8 ms·

Reminder that Elon didn't even intend to buy Twitter He wanted to sell ~$2.5 Billion Tesla stock at all-time highs without causing the stock price to significa

Reminder that Elon didn't even intend to buy Twitter He wanted to sell ~$2.5 Billion Tesla stock at all-time highs without causing the stock price to significantly deflate, so he used the Twitter purchase suggestion as a cover. He did similar pump and dump schemes with crypto - like Dogecoin - but because Elon is fundamentally a dumb guy, he did the extraordinarily stupid thing of signing a purchase agreement with Twitter Elon thought he'd be able to wiggle out of it because he assumed the SEC would be the regulatory body he'd be up against - and to his credit he has made a career out of making the SEC look like spineless chumps - but much to Elon's horror he actually found himself before the almighty Delaware Court of Chancery So in an effort to slyly make a couple Billion $'s, Elon torched ~$40 Billion of his personal wealth, in what is arguably the biggest bag fumbling in modern history

kuchenbecker 3y ago
Most of the money was loaned, and the debt is now Twitters and not his.
- minimaxir 3y ago
  Elon rolled Twitter into X Corp, which would mean the debt is entangled with his other assets and may make things messy in the inevitable lender lawsuits.
  - fundad 3y ago
    That means he can spin off all of X’s debt together with Twitter whenever he wants.
FrankWilhoit 3y ago
What are your counterexamples from ancient history?
- ben_w 3y ago
  There's the guy who gave away so much gold he broke half of Africa's economy for a bit; the motivation might be different, but I think it counts if the category is "got money badly wrong". https://en.wikipedia.org/wiki/Mansa_Musa https://en.wikipedia.org/wiki/Mansa_Musa
  - PaulDavisThe1st 3y ago
    from wikipedia: > According to some Arabic writers, Musa's gift-giving caused a depreciation in the value of gold in Egypt. Al-Umari said that before Musa's arrival, a mithqal of gold was worth 25 silver dirhams, but that it dropped to less than 22 dirhams afterward and did not go above that number for at least twelve years.[95] Though this has been described as having "wrecked" Egypt's economy,[83] the historian Warren Schultz has argued that this was well within normal fluctuations in the value of gold in Mamluk Egypt.[96] Seems like this might a misleading folk tale.
- kibwen 3y ago
  How about the time that Scotland got envious of all the other European powers doing colonialism in the New World, so they dumped all their wealth into setting up a colony in the Darien gap, which failed so horribly that it bankrupted the country and forced them to unite with England. https://en.wikipedia.org/wiki/Darien_scheme https://en.wikipedia.org/wiki/Darien_scheme
SamReidHughes 3y ago
[flagged]
- dspillett 3y ago
  Care to be more specific about the inaccurate parts and/or provide counterpoints (preferably with appropriate counter-evidence)?
  - SamReidHughes 3y ago
    The parent's source is mind-reading.
  - parthdesai 3y ago
    “Elon is fundamentally a dumb guy” This is the guy who’s had more than a few successful businesses now. A lot of smart people did want to work with him. Andrej Karpathy himself has said that Elon was very quick to pick up AI technically. That doesn’t sound like a “fundamentally dumb” guy to me
    - pinkcan 3y ago
      a lot of smart people fell for Elizabeth Holmes charm and put their money on Theranos for the purpose of this thread saying “Elon is fundamentally a dumb guy” is a statement of opinion, one that a growing number of people agree with
      - SamReidHughes 3y ago
        It's not a statement of opinion, it's a bitter resentful raving.
        pinkcan 3y ago
        okay
      - parthdesai 3y ago
willvarfar 3y ago
Was reading another thread about LLMs on HN yesterday (yeah, can't find which one, there's always soooo many) about how Elon was 'tricked' into funding the charity OpenAI before it pivoted into for-profit and he got no equity. And now this timely reminder that Elon was 'tricked' into buying Twitter too! Quite a record, and yet he is somehow still the world's richest person? I do enjoy him talking about rockets, though.
jdminhbg 3y ago
This is some pretty dumb mental gymnastics to retcon a motivation. The simple explanation: he made an offer for Twitter, then the market (and Twitter’s value) crashed, and he tried to avoid paying the now-vastly overpriced fee he was on the hook for.
- krainboltgreene 3y ago
  This timeline is ahistorical.
- bb611 3y ago
