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This article says Musk agreed to buy Twitter mostly as a joke. I think there's a far better explanation. This wasn't a joke for Musk because after agreeing to b

This article says Musk agreed to buy Twitter mostly as a joke. I think there's a far better explanation. This wasn't a joke for Musk because after agreeing to buy Twitter he proceeded to sell billions of dollars' worth of TSLA stock, supposedly to finance the purchase. Even for the richest man in the world that's not a joke. I think a better explanation is that Musk offered to buy Twitter as a cover for selling billions of dollars' worth of TSLA. Look at this story: https://www.wsj.com/articles/elon-musk-sells-billions-of-dollars-in-tesla-stock-11651197227 https://www.wsj.com/articles/elon-musk-sells-billions-of-dol... The headline is: "Elon Musk Sells $8.5 Billion of Tesla Shares After Deal to Buy Twitter" Why does he need a cover? Because TSLA is way too overvalued. He has to know that it is overvalued. Tesla's market cap is double of Toyota, VW, Mercedes, BMW, GM, Honda, Ferrari and Volvo all combined! [1]. If you sell stock while knowing your company's stock is way too overvalued, you're fleecing unsophisticated investors. Pretending to buy Twitter provides a convenient cover. Musk pretended that TSLA valuation is reasonable. Musk even called out Gates for shorting TSLA stock [2]. If he didn't have a cover then Musk would look like a hypocrite for selling TSLA. In reality, both Musk and Gates sold TSLA, the only difference is that Musk sold stocks he owned, but Gates sold borrowed stocks. But Musk used buying Twitter as a cover, so he gets to pretend to be morally superior. Even though both men sold TSLA, according to Musk, Gates' sales means that he isn't serious about climate change [3]. [1] https://companiesmarketcap.com/automakers/largest-automakers-by-market-cap/ https://companiesmarketcap.com/automakers/largest-automakers... [2] https://nypost.com/2022/05/31/elon-musk-calls-out-bill-gates-for-his-multi-billion-dollar-tesla-short-position/ https://nypost.com/2022/05/31/elon-musk-calls-out-bill-gates... [3] https://www.businessinsider.com/bill-gates-shorting-tesla-wont-hurt-musk-says-sigh-2022-6 https://www.businessinsider.com/bill-gates-shorting-tesla-wo...

