This is standard operating procedure for takeovers, but I think you're massively overestimating the amount of pressure someone selling 9% of the company places on the stock price. Someone buying 9% (with an expecation that they would buy more) moved the stock $10. The same person selling 9% stock (with no possibility that can sell more) is unlikely to move the stock more than that.

Twitter is selling at $45, a $10 move is 22%. That's insane pressure.

I think you should look at the historical volatility of TWTR before calling a 22% move "insane pressure".

It's also worth noting that the stock price is almost unchanged today as of this writing, which tells you that the market thinks he's not serious, or his lowball offer is going to be laughed out by the board, which significantly reduces the amount of "insane pressure" he's exerting.

What does historical volatility have to do with it? If Elon can basically manipulate his investment into a 22% return why on earth wouldn't he do that? A single person able to pressure a single commodity to the tune of 22% is bonkers.

I'm not debating whether that will happen, just contending your first statement.

He can't manipulate it into a 22% profit, for exactly the reason you articulated. His buying pushed the price up - his selling will push the price down. He might might make a small profit from the increase his buying news generated if he were to sell now, but his VWAP would be well below 22%.

Because the existing volatility sets the tone for the underlying risk tolerance that shareholders already deal with. It sucks, it’s not insignificant, but I do agree it’s not immensely significant as you are making it seem. It’s just the exposure a public company on the market can have have these days.

I agree it's bonkers that this is possible. I agree, in an environment where the SEC seems unable to stop him, Elon Musk might well consider 22% return worth doing. None of that is relevant to the point I'm making.

I'm contending the claim that the implicit (and completely pro forma!) threat in his SEC filing places "insane pressure" on the Twitter board. The the possibility of a 20+% stock price change will not play a large part in their calculations. It's just not a big deal in the context of such a volatile stock.

Don't you think he would lose a lot of reputation in future deals like this? I wouldn't trust him.

He hasn't needed any trust to go this far, his MO here is more of a hostile takeover, and he doesn't need any permission from Twitter to do it.

Good point.

It's not just any single person.

It’s a cascading effect though. 9% sell off. Ticker drops by some value. This then triggers stop losses, and another set of sell offs. It goes down the line until retail is left holding the bag.

I disagree. The fact that someone is willing to buy a stake in a company suggests the company has some potential. The fact that someone having bought a company is willing to dump their entire ownership so quickly suggests the company may be rotten from the inside. The latter would exert a much stronger downward pressure on the stock, in my opinion.

That makes sense if you assume Musk has learned something shocking about Twitter from the inside in the past couple of weeks. How likely is that?

It seems spectacularly unlikely to me that a demonstrably impatient person with a pre-existing thesis about Twitter would take the time to investigate and learn new things about its product/financials/culture/governance.

It also seems unlikely that a person with a known strong stomach for legal and ethical "flexibility" would be especially bothered by anything they did learn, assuming they took the trouble. But YMMV.

His point is that it will look like Elon didn't like what he saw and changed his mind, it doesn't matter what he truly saw.

"Musk, what do your Elon eyes see?"

"They're taking Twitter to Isengard!"

I do think something like twitter longterm could a big play at something like authenticity verification in the world of deep fakes, similar to what keybase was trying to do but they already have traction with public figures

As a hypothetical investor on Twitter, would you be willing to take that chance?

> suggests the company may be rotten from the inside.

Even if there are 0 actual facts open to the public that prove this, the optics suggest that this narrative can be made. He moved the stock 30%+ in a few days by publically buying in. If he sells it, why wouldn't it give up all of the gains he brought (and maybe more)?

I don't know what he thinks he stands to gain by buying Twitter. Can a rocket scientist/electric car guru really get into tweets + advertising?

To strongman the case for him running twitter, he clearly has significant experience and success with running large engineering oriented companies - which is the primary job of twitter executives. Both Tesla and SpaceX have significant software organizations, and he also has experience in running a pure software company back when he was involved with paypall. As a heavy user of twitter, and the de-facto PR person for Tesla and SpaceX he also has a good understanding of the product, both from a normal users perspective and a marketers perspective.

That said, I don't think this is primarily about buying twitter being profitable, but that he is motivated by a mix of politics, fun, and funny. I also don't think he's likely to get that into the day to day of running twitter, just because he's already busy with Tesla and SpaceX.

