What do you all think? Will this go through? Personally hope it does and Elon keeps to the original plan and democratizes the platform to allow all voices
Makes you wonder though why he made such a fuss if he was going to honor the deal, what an unnecessary amount of drama (unless I'm missing something)
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Macro environment has deteriorated significantly since the start. I wonder if he will be able to raise funds.
(wondering how I can avoid getting flagged for politics, when the biggest M&A deal of the year is wrapped up in political undertones)
I wish everyone the best in this prospective acquisition and hope everyone has fun.
You did. I think we all hope we agree on the best outcome example.
Only reason he would do this is if he sees the value of Tesla dropping at a faster rate than Twitter, no? Surely its not about "honoring his agreement" at all, but maximizing the preservation of his NW.
I bet Elon took too much Adderall and came up with some absurd revenue generation strategy for twitter, so he made the psuedo-offer, then he crashed and realized it was a hasty decision. He had no intention of pursuing the acquisition further, but then Teslas share price started dropping like it was crypto and Elon thought Twitter was better positioned to survive the '23 recession.
With boom in traditional manufacturers developing EVs, Tesla is falling victim to the “Pioneers get slaughtered, and the settlers prosper” idea
I really love Tesla, but they weren’t able to scale production nearly fast enough to be able to compete with traditional OEMs and their entrenched supply chains and manufacturing capabilities.
I mean Tesla has always been overvalued, even post correction it is currently trading at 50x EV/EBITDA, and over 11x EV/Revenue. In comparison, Toyota, which has the second largest market cap of any auto manufacturer, and sells over 10 million vehicles annually (Tesla ~200k), trades at 10.6x EV/EBITDA and 1.6x EV/Revenue.
I think if Tesla had been honest with shareholders, provided reasonable growth estimates, and not been run by a manic-depressive billionaire with an ego, it could be a very different story. Elon did the hard part, he found a way to make EVs profitable when no one else could. Elon was by no means first to market, but he was first to profit. Tesla deserves to continue to capture market share and may very well do so, but its share price is just so ridiculously high
Edit: Love the high school / college student throwing MS because Tesla is plummeting. Sorry Im spitting objective facts kiddo, might be tough to stomach
I mean, isn't the answer that he realizes that he's going to lose his lawsuit, so paying millions of additional dollars to fight what will obviously be a losing battle is a waste of money? Has Tesla ever even paid a dividend? It's not a guarantee that the guy has the liquidity to fight this battle, which again, he has no chance of winning, for years and years. All his net worth is tied up in equities which it'll be hard for him to realize without sparking panic, and none of his companies are actually cash flowing to any extent, are they?
Very weird, I thought he would at least negotiate a discount. He would be overpaying hugely, especially in these current markets where social media companies are underperforming.
This could have a major impact on the midterms IMO, if he goes to work ASAP.
Maybe I'm missing something in this whole saga, but isn't the whole point that Mr Musk had absolutely no leverage? Why in the world is Twitter giving him a discount? It was a pretty cut and dried case, though I'm not an expert - this is the problem with being an egomaniac who is a bit of a shitheel. He managed to pump his net worth to many multiples of what it should have been, but that same con artist energy also gets him in trouble when it's someone with resources to match his who he's fucking with.
Ignoring that rant, can you explain to me why (a) Twitter's board would give Mr Musk a discount on his initial offer and (b) if that's even legal... aren't they legally obligated to protect the shareholder's interest, which in this case is holding Mr Musk to his word?
As far as I know you arent missing anything, he is just extraordinarily delusional. I cant imagine the cocktail of pills that keep the old Musket firing
Don't always agree with you, but those points A and B are spot on.
To your points:
A Because there seems to be serious issues looking at the amount of fake bots that are on twitter, far more than was pictured. Also the whistleblower that has testified that Twitter has failed to secure sensitive data: 'He described an executive team that was financially incentivized to ignore root problems, such as employees having too much access to data. Because the company wasn’t properly tracking data access, he claimed, it was impossible for the company to respond to critical national security risks — including access gained by potential foreign agents on its payroll' https://www.washingtonpost.com/technology/2022/09/13/twitter-whistleblo….
From a legal standpoint this would probably not meet the bar to cancel the whole thing, however I would argue that it could make some room for negotiation.
B Ofcourse, from the boards point of view I would fight for every penny.
My point was that I thought Musk wouldn't throw in the towel this early.
Is he going to ban Arestovich for suggesting to kidnap him?
Looks like it went through. Musk now owns Twitter apparently.
Idk man. All I know is that I saw this happening from a mile away and made a cool 25% ROI.
Think OP and some others are missing the forest from the trees or whatever that expression is…
Musk likely realized that the probability of him winning his suit with Twitter was low. All the while his text messages with wealthy and famous individuals (many of which could/would be involved in the financing for this or other of his ventures) are being released to the public. He was also scheduled to be deposed imminently and that’s typically something one would like to avoid, especially when extremely wealthy and extremely famous.
This isn’t a grand plot by Musk or a revaluation by him that the bot / whistleblower problems aren’t material - it’s more likely a realization that he’s legally bound to go through with the transaction, and it’s in his best interest to avoid the sharp scrutiny a trial and deposition would bring.
One of the key reasons he bought twitter was to clean up the bot problem in the first place…that argument never made sense. If you read the texts with Dorsey and others you can see what his vision for Twitter is (as well as how he manages people like current Twitter CEO).
What’s way more interesting to me is how this deal will actually get financed, and if it will blow a hole in banks’ 2023 budgets right off the bat…
The Twitter deal is going to be interesting to say the least. Financing package was going to be $12.5 bn ($6.5bn loan, $3bn secured, $3bn unsecured) - the unsecured portion of the deal being the big issue.
Recent Citrix deal had a large OID with relaxed covenants just to get the unsecured bond deal done and it still priced around 13%.
If Twitter prices the unsecured bond any higher than 11.75%, they will start eating into their fees. Anything higher than 13% at par they are going to start losing money.
Citrix was the most recent CCC unsecured bond deal and that priced at 13% with an OID of 83.561.
Apollo is already trying to back out and if they are bailing on you, you might be screwed. Also possible that this will be a clubby private credit deal where a few big shops take down the unsecured portion. Going to be interesting to see.
I would think it gets priced wider than Citrix given the credit profile, the fact that rates will only continue to go up, and investors should smell blood in the water.
I have heard anecdotally that financing parties are consulting with counsel regarding the viability of getting out of the deal on the basis of Musk having materially negatively impacted the prospect of syndication.
Also supposedly they have have to fund the deal within ten days of the purchase agreement being executed? I haven’t actually combed over the agreement but that’s an interesting dynamic if so…effectively have to fund long no matter what most likely as I don’t expect an orderly syndication process unless maybe twitter/musk drag their talks out.
Why do you think a few large private credit players would consider snapping it up? I mean they’re around virtually every deal that gets done now anyways I guess
I strongly doubt Elon will spend 44 billion dollars to make another Parler or Gab. That would be the biggest impulse purchase of all time. He's going to find another way to weasel out of this deal, mark my words.
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