Musk announces funding secured for Twitter buy(sec.gov)
sec.gov
Musk announces funding secured for Twitter buy
https://www.sec.gov/Archives/edgar/data/1418091/000110465922048128/tm2213229d1_sc13da.htm
1,029 comments
>If he tries to sell 21 billion dollars worth of tesla shares, the share price will collapse.
So why didn't the stock price collapsed when he sold $15B in December 2021?
https://www.reuters.com/markets/deals/teslas-musk-says-he-so...
So why didn't the stock price collapsed when he sold $15B in December 2021?
https://www.reuters.com/markets/deals/teslas-musk-says-he-so...
He sold that over two months and the overall market was much stronger then. Also those sales were pretty much required for taxes and thus did not send a negative signal to the market. If he sells large amounts of tsla shares to buy twitter, this will be a negative signal -- any other tesla shareholder can sell tesla shares to buy twitter, and why wouldn't they when the tesla CEO is doing it.
It is still possible that he tries to raise 21 billion by selling stock but I doubt it. First if he actually wanted to do that, he would keep quiet while selling and then come out with the tender offer when he had the cash.
It is still possible that he tries to raise 21 billion by selling stock but I doubt it. First if he actually wanted to do that, he would keep quiet while selling and then come out with the tender offer when he had the cash.
There stock is up because they just beat earnings [0] and TSLA has 24 billion dollars worth of volume per day [1]. I'm pretty sure he could raise the 21 billion given some time.
[0]: https://www.cnbc.com/2022/04/20/tesla-tsla-earnings-q1-2022....
[1]: https://www.nasdaq.com/market-activity/stocks/tsla
[0]: https://www.cnbc.com/2022/04/20/tesla-tsla-earnings-q1-2022....
[1]: https://www.nasdaq.com/market-activity/stocks/tsla
He can always borrow it, too. Tesla is a volatile stock, but if he's not borrowing a huge percentage of his stake, he should be able to use it as collateral. Then he can sell later to pay it off when the timing is right.
Musk goes to the bank
Musk: I can haz money?
Bank: You said that Twitter isn't going to be a way to make money. That you "don't care about the economics at all". Your exact words.
Musk: ...
Bank: ...
Musk: Give me money
Musk: I can haz money?
Bank: You said that Twitter isn't going to be a way to make money. That you "don't care about the economics at all". Your exact words.
Musk: ...
Bank: ...
Musk: Give me money
Bank: I see your net worth is far beyond what you're asking for and you won't have a problem making payments with your income. I didn't even know credit scores got as high as yours. Here you go.
> I didn't even know credit scores got as high as yours.
A bit of an aside, but the richest person I know (as in buys multi-million dollar cars on a whim and has many many of those) says his credit score is pretty mediocre because he's never had a loan. I'd thought having gazillion dollars in the bank would give you a good credit score but guess not.
A bit of an aside, but the richest person I know (as in buys multi-million dollar cars on a whim and has many many of those) says his credit score is pretty mediocre because he's never had a loan. I'd thought having gazillion dollars in the bank would give you a good credit score but guess not.
correct. a credit score is mostly about one's demonstrated ability to service debt.
Just because you have a lot of money doesn't mean you'll make payments on a loan.
Just because you have a lot of money doesn't mean you'll make payments on a loan.
The credit score system is really about incentivizing you to get, use, and keep credit cards, including retail credit cards, and loans, i.e. take on debt.
The fact that so many things require a high credit score is a forcing function for you to take on these debt instruments, and the credit score is a way for the system to optimize that it get its money.
The entire system is gamed against the consumers unwittingly or unwillingly forced to participate.
The fact that so many things require a high credit score is a forcing function for you to take on these debt instruments, and the credit score is a way for the system to optimize that it get its money.
The entire system is gamed against the consumers unwittingly or unwillingly forced to participate.
I believe the system was intentionally designed that way by lenders to make borrowing a universal habit.
As another side note, the richest person I know regularly maxes out his credit card so he can pay it all down and rake in the score bump. Every couple times he does this, they issue him an upgraded card with less limits: the cycle continues.
Not a bad way to buy stuff if you have the means to pay it off.
Not a bad way to buy stuff if you have the means to pay it off.
> regularly maxes out his credit card so he can pay it all down and rake in the score bump
Does it really?
I have a very high credit score but putting a large charge on one credit card (nowhere close to maxing it out though) dramatically drops my credit score for one month until I pay it off in full at the end of the month.
I pay my child's tuition in full for the year each August (school in California is way too expensive so it's a lot of money, but that's a different topic). I put it on the credit card to get some cash back. My credit score drops by about 150 points right away. Once I get the bill at the end of the cycle and pay it off, the credit score goes right back to where it was before. I don't get any bump though.
Does it really?
I have a very high credit score but putting a large charge on one credit card (nowhere close to maxing it out though) dramatically drops my credit score for one month until I pay it off in full at the end of the month.
I pay my child's tuition in full for the year each August (school in California is way too expensive so it's a lot of money, but that's a different topic). I put it on the credit card to get some cash back. My credit score drops by about 150 points right away. Once I get the bill at the end of the cycle and pay it off, the credit score goes right back to where it was before. I don't get any bump though.
Imagine the airline miles you’d get by purchasing Twitter on your credit card.
“Nobody’s gonna try to buy Twitter with a credit card, right?”
“Nah.”
“Alright, we don’t need BIGINT in the ‘balance’ column.”
“Nah.”
“Alright, we don’t need BIGINT in the ‘balance’ column.”
I imagine once you have a verifiable net worth over a certain amount (at least 10 million in near cash assets + a hefty amount on hand) you are able to bypass certain things the rest of us simply can't. This is what I've heard second hand anyway
Once you have a balance above a few hundred thousand your bank starts treating you differently. Sometimes you even get a different entrance to the bank, different tellers, so on.
I can only get loans from my private bank because my credit score is bad. I only borrow on margin foe trading I don't really need other debt but it's embarrassing
Not having loans is not one of Elon Musk's problems.
As the saying goes: If I owe the bank one million dollars, I have a problem. If I owe the bank one billion dollars, the bank has a problem.
The saying goes:
"If you owe the bank $100, that's your problem. If you owe the bank $100 million, that's the bank's problem."
and comes from 1976 "As I see it: the autobiography of J. Paul Getty". There were no billionaires back then. When you owe a bank 20 Billion while being worth 260 you are still in the first category.
"If you owe the bank $100, that's your problem. If you owe the bank $100 million, that's the bank's problem."
and comes from 1976 "As I see it: the autobiography of J. Paul Getty". There were no billionaires back then. When you owe a bank 20 Billion while being worth 260 you are still in the first category.
There were obviously billionaires back then. For example, J. Paul Getty was worth an estimated 6 billion when he died in 1976.
https://en.wikipedia.org/wiki/J._Paul_Getty
https://en.wikipedia.org/wiki/J._Paul_Getty
Wrong in this case.
Here the bank can reclaim what is owed via other means.
Here the bank can reclaim what is owed via other means.
Having to find "other means" to reclaim is exactly what makes it the banks problem.
Do you think it's easy to get someone with access to billions of dollars (of your money) to do something they'd rather not? They can tie you up in the courts for years since they're basically equal powers: an $800 billion bank doesn't get better lawyers than a guy worth $1 billion. A bank vs someone with just a million dollars means the individual is at a major disadvantage as lawyer fees can easily exceed that amount in attritional lawfare.
Do you think it's easy to get someone with access to billions of dollars (of your money) to do something they'd rather not? They can tie you up in the courts for years since they're basically equal powers: an $800 billion bank doesn't get better lawyers than a guy worth $1 billion. A bank vs someone with just a million dollars means the individual is at a major disadvantage as lawyer fees can easily exceed that amount in attritional lawfare.
Also, the reason the bank suddenly wants to reclaim that money might be that the wealth has vanished. If Tesla drops 99% for whatever reason, they will have a big problem getting their money back from stocks.
That's a great point: counterparty risk is a much bigger concern on a billion-dollar loan
Musk's net worth his highly volatile. Telsa is trading at pretty high 200 P/e, one bad quarter could crater the stock price. Space X is private, which carries its own issues. Add to that the risk to these assets if Musk dies. Or hell, even it Musk merely "spooks" investors with his flamboyance.
This is a insanely risky vanity project.
This is a insanely risky vanity project.
No matter how volatile his worth is, it's just around a tens of the said worth and there's no way it loses 90% of its value overnight, even if TSLA's valuation is arguably nonsensical.
It doesn't need to lose 90% of its value overnight, 30% is enough to trigger a call on margin loans.
Within the past year, Telsa stock slide from a $1209/sh peak to $766/sh in the span of about five months.
Within the past year, Telsa stock slide from a $1209/sh peak to $766/sh in the span of about five months.
And what? Can't he just add more securities as a collateral if it happens?
If he has it. At standard margin rates, he'd need to put up ~$140 billion in TSLA stock to cover his TWTR offer. How much can TSLA slide before he doesn't have that. Keep in mind, private companies (SpaceX, Twitter in this hypothetical) cannot be used for margin purposes.
[deleted]
It's about him defaulting on the loan which is not possible considering his shares in Tesla etc. not about him borrowing for investment purposes
There's a not totally unreasonable chance that tesla is 10x lower next year. That would mean his net worth is basically equivalent to the loan he would need. Seems pretty risky.
We don’t know the interest rate of that margin loan but you can be goddamn certain whoever underwrote the loan calculated that risk more precisely than HN crowd such that the rate justifies the default risk.
You can default on a loan regardless of your net worth; you can even default on a secured loan. The default is what triggers the civil proceedings for a judgement and forced liquidation of assets
I have to disagree. It is about the risk of his counterparties. If their risk is deemed too high, they will start liquidating assets to get minimise their risk.
Just look at what recently happened in the nickel markets on the London Metals Exchange when a Chinese Nickel Producer had a margin call against a $2bn short position.
Tldr: the brokers liquidated their position due to the unnecessary risk of having a margin call over a weekend.
Just look at what recently happened in the nickel markets on the London Metals Exchange when a Chinese Nickel Producer had a margin call against a $2bn short position.
Tldr: the brokers liquidated their position due to the unnecessary risk of having a margin call over a weekend.
Bank: put that sweet sweet Tesla stock in this account and take what you want
[deleted]
It's a secured loan. The bank doesn't care if it makes money or not.
Bank: "Do you want that in twenties, or fifties?"
Instead of the bank, what if he went to SoftBank. Imagine the possibilities of an Elon Musk-Masayoshi Son collaboration.
Could be like We Work, Greensill Capital, or Wirecard, or it could be like GoTo.
Only one way to find out though.
Only one way to find out though.
It could also be more like Alibaba and double or triple the 37B profit Softbank's Vision Fund made this year.
I would not bet against Musk.
I would not bet against Musk.
The other half of the money was borrowed against his stocks already. He probably can't get a favorable rate on the other half so 21 million is coming out of pocket.
Pretty sure that this filing shows he is $21 billion short on the borrowing front.
He’s already borrowing 12.5B via a margin loan against his assets. Maybe that’s the most he can get away with.
Interested in a source for this?
It's this para in TFA:
> (ii) A separate debt commitment letter, dated April 20, 2022 (the “Margin Loan Commitment Letter”), from Morgan Stanley Senior Funding, Inc. and certain other financial institutions party thereto as commitment parties (collectively, the “Margin Loan Commitment Parties”) pursuant to which the Margin Loan Commitment Parties have committed to provide $12.5 billion in margin loans (the “Margin Loan Facility”), the proceeds of which will be distributed or otherwise made available to Purchaser; and
The letter: https://www.sec.gov/Archives/edgar/data/1418091/000110465922...
> (ii) A separate debt commitment letter, dated April 20, 2022 (the “Margin Loan Commitment Letter”), from Morgan Stanley Senior Funding, Inc. and certain other financial institutions party thereto as commitment parties (collectively, the “Margin Loan Commitment Parties”) pursuant to which the Margin Loan Commitment Parties have committed to provide $12.5 billion in margin loans (the “Margin Loan Facility”), the proceeds of which will be distributed or otherwise made available to Purchaser; and
The letter: https://www.sec.gov/Archives/edgar/data/1418091/000110465922...
One advantage of Musk's positioning as a "nutcase" is that him selling Tesla stock to buy Twitter doesn't signal "I believe Twitter is a better investment than Tesla" as much as it signals "Musk is doing Musk stuff"
This. He communicated his plan pretty overtly: He made no secret that his buy attempt is mostly for political reasons and that his selloff will be a means to the end of securing funding for the takeover. None of this has anything to do with actual investment decisions.
So maybe he hopes to sell his shares to "activist buyers" who want the takeover to succeed and therefore have no interest in dropping the share price.
Of course that is assuming any of the purported motives are real and not just an act.
So maybe he hopes to sell his shares to "activist buyers" who want the takeover to succeed and therefore have no interest in dropping the share price.
Of course that is assuming any of the purported motives are real and not just an act.
So you're saying TSLA holders don't care that Elon Musk is an unhinged lunatic. Got it.
Someone remind me again why this isn't a cult?
Someone remind me again why this isn't a cult?
As a TSLA holder I care that I've made 20x on my stock.
I care it's the best performing stock in the last 5 and 10 years.
I care that Tesla is growing revenues at 50%+ over more than a decade, and profits even faster. Which is a better financial performance than Amazon has at similar stage.