akelly 4y ago
If that was his plan, why didn't he put an out in the contract?
- perlgeek 4y ago
  Because then the Twitter board wouldn't have signed it.
  - kevinmchugh 4y ago
    If he just needed plausible deniability for why he was selling stock, why would he need the Twitter board to agree?
tptacek 4y ago
That seems like an enormous amount of risk to take on just to sell stock that he actually owns and avoiding "looking like a hypocrite". It's not just plausible but somewhat likely that he'll be forced into an 11-figure settlement with Twitter to avoid the actual worst case outcome of being forced to take custody of and actually operate Twitter until he can unload it on someone else.
- ratww 4y ago
  It's not about avoiding looking like a hypocrite, the major theory is that it's about being able to sell 8.5bi without causing the value to go down too much.
  - ckastner 4y ago
    Your argument is inconsistent. Why would the value go down at all, if not because he would look like a hypocrite otherwise. Regardless, even if this were consistent, GP's argument still stands: that's an enormous asking of risk to take on. It could end up costing him more than the $8.5bn.
    - ratww 4y ago
      I’m not making any argument, I’m just repeating the most popular theory right now.
      - matthewdgreen 4y ago
        It is the most popular theory among a specific collection of people: those disinclined to accept that Musk is impulsive and out of control.
      - ckastner 4y ago
        You said "It's not about avoiding looking like a hypocrite, the major theory is [...]", which is not the same as "The major theory is that it's not about avoiding looking like a hypocrite, [...]".
Strom 4y ago
> Because TSLA is way too overvalued. He has to know that it is overvalued. Indeed he does. He has talked about this publicly in various interviews over the years. [1] > Musk pretended that TSLA valuation is reasonable. Musk even called out Gates for shorting TSLA stock Musk definitely really dislikes short sellers, no doubt about that. However that is different from pretending that TSLA valuation is reasonable. -- [1] A decent example is the 2021 Kara Swisher interview, where he states I have literally gone on record and said that our stock price is too high. https://youtu.be/O1bZg7frOmI?t=2450 https://youtu.be/O1bZg7frOmI?t=2450
- swyx 4y ago
  musk said that in May 2020, when the stock was at $140. it is 437% higher now even with the market pullback.
  - chasebank 4y ago
    Wasn't that tweet supposed to be cryptic? Right before he announced the stock spilt? I mean, he's surely a smart dude and a master in 140 character public manipulation. We'll never know but it's sure entertaining to watch.
grecy 4y ago
If that was his plan, what's he doing with the billions he now has in cash?
- 202206241203 4y ago
  Trust funds for the next dozen of his babies?
loceng 4y ago
I think there's an even better explanation, and liquidating $8.5 billion of Tesla stock may just be the icing on the cake: Elon despises the SEC and he's now has exposed that the "less than 5%" of accounts are bots, that the SEC should have verified and accepted their methods for determining that number - and it should be adequate and reasonable to give a grounded-in-reality output, and it seems like it's a total bullshit statement. I'd be surprised if Twitter stockholders don't sue the SEC.
- tsimionescu 4y ago
  > he's now has exposed that the "less than 5%" of accounts are bots He did the opposite of that. The Twitter CEO's explanations are quite believable, and Musk has not presented a single tiny shred of evidence against them. He hasn't even presented any methodology he used to arrive at the belief that the 5% is wrong - and note that his lawyers were careful to call it a belief only, since they know full well that claiming it as a fact would be indefensible in court.
  - loceng 4y ago
    Does Twitter also say in their official filings that it's their belief that bots are less than 5% or is it a concrete statement that less than 5% of accounts are bots?
treis 4y ago
He's sold plenty of Tesla stock over the years. No real need for him to make up a story.
- dodobirdlord 4y ago
  There is certainly some limit to how much of his stake he could sell out of at once without spooking the market and destroying retail investor confidence, though it’s hard to say what that limit is. Without some cover story I suspect an $8.5 billion sale would be newsworthy and significantly impact the share price.
  - treis 4y ago
    He sold like 14 billion last year. Had a Twitter poll and everything.
    - dodobirdlord 4y ago
      Arguably the Twitter poll and attendant media circus with Bernie Sanders about taxation was also to provide pretext for a large sale without spooking retail investor confidence.
      - extheat 4y ago
        He needed to liquidate stock to pay taxes from previous stock options he'd been given either way of the Twitter poll. I find a lot of the comments here to be pretty off-base and ill-informed to say the least.
      - treis 4y ago
        He sold stock before that too. Either way, it's a lot cheaper pretext than fooling around with a phony acquisition.
neither_color 4y ago
>Tesla's market cap is double of Toyota, VW, Mercedes, BMW, GM, Honda, Ferrari and Volvo all combined! This phrase gets thrown around a lot with dunning-kreuger confidence so I'd like to add context that it's not unusual for a market disruptor to be worth more than the sum of its legacy competitors - you are on a tech website related to startup incubator you should know this already.
- croes 4y ago
  Tesla doesn't scale like some internet startups.
- tsimionescu 4y ago
  That would be the case if they had disrupted some market, but Tesla has only succeeded in creating a new niche vehicle, and cornering that market to some extent. They are still bit players in the overall car market (and they are losing market dominance even in BEVs, mostly to Chinese companies).
  - retcon 4y ago
    Erm, it's VW due to overtake Tesla for EV sales by the end of this year. Edit: ouch that statement might have been correct if VW hadn't sold out annual production by May and supply chain problems hamper ramp up. So it's predicted for 2024 VW BEV sales will exceed those of Tesla.
    - jen20 4y ago
      Further I have no doubt that now BMW are making electric cars that look like normal cars inside, are screwed together properly and support CarPlay, they too will overtake Tesla in this segment.
teleforce 4y ago
