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Am I the only one who thinks it's obvious he was pretending to buy Twitter to try cover his cashing out of massive amounts of tesla?

skohan 4y ago
Could it be that he actually wanted to buy Twitter at a discount, but mis-calculated how much TSLA stock would drop? Maybe it was attractive at 10-20% of his net worth, but the price got too high.
- pmorici 4y ago
  This is my thinking, he didn’t anticipate the market would tank as bad as it did and now the math on the deal isn’t what it was before all the multiple compression both for Tesla and Twitter. People saying he wasn’t serious about it from the start are off the mark.
  - throwaway0a5e 4y ago
    Exactly. Everyone is serious at one price and a tire kicker at another price. Due to the market drop the dollar figure is now more expensive relatively speaking. I would not be surprised if some lawsuits fly back and forth and the deal winds up going through at a valuation that is similar in relative terms to the offer when it was made but different numerically.
    - HWR_14 4y ago
      > a valuation that is similar in relative terms to the offer when it was made but different numerically. I have no idea what that means. You think they negotiate to 53.69/share so Musk can save some face?
      - throwaway0a5e 4y ago
        Both Twitter's value and the value of the stuff that underlies Musk's wealth has dropped. So they could agree to a new lower price and Twitter shareholders would still make the same money relative to the recent value of the stock and Musk would take a similar ding relative to his net worth. It's like if you agree with someone's heirs to buy something after the current owners croaks but the current owner takes long enough to croak that the market for that thing changes. The typical path forward is to re-adjust so the deal is just as fair for both parties as it used to be and get on with it. But because of the dollar figures involved here the parties will sue each other instead of exchanging emails/texts like normal people looking to buy and sell stuff do.
        skohan 4y ago
        > So they could agree to a new lower price and Twitter shareholders would still make the same money relative to the recent value of the stock What? So let's imagine I bought 10000 shares of TWTR in 2018 for $25. And now Musk wants to revise the offer down from 54.20 down to 34.20. Why should I accept a $200k smaller return, just to be more "fair to Elon" in terms of the effect on his net worth? Or worse, what if I bought 10000 shares close to the peak? Why should I accept a $200k larger loss on the stock? He made a contract to pay a certain price - it's in no way a wash to shareholders if he wants to pay less. He just made a bad deal. Nobody forced him to sign a contract to acquire Twitter at that price.
    - skohan 4y ago
      I have no idea why Twitter would agree to that. It seems to me the more likely outcome is that Musk will use lawsuits as a disincentive to prevent Twitter from forcing him to go through with the deal, and he will back out at the cost of a massive penalty payment.
      - pmorici 4y ago
        It isn’t without precedent there were pending acquisitions during the COVID crash in 2020 that got renegotiated to a lower price.
- cloutchaser 4y ago
  It's not just that TSLA drop. If Twitter had gone through the current tech market drop, without Musk hanging over it, it could easily be down 60-70%, maybe even 80%. Twitter is a terrible business on paper with the current board. It wouldn't have done well in this tech crash. Musk must be pretty annoyed that if he had waiting about 30 days he could have gotten twitter for 60% less money.
  - jacquesm 4y ago
    Regret was never a valid reason for annulment of a contract.
    - ant6n 4y ago
      It is when buying stuff on Amazon…
      - jacquesm 4y ago
        No, even then: You are still operating within the parameters of your contract with Amazon when you return something, the contract is not annulled, it is merely another clause in the same contract that gets triggered. Consumer law gives you certain protection varying from place to place because it is impossible to verify what you buy online, but a bid on the stock of a public company is not an Amazon purchase and hence does not have the same kind of protections. And in a way that is Elon's play: to claim that he put that bid in with important information being withheld by the company that would have had a material effect on the bid price. A reasonable person might take the position that Elon should have done his due diligence before making that bid.
        hef19898 4y ago
        I always love when these stunts are hitting reality, be that legal, regulation or physics. Because it always fun to watch them crumble. It just doesn't happen often enough, ignorance and endless (VC) money go a long in ignoring those limits without consequences.
- kakwa_ 4y ago
  Is the Tesla stock drop having a significant impact? The whole tech field, including Tesla and Twitter has seen stock prices drop. Yes Musk can leverage less money, but he also has to spend less to buy Twitter.
  - maigret 4y ago
    No they signed a contract about the price, and it's fixed at $54 a share. Which is why the current theater...
  - noduerme 4y ago
    Speaking personally, for the last 3 months or so I've watched my retirement investments lose more than I made each month. I can't really pull out of the stock market unless I want to just eat a 9% inflationary loss. I suppose if I had the platform to talk one stock down to buy it while talking another up to sell it, I'd resort to games too.
    - prepend 4y ago