What I do not care is your editorializing of Musk's character of calling me a cult member.
I guess I should be offended but then I take a look at my bank account and it kind of makes me not care about what you think about me or Musk.
I care it's the best performing stock in the last 5 and 10 years.
I care that Tesla is growing revenues at 50%+ over more than a decade, and profits even faster. Which is a better financial performance than Amazon has at similar stage.
What I do not care is your editorializing of Musk's character of calling me a cult member.
I guess I should be offended but then I take a look at my bank account and it kind of makes me not care about what you think about me or Musk.
Your TSLA gains are nothing compared to what many people in here made on Ethereum.
Yet such people don't roam around screaming off the top of their lungs "Buterin is God!".
Ethereum, much like TSLA, much like betting on Trump back in 2016 are about calling an event and predicting what's gonna be the outcome of a socio-political movement.
Nobody is better prepared to predict such outcome than the guy who can keep his cool and openly admit that such social movement is really just BS and hot air, but that nonetheless it still has steam and room to grow among the populace for the time being.
What you don't want to be is a so called "true believer" as that would prevent you from jettisoning yourself once the movement runs out of steam, if you are a "true-true believer" you might find yourself storming the capitol...or in Musk's case the SEC building as that would be the aim of his rage when the socio-religious movement that he built runs out of steam as they eventually all do.
Yet such people don't roam around screaming off the top of their lungs "Buterin is God!".
Ethereum, much like TSLA, much like betting on Trump back in 2016 are about calling an event and predicting what's gonna be the outcome of a socio-political movement.
Nobody is better prepared to predict such outcome than the guy who can keep his cool and openly admit that such social movement is really just BS and hot air, but that nonetheless it still has steam and room to grow among the populace for the time being.
What you don't want to be is a so called "true believer" as that would prevent you from jettisoning yourself once the movement runs out of steam, if you are a "true-true believer" you might find yourself storming the capitol...or in Musk's case the SEC building as that would be the aim of his rage when the socio-religious movement that he built runs out of steam as they eventually all do.
> Yet such people don't roam around screaming off the top of their lungs "Buterin is God!".
You haven't met crypto people yet, I take?
It's normal, you give people money and they worship you.
Think of the "cult" of Steve Jobs linked to Apple gains.
This is nothing new. It's also not a real cult, it's more as admiring successful entrepreneurs.
You haven't met crypto people yet, I take?
It's normal, you give people money and they worship you.
Think of the "cult" of Steve Jobs linked to Apple gains.
This is nothing new. It's also not a real cult, it's more as admiring successful entrepreneurs.
> It's normal, you give people money and they worship you.
You earn yourself that money by successfully making a prediction. By the same token when you win a poker game in Vegas you don't worship Steve Wynn for providing you the casino and a table. You gave yourself that money.
> Think of the "cult" of Steve Jobs linked to Apple gains.
Apple stock gains came as the product was becoming ubiquitous among the populace, matter of fact it slightly trailed the virality of the product. Same goes for Google, Microsoft, Oracle, Facebook etc.
That is the normal financial trajectory of a company, which differs from a socio-religious movement such as crypto, TSLA, a political candidate etc. Those are all based on promises about the future and getting people galvanized without ever delivering any actual product improving people's quality of life on a scale comparable to the promises made.
> This is nothing new. It's also not a real cult, it's more as admiring successful entrepreneurs.
This is exactly what gets people burned when the socio-religious movement implodes and they fail to jettison themselves. Don't admire, limit yourself to gauge the level of admiration that other people have for the guy and try predicting if it will expand or contract. That's an indicator of the health of the socio-religious movement so that you know when to jettison yourself.
You earn yourself that money by successfully making a prediction. By the same token when you win a poker game in Vegas you don't worship Steve Wynn for providing you the casino and a table. You gave yourself that money.
> Think of the "cult" of Steve Jobs linked to Apple gains.
Apple stock gains came as the product was becoming ubiquitous among the populace, matter of fact it slightly trailed the virality of the product. Same goes for Google, Microsoft, Oracle, Facebook etc.
That is the normal financial trajectory of a company, which differs from a socio-religious movement such as crypto, TSLA, a political candidate etc. Those are all based on promises about the future and getting people galvanized without ever delivering any actual product improving people's quality of life on a scale comparable to the promises made.
> This is nothing new. It's also not a real cult, it's more as admiring successful entrepreneurs.
This is exactly what gets people burned when the socio-religious movement implodes and they fail to jettison themselves. Don't admire, limit yourself to gauge the level of admiration that other people have for the guy and try predicting if it will expand or contract. That's an indicator of the health of the socio-religious movement so that you know when to jettison yourself.
> Your TSLA gains are nothing compared to what many people in here made on Ethereum.
sigh
sigh
Can’t he borrow against his Tesla stock, and other assets including his ownership of SpaceX, and personal property, for cash to buy Twitter?
Depending on his banking relationships, and other assets that he can use as collateral for the loan, he might be able to borrow a fairly high percentage of the current value of those assets as cash (maybe 50 to 70 or 80% or more if the collateral assets are diversified or the bank simply has high confidence in his effective credit rating or ability to repay — and he may be doing other business with that bank incentivizing them to give him a favorable deal).
I’m not a billionaire but by establishing a strong relationship with a bank, have been able to establish a credit line with a limit that is a high percentage of my assets that are invested by the bank in a diversified portfolio, along with other assets, at a low interest rate (mortgage levels - a credit line at approx 2.5% interest of an amount almost equal to my total assets at the bank).
I also recently refinanced my house with this bank starting last winter and was able to achieve getting a 15 year fixed mortgage at a 2.125% interest rate - a huge reduction from my previous rate of 3.5% on a 30 year. I now pay less per month and will own my home much sooner, consequently paying considerably less in interest over the remainder of the loan, and building much more wealth in the process.
With some wealth and favorable banking relationships you can accomplish things that most ordinary people don’t know about and I myself didn’t know about until I started looking into the possibilities. I am sure a billionaire has access to even more options than I can conceive of.
Depending on his banking relationships, and other assets that he can use as collateral for the loan, he might be able to borrow a fairly high percentage of the current value of those assets as cash (maybe 50 to 70 or 80% or more if the collateral assets are diversified or the bank simply has high confidence in his effective credit rating or ability to repay — and he may be doing other business with that bank incentivizing them to give him a favorable deal).
I’m not a billionaire but by establishing a strong relationship with a bank, have been able to establish a credit line with a limit that is a high percentage of my assets that are invested by the bank in a diversified portfolio, along with other assets, at a low interest rate (mortgage levels - a credit line at approx 2.5% interest of an amount almost equal to my total assets at the bank).
I also recently refinanced my house with this bank starting last winter and was able to achieve getting a 15 year fixed mortgage at a 2.125% interest rate - a huge reduction from my previous rate of 3.5% on a 30 year. I now pay less per month and will own my home much sooner, consequently paying considerably less in interest over the remainder of the loan, and building much more wealth in the process.
With some wealth and favorable banking relationships you can accomplish things that most ordinary people don’t know about and I myself didn’t know about until I started looking into the possibilities. I am sure a billionaire has access to even more options than I can conceive of.
He could, but if TSLA goes down and he gets a margin call things could get ugly
It is risky but keep in mind the proposal in non-binding and contingent upon several other conditions.
Tesla has a rule limiting borrowing against its stock to 25% so that's probably his limiting factor.
Does the rule apply to all shareholders? I don't really see how a publically traded company can put an arbitrary condition on what can be done like that - any borrowing can be a totally private deal between you and a bank (or another private individual) - Tesla isn't even privvy to such deals, so how can they enforce any rules about them?
Large shareholders have different rules and restrictions. For example, you can go buy TWTR all you want, but Musk had to report when he had obtained a certain percentage.
Remember that Musk is not only a shareholder of TSLA, but also an employee.
Remember that Musk is not only a shareholder of TSLA, but also an employee.
Tesla is not the lender, Musk's broker is.
Therefore Tesla has zero input into margin rate broker decides to give Musk.
Therefore Tesla has zero input into margin rate broker decides to give Musk.
No, Musk has an agreement with tesla that he can only borrow against a quarter of his shares. He's already borrowed against quite a few too. Musk could go to the board to get that number bumped up, but until then he can't just borrow the full $21 billion against his shares.
> If he sells large amounts of tsla shares to buy twitter, this will be a negative signal
Not necessarily. It's conceivable that TSLA shareholders could interpret Elon Musk acquiring more political influence as good for TSLA. The question would be whether Musk can use control of twitter to actually influence politics in favor of his other companies. I don't know if that would actually work, but I think it's conceivable that many of those who own TSLA might believe it will work.
Not necessarily. It's conceivable that TSLA shareholders could interpret Elon Musk acquiring more political influence as good for TSLA. The question would be whether Musk can use control of twitter to actually influence politics in favor of his other companies. I don't know if that would actually work, but I think it's conceivable that many of those who own TSLA might believe it will work.
You know... I have a feeling you might be the most right in this discussion.
Is Musk known really for his shrewd political skills and sharp maneuvers?
If I were a Tesla shareholder and this was his actual masterplan to maximize value for shareholders, I'd unload my stake in a heartbeat because I know his brand and business holdings will got tainted by his politics like what happened with Trump, and the plan will most likely backfire and decimate his business empire.
If I were a Tesla shareholder and this was his actual masterplan to maximize value for shareholders, I'd unload my stake in a heartbeat because I know his brand and business holdings will got tainted by his politics like what happened with Trump, and the plan will most likely backfire and decimate his business empire.
> Is Musk known really for his shrewd political skills and sharp maneuvers?
He should be. Solidly Republican-leaning Texans are buying and driving electric vehicles, in some cases believing that doing so is "owning the libs".
Tesla seemed like an impossible long shot 15 years ago, not just for the considerable technical and business challenges but also because most Americans were happily buying gas-gusslers and even fantastic hybrids like the Prius were still somewhat niche. At the time, not a single major car company was willing to invest seriously in building electric vehicles.
Now there's gigafactory right outside Austin. It's something I did not think would have been possible. Tesla has threaded a nearly impossible needle to get to where it is in 2022.
He should be. Solidly Republican-leaning Texans are buying and driving electric vehicles, in some cases believing that doing so is "owning the libs".
Tesla seemed like an impossible long shot 15 years ago, not just for the considerable technical and business challenges but also because most Americans were happily buying gas-gusslers and even fantastic hybrids like the Prius were still somewhat niche. At the time, not a single major car company was willing to invest seriously in building electric vehicles.
Now there's gigafactory right outside Austin. It's something I did not think would have been possible. Tesla has threaded a nearly impossible needle to get to where it is in 2022.
> He should be. Solidly Republican-leaning Texans are buying and driving electric vehicles, in some cases believing that doing so is "owning the libs".
Could this attempt at buying Twitter be part of the same vice-signalling[1] schtick, then?
1. As in "See how I hate the same things you do?"
Could this attempt at buying Twitter be part of the same vice-signalling[1] schtick, then?
1. As in "See how I hate the same things you do?"
All these examples are business bets and not political ones. Don't get me wrong, they're astoundingly impressive but of the wrong type.
I don't dispute that he's a shrewd businessman and fancy visionary but when it comes to the world of politics, I have my doubts and reservations.
I'd like to see action and results first before I can vouch for him in that field.
I don't dispute that he's a shrewd businessman and fancy visionary but when it comes to the world of politics, I have my doubts and reservations.
I'd like to see action and results first before I can vouch for him in that field.
> I don't dispute that he's a shrewd businessman and fancy visionary but when it comes to the world of politics, I have my doubts and reservations.
In this day and age you don't become a billionaire without being good at politics. Navigating the regulatory state is an enormous task even when you don't have people laser-focused on you like Musk would due to his wealth and size of his companies.
In this day and age you don't become a billionaire without being good at politics. Navigating the regulatory state is an enormous task even when you don't have people laser-focused on you like Musk would due to his wealth and size of his companies.
> If I were a Tesla shareholder and this was his actual masterplan to maximize value for shareholders
Doesn’t have to be either-or. Marketing strategy is an important part of running Tesla and given the empirical dislike of media establishment of him, ensuring Twitter won’t go against him on a whim of the board seems strategically important.
> business holdings will got tainted by his politics like what happened with Trump
Is there data on Trump businesses doing materially worse overall after the taint? I assume the half of US that like him bolster it and the other half see the taint but the vector sum is material here.
Doesn’t have to be either-or. Marketing strategy is an important part of running Tesla and given the empirical dislike of media establishment of him, ensuring Twitter won’t go against him on a whim of the board seems strategically important.
> business holdings will got tainted by his politics like what happened with Trump
Is there data on Trump businesses doing materially worse overall after the taint? I assume the half of US that like him bolster it and the other half see the taint but the vector sum is material here.
Alternatively he stops being the whimsical "fun" billionaire that people find amusing, and starts being the tyrannical billionaire that people hate. This results in political backlash and a massive boycott of Tesla's consumer products.
To be clear: Elon buying Twitter doesn't necessarily trigger any of this. Elon using that influence to actually push Twitter around in ways that are "useful" to Tesla shareholders potentially does. For Tesla shareholders I'd say the risk here is much higher than any possible reward.
To be clear: Elon buying Twitter doesn't necessarily trigger any of this. Elon using that influence to actually push Twitter around in ways that are "useful" to Tesla shareholders potentially does. For Tesla shareholders I'd say the risk here is much higher than any possible reward.
