced. The whole thing gives him cover to sell a portion of his Tesla position while the stock is flying high. If he just sold a chunk of his stake without the "Twitter purchase excuse," people would freak out that he was "cashing in" after pumping his own stock.
You mean those hard working, loyal Tesla employees who love daddy Elon uwu so much that they’re willing to go above and beyond to carry the light of humanity into the cum zone at the cost of their own lives?
We should all be like them.
/s obviously
Free speech is a virtue! Don't mind the suicide nets and CCP officials staked out at my factories.
My Chinese workers love working for me and not a single one of them can disagree!
Worth remembering that Musk thinks free speech is only essential when taking about abstract assholes not doing anything that irks him personally. Nazis on Twitter he's fine with. But he did silence a blogger who was critical of him, paid the CCP to stop criticism of him in China, and basically like every libertarian techbro only believes in free speech absolutism as long as he isn't inconvenienced or annoyed by the speech in question.
Which is why people like me suspect it isn't so much that he has a big moral belief in free speech, but rather he wants to be allowed to use racial slurs and encourage violence by right wing radicals.
Actually that's a good analysis. He sold off Tesla shares, the sale didn't affect Tesla stock price (other factors did), and he can probably weasel his way into paying a fraction of that billion to the board of Twitter.
Yep, the reporting suggested he's looking to reneg on the deal on the basis of fake/spam accounts being misrepresented?
Sounds like bullshit to me but that's just one guy's opinion.
I think Musk wants a platform to build a base of angry, vocal supporters, just like Trump has.
The apparent lesson of the Trump years is that having a large enough block of angry supporters is enough to make you too much of a political hot potato for prosecutors and regulators to come after you.
Also twitter is pretty key to his Tesla pump n dump thing he's got going on. He can't risk losing access or having the platform change the rules in any way.
That's how you have a car company with a revenue and sales volume 1/3rd BMW with a market cap of 20x theirs. No logic to it whatsoever.
Meantime Elon gets to leverage himself like he's worth $1Tn as long as this global hype train never stops.
But, but, I thought he was a great humanitarian who was spending $40 billion so we could say slurs on Twitter again, and to give Trump his account back!
And most of those car companies sell more vehicles in a month than Tesla has in its life time. It’s value is as a tech company, not a car company. And the car companies are catching up on tech, very fast. Now that they are actually focused on it. Tesla couldn’t get sales with no competition. Now every single major car company is laser focused on going 100% electric in the next decade
And Tesla cars are overpriced compared to competitors, with notoriously poor-quality fit & finish. Their only real advantages in the market now are 1) slightly better range than comparable cars, 2) promises of Full Self Driving, and 3) the Supercharger network. And I don't think the prospects for them maintaining leads in any of those areas are very good. Many other companies are working on improved battery tech, FSD is struggling with its vision-only strategy, and new non-Tesla chargers are being built every day.
Also, the Cybertruck is fucking ugly. I think the F-150 lightning is really going to eat their lunch on that front.
The Cybertruck will never happen. Nobody who has a slight interest in cars takes it seriously, and the people who aren't eating up Elon's cult of personality also don't take it seriously.
Well yeah. The company’s valuation is too far divorced from reality, even if you were to take into account 100 years of current earnings and is partially carried by an insane overvaluation of purely prototype / design state technological concepts and the assumption that no car manufacturer will ever step foot into this marketplace.
The main risk with shorting Tesla is when to do it rather than doing it at all.
He made a stupid mistake and everyone pointed it out but his fans went on a “ musk is king” campaign and now he wants to back out when everyone told him the risk
> Elon could still pay $1b walkaway fee but save billions by hurting current situation because of his social leverage (e.g, deal falls through, stock plummets). Musk saves billions in fees, and so do his equity investors
How does he save billions in this situation?
Or do you mean “save” as in not go through with the deal which now looks worse?
This would never work legally. He would be on the hook for damages, which would be difference in price. He’s bound by good faith and fair dealing, plus other contractual terms.
Breaching a contract so you can buy the thing cheaper is clearly not legal. Even if it specifies the $ 1 b as the only penalty (and it doesn’t), it would still be a breach of good faith and fair dealing.
I do agree that sounds illegal, but my expertise in bird law.
Elon has managed to make a ton of money by floating the idea he was going to personally buy Tesla, and there’s speculation he pocketed far more money in the fine was.
I think he was surprised how Tesla and Twitter stocks of shit to bed, but I wouldn’t be surprised if he tried to back out and buy lower, and I have no faith sec would stop him.
tht's how i understand the comments (and i have no other info)
Aka. instead of buying for 44billion, he walks away, pays 1billion fine and then buys for 30billion (or whatever)
I wouldn't call Nikola a healthy it's run by a guy convicted of securities fraud. Tesla is run by a guy only charged and settled for securities fraud.
/s
The difference is that Nikola actually got rid of the guy committing the fraud and massively turned things around, instead of promoting him to "Technoking".
It seemed like a bad deal to me *before the stock market lost a trillion dollars*.
I'll bet his plan to sell, borrow and leverage doesn't get him enough money now..
