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More like, how not to buy a business. Elon basically started with the Private Equity leveraged buyout playbook - borrow money to buy a business, then assign th

More like, how not to buy a business. Elon basically started with the Private Equity leveraged buyout playbook - borrow money to buy a business, then assign that business the debt used to buy it. But it’s unclear how he’s going to do part 2, which is to either suck enough value out of it to recoup the purchase price before it fails completely, or turn it around and make it more valuable than when he bought it. Right now Twitter needs to drastically increase its revenue and decrease its expenses just to service the new debt load. Hence Elon firing everyone and trying to charge more for every little thing. It’s amazing that Twitter was more or less self-sustaining prior to this, and now it’s not.

giraffe_lady 4y ago
I think it's a mistake to evaluate his success with it in purely financial terms like that. He's proven himself thin skinned, egotistical, and capricious, and is easy to provoke into vindictive & retributive actions even if not in his best interests. I think a big part of why he bought twitter was a sense of grievance, basically that the wrong people were getting positive attention, that people were being mean to and making fun of him and his friends & allies. He wanted to restructure the mechanics and incentives of the platform to better support the people and outcomes he values. I'm not sure whether he succeeded by these terms either, it's still too early to tell I think. But I do think it's an important factor in evaluating whether he succeeded in what he set out to do when buying twitter. And from that perspective "make it good or (let it) die trying" may be an acceptable compromise. He doesn't get the musk-adoration platform he wants, but at least there is no longer the musk-ridicule platform he perceived it to be.
- JohnFen 4y ago
  Remember, he didn't want to buy Twitter. He pitched it in the first place purely in an attempt to get leverage over the board. He didn't really want to own it. The board called his bluff and said "sold!", then Musk spent a great deal of time and effort trying to wiggle out of the deal. He failed, and now he's stuck with it. Everything he's doing now is trying to minimize the amount of financial damage this debacle will cause him.
  - pkulak 4y ago
    I think he did want to buy it, but then later thought that decision through a bit, or had it thought through for him, and realized his mistake. You're giving him too much credit.
    - myko 4y ago
      It does seem like he was not in the right state of mind when he decided to buy for $54.20/share
  - giraffe_lady 4y ago
    I still think my analysis holds. Why did he want leverage over the board? For the grievance-based reason I pointed to. He didn't want to follow through with it, but once forced, why would he not continue to act based on that driver and similar petty impulsiveness we now know he experiences? It's true though that if it loses a bucket of money and he never wanted it in the first place he might not consider it as successful as I'm guessing. We can't know his mind, but thinking of it in this way explains a lot of his behavior around twitter that is difficult or impossible to explain from a pure financial standpoint, so I'm going to stick with it for now.
  - cutemonster 4y ago
    Are you sure he didn't actually want to but it, before it turned out there are so many bots? In any case, I suspect that the GP comment by giraffe_lady, explains why he was interested in Twitter at all -- why bothering trying to get leverage over the board. Or, if he wants to eventually become the President of the US, then that's an alternative explanation (of why he cared)?
    - periphrasis 4y ago
      > Or, if he wants to eventually become the President of the US, then that's an alternative explanation (of why he cared)? That would require a constitutional amendment in order for him to be eligible. He’s revealed himself to be pretty dumb, but even I give him enough credit to not be so stupid as to think he will one day he President.
- jkern 4y ago
  Bit of a Pyrrhic victory isn't it?
- SkyMarshal 4y ago
  I don't think he would be ok losing $40billion+ and with only some assuaged grievances to show for it. He's not that tempermental. He's got a business idea for Twitter, which is to turn it into "X", the everything app he originally wanted Paypal to be 20yrs ago. Basically a US version of WeChat. But it will be a steep climb from here, with a skeleton engineering crew that needs to both maintain current Twitter and build new X, and the debt service draining money and constraining hiring.

giraffe_lady 4y ago

I think it's a mistake to evaluate his success with it in purely financial terms like that. He's proven himself thin skinned, egotistical, and capricious, and is easy to provoke into vindictive & retributive actions even if not in his best interests. I think a big part of why he bought twitter was a sense of grievance, basically that the wrong people were getting positive attention, that people were being mean to and making fun of him and his friends & allies. He wanted to restructure the mechanics and incentives of the platform to better support the people and outcomes he values. I'm not sure whether he succeeded by these terms either, it's still too early to tell I think. But I do think it's an important factor in evaluating whether he succeeded in what he set out to do when buying twitter. And from that perspective "make it good or (let it) die trying" may be an acceptable compromise. He doesn't get the musk-adoration platform he wants, but at least there is no longer the musk-ridicule platform he perceived it to be.

JohnFen 4y ago
Remember, he didn't want to buy Twitter. He pitched it in the first place purely in an attempt to get leverage over the board. He didn't really want to own it. The board called his bluff and said "sold!", then Musk spent a great deal of time and effort trying to wiggle out of the deal. He failed, and now he's stuck with it. Everything he's doing now is trying to minimize the amount of financial damage this debacle will cause him.
- pkulak 4y ago
  I think he did want to buy it, but then later thought that decision through a bit, or had it thought through for him, and realized his mistake. You're giving him too much credit.
  - myko 4y ago
    It does seem like he was not in the right state of mind when he decided to buy for $54.20/share
- giraffe_lady 4y ago
  I still think my analysis holds. Why did he want leverage over the board? For the grievance-based reason I pointed to. He didn't want to follow through with it, but once forced, why would he not continue to act based on that driver and similar petty impulsiveness we now know he experiences? It's true though that if it loses a bucket of money and he never wanted it in the first place he might not consider it as successful as I'm guessing. We can't know his mind, but thinking of it in this way explains a lot of his behavior around twitter that is difficult or impossible to explain from a pure financial standpoint, so I'm going to stick with it for now.
- cutemonster 4y ago
  Are you sure he didn't actually want to but it, before it turned out there are so many bots? In any case, I suspect that the GP comment by giraffe_lady, explains why he was interested in Twitter at all -- why bothering trying to get leverage over the board. Or, if he wants to eventually become the President of the US, then that's an alternative explanation (of why he cared)?
  - periphrasis 4y ago
    > Or, if he wants to eventually become the President of the US, then that's an alternative explanation (of why he cared)? That would require a constitutional amendment in order for him to be eligible. He’s revealed himself to be pretty dumb, but even I give him enough credit to not be so stupid as to think he will one day he President.
jkern 4y ago
Bit of a Pyrrhic victory isn't it?
SkyMarshal 4y ago
I don't think he would be ok losing $40billion+ and with only some assuaged grievances to show for it. He's not that tempermental. He's got a business idea for Twitter, which is to turn it into "X", the everything app he originally wanted Paypal to be 20yrs ago. Basically a US version of WeChat. But it will be a steep climb from here, with a skeleton engineering crew that needs to both maintain current Twitter and build new X, and the debt service draining money and constraining hiring.