> massive boycott of Tesla's consumer products.
I mean we could speculate at length but the condition you’re describing already exists. People have polar reactions to him. Some hate with a passion, some love him. As for boycott, I’m not surprised if a lot of people already feel like they won’t buy a Tesla. Hard to imagine it can get worse from here.
I mean we could speculate at length but the condition you’re describing already exists. People have polar reactions to him. Some hate with a passion, some love him. As for boycott, I’m not surprised if a lot of people already feel like they won’t buy a Tesla. Hard to imagine it can get worse from here.
> Hard to imagine it can get worse from here.
He could get indicted for the FSD scamming and bring the whole thing tumbling down. If he stuck to just selling battery powered cars I'd be a lot more bullish on TSLA, but he hasn't and I think his antics represent a serious threat to the company in the long run.
He could get indicted for the FSD scamming and bring the whole thing tumbling down. If he stuck to just selling battery powered cars I'd be a lot more bullish on TSLA, but he hasn't and I think his antics represent a serious threat to the company in the long run.
I think the opposite. Getting it right once is hard enough but the fact Musk has been a core figure involved in the development of:
- Paypal - Tesla - SpaceX
Tells me that his success isn't a fluke. You might get lucky with one of those companies, but with three? Don't think so.
- Paypal - Tesla - SpaceX
Tells me that his success isn't a fluke. You might get lucky with one of those companies, but with three? Don't think so.
[deleted]
> . Hard to imagine it can get worse from here.
I imagine a lot of "save the earth" and "Let's go to Mars" people overlap with the "Fuck Donald Trump" people. So letting Trump back on Twitter may cause them to swear off Teslas and DogeCoin. Alternatively, not letting Trump back may cause a bunch of truck-driving Texans he's been targeting to convert to electric to tell him to fuck off.
Bottom line, it puts Musk in the unenviable position of having to piss off a third of the country by deciding if Trump has a Twitter account. And while I would still swap with him in a second, this is an additional burden he's putting on himself.
I imagine a lot of "save the earth" and "Let's go to Mars" people overlap with the "Fuck Donald Trump" people. So letting Trump back on Twitter may cause them to swear off Teslas and DogeCoin. Alternatively, not letting Trump back may cause a bunch of truck-driving Texans he's been targeting to convert to electric to tell him to fuck off.
Bottom line, it puts Musk in the unenviable position of having to piss off a third of the country by deciding if Trump has a Twitter account. And while I would still swap with him in a second, this is an additional burden he's putting on himself.
See this is precisely why I am bearish of Elon's companies, he's a savvy businessman, not a technologist, precisely why my opinion is that he is an idiot not a savant - PayPal is known for having been a flaming dumpster fire, it succeeded because of early market penetration (banks unable and unwilling to produce online payments systems in lieu of pushing credit cards). Ironically it is most useful now in traditional payment systems online, there are now reasonable more up to date payment systems available which largely supersede PayPal.
Again, Tesla is known for creating more hype fewer cars, expensive messes and underdelivering on promises - he has stimulated the market into considering alternative fuel sources, which is good but in a lot of ways showmanship not vision, more top down execution and spectacle than forethought or planning.
SpaceX is the most evident of these, Musk is busy taking tax dollars and building efficient rockets, which I guess is good but not about getting us to Mars.
So I think you are right to call out pandering for sales, it's what musk does best, not tech or vision.
It's like calling flappy bird visionary - popular yes but preceded by hundreds of sidescroller helicopter games with a single button controlling altitude. Difference being Flappy broke in on a verdant mobile market while the two color LCD version I played 25 years ago on a flipphone didn't even have Facebook to get popular on, while Flash versions of the same thing that had been out for decades suffered from anti Flash sentiment and a smaller mindshare.
Again, Tesla is known for creating more hype fewer cars, expensive messes and underdelivering on promises - he has stimulated the market into considering alternative fuel sources, which is good but in a lot of ways showmanship not vision, more top down execution and spectacle than forethought or planning.
SpaceX is the most evident of these, Musk is busy taking tax dollars and building efficient rockets, which I guess is good but not about getting us to Mars.
So I think you are right to call out pandering for sales, it's what musk does best, not tech or vision.
It's like calling flappy bird visionary - popular yes but preceded by hundreds of sidescroller helicopter games with a single button controlling altitude. Difference being Flappy broke in on a verdant mobile market while the two color LCD version I played 25 years ago on a flipphone didn't even have Facebook to get popular on, while Flash versions of the same thing that had been out for decades suffered from anti Flash sentiment and a smaller mindshare.
[deleted]
> For Tesla shareholders I'd say the risk here is much higher than any possible reward.
I think that's probably right. But do those Tesla shareholders believe it?
I think that's probably right. But do those Tesla shareholders believe it?
> ensuring Twitter won’t go against him on a whim of the board
Can you tell me please what you mean by this?
AFAIK, Twitter is decentralized and fragmented for any actor to orchestrate an all-out political witch hunt where everyone on the platform goes against anyone in particular.
As far as Trump's business holdings go, Trump Organization runs like a brand management firm where they license and operate businesses with Trump name plastered on them, and I believe it's safe to say that the brand name's risk profile increased greatly due to the association with Trumpism from 2015 onward.
Can you tell me please what you mean by this?
AFAIK, Twitter is decentralized and fragmented for any actor to orchestrate an all-out political witch hunt where everyone on the platform goes against anyone in particular.
As far as Trump's business holdings go, Trump Organization runs like a brand management firm where they license and operate businesses with Trump name plastered on them, and I believe it's safe to say that the brand name's risk profile increased greatly due to the association with Trumpism from 2015 onward.
> Can you tell me please what you mean by this?
Twitter can find an excuse to ban his account (you can easily imagine this sort of risk exists after some of his recent meme tweets for example). I believe that is a single point of failure in Tesla PR strategy and a risk to be mitigated.
> brand name's risk profile increased
Risk profile sure but has the net value decreased or increased due to his presidency? I don’t have data to say it’s one way or another but looking at the downside without the upside as well is futile.
Twitter can find an excuse to ban his account (you can easily imagine this sort of risk exists after some of his recent meme tweets for example). I believe that is a single point of failure in Tesla PR strategy and a risk to be mitigated.
> brand name's risk profile increased
Risk profile sure but has the net value decreased or increased due to his presidency? I don’t have data to say it’s one way or another but looking at the downside without the upside as well is futile.
Well .. not really. Not at all. How could you even think it matters?
Musk could simply setup muskannouncements.com and blog his own tweets. No one may search for your announcements, but you better believe for his site he will still get full coverage.
ergo he's not doing it for his own announcements. it will be for a mix of media influence, and to address the bias in twitters 'fact checking'
Musk could simply setup muskannouncements.com and blog his own tweets. No one may search for your announcements, but you better believe for his site he will still get full coverage.
ergo he's not doing it for his own announcements. it will be for a mix of media influence, and to address the bias in twitters 'fact checking'
> ergo he's not doing it for his own announcements.
I do agree he is doing things for reasons besides his own announcements, but I cannot agree that it's not part of it. Some people may simply not care enough about EVs to bother, as technologists we assume people see the world through our lens but I bet you many people have barely bothered to research his cars, they only know Tesla in a cursory fashion the same way you might know Nissan or Kia, or even computers (people exist who struggle to use anything more complex than a power button, these can be intelligent well read people even).
If you do use Twitter say, to follow XYZ (not even certain this is correct, I don't and struggle to use Twitter although I have a general idea how it works), if they see some promoted or retweet involving a Tesla, they are likely to learn more or investigate further. Owning this would be a non insignificant marketing advantage.
I do agree he is doing things for reasons besides his own announcements, but I cannot agree that it's not part of it. Some people may simply not care enough about EVs to bother, as technologists we assume people see the world through our lens but I bet you many people have barely bothered to research his cars, they only know Tesla in a cursory fashion the same way you might know Nissan or Kia, or even computers (people exist who struggle to use anything more complex than a power button, these can be intelligent well read people even).
If you do use Twitter say, to follow XYZ (not even certain this is correct, I don't and struggle to use Twitter although I have a general idea how it works), if they see some promoted or retweet involving a Tesla, they are likely to learn more or investigate further. Owning this would be a non insignificant marketing advantage.
This is patently ridiculous—it's like saying since everyone can post on their own blog, why would anyone publish an OpEd in NYTimes? Obviously reach and distribution of the medium is fundamental. How would you notify 80 million people that muskannouncements.com posted a new entry?
> How would you notify 80 million people that muskannouncements.com posted a new entry?
an app with push notifications. email. sms.
an app with push notifications. email. sms.
You've missed the point here - it's not that EVERYONE can post on their own blog.
But Elon Musk is unique, HE would still get full coverage. Journalists and influencers and the fanboys and outrage crowd would post his stuff to twitter for him lol.
But Elon Musk is unique, HE would still get full coverage. Journalists and influencers and the fanboys and outrage crowd would post his stuff to twitter for him lol.
> Is Musk known really for his shrewd political skills and sharp maneuvers?
The question should be whether TSLA shareholders think he is, and I think most of them probably do.
(I don't own any TSLA, btw. But from what I've seen, many of his fanboys love him for being conniving while simultaneously claiming he's done nothing wrong. I believe this is an example of double-think. But the subject of this discussion is how these people might react to Elon Musk controlling Twitter, not whether their allegiance to Elon Musk is rational and rhetorically consistent.)
The question should be whether TSLA shareholders think he is, and I think most of them probably do.
(I don't own any TSLA, btw. But from what I've seen, many of his fanboys love him for being conniving while simultaneously claiming he's done nothing wrong. I believe this is an example of double-think. But the subject of this discussion is how these people might react to Elon Musk controlling Twitter, not whether their allegiance to Elon Musk is rational and rhetorically consistent.)
Is really the makeup of TSLA shareholders a bunch of WallStreetBets dummies?
I really doubt that this is the case. I know that there's some real retail investor interest in the stock price movement and for a minority the fundamentals, but I'm sure there's some institutional investors and smart money who are in it for the long run and who analyze the company's financial statements, and evaluate and scrutinize the founder's every move and decision and this Dr. Evil's scheme of taking over Twitter and turn the platform as a tool of propaganda for Musk's financial interests and self-aggrandizement looks very concerning to put it mildly.
I really doubt that this is the case. I know that there's some real retail investor interest in the stock price movement and for a minority the fundamentals, but I'm sure there's some institutional investors and smart money who are in it for the long run and who analyze the company's financial statements, and evaluate and scrutinize the founder's every move and decision and this Dr. Evil's scheme of taking over Twitter and turn the platform as a tool of propaganda for Musk's financial interests and self-aggrandizement looks very concerning to put it mildly.
> tool of propaganda for Musk's financial interests and self-aggrandizement looks very very concerning to put it mildly
How is it any different than Bezos buying WaPo, in principle? That does not seem to have been detrimental to Amazon shareholders. And how does having a propaganda arm detrimental to Tesla financial interests? Marketing is a euphemism for propaganda after all.
(I can see legitimate Tesla shareholder concern for Musk attention being spread too thin, but to claim having Twitter makes things worse beyond his existing presence as a user seems ridiculous.)
How is it any different than Bezos buying WaPo, in principle? That does not seem to have been detrimental to Amazon shareholders. And how does having a propaganda arm detrimental to Tesla financial interests? Marketing is a euphemism for propaganda after all.
(I can see legitimate Tesla shareholder concern for Musk attention being spread too thin, but to claim having Twitter makes things worse beyond his existing presence as a user seems ridiculous.)
Bezos bought WaPo for what is (to him) a relatively small sum of money to be a hands off owner of something he thought should continue to exist and has potential for Amazon style economising. That's a bit different to Musk proposing to offload or borrow against a significant chunk of his TSLA shares whilst declaring winning an argument with the management of his favourite social media platform about rewriting Twitter's policies on controversial stuff is more important to him than making money. And yes, Musk's record of posting Tweets unhelpful to TSLA as a user is another reason for them to be alarmed at controversy on Twitter becoming increasingly important to him.
It's not just the inevitability of less time to focus on managing TSLA (though running Twitter being a full time job was an issue for Dorsey, and he was only running one other company and wasn't at war with the management) but also the hints that this is an obsession.
It's not just the inevitability of less time to focus on managing TSLA (though running Twitter being a full time job was an issue for Dorsey, and he was only running one other company and wasn't at war with the management) but also the hints that this is an obsession.
Correct me if I'm wrong, I have not seen WaPo pushing Amazon propaganda in their content.
I'd like to take this occasion to remind you that my first comment was a rebuttal to someone's argument speculating about the motive or rationale behind this acquisition and posited that Musk's control of the platform would afford him political influence to further his own financial interests, hence my opening reply.
I'd like to take this occasion to remind you that my first comment was a rebuttal to someone's argument speculating about the motive or rationale behind this acquisition and posited that Musk's control of the platform would afford him political influence to further his own financial interests, hence my opening reply.
> posited that Musk's control of the platform would afford him political influence to further his own financial interests,
Clarification: Positing that many TSLA shareholders presently believe Musk's control of twitter would afford him political influence to further his financial interests.
Clarification: Positing that many TSLA shareholders presently believe Musk's control of twitter would afford him political influence to further his financial interests.
Well, I stand corrected then if that was your initial intent but the delusion with these folks is really strong to come up with such ridiculous scenarios to justify their unquestionable attachment to that online persona.