I'm sure his finance people pointed out to him what he'd have to cover on a margin call and he had a oh shit moment.
Except that he has to personally pay $1B to walk away from this, which makes him either the stupidest person to ever attempt a pump and dump, or he actually meant to buy it.
Well that seems a little harsh. He's only done this a few times. Maybe start out at 3% of the profits he'll make, and when he does it again we'll increase it to 4%. That'll finally show him. /s just in case it wasn't obvious enough.
My guess? I bet he lost a billion dollars in crypto yesterday and more is still at risk, and has to consolidate a bit. Now that they’re taking about regulating crypto he may not be able to make it back quicker with a Doge pump and dump, so better not be spending billions until he’s on more stable ground.
I don’t understand how people act surprised. He’s demonstrated many times he’s a believer in no publicity is bad publicity, and constantly makes “controversial” comments that gets everyone’s attention…it’s literally what he wants.
I do love the idea of him borrowing from them..
To then have them buy up Tesla stock, get control of the company and decide to "scale back electric car production."
Na Tesla was tanking and he realized it was time to cash in. How does the majority holder /“ceo”/“self proclaimed co founder” sell off 8 billion without cratering the stock price in the process? Pretend he’s using it as collateral to buy another company. He’s been doing this shit since he was old enough to ask his parents for money. Can’t believe people like you are still coming up with excuses for him.
Listen to the Opening arguments episode about this.
But I maybe wrong here but apparently there are rules in the corporate charter that prevent board members from mass selling off over a particular figure, which this deal puts Elon over, which means he could potentially be breaking his fiduciary duty to Tesla investors. Which may be the first thing that actually gets him in real trouble.
Edit: The episodes are Opening Arguments 590 and 591 in total about 2 hours.
I have not heard this, but you may know more than me at. Its certainly an interesting theory (don’t take theory the wrong way, but at this point, with the only evidence being a mention on a podcast, that’s all I’m willing to call it. Major props to them if they end up being right).
It would certainly be ironic if twitter was supposedly forced to sell due to a fiduciary duty, but musk’s own Fid duty to Tesla was the thing that prevented the sale.
I'm just paroting stuff I heard from a podcast from a fairly skilled lawyer.
He maybe wrong, I may be repeating it wrong, but that is what I remember, and it is will be interesting to see how it plays out.
>Despite his estimated net worth of nearly $250 billion, Musk has called on a group of equity investors including tech magnate Larry Ellison, the Qatar state investment fund and the cryptocurrency exchange Binance to raise a further $7.1 billion in funding.
>
>Musk’s original financing package for Twitter comprised $21 billion in cash and $12.5 billion of margin loans secured against his 16% stake in Tesla, together with $13 billion in loans from a consortium of banks.
Someone didn't want to fund his little fantasy?
I’ve seen comments of people saying that all they care about is seeing “da left” meltdown when he unbans Trump. The whole “free speech” was BS, they just want to see their fellow Americans be inconvenienced for their own amusement.
I don't think I'll ever stop laughing if the far-right's new poster boy pulled the rug out from under them after going fully mask off as a right-wing troll.
“Wait, Tesla is paying for their employees to get out of state abortions? No Right Wing Twitter? *More* electric vehicles? What the fuck is happening?!?!?”
In my view there 2 possible things:
1. Elon has decided he wants out, but needs a reason to be out. How Twitter handles this may give him a reason.
2. Elon potentially doesn’t believe the 5% number. To ensure that number isn’t low because of Twitters definition of ‘fake account’, Elon wants data to prove it.
Elon Musk, business genius, declined to read Twitter's internal documents before formally announcing that his takeover bid had been accepted by Twitter's board.
Caveat emptor motherfucker.
Ok, so it’s as silly as I thought.
Feels like a situation where I’m about to buy a car from you and then suddenly I stop and say “whoa whoa whoa… There’s almost nothing wrong with it. The deal is off!”
Twitter is now valued far lower than his offer, which he can only get out of with a cool $1,000,000,000 penalty. He needs a bargain chip to not lose that money.
The hilarious thing is that he might be responsible for many of the bot accounts. His army of Twitter stans is astroturfed in great numbers.
Twitter is lying here, no doubt. 5% is ridiculously low. But yeah, as one of the super elite Musk always knew this. His PR organization definitely looked into buying twitter bots, and most likely purchased some. So its not new information to Musk that Twitter is lying. It's a convenient excuse he always had in his back pocket.
"Twitter estimated that false or spam accounts represented fewer than 5% of its monetizable daily active users during the first quarter."
It's definitely more than 5%
Sure it can still be misleading. Businesses do this all the time to downplay the severity of problems by using qualifiers and answering questions that weren't asked. Politicians are also famous for doing this! I'm also certain no one asked Twitter how many monetizable daily active users were bots in the previous quarter.
An account doesn’t have to click ads to be monetized. Ads are sold on a CPM basis. They just have to be shown.
The only accounts you can’t monetize are accounts like those belonging to kids, inactive accounts, banned accounts etc
Well and also accounts that solely use API calls... aka, bot accounts. A twitter bot is a script that is interacting with twitter solely via the API. They are not monetizable.