  His offer was always well above fair value, which is why Twitter's board took him to court to enforce it.
  - JauntTrooper 3y ago
    His offer was $54.20 in April 2022. That was a 38% premium to the market price immediately prior to his investment, which is attractive but not necessarily "always well above fair value" Twitter had traded above that price as recently as five months earlier, and had traded in the $60s and even $70s for most of 2021. Twitter's stock had cratered in early 2022 along with many other tech stocks (Facebook went from $330 to $220 in that period). At the time, the Board could have argued that the current stock price was artificially low due to market forces, and that it wasn't an accurate reflection of the company's prospects. That's especially true because Boards have access to non-public information and longer term forecasts. When the board agreed to the merger, it signaled to investors that sophisticated insiders on the Board and their financial advisors did not believe the stock would be reasonably likely to reach the offer price in the near/medium term, on a risk adjusted basis, and thus the acquisition is superior. That's important intel for investors, and one of the reasons why failed mergers are so risky.
    - samtp 3y ago
      In what world is a 38% premium not well above market value? If you pay $1.38m for a $1m house, you are definitely paying well above market value.
leobg 3y ago
Haven’t read anything so off the mark in quite a while. Your basic assumption already makes no sense. Please list the businesses Elon has started after his PayPal days with the goal of enriching himself. Also, money is a means to an end, is it not? So what do you think he’d do with more money? Again, you can look at what he did with his Zip2 money. And then his PayPal money. That might give you a clue.
- fundad 3y ago
  Right it’s not about revenue, only power
  - leobg 3y ago
    One might think that, sure. But I’ve seen this story that led to the Twitter takeover unfold since 2015. And I don’t think you’re right in this case.
thomassmith65 3y ago
My impression was that he bought Twitter for the reasons you say, but failed to predict the dip in the market that followed it. If Twitter stock hadn't sunken immediately like a stone, he probably would have pulled it off, too, even after the signing the agreement. If indeed the Twitter deal was manipulation to leave poorer investors holding the Tesla bag, it's hard to feel sorry for him.
- deleted 3y ago
  [deleted]
- kevingadd 3y ago
  It seems like loading Twitter up with debt servicing was always a bad idea, stock dip or not, considering what its revenues were like. It wasn't in great shape before but the amount of money it now has to spend servicing debt is a nightmare for anyone trying to make that company profitable. His strategy for buying it simply doesn't make sense.
  - fundad 3y ago
    I think the influence is more important than revenue
  - Beldin 3y ago
    Not if the endgoal is to arrive at a profitable version of Twitter, no. So maybe that's not the goal. Or maybe it is but the CEO is vastly more incompetent than those underwriting his bid anticipated.
whitepaint 3y ago
[flagged]
- theobromananda 3y ago
  Is your comment the reverse of the great philosophical statement "If you're so clever why aren't you rich?".
- leokennis 3y ago
  Ah yes. Inheriting and owning stuff makes you smart. Maybe even the smartest. One could argue it even makes you a “stable genius”!
  - whitepaint 3y ago
    I just absolutely love how he makes his haters' brains break.
    - leokennis 3y ago
      I’m really happy you’re enjoying it that much. And I’m sure Elon will sleep a little better next night, knowing you’re there standing guard for him!
  - ALittleLight 3y ago
    Both of Musk's parents are still alive. Neither of them were involved in the electric car or rocket companies. It's fine to be a Musk critic - but you should restrict yourself to saying things that are actually true rather than making stuff up.
    - Timon3 3y ago
      Maybe inheritance isn't the right word. I understood them as saying "he was born into money" - is there another way to say he "inherited" purely in the sense of money being passed onto him?
grecy 3y ago
And the incredible part is that it just won’t matter. Tesla and spacex are licensed to print money for the next decade or more. Him losing 40 billion is like us losing 400. It just won’t matter in the grand scheme
l33tc0de 3y ago
"but because Elon is fundamentally a dumb guy" - Oh genius, let us know who you are

