If that's the case, it won't be so different from when Twitter was run as a public co.

The social media bubble has burst (see stock prices of other social media companies). This is a quick path to having Twitter shut down or go bankrupt.

Given the state of the economy if you go by "look at other X companies" you can say that every industry was a bubble that popped.

US GDP increased significantly in the most recent quarter.

Musk Twitter and Musk have way bigger loans than public twitter.

Which also means Twitter has much bigger payments to make. That will have some impact on its path as well.

The world is full of stories of companies desperately looking for revenue when their on the downswing and I can't think of any which have worked out.

how about Apple at the end of the 1990’s?

They were almost ready to fold, got a new iCEO, and completely turned around to become the world’s most valuable company two decades later.

They wouldn't have succeeded without much needed cash from Microsoft.

It wasn't strictly cash, it was an agreement to buy $150 million of stock as part of a Judge-approved settlement of a lawsuit which Apple was winning. The settlement was a win-win for both sides, because it meant Apple remained a healthy company and Microsoft got to avoid paying out BILLIONS to Apple. Instead they bought stock which they sold for a tidy profit ($550 million) a few years later.

(Fun fact: if Microsoft hadn't sold this $150 million investment in Apple stock, it would be worth $120 BILLION today and this shareholding would be Microsoft's single most profitable business unit.)

What you don’t know is how much worse MS itself would have been without the 550M for whatever they used it for. Unlikely 120B worse off but it would be something.

That might be true on the margins, but it's impossible to know. Maybe they would have not pursued the original Xbox and lost out on that enormous market. Or maybe they would not have pursued Windows Mobile/Windows Phone and saved a few billion dollars on a dead end...

One of the important parts of that deal was Microsoft promising to develop Office for the Mac. There were definitely competing products out there, but the Mac needed Office.

It's really impractical to second guess history, but I don't think Office was quite as necessary as people say. Its absence definitely would have hurt sales on the margins, but it certainly didn't affect the majority of Apple's customers. The reasons why people owned computers was exploding in the late 90s, with the advent of the internet and the home digital media revolution.

Apple wouldn't have revitalised without the iPod though. However you slice it that 1 product is responsible for everything.

Twitter is the product though, there's not an underserved market that they can move into.

I feel we have a generic tendency of looking at downward trends and assuming that shocking radical change can’t make it worse. As history tells, it sure can.

The old Twitter was a lost cow looking for pasture and moving very little in fear of getting more lost. For better and worse it had stability. We can assume that stability is now gone through the window.

There's a massive difference because Twitter is now owned through a massive debt finance.

Except the previous owners, hated by the right, got their money.

Isn't that kind of the story of Twitter thus far already? Certainly on the financial front they never seemed to have much of a plan, and on the product side things always seemed like a bit of a mess to me as well.

Some fresh leadership might not be a bad thing for Twitter. Whether Musk is the right person for that...

What these comparative analyses keep missing is that Musk Twitter is an LBO company with billions in loans on its books. It's private, which takes public shareholder pressure off, but it's also directly losing billions of dollars in debt service. The pressure to generate some kind of stable income, soon, is probably immense.

It's worth keeping in mind that despite the brave face, Musk didn't want to buy Twitter. In fact: he desperately didn't want to buy Twitter. He's been forced to do so by the Delaware courts.

No, he just tried to use the courts to leverage a better deal. Imo, he always intended to buy Twitter, it was just part of the dance.

I agree. We know they were meeting to discuss a lower price throughout the process, but no agreement was reached. Not surprising if Twitter felt they were very likely to win, why accept less? But they did discuss it.

It's more accurate to say Musk didn't want to buy Twitter for $44 billion. His timing on his bid really sucked. He might have saved half or more if he'd waited a few months.

What baffles me is that he would have just followed the tried and tested procedures of acquiring a company he would have paid less and would have had a chance to reconsider if he reaely wanted to during due diligence.