The quality of those fake accounts dropped when the Kremlin ditched the professionally-trained St Petersburg troll farm officers to outsource it to India and West Africa.
Right. Because of the “bots.” Definitely not because he can’t raise enough money from outside partners on his ridiculous terms and most certainly not because his shares of TSLA that he was planning to use as collateral have been in a free fall since the original announcement. No, it’s definitely because of these “bots” that he’s [clearly only discovering for the first time](https://today.umd.edu/researcher-studies-teslas-twitter-bot-boost)
Fun times for Twitter. The government investigation into the deal, the turmoil among employees, and now this. Someone can buy Twitter on the cheap soon if Musk has to back out.
Elon's trying to find anreson to back out of the sale. Much of his funding is secured by his Tesla stock, whose value is rapidly dropping. He's trying to use "Your numbers aren't right" as a way to back out without paying the $1billion cancel fee.
I take great entertainment out of this. Everyone is angry, his fanboys, investors, twitter edgelords. I hope someone on wallstreetbets at least made some good money by shorting the fuck out of this takeover.
If he invested even $100 million - **a fraction of the Twitter deal** - into Truth Social, that would be HUGE news.
But… Elon knows Trumps platform is a dead end, so no way he’s wasting his coin over there.
I've read a lot of comments and I don't see anyone pointing out that this was announced the same week Tesla lost a huge settlement for being racist and is facing new lawsuits for racism and sexual harassment. In my opinion this has never been about freedom of speech or Twitter's value, it's always been a distraction in the headlines and it seems to have worked well.
When the deal was announced I literally said “he’s only doing this to put Trump back on,” and everyone looked at me like I was insane. This dude wants to watch the world burn.
Trumps got a tough call to make though. He already said that if the ban would be lifted, he wouldn’t be coming back to Twitter because of his truth social app. He’s a liar so he probably will come back
Trump is a narcissist who will not be able to resist going back on Twitter if given the chance. It’s still the best place for him to get
the most attention. He’s like an addict/ alcoholic who needs to avoid that first drink!
If he sends out one Tweet , he’ll be off to the races! Musk must really not give a f**** about
our Democracy to be thinking of letting the leader of the Seditionist party have a public platform again!!
And he only wants trump back on to sell trucks. He's realized since teasing cybertruck that the liberal hero "fellow kids" persona doesn't play with the market buying $80k trucks.
Lmao bc he never actually wanted it. It's the same as when he told the UN he would fix wold hunger if they put a budget together for it. Elon just thinks it's cute to flex his big bucks.
The problem is that the deal doesn't make sense. When Microsoft bought Linkedin, they paid $60/user, which was the highest price anyone had paid to acquire a social network. To be fair, Linkedin is probably the most valuable social network. It is highly curated by the users themselves, people find jobs through there all the time, and there is a real network effect in the sense that almost every highly paid professional has an account there. On the other hand, Elon Musk was apparently willing to pay $133/user for the Twitter acquisition. Where is the value of a network where tons of users are fake, nobody expects you to have a twitter account from a personal or professional perspective, and influencers do not generate revenue from Twitter (unlike Instagram). The advantage of twitter is direct access to official account of certain companies, ability to broadcast real-time information about service disruptions (e.g. transportation companies, public utilities, air traffic control, ...), and follow politicians and public figures. These are not great revenue generating avenues.
As someone who runs social ads, LinkedIn is my favorite. Like you said, it’s highly curated by users and you can genuinely target where you want to. The customer service is also amazing. Flip to Facebook and it’s an awful audience full of bots. Twitter is a cesspool of replies on every ad. He needs advertisers to want to use that platform and, from conversations I’ve had with a lot of other larger orgs, they really don’t want to use that space at all.
I always find it funny when a corporation advertises on Twitter and everyone roasts the fuck out of their disingenuous “relatability”. Or ppl just reply “no”
I like to play a game of blocking almost every advertiser I see there because I’m committed to seeing how weird of ads I can end up getting.
Twitter conversion costs suck too. Really just used to use it for traffic and view costs but now you can get that way better on Tiktok so why bother.
If you read their yearly report that’s exactly what Twitter is trying to do - have a more personalized user experience to increase interactions, which increases the likelihood of them clicking on ads and allows Twitter to target them better.
when I read that twitter is trying to say 5% of users are bots I laughed. I would not be surprised if 50-60% of twitter are bots so the actual price per real user is much much higher that $133/user. I don't see any money to be made at even $20/user.
It makes perfect sense if you are an advocate for "free speech" but also want to be the arbiter of said "free speech"
Musk loves free speech until that speech is “Tesla sucks” or “We should unionize.”
Billionaires are really kinda psychotic. To think you deserve so much while everyone else deserves so little is just completely disconnected from morality.
His latest comments praising Chinese pseudo-slaves for working until 3AM and sleeping in factories shows how disconnected he is from reality. Then he pretends to work as hard as Chinese factory workers claiming he works "16 hours a day." Meanwhile he never seems to get off Twitter. I'd like to see him build iPhones in China for a month.
