Musk offers to buy Twitter

[Eric]

Just like you do that have to observe speed limits and obey traffic signals while driving.

But those things are illegal, not selling to Musk isn't. It's basically "how can you NOT take such an insane amount of money without being sued over it". Everyone has their price but they still didn't have to do it.

 

[ronntaylor]

But those things are illegal, not selling to Musk isn't. It's basically "how can you NOT take such an insane amount of money without being sued over it". Everyone has their price but they still didn't have to do it.

At the time Twitter was realistically valued at $8-15B. Musk's offer was $44B. The board had to accept because it also meant that they would be rewarded handsomely for a service with a bleak financial future and investors ready to sue them into oblivion should they foolishly turn down the offer. Getting rewarded for cashing out of a bleak service VS potentially months/years of court fights & financial ruin is an easy decision.

 

[Renzatic]

Still didn't have to do it.

Why wouldn't they? Didn't they get a 3-5x return on their initial investment from Musk?

 

[Eric]

Why wouldn't they? Didn't they get a 3-5x return on their initial investment from Musk?

I don't question that, my point is they didn't "have to sell" and so far nobody has backed that up, short of greed, capitalism and potential lawsuits as a result. They sold their soul to a monster by choice.

 

[dada_dave]

I don't question that, my point is they didn't "have to sell" and so far nobody has backed that up, short of greed, capitalism and potential lawsuits as a result. They sold their soul to a monster by choice.

Okay but my point was that the quote was about the staff and by and large the staff got screwed by the deal (mostly what that article is about in fact)

 

[Eric]

Okay but my point was that the quote was about the staff and by and large the staff got screwed by the deal (mostly what that article is about in fact)

As usual, it's those who do the actual work that get the worst of it. Capitalism at its finest.

 

[Renzatic]

I don't question that, my point is they didn't "have to sell" and so far nobody has backed that up, short of greed, capitalism and potential lawsuits as a result. They sold their soul to a monster by choice.

It's more like they unloaded their responsibilities on a dipshit for a greatly inflated price.

I'm of the opinion that Twitter is far from unique, and it's only a matter of time before something else fills that void. The faster that Musk runs it into the ground, the sooner we'll see this alternative arrive. Plus, we get the added bonus of watching our favorite self-proclaimed genius crash and burn.

So, hey.

 

[Eric]

It's more like they unloaded their responsibilities on a dipshit for a greatly inflated price.

I'm of the opinion that Twitter is far from unique, and it's only a matter of time before something else fills that void. The faster that Musk runs it into the ground, the sooner we'll see this alternative arrive. Plus, we get the added bonus of watching our favorite self-proclaimed genius crash and burn.

So, hey.

I had/have high hopes for Mastodon but it seems to have leveled off for now. I browsed over at Twitter the other day and it's like every jackwagon who pays money is verified so you have no idea who is reputable or not, they've really screwed all those who were authentic.

 

[lizkat]

It's more like they unloaded their responsibilities on a dipshit for a greatly inflated price.

I'm of the opinion that Twitter is far from unique, and it's only a matter of time before something else fills that void. The faster that Musk runs it into the ground, the sooner we'll see this alternative arrive. Plus, we get the added bonus of watching our favorite self-proclaimed genius crash and burn.

So, hey.

Even Musk may have been foretelling that scenario by a year-end tweet I'd have missed except for the fact that the New York mag piece relayed the gist of it.

As the year came to a close, Musk’s public statements about Twitter veered from pride in the site’s usage metrics (all-time highs, he regularly assured followers) to what might have been more sober self-assessments of his predicament. “Don’t be the clown on the clown car!” he tweeted on December 27. “Too late haha.”

Ha ha indeed. I'm pretty sure the banks consortium is not laughing. They have not been able to securitize and unload their "investment" so are carrying it on their books in a time when it's excruciating to be carrying even stuff they can still slice and dice and move out.

 

[lizkat]

But those things are illegal, not selling to Musk isn't. It's basically "how can you NOT take such an insane amount of money without being sued over it". Everyone has their price but they still didn't have to do it.

I'm waiting to see the lawsuits by those who were IN on the deal when Elon finally cut it. Not just the banks. The rest of them. Did billionaires like Larry Ellison in their worst nightmares figure Elon would drive the thing nearly into the ground?

