Musk grumbles about 'overpaying' for Twitter Billionaire Tesla boss Elon Musk told analysts last night he was excited about his upcoming deal to buy Twitter despite his apparent belief that he will be "obviously overpaying." Musk has just eight days to complete the Twitter acquisition after the social media firm sued him in a Delaware Chancery court to force him to stick …
"...asked the judge to delay the trial while he figured out financing"
Proof enough that this was never more than to stir the pot and market himself. This is not a serious person.
You want to take a company private at 40+(?) billion, you dick around for months and not the get the financing started until your threatened by the seller in court (probably to avoid discovery)? My understanding, despite being so rich, he is going to have to do a lot of collateral and borrowing to get this done.
Then go public and trash talk the stock you want to buy? I have a feeling the SEC will come knocking again. God, this man is insufferable.
The delay was not to figure out the financing. He had that ready to go. He was hoping that delay would cause the financing to pass its sell by date. Somehow his lawyers have explained to him that that does not matter: the court would appoint a special master with the authority so sell anything Musk has to complete the purchase. On top of that, Musk would have to go through deposition and his inability to keep his mouth shut would have dropped him in even deeper trouble.
Maybe not for Musk, but someone working with the authority of the State could do it no problem. And it would be more than 6% of the company because as soon as the shares started hitting the market the price would start going down and more would need to be sold to make up the full purchase price. Which are all things Musk should have thought about before agreeing to the deal.
What I mean is you need to find people who are willing to buy it, over and above the normal trading volume which is about $75m per day. Doesn't matter if you are Musk or the government, except that Musk would probably get a slightly better price for it.
And yes, I absolutely agree, the price will go down when shares are dumped on the market.
He makes an offer so large that the Twitter board literally cannot refuse then says he is obviously over paying - well derr that was why the Twitter board put the sale up to for a vote and why the share holders voted to sell.
Now he says "the long-term potential for Twitter, in my view, is an order of magnitude greater than its current value". If that were true he would not be over paying.
Perhaps he is right because there is an obvious synergy with Tesla. Soon I will be able to buy a Tesla bot that can write Tweets for me, follow the trend setters for me, click on the adverts for me and buy the things he says I should want.
And he did rush into the deal.
I expect based on the recent revelations that Twitter is internally in pretty bad shape. He agreed to waive full due diligence.
He set the price of the offer based on what he could pay, not on what he could get it for.
When the market turned a corner the valuation tanked.
When Twitters internal problems came to light it tanked more.
When he tried to back out the deal it tanked more.
Musk timed the market perfectly to buy near the top, and personally helped turn his acquisition into a wounded animal.
Because of the attempt to back out and the court fight, he is now hated by employees of the company he soon will own. He has made personal beefs with senior management, and the company has it's own culture which is antithetical to how he runs the rest of his empire.
Those he didn't already order fired are deciding to flee in droves, and silicon valleys finest headhunters taste blood in the water. And all of the old timers probably won't even need to work again after the buyout.
He thinks of himself as a visionary, but the rest of Twitter's users is what makes the platform, and how many share his vision?
The web is littered with the bones of the last dozen platforms that filled the role Twitter did. Twitter isn't clever, it doesn't do that much, it was in the right place at the right moment, and was the lucky lottery winner. It survived because it stayed simple, and avoided screwing up it's success by not messing with it's user bases, but it has been running on VC money and IPO practically the whole time. The gamblers got lucky, the found a sucker with a big wallet. That was the business plan.
As for what comes next? Odds are between his tantrums and probably re-platforming the people the company justifiably removed, Musk will turn Twitter into a toxic waste pit. He will jack around with the app to suit his personal whims, and he has to monetize the hell out of and already marginally profitable venture. The people that built the companies core infrastructure are in play and may leave for all of the reasons above.
I can't wait to see what Ted Dziuba has to say about this one. I feel like he should take the old brown bess off the mantle and come out of retirement for one more post to put a capstone on the grave of one the ages unicorns.
First up, the "break up fee" was never on the table. It required very specific conditions to be met, it wasn't just a "get out of deal for $1bn" monopoly card. Regulators had to nix the idea or Musk wouldn't be able to secure financing, something on that order. Usually one of the things I like about El Reg is that you read all the boring crap like legal documents and then summarize it for everyone with a healthy dose of snark. This seems to be a case of someone getting lazy.
Second, it seems more than a little curious that the same day the judge in the case orders Musk to hand over documents related to how he's under federal investigation from TWO different US agencies, is the same day he suddenly decides he'll buy Twitter after all, but ONLY if they agree to drop the lawsuit. Just my personal bit of speculation, but that sounds like the actions of someone who knows he's in some deep shit, which will probably tank the Tesla stock, which is where most of his net worth exists. You can get away with a lot if you're a rich white male in the US, but when you tell a regulatory agency to suck your cock... the gloves come off.
I hope, though realize it's probably in vain, that other top executives are paying attention to this lesson in why you don't negotiate deals A) while on some kind of mind altering substance, and B) without your lawyers being involved at every step.
I will never understand it myself, but there are some people out there for whom Musk can do no wrong. He could break into their house, trash the place, leave a steaming pile of poo in the middle of the bed, and then send them a bill for the Uber he took there and back and they'd still worship the ground he walked on.
We also know a good number of Elon's Twitter followers are bots and he's not above hiring astroturfers, so... it's not out of the question that someone was paid to go around to places like El Reg and downvote everything. Sort of the lazy troll who can't even come up with a response to any of the comments so far.
On the flip side, there are people for whom Musk can do no right, which I find equally baffling.