> running large engineering oriented companies

I don't disagree. It's just that... what are his plans for Twitter? Add an edit button? Tweak the algorithm that delivers timelines? None of that is really complicated. Those could be 6 month roadmap projects.

> but that he is motivated by a mix of politics, fun, and funny

1/3rd of his net worth on a company seems odd.

First, it’s more like 1/6 his net worth. But I don’t believe the proportion means anything at that level of personal wealth. He’d still have the other $210B, plus ownership of Twitter. Each of those other billions is worth a billion dollars. Almost everybody could make do with just one of them, and he’d have over 200 of them. Even luxury goods don’t scale up to that scale. All he can really do with that is buy companies anyway. And Twitter is what holds his interest right now.

It seems like Twitter's barely done anything new since going public over 8 years ago. Making a UI that was actually usable for following conversations would be a good place to start. What are all these product people doing? (I'm a small TWTR shareholder. It's one of my worst tech investments.)

Why do rich people buy newspapers and media conglomerates? Why did Jeff Bezos "get into journalism" via Washington Post? There is your answer.

Washington Post can control what is posted through journalists, etc. (digital or not)

Twitter is like... an aggregator of a bunch of people tweeting. The people tweeting aren't being paid by Twitter to tweet (like journalists are for Washington Post, even if it's like $75 for an opinion piece/basically blogspam)

I feel like that's a pretty big difference?

Twitter can control what who can post and who cannot (remember Donald J Trump being banned?).

Twitter can control what is being read by deciding what is promoted by their algorithms and what gets buried down.

These are just few examples. We can't pretend that Twitter is a fully decentralised service and that there's no one pulling the strings.

Kara Swisher said this 4 days ago: https://twitter.com/karaswisher/status/1513370798815330307

Twitter likely decided to not allow him onboard just because of his constant shitposting about the company, his volatility, and really just wanting Twitter to be his sounding board for whatever offensive things he has to say, so they're trying to ensure he can't try and takeover as we speak.

Okay, but it's Elon Musk selling 9% of a company's stock.

The dude makes stocks move when he tweets memes. I think it's fair to say he's got some... extra pull.

He demonstrated precisely how much pull he had when he bought 9%. It's about $10.

The price moved from $33 to $40 as he bought the shares[1]. THEN it moved from $40 to $50 when he announced that he bought the shares on April 4th.

Hard to say what the stock would have done without the purchase, but Musk has both the threat of dumping his shares on the market AND the threat of him announcing that he's dropping his shares. A case could be made that he has at least $17 of influence on share price, but my guess is that the market frenzy will drag it lower if Musk backs out.

1. Purchase began March 14th 2022 https://www.sec.gov/Archives/edgar/data/1418091/000110465922...

Note: Please correct me if I misunderstand the meaning of the filing. I read it as Musk began buying up shares March 14th, and finished near the end of March, then reported Friday/Monday April 1/4. I don't think he bought and announced the same day. Musk owns ~73M shares, and trading volume was ~15M on the 13th, then jumps to ~35M/day over the next few days before settling down at ~15M/day again. https://finance.yahoo.com/chart/TWTR#eyJpbnRlcnZhbCI6ImRheSI...

No, that is not how that works.

How does it work?

Whoever knew that stands to make a lot of money.

What we do know is that it's not a 1 to 1 mathematical if one buys 9% it moves 10$ if one then sells 9% if falls $10. This has historically proven over and over.

Seems like an amazing move by Elon. Buy a sizable portion of the business to hold hostage, and then make the company an offer that they essentially can’t refuse because of fiduciary responsibility. If they reject Elon’s offer the stock price will sink like a rock. They pretty much have to take it.

>Seems like an amazing move by Elon

You and I have very different definitions of the word "amazing"

> amaze (v.)

> "overwhelm or confound with sudden surprise or wonder," 1580s, back-formation from Middle English amased "stunned, dazed, bewildered," (late 14c.), earlier "stupefied, irrational, foolish" (c. 1200), from Old English amasod, from a- (1), probably used here as an intensive prefix, + *mæs (see maze). Related: Amazed; amazing.

"amazing" never meant "this is of surprisingly high quality and good"

Here's another dictionary (https://www.lexico.com/en/definition/amazing):

1. Causing great surprise or wonder; astonishing. 1.1 [informal] Startlingly impressive

Did pointedly ignoring common usage add anything here?

>Did pointedly ignoring common usage add anything here?