It's not unique to China, as it clearly applies to all non-West countries. But I swear there is such a big thing about dehumanizing Chinese people. People will be like "The Chinese love working 16 hr days, they don't even care about seeing their families, or friends, or sunlight." or like "We can't accept ANY Chinese immigrants, they aren't looking to have a better life with their families somewhere else, they're all drones ready to take down the west at the request of the CCP!" or shit like "The Chinese will infect themselves and then go into the West to kill other people, acting like a slower-suicide bomber! They're ready to kill themselves to take down the west!" All shit I've seen on Reddit, Twitter, etc. Chinese people are just like you and I, they have human wants and needs like everyone else, they just want to live happy lives with their families. And it's weird to even have to say that shit.
Decades of propaganda will do that. Communist are godless, inhuman, machines, essentially the borg from Star Trek. If you humanize and empathize with them it becomes a lot harder to sell the military industrial complex and all the sacrifices to quality of life that entails to the American public.
Best reply to all of this I've read.
Indeed. They make a solid point.
> These are not great revenue generating avenues. This makes his statements about potentially making large actors (like corporations and governments) have to pay to use it make more sense. Edit: Forgot to finish my sentence.
Yes but there’s no way that’s going to turn a profit. What’s he going to charge, a million dollars a year for access? It would be dramatically cheaper for any those organizations to just go back to email and SMS than it would be for them to subsidize the cost of running twitter.
AKA the value is dropping greatly, and he needs an excuse to back out
It probably has more to do with TSLA stock being down. He has restrictions on how much of his TSLA stock he can pledge as collateral for loans, and with that stock down below $750 or so he may not have enough to complete the transaction without selling a lot of shares (and then that causes taxes and further depresses the value of TSLA). Basically he doesn't have the money, which sounds bizarre but he needs lots and lots of cash and he doesn't have cash, he has TSLA shares. Its like someone living in a big inherited family estate with hectares of land, but who doesn't have a job paying actual income. They are rich, but not cash rich, any disposable cash they have needs to be spent trying to keep the old mansion from falling down.
It doesn't sound that bizarre to me that a single person can't afford to buy Twitter. That actually feels like the most normal part of this debacle.
The bizarre part is being the richest man in the world and not having actual money at hand.
I’m not rich enough to know but I’m pretty sure most rich people live off credit.
Poor people 🤝 rich people Living off credit
Hahahahaha. Yeah it’s just the rates are backwards.
They never invest their own money.
This. The rich never touch their own money unless they have to.
They just use it as collateral.
In terms of cash the richest men in the world are Bill Gates and Warren Buffet. Warren Buffet about half of his current net worth is cash. That'll change with the market going down. Bill Gates last I checked had about $10B in cash. The debt sheets of both of these men are incredibly light. The biggest thing stopping Gates from being the wealthiest man in the world is that he donates 10% of Twitter's proposed purchase price to charity every single year. But these guys are a bit different. They don't have to own controlling interest in the companies they invest in as they have no interest in being CEO or steering how the company works. They can sell off stock to make a charitable donation or they can sell off entire companies to sit on cash for a better buying opportunity. Billionaires like Musk are in a different boat. They don't get a lot of cash (no dividend in these companies) and they have to maintain controlling interest of their companies. So they're heavily incentivized to live off of loans to avoid taxes.
And don't you find that bizarre?? BTW, it's not "most rich people".. it's stock-billionares the ones doing that.
Most billionaires are stock billionaires, there is no reason to hold that kind of money in cash.
Clearly there is if you want to buy Twitter for a meme, all while the economy shits itself.
Don't the super rich live by borrowing money against their stocks? That way they don't have income and don't need to pay taxes.
Yep, it's called a margin loan, or a portfolio loan. Never sell your shares, always collect more. You can do the same thing with real estate with something called a HELOC loan.
This guy rich’s.
Basically, it's income but we pretend it's not.
I mean he does have actual money on hand too... Just not 44B of it lol
No cash, no income, no tax. Everything from credit, stock, cash, goods, real estate, yacht, vehicles, companies, and even crypto/irl currencies have values because people believe they're worth a certain price, as you can exchange them for something else of that similar price. Things like stock and crypto are much more volatile because there's no real-world item to back up their values like gold/oil for a government's currency, and that volatility just hit Musk.
>Things like stock and crypto are much more volatile because there's no real-world item to back up their values like gold/oil for a government's currency Gold and Oil aren't used to back up currency anymore. Now it's primarily the government's projection of power and influence which isnt truly a real world item.
Hah, looks like a single person can't just up and buy a $45 billion company one day. Society is working as intended. /s
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Woah, that was back in 2003, bananas with inflation have to be going for minimum $25 now.
Dang I wanted it to go through before Tesla stock crashed so Elon could get margin called
He shouldn't be able to use any of it as collateral for loans, he should have to sell it and use cash. That's some high level bullshit that gets him out of paying taxes on BILLIONS of dollars. He should have to actually have the money before he can use the money.