If they shrugged and figured well we can just wait it out and eventually there will be an IPO and we'll all make a killing... I guess that's an option for people who aren't "investing" the grocery budget in this or that lottery drawing, assuming they stay healthy long enough to cash in on an IPO of Twitter 2.0.

Still, Musk seems to be losing favor in the eyes of the street by the hour lately. But then one can probably chalk that up to the street trying to sound like shorting everything is the path to great wealth just over the horizon. All those guys are trying to cover their own shorts on the cheap right now anyway.

No one figured Twitter's refurb and re-entry to public trading would be imminent, but when markets tip sour, some days can feel years longer than they are. Musk has made Twitter a questionable place (at best) for brand safety or brand media outlets to hang out, and a rude place for users to experience without using more filters than in the past. So bottom line, it's currently no more valuable than say Parler, which struggles to keep drawing breath because Trump's own struggling social media outfit is barely making what to keep the lights on now, and the two of those carve up the bulk of right wing posters on Twitter-like venues.

One can try to corner a market on ultraconservative messaging and rowdy amplification of hateful commentary, but if that market's pretty small to begin with, then what? The big co-investors figured Musk wasn't just about that; that he would quickly bolt on payment applications or entertainment options or something.

Maybe he'd like to do that, but Musk seems unable to step back from micromanaging a platform without revenue streams to help him do it. In the meantime he has lost a personal fortune and brought down upon him more potential lawsuits via wrath of Tesla shareholders ... in addition to the ones suing him over a dangled Tesla buyout that never materialized in 2018 and Musk tweeting share-price-altering info in the meantime. That suit finally hit the courtroom yesterday.

Elon Musk drama shifts from Twitter, to lawsuit on tweets about Tesla

While still grappling with the fallout from a company he did take private, beleaguered billionaire Elon Musk is now facing a trial over a company he didn't.

www.marketwatch.com

 

[SuperMatt]

I'm waiting to see the lawsuits by those who were IN on the deal when Elon finally cut it. Not just the banks. The rest of them. Did billionaires like Larry Ellison in their worst nightmares figure Elon would drive the thing nearly into the ground?

If they shrugged and figured well we can just wait it out and eventually there will be an IPO and we'll all make a killing... I guess that's an option for people who aren't "investing" the grocery budget in this or that lottery drawing, assuming they stay healthy long enough to cash in on an IPO of Twitter 2.0.

Still, Musk seems to be losing favor in the eyes of the street by the hour lately. But then one can probably chalk that up to the street trying to sound like shorting everything is the path to great wealth just over the horizon. All those guys are trying to cover their own shorts on the cheap right now anyway.

No one figured Twitter's refurb and re-entry to public trading would be imminent, but when markets tip sour, some days can feel years longer than they are. Musk has made Twitter a questionable place (at best) for brand safety or brand media outlets to hang out, and a rude place for users to experience without using more filters than in the past. So bottom line, it's currently no more valuable than say Parler, which struggles to keep drawing breath because Trump's own struggling social media outfit is barely making what to keep the lights on now, and the two of those carve up the bulk of right wing posters on Twitter-like venues.

One can try to corner a market on ultraconservative messaging and rowdy amplification of hateful commentary, but if that market's pretty small to begin with, then what? The big co-investors figured Musk wasn't just about that; that he would quickly bolt on payment applications or entertainment options or something.

Maybe he'd like to do that, but Musk seems unable to step back from micromanaging a platform without revenue streams to help him do it. In the meantime he has lost a personal fortune and brought down upon him more potential lawsuits via wrath of Tesla shareholders ... in addition to the ones suing him over a dangled Tesla buyout that never materialized in 2018 and Musk tweeting share-price-altering info in the meantime. That suit finally hit the courtroom yesterday.

Elon Musk drama shifts from Twitter, to lawsuit on tweets about Tesla

While still grappling with the fallout from a company he did take private, beleaguered billionaire Elon Musk is now facing a trial over a company he didn't.

www.marketwatch.com

Their mistake. They foolishly believed that Musk could use his billionaire genius super powers to turn Twitter into something profitable. Just goes to show Musk isn’t the only billionaire who’s actually an idiot that has been falling up their whole life.