Instead he made a take-it-or-leave-it offer with a ludicrously tight schedule and locked himself into an unfavorable deal without any obvious reason.

I am certain there is a bad decision in there sometimes and I'm wondering what it it might be.

A small part of me thinks that maybe he was uncertain and scared that he would back out so he took that option off the table preemptively.

That would be more plausible if he hadn't savaged the company for months, degrading its value, prior to being forced to consummate. It's below the threshold for plausibility now.

It's probably more or less the case that for the next several years, it will be difficult for Musk to do any big-ticket M&A, despite having some of the biggest pockets in the business, without agreeing to exceptionally seller-friendly terms. All because of how he handled an acquisition of a flailing media company that it is very unclear that he wanted in the first place.

I don't think that's quite right, or rather you're presenting it incorrectly. When musk proposed the twitter deal he was already in the state where any acquisition that he proposed would necessarily be under exceptionally seller-friendly terms, that's why the twitter deal was such. If he already had had to present such terms at that time, what more terms could his proposals possibly provide now after this bullshit?

He had to buy Twitter under exceptionally seller-friendly terms, because Twitter didn't want to change hands or be taken over by Musk; that's the month of drama leading up to the M&A debacle.

What I'm saying is that he'll be getting exceptionally seller-friendly terms from everybody, for years to come, because in the course of this supposed "negotiation" he repeatedly breached the terms of the acquisition agreement, publicly slagged the target over and over again, reneged on the deal, and brought a horseshit case to the Delaware Chancery Court to try to avoid performance when the target held him to the deal he agreed to. Every other company is going to notice that (it's one of the most noticeable things to happen in business in 50 years!), and nobody is going to trust him.

I don't believe he did all of that as a negotiating ploy. If he wanted to get the price down, all he had to do was wait before agreeing to an ironclad, overpriced deal. In fact: "waiting" is what he ended up trying to make happen anyways!

This wasn't a negotiating strategy.

You do that BEFORE legally committing to a purchase price, not after.

He thought he could get away with an "epic troll" for his acolytes to croon over, like the stock price manipulation Tweets. Turns out the Delaware courts have teeth.

No, he signed a contract to buy something with no contingencies at what everyone quickly came to realize was 2x to 3x what it was worth.

Twitter’s management, acting in the best interest of their shareholders, used the court to force him to hold to the contract when he tried to walk. Musk decided to buy the company for the agreed on price rather than have that imposed on him by court order after (more) embarrassing discovery.

Seeing Musk as a business genius in this deal requires ignoring nearly every event in the saga.

There is an opt out of 1bn. That is the only thing he would pay if he wanted to walk...

No, there wasn't. If he could have paid $1b to be out of this deal, he would have.

He did not even offer to pay it, that was the reason for the law suit.

anyone who actually think he was forced to pay 43bn when he could have paid 1bn. (even 2bn) are just not thinking correctly.

https://www.theverge.com/2022/7/8/23201004/twitter-to-sue-el...

You are reading the terms of the deal incorrectly. He had the option to pay 1b only under the specific case that his financing fell through. That never happened, quite the opposite the banks backing this deal have been adamant that they were ready to go but Musk was dragging his feet.

Meanwhile, Musk was getting absolutely savaged in the Delaware chancery court and they were just in discovery. He was going to lose and that would be more embarrassing (somehow) than this outcome.

All because he went off half cocked and didn’t write bog standard contingencies into his offer.

He’s come off looking like an absolute simpleton in this and that’s the better outcome for him than if the court case had proceeded.

It wasn’t an “opt out”, the termination fee was only available under several specific circumstances, neither of which applied to the facts at hand. He was never permitted to walk for $1 billion.

Nope.

There was a provision that Musk would be on the hook for $1B if a third party (e.g. regulators) blew up the deal in a couple enumerated ways. No such option was available to Musk himself.

https://www.cnbc.com/amp/2022/05/13/elon-musk-cant-just-walk...