Yes, there are plenty of words going though the natural process of dilution. Providing some backpressure is, I think, useful to the language to preserve the richness of meaning. I'm responding directly to a discussion about the meaning of a word not interjecting into another conversation with a "well, actually..."

When you're writing a dictionary, words mean what people use them to mean. I'm not writing a dictionary.

Except that your 'well actually' still exists because you ignored the much more common usage when you made your point and didn't mention anything about your valiant effort to preserve etymological treasures until questioned?

Damn, get the body bag

It does, now. NLP sentiment classifiers assign it a positive rating with a very high confidence.

However it may still be use in some limited contexts, or historical contexts, its modern day usage is almost always with a positive connotation.

If you read the Lord of the Rings, you'll see quite a few usages of the word "amaze" not at all in the sense of "dude, that's amazing". It is not like reading that is some archaic text exclusive to english scholars.

I think it is good to be reminded of the higher quality meaning of words that are falling into bland generic meanings. Words do change and there's nothing wrong with that, but some changes are better than others and the degeneration of specific strong meanings to generic common place ones isn't something that should be celebrated.

Celebrated or don't celebrate. Language evolves, meanings change, recognize it when it happens or you become the pedantic boring person at a meeting or party trying to explain, "No, 'begging the question' does mean what you think it does. It's a type of fallacy, not some segue into asking an obvious question.

I'm responding to somebody questioning another's definition of a word, not correcting someone for using a term wrong.

Then you misunderstand my point entirely. It's no longer wrong to use "beg the question" in this way. It is now part of everyday vernacular. It is now one of at least two correct ways of using the phrase. Language is weird that way, it's not set in stone, so if the "wrong" thing gets used enough and hits critical mass, it becomes a correct usage.

Look at the Great Vowel Shift, or how creoles, pidgins and patois develop and evolve. Language isn't static, and in the case of "amazing" its current vernacular usage has changed to almost always have a positive connotation.

Lol, you know an online debate is spicy when people start pulling out dictionary definitions

I've been in some spicy meetings where people pull up definitions on their phone. Those were amazing.

Haha, do you remember what the word was?

One was trying to decide whether to call the first version of something. Revision 0, revision 1, or version 1 followed by revision 1. The users that we were making the application for didn't care one bit what we called it, but the programmers sure had a lively discussion with a lot of eye rolling in the room.

To paraphrase Samuel Johnson, dictionary definitions are the last resort of someone flailing for an argument.

Not if the argument is essentially about dictionary definitions. FWIW, if I had to imagine someone saying something is amazing without any context my understanding would tend towards the “old” meaning.

Just wait until you see what we've done to awesome.

It means that today.

You say, in response to somebody using it to mean something else.

There is a strange circular logic to saying words mean something new because they are commonly used in a new way and at the same time telling somebody how they're using a word is wrong because it doesn't match this new meaning.

Justifying a prescriptive attitude with descriptivist arguments is farcical.

Other than the ability to amaze?

That's not how it works, the board would look at the long term value of the company, not the current price or what it will be in the next few weeks if Elon sold.

For instance Twitter stock was $60 last october, if they didn't ask for at least that it would be shortchanging shareholders and also imply a declining company.

Twitter stock price target for financial institutions is 30 dollars. They're shorting it, and giddy about the board rejecting Elon's proposal.

We will never see those prices again. They occurred during overvalued and speculative market conditions and we will not return to that for several years, if ever.

You don't need an implication of decline when the market has already explicitly indicated it believes Twitter is declining as evidenced by the falling stock price.

This amazing move is considered a form of maket manipulation in my country. Not sure about US stock markets.

What law forbids offering to buy a company?

'Knowing' you will put an offer to buy a company is insider information. The assumption here is he has been acting on this information recently and it was part of his plan.

Unless you think he just woke up today and said: You know what, I'm going to buy Twitter! Which, I mean.. given Elon maybe that's what happened. But if it was premeditated then he has clearly been acting on insider information.

I'm sorry, but in what world does having a plan constitute insider information?

> 'Knowing' you will put an offer to buy a company is insider information

No it's not.

Step 1: You plan to put an offer in on a company, which you know will drive up the share price

Step 2: You buy shares in the company

Step 3: You publicly disclose you will buy the company, driving it's share price up

Step 4: You sell those existing shares now that the price has gone up.