      Don’t worry about it. You’ll see this happen a bunch of times before you retire. Best not even to look at the amounts until your close to retirement and need to adjust your investments.
- decafninja 4y ago
  I am not a financial markets expert, but many who are seem to believe at least some of TSLA's drop is due to Elon's clowning around with Twitter. So it's a self inflicted wound (which he seems to be doing a lot of these days).
- natch 4y ago
  Yes that is the common sense, simple, sane theory about what is going on here. It doesn't make Elon look great, but some of the other theories… - he wants to feed his ego because he doesn't already have enough to feed his ego - he wants to make money because he doesn't have enough money - he wants to grief twitter because it's such a good tool for him and he uses it every day - he wants to get more people to preorder cars since the waiting line is only a year right now ...are just bonkers.
CamperBob2 4y ago
He's like a kid who starts a grass fire so nobody will notice he broke a window playing baseball.
aliswe 4y ago
To what end?
- xupybd 4y ago
  If he sells a lot of Tesla stock it could cause a run. If he does it with a pretence he might avoid the run and preserve his stock price.
  - cookingrobot 4y ago
    I think this theory is right. And as much as he trash talks Warren Buffet, I think he was basically following his advice of “buy what you know.” He just got burned by amazingly bad market timing.
- boxmonster 4y ago
  He obviously has insider knowledge of Tesla, a finger on the pulse of his market and saw warnings about world economic conditions. He predicted the stock was going to take a hit, probably needed some money for his other ventures and wanted to sell fewer shares at a higher price. That way he keeps more control of the company. Occam's razor says the simplest explanation is probably right.
  - rad88 4y ago
    That is not what Occam's razor says and is a very complicated, explanation anyway.
  - moonchrome 4y ago
    That makes no sense - he predicted the stock market crash - and then started twitter buyout at pre-crash prices ?
    - DSingularity 4y ago
      What makes you think twitter shareholders would sell for less? If you made a 1B dollar investment in twitter ten years ago, what return would you look for? If you didn’t get it from the present offer what would you do? Would you lobby 5 other massive shareholders that twitter will be worth more in 6 years and there is no need to sell or would you sit on your hands and hope for the best?
coffeeblack 4y ago
- shakes_mcjunkie 4y ago
  "Suddenly" is a bit reductive, no? https://www.reddit.com/r/technology/comments/utes3n/comment/i99o003/ https://www.reddit.com/r/technology/comments/utes3n/comment/... I find it hard to believe that someone so rich, yet so petty will "save humanity".
- matkoniecz 4y ago
  > What is it with the Musk hate? Repeated promises and claims which turn out false. He is extremely arrogant and annoying. For example used "Pedo Guy" as insult at Twitter toward someone who committed crime of disagreeing with him, proceeded to claim that this does not mean "pedophile" in court. And claimed that this person "married" 12 year old girl (actually, she was 32 years old). Also, Musk has bunch of annoying fans. (that is among some legitimate reasons, many hate him BECAUSE he is successful) > dozen other things that will save humanity That is really overstating it, and case of annoying fanboyism. (personally I appreciate some achievements and see his role in that - without giving 100% credit to leader, confused why people praise some projects already, but see no reason to engage in fanboyism or Musk hate)
  - coffeeblack 4y ago
    - netsharc 4y ago
      > It was years ago. Not original commenter, but, so what if it's a while ago, from appearances it's not like his character has changed that much from being a major dickhead. He dismissed Covid as nothing because it would've been bad for his factories' output (he didn't say this but let's draw conclusions). Oh that's 2 years ago, also old news?
      - 4y ago
hooande 4y ago
He could have done this with any number of pretenses that didn't require signing a binding legal agreement to buy Twitter. Generally, this is far too complicated and involved to be any kind of effective scheme. He has professional managers and lawyers who could have easily come up with dozens of ways to sell tsla stock without this public legal morass. The situation most likely is as it seems: He wanted to buy twitter for personal reasons and is in the process of doing so.
- Jistern 4y ago
  I concur with everything except this part... *** He wanted to buy twitter for personal readons [reasons] and is in the process of doing so. *** I suppose that he wanted to buy Twitter. Perhaps it was for personal and business reasons. I simply don't know. Also, at this point it seems like he might have decided not to purchase Twitter. Nonetheless, the following comment which you successfully refuted... *** Am I the only one who thinks it's obvious he was pretending to buy Twitter to try cover his cashing out of massive amounts of tesla? *** was ridiculous.
  - rmbyrro 4y ago
    We don't need to call names, just present the arguments and let others judge.
concinds 4y ago
Huh? I keep seeing people make this point, but the premise is defective. Investors clearly reacted negatively to Elon's Tesla stock sale, despite the Twitter 'excuse'. Furthermore, if Elon wanted to minimize Tesla sell pressure, his initial Twitter deal proposal wouldn't have been missing $21B of financing, which made investors think Elon would need to sell more stock in the future. He could have justified the stock sale in plenty of other ways, including reallocating funds to his other companies, without forcing himself into a $44B deal.