Read the actual SEC link. No one will pay 43bn is he can even pay 2bn and out!

It is embedded on this link https://www.theverge.com/2022/7/8/23201004/twitter-to-sue-el...

Right, the limited circumstances for termination were outlined in section 8.1 of the offer agreement:

https://www.sec.gov/Archives/edgar/data/1418091/000119312522...

“Pay $2B and out” was not a choice available to him.

Did he get a better deal? Looks like he still had to pay the $54 per share price.

> It's worth keeping in mind that despite the brave face, Musk didn't want to buy Twitter. In fact: he desperately didn't want to buy Twitter. He's been forced to do so by the Delaware courts.

I haven't had a lot of good things to say about Musk as of late but I think this might be an exception, this kind of fortitude is something we should all strive to have. When cornered, he at least didn't complain or cry too much, he actually bit the bullet and has a very convincingly brave face on indeed.

I honestly can't think of a worse example of fortitude than Elon Musk's handling of the Twitter deal, which he entered capriciously, repeatedly violated terms he agreed to, ultimately reneged on the deal, and had to be forced by a court to uphold.

I think that’s potentially charitable - arguably he pumped out some pro Russia tweets to try and get the deal flagged as against national interest to blow up his financing. He wanted pretty badly for this not to happen including trying a couple of 3D chess moves

Uhh, if you've followed any of the Musk/Twitter drama over the last few months there was much whinging and crying

lol. It definitely takes courage to knowingly mismanage $44 billion.

It is joke being taken seriously that he was forced to buy it. No one will spend $43bn to avoid paying 1bn (opt out fee)

He decided to buy because he feels its better to own it.

That wasn't a general purpose "whoops, takesie backsies" clause, it was contingent on financing falling through for an otherwise best-effort deal.

Those sort of breakup fees are to give the company some compensation for non-bad-faith purchasers having external problems, because a failed acquisition is still an expensive thing for a company to have gone through in those situations. A cold-feet buyer throwing shit at the company in public even though he has the means to close the deal? Different story.

>Musk didn't want to buy Twitter.

He did but not for this price...

> he desperately didn't want to buy Twitter.

I think it's more precise to say he acted as if "he desperately didn't want to buy Twitter.".

>Whether Musk is the right person for that...

If he's unsure about that, he can hire Zuck which might be free from contract soon if we look at how Meta stock is trading.

Looking at all musk has achieved so far - despite (or because of?) boards of experts adamant it couldn’t be done - I think it’s immensely clear a plan is something he clearly has and works very hard towards.

Obviously many people will disagree with his plan, though I’m 100% certain he has one, and will make it happen.

I'm 100% certain he is quite literally the biggest internet troll of all time. His words have caused volatility in crypto and stonk markets, and all as jokes to himself. He demanded his California workers continue working in large in-person groups despite a deadly virus pandemic without a vaccine at the time. His plan was to dangle a carrot in front of Twitter that he'd buy, then pull the rug out. He once again violated really commonsense ETF/FCC/whatever laws and once again got bit. He's a genius in many ways, and a playground bully in others.

Which ways is he a genius? I don't know much about him but as far as I can tell he's just an engineer who had a very rich father. Did he invent something that I'm not aware of? Genuinely asking, I would not be surprised to learn that I've missed something.

Lots of people have rich fathers. Almost none of them found multiple multi-billion dollar companies and become the wealthiest person in the world. Do you think there's not anything different?

If "having a rich father" is the only thing that matters, why isn't everyone with a rich father a billionaire?