That is trading on insider information.

Insider information isn’t information that only exists in your mind.

If you have no intention to actually follow through and it's a false promise, that's a pump-and-dump. It's securities fraud, but it's not insider trading.

If you have an intention to actually buy and make a good faith effort and fail, that's just business.

Market manipulation is what I meant instead of insider trading. My point was: illegal.

Depends on intentions. The fact that he hired Morgan Stanley to facilitate the privatization process indicates genuine intent.

Ehhh any large play could be considered market manipulation. JetBlue recently offered to buy Spirit, but there’s no 2000+ comment thread on that.

I can assure you that the CEO and the board has much more insider information than Elon.

Duh, but they are not acting on the insider information.

Elon is. He bought shares, then put in an offer which drives his existing shares up. Perhaps you can argue until he sells them he isn't acting.. perhaps.. but if he sells them today, are you still telling me he isn't acting on insider information?

From the SEC website: Who is an insider? An “insider” is an officer, director, 10% stockholder and anyone who possesses inside information because of his or her relationship with the Company or with an officer, director or principal stockholder of the Company.

A principal shareholder is a person that directly or indirectly owns or controls more than 10% of any class of voting shares or securities of a company. The principal shareholder has the authority to vote using those voting shares.

Elon has less than 10% share (9.2%), so he's not an insider. Probably he stayed under 10% because of this law.

Hopefully your correct and Twitter tanks and maybe we can finally be rid of this crap

I don't hate Twitter like I hate Facebook (mainly for ideological reasons and their propensity for exploitation) but god damn is their interface and entire product model annoying.

It doesn't take a genius to arrive at this strategy. Just tens of billions of dollars.

No, if they reject it, they will just ask for something like $80 a share and say that that is what they feel is the true value.

When it comes to a situation like this, you can't just say you 'feel' that is the true value. They'd have to have something to back that up.

That's funny because its worth half that right now.

Amazing? This is exactly the type of move I'd expect from someone like Elon who lacks empathy.

He is a sociopath. The fact that a sociopath wants to be a king of social media is disturbing.

I'm amused you think sociopaths aren't already the kings of social media.

Who exactly is Musk demonstrating a lack of empathy for in this situation?

Wow. This community isn't what it used to be. Sociopath? Don't you think you should validate that claim? This isn't a reductive Hasan Piker stream.

Those poor sociopathic one-party state marxists at twitter "trust & safety."

Once Elon has full control of Twitter, they can always leave and go start their own platform.

Or the SEC could finally go after Elon for market manipulation. There's always options.

THIS THIS THIS. It is absolutely illegal what he is doing.

Wait, aren't you aware of the "It's not illegal if a billionaire does it" rule?

Billionaire or not, what is illegal in his move ?

That is a great question and I wonder the same thing.

"I am going to dump 1/10th of the company that I very publicly acquired if they don't do what I want them to do" feels like manipulation since he's controlling the value of such a large amount of it.

But is it illegal to be willing to lose money if a threat isn't met?

Furthermore, would it be illegal for him to dump his shares, allow the trajectory to tank the price further, then rebuy when it bottoms, rinse and repeat?

It’s not illegal to say “I want to buy more shares at what I believe to be a generous price. If the board won’t sell me these shares, I don’t trust the judgement of the board and will subsequently sell my existing shares.”

That's called a hostile takeover. Part of being a public company.

No, you are allowed to sell your shares if you don't want them anymore.

How? The laws absolutely allow for hostile takeovers. If Twitter gets to determine what to censor because it's a corporation, well, they get to get bought like one too.

The mental gymnastics going on in this thread is crazy.

Let's separate two concerns:

1) Belief system – whether you philosophically support Elon's take over or not

2) Objective facts, corporate finance and legal aspects of what's going on

All I can see in this thread is 1) masquerading as 2).

>All I can see in this thread is 1) masquerading as 2).

Indeed. One would have hoped that Hacker News would be immune from Reddit/Twitter-style "Anything I don't like is illegal/unconstitutional", but apparently not.

"Someone buying up shares of a company before he announces a hostile takeover is inside information and thus illegal!" Good grief.

Depends if the offer is made in good faith. If not, this would really look like market manipulation.

No it's not.