skohan 4y ago

Could it be that he actually wanted to buy Twitter at a discount, but mis-calculated how much TSLA stock would drop? Maybe it was attractive at 10-20% of his net worth, but the price got too high.

pmorici 4y ago
This is my thinking, he didn’t anticipate the market would tank as bad as it did and now the math on the deal isn’t what it was before all the multiple compression both for Tesla and Twitter. People saying he wasn’t serious about it from the start are off the mark.
- throwaway0a5e 4y ago
  Exactly. Everyone is serious at one price and a tire kicker at another price. Due to the market drop the dollar figure is now more expensive relatively speaking. I would not be surprised if some lawsuits fly back and forth and the deal winds up going through at a valuation that is similar in relative terms to the offer when it was made but different numerically.
  - HWR_14 4y ago
    > a valuation that is similar in relative terms to the offer when it was made but different numerically. I have no idea what that means. You think they negotiate to 53.69/share so Musk can save some face?
    - throwaway0a5e 4y ago
      Both Twitter's value and the value of the stuff that underlies Musk's wealth has dropped. So they could agree to a new lower price and Twitter shareholders would still make the same money relative to the recent value of the stock and Musk would take a similar ding relative to his net worth. It's like if you agree with someone's heirs to buy something after the current owners croaks but the current owner takes long enough to croak that the market for that thing changes. The typical path forward is to re-adjust so the deal is just as fair for both parties as it used to be and get on with it. But because of the dollar figures involved here the parties will sue each other instead of exchanging emails/texts like normal people looking to buy and sell stuff do.
      - skohan 4y ago
        > So they could agree to a new lower price and Twitter shareholders would still make the same money relative to the recent value of the stock What? So let's imagine I bought 10000 shares of TWTR in 2018 for $25. And now Musk wants to revise the offer down from 54.20 down to 34.20. Why should I accept a $200k smaller return, just to be more "fair to Elon" in terms of the effect on his net worth? Or worse, what if I bought 10000 shares close to the peak? Why should I accept a $200k larger loss on the stock? He made a contract to pay a certain price - it's in no way a wash to shareholders if he wants to pay less. He just made a bad deal. Nobody forced him to sign a contract to acquire Twitter at that price.
  - skohan 4y ago
    I have no idea why Twitter would agree to that. It seems to me the more likely outcome is that Musk will use lawsuits as a disincentive to prevent Twitter from forcing him to go through with the deal, and he will back out at the cost of a massive penalty payment.
    - pmorici 4y ago
      It isn’t without precedent there were pending acquisitions during the COVID crash in 2020 that got renegotiated to a lower price.
cloutchaser 4y ago
It's not just that TSLA drop. If Twitter had gone through the current tech market drop, without Musk hanging over it, it could easily be down 60-70%, maybe even 80%. Twitter is a terrible business on paper with the current board. It wouldn't have done well in this tech crash. Musk must be pretty annoyed that if he had waiting about 30 days he could have gotten twitter for 60% less money.
- jacquesm 4y ago
  Regret was never a valid reason for annulment of a contract.
  - ant6n 4y ago
    It is when buying stuff on Amazon…
    - jacquesm 4y ago
      No, even then: You are still operating within the parameters of your contract with Amazon when you return something, the contract is not annulled, it is merely another clause in the same contract that gets triggered. Consumer law gives you certain protection varying from place to place because it is impossible to verify what you buy online, but a bid on the stock of a public company is not an Amazon purchase and hence does not have the same kind of protections. And in a way that is Elon's play: to claim that he put that bid in with important information being withheld by the company that would have had a material effect on the bid price. A reasonable person might take the position that Elon should have done his due diligence before making that bid.
      - hef19898 4y ago
        I always love when these stunts are hitting reality, be that legal, regulation or physics. Because it always fun to watch them crumble. It just doesn't happen often enough, ignorance and endless (VC) money go a long in ignoring those limits without consequences.
kakwa_ 4y ago
Is the Tesla stock drop having a significant impact? The whole tech field, including Tesla and Twitter has seen stock prices drop. Yes Musk can leverage less money, but he also has to spend less to buy Twitter.
- maigret 4y ago
  No they signed a contract about the price, and it's fixed at $54 a share. Which is why the current theater...
- noduerme 4y ago
  Speaking personally, for the last 3 months or so I've watched my retirement investments lose more than I made each month. I can't really pull out of the stock market unless I want to just eat a 9% inflationary loss. I suppose if I had the platform to talk one stock down to buy it while talking another up to sell it, I'd resort to games too.
  - prepend 4y ago
    Don’t worry about it. You’ll see this happen a bunch of times before you retire. Best not even to look at the amounts until your close to retirement and need to adjust your investments.
decafninja 4y ago
I am not a financial markets expert, but many who are seem to believe at least some of TSLA's drop is due to Elon's clowning around with Twitter. So it's a self inflicted wound (which he seems to be doing a lot of these days).
natch 4y ago
Yes that is the common sense, simple, sane theory about what is going on here. It doesn't make Elon look great, but some of the other theories… - he wants to feed his ego because he doesn't already have enough to feed his ego - he wants to make money because he doesn't have enough money - he wants to grief twitter because it's such a good tool for him and he uses it every day - he wants to get more people to preorder cars since the waiting line is only a year right now ...are just bonkers.

