Elon Musk-Twitter’s drama continues to spin strange and unexpected twists, so anything I write here could become debatable shortly after the ink dries.
It has always been dangerous to talk about Musk at all. He is said to be genius-wise, but he has done very stupid things (strange tweets almost blocked him for defamation and caused him problems with the Securities and Exchange Commission). Her baby, the electric car giant Tesla, was sadly mismanaged, affected by production issues and almost declared bankrupt. He miraculously survived and became stronger, making him the richest man in the world.
Most recently, it introduced a “better and more definitive” offer for the socially unstable but ubiquitous social media company Twitter. Price: $ 44 billion or $ 54.20 per share (which included a pot reference; “4:20” is the “toke hour” in the culture of weed smoking). It was then a big premium on its stock price and even stronger now after the market sale.
The Twitter board finally realized that Crazy Elon was offering a one-day payday for its besieged investors and accepted the deal.
Musk was about to buy what he called the public square of the world. He would be the king of all media if he took Twitter in private and fixed his multiple business flaws (despite all his influence, he has no cash flow or profits).
Until suddenly it wasn’t.
Somewhere along the line, he was thought to be overpaying for a flea dog. He put the deal on hold indefinitely. His unbelievable reason for threatening to walk: There are too many fake Twitter accounts that can’t be monetized by him or anyone else. He also said that Twitter was hiding this bot problem, something equivalent to fraud. He wants to delve deeper into books.
Elon Musk has said he is concerned about the large number of fake Twitter accounts. JOSH EDELSON / AFP via Getty Images
If he was really concerned about robots, he would not have given up due diligence before signing the agreement documentation.
What’s next? The corporate press has always been skeptical about Musk’s intentions because most of Wall Street has been skeptical. That is why the shares were never traded near their bid price.
For now, here’s the point of view of two bankers, one who has worked with his Tesla board and another on a company involved in his Twitter financing machinations.
Only on its terms
They say pretty much the same thing. Musk tells people he still wants Twitter. He believes that he can make it work as a private company, clean up the problem of the bot and sell it profitably at some point in the next five years.
But Musk wants the company (like everything else) on its terms, which are always on the move. He doesn’t read the balance sheets, but he goes by his instinct and has no problem breaking the conventional banking rules (i.e. your word is your link) to get his reward. His instinct told him to give up due diligence. Now he tells her that even though he signed an agreement that left him hooked by the $ 1 billion rupture fee and perhaps more damage, he can put Twitter on the table and accept its terms, also a purchase price much lower.
Maybe he’s right. Twitter first said it would enforce the terms of the initial agreement, maybe even go to court, but now it looks like it’s playing with Musk. He recently said he will deliver more data on his bot’s problem, a move that means talks have resumed. Bankers tell me that the Twitter board knows that finding another suitor will be difficult even with about $ 40 per share it is currently negotiating. Not only can the board accept nothing, but neither can it tell Musk to just make sand.
Elon Musk could lose $ 1 billion if his Twitter deal falls through. Patrick Pleul / Pool Photo via AP, File
So the thought between my two boys is that Twitter accepts a lower price, possibly significantly lower, and Crazy Elon gets its public square, albeit for much cheaper.
That means the deal is underway, right? That seems like it. But no one really knows about Crazy Elon.
Gensler becomes a gaga
SEC Left Chief Gary Gensler finally announced last week his intentions to review the stock market. Forget about the great deals small investors are getting now – no-commission transactions and mobile apps that make stock trading perfect and affordable for beginners.
Gary Gensler Securities and Exchange Commission is pursuing retail investors in “memes”. Samuel Corum – CNP / MEGA
Gensler told attendees at an investor conference that bad things are happening where no one can see them; too many shops will not be used for public exchanges. They are heading to private trading venues known as dark pools. Investors believe they are trading for free on Robinhood, but they could be scammed without knowing it.
Gensler did not provide any data to show that markets are engaging small investors through its current structure. It is his intuition.
Turning markets upside down with intuition is quite dangerous. Especially when you’re just trying to harden your class war credentials, as most observers suspect. The good news (and bad news for Gensler): His proposed changes are likely to take years to implement, as Congress, which is likely to be in the hands of the GOP after November, debates its merits.
At that moment, everything will be over. Its current leader, Sleepy Joe Biden, will likely be out of office, replaced by a sober Republican or Democrat president who will resist “fixing” something that doesn’t need to be fixed.