Me, I think he's a bit of a prick who needs to learn when to keep his mouth shut, but at the moment he has two products on the market that are unique in their combination of capabilities. So, for the moment, I own those two products, and like them a lot. When they come due for replacement, if there are other products that meet the requirements, I will compare them and buy whichever is best for me.
GJC
How could Twitter possibly be turned profitable? I might be possible to make people with big twitter-egos pay for it. After all, that's what motivated Musk to buy Twitter, except that he would be at the top of the pyramid. Tweak the algorithm to give extra "boost" to higher payers. Sounds like a recipe for disaster - but there is no accounting for bad taste.
Yes, but letting the idiots loose is also the shortest path to lose the few people that have remained on Twitter.
The problem has been amply demonstrated by Musk himself, and his mate Trump has shown with his (Absolutely Not The) Truth thing that exclusively focusing on the dreck of society does not exactly yield the so desired profits either.
If I were someone with Twitter shares I would be extremely grateful for the buyout price because I suspect that as soon as Musk starts "leading" the shares will follow the opposite trajectory of Space X rockets. Given that he had to borrow money from his other ventures to deal with the consequences of his big mouth, there is every chance that such a downturn will have further consequences.
Shareholders are not fans, they're in it for the money.
Unfortunately, I believe you're correct. Musk's version of "free" speech includes giving a platform to those who support insurrection and overthrow of legitimate governments. Not exactly a recipe for stable society with that vision for "freedom" being paffed.
I think Twitter could be made profitable. It might be a much smaller company when it comes out the other side, but profit margins would be higher.
You start by making it clear that all the nazis, white nationalists, trans/homophobes, antisemitic, and other hate groups are not welcome by giving them the boot. You also put anti-vaxxers, qanon kool-aid drinkers, and similar groups on a very short leash. They can discuss conspiracy theories all they want, but as soon as it veers into blaming/targeting any specific group they're gone.
Once the cockroaches have all scattered to Parler, Gab, and Truth Social, it might be that Twitter shrinks considerably and they may have to shed some staff because they don't really have anything for them to do any longer. However, once Twitter comes out the other side they could tell advertisers they may have a smaller user base, but it's a much more active and engaged group so their advertising dollars are going to be more effective and they can thus charge a higher rate relative to what they charge now.
IMO, if you lean into all these groups, which seems to be Musk's plan, you're just going to alienate advertisers. Nestle doesn't want its baby formula ads showing up with tweets about kiddie porn for example. You'll have to offer deeper discounts to get them to stick around and risk the blowback from customers the next time one of their ads shows up next to some objectionable content. Musk's plan is to basically back up a tanker truck and spray gasoline onto the smoldering fire that has been Twitter's business model to date. All he's going to succeed in doing, IMO anyway, is burning the company to the ground faster than it was doing it itself.
"How could Twitter possibly be turned profitable?"
Eliminating downtown offices in major cities with outrageous rents could be a good start. Not only are those locations expensive to rent, a company has to pay their staff especially high wages just to be able to work in those cities and afford more than a couple of square meters of living space.
One would think that an internet based company has a single major need, bandwidth. If that can be had along the I-90 in the northern part of the US, why not be there? I've seen many nice office buildings and complexes for sale all over the US that are less to purchase than one year of rent for the same amount of space in New York City. If some job positions can be done from a person's home, let them. There are a whole bunch of people that can still do good work but have needs that are hard for an employer to accommodate. Since those people will already live someplace that has been configured for them, it makes sense to not require them to come into an office that isn't set up for them. The pay can be the same, but a company not having to provide space, coffee and bog rolls is a net gain for the company.
Well, profit comes from offering services that people want or need. One that I can see Twitter pioneering, and which Musk has hinted at, I think, would be a federated identity service, so that online users can have a validated identity used across multiple services. Things like Facebook login services come close to offering this, but fall a bit short.
GJC
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I've heard multiple stories of Twitter employees having basically elective hours. They have a a 40 hour a week contract and get payed based on those hours but only have to work "when they feel like it" and can take time for "personal reasons" whenever they feel like it. Effectively meaning they were working about 10 to 15 hours a week (and doing basically fuckall in the time they were actually "working"). If that is indeed the case for even a portion of the workforce you could probably cut the amount of people there drastically, have the rest actually work their contracted hours (and no more) and come out ahead on productive time with fewer people.
Modern tech companies like Twitter seem to consist of 80% bullshit jobs that are only there to "impress" the rest of the world. See also all the videos of young "tech consultants" supposedly working for these companies that seem to be the most vapid, empty people that really don't have a clue. They'll be the first to be shown the door.
I can't help but feel many of these "tech" companies (Google, Twitter, etc) are currently still in the "don't care, we have piles of money to burn" stage. When (it's not an if at this point) the western economy is going to take it's massive nose-dive all of these useless people are going to be whining the hardest about how there's suddenly no work and nobody wants them. Surprise surprise, nobody wants to employ you if you're useless and your idea of a long day working consists of 6 hours, 4 of which was spent on drinking coffee and eating snacks.
They have a a 40 hour a week contract and get payed based on those hours but only have to work "when they feel like it" and can take time for "personal reasons" whenever they feel like it. Effectively meaning they were working about 10 to 15 hours a week (and doing basically fuckall in the time they were actually "working").How would one go about landing a job at Twitter?
Asking for a friend.
Some organizations seem to have made the "no time tracking" approach work, according to a couple of pieces I've read. You do need to continue to evaluate employees based on productivity – and we all know measuring that is difficult, though it can be done with the right sort of structure and managers who actually do the job – and you have to be willing to tell under-performers to shape up or ship out (or verify they're under-performing for a good reason and they're worth investing in).
But certainly if you're going to let people work when they feel like it, you have to give them a reason to feel like it.
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