Musk could go totally broke. He could put Twitter into bankruptcy to save himself, but then he’d lose control of the company. And he bought it just so he could be the king of the trolls. So he won’t do that... or at least he won’t until he has literally no other choice.

Billions of dollars in losses? Couldn’t happen to a more deserving bunch of people.

 

[ronntaylor]

Why wouldn't they? Didn't they get a 3-5x return on their initial investment from Musk?

Exactly! They put in work for years for a service that was about to nosedive and got massively rewarded. All without the headache of lawsuits from shareholders as they performed their due diligence (unlike Musty).

 

[Eric]

 

[lizkat]

The lawsuits against Musk are now starting to pile up like so many unpaid bills. In fact they're about unpaid bills...

Twitter hired experts for case against Musk—now Musk won’t pay them, lawsuit says

Company says it wasn't paid for work on lawsuit that forced Musk to complete merger.

arstechnica.com

 

[Eric]

The lawsuits against Musk are now starting to pile up like so many unpaid bills. In fact they're about unpaid bills...

Twitter hired experts for case against Musk—now Musk won’t pay them, lawsuit says

Company says it wasn't paid for work on lawsuit that forced Musk to complete merger.

arstechnica.com

Putting personal bias aside, can anyone tell us why a billionaire would refuse to pay rent or basic necessities, is it a means to a goal of some kind? Just trying to understand it.

 

[lizkat]

Putting personal bias aside, can anyone tell us why a billionaire would refuse to pay rent or basic necessities, is it a means to a goal of some kind? Just trying to understand it.

Heh, it's sometimes said that only the poor are truly generous. Maybe only the poor are truly afraid of not paying the rent and the caterer and the provider of transportation services... e.g., Musk is just an arrogant kinda super-rich guy. Bills he doesn't want to pay, he may figure someone will sue and then his lawyers will countersue and the whole thing will go away. Untrue but convenient thinking.

But it's not his place to say that bills for this or that (rent, private jet services) were for things he would not have contracted for if he owned the company when those expenses were incurred. The company was a going concern and his purchase contract doubtless covered stuff like requirement to pay for contractual services rendered to the company under previous ownership.

Further though, and aside from "basics"... some of the bills mentioned in this piece are from lawyers, like the ones hired to make a case for completion of Musk's Twitter purchase offer, a case that if Musk had landed in the chancery court to defend against it, it's thought he'd likely have lost. He doesn't feel like paying these guys that Twitter had hired to help enforce the agreement, because he's angry that he couldn't just walk away from the deal after he changed his mind.

It's sheer folly not to pay that bill, no matter how angry he might be at having to pay for work that helped box him into completing the purchase. I mean he'll end up with damages on top of having to pay the original invoices. These are lawyers suing over not having got paid, after all. It's not like they will have been careless about how they wrote up that contract with Twiitter's board, nor careless with this lawsuit against Musk's "Twitter 2.0" for nonpayment either. I can see another change in Twitter's in-house counsel on the horizon though. The messenger always takes the hit.

 

[Nycturne]

Putting personal bias aside, can anyone tell us why a billionaire would refuse to pay rent or basic necessities, is it a means to a goal of some kind? Just trying to understand it.

The only rational thought I have is that if Twitter is planning on declaring bankruptcy in the near future, then any unpaid bill is just another line item of debt. And anyone down far enough on that list of debt effectively gets stiffed in the end. Can’t discharge all debts this way, but if you already know that you are going to file, there’s not much incentive to pay any bills.

 

[lizkat]

The only rational thought I have is that if Twitter is planning on declaring bankruptcy in the near future, then any unpaid bill is just another line item of debt. And anyone down far enough on that list of debt effectively gets stiffed in the end. Can’t discharge all debts this way, but if you already know that you are going to file, there’s not much incentive to pay any bills.

On the other hand there's not a lot of incentive to file Chapter 11 either since the banks or co-investors are very likely to insist on management changes. We can't see the balance sheet now since the company went private, but watching what the banks do when marking down the debt they hold will give some clues. They can't offload the debt as they had originally figured, so they will be wanting to make a series of markdowns to lessen impact on their own balance sheets over time.