One thing I feel relatively sure of is that present TSLA shareholders are the sort of people who, up until the present, see fit to own TSLA shares. This despite everything that is already publicly known or said about Elon Musk.
If I keep myself in my personal mindset of a Musk skeptic and try to model the behavior of TSLA shareholders, I would anticipate TSLA shareholders selling immediately (today, and every day previously in the past several years), because that is what I would do if I were gifted TSLA. But that's obviously not what TSLA shareholders do, so my personal mindset evidently makes for an inadequate model of TSLA shareholders.
If instead I try to suspend my own beliefs and imagine myself as somebody who thinks owning and holding TSLA is a good idea, then my new assumed mindset says that Elon Musk getting more power, by hook or by crook, is a good thing for me.
If I keep myself in my personal mindset of a Musk skeptic and try to model the behavior of TSLA shareholders, I would anticipate TSLA shareholders selling immediately (today, and every day previously in the past several years), because that is what I would do if I were gifted TSLA. But that's obviously not what TSLA shareholders do, so my personal mindset evidently makes for an inadequate model of TSLA shareholders.
If instead I try to suspend my own beliefs and imagine myself as somebody who thinks owning and holding TSLA is a good idea, then my new assumed mindset says that Elon Musk getting more power, by hook or by crook, is a good thing for me.
> It's conceivable that TSLA shareholders could interpret Elon Musk acquiring more political influence as good for TSLA
For that they would have to see through Musk's grift. Most retail TSLA holders are Musketeers and they truly believe that he is a visionary genius. To them, fluff like Twitter doesn't matter when they have the real life Tony Stark at the helm.
For that they would have to see through Musk's grift. Most retail TSLA holders are Musketeers and they truly believe that he is a visionary genius. To them, fluff like Twitter doesn't matter when they have the real life Tony Stark at the helm.
Believing Musk is a visionary genius scarcely seems inconsistent with believing Musk owning Twitter will be advantageous for Musk companies.
Genius doesn't need publicity. Its influence is inevitable.
> any other tesla shareholder can sell tesla shares to buy twitter, and why wouldn't they when the tesla CEO is doing it.
Because they wouldn't be taking control over the company... That's the purpose of those whole situation. Musk isn't just making a play on the basis of thinking "one dollar of TWTR is worth more than one share of TSLA"
Because they wouldn't be taking control over the company... That's the purpose of those whole situation. Musk isn't just making a play on the basis of thinking "one dollar of TWTR is worth more than one share of TSLA"
I don’t think it’s possible for him to quietly sell 21B shares. That’s all very public information isn’t it?
It is possible. He has to file certain forms when he sells but the SEC often lets large buyers and sellers have a bit of a delay when making these forms public to avoid front running.
> Also those sales were pretty much required for taxes
His reason - or at least his public justification - for that sale was to deliberately generate a tax liability. If you recall people were getting pretty bent about him not having such a thing, as a zillionaire.
His reason - or at least his public justification - for that sale was to deliberately generate a tax liability. If you recall people were getting pretty bent about him not having such a thing, as a zillionaire.
Yeah that's the story telling but not the reality, most of the sales were to cover taxes due on option exercise (had to do it in 2021 to avoid a tax regime change that was starting in 2022).
> If you recall people were getting pretty bent about him not having such a thing, as a zillionaire.
Some people, a minority, from a particular political bend. the overwhelming majority of americans don’t consider his finances at all
Some people, a minority, from a particular political bend. the overwhelming majority of americans don’t consider his finances at all
“Any other Tesla shareholder” is less capable of successfully executing a hostile takeover of Twitter, which is why they wouldn’t and Elon would.
Typically these sales are scheduled and announced well ahead of time and then, like another user pointed out, may be solve over the course of months. So the market typically reacts near the announcement and it isn't much because it looks like business as usual. From the article you linked it specifically says that he was exercising options that would have expired. IIRC he also has another large stock allocation that expire in August of this year and so will be selling those.
There is no reason why he can't do the same here.
I agree. But what I'm saying is that it will take a few months to execute. I was just trying to expand on the above discussion and why his sales didn't make Tesla stock crash but selling out of the blue would.
because selling another $21b of tesla would indicate he has found other more interesting things to do.
Or, following Ockham's Razor, it would indicate he needs money to do something with it.
Maybe buy $600 million yacht or maybe buy money losing company.
Maybe buy $600 million yacht or maybe buy money losing company.
He bought ~9% of Twitter already. I'm sure his co-shareholders prefer that he takes control over companies he bought in, because he can then easily develop synergies (cf. Boring Co and Tesla, SpaceX and Tesla, SolarCity and Tesla, etc).
The problem with this idea is that nobody's really on Twitter for the free speech. He might take the company to new and exciting places, but it won't be with the current userbase.
This raises another issue, that is can he even sell that many shares of Tesla and still stay in control?
IIRC he made a comment about how he was "cash poor" a while back and it basically came down to he can't sell more of Tesla/SpaceX without dipping below 51% and loosing control.
IIRC he made a comment about how he was "cash poor" a while back and it basically came down to he can't sell more of Tesla/SpaceX without dipping below 51% and loosing control.
> cash poor
I wonder what a paper billionaire's definition of 'cash poor' is compared to mine.
I wonder what a paper billionaire's definition of 'cash poor' is compared to mine.
Grimes gave an interview on this:
"[Musk] lives at times below the poverty line," Grimes said, per Vanity Fair. "To the point where I was like, can we not live in a very insecure $40,000 house? Where the neighbors, like, film us, and there's no security, and I'm eating peanut butter for eight days in a row?" [0]
In the same article Grimes complains Musk wouldn't replace a broken mattress.
No idea how Much this shows Musk is cash poor, and how much it shows crazy rich person, but it gives a glimpse either way
[0] https://www.businessinsider.com/grimes-says-elon-musk-someti...
"[Musk] lives at times below the poverty line," Grimes said, per Vanity Fair. "To the point where I was like, can we not live in a very insecure $40,000 house? Where the neighbors, like, film us, and there's no security, and I'm eating peanut butter for eight days in a row?" [0]
In the same article Grimes complains Musk wouldn't replace a broken mattress.
No idea how Much this shows Musk is cash poor, and how much it shows crazy rich person, but it gives a glimpse either way
[0] https://www.businessinsider.com/grimes-says-elon-musk-someti...
This sounds like Musk being a "eccentric" person.
I have a difficult time believing Telsa couldn't put him up in executive housing and cover a security detail. Or, he couldn't send out a tweet and get a $50 million line of credit, uncallable line of credit to live on. Especially given that he can at get 13 billion dollars to acquire another company.
I think he likes bragging about being a homeless couch surfer.
I have a difficult time believing Telsa couldn't put him up in executive housing and cover a security detail. Or, he couldn't send out a tweet and get a $50 million line of credit, uncallable line of credit to live on. Especially given that he can at get 13 billion dollars to acquire another company.
I think he likes bragging about being a homeless couch surfer.
Another take from the Journal https://www.wsj.com/articles/elon-musk-says-he-lives-in-a-50...
‘In the same article Grimes complains Musk wouldn't replace a broken mattress.’
That’s just a humble brag.
That’s just a humble brag.
He's billionaire cash poor which is a lot different to our cash poor.
Musk only controls 17% of tesla votes, he's already out of control.
Well if you needed further proof, look at the Tesla price action today. It is doubtful that Musk has even started selling, but the price is already collapsing.
He’d have no trouble borrowing money against his assets though. As far as I know, that’s what most billionaires do.
There are limits to how much he can borrow against his assets, both due to banking risk models and Tesla bylaws. He's too close to those limits already to borrow another $20B.
>He's too close to those limits already to borrow another $20B.
What are the limits and where is he now? Please tell us.
What are the limits and where is he now? Please tell us.
You have no idea how much money he has, how much connections he has, how many VC's, bankers, nationstates are willing to put money behind him. you hve no idea how much Eth, BTC and DOGE he has. He's up at least %14,000 on Doge from when he started tweeting about it.
You have no idea how rich this man is, people need to stop acting like they do.
You have no idea how rich this man is, people need to stop acting like they do.
How wrong you were. https://www.reuters.com/business/musk-tears-up-buyout-playbo...
"Musk himself has committed to put up $33.5 billion, which will include $21 billion of equity and $12.5 billion of margin loans against some of his Tesla Inc (TSLA.O) shares to finance the transaction"
"Musk himself has committed to put up $33.5 billion, which will include $21 billion of equity and $12.5 billion of margin loans against some of his Tesla Inc (TSLA.O) shares to finance the transaction"
Even billionaires don't just borrow $21 billion.
He just borrowed $25.5 billion[0]. So your assertion is false. The issue is coming up with $21 billion worth of equity which is contingent upon TSLA stock price.
>[0]https://twitter.com/exec_sum/status/1517137710699458560?s=21...
>[0]https://twitter.com/exec_sum/status/1517137710699458560?s=21...
'Just' is doing a lot of work in this assertion.
> So no, once again he does not have funding secured
For the reader’s consideration: Musk’s TED interview [0], he claims (quite forcefully) that he did in fact have funding secured, but effectively “pled not secured” as to get a more favorable response from the SEC.
[0]: (time stamp: 0h27m00s) https://youtu.be/cdZZpaB2kDM
For the reader’s consideration: Musk’s TED interview [0], he claims (quite forcefully) that he did in fact have funding secured, but effectively “pled not secured” as to get a more favorable response from the SEC.
[0]: (time stamp: 0h27m00s) https://youtu.be/cdZZpaB2kDM
Because he keeps going around saying that in public, there was a recent request for a restraining order to stop him from repeating it since it poisons the jury pool. It quoted the US District Court's ruling from 1 April of this year[0]:
"the evidentiary record demonstrated that no reasonable jury could find Musk’s tweets on August 7, 2018 accurate or not misleading. Likewise, given that Musk was intimately involved with the facts leading to that conclusion, the Court also held that he recklessly made the statements with knowledge as to their falsity"
Which is to say, a federal judge has ruled that it was inaccurate, and he knows it was inaccurate.
[0] - https://storage.courtlistener.com/recap/gov.uscourts.cand.33...
"the evidentiary record demonstrated that no reasonable jury could find Musk’s tweets on August 7, 2018 accurate or not misleading. Likewise, given that Musk was intimately involved with the facts leading to that conclusion, the Court also held that he recklessly made the statements with knowledge as to their falsity"
Which is to say, a federal judge has ruled that it was inaccurate, and he knows it was inaccurate.
[0] - https://storage.courtlistener.com/recap/gov.uscourts.cand.33...
Actually, the judge just denied plaintiffs motion saying it's too broad.
First Amendment strikes again!
https://www.cnet.com/news/politics/elon-musk-doesnt-have-to-...
First Amendment strikes again!
https://www.cnet.com/news/politics/elon-musk-doesnt-have-to-...
Right, he denied the TRO, but that doesn't change the prior ruling regarding the accuracy of the tweet. Also "accuracy of the tweet" is a horrible thing to have to be debating in a court of law.
> Also "accuracy of the tweet" is a horrible thing to have to be debating in a court of law.
I agree. The lawsuit is laughable and should be thrown out of the court.
I agree. The lawsuit is laughable and should be thrown out of the court.
He also claimed FSD will be better than humans within a year in that interview. I'm not buying it.
Better than the best human driver, or better than your average driver? If it's the latter, it's probably there.
As someone who doesn't really know what they're talking about, I'm also wondering how he would be getting around the widely-reported "poison pill", even if he did have $21B more.
By asking the board to remove it. If faced with a serious tender offer backed by financing and accepted by a majority of shareholders, the board would find it difficult not to allow it to go ahead (by removing the poison pill).
That doesn't mean they couldn't refuse to remove it, but since they should act in the interests of the shareholders, they would need a good explanation (e.g. another better offer, or a plausible plan for extracting more value from Twitter than they currently do).
That doesn't mean they couldn't refuse to remove it, but since they should act in the interests of the shareholders, they would need a good explanation (e.g. another better offer, or a plausible plan for extracting more value from Twitter than they currently do).
So, total noob here in that whole area, but I have a question about fiduciary duty.
The popular understanding seems to be that a companies' board is legally bound to act in the best (financial) interests of the shareholders - and only those. This is why hostile takeovers are a thing at all: If the acquiring company gets the majority of the target's shareholders on board (or becomes the majority), then the target's board of directors is legally bound to accept the takeover, even if it would be harmful to the company (nevermind the company's employees or customers)
How far does this go? If I'm a shareholder of McDonald's, could I sue them because they could have increased profits by lacing their burgers with cocaine but chose not to? (Or say some synthetic drug that's technically legal because it hasn't been banned yet).
If a company could make more profit but is kept from it by some regulation, could I sue them if they didn't try to lobby against that regulation?
The popular understanding seems to be that a companies' board is legally bound to act in the best (financial) interests of the shareholders - and only those. This is why hostile takeovers are a thing at all: If the acquiring company gets the majority of the target's shareholders on board (or becomes the majority), then the target's board of directors is legally bound to accept the takeover, even if it would be harmful to the company (nevermind the company's employees or customers)
How far does this go? If I'm a shareholder of McDonald's, could I sue them because they could have increased profits by lacing their burgers with cocaine but chose not to? (Or say some synthetic drug that's technically legal because it hasn't been banned yet).
If a company could make more profit but is kept from it by some regulation, could I sue them if they didn't try to lobby against that regulation?