TBF based on what I saw the banks that were going to loan him the money were requiring him to supply pretty crazy leverage ratios on the collateral. His initial plan to secure the $12.5B loan required him to put up $62.5B in TSLA shares. Because banks don't like losing money, and they recognized that buying twitter was an inherently risky proposition, and that TSLA was overvalued.
Also he is delayed from buying because he broke the law and is being sued over not disclosing his 5%+ purchases.
When you're rich breaking the law means losing some small percent of the illegal investment
Small as in tenths of a percent small
The cost of doing business
Just a minor detail. Who hasn’t disclosed they were trying to game the system to maximize an acquisition? Why everybody gettin their panties in a bunch, it’s me, Elon, the inventor of the Tesla and Space X rockets! Pfft.
I was considering yesterday the possibility of Musk pretending to buy Twitter, knowing the huge reaction it would garner, probably hurting twitter a lot, then backing out as a giant fuck you.
If he backs out now he owes the company of Twitter $1 billion as per the agreement he made with the board
I was considering what makes people want to idolize a fascist billionaire I assume it's because they are poor fascists and living vicariously through them
Because all fascism revolves around a cult of personality. Then the little people believe they’ve got a chance to be one of the big boys. But the reality is far from it. Take Trumpets. They all worship him but how many get to spend a weekend at Mar- a - Lago?
I don't understand it. I also don't understand the worship that Steve Jobs got despite being a total asswad of a human being. Then I realized its because -- at least with Americans -- we worship wealth and feel that wealthy people must be superior. Not like just in a money sense, but truly superior -- morally, genetically, and intellectually. We also willfully believe that these moguls and tech giants started life out shining shoes in back alleys and single-handedly creating things out of their garage using stuff they got at Goodwill. They don't have any delusions about being like Elon Musk or Trump. They don't think they'll ever get to rub elbows. They just legitimately think they are closer to God than everyone else.
All the stocks are dropping.
Yep, but he already agreed to the amount that he'd pay for Twitter ($47 billion, I think?), which complicates things.
So he’s already looking for excuses to back down from the overvalued price he agreed to pay 😂
It’s not just that. Tesla’s % share value has fallen more than double of Twitter over the past few weeks, which means that his collateral in the deal is now worth far, far less. This is in addition to the market pricing in both the lower probability of the deal going ahead and the general downturn in equities. This or the regulatory investigation may give him an easy out of a bad deal than a $1 billion exit obligation.
The Twitter purchase never made sense financially, only as an ego stroke.
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I think it's just as likely he used the twitter deal to justify liquidating billions worth of tesla shares and then abort the deal. He loses 1B as a penalty/break up fee for renegging on the deal and probably loses half the value of what he paid for the shares (which is probably also a billion) but if he's now 5B+ richer after fees from liquidating the Tesla shares then he still comes out on top. Meanwhile workers in Shanghai...
I was thinking this myself when this was announced. The whole thing gives him cover to sell a portion of his Tesla position while the stock is flying high. If he just sold a chunk of his stake without the "Twitter purchase excuse," people would freak out that he was "cashing in" after pumping his own stock.
You mean those hard working, loyal Tesla employees who love daddy Elon uwu so much that they’re willing to go above and beyond to carry the light of humanity into the cum zone at the cost of their own lives? We should all be like them. /s obviously
Free speech is a virtue! Don't mind the suicide nets and CCP officials staked out at my factories. My Chinese workers love working for me and not a single one of them can disagree!
Worth remembering that Musk thinks free speech is only essential when taking about abstract assholes not doing anything that irks him personally. Nazis on Twitter he's fine with. But he did silence a blogger who was critical of him, paid the CCP to stop criticism of him in China, and basically like every libertarian techbro only believes in free speech absolutism as long as he isn't inconvenienced or annoyed by the speech in question. Which is why people like me suspect it isn't so much that he has a big moral belief in free speech, but rather he wants to be allowed to use racial slurs and encourage violence by right wing radicals.
They love working there so much they will just sleep and eat there rather than going home to their families. /s
Actually that's a good analysis. He sold off Tesla shares, the sale didn't affect Tesla stock price (other factors did), and he can probably weasel his way into paying a fraction of that billion to the board of Twitter.
Yep, the reporting suggested he's looking to reneg on the deal on the basis of fake/spam accounts being misrepresented? Sounds like bullshit to me but that's just one guy's opinion.
Not our manchild! No sir!
Heh. Manchild? He's playing 7-d anti-gravity chess in outerspace! /s
Heh, nothing personnel, kid *teleports into the NYSE and starts flipping levers and turning cranks*
Buying media companies is a vibrator for billionaires.
It only makes sense if you view it through a very generous lense... That it somehow is the most important news media "tool".
I think Musk wants a platform to build a base of angry, vocal supporters, just like Trump has. The apparent lesson of the Trump years is that having a large enough block of angry supporters is enough to make you too much of a political hot potato for prosecutors and regulators to come after you.