It’s not the only thing which matters but it’s important to remember because these guys get so much public praise for being visionary geniuses while there are a ton of people who are just as smart and hard working but didn’t have the resources and luck to hit a high-return jackpot. For example, Bill Gates has been the subject of so many business books which love to describe him as a genius but while he’s far from stupid he wasn’t noteworthy compared to his peers: MS BASIC & DOS worked but they weren’t better than the alternatives – but those competitors didn’t have parents on IBM’s board, either. Prior to the Meta debacle, Zuckerberg got tons of laudatory press which tended not to focus on how much his early success was due to leveraging the Harvard network, or the almost forgotten classmate who went around the country getting sororities (and thus fraternities) to use it, great boosting its reputation as a place to be.

That matters personally because you want to set realistic expectations: if you can’t afford to write off a couple of year’s work, launching a startup probably isn’t the best call for you compared to a more staid job which means you don’t need to worry about rent money or health insurance.

It also matters societally because these guys really want to influence our laws, educational system, tax code, etc. and that context is critical. If a billionaire says we should cut taxes on startups to help people climb the ladder, the first question should be how much of the money will go to rich kids from Ivy League schools versus the ones featured in the ad. Similarly, if they’re pushing kids to drop out of college for startups or turning public schools into coding camp, we should be asking how that’ll work out for everyone: the prospects for a kid with affluent high-status parents and a robust social network are quite different from kids who are poor, brown, in the wrong part of the country, etc. and such a policy might be especially dubious if it meant that they have lower negotiating power to get better jobs at the companies run by people making such suggestions.

Christos Papadimitriou, one of the most cited computer scientists, said Bill Gates was the smartest student he’d ever met.

I've only heard that in the “brilliant kid, what a waste” quote describing his reaction to learning that Gates had left academia to start a company, which is a little less dramatic sounding from a then relatively early career professor but, again, the point is not that Gates was stupid but rather than his intelligence was only part of the story.

If you look at software of that era, he wasn't doing something nobody else could do. They had a BASIC interpreter, but it wasn't the first or notably better. MS-DOS certainly worked, but it was at least heavily inspired by CP/M even if the plagiarism accusations were wrong. Being a capable programmer was necessary to his success but it was far from the reason: there were many others around, and they did well but the legendary wealth came to the person whose mother was on IBM's board when he made that company-defining sale. He subsequently executed well but again not uniquely so — anyone who used Microsoft software of that era could tell you that it wasn't the quality of that software which kept people using it. He executed well, and certainly wasn’t shy about an … aggressive … legal strategy but there was also a substantial portion of nepotism and luck.

The world has many people who were smart and hardworking but will never be close to that level of success because they didn’t have the family connections, startups capitol, friends they made at the right school, or the freedom to make a big gamble.

I think you're looking at this as though it were a merit-based system, and it's unfair that Gates did so well when his merit alone deserves a much less level of success.

If so, what you're missing is that Gates knew how to play "the game." He knew how to close sales, how to navigate the muddy waters of business, and how to leverage success into more success.

The actual question was:

> If "having a rich father" is the only thing that matters, why isn't everyone with a rich father a billionaire?

My position is that there are multiple factors and neither is sufficient on their own.

I think success takes a lot of hard work and little luck. Great success takes a little more hard work and a lot more luck.

I think Bill Gates, Elon Musk are all examples of great success. It doesn't mean they are vastly different from the similar hard working people in their fields. It just means that they did a "little" more combined with lots of other factors that put them where they are.

I guess the point is that the working 16 hours a day for years on something that might return billions but might also return nothing, is a lot more rational if you have a safety net that means you'll still have somewhere to live if it doesn't work out.

> Almost none of them found multiple multi-billion dollar companies and become the wealthiest person in the world. Do you think there's not anything different?

Lots of stuff is different. I know lots of people with very very wealthy parents. They don't want to run businesses... so they don't. The number of people who have the will and means is probably quite a lot smaller than the people who have the means.

Anyway you've just dodged the question by implying "surely there must be something" but I'm asking what it is. To clarify further, I would consider the marks of a genius to be someone who is either a prodigy (ie: exhibits mastery of a subject at a very early age or with little experience) or who has made significant and particularly novel contributions to a field or multiple fields.