Thank you for the explanations. How this is not one of the top comments is beyond me. This comment most logically explains all the drama started several months when Musk offered to buy Twitter. The stories generated several of the highest rated posts and several of the most commented posts at HN, just adding to the drama. Now it seems that it's quite a possibility that the Twitter drama is just a red herring for Musk to sell the much overpriced TSLA stocks.
- nosianu 4y ago
  > How this is not one of the top comments is beyond me. Uhm... Exactly this is mentioned in the article: > He also gave himself an excuse to sell a bunch of Tesla stock near the highs. So Levine already mentioned this.
- LMYahooTFY 4y ago
  How is it so obvious given the state of the market? Bezos has also sold off a massive chunk of assets? There's nothing odd at all about shorting the market during this time.
Rapzid 4y ago
I think the whole thing started as a lark because Twitter is personal to him and he knows better than everyone. Maybe he sold more shares than he needed while he was at it; like you'd withdraw a bit more cash than you really need at the ATM. Then the market down turn sobered him up. Simple.
mlindner 4y ago
> Musk pretended that TSLA valuation is reasonable. Musk even called out Gates for shorting TSLA stock [2]. If he didn't have a cover then Musk would look like a hypocrite for selling TSLA. This is outright false and goes directly against his multiple stated instances of saying that the Tesla stock price is overvalued. Don't make things up to suit your biases.
- petilon 4y ago
  If you believe your company's stock is overvalued, how can you fault someone for selling the stock? Bill Gates sold TSLA stock that he borrowed. If you truly believe that TSLA is overvalued, then it makes no sense to fault someone for selling it.
  - mlindner 4y ago
    He doesn't find fault with people selling the stock. He finds fault with people shorting the stock. He seems to believe shorting in general is morally wrong as it's external influences who don't understand the goal (or actively want the goal to fail) trying to make money on the failure of something. Try and find any instance of him attacking anyone who was an investor and then sold out.
    - selfportrait 4y ago
      I’m a little confounded that you suggest Elon believes shorting to be “morally wrong”. Why conflate his ego and financial stake with “morality”? Plus, Elon has proven himself to be morally nefarious more than anything. With the law and social expectations and plenty more. The only thing I can find about Elon and his utterance of morality is him saying it was morally wrong to ban Donald Trump. What a joke.
      - mlindner 4y ago
        > I’m a little confounded that you suggest Elon believes shorting to be “morally wrong”. Why conflate his ego and financial stake with “morality”? Because in the over ten years I have of watching what he says and what he does I've found him to be a forthright person who says what he thinks. He's not the type to intentionally deceive others. He's often wrong, but he's upfront with what he thinks. Also he's shown many times to not be interested in financial merits. He wants to achieve great things and be known for doing great things. He only cares about money in the sense that it lets him achieve the goals he wants to achieve. > Plus, Elon has proven himself to be morally nefarious more than anything. With the law and social expectations and plenty more. I've not seen that myself. I've seen him let his emotions get out of control many a time that he often regrets, but I've not seen him act in an explicitly nefarious way. > The only thing I can find about Elon and his utterance of morality is him saying it was morally wrong to ban Donald Trump. What a joke. He didn't say that it was morally wrong to ban Donald Trump. That was an oft-repeated synthesized quote that was also taken out of context. He doesn't particularly like Donald Trump at all.
qudat 4y ago
> I think a better explanation is that Musk offered to buy Twitter as a cover for selling billions of dollars' worth of TSLA. Why waive due diligence then? What’s that saying don’t assume malice when it can be explained by ignorance.
- pclmulqdq 4y ago
  You can't announce that you are purchasing a public company until after due diligence, and the sale is in its final closing process. There is no "waiver" of due diligence per se, but the initial offer says "I did enough due diligence and I intend to purchase." Most people would do their due diligence under NDA for a while while negotiating prices before making an announcement, and before lining up funding.
- deleted 4y ago
  [deleted]
pseudoramble 4y ago
I think this makes a lot of sense. A question I have about it though - why not say it's for something else then? If the goal is to get value out of Tesla and put it elsewhere, it seems like cash for another company he's running seems reasonable enough? Perhaps that's illegal for some reason I'm naive about?
JaceLightning 4y ago
Twitter is overvalued at its current valuation. Musk realized that after making an offer. Now he has buyer's remorse.
choppaface 4y ago
Do we really need to assign a financial motive to Elon Musk?! Musk is in it for his own entertainment. Period. And that greed changes as often as the phases of the moon. It's a good story to his following to come out financially ahead. It's also a good story to the libertarian crowd to drag the issues of bot accounts and free speech into court. And if the deal were to have gone through, I'm sure Musk would have made a great story forming an Alphabet/Berkshire-like holding company across Tesla, SpaceX, and his other amusements. And of course daily amusement of adding a Twitter edit button, an irony mode, etc. But what will the legacy of all this mess be? It's looking a lot like Howard Hughes, except that Hughes successfully monetized his stage presence. Elon has officially thrown in the towel, and spit in the face of his wider audience in the process.
MichaelMoser123 4y ago