My understanding is that courts and regulators give board members a lot of deference on their decisions, as long as they are well considered and not obviously ridiculous.
It's perfectly fine for a board to say that the legal and reputational risks far outweigh the benefits of lacing burgers with cocaine.
Most decisions, such as lobbying, involve complicated calculous and don't have a simple way to verify the ROI. The board can defend most positions (from no lobbying to lots of lobbying) by arguing that they believe it's the right decision based on their experience, judgement, and analysis of the situation; probably with some written analysis defending whatever their decision was at the time.
It's perfectly fine for a board to say that the legal and reputational risks far outweigh the benefits of lacing burgers with cocaine.
Most decisions, such as lobbying, involve complicated calculous and don't have a simple way to verify the ROI. The board can defend most positions (from no lobbying to lots of lobbying) by arguing that they believe it's the right decision based on their experience, judgement, and analysis of the situation; probably with some written analysis defending whatever their decision was at the time.
They don't have to make the best decision to advance the interests of the shareholders. It is impossible to know if an option that wasn't taken would have been better. They're require to act in a reasonable way that fits market norms and the data they had at the time. The decision of whether to accept Musk's proposal, regardless of how much he claims it to be the "best thing to do", is very subjective and complex. As long as they don't rely on immaterial facts (such as their dislike of Musk), it's impossible to prove that they made the wrong decision because we can't A/B test reality. They might still believe that Twitter can be worth $60B in a year and if they have enough data to support that, they can do whatever they think is right.
Could you sue them? Sure. Would you win? Probably not.
The board would likely make a compelling case that the long-term effect of lacing burgers with cocaine is a net loss for shareholders given the inevitable reputational harm, lawsuits, payouts, etc.
The board would likely make a compelling case that the long-term effect of lacing burgers with cocaine is a net loss for shareholders given the inevitable reputational harm, lawsuits, payouts, etc.
One key thing to know here, in addition to the replies you already received, is that the role of fiduciary duty is dramatically overstated by a lot of other HN comments.
The poison pill is there so he can't do it without approval of the board. If he comes in with a serious offer that the board decides is worthwhile, they can remove it just as easily as they added it.
By persuading the board, either directly or by turning shareholder opinion strongly enough, for them to put it to a shareholder vote.
Forgive my ignorance, but rich people routinely get access to cash secured with their assets though, so why can't he do that, pledging his huge equity ownership?
It is still borrowed, which means still needs paying back. If you don't care about the stocks (i.e. they are only an investment vehicle) this is fine.
Musk controls Tesla by way of owning more than 50% of its stock. He'd be trading Tesla for Twitter, which I think anyone would agree is a terrible trade.
Musk controls Tesla by way of owning more than 50% of its stock. He'd be trading Tesla for Twitter, which I think anyone would agree is a terrible trade.
He can just borrow the money. He’s the worlds richest man - he can borrow < 10% of his net worth against his Tesla stocks if he wanted to.
The funding already includes a $12.5 billion loan against his tesla shares. He is limited by tesla by laws and banker risk aversion to how much loans he can take out against his shares. I would speculate that the $21 billion in his equity is there because he couldn't get more loans.
And I believe he has already pledged other Tesla shares to secure previous loans.
Sorry to respond to my own post, but after writing it I ran across and article in Bloomberg that basically confirms what I am saying. Apparently Musk is looking for equity partners to provide the 21 billion equity part of twitter's bid.
https://www.bloomberg.com/news/articles/2022-04-21/musk-is-s...
https://www.bloomberg.com/news/articles/2022-04-21/musk-is-s...
The SEC filing shows there's now a commitment to provide that equity investment. Elon Musk has formed a Delaware corporation which investors could invest into to provide the money behind the "Equity Financing". The article does not confirm your point and your top comment is misleading.
I wonder how Tesla shareholders feel about this situation. It seems like by leveraging with his Tesla shares, he's passing on the risk to everyone who owns Tesla stock. If they have a couple bad quarters or some kind of macro change happens and the price starts going down, Musk gets margin called and has to dump his stock on the market, which could start a spiral of panic-selling or even open Tesla itself to being corporate-raided.
As a shareholder, Musk multiplied my money by 20x
Even though I'm obviously so much smarter than him on matter of acquiring public companies, I'll graciously allow him to do whatever he pleases as long as he continues growing Tesla at 50% compounded rate.
Which he did this quarter, and the one before that and the one before that.
I'll be concerned when that stops happening. Until then I give him my blessing to do whatever he pleases with HIS money.
Even though I'm obviously so much smarter than him on matter of acquiring public companies, I'll graciously allow him to do whatever he pleases as long as he continues growing Tesla at 50% compounded rate.
Which he did this quarter, and the one before that and the one before that.
I'll be concerned when that stops happening. Until then I give him my blessing to do whatever he pleases with HIS money.
And how can Tesla keep growing at a 50% rate, buy out all the other car companies in the world? There is a limit as to how many people can afford to buy $60k+ cars. The stock is already far beyond what the company profits will ever be worth. Today it seems like no one cares about profits, but will that always be the case?
Tesla is not about cars. It’s a marketing company and its product is the Tesla share price. This Twitter stunt is just one in a long line of stunts that Musk does to get attention for himself. People invest in Tesla because they want to invest in Musk as an individual.
This media hijacking is similar to the way that Trump got elected in 2016.
I bet that if SpaceX ever went public it would cause Tesla to fall as everybody who wants to invest in “Musk is a genius” would invest in SpaceX instead of Tesla.
This media hijacking is similar to the way that Trump got elected in 2016.
I bet that if SpaceX ever went public it would cause Tesla to fall as everybody who wants to invest in “Musk is a genius” would invest in SpaceX instead of Tesla.
Agreed. Also in other countries like mine where EV cars and the climate change issue and environmentalism movement that's being pedalled by the western media arent a thing, mostly Asian countries, Tesla here is more synonymous to batteries and sustainable energy. We've got a presidential election next month and some of the presidentiables, including the one who's most likely to win according to polls, are calling for more Tesla energy adoption for the country during their campaign. Musk diversified his company's products well
> This media hijacking is similar to the way that Trump got elected in 2016.
Please elaborate.
Please elaborate.
Well yeah, of course you would be concerned if that stopped happening, even more so if it means the CEO is suddenly compelled sell a bunch of his stock at a discount to avoid violating his debt covenants. You don’t get any upside from the twitter deal, so unless you think Musk will use Twitter to boost Tesla’s price (suppressing bad news?), it seems like all downside for current Tesla owners.
Like I said, I'm a very benevolent person.
Trust me, I'll unleash my wrath on Musk the moment his actions cause my net worth go down due to TSLA stock going down.
But in my infinite compassion for lesser human beings, I allow Musk to continue doing things that are not 100% related to increasing TSLA stock price.
He has my blessing to purchase Twitter, if that makes him happy.
Don't get me wrong, there are limits to everything. Recently he asked if he can have a 9-th child and I said "absolutely no".
Another child would distract him from running a company and I, as a shareholder, absolutely cannot have it.
Trust me, I'll unleash my wrath on Musk the moment his actions cause my net worth go down due to TSLA stock going down.
But in my infinite compassion for lesser human beings, I allow Musk to continue doing things that are not 100% related to increasing TSLA stock price.
He has my blessing to purchase Twitter, if that makes him happy.
Don't get me wrong, there are limits to everything. Recently he asked if he can have a 9-th child and I said "absolutely no".
Another child would distract him from running a company and I, as a shareholder, absolutely cannot have it.
Read your post again. You talk like you have more money than Musk, which maybe you do but I doubt. You also have a huge ego. I know, I know “when I go look at my bank account I stop caring…”
> so unless you think Musk will use Twitter to boost Tesla’s price (suppressing bad news?)
Or bullying American politicians. Or simply preventing himself from being banned.
Or bullying American politicians. Or simply preventing himself from being banned.
The USA's politicians can stand to be bullied a lot more than they currently are. Many of them got to where they are now by being bullies themselves - Twitter bullies in particular!
They say the United States Congress is really just Hollywood for ugly people. In a sense, social media is really just Hollywood for smart people. Given Elon Musk's circumstances, and no matter what his motivations, they seem to be the correct ones to maximize his possible outcomes.
They say the United States Congress is really just Hollywood for ugly people. In a sense, social media is really just Hollywood for smart people. Given Elon Musk's circumstances, and no matter what his motivations, they seem to be the correct ones to maximize his possible outcomes.
I certainly understand the schadenfreude aspect of it. But when I said bullying I mostly meant that as a euphemism for a sort of aggressive lobbying. For instance, manipulating politicians into supporting his companies by threatening to signal boost their opponents during the next election, or promising to suppress them.
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Or he'll trade TSLA shares for TWTR. I can imagine that some investors in TWTR would be happy to take him up on such an offer.
Not in this case: this is a tender offer, and what you're describing is a merger. Which might actually make sense, but it would be something that goes through the TSLA board, and can't be done unilaterally by Musk.
Of course, he must be supremely influential with the board, but there is a governance structure that can't just be bypassed.
Of course, he must be supremely influential with the board, but there is a governance structure that can't just be bypassed.
If TWTR holders want to trade for TSLA they can simply do it on the open market
When you see "Acquired for 50% cash and 50% stock" this is a company "trading" x shares for y shares. So yeah this happens all the time not in the open market.
Not for the premium he's offering to take it private.
This is true. But if he was talking about trading shares of SpaceX for TWTR I would probably rearrange my holdings.
Some quick searching says TSLA is about $1000 and Elon owns 178M Tesla shares.
Assuming Elon owns all those shares free and clear, aren't there plenty of investment banks that would eagerly loan Elon the $21B if Elon pledges ~63M of those shares as collateral? (I got the 63M number from assuming the lender requires collateral value equal to 3x the loan to protect against price drops.)
Then presumably Elon would sell 21M TSLA over the next year or three to pay off the loan and get the other 42M of collateral out of hock, but sell slowly enough not to crash the price of TSLA.
Assuming Elon owns all those shares free and clear, aren't there plenty of investment banks that would eagerly loan Elon the $21B if Elon pledges ~63M of those shares as collateral? (I got the 63M number from assuming the lender requires collateral value equal to 3x the loan to protect against price drops.)
Then presumably Elon would sell 21M TSLA over the next year or three to pay off the loan and get the other 42M of collateral out of hock, but sell slowly enough not to crash the price of TSLA.
Funding is secured via multiple strategies that best fits the case. How can you possibly think he does not have funding secured, when in fact he has more options than anyone private citizen in the world right now?
Ludicrous
Ludicrous
> How can you possibly think he does not have funding secured, when in fact he has more options than anyone private citizen in the world right now?
He’s already margined a lot of his Tesla shares. The rest is largely illiquid. Tesla shares are expensive to margin, especially for $10bn; we’re seeing an unusually-large consortium of banks assemble to provide that tranche of financing. That implies having to sell large, market-moving stakes in, all likelihood, Tesla and/or SpaceX. Something feasible, but unlikely pleasant for Musk or other shareholders in those names.
Also, Musk is someone who said “funding secured” without funding secured in 2018.
He’s already margined a lot of his Tesla shares. The rest is largely illiquid. Tesla shares are expensive to margin, especially for $10bn; we’re seeing an unusually-large consortium of banks assemble to provide that tranche of financing. That implies having to sell large, market-moving stakes in, all likelihood, Tesla and/or SpaceX. Something feasible, but unlikely pleasant for Musk or other shareholders in those names.
Also, Musk is someone who said “funding secured” without funding secured in 2018.
> Musk is someone who said “funding secured” without funding secured in 2018.
Yes, though that was a Tweet and not an SEC filing
Yes, though that was a Tweet and not an SEC filing
> that was a Tweet and not an SEC filing
Most people, at this point, believe he has funding. When he first tweeted his bid, however, the stock dropped.
He still has to come up with $21bn. He’s tapped out on margin loans, so that will involve some selling of assets. And market conditions are volatile enough for those funding commitments to fall through.
Most people, at this point, believe he has funding. When he first tweeted his bid, however, the stock dropped.
He still has to come up with $21bn. He’s tapped out on margin loans, so that will involve some selling of assets. And market conditions are volatile enough for those funding commitments to fall through.
>If he tries to sell 21 billion dollars worth of tesla shares, the share price will collapse.
He can execute an equity stock swap agreement with an investment bank and not unload any shares.
He can execute an equity stock swap agreement with an investment bank and not unload any shares.
[deleted]
> If he tries to sell 21 billion dollars worth of tesla shares, the share price will collapse.
Stock swap agreements are a thing. He doesn't have to outright sell them on the open market to get cash. Even if he did, it's not like the price is going to crater because he's losing confidence in TSLA or something.
Stock swap agreements are a thing. He doesn't have to outright sell them on the open market to get cash. Even if he did, it's not like the price is going to crater because he's losing confidence in TSLA or something.
According to wikipedia:
An equity swap is a financial derivative contract (a swap) where a set of future cash flows are agreed to be exchanged between two counterparties at set dates in the future.
That was not what I was referring to.
https://www.investopedia.com/terms/s/stock-swap.asp
While this case wouldn't be TSLA acquiring Twitter, stocks are fungible assets that can be traded as part of an agreement.
https://www.investopedia.com/terms/s/stock-swap.asp
While this case wouldn't be TSLA acquiring Twitter, stocks are fungible assets that can be traded as part of an agreement.