kuchenbecker 3y ago

Most of the money was loaned, and the debt is now Twitters and not his.

minimaxir 3y ago
Elon rolled Twitter into X Corp, which would mean the debt is entangled with his other assets and may make things messy in the inevitable lender lawsuits.
- fundad 3y ago
  That means he can spin off all of X’s debt together with Twitter whenever he wants.

FrankWilhoit 3y ago

What are your counterexamples from ancient history?

ben_w 3y ago
There's the guy who gave away so much gold he broke half of Africa's economy for a bit; the motivation might be different, but I think it counts if the category is "got money badly wrong". https://en.wikipedia.org/wiki/Mansa_Musa https://en.wikipedia.org/wiki/Mansa_Musa
- PaulDavisThe1st 3y ago
  from wikipedia: > According to some Arabic writers, Musa's gift-giving caused a depreciation in the value of gold in Egypt. Al-Umari said that before Musa's arrival, a mithqal of gold was worth 25 silver dirhams, but that it dropped to less than 22 dirhams afterward and did not go above that number for at least twelve years.[95] Though this has been described as having "wrecked" Egypt's economy,[83] the historian Warren Schultz has argued that this was well within normal fluctuations in the value of gold in Mamluk Egypt.[96] Seems like this might a misleading folk tale.
kibwen 3y ago
How about the time that Scotland got envious of all the other European powers doing colonialism in the New World, so they dumped all their wealth into setting up a colony in the Darien gap, which failed so horribly that it bankrupted the country and forced them to unite with England. https://en.wikipedia.org/wiki/Darien_scheme https://en.wikipedia.org/wiki/Darien_scheme

SamReidHughes 3y ago

[flagged]

dspillett 3y ago
Care to be more specific about the inaccurate parts and/or provide counterpoints (preferably with appropriate counter-evidence)?
- SamReidHughes 3y ago
  The parent's source is mind-reading.
- parthdesai 3y ago
  “Elon is fundamentally a dumb guy” This is the guy who’s had more than a few successful businesses now. A lot of smart people did want to work with him. Andrej Karpathy himself has said that Elon was very quick to pick up AI technically. That doesn’t sound like a “fundamentally dumb” guy to me
  - pinkcan 3y ago
    a lot of smart people fell for Elizabeth Holmes charm and put their money on Theranos for the purpose of this thread saying “Elon is fundamentally a dumb guy” is a statement of opinion, one that a growing number of people agree with
    - SamReidHughes 3y ago
      It's not a statement of opinion, it's a bitter resentful raving.
      - pinkcan 3y ago
        okay
    - parthdesai 3y ago

willvarfar 3y ago

Was reading another thread about LLMs on HN yesterday (yeah, can't find which one, there's always soooo many) about how Elon was 'tricked' into funding the charity OpenAI before it pivoted into for-profit and he got no equity. And now this timely reminder that Elon was 'tricked' into buying Twitter too! Quite a record, and yet he is somehow still the world's richest person? I do enjoy him talking about rockets, though.

jdminhbg 3y ago

This is some pretty dumb mental gymnastics to retcon a motivation. The simple explanation: he made an offer for Twitter, then the market (and Twitter’s value) crashed, and he tried to avoid paying the now-vastly overpriced fee he was on the hook for.