Are you sure that TSLA is overvalued? Right now they are performing pretty well, for their niche. I mean it will be overvalued if Toyota gets its act together - if the competition can produce reliable electric cars for the mass market. I suspect that this is not quite happening due to some real technical problems. A mass market electric car would need to handle some real problems with battery depreciation/range loss. I am not sure if that is happening, right now. I found quite a range of opinions on battery depreciation, not quite sure who is right (never owned one): https://www.carwow.co.uk/blog/do-electric-cars-depreciate#gref https://www.carwow.co.uk/blog/do-electric-cars-depreciate#gr... https://www.cars.com/articles/your-guide-to-ev-batteries-premature-death-range-loss-and-preservation-446126/ https://www.cars.com/articles/your-guide-to-ev-batteries-pre... https://www.motorbiscuit.com/how-long-will-an-ev-battery-last/ https://www.motorbiscuit.com/how-long-will-an-ev-battery-las...
- tsimionescu 4y ago
  It would be perhaps plausible for Tesla to be worth more than any other single car company. But it is patently absurd for them to be higher than all other car companies combined. By any possible measure, they are far far smaller, and have far smaller prospects for growth, than the rest of the card industry put together. The only place where Tesla has a lead is in sales of BEVs, where indeed they are selling more than the rest of the industry combined, except for some Chinese companies. However, BEVs are still a tiny part of the car market, and are likely to remain so for the next ten years at least.
  - thesumofall 4y ago
    Even their sales leadership is eroding (at least looking at global figures). The next biggest three combined (VW, Hyundai-Kia, Stellantis) have sold as many BEV cars as Tesla in 2021. And there are many big players on the following ranks that clearly have the money and willingness to grow https://www.jato.com/the-global-electric-car-sales-2021-in-numbers/ https://www.jato.com/the-global-electric-car-sales-2021-in-n... // Edit: Added BEV
    - 4y ago
fbn79 4y ago
Too much conspiracy theory. I think simply that Musk do not see the imminent market crash. Now he is going in tribunal to negotiate a lower price. The think will end with Musk owning Twitter in a way or another.
- godmode2019 4y ago
  This is the obvious answer for any rational observer. Everyone seems to want to attribute it to some projected character fault in Musk, a chance to elevate their morality or intelligence higher than a famous rich guy. Musks offer was strategically made before yearly earnings, when everyone posted bad earnings the market tanked.
  - ordu 4y ago
    > This is the obvious answer for any rational observer. "Obvious" and "rational" in one sentence seem to me suspicious every time. I'm suspicious about "obvious" itself, because of my math education, but when combined with "rational" it is just too much for me. The answer you refer is a simpliest one: it doesn't need any special assumptions of Musk's personality and it is built on a smallest possible sample of relevant facts. May be it means that it is an obvious answer? May be. But it doesn't mean that it closer to reality than more complex opinions relying on more data points and more complex models of Musk's personality, not just an assumption of his rationality.
  - SZJX 4y ago
    On the contrary, explanations like the one by the GP seem to attribute way more superhuman character to Musk than who he is: just another person, and one with a pretty peculiar personality at that. His traits could have brought him spectacular success, but could also make him prone to eccentric episodes like this, especially as the years go by. I don’t see anything petty minded in just analyzing the situation in this way.
- tarsinge 4y ago
  OTOH let's not underestimate what kind of scheme smart people can come up with for billions of dollars. Maybe what he didn't see wasn't the market crash but that he could not back away as easily as he tough.
Tepix 4y ago
> Musk pretended that TSLA valuation is reasonable. He did? I thought he said more than once that he believes the stock price to be too high.
datatrashfire 4y ago
This such an elaborate conspiracy, even if true, he's set himself up legally to all but have to acquire the company after Twitter beats him in court. This seems much less plausible than Elon is an impulsive person who likes attention.
rmk 4y ago
Elon Musk has probably taken a big haircut on his current stake in Twitter and is also risking being forced to buy Twitter anyway or losing 1 billion plus legal fees. That sounds like an awful lot of work to sell 8.5 billion worth of Tesla shares.
- shswkna 4y ago
  > That sounds like an awful lot of work to sell 8.5 billion worth of Tesla shares. IDK. Most people work their entire life not even getting to 1 million.
  - rmk 4y ago
    Well, Musk is not "most people", and 8.5 billion is a small percentage of Elon Musk's net worth. I'd not be surprised if 8.5 billion is perhaps the daily fluctuation in his net worth!
davidguetta 4y ago
"Musk pretended that TSLA valuation is reasonable." Excuse me what ? He alwways said it was overvalued. I dont think anyone would have bat an eye if he had sold for no reason
bambax 4y ago
This is alluded to at the end of the article: > Is it fun for him? If he manages to walk away having spent only millions in financing fees, millions in legal fees and say $1 billion in termination fees, was it worth it? What did he get out of this? The guy really seems to like being on Twitter, and he did make himself the main character in Twitter's drama for months on end. That’s nice for him I guess. Also he made the lives of Twitter’s executives and employees pretty miserable; as a fellow Twitter addict I can kind of see the appeal of that? I always assume that “everyone who works at Twitter hates the product and its users,” and I suppose this is a case of the richest and weirdest user getting some revenge on the employees. He also gave himself an excuse to sell a bunch of Tesla stock near the highs. He maybe got an edit button too? Maybe that’s worth a billion dollars to him? But for that to be the sole reason of the whole circus is conspiracy theory. > Musk has buying Twitter as a cover It's a very, very annoying/distracting cover, not to mention an expensive one.
- deleted 4y ago
  [deleted]
- nicce 4y ago
  > It's a very, very annoying/distracting cover, not to mention an expensive one. It is hard to say how expensive it actually is… if he had sold overpriced Tesla stock without cover, could that lose be much more than - one billion termination fee?
  - DwnVoteHoneyPot 4y ago
    How much has he lost in his stake of Twitter as its share price decreases? Why would he use Twitter as cover when he could use much better alternatives? Why would he waive normal due diligence that is customary if it was a fancy plan to exit Twitter from the beginning?
    - deleted 4y ago
      [deleted]
    - Beldin 4y ago