Oh, I misundertood.
I thought that when you said that "he doesn't have to outright sell them on the open market to get cash" you were referring to an alternative way of getting cash - not to an alternative form of payment.
I'm not even sure that it would be really feasible, in any case it would surely be very unusual.
As that link says, the way it goes normally is: "A stock swap occurs when shareholders' ownership of the target company's shares is exchanged for shares of the acquiring company." But here people would not be getting shares of the acquiring company, they would be getting shares of an unrelated company. There is no reason why they would want to keep those shares, so they would quickly flood the market.
I thought that when you said that "he doesn't have to outright sell them on the open market to get cash" you were referring to an alternative way of getting cash - not to an alternative form of payment.
I'm not even sure that it would be really feasible, in any case it would surely be very unusual.
As that link says, the way it goes normally is: "A stock swap occurs when shareholders' ownership of the target company's shares is exchanged for shares of the acquiring company." But here people would not be getting shares of the acquiring company, they would be getting shares of an unrelated company. There is no reason why they would want to keep those shares, so they would quickly flood the market.
Unless a contract specifies that they cannot do that for a certain period of time.
> If he tries to sell 21 billion dollars worth of tesla shares, the share price will collapse.
Elon Musk is routinely selling billions of dollars: https://finance.yahoo.com/quote/TSLA/insider-transactions?p=...
* $1,007,908,791 on Dec 28, 2021
* $333,647,031 on Dec 22, 2021
* $594,924,622 on Dec 22, 2021
* $325,723,600 on Dec 21, 2021
* $528,016,861 on Dec 21, 2021
* $738,683,277 on Dec 13, 2021
As long as the trade is small compared to the daily volume, the market impact is limited.
Elon Musk is routinely selling billions of dollars: https://finance.yahoo.com/quote/TSLA/insider-transactions?p=...
* $1,007,908,791 on Dec 28, 2021
* $333,647,031 on Dec 22, 2021
* $594,924,622 on Dec 22, 2021
* $325,723,600 on Dec 21, 2021
* $528,016,861 on Dec 21, 2021
* $738,683,277 on Dec 13, 2021
As long as the trade is small compared to the daily volume, the market impact is limited.
You clearly don't know what you're talking about. A holding company is responsible for the 21 billion. Elon happens to have created & owned that holding company. It's a perfect vehicle for him to allow private investors
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Isn’t Musk set to receive a 23 billion dollar bonus for performance?
For far less than $21 billion of investment I, or many other people, could redevelop and scale an entirely new social platform that would outpace Twitter, and I could probably do it multiple times over until it succeeds... The goal seems rather "Captain Ahab-ish" in nature...
I think the story is quickly turning into more of a hype effort than actual advancement.
Twitter would still need time and labor to be re-worked, which in itself is a massive undertaking. It looks like Twitter has multiple problems in scaling beyond it's current state, and that's why it has only made gradual changes over time for many years.
I think the story is quickly turning into more of a hype effort than actual advancement.
Twitter would still need time and labor to be re-worked, which in itself is a massive undertaking. It looks like Twitter has multiple problems in scaling beyond it's current state, and that's why it has only made gradual changes over time for many years.
You can absolutely take out low interest loans using your stock as collateral. That's how the wealthy pay for many things.
It's how they scrape by on a $1 salary so they can engineer themselves into a lower tax bracket.
This is pretty misleading. Don't you think the government's forcing "income" to be defined as w2 salary has a lot to do with why this happens, and is therefore an important qualifier? They literally invented a new industry by arbitrarily restricting terminology. Those loans would never exist if we did not pray on individual earners to "fund" the government's "services."
once again HN demonstrates how much it does not know anything . he does not need to own 100% , 51% is well and good. musk + jack + ark invest + JPM already have 25% they need to get the other 26% which should be very achievable with tesla stock . All SEC fillings aside this is pretty much a done deal .
This brings about an interesting question. If I've got $1000 in cash, that's valuable because I have it now and I can spend it now without many strings. When we talk about billionaires we look at the 21 billion musk has in Tesla and just extrapolate that $1000 in the pocket but to $21 billion in elons pocket. But in reality, he doesn't REALLY have 21 billion because he can't actually spend it all.
Why does he have to sell a single share?
He routinely takes out loans against his shares to disturbingly high levels.
He routinely takes out loans against his shares to disturbingly high levels.
He is trying to take out a loan here as well. One of the letters included in the story is actually a margin loan commitment from morgan stanley. But that was for only 12.5 billion. This was all he could get against his shares.
It does seem low in comparison with the value of his shares, but banks are well aware of the self reinforcing negative spiral a margin call can have on a share price and will not give out massive margin loans.
My point is that even after he got the maximum loan he could get, and then got the maximum margin loan against his shares, he is still 21 billion short.
It does seem low in comparison with the value of his shares, but banks are well aware of the self reinforcing negative spiral a margin call can have on a share price and will not give out massive margin loans.
My point is that even after he got the maximum loan he could get, and then got the maximum margin loan against his shares, he is still 21 billion short.
> It does seem low in comparison with the value of his shares
He's only putting up 62.5 billion worth of stock. So that's 20%, which is a little low but not insanely so.
He's only putting up 62.5 billion worth of stock. So that's 20%, which is a little low but not insanely so.
You don't know that those are the largest loans he was able to get. They might just be the largest loans he wanted to get.
But why? Why would this be the number he wanted?
The loans have different risk characteristics than his equity stake, he balances risk by deciding how much of his own money to put in vs. how much borrowed money to put in. (There is no doubt a ceiling — how much of his own money he is able to put in — but there's no reason to assume he wouldn't invest less than that ceiling.)
If you have enough cash to buy a house, you might sensibly still take out a mortgage, and you'll need to decide how much cash to put down as a deposit vs. how much to borrow. (The bank will likely set a lower limit for the amount of cash, but you might choose to put down more.) Someone could ask you "why did you choose that number", and you'd give a similar answer.
If you have enough cash to buy a house, you might sensibly still take out a mortgage, and you'll need to decide how much cash to put down as a deposit vs. how much to borrow. (The bank will likely set a lower limit for the amount of cash, but you might choose to put down more.) Someone could ask you "why did you choose that number", and you'd give a similar answer.
Why would he intentionally put himself in a situation where there is a 21 billion shortfall?
You don't know that there is a 21 billion shortfall. The source of funds for his intended equity stake is unknown to us at this point. It could be his imagination (especially given his history with the phrase "funding secured"!), or it could be something we are not aware of.
What is disturbing about taking a loan out using an asset as collateral?
He does not need to sell he could get a loan by using his shares as collateral
Maybe he has 21 billion available in his margin account on Robinhood
Why can't he take out a loan against those shares?
He's also doing that:
https://www.bloomberg.com/opinion/articles/2022-04-21/elon-g...
https://www.bloomberg.com/opinion/articles/2022-04-21/elon-g...
Elon Musk needs about $46.5 billion to buy Twitter at $54.20 per share: about $39.4 billion to pay for the 91% of Twitter’s stock that he doesn’t currently own, about $4.3 billion of debt to refinance and various miscellaneous costs. To pay that, he has:
A letter from his banks offering to lend $13 billion to Twitter, if he buys it, with $7 billion of that coming in the form of senior secured bank loans and $6 billion coming in the form of junk bonds.
A letter from his banks offering to lend him $12.5 billion personally, secured by $62.5 billion worth of his Tesla Inc. stock. At yesterday’s closing price, that comes to about 64 million shares, or about one-third of his Tesla stake.
An agreement with himself to put up the other $21 billion, give or take.Seriously, how can I buy some of his shares of spacex?
Easiest way? Buy Alphabet stock. They are a spacex investor. Otherwise you can't, it's a privately held company
Looks like Alphabet owns ~7.5% of SpaceX. Alphabet is worth $1.67T; SpaceX is worth, say, $150B. This means ~$11B of Alphabet (~0.66%) is SpaceX. That is an extremely dilute method of gaining exposure to SpaceX!
(Disclosure: I work for Google, which is part of Alphabet)
(Disclosure: I work for Google, which is part of Alphabet)
Dilute is better than zero I suppose. Presumably the play is that SpaceX might end up controlling an extremely profitable Mars colony, creating the ultimate gigaunicorn, and making that 0.66% seem much bigger. This influx of cash will also allow Musk to become President of Earth, at which point even those with dilute indirect holdings in SpaceX will be sitting pretty. It's a classic long-term play really.
Well, he's just following the American model. Leave, displace and colonize, rebel, and declare sovereignty.
To those who would follow him on such a mission? Sayonara. He's spoken about how it would be mostly work for those living there, and I wouldn't be surprised if he tried to implement a 9/9/6 schedule.
I would trust Weyland Yutani with a Mars colony before I would trust EM.
To those who would follow him on such a mission? Sayonara. He's spoken about how it would be mostly work for those living there, and I wouldn't be surprised if he tried to implement a 9/9/6 schedule.
I would trust Weyland Yutani with a Mars colony before I would trust EM.
Call me a nerd, but that's be an acceptable cost to being a colonist on another planet for me. 9/9/6 would be a cheap cost for insuring the success of the human race.
The point is that 10% swing in Google's performance (in either direction) has much bigger impact on stock price than 1000% swing in SpaceX performance.
Amdahl law applied to company performance.
Don't buy Google to own SpaceX.
Wait until Starlink IPO and buy that (if not too expensive).
Amdahl law applied to company performance.
Don't buy Google to own SpaceX.
Wait until Starlink IPO and buy that (if not too expensive).
My sarcasm detector is having a lot of trouble with this comment.
Or just takes a loan against his shares
u mad bro?
He can easily get a loan against the value of his shares for this, combined with his own personal wealth (he recently sold a huge amount of stock, he has lots of cash on hand). It's not bullshit at all.
Personally, I think Musk is having a bit of a laugh. This will never happen. *
Twitter operating income for 12 m/e 31 Dec 2021 was negative. For the q/e 31 Dec 2021 it was $0.167B. Why he thinks Twitter is worth $45b is beyond me. What would Warren Buffett do? Well, he wouldn't buy Twitter, that's for sure.
* Time will tell, of course. I've been wrong before. But the whole thing seems like madness to me.
Twitter operating income for 12 m/e 31 Dec 2021 was negative. For the q/e 31 Dec 2021 it was $0.167B. Why he thinks Twitter is worth $45b is beyond me. What would Warren Buffett do? Well, he wouldn't buy Twitter, that's for sure.
* Time will tell, of course. I've been wrong before. But the whole thing seems like madness to me.
“What is the point of fuck you money if you don’t get to say fuck you?” is the turn of phrase I believe. (Or in the case of Musk, meme lord when you’re not on the factory/star base floor)
Wealth has diminishing returns; he’s just trying to get more value for his exceptional personal wealth (and remember, he plans on dying on Mars, he’s playing a different game than typical billionaires). Status is his drug of choice, Twitter his platform. If you crave validation (Biden admin not mentioning him until recently, people buying ads in time square “say their [Tesla] name”), buy it if it isn’t given freely.
(observations as someone with years of therapy and a scholar of the human psyche)
Wealth has diminishing returns; he’s just trying to get more value for his exceptional personal wealth (and remember, he plans on dying on Mars, he’s playing a different game than typical billionaires). Status is his drug of choice, Twitter his platform. If you crave validation (Biden admin not mentioning him until recently, people buying ads in time square “say their [Tesla] name”), buy it if it isn’t given freely.
(observations as someone with years of therapy and a scholar of the human psyche)
> Status is his drug of choice
Couldn't he have more noble causes in mind like trying to do the right thing for humanity (e.g. Tesla, SpaceX)? Social media is a cesspool right now, they seem to have a negative impact on democracy and humanity in general, and public social media companies have no incentive to clean themselves up because that will hurt shareholder value in the short term. Buying the company and taking it private will give him the ability to make those hard choices and try to make a social media company that is positive for humanity.
Couldn't he have more noble causes in mind like trying to do the right thing for humanity (e.g. Tesla, SpaceX)? Social media is a cesspool right now, they seem to have a negative impact on democracy and humanity in general, and public social media companies have no incentive to clean themselves up because that will hurt shareholder value in the short term. Buying the company and taking it private will give him the ability to make those hard choices and try to make a social media company that is positive for humanity.
> Social media is a cesspool right now, they seem to have a negative impact on democracy and humanity in general, and public social media companies have no incentive to clean themselves up because that will hurt shareholder value in the short term. Buying the company and taking it private will give him the ability to make those hard choices and try to make a social media company that is positive for humanity.
AFAIK, his publicly-stated plan is to not "clean [Twitter] up," but rather turn it into more of an un-moderated cesspool.
AFAIK, his publicly-stated plan is to not "clean [Twitter] up," but rather turn it into more of an un-moderated cesspool.
The perspective of "un-moderated" equaling "cesspool" is entirely based on whether or not you hold any opinions which are unpopular with the powerful.
I had an account I created in 2009. I had a modestly decent number of followers due to some past blogging on data science and DIY electronics. My account was suspended because I talked about the lab leak hypothesis before it was decided that it was ok to do so by The Good People™.
Maybe you hold some opinions that will also one day be unpopular with The Good People™. If you do, you'll soon find out that censorship is a very clumsy tool.
I had an account I created in 2009. I had a modestly decent number of followers due to some past blogging on data science and DIY electronics. My account was suspended because I talked about the lab leak hypothesis before it was decided that it was ok to do so by The Good People™.