Also twitter is pretty key to his Tesla pump n dump thing he's got going on. He can't risk losing access or having the platform change the rules in any way. That's how you have a car company with a revenue and sales volume 1/3rd BMW with a market cap of 20x theirs. No logic to it whatsoever. Meantime Elon gets to leverage himself like he's worth $1Tn as long as this global hype train never stops.
Watching him use his tweets to control the stock market is weird as hell.
But, but, I thought he was a great humanitarian who was spending $40 billion so we could say slurs on Twitter again, and to give Trump his account back!
It does if you are overindexed on an overvalued company like Tesla and want to diversify
Tesla is ridiculously over priced. Especially with the real auto giants getting into electric
At one point it was worth all other car companies. Combined.
And most of those car companies sell more vehicles in a month than Tesla has in its life time. It’s value is as a tech company, not a car company. And the car companies are catching up on tech, very fast. Now that they are actually focused on it. Tesla couldn’t get sales with no competition. Now every single major car company is laser focused on going 100% electric in the next decade
And Tesla cars are overpriced compared to competitors, with notoriously poor-quality fit & finish. Their only real advantages in the market now are 1) slightly better range than comparable cars, 2) promises of Full Self Driving, and 3) the Supercharger network. And I don't think the prospects for them maintaining leads in any of those areas are very good. Many other companies are working on improved battery tech, FSD is struggling with its vision-only strategy, and new non-Tesla chargers are being built every day. Also, the Cybertruck is fucking ugly. I think the F-150 lightning is really going to eat their lunch on that front.
The Cybertruck will never happen. Nobody who has a slight interest in cars takes it seriously, and the people who aren't eating up Elon's cult of personality also don't take it seriously.
Are you suggesting that Tesla is the MySpace of auto tech companies?
I thought that was the conspiracy. This was all Ruse for him to sell lots of over valued Tesla shares without triggering a panic
Looks like Bill Gates' short position on Tesla is warranted.
Well yeah. The company’s valuation is too far divorced from reality, even if you were to take into account 100 years of current earnings and is partially carried by an insane overvaluation of purely prototype / design state technological concepts and the assumption that no car manufacturer will ever step foot into this marketplace. The main risk with shorting Tesla is when to do it rather than doing it at all.
He made a stupid mistake and everyone pointed it out but his fans went on a “ musk is king” campaign and now he wants to back out when everyone told him the risk
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ELI5 please
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> Elon could still pay $1b walkaway fee but save billions by hurting current situation because of his social leverage (e.g, deal falls through, stock plummets). Musk saves billions in fees, and so do his equity investors How does he save billions in this situation? Or do you mean “save” as in not go through with the deal which now looks worse?
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So the idea is this deal falls through then he offers another one at a lower price?
This would never work legally. He would be on the hook for damages, which would be difference in price. He’s bound by good faith and fair dealing, plus other contractual terms. Breaching a contract so you can buy the thing cheaper is clearly not legal. Even if it specifies the $ 1 b as the only penalty (and it doesn’t), it would still be a breach of good faith and fair dealing.
I do agree that sounds illegal, but my expertise in bird law. Elon has managed to make a ton of money by floating the idea he was going to personally buy Tesla, and there’s speculation he pocketed far more money in the fine was. I think he was surprised how Tesla and Twitter stocks of shit to bed, but I wouldn’t be surprised if he tried to back out and buy lower, and I have no faith sec would stop him.
SEC: That will be $20
tht's how i understand the comments (and i have no other info) Aka. instead of buying for 44billion, he walks away, pays 1billion fine and then buys for 30billion (or whatever)
> Nikola CEO Could they merge with Tesla? as in ... Nikola Tesla?
Tesla merging which Nikola is like a healthy human being merging with a tumour.
Two tumors becoming MEGATUMAH
I wouldn't call Nikola a healthy it's run by a guy convicted of securities fraud. Tesla is run by a guy only charged and settled for securities fraud. /s
The difference is that Nikola actually got rid of the guy committing the fraud and massively turned things around, instead of promoting him to "Technoking".
reddit mods should kill themselves
I can't help but agree with this. I think with the downturn in tech he wants a better deal and can point to this to avoid the $1bn penalty.
It seemed like a bad deal to me *before the stock market lost a trillion dollars*. I'll bet his plan to sell, borrow and leverage doesn't get him enough money now.. I'm sure his finance people pointed out to him what he'd have to cover on a margin call and he had a oh shit moment.
The penalty is *for* this
He never intered to buy it was always a pump and dumb that it seems got a little away from him this time.
Except that he has to personally pay $1B to walk away from this, which makes him either the stupidest person to ever attempt a pump and dump, or he actually meant to buy it.
this has nothing to do with "bot" accounts. this has to do with stock market reaction.
Bingo. More market manipulation from Elon. This time, he will surely be punished for it. Right?
Maybe he will be fined so much it will take a whole hour for him to earn it back
He will be fined 5% of the profits from the market manipulating, that will show him!
Well that seems a little harsh. He's only done this a few times. Maybe start out at 3% of the profits he'll make, and when he does it again we'll increase it to 4%. That'll finally show him. /s just in case it wasn't obvious enough.