akelly 4y ago

If that was his plan, why didn't he put an out in the contract?

perlgeek 4y ago
Because then the Twitter board wouldn't have signed it.
- kevinmchugh 4y ago
  If he just needed plausible deniability for why he was selling stock, why would he need the Twitter board to agree?

tptacek 4y ago

That seems like an enormous amount of risk to take on just to sell stock that he actually owns and avoiding "looking like a hypocrite". It's not just plausible but somewhat likely that he'll be forced into an 11-figure settlement with Twitter to avoid the actual worst case outcome of being forced to take custody of and actually operate Twitter until he can unload it on someone else.

ratww 4y ago
It's not about avoiding looking like a hypocrite, the major theory is that it's about being able to sell 8.5bi without causing the value to go down too much.
- ckastner 4y ago
  Your argument is inconsistent. Why would the value go down at all, if not because he would look like a hypocrite otherwise. Regardless, even if this were consistent, GP's argument still stands: that's an enormous asking of risk to take on. It could end up costing him more than the $8.5bn.
  - ratww 4y ago
    I’m not making any argument, I’m just repeating the most popular theory right now.
    - matthewdgreen 4y ago
      It is the most popular theory among a specific collection of people: those disinclined to accept that Musk is impulsive and out of control.
    - ckastner 4y ago
      You said "It's not about avoiding looking like a hypocrite, the major theory is [...]", which is not the same as "The major theory is that it's not about avoiding looking like a hypocrite, [...]".

Strom 4y ago

> Because TSLA is way too overvalued. He has to know that it is overvalued. Indeed he does. He has talked about this publicly in various interviews over the years. [1] > Musk pretended that TSLA valuation is reasonable. Musk even called out Gates for shorting TSLA stock Musk definitely really dislikes short sellers, no doubt about that. However that is different from pretending that TSLA valuation is reasonable. -- [1] A decent example is the 2021 Kara Swisher interview, where he states I have literally gone on record and said that our stock price is too high. https://youtu.be/O1bZg7frOmI?t=2450 https://youtu.be/O1bZg7frOmI?t=2450

swyx 4y ago
musk said that in May 2020, when the stock was at $140. it is 437% higher now even with the market pullback.
- chasebank 4y ago
  Wasn't that tweet supposed to be cryptic? Right before he announced the stock spilt? I mean, he's surely a smart dude and a master in 140 character public manipulation. We'll never know but it's sure entertaining to watch.

grecy 4y ago

If that was his plan, what's he doing with the billions he now has in cash?

202206241203 4y ago
Trust funds for the next dozen of his babies?

loceng 4y ago

I think there's an even better explanation, and liquidating $8.5 billion of Tesla stock may just be the icing on the cake: Elon despises the SEC and he's now has exposed that the "less than 5%" of accounts are bots, that the SEC should have verified and accepted their methods for determining that number - and it should be adequate and reasonable to give a grounded-in-reality output, and it seems like it's a total bullshit statement. I'd be surprised if Twitter stockholders don't sue the SEC.