It will hit back at 40$ is as if the Elon pump never happened, is that so bad? However, it does create pressure from “activitists” to sell to Elon. The main thing is: Is Elon a good leader for Twitter. There is a lot of positives because Elon has already proven himself in multiple companies, plus he understands Twitter as much as anyone from his use of it

His absolutist "free speech" attitude would absolutely be horrible for Twitter. There would be literally nothing to stop bots and state-sponsored messmakers from completely gaming Twitter far beyond what they already do today. I think a lot of people do not realize the can of worms they are opening when they advocate for zero moderation on a platform as large as Twitter.

He's not a free speech absolutist (he even tried to get a particular account shutdown for tracking his private jet, albiet he was offering them money to stop), he more or less just wants a more transparent form of moderation with only moderation leaning in one direction. That's actually a -good- thing. I've seen accounts banned for mild jokes, while some accounts literally post death threats and skirt by. The Taliban, Russia, etc all have Twitter accounts at the very moment and you think this is some new thing of "state sponsored" whatever. I am pretty sure many people here with comments like this have rarely if ever used Twitter for anything.

I don't think he's campaigning for "zero moderation" -- he's spoken about plans to fight bots. I think he just wants zero moderation for accounts run by actual humans, which is still a can of worms, but a different can of worms.

You are assuming Elon will run Twitter to the ground based on his 2 word view. He seem smart enough to know what a middle ground is.

He isn’t smart. Just like trump isn’t smart. How could such guys be so successful if they aren’t smart?? Well, they are just the right amount of stupid, careless and bold to succeed in today’s world of mindless masses.

Like how Twitter memory-holed the NY Post/Biden Laptop story? Yeah, moderation, sure.

Perhaps you're an example of how its censorship spreads misinformation. I'm not really passionate about the Biden laptop, but my understanding is that the NYT did recently admit* that it was real and they had some sort of policy to report on it as if it weren't. If you believe the laptop story was a fabrication by right-wingers, is it possible you have been deceived?

Disclaimer: I have no confidence either way to the veracity of the laptop. I don't know that much about it and whether it were true or not wouldn't change my political views much.

*I googled 'NYT biden laptop' and the most legitimate looking of the results was a WSJ article. I don't have a WSJ subscription to evaluate it, however.

It's crazy to me that people _still_ don't know that it's been confirmed by a "reliable" news source. The veracity of the NY Post story wasn't controversial, just the effect it would have on getting Biden into the White House. The corporate press ran cover for the Biden family to get the outcome they wanted in the 2020 elections.

https://greenwald.substack.com/p/the-nyt-now-admits-the-bide...

The NYTimes and Washington Post have admitted that the laptop is genuine. conveniently 18 months after that same national election.

It wasn’t given scrutiny. It was silenced. And, turns out it wasn’t misinformation either.

Thank God with Musk’s new Twitter we won’t have to have this sort of discussion anymore anyway, people won’t be able to just shout Russian disinformation at anything that makes the left look bad and have Big Tech scramble to do their bidding to help influence elections.

>Is Elon a good leader for Twitter.

Since there would no longer be any public investors in Twitter after this, that does not actually matter as far as the present investors are concerned.

I read it as a threat too... is it not against the SEC's rules for market manipulation?

How so? He is even giving more information about his future intention than he had to.

That's where the market manipulation comes into play. Acknowledging/threatening a possible pump and dump if he doesn't get his way could clear the SEC's bar of "Intentional or willful conduct designed to deceive or defraud investors by controlling or artificially affecting the price of securities, or ... designed to drive a stock’s price up or down"

Someone much smarter than I could likely argue that the "threat" of Elon possibly pulling out his investment in a company is affecting the stock price, and now suddenly Elon is in control of the direction of the stock, even though the underlying fundamentals have not been changed.

https://www.sec.gov/files/Market%20Manipulations%20and%20Cas...

AFAICT, there's no deception or fraud in his behaviour; nor is there anything artificial - he's put real money down, and is offering real money. It's not like he's made a one-off tweet about it.

Not to get pedantic, but if you read their definition of market manipulation, there's another point that's unrelated to the deception/fraud clause (though those are loaded terms legally, and one again likely could argue they are)

"Intentional interference with the free forces of supply and demand"

He put money down (a lot of money down!), but that doesn't give him the right to manipulate the stock price purely based on the fact he has a stake on it or not; in fact it gives him a duty not to do so, because he now has a motive/vested interest in profiting off of it. There's rules to follow and forms to file to protect against that, and he's already has one lawsuit against him in that vein: https://www.nytimes.com/2022/04/14/business/twitter-lawsuit-...