"Marking to market" is a game when there is not much of a market, eh? Except when the asset is under a lot of scrutiny, as is the case with Twitter 2.0 under Musk's control. We are not sure how much access those banks or co-investors have to Twitter's books. So the markdowns will occur (Fidelity is a co-investor and made a large markdown already), but they may be somewhat inadequate, intentionally, especially by the banks and in the early going like now. The banks want to say to their own stakeholders "yeah we know it's problematic but it's not hopeless."

Still the potential actual loss is not that big a deal for any of the banks really. To them it's just more of an annoyance as a reminder they're not able to securitize and offload the stuff as originally intended. But if Musk goes to Ch 11 then the banks will want to get paid and they'll probably offload the debt to hedge funds, which will be far less sanguine about taking a future hit and so will likely demand management changes at Twitter.

The main reasons Musk might see as not to pay bills right now are the upcoming first interest payment of around USD 1.5B on that collateralized debt, versus the fact that he has said (again) that he doesn't mean to sell more Tesla stock. He seems to say that before he sells more of it though, so it's becoming a useless attempt to keep Tesla stock from sinking further. The whole situation seems precarious, Tesla stock being so entwined both as collateral for the secured loans and the source of most of Musk's wealth. And it probably doesn't help that Musk is currently in court on that case involving his past tweets about Tesla.

Forbes ran a piece based in part on reporting by the FT, summarizing some options ahead. The annual interest payment to the banks could be due as soon as the end of this month...

Elon Musk Could Sell More Tesla Stock To Pay Twitter’s $1.5 Billion Interest

Tesla did not acquire Twitter for $44 billion but its shareholders will pay a heavy price for this terrible deal

www.forbes.com

Filing for bankruptcy — which would wipe out his $26 billion investment in Twitter,

Buying the debt at a discount — possibly in bankruptcy or outside of it,

Refinancing the debt — bankers are discussing a deal to replace $3 billion of 11.75% unsecured debt with margin loans secured by Musk’s Tesla holdings, or

Paying the interest on time — by selling more Tesla stock or using what Musk says is Twitter’s $1 billion in cash, according to FT.

 

[Nycturne]

The main reasons Musk might see as not to pay bills right now are the upcoming first interest payment of around USD 1.5B on that collateralized debt, versus the fact that he has said (again) that he doesn't mean to sell more Tesla stock. He seems to say that before he sells more of it though, so it's becoming a useless attempt to keep Tesla stock from sinking further. The whole situation seems precarious, Tesla stock being so entwined both as collateral for the secured loans and the source of most of Musk's wealth. And it probably doesn't help that Musk is currently in court on that case involving his past tweets about Tesla.

Forbes ran a piece based in part on reporting by the FT, summarizing some options ahead. The annual interest payment to the banks could be due as soon as the end of this month...

This is where I get a bit confused though. In a leveraged buyout like this, the debt would usually become Twitter's, rather than Musk's. So it's weird to me to conflate the two like Forbes does here. Unless Musk is holding onto the debt as a personal liability or somehow intends to continue to infuse personal assets to keep the company aloft, in either case he's an even bigger idiot than I thought. That said, I could certainly see some financial plays in the form of refinancing or the like as a way to avoid bankruptcy.

As I said, about the only rational reason I can think of to ignore the bills is if you're planning on getting those debts dismissed. I never claimed Musk was acting rationally. The more I see about his history in business, the more I realize his image has been well curated to avoid revealing he's just really bad at this (but lucky), and is incredibly petty.

 

[Macky-Mac]

....As I said, about the only rational reason I can think of to ignore the bills is if you're planning on getting those debts dismissed. I never claimed Musk was acting rationally. The more I see about his history in business, the more I realize his image has been well curated to avoid revealing he's just really bad at this (but lucky), and is incredibly petty.

When you don't have enough money to pay all the bills and debts, it's "rational" to prioritize paying those that are going to hurt the most if they don't get paid.......in twitter's current situation, paying the interest on the borrowed purchase money is probably much more urgent for Musk than paying rents or the twitter lawyers's bills. Whether it's a personal debt or Twitter's corporate debt doesn't make a lot of difference if it means the company is going into bankruptcy if the interest doesn't get "paid".

If Musk can't get twitter onto solid financial ground, then the lawyers and landlords can join the line of creditors during bankruptcy......and if Twitter becomes financially viable, then they'll get paid ultimately......maybe