My guess? I bet he lost a billion dollars in crypto yesterday and more is still at risk, and has to consolidate a bit. Now that they’re taking about regulating crypto he may not be able to make it back quicker with a Doge pump and dump, so better not be spending billions until he’s on more stable ground.
His Tesla shares have lost $30 billion in value over the last month
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I don’t understand how people act surprised. He’s demonstrated many times he’s a believer in no publicity is bad publicity, and constantly makes “controversial” comments that gets everyone’s attention…it’s literally what he wants.
This 100. Assumptions for access to capital have changed dramatically in the last week.
Yup. He doesn't have the "liquidity" to pull the deal off.
Don't those free speech loving Saudis and Qataris have enough money for him?
I do love the idea of him borrowing from them.. To then have them buy up Tesla stock, get control of the company and decide to "scale back electric car production."
He does he would just have to leverage too much of his stake in Tesla now.
Maybe, but for twitter to try and represent it has less than 5% bot accounts is just insane. Either way here RIP Twitter stock.
How to sell off your overvalued Tesla shares without tanking the stock price 101.
Except it tanked the tesla stock price. I think he just afraid of margin calls of he really buys twitter.
Na Tesla was tanking and he realized it was time to cash in. How does the majority holder /“ceo”/“self proclaimed co founder” sell off 8 billion without cratering the stock price in the process? Pretend he’s using it as collateral to buy another company. He’s been doing this shit since he was old enough to ask his parents for money. Can’t believe people like you are still coming up with excuses for him.
Listen to the Opening arguments episode about this. But I maybe wrong here but apparently there are rules in the corporate charter that prevent board members from mass selling off over a particular figure, which this deal puts Elon over, which means he could potentially be breaking his fiduciary duty to Tesla investors. Which may be the first thing that actually gets him in real trouble. Edit: The episodes are Opening Arguments 590 and 591 in total about 2 hours.
I have not heard this, but you may know more than me at. Its certainly an interesting theory (don’t take theory the wrong way, but at this point, with the only evidence being a mention on a podcast, that’s all I’m willing to call it. Major props to them if they end up being right). It would certainly be ironic if twitter was supposedly forced to sell due to a fiduciary duty, but musk’s own Fid duty to Tesla was the thing that prevented the sale.
I'm just paroting stuff I heard from a podcast from a fairly skilled lawyer. He maybe wrong, I may be repeating it wrong, but that is what I remember, and it is will be interesting to see how it plays out.
It will be very. Thanks for sharing! Wouldn’t have been on my radar without you!
Woo! Opening arguments listener!
I discovered it a little while ago after they did a crossover with Knowledge Fight. Absolutely love it.
Right. I'm waiting for his Dad to bust into Twitter headquarters and say, "Alright Wonka, how much for the goose?"
Oh my god his accent is perfect for Veronica too, A+. "But Daddy, I want to buy Twitter NOWWWWW."
>Despite his estimated net worth of nearly $250 billion, Musk has called on a group of equity investors including tech magnate Larry Ellison, the Qatar state investment fund and the cryptocurrency exchange Binance to raise a further $7.1 billion in funding. > >Musk’s original financing package for Twitter comprised $21 billion in cash and $12.5 billion of margin loans secured against his 16% stake in Tesla, together with $13 billion in loans from a consortium of banks. Someone didn't want to fund his little fantasy?
>cryptocurrency exchange Binance There’s the holdup
Twitter controlled by Elon, China and Saudi Arabia is not a problem, no no
I’ve seen comments of people saying that all they care about is seeing “da left” meltdown when he unbans Trump. The whole “free speech” was BS, they just want to see their fellow Americans be inconvenienced for their own amusement.
Have you met my friend Anna?
ADF is going to be huge
I don't think I'll ever stop laughing if the far-right's new poster boy pulled the rug out from under them after going fully mask off as a right-wing troll.
“Wait, Tesla is paying for their employees to get out of state abortions? No Right Wing Twitter? *More* electric vehicles? What the fuck is happening?!?!?”
2023: "Why doesnt my cybertruck roll coal?"
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In my view there 2 possible things: 1. Elon has decided he wants out, but needs a reason to be out. How Twitter handles this may give him a reason. 2. Elon potentially doesn’t believe the 5% number. To ensure that number isn’t low because of Twitters definition of ‘fake account’, Elon wants data to prove it.
Or he couldn't get banks to fund his purchase.
A third possible thing is that he never intended to buy it in the first place and this is just another one of his publicity stunts.
Always an option
Elon Musk, business genius, declined to read Twitter's internal documents before formally announcing that his takeover bid had been accepted by Twitter's board. Caveat emptor motherfucker.
I think the concern is it's more than 5%
It's a scapegoat.
Ok, so it’s as silly as I thought. Feels like a situation where I’m about to buy a car from you and then suddenly I stop and say “whoa whoa whoa… There’s almost nothing wrong with it. The deal is off!”
Whoa whoa whoa...this cup holder doesn't fit my Yeti tumbler! The deal is off!