krainboltgreene 3y ago
This timeline is ahistorical.
bb611 3y ago
His offer was always well above fair value, which is why Twitter's board took him to court to enforce it.
- JauntTrooper 3y ago
  His offer was $54.20 in April 2022. That was a 38% premium to the market price immediately prior to his investment, which is attractive but not necessarily "always well above fair value" Twitter had traded above that price as recently as five months earlier, and had traded in the $60s and even $70s for most of 2021. Twitter's stock had cratered in early 2022 along with many other tech stocks (Facebook went from $330 to $220 in that period). At the time, the Board could have argued that the current stock price was artificially low due to market forces, and that it wasn't an accurate reflection of the company's prospects. That's especially true because Boards have access to non-public information and longer term forecasts. When the board agreed to the merger, it signaled to investors that sophisticated insiders on the Board and their financial advisors did not believe the stock would be reasonably likely to reach the offer price in the near/medium term, on a risk adjusted basis, and thus the acquisition is superior. That's important intel for investors, and one of the reasons why failed mergers are so risky.
  - samtp 3y ago
    In what world is a 38% premium not well above market value? If you pay $1.38m for a $1m house, you are definitely paying well above market value.

leobg 3y ago

Haven’t read anything so off the mark in quite a while. Your basic assumption already makes no sense. Please list the businesses Elon has started after his PayPal days with the goal of enriching himself. Also, money is a means to an end, is it not? So what do you think he’d do with more money? Again, you can look at what he did with his Zip2 money. And then his PayPal money. That might give you a clue.

fundad 3y ago
Right it’s not about revenue, only power
- leobg 3y ago
  One might think that, sure. But I’ve seen this story that led to the Twitter takeover unfold since 2015. And I don’t think you’re right in this case.

thomassmith65 3y ago

My impression was that he bought Twitter for the reasons you say, but failed to predict the dip in the market that followed it. If Twitter stock hadn't sunken immediately like a stone, he probably would have pulled it off, too, even after the signing the agreement. If indeed the Twitter deal was manipulation to leave poorer investors holding the Tesla bag, it's hard to feel sorry for him.

deleted 3y ago
[deleted]
kevingadd 3y ago
It seems like loading Twitter up with debt servicing was always a bad idea, stock dip or not, considering what its revenues were like. It wasn't in great shape before but the amount of money it now has to spend servicing debt is a nightmare for anyone trying to make that company profitable. His strategy for buying it simply doesn't make sense.
- fundad 3y ago
  I think the influence is more important than revenue
- Beldin 3y ago
  Not if the endgoal is to arrive at a profitable version of Twitter, no. So maybe that's not the goal. Or maybe it is but the CEO is vastly more incompetent than those underwriting his bid anticipated.

whitepaint 3y ago

[flagged]

theobromananda 3y ago
Is your comment the reverse of the great philosophical statement "If you're so clever why aren't you rich?".
leokennis 3y ago
Ah yes. Inheriting and owning stuff makes you smart. Maybe even the smartest. One could argue it even makes you a “stable genius”!
- whitepaint 3y ago
  I just absolutely love how he makes his haters' brains break.
  - leokennis 3y ago
    I’m really happy you’re enjoying it that much. And I’m sure Elon will sleep a little better next night, knowing you’re there standing guard for him!
- ALittleLight 3y ago
  Both of Musk's parents are still alive. Neither of them were involved in the electric car or rocket companies. It's fine to be a Musk critic - but you should restrict yourself to saying things that are actually true rather than making stuff up.
  - Timon3 3y ago
    Maybe inheritance isn't the right word. I understood them as saying "he was born into money" - is there another way to say he "inherited" purely in the sense of money being passed onto him?

grecy 3y ago

And the incredible part is that it just won’t matter. Tesla and spacex are licensed to print money for the next decade or more. Him losing 40 billion is like us losing 400. It just won’t matter in the grand scheme

l33tc0de 3y ago

"but because Elon is fundamentally a dumb guy" - Oh genius, let us know who you are