Maybe that's Elon, I don't know.

> exhibits mastery of a subject at a very early age or with little experience

He wrote and sold a computer game at 12 years old after teaching himself to program at 10.

> significant and particularly novel contributions to a field or multiple fields.

Made eletric cars a viable economic prospect, pioneered reusable rockets. Obviously not making every single technical contribution himself, but leading the process.

I don't know, I guess if you're just predisoposed to follow journalists who want to push him as nothing as a cringy nerd, you might not consider that significant, but clearly the market does.

> I don't know, I guess if you're just predisoposed to follow journalists who want to push him as nothing as a cringy nerd, you might not consider that significant, but clearly the market does.

I literally said I don't follow anything about him and was genuinely asking why people call him a genius. He's obviously a cringy nerd but that's not what I'm looking for.

Anyway I guess the game thing seems somewhat impressive, I'm not sure I'd qualify it as "genius" but that's something.

I mean, if you were actually curious you could have spent 5 minutes reading Wikipedia or any number of other sources for what people attribute to him. It's not like the information is hard to find. Like, the guy builds one company that literally becomes the most valuable in the world, and another company that builds rockets that a lot of people said were literally impossible and you just write that off as "oh he didn't do anything special, he just had a rich dad". I mean come on, it's hard to believe you're arguing in good faith.

I didn't expect a "why he's considered a genius" on the wikipedia page but I can check that out. I expected a pretty simple answer. I asked this about Kanye the other day and got a great response explaining how his music was novel.

Business accomplishments are impressive but I don't think they make someone a genius.

Why would business accomplishments not make someone a genius? Business requires creativity and intelligence just as much as any other field of human endeavor.

Tesla (the company) didn't invent electric cars, but they were the first to make electric cars that people actually wanted to buy.

Pre-Tesla, the public perception of elecric cars was something like this: https://www.youtube.com/watch?v=X2HX5wsQVEA (this did not age well)

They were expensive, small, underpowered, and had poor range. Musk took a weakness (expensive) and turned it into a strength (luxury status symbol) by just embracing that making a high-performance electric car was going to be really expensive and marketing it as a toy for rich people to show off how rich they are. Then, he used the profits from that to scale production and bring down the price for future models.

I don't know if he invented this business strategy, but it's a least a pretty brilliant application of it, along with the admirable goal of reducing fossil fuel emissions by putting more electric cars on the road. He also open-sourced all patents developed by Tesla, so other manufacturers could benefit from whatever they discovered along the way.

Musk didn't start Tesla and he's not the only person working there.

Business accomplishments are really complex and hard to attribute to one person. There's also a difference between "good at thing" and "genius".

Read some of quotes in this post and perhaps that will help you decide whether he is a genius or not.

https://www.reddit.com/r/SpaceXLounge/comments/k1e0ta/eviden...

"Elon is brilliant. He’s involved in just about everything. He understands everything. If he asks you a question, you learn very quickly not to go give him a gut reaction.

He wants answers that get down to the fundamental laws of physics. One thing he understands really well is the physics of the rockets. He understands that like nobody else. The stuff I have seen him do in his head is crazy.

He can get in discussions about flying a satellite and whether we can make the right orbit and deliver Dragon at the same time and solve all these equations in real time. It’s amazing to watch the amount of knowledge he has accumulated over the years."

Kevin Watson - chief of avionics at Launcher

Elon is definitely an engineer. He is deeply involved with technical decisions at spacex and Tesla. He doesn’t write code or do CAD today, but he is perfectly capable of doing so.

John Carmack

When I met Elon it was apparent to me that although he had a scientific mind and he understood scientific principles, he did not know anything about rockets. Nothing. That was in 2001. By 2007 he knew everything about rockets - he really knew everything, in detail. You have to put some serious study in to know as much about rockets as he knows now. This doesn't come just from hanging out with people.