tsimionescu 4y ago
> he's now has exposed that the "less than 5%" of accounts are bots He did the opposite of that. The Twitter CEO's explanations are quite believable, and Musk has not presented a single tiny shred of evidence against them. He hasn't even presented any methodology he used to arrive at the belief that the 5% is wrong - and note that his lawyers were careful to call it a belief only, since they know full well that claiming it as a fact would be indefensible in court.
- loceng 4y ago
  Does Twitter also say in their official filings that it's their belief that bots are less than 5% or is it a concrete statement that less than 5% of accounts are bots?

treis 4y ago

He's sold plenty of Tesla stock over the years. No real need for him to make up a story.

dodobirdlord 4y ago
There is certainly some limit to how much of his stake he could sell out of at once without spooking the market and destroying retail investor confidence, though it’s hard to say what that limit is. Without some cover story I suspect an $8.5 billion sale would be newsworthy and significantly impact the share price.
- treis 4y ago
  He sold like 14 billion last year. Had a Twitter poll and everything.
  - dodobirdlord 4y ago
    Arguably the Twitter poll and attendant media circus with Bernie Sanders about taxation was also to provide pretext for a large sale without spooking retail investor confidence.
    - extheat 4y ago
      He needed to liquidate stock to pay taxes from previous stock options he'd been given either way of the Twitter poll. I find a lot of the comments here to be pretty off-base and ill-informed to say the least.
    - treis 4y ago
      He sold stock before that too. Either way, it's a lot cheaper pretext than fooling around with a phony acquisition.

neither_color 4y ago

>Tesla's market cap is double of Toyota, VW, Mercedes, BMW, GM, Honda, Ferrari and Volvo all combined! This phrase gets thrown around a lot with dunning-kreuger confidence so I'd like to add context that it's not unusual for a market disruptor to be worth more than the sum of its legacy competitors - you are on a tech website related to startup incubator you should know this already.

croes 4y ago
Tesla doesn't scale like some internet startups.
tsimionescu 4y ago
That would be the case if they had disrupted some market, but Tesla has only succeeded in creating a new niche vehicle, and cornering that market to some extent. They are still bit players in the overall car market (and they are losing market dominance even in BEVs, mostly to Chinese companies).
- retcon 4y ago
  Erm, it's VW due to overtake Tesla for EV sales by the end of this year. Edit: ouch that statement might have been correct if VW hadn't sold out annual production by May and supply chain problems hamper ramp up. So it's predicted for 2024 VW BEV sales will exceed those of Tesla.
  - jen20 4y ago
    Further I have no doubt that now BMW are making electric cars that look like normal cars inside, are screwed together properly and support CarPlay, they too will overtake Tesla in this segment.

teleforce 4y ago

Thank you for the explanations. How this is not one of the top comments is beyond me. This comment most logically explains all the drama started several months when Musk offered to buy Twitter. The stories generated several of the highest rated posts and several of the most commented posts at HN, just adding to the drama. Now it seems that it's quite a possibility that the Twitter drama is just a red herring for Musk to sell the much overpriced TSLA stocks.

nosianu 4y ago
> How this is not one of the top comments is beyond me. Uhm... Exactly this is mentioned in the article: > He also gave himself an excuse to sell a bunch of Tesla stock near the highs. So Levine already mentioned this.
LMYahooTFY 4y ago
How is it so obvious given the state of the market? Bezos has also sold off a massive chunk of assets? There's nothing odd at all about shorting the market during this time.

Rapzid 4y ago

I think the whole thing started as a lark because Twitter is personal to him and he knows better than everyone. Maybe he sold more shares than he needed while he was at it; like you'd withdraw a bit more cash than you really need at the ATM. Then the market down turn sobered him up. Simple.

mlindner 4y ago

> Musk pretended that TSLA valuation is reasonable. Musk even called out Gates for shorting TSLA stock [2]. If he didn't have a cover then Musk would look like a hypocrite for selling TSLA. This is outright false and goes directly against his multiple stated instances of saying that the Tesla stock price is overvalued. Don't make things up to suit your biases.