CamperBob2 4y ago

He's like a kid who starts a grass fire so nobody will notice he broke a window playing baseball.

aliswe 4y ago

To what end?

xupybd 4y ago
If he sells a lot of Tesla stock it could cause a run. If he does it with a pretence he might avoid the run and preserve his stock price.
- cookingrobot 4y ago
  I think this theory is right. And as much as he trash talks Warren Buffet, I think he was basically following his advice of “buy what you know.” He just got burned by amazingly bad market timing.
boxmonster 4y ago
He obviously has insider knowledge of Tesla, a finger on the pulse of his market and saw warnings about world economic conditions. He predicted the stock was going to take a hit, probably needed some money for his other ventures and wanted to sell fewer shares at a higher price. That way he keeps more control of the company. Occam's razor says the simplest explanation is probably right.
- rad88 4y ago
  That is not what Occam's razor says and is a very complicated, explanation anyway.
- moonchrome 4y ago
  That makes no sense - he predicted the stock market crash - and then started twitter buyout at pre-crash prices ?
  - DSingularity 4y ago
    What makes you think twitter shareholders would sell for less? If you made a 1B dollar investment in twitter ten years ago, what return would you look for? If you didn’t get it from the present offer what would you do? Would you lobby 5 other massive shareholders that twitter will be worth more in 6 years and there is no need to sell or would you sit on your hands and hope for the best?

coffeeblack 4y ago

shakes_mcjunkie 4y ago
"Suddenly" is a bit reductive, no? https://www.reddit.com/r/technology/comments/utes3n/comment/i99o003/ https://www.reddit.com/r/technology/comments/utes3n/comment/... I find it hard to believe that someone so rich, yet so petty will "save humanity".
matkoniecz 4y ago
> What is it with the Musk hate? Repeated promises and claims which turn out false. He is extremely arrogant and annoying. For example used "Pedo Guy" as insult at Twitter toward someone who committed crime of disagreeing with him, proceeded to claim that this does not mean "pedophile" in court. And claimed that this person "married" 12 year old girl (actually, she was 32 years old). Also, Musk has bunch of annoying fans. (that is among some legitimate reasons, many hate him BECAUSE he is successful) > dozen other things that will save humanity That is really overstating it, and case of annoying fanboyism. (personally I appreciate some achievements and see his role in that - without giving 100% credit to leader, confused why people praise some projects already, but see no reason to engage in fanboyism or Musk hate)
- coffeeblack 4y ago
  - netsharc 4y ago
    > It was years ago. Not original commenter, but, so what if it's a while ago, from appearances it's not like his character has changed that much from being a major dickhead. He dismissed Covid as nothing because it would've been bad for his factories' output (he didn't say this but let's draw conclusions). Oh that's 2 years ago, also old news?
    - 4y ago

hooande 4y ago

He could have done this with any number of pretenses that didn't require signing a binding legal agreement to buy Twitter. Generally, this is far too complicated and involved to be any kind of effective scheme. He has professional managers and lawyers who could have easily come up with dozens of ways to sell tsla stock without this public legal morass. The situation most likely is as it seems: He wanted to buy twitter for personal reasons and is in the process of doing so.

Jistern 4y ago
I concur with everything except this part... *** He wanted to buy twitter for personal readons [reasons] and is in the process of doing so. *** I suppose that he wanted to buy Twitter. Perhaps it was for personal and business reasons. I simply don't know. Also, at this point it seems like he might have decided not to purchase Twitter. Nonetheless, the following comment which you successfully refuted... *** Am I the only one who thinks it's obvious he was pretending to buy Twitter to try cover his cashing out of massive amounts of tesla? *** was ridiculous.
- rmbyrro 4y ago
  We don't need to call names, just present the arguments and let others judge.

concinds 4y ago

Huh? I keep seeing people make this point, but the premise is defective. Investors clearly reacted negatively to Elon's Tesla stock sale, despite the Twitter 'excuse'. Furthermore, if Elon wanted to minimize Tesla sell pressure, his initial Twitter deal proposal wouldn't have been missing $21B of financing, which made investors think Elon would need to sell more stock in the future. He could have justified the stock sale in plenty of other ways, including reallocating funds to his other companies, without forcing himself into a $44B deal.