It sounds to me that you're interpreting that in such a broad way that you could argue that any stock purchases he makes would be in violation of this.

If the market decides the stock should go up or down after someone invests/divests (or files the applicable, standard form), that's one thing.

If he's prematurely saying what direction he's going to go one way or another, that's another thing. You don't see Vanguard tweeting "we're going to invest in this company if X happens and divest if not" to the general public, especially if they're trying to influence X to happen.

This essentially why he got in trouble with Tesla for tweeting he wanted to take it private at $420/share, immediately making the stock price jump up, even though he did not have "funding secured" and did not take it private. And he almost lost the ability to be a CEO or on a board of a public company for 10 years because of that!

https://www.sec.gov/news/press-release/2018-226

> If he's prematurely saying what direction he's going to go one way or another, that's another thing. You don't see Vanguard tweeting "we're going to invest in this company if X happens and divest if not" to the general public, especially if they're trying to influence X to happen.

Because Vanguard is a passive fund. Activist funds do this all the time.

And Elon initially filed as a passive investor.

Him putting money down literally is a free market demand for that security, and his ability to freely publicly offer lots of money literally is the "free forces of supply and demand" that's not supposed to be interfered with.

This clause is explicitly not intended to do what you imply, it does not restrict this particular action by Musk at all.

Certainly someone out there agrees with you. Realistically, a lawsuit would certainly quell the interest in this and drag this issue into relative obscurity over the course of years. Timeless tactic.

It is almost certain that whatever happens, there will be a lawsuit. Suing twitter, the board, elon, maybe the SEC (possibly multiple in different directions). It happens with almost any large move where there is even a hint that something happened incorrectly.

More like it happens with any large move period, no hints needed, because the expected value payoff of a lawsuit in that case typically makes it a worthwhile exercise.

Musk being known as a long-time fan of the SEC with a respect for their rules.

> is it not against the SEC's rules for market manipulation?

Maybe, but he's also being sued over a violation of market manipulation rules with regard to non-disclosure of his recent Twitter purchase, and that's not the first problem he’s had with those rules.

“Elon Musk” and “securities rules” don't really go together.

I know; But I can't help but feel the SEC is just waiting to build up an open-and-shut case to really make an example out of him, as they usually do to high profile people who openly challenge them. Of course the richest man in the world is going to put up a very strong fight in court, and the SEC will not risk its authority by losing, so there can't be much ambiguity in any evidence they present

On the other hand - the stock was flat over the time that he bought... So not in total agreement with you on the stock impact of his selling. It seems like the only impact is the headline risk - and not so much actual selling pressure.

If the stock was flat while Elon was buying almost 10% of the company, it probably would have declined quite a bit if he hadn't been buying, because the people who sold the shares Elon bought would have been looking for other buyers.

Someone can do a basic quantitative analysis. He started buying March 1 (?) I believe. This date is public in last filing. You can estimate the historical beta, and get TWTR return and market return in March.

My quick analysis was that in the absence of any other news, his buying really had no serious impact.

I think he started March 14th based on trading volume. Goes from ~15M/day to 35M/day for the next few days before settling down. (Made another comment elsewhere on this)

https://www.sec.gov/Archives/edgar/data/1418091/000110465922...

Ok so assuming march 14 to April 1. The market was up 8% over that time and TWTR was up 19%. Beta is 1.3 so with a beta adjustment the excess return from musk's buying is about 19-(8*1.3)=8.6%.

Is this a lot or a little impact for buying close to 10 percent of a large cap stock? It's hard to say. I'd say it's a bit lower than i would have expected. Nonetheless, it provides somewhat of a floor if musk decides to sell his stake.

Edit: https://www.sec.gov/Archives/edgar/data/0001418091/000110465...

Musk bought between Jan 31 and April 1. Market was up 2.8% and Twitter was up 11.5%. So the impact was less. 7.8% beta adjusted.... Really not much...

Want to write a contract for where it'll be at close of market the first trading day after he announces he'll pull out? We can have break-even at Twitter being 19% down from now. You can appropriately hedge beta risk elsewhere and I'll put in $100 to induce participation. I'd prefer max $10k exposure for my side.

I can meet you in SF if you want signatures.