petilon 4y ago
If you believe your company's stock is overvalued, how can you fault someone for selling the stock? Bill Gates sold TSLA stock that he borrowed. If you truly believe that TSLA is overvalued, then it makes no sense to fault someone for selling it.
- mlindner 4y ago
  He doesn't find fault with people selling the stock. He finds fault with people shorting the stock. He seems to believe shorting in general is morally wrong as it's external influences who don't understand the goal (or actively want the goal to fail) trying to make money on the failure of something. Try and find any instance of him attacking anyone who was an investor and then sold out.
  - selfportrait 4y ago
    I’m a little confounded that you suggest Elon believes shorting to be “morally wrong”. Why conflate his ego and financial stake with “morality”? Plus, Elon has proven himself to be morally nefarious more than anything. With the law and social expectations and plenty more. The only thing I can find about Elon and his utterance of morality is him saying it was morally wrong to ban Donald Trump. What a joke.
    - mlindner 4y ago
      > I’m a little confounded that you suggest Elon believes shorting to be “morally wrong”. Why conflate his ego and financial stake with “morality”? Because in the over ten years I have of watching what he says and what he does I've found him to be a forthright person who says what he thinks. He's not the type to intentionally deceive others. He's often wrong, but he's upfront with what he thinks. Also he's shown many times to not be interested in financial merits. He wants to achieve great things and be known for doing great things. He only cares about money in the sense that it lets him achieve the goals he wants to achieve. > Plus, Elon has proven himself to be morally nefarious more than anything. With the law and social expectations and plenty more. I've not seen that myself. I've seen him let his emotions get out of control many a time that he often regrets, but I've not seen him act in an explicitly nefarious way. > The only thing I can find about Elon and his utterance of morality is him saying it was morally wrong to ban Donald Trump. What a joke. He didn't say that it was morally wrong to ban Donald Trump. That was an oft-repeated synthesized quote that was also taken out of context. He doesn't particularly like Donald Trump at all.

qudat 4y ago

> I think a better explanation is that Musk offered to buy Twitter as a cover for selling billions of dollars' worth of TSLA. Why waive due diligence then? What’s that saying don’t assume malice when it can be explained by ignorance.

pclmulqdq 4y ago
You can't announce that you are purchasing a public company until after due diligence, and the sale is in its final closing process. There is no "waiver" of due diligence per se, but the initial offer says "I did enough due diligence and I intend to purchase." Most people would do their due diligence under NDA for a while while negotiating prices before making an announcement, and before lining up funding.
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pseudoramble 4y ago

I think this makes a lot of sense. A question I have about it though - why not say it's for something else then? If the goal is to get value out of Tesla and put it elsewhere, it seems like cash for another company he's running seems reasonable enough? Perhaps that's illegal for some reason I'm naive about?

JaceLightning 4y ago

Twitter is overvalued at its current valuation. Musk realized that after making an offer. Now he has buyer's remorse.

choppaface 4y ago

Do we really need to assign a financial motive to Elon Musk?! Musk is in it for his own entertainment. Period. And that greed changes as often as the phases of the moon. It's a good story to his following to come out financially ahead. It's also a good story to the libertarian crowd to drag the issues of bot accounts and free speech into court. And if the deal were to have gone through, I'm sure Musk would have made a great story forming an Alphabet/Berkshire-like holding company across Tesla, SpaceX, and his other amusements. And of course daily amusement of adding a Twitter edit button, an irony mode, etc. But what will the legacy of all this mess be? It's looking a lot like Howard Hughes, except that Hughes successfully monetized his stage presence. Elon has officially thrown in the towel, and spit in the face of his wider audience in the process.

MichaelMoser123 4y ago

Are you sure that TSLA is overvalued? Right now they are performing pretty well, for their niche. I mean it will be overvalued if Toyota gets its act together - if the competition can produce reliable electric cars for the mass market. I suspect that this is not quite happening due to some real technical problems. A mass market electric car would need to handle some real problems with battery depreciation/range loss. I am not sure if that is happening, right now. I found quite a range of opinions on battery depreciation, not quite sure who is right (never owned one): https://www.carwow.co.uk/blog/do-electric-cars-depreciate#gref https://www.carwow.co.uk/blog/do-electric-cars-depreciate#gr... https://www.cars.com/articles/your-guide-to-ev-batteries-premature-death-range-loss-and-preservation-446126/ https://www.cars.com/articles/your-guide-to-ev-batteries-pre... https://www.motorbiscuit.com/how-long-will-an-ev-battery-last/ https://www.motorbiscuit.com/how-long-will-an-ev-battery-las...

tsimionescu 4y ago
It would be perhaps plausible for Tesla to be worth more than any other single car company. But it is patently absurd for them to be higher than all other car companies combined. By any possible measure, they are far far smaller, and have far smaller prospects for growth, than the rest of the card industry put together. The only place where Tesla has a lead is in sales of BEVs, where indeed they are selling more than the rest of the industry combined, except for some Chinese companies. However, BEVs are still a tiny part of the car market, and are likely to remain so for the next ten years at least.
- thesumofall 4y ago
  Even their sales leadership is eroding (at least looking at global figures). The next biggest three combined (VW, Hyundai-Kia, Stellantis) have sold as many BEV cars as Tesla in 2021. And there are many big players on the following ranks that clearly have the money and willingness to grow https://www.jato.com/the-global-electric-car-sales-2021-in-numbers/ https://www.jato.com/the-global-electric-car-sales-2021-in-n... // Edit: Added BEV
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fbn79 4y ago