Maybe you hold some opinions that will also one day be unpopular with The Good People™. If you do, you'll soon find out that censorship is a very clumsy tool.
> The perspective of "un-moderated" equaling "cesspool" is entirely based on whether or not you hold any opinions which are unpopular with the powerful.
Eh, no. It's more about signal to noise ratio. Because if recent history has taught us anything, it's that crowdsourced lies are often at least as compelling as the truth.
> My account was suspended because I talked about the lab leak hypothesis before it was decided that it was ok to do so by The Good People™.
Realistically, "un-moderated" will be 99% Qanon and Stop-the-Steal and 1% the kind of stuff you say you posted. The most obsessive have the loudest voices in those spaces, and people who believe wacky things seem to be more obsessive than those who don't.
Eh, no. It's more about signal to noise ratio. Because if recent history has taught us anything, it's that crowdsourced lies are often at least as compelling as the truth.
> My account was suspended because I talked about the lab leak hypothesis before it was decided that it was ok to do so by The Good People™.
Realistically, "un-moderated" will be 99% Qanon and Stop-the-Steal and 1% the kind of stuff you say you posted. The most obsessive have the loudest voices in those spaces, and people who believe wacky things seem to be more obsessive than those who don't.
I'm with you, but should a person who holds no forbidden opinions today really feel worried that one of their opinions will be forbidden in the future?
You've got to think, if someone has the exact set of approved opinions today, that's almost certainly not a coincidence, but a sign that they form their opinions based on what is approved. And in that case they're at no risk of ever having a meaningfully unpopular opinion.
You've got to think, if someone has the exact set of approved opinions today, that's almost certainly not a coincidence, but a sign that they form their opinions based on what is approved. And in that case they're at no risk of ever having a meaningfully unpopular opinion.
Unfortunately, you make an excellent point. And yes, I do think that the majority of people, when given the choice between what they know to be right and what they know to be popular, will choose the latter. Additionally, they will aggressively attack those who hold the unpopular opinion to buy themselves protection from the witch-hunters going after those with unpopular opinions.
The lab leak stuff gave me whiplash for sure. Early on, if you had the audacity to suggest that a coronavirus came out of a coronavirus lab, people would unironically call you a racist fascist right-wing lunatic.
Now it's officially a credible theory[1].
This is exactly why moderating "The Truth" is so dangerous. The people claiming to be the arbiter of the truth are politically motivated and self serving.
[1] https://www.cnn.com/2021/07/16/politics/biden-intel-review-c...
Now it's officially a credible theory[1].
This is exactly why moderating "The Truth" is so dangerous. The people claiming to be the arbiter of the truth are politically motivated and self serving.
[1] https://www.cnn.com/2021/07/16/politics/biden-intel-review-c...
Additionally, most of them were utterly innumerate. There's nothing more infuriating than the "I'm not a math person" folks sitting there gleefully pretending to understand data as they disseminate mass panic.
Maybe he thinks an unmoderated cesspool is better than a moderated cesspool. Either way, you're swimming in shit. Twitter not being a cesspool is an appealing fantasy, but only that.
> Maybe he thinks an unmoderated cesspool is better than a moderated cesspool. Either way, you're swimming in shit.
I'm sure he thinks that. Apparently he's a "free speech absolutist."
> Twitter not being a cesspool is an appealing fantasy, but only that.
It's not a binary condition. Twitter can be a cesspool with relatively more or relatively less shit. I'm sure his preference will result in relatively more shit.
Personally, I've appreciated a having society that lacks the shit Donald Trump created on Twitter.
I'm sure he thinks that. Apparently he's a "free speech absolutist."
> Twitter not being a cesspool is an appealing fantasy, but only that.
It's not a binary condition. Twitter can be a cesspool with relatively more or relatively less shit. I'm sure his preference will result in relatively more shit.
Personally, I've appreciated a having society that lacks the shit Donald Trump created on Twitter.
> Buying the company and taking it private will give him the ability to make those hard choices and try to make a social media company that is positive for humanity.
If that's the goal, why not simply found another social media company built around those values?
Surely he has the means to attract tech talent to do it, the means/message to attract users to a new platform, and presumably if he knows what's bad about Twitter and how to subtract it and make it good, he could do this greenfield.
This would result in increased platform diversity, too. And I'll bet you it's cheaper.
Imagine if Musk had tried to buy a big three automaker in order to make electric cars happen.
If that's the goal, why not simply found another social media company built around those values?
Surely he has the means to attract tech talent to do it, the means/message to attract users to a new platform, and presumably if he knows what's bad about Twitter and how to subtract it and make it good, he could do this greenfield.
This would result in increased platform diversity, too. And I'll bet you it's cheaper.
Imagine if Musk had tried to buy a big three automaker in order to make electric cars happen.
Because this isn't really about building a neat social network, it's about power.
People have tried to do what you said. Let's make a Twitter that's not controlled by the hard left! The result was Twitter's ideological allies at tech firms immediately banned them from every platform they controlled, and other allies ganged up to hack and destroy them.
You cannot start a Twitter competitor today, it's impossible, because:
1. The sort of people who found companies tend to be pro-free speech because their economic survival depends on having risky but correct ideas, and that naturally leads to a sympathy for free speech.
2. The sort of people who hate free speech are obsessed with Twitter/tweeting platforms specifically.
3. They are exceptionally aggressive. They will do anything, including damaging their own companies and even breaking the law in order to stop any other platform from becoming popular. They've managed to take over tech firms to a sufficient extent that they will destroy any attempts to replace Twitter, which they see as a key pivot point in their power over society.
The obvious solution: buy Twitter and fix it. It's too big to ban. This also has the major benefit of really, really upsetting Musk's ideological enemies. They'd hate him anyway and many are in powerful positions in politics and the media. Even the thought of losing Twitter to Musk has very conspicuously driven them into a frenzy in recent days, and such frenzies discredit them in the eyes of the general public, thus weakening their ability to move against Musk.
People have tried to do what you said. Let's make a Twitter that's not controlled by the hard left! The result was Twitter's ideological allies at tech firms immediately banned them from every platform they controlled, and other allies ganged up to hack and destroy them.
You cannot start a Twitter competitor today, it's impossible, because:
1. The sort of people who found companies tend to be pro-free speech because their economic survival depends on having risky but correct ideas, and that naturally leads to a sympathy for free speech.
2. The sort of people who hate free speech are obsessed with Twitter/tweeting platforms specifically.
3. They are exceptionally aggressive. They will do anything, including damaging their own companies and even breaking the law in order to stop any other platform from becoming popular. They've managed to take over tech firms to a sufficient extent that they will destroy any attempts to replace Twitter, which they see as a key pivot point in their power over society.
The obvious solution: buy Twitter and fix it. It's too big to ban. This also has the major benefit of really, really upsetting Musk's ideological enemies. They'd hate him anyway and many are in powerful positions in politics and the media. Even the thought of losing Twitter to Musk has very conspicuously driven them into a frenzy in recent days, and such frenzies discredit them in the eyes of the general public, thus weakening their ability to move against Musk.
> If that's the goal, why not simply found another social media company built around those values?
Twitter is one of the few social networks that actually has a network. A lot of social media failed because the cold start problem is a very hard problem to solve at this point in the game. Elon probably knows it and I would bet that this is why he is looking to buy an established social network rather than creating a new one.
Twitter is one of the few social networks that actually has a network. A lot of social media failed because the cold start problem is a very hard problem to solve at this point in the game. Elon probably knows it and I would bet that this is why he is looking to buy an established social network rather than creating a new one.
It's a hard problem if you don't have the clout to get attention and/or if there's no particular demand for whatever distinction your platform offers.
Musk has market-moving clout and a cult of personality, so the remaining question would be if he has a compelling insight into distinguished features.
If he doesn't, he won't make Twitter better. If he does, he could make a greenfield platform a success.
Musk has market-moving clout and a cult of personality, so the remaining question would be if he has a compelling insight into distinguished features.
If he doesn't, he won't make Twitter better. If he does, he could make a greenfield platform a success.
Google failed at it multiple times. Trumps network seems to have failed
> Imagine if Musk had tried to buy a big three automaker in order to make electric cars happen.
Bad analogy. Social media platforms are natural monopolies. The utility of a car doesn't grow with how many other people own that model. By contrast, Twitter's utility is basically just a function of the fact that all the relevant players use it.
Bad analogy. Social media platforms are natural monopolies. The utility of a car doesn't grow with how many other people own that model. By contrast, Twitter's utility is basically just a function of the fact that all the relevant players use it.
> Social media platforms are natural monopolies.
If this was the case, Facebook wouldn't have needed to buy Instagram and Whatsapp. Or hell, there wouldn't have been FB because MySpace would have been king forever.
Network effects are real and they can help sustain engagement and mindshare but given how easy it is to move fluidly between multiple forums (social or no), the next competing platform is one compelling reason for engagement away.
If this was the case, Facebook wouldn't have needed to buy Instagram and Whatsapp. Or hell, there wouldn't have been FB because MySpace would have been king forever.
Network effects are real and they can help sustain engagement and mindshare but given how easy it is to move fluidly between multiple forums (social or no), the next competing platform is one compelling reason for engagement away.
> Couldn't he have more noble causes in mind like trying to do the right thing for humanity (e.g. Tesla, SpaceX)? ...
> ...Social media is a cesspool right now,...
He would have greater impact if he used his account to not add to the cesspool, then. Much more than if he bought the company and kept tweeting like he does.
> ...Social media is a cesspool right now,...
He would have greater impact if he used his account to not add to the cesspool, then. Much more than if he bought the company and kept tweeting like he does.
So.. what, we just let the dumpster fire continue on unabated and do nothing? I would argue his tweets are a lot less harmful than those that push false news in an attempt to change the route that democracies are following.
Luckily this is also the right thing for humanity.
> Couldn't he have more noble causes in mind like trying to do the right thing for humanity (e.g. Tesla, SpaceX)?
Why should he?
Why should he?
> Couldn't he have more noble causes in mind like trying to do the right thing for humanity (e.g. Tesla, SpaceX)?
Like what?
Like what?
Plastics in the ocean, mass die offs, hunger around the world, health care around the world
Jeez, he's already launched Tesla and SpaceX, why's he gotta solve every problem under the sun before he does something not quite so clear cut.
And haven't we already established that no amount of money thrown around is going to actually fix "hunger around the world" or "health care around the world". How many billions have already been dumped down that hole to little effect?
And haven't we already established that no amount of money thrown around is going to actually fix "hunger around the world" or "health care around the world". How many billions have already been dumped down that hole to little effect?
He didn't launch tesla, he bought his title. Neither company is really making the world better.
And idk why your so cynical about results. Just one example is Bill gates helping with polio vaccines.
Anyway I thought you were asking for better ways to actually help the world then buying Twitter. Plenty of research needs funding.
And idk why your so cynical about results. Just one example is Bill gates helping with polio vaccines.
Anyway I thought you were asking for better ways to actually help the world then buying Twitter. Plenty of research needs funding.
Polio vaccines? Bad example. Whatever good they did in the past, most outbreaks of polio in the world today are triggered by oral vaccine rollouts.
https://www.cdc.gov/mmwr/volumes/70/wr/mm7049a1.htm
https://abcnews.go.com/Technology/wireStory/polio-outbreak-s...
https://abcnews.go.com/Health/wireStory/polio-cases-now-caus...
https://www.cdc.gov/mmwr/volumes/70/wr/mm7049a1.htm
https://abcnews.go.com/Technology/wireStory/polio-outbreak-s...
https://abcnews.go.com/Health/wireStory/polio-cases-now-caus...
He could but he doesn't, because he is a narcissist
It's really none of your business what someone does with their own money.
He could also do much worse.
He could also do much worse.
> It's really none of your business what someone does with their own money.
Then don't you think people shouldn't have so much money that they can literally control society? What a facile stance.
Then don't you think people shouldn't have so much money that they can literally control society? What a facile stance.
Musk doesn't control society, neither does twitter. If electrifying the cars of the western world affords someone the insane wealth required to... buy an internet forum... that seems like a fairly reasonable level of control over capital allocation to me.
I never stated anything about "complete control of society", I am merely making the point that money is essentially an abstraction of power and that modern society does nothing to prevent that, maybe it even is built to amplify that. Accordingly, to say "it's none of your business what others do with their money" is to say "it's none of your business how others use their power", and if you can't see how it's pretty directly everyone's business what everyone else does in our shared world, I think you and I understand ethics a little differently.
Edit: parent comment cleanly and completely changed due to my response, what a world. Cowards.
Edit: parent comment cleanly and completely changed due to my response, what a world. Cowards.
So what you're trying to say is that Trump Social should clone a load balancer or two and migrate to Postgres
Musk doesn't have enough money to literally control the society.
If controlling twitter means literally controlling society, then I hope he crashes and burns that whole affair. That much power should never be concentrated into a single corporation.
I'm more talking about lobbying and the pernicious effects of a legal system modifiable by the elites. You can surely see that the rich and elite in society have written tax laws, property (IP, copyright) laws, employment laws, and complicated everything enough that the legal system is pretty directly pay to win.
I think the online giant platforms are another problematic avenue of control, I don't object to that characterization, but I'm really saying that saying "other's money is none of your business" can't be a good-faith statement in a world where money can control livelihoods and laws with such ease.