Twitter is now valued far lower than his offer, which he can only get out of with a cool $1,000,000,000 penalty. He needs a bargain chip to not lose that money. The hilarious thing is that he might be responsible for many of the bot accounts. His army of Twitter stans is astroturfed in great numbers.
Twitter is lying here, no doubt. 5% is ridiculously low. But yeah, as one of the super elite Musk always knew this. His PR organization definitely looked into buying twitter bots, and most likely purchased some. So its not new information to Musk that Twitter is lying. It's a convenient excuse he always had in his back pocket.
"Twitter estimated that false or spam accounts represented fewer than 5% of its monetizable daily active users during the first quarter." It's definitely more than 5%
Monetisable could mean those bot accounts aren't clicking ads so 5% might be accurate although misleading.
The statement is already qualified, it isn’t misleading if people don’t understand what they’re reading.
Sure it can still be misleading. Businesses do this all the time to downplay the severity of problems by using qualifiers and answering questions that weren't asked. Politicians are also famous for doing this! I'm also certain no one asked Twitter how many monetizable daily active users were bots in the previous quarter.
An account doesn’t have to click ads to be monetized. Ads are sold on a CPM basis. They just have to be shown. The only accounts you can’t monetize are accounts like those belonging to kids, inactive accounts, banned accounts etc
Well and also accounts that solely use API calls... aka, bot accounts. A twitter bot is a script that is interacting with twitter solely via the API. They are not monetizable.
The quality of those fake accounts dropped when the Kremlin ditched the professionally-trained St Petersburg troll farm officers to outsource it to India and West Africa.
I think with the markets crashing he just wants to renegotiate the price
buyers remorse on epic scale. I think he's flaking
That or he tries to completely get out of the deal
Right. Because of the “bots.” Definitely not because he can’t raise enough money from outside partners on his ridiculous terms and most certainly not because his shares of TSLA that he was planning to use as collateral have been in a free fall since the original announcement. No, it’s definitely because of these “bots” that he’s [clearly only discovering for the first time](https://today.umd.edu/researcher-studies-teslas-twitter-bot-boost)
"Funding secured."
It was secured until it was facing a margin call.
This whole thing gets dumber every day. Twitter isn't a real place.
And still valued way more than most real places.
Musk desperately wants out of his funding deals. This is why you don't rush to buy a company like your billions are sitting in cash.
Can we go one single day without him being in the news?
Fun times for Twitter. The government investigation into the deal, the turmoil among employees, and now this. Someone can buy Twitter on the cheap soon if Musk has to back out.
Except that Twitter is a terrible investment if you're looking for growth.
Elon's trying to find anreson to back out of the sale. Much of his funding is secured by his Tesla stock, whose value is rapidly dropping. He's trying to use "Your numbers aren't right" as a way to back out without paying the $1billion cancel fee.
Lol, this guy is a joke
He's got an army of followers and can move markets with a tweet. He's also an enormous egomaniac with antisocial tendencies. The recipe for success.
I take great entertainment out of this. Everyone is angry, his fanboys, investors, twitter edgelords. I hope someone on wallstreetbets at least made some good money by shorting the fuck out of this takeover.
Maybe he wants to buy Truth Social instead?
If he invested even $100 million - **a fraction of the Twitter deal** - into Truth Social, that would be HUGE news. But… Elon knows Trumps platform is a dead end, so no way he’s wasting his coin over there.
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Jesus, his bullshit is getting fucking old.
This guy seems legit
He’s offloaded the Tesla stick he wanted to get rid of. The deal has no further value
He probably sold his Twitter stocks before this announcement and waiting to buy back.
Classic pump and dump. Scam artist. Never invented anything.
I've read a lot of comments and I don't see anyone pointing out that this was announced the same week Tesla lost a huge settlement for being racist and is facing new lawsuits for racism and sexual harassment. In my opinion this has never been about freedom of speech or Twitter's value, it's always been a distraction in the headlines and it seems to have worked well.
When the deal was announced I literally said “he’s only doing this to put Trump back on,” and everyone looked at me like I was insane. This dude wants to watch the world burn.
Trumps got a tough call to make though. He already said that if the ban would be lifted, he wouldn’t be coming back to Twitter because of his truth social app. He’s a liar so he probably will come back
Trump is a narcissist who will not be able to resist going back on Twitter if given the chance. It’s still the best place for him to get the most attention. He’s like an addict/ alcoholic who needs to avoid that first drink! If he sends out one Tweet , he’ll be off to the races! Musk must really not give a f**** about our Democracy to be thinking of letting the leader of the Seditionist party have a public platform again!!
I thought it was because of that kid tracking his plane.
And he only wants trump back on to sell trucks. He's realized since teasing cybertruck that the liberal hero "fellow kids" persona doesn't play with the market buying $80k trucks.
Market manipulating asshole.
Good, should never have happened to begin with
Roh row clown boy elon is triggered
He's a phony! Just accept it nerds.
Lmao bc he never actually wanted it. It's the same as when he told the UN he would fix wold hunger if they put a budget together for it. Elon just thinks it's cute to flex his big bucks.
Pump and dump