Robert Zubrin - Aerospace engineer

Check out Ashley Vance’s biography of Musk. One anecdote that sticks out in my memory is he was both scientifically knowledgeable enough and knee-deep enough in what SpaceX was doing to realize that they didn’t need to buy a certain hundred dollar (or something) existing part to use it for their rockets because they could make their own that did the specific thing they needed it to do for a few cents.

The "he had very rich parents" is often used to reduce one's achievements. A quick google search shows there are over 60 million "millionaires" in the world, yet less than 1% know how to turn it into a billion.

I addressed this.

I think the Tesla's are cool, SpaceX is immpressive, I enjoy his online trolling but I don't think he is a genius. The rocket scientist he employs at SpaceX is a genius. I got caught up on the way you phrased your response-- I felt that it was written in bad faith with "he's just an engineer who had a very rich father, Did he invent something that I'm not aware of? ". However seing as you were responding to someone who elevated him to Genius I can see why.

There is some pretty good evidence that wealth accumulation accelerates. In particular if you go above a certain threshold things will only go up (and go up faster). If that is the case and if we add some noise to the system. Some percentage of people will always become billionaires just by luck alone (and importantly never loose that status). I'm not saying that Musk got there by just luck, but the existence of a billionaire does not proof he is a genius.

So the assumption to be a genius is that you must start from zero? I completely reject that assumption. It’s false for so many true geniuses, like von Neumann. His dad was well connected, the same is true for John Stuart Mill and a bunch of others I can’t think of now.

This idea that every genius must be formed in a vacuum and can only be considered a “true” one if they can bootstrap themselves from nothing is an absurd idea peddled by underachievers who somehow find solace in their own mediocrity by nullifying the accomplishments of others who don’t fulfil their arbitrary starting conditions.

No, that's not what they said at all.

The meat of the claim is "just an engineer [...] Did he invent something that I'm not aware of?"

The money isn't mentioned to disqualify him, but to point out that money isn't enough.

What did he actually do that shows genius?

One doesn't need to be able to point to a specific thing which they invented while alone in their garage with no help from anyone else in order to be a remarkable person. Elon is intimately involved in the minutae of SpaceX engineering and damn, if landing orbital rockets on a floating barge isn't impressive enough for you, I don't know what is.

https://www.reddit.com/r/SpaceXLounge/comments/k1e0ta/eviden...

The richness of his father mostly a myth. All that gave him after he left home is a $25k loan in a second round of investment.

Elon Musk had no more support than the son of any upper middle class (doctor/pilot/lawyer) household in America would have.

> stonk

Watching language evolve in real time is fascinating sometimes.

> Looking at all musk has achieved so far - despite (or because of?) boards of experts adamant it couldn’t be done

This is where I think his detractors overlook the real benefits he brings. He is fearless and will willingly take long shot bets down roads where others don’t dare tread. His willingness to take the big risk has resulted in some transformative leaps. He’s either very lucky and not very good, or very good and not very lucky, but more likely has a lot of both going for him.

The harder I worked, the luckier I got. - Henry Ford

That's certainly possible. But which of the following would you think is most likely to succeed?

(a) a company trying to build electric cars at a time when there was zero consumer demand for them and the battery technology was nowhere near good enough

(b) a company trying to launch things into space when the vast majority of nations in the world were unable to do so and even NASA seemed like it had lost its way

(c) a popular social media app with 400M users and maybe some issues with product direction

You gotta look both at odds and also at returns...

You bet on (a) and (b) because nobody else has pulled it off so if you can do it, you can win big, and you aren't just one of many players in a crowded sea.

(c) is a rough bet since you're already huge but you still have a lot of competition and it's a crowded market and you haven't always made as much money per user as people would like...

Isn't that reminiscent of Bezos buying a news paper as public mouth piece?!

I don't think Jeff had to take out loans to buy Washington post. That changes a lot.

Kind of did, indirectly. Wasn't the shop operating at a loss to boot out the competition?