In the months before Musk started buying, Twitter stocked declined by about 40% while the S&P was up slightly. Is it reasonable to assume that TWTR would have followed the market from Jan 31 to April 1 without Musk?

Good observation. Market impact is notoriously hard to measure - especially over a 2-month period like this one. You have to build a more complex model - which includes fundamentals.

It's a hostile take over.

I think calling it a gun to their head is a bit over dramatic.

You've omitted some details:

d. If the deal doesn’t work, given that I don’t have confidence in management nor do I believe I can drive the necessary change in the public market, I would need to reconsider my position as a shareholder.

i. This is not a threat, it's simply not a good investment without the changes that need to be made.

ii. And those changes won't happen without taking the company private.

https://www.sec.gov/Archives/edgar/data/0001418091/000110465...

Not a threat. If Musk can’t fix Tw, then the share value will further decrease, so it’s just rational for him to then sell. And good for him to be honest about it from the start.

That’s what every corporate raider hostile takeover attempt does. If the board won’t do what the pursuer thinks is best, why would they continue to hold the company?

I hope the short sellers who have a long standing hatred of Musk short the hell out of Twitter and make a ton when this offer is rejected.

I'd expect the more they short it, the more likely it is to be accepted.

Selling shares is putting a gun to their head?

The price is currently $46 and considering the stock market is down as a whole, the $54 price will easily be eclipsed in the near future imo. Granted Musk will sell his stock and that price will go down, but I would balk at this offer if I had any skin in the game.

If you're basing this on the stock market as a whole being down, surely you'd make more money by selling to Elon at $54 while it's still down, and re-investing your money in other stocks - letting you get the upside twice, once from Elon and once from the stock market going up.

Corporate raiders did this all the time. Just look at the history of Carl Icahn in the 1980s.

To me, the main message is that he wasn't really serious about Mars at all, or even about SpaceX, or Tesla -- never mind global climate catastrophe.

Were I a Twitter stockholder I might perceive a different emphasis.

Yea, he only engineered and launched spacecraft into space. Not serious about SpaceX at all...

He what? He does "business", not engineering. His engineering decisions are notoriously bad, see the LiDAR vs camera discussions. He has no real expertise, beside compulsory lying and coming up with bold bullshit statements.

Spacecraft are one thing, Mars another. By the evidence, he is satisfied with where SpaceX and Tesla have got to. And, renewable energy generation and storage development and deployment.

Or maybe he wants to turn Twitter into a bully pulpit, and drive government spending where he thinks it should go... That's the 4D chess argument.

The significant ramping up of SpaceX production and work to add launch locations is a strong indicator that he’s not satisfied.

I don't think Elon needs or even could have any more of a bully pulpit than he already has.

He has a pulpit, but it is not bully.

>To me, the main message is that he wasn't really serious about Mars at all, or even about SpaceX, or Tesla -- never mind global climate catastrophe.

What are you talking about? He literally offered up the Tesla patents to anyone who wants to use them: https://www.tesla.com/en_GB/blog/all-our-patent-are-belong-y...

And:

>On June 12, 2014, Tesla announced that it will not initiate patent lawsuits against anyone who, in good faith, wants to use its technology. Tesla was created to accelerate the advent of sustainable transport, and this policy is intended to encourage the advancement of a common, rapidly-evolving platform for electric vehicles, thereby benefiting Tesla, other companies making electric vehicles, and the world. These guidelines provide further detail as to how we are implementing this policy.

https://www.tesla.com/legal/additional-resources#patent-pled...

I think there's a credible argument that SpaceX is not currently cash blocked. Same may apply for Tesla.

He may have just run out of good places to put it.

He could have put it into developing and deploying renewable energy development and deployment. So, no, that argument doesn't work.

It is possible he thinks he can use Twitter to drive politics, and maybe government spending, in directions he favors.

You're right about politics. The SpaceX Mars mission is ultimately tied up in NASA funding/approvals. Twitter is the hangout spot for the journalist profession. So even a slight manipulation of the algorithm could result in incalculable benefits to the Mars mission.

On the other hand, it's possible Musk is just getting revenge for Twitter censoring his friends at the Babylon Bee...

If your bar for "serious" doesn't allow for multi-tasking.

Money is fungible. Every single dollar that goes for Twitter is exactly a dollar that does not go for what he used to say was important.

He might be heard to say those again, but dollars speak louder than words. Musk can say anything, anytime. What he does with his money demonstrates what he believes.

