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A better question might be is When does Musk run out of rich friends and financiers willing to blindly hand him money?

Zigurd 4y ago
Rich friends are good for a mere billion here and there, which is what Larry Ellison put in. Jack left half a billion on the table when he could have cashed out. But they can't provide tens of billions, which is the scale at which Musk has borrowed. All this debt collateralized by Tesla shares is what will squeeze Musk at scale. Musk will never get a dime out for every dollar he paid for Twitter. That money is gone for good. On top of that, the value of Tesla shares he has used as collateral is down by 60%. Twitter revenue has collapsed. An operating profit is a distant dream. Interest payments loom. My guess is that Musk, who was trying to trash talk his way out of the deal, finally closed the deal because he believed he could "flip" Twitter, if not for a profit, for less than a settlement would have cost. That's looking like a losing bet.
- strangattractor 4y ago
  He should have cashed out a billion from Tesla and walked away from the deal.
  - detaro 4y ago
    The billion dollar fee was in the case that the deal broke down for reasons outside Musks control. He made a binding offer, he couldn't just say "I changed my mind", pay the billion and walk away.
    - Zigurd 4y ago
      This is correct. There was never a discretionary exit from the contract. Any settlement would be a negotiated amount. In principle it could be less than $1B. But accepting anything much short of the agreed price per share would have gotten the board sued by shareholders who, understandably, wanted the full amount.
- detaro 4y ago
  > he could "flip" Twitter, if not for a profit, for less than a settlement would have cost. That doesn't really match with what he's done since buying it though IMHO. If that's the goal, why get involved as he did, instead of handing over quickly to someone else to manage it and slim it down with less waves?
  - Zigurd 4y ago
    Pundits are still claiming Twitter is running "better than ever." When people always tell you you are wonderful and doing a great job, you might start believing your own line of bull.
- prirun 4y ago
  > closed the deal because he believed he could "flip" Twitter, if not for a profit, for less than a settlement would have cost I think he closed it because he and his billionaire buddies didn't want to go through court depositions. Who knows what shenanigans might have been exposed from that.

Rich friends are good for a mere billion here and there, which is what Larry Ellison put in. Jack left half a billion on the table when he could have cashed out. But they can't provide tens of billions, which is the scale at which Musk has borrowed. All this debt collateralized by Tesla shares is what will squeeze Musk at scale. Musk will never get a dime out for every dollar he paid for Twitter. That money is gone for good. On top of that, the value of Tesla shares he has used as collateral is down by 60%. Twitter revenue has collapsed. An operating profit is a distant dream. Interest payments loom. My guess is that Musk, who was trying to trash talk his way out of the deal, finally closed the deal because he believed he could "flip" Twitter, if not for a profit, for less than a settlement would have cost. That's looking like a losing bet.

strangattractor 4y ago
He should have cashed out a billion from Tesla and walked away from the deal.
- detaro 4y ago
  The billion dollar fee was in the case that the deal broke down for reasons outside Musks control. He made a binding offer, he couldn't just say "I changed my mind", pay the billion and walk away.
  - Zigurd 4y ago
    This is correct. There was never a discretionary exit from the contract. Any settlement would be a negotiated amount. In principle it could be less than $1B. But accepting anything much short of the agreed price per share would have gotten the board sued by shareholders who, understandably, wanted the full amount.
detaro 4y ago
> he could "flip" Twitter, if not for a profit, for less than a settlement would have cost. That doesn't really match with what he's done since buying it though IMHO. If that's the goal, why get involved as he did, instead of handing over quickly to someone else to manage it and slim it down with less waves?
- Zigurd 4y ago
  Pundits are still claiming Twitter is running "better than ever." When people always tell you you are wonderful and doing a great job, you might start believing your own line of bull.
prirun 4y ago
> closed the deal because he believed he could "flip" Twitter, if not for a profit, for less than a settlement would have cost I think he closed it because he and his billionaire buddies didn't want to go through court depositions. Who knows what shenanigans might have been exposed from that.