Too much conspiracy theory. I think simply that Musk do not see the imminent market crash. Now he is going in tribunal to negotiate a lower price. The think will end with Musk owning Twitter in a way or another.

godmode2019 4y ago
This is the obvious answer for any rational observer. Everyone seems to want to attribute it to some projected character fault in Musk, a chance to elevate their morality or intelligence higher than a famous rich guy. Musks offer was strategically made before yearly earnings, when everyone posted bad earnings the market tanked.
- ordu 4y ago
  > This is the obvious answer for any rational observer. "Obvious" and "rational" in one sentence seem to me suspicious every time. I'm suspicious about "obvious" itself, because of my math education, but when combined with "rational" it is just too much for me. The answer you refer is a simpliest one: it doesn't need any special assumptions of Musk's personality and it is built on a smallest possible sample of relevant facts. May be it means that it is an obvious answer? May be. But it doesn't mean that it closer to reality than more complex opinions relying on more data points and more complex models of Musk's personality, not just an assumption of his rationality.
- SZJX 4y ago
  On the contrary, explanations like the one by the GP seem to attribute way more superhuman character to Musk than who he is: just another person, and one with a pretty peculiar personality at that. His traits could have brought him spectacular success, but could also make him prone to eccentric episodes like this, especially as the years go by. I don’t see anything petty minded in just analyzing the situation in this way.
tarsinge 4y ago
OTOH let's not underestimate what kind of scheme smart people can come up with for billions of dollars. Maybe what he didn't see wasn't the market crash but that he could not back away as easily as he tough.

Tepix 4y ago

> Musk pretended that TSLA valuation is reasonable. He did? I thought he said more than once that he believes the stock price to be too high.

datatrashfire 4y ago

This such an elaborate conspiracy, even if true, he's set himself up legally to all but have to acquire the company after Twitter beats him in court. This seems much less plausible than Elon is an impulsive person who likes attention.

rmk 4y ago

Elon Musk has probably taken a big haircut on his current stake in Twitter and is also risking being forced to buy Twitter anyway or losing 1 billion plus legal fees. That sounds like an awful lot of work to sell 8.5 billion worth of Tesla shares.

shswkna 4y ago
> That sounds like an awful lot of work to sell 8.5 billion worth of Tesla shares. IDK. Most people work their entire life not even getting to 1 million.
- rmk 4y ago
  Well, Musk is not "most people", and 8.5 billion is a small percentage of Elon Musk's net worth. I'd not be surprised if 8.5 billion is perhaps the daily fluctuation in his net worth!

davidguetta 4y ago

"Musk pretended that TSLA valuation is reasonable." Excuse me what ? He alwways said it was overvalued. I dont think anyone would have bat an eye if he had sold for no reason

bambax 4y ago

This is alluded to at the end of the article: > Is it fun for him? If he manages to walk away having spent only millions in financing fees, millions in legal fees and say $1 billion in termination fees, was it worth it? What did he get out of this? The guy really seems to like being on Twitter, and he did make himself the main character in Twitter's drama for months on end. That’s nice for him I guess. Also he made the lives of Twitter’s executives and employees pretty miserable; as a fellow Twitter addict I can kind of see the appeal of that? I always assume that “everyone who works at Twitter hates the product and its users,” and I suppose this is a case of the richest and weirdest user getting some revenge on the employees. He also gave himself an excuse to sell a bunch of Tesla stock near the highs. He maybe got an edit button too? Maybe that’s worth a billion dollars to him? But for that to be the sole reason of the whole circus is conspiracy theory. > Musk has buying Twitter as a cover It's a very, very annoying/distracting cover, not to mention an expensive one.

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nicce 4y ago
> It's a very, very annoying/distracting cover, not to mention an expensive one. It is hard to say how expensive it actually is… if he had sold overpriced Tesla stock without cover, could that lose be much more than - one billion termination fee?
- DwnVoteHoneyPot 4y ago
  How much has he lost in his stake of Twitter as its share price decreases? Why would he use Twitter as cover when he could use much better alternatives? Why would he waive normal due diligence that is customary if it was a fancy plan to exit Twitter from the beginning?
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  - Beldin 4y ago