By that same logic the US should immediately stop giving foreign aid to developing countries or investing in other programs since we still have homeless people here. The reasons why entities spend money on specific things is not a univariate. Also, there is a whole meta discussion to be had about what sparks creativity and innovation, I have a pet theory about over abundance of resources creating stagnation and dulling people's motivation and creativity. Beyond a certain point, throwing money at a problem can be counter productive.

At the end of the day, results matter and SpaceX has shown results.

"does not go for" 0 nope all of his share holdings are just that, holdings. It's not until he liquidates any of those shares that the money be put to work. In that way it doesn't matter he he shifts billions into twitter, he can liquidate it just the same. Probably for more given his track record pumping the value of companies.

If he owned 0% of both companies as CEO he could still achieve both goals.

Recipe for not thinking anything is important: split your holdings into two investments.

Recipe for thinking two things are equally important. If one of those is as intrinsically unimportant as Twitter, the other is too.

Maybe he sees twitter as a threat to his other goals? 'Whitey on Mars' could be very compelling to the twitter crowd.

Like it or not, Twitter is extremely important. It sets discourse and gets politicians into office. Remember how much Trump's tweeting dominated the news cycle? Elon buying Twitter isn't him saying he thinks it should be important, just that it is.

So, this is his entree into politics? A way to drive money at federal-government scale the way he wants?

Possible.

They don’t call it thirsty Thursday for nothin’!

I can’t see how his plan isn’t about getting trump back on twitter. He will do a lot of smoke screen speech, telling contradictions and unclear bold statements. But in the end I bet all of this will end in removing trump ban. If I’m right, it’ll confirm that musk is just a fascist greedy sociopath disguised as a tech enthusiast.

As another commenter pointed out: It’s Elon Musk.

While selling all his shares would make the price dip short-term, no one who knows his tactics will take that as a serious commentary on the viability of Twitter itself.

Yea people don't understand he has too much money to care about playing games and pumping/dumping shares. He basically can't take a breath without 'manipulating' the stock price of something.

That would mean that management effectively wins, the stock would go down but they wouldn't have to worry about the threat of Elon Musk looming over them and the crisis would be solved. It doesn't make any sense from a takeover perspective, if I was Parag that would make me feel more comfortable rejecting the offer.

What does it take for you to see someone as a threat ? A compulsive liar throwing 43000000000$ to take over one of the largest social network in the world, grossly pretending it’s for "free speech"? And people on HN are buying it? Hmmm.

You clearly have an axe to grind moreso than an actual point. In this community, if you declare someone as a liar, you generally have to provide some proof of that. This isn’t a « my feelings » community.

Twitter is literally ruining the world. Donald Trump was elected because of it. I’m sorry, but Twitter could not get any worse. I fully support the purchase. Anyone who’s actually watching what’s going on do, too. You’re just going to have to deal with it, albeit, while spewing fear mongering pretending to be concern. Reductive childlike reasoning might work on Hasan’s millionaire stream, but not in reality.

Canadian you mean.

Elon Musk is not important to Twitter.

It's a toy gun pointed at their head.

He could maybe maybe start a competitor, but I doubt it would work.

1) He doesn't have the energy for another serious project 2) It would end up being something else, which frankly might be welcome, but it won't replace twitter.

Journalists etc. around the world are not going to flock to a 'free speech' platform with little moderation.

They 10x will not do it if Trump is on it, and gaining traction, for example.

Journalists thrived when Trump was still on Twitter. It was nightly news and they all RTed him constantly.

The media benefited from Trump in that audiences were bigger, but they don't like him.

They won't validate a new project by their presence if he is involved.

People avoid Trump's 'truth' platform because they don't want it to have a critical mass of legitimacy.

If 50% of people, and 75% of public voices who despise Trump stay off the platform, it cannot develop a critical mass.

Trump himself has never even used the Truth platform. I never said the media "likes" Trump, but they profited from him greatly, he's actually great for business (and arguably great for Democrats.) If Trump were allowed back on Twitter, journalists would decry it for a while and then embrace their renewed social interaction numbers. Outrage is a big seller and when everyone is pissed about something it generates a lot of revenue/clicks/interactions for these media organizations.

Oh yea, I agree with that, I was just indicating that most of the industry is going to avoid him for now for reasons that arguably go against their own bottom line.