I think the online giant platforms are another problematic avenue of control, I don't object to that characterization, but I'm really saying that saying "other's money is none of your business" can't be a good-faith statement in a world where money can control livelihoods and laws with such ease.
> but I'm really saying that saying "other's money is none of your business" can't be a good-faith statement in a world where money can control livelihoods and laws with such ease.
It absolutely can. I have no problem with the fact that money can buy politicians.
I have a problem with the fact that politicians can be bought in the first place.
Which are 2 completely different issues. If you had loads of money, you’d play the game too.
It absolutely can. I have no problem with the fact that money can buy politicians.
I have a problem with the fact that politicians can be bought in the first place.
Which are 2 completely different issues. If you had loads of money, you’d play the game too.
Then we’re “playing the game” by caring how he spends his money and trying to use social pressure to force changes in law. You can’t simultaneously say Musk should be able to do what he wants because he can, and then tell others that they need to behave differently.
Well, you can, but it’d be massively hypocritical and an opinion that’s easily dismissed
Well, you can, but it’d be massively hypocritical and an opinion that’s easily dismissed
Oh, come now. It’s not our business if he uses his money to outright purchase a politician? It’s not our business if he uses his money in pursuit of The Most Dangerous Game? It’s not our business if he uses his money to run disinformation campaigns via social media? Of course it is very clearly our business what he does with his money.
If anything, we should not only be scrutinizing the hell out of Musk’s stated intentions, but also scrutinizing those people in the Twitter organization who have the power to manipulate the public message, and ensuring that there are checks in place to keep falsehoods and anti-democracy messaging out of social media.
I mean, really, “mind your business!”? So let’s pretend it’s some other mega-billionaire, shall we? We sure has hell don’t want the likes of Putin purchasing twitter, do we? Give your head a shake.
Edit: ah, shit, I see later in the thread you double down. What a waste of my time. Don’t bother responding, IDGAF.
If anything, we should not only be scrutinizing the hell out of Musk’s stated intentions, but also scrutinizing those people in the Twitter organization who have the power to manipulate the public message, and ensuring that there are checks in place to keep falsehoods and anti-democracy messaging out of social media.
I mean, really, “mind your business!”? So let’s pretend it’s some other mega-billionaire, shall we? We sure has hell don’t want the likes of Putin purchasing twitter, do we? Give your head a shake.
Edit: ah, shit, I see later in the thread you double down. What a waste of my time. Don’t bother responding, IDGAF.
>status vs noble cause
Why not both?
Why not both?
> and remember, he plans on dying on Mars, he’s playing a different game than typical billionaires
I think you’re giving him too much credit here. It’s male appendage measuring at this point, like with most three comma club members.
I think you’re giving him too much credit here. It’s male appendage measuring at this point, like with most three comma club members.
> three comma club members
So you're gonna bundle people with $999B and $1B together, just like that?
So you're gonna bundle people with $999B and $1B together, just like that?
joe rogan said that i believe
It's not really about that alone.
Musk have a case against him by the SEC (tweeting about taking tesla private), it seems like they can win it, and he might be forced to stop using twitter.
Now I can imagine it hard for the SEC to enforce such a role if it's his private company.
So in a sense he's using that money to secure his best tool to marketing / growth which is definitely worth 50Bn$ for tesla alone (then add all his other ventures now and in the future)
Musk have a case against him by the SEC (tweeting about taking tesla private), it seems like they can win it, and he might be forced to stop using twitter.
Now I can imagine it hard for the SEC to enforce such a role if it's his private company.
So in a sense he's using that money to secure his best tool to marketing / growth which is definitely worth 50Bn$ for tesla alone (then add all his other ventures now and in the future)
Is the SEC upset about Elon’s tweeting or making public statements that happen to occur on Twitter?
It was definitely his false and misleading statements that were the problem.
The SEC doesn't need to persuade Twitter to enforce anything and it would make a difference if Twitter is public or private. The SEC can sanction Musk as an individual and officer of Tesla. As such insider trading rules (and whatever?) apply to him, no matter what medium he uses to break them.
(And please explain how publishing stoner and dogecoin memes is worth $50billion to Tesla... ;)
(And please explain how publishing stoner and dogecoin memes is worth $50billion to Tesla... ;)
He addresses the SEC thing here: https://youtu.be/cdZZpaB2kDM?t=1635
>he might be forced to stop using twitter
Just like last time.
Just like last time.
SEC already punished him by making him step down as chair of Tesla for 3 years, plus a fine. And I doubt that curtailing anyone’s first amendment rights is a punishment the SEC is legally allowed to enact.
[1]:https://www.sec.gov/news/press-release/2018-226
[1]:https://www.sec.gov/news/press-release/2018-226
The SEC “curtails first amendment rights” all the time. It’s arguably one of their most effective means of enforcement: an order or agreement to stop lying.
I am not a lawyer, but restricting Musk from being able to speak publicly seems an overly-broad way of restricting him from lying about market-related things, given that the latter is a small subset of his overall speech.
I don’t think it’s likely the SEC would prohibit him from using twitter altogether but I don’t think it’s entirely beyond their ability, either. Especially in the context of a settlement agreement.
Because it's not his 'fuck you' money but the supposed hopes and dreams of all those who believe he is some wonderful 'capital allocator'.
Bullshi!t proven.
Is buying twitter an example of that? He may make a buck but I'll 100% disagree.
And what? You think he earned 260 squillian dollars?
No, his shares were brought to that level through the demand of those who purchased shares in companies he owns.
It's not 'his' 'fuck you' money at all.
At this stage, he's using societies capital for entertainment value ... the support for him is cult like.
The whole spectacle is obscene and pathetic.
Bullshi!t proven.
Is buying twitter an example of that? He may make a buck but I'll 100% disagree.
And what? You think he earned 260 squillian dollars?
No, his shares were brought to that level through the demand of those who purchased shares in companies he owns.
It's not 'his' 'fuck you' money at all.
At this stage, he's using societies capital for entertainment value ... the support for him is cult like.
The whole spectacle is obscene and pathetic.
> the support for him is cult like
Don’t think for a moment that he does not pay a team of promotionists. Every public forum is monitored and “influenced.” He is not a completely stupid person and he obviously understands social media. Of course many of those in this very thread that argue against those who say “bad things” about Musk are being engaged by his paid mouthpieces. It is very much in his best interests to spend pocket change amounts to counter all criticism. It is absurd to think otherwise.
Don’t think for a moment that he does not pay a team of promotionists. Every public forum is monitored and “influenced.” He is not a completely stupid person and he obviously understands social media. Of course many of those in this very thread that argue against those who say “bad things” about Musk are being engaged by his paid mouthpieces. It is very much in his best interests to spend pocket change amounts to counter all criticism. It is absurd to think otherwise.
moistly, I think you are in an epistemic pit because you think misleading others is smart. Notice that you don't present evidence that everything is monitored and influenced, because it isn't an evidence rooted belief. Notice that you think that influence on social media is intelligent, that misinformation is clever, and that countering criticism rather than entertaining it is wisdom - you call it absurd to not counter criticism at the end of your post. On the basis of these things you think that smart people must be doing it and since you consider Elon smart you think he is doing it.
The problem is, being smart and thinking misleading people via online influence is smart aren't the same thing. moistly, in mistaking intelligence for oppression, I think you are dooming yourself into accepting a potentially false belief. Many very intelligent people value integrity.
You asks us not to think for even a moment. Fuck that. What happens when we do? The finances at Tesla are public knowledge because it a public company. They don't have an advertising department. It seems reasonable that Elon might not believe in paid promotions as much as some people. So a reasonable person might entertain the thought that -- and now we've transgressed your command to not think for even a moment.
> Of course many of those in this very thread that argue against those who say “bad things” about Musk are being engaged by his paid mouthpieces.
I'm not being paid by Elon Musk to post this. I publicly declare right now that I will retract my assertion that you are trapped in an epistemic pit and give you one hundred dollars if you can prove that at least four people in this thread are being paid by Elon Musk to counteract criticism. I will welcome this public disgrace if you teach me better, because I strongly believe that accepting criticism from you so that my beliefs are more accurate is not absurd, but of great benefit to me.
The problem is, being smart and thinking misleading people via online influence is smart aren't the same thing. moistly, in mistaking intelligence for oppression, I think you are dooming yourself into accepting a potentially false belief. Many very intelligent people value integrity.
You asks us not to think for even a moment. Fuck that. What happens when we do? The finances at Tesla are public knowledge because it a public company. They don't have an advertising department. It seems reasonable that Elon might not believe in paid promotions as much as some people. So a reasonable person might entertain the thought that -- and now we've transgressed your command to not think for even a moment.
> Of course many of those in this very thread that argue against those who say “bad things” about Musk are being engaged by his paid mouthpieces.
I'm not being paid by Elon Musk to post this. I publicly declare right now that I will retract my assertion that you are trapped in an epistemic pit and give you one hundred dollars if you can prove that at least four people in this thread are being paid by Elon Musk to counteract criticism. I will welcome this public disgrace if you teach me better, because I strongly believe that accepting criticism from you so that my beliefs are more accurate is not absurd, but of great benefit to me.
LOL, go ahead and believe what you wish. More the fool you, though, if you naïvely believe that the ultra-wealthy don’t manage their public image!
You're retreating from your original claim that Musk specifically pays people to "monitor and influence public forums" and in particular this forum. Now someone else pointed out that this is nonsense, you're retreating to the bailey of "wealth people manage their public image" which is a much weaker claim.
It’s the same claim! Since the time of pharaohs those with power and money have paid informers and influencers to keep their ear to the ground and to promote their benefactor. It’s a well-established industry. Hollywood makes extensive use of it, Scientology infamously so, politicians the same, and sure as god made little green apples, Musk’s cult-like evangelists are helped along their path by the ministrations of professional influencers. You can’t say Musk farted without some toady sycophant popping up to say that it smells like roses. It’s bizarre and unnatural, and Occam’s razor says that it’s hired help.
Claim 1:
> Of course many of those in this very thread that argue against those who say “bad things” about Musk are being engaged by his paid mouthpieces.
Claim 2
> More the fool you, though, if you naïvely believe that the ultra-wealthy don’t manage their public image!
In one you claim that people in this thread are doing it. In the other you claim that it is a thing which is done. These are two different claims.
You think people who disagree with you are fools, because you think misleading others is wisdom. I think you can escape, because I think you know that Putin is a moron. Do you agree that it was stupid of him to spread misinformation, ultimately resulting in deception prospering so much so that he lost sight of the truth, leading to ruin? If it was stupid for Putin, then why can't it be stupid for others? Look, you point to Pharaoh. He is dead, his empire is dead, and his fancy pyramid didn't help him. You point to politicians - Hitler killed himself. You point to Scientology - do you think them clever and wise, that they have the truth; I don't. Why are you pointing at idiots? Why are you pointing at dead men? Why do you think they are so clever?
If you had evidence that people were being paid, you wouldn't need to point to unwise dead men! Get out of the pit. Where is the oppression you claim? Where are the people being paid? Where is your evidence? Show me a check. Show me a paystub! Show me an account name which can be hired through an online service. Show me that I'm wrong that your beliefs are not rooted in your preconception that it is wise to mislead. I confess that I believe that it isn't absurd to be corrected. Criticize me! Point out my flaws! I will be better for it.
I am not talking about claim 2. I am talking about claim 1.
Also, from the Hacker News site guidelines:
> Please don't post insinuations about astroturfing, shilling, bots, brigading, foreign agents and the like. It degrades discussion and is usually mistaken. If you're worried about abuse, email [email protected] and we'll look at the data.
> Comments should get more thoughtful and substantive, not less, as a topic gets more divisive.
> Of course many of those in this very thread that argue against those who say “bad things” about Musk are being engaged by his paid mouthpieces.
Claim 2
> More the fool you, though, if you naïvely believe that the ultra-wealthy don’t manage their public image!
In one you claim that people in this thread are doing it. In the other you claim that it is a thing which is done. These are two different claims.
You think people who disagree with you are fools, because you think misleading others is wisdom. I think you can escape, because I think you know that Putin is a moron. Do you agree that it was stupid of him to spread misinformation, ultimately resulting in deception prospering so much so that he lost sight of the truth, leading to ruin? If it was stupid for Putin, then why can't it be stupid for others? Look, you point to Pharaoh. He is dead, his empire is dead, and his fancy pyramid didn't help him. You point to politicians - Hitler killed himself. You point to Scientology - do you think them clever and wise, that they have the truth; I don't. Why are you pointing at idiots? Why are you pointing at dead men? Why do you think they are so clever?
If you had evidence that people were being paid, you wouldn't need to point to unwise dead men! Get out of the pit. Where is the oppression you claim? Where are the people being paid? Where is your evidence? Show me a check. Show me a paystub! Show me an account name which can be hired through an online service. Show me that I'm wrong that your beliefs are not rooted in your preconception that it is wise to mislead. I confess that I believe that it isn't absurd to be corrected. Criticize me! Point out my flaws! I will be better for it.
I am not talking about claim 2. I am talking about claim 1.
Also, from the Hacker News site guidelines:
> Please don't post insinuations about astroturfing, shilling, bots, brigading, foreign agents and the like. It degrades discussion and is usually mistaken. If you're worried about abuse, email [email protected] and we'll look at the data.
> Comments should get more thoughtful and substantive, not less, as a topic gets more divisive.
Good god what tiresome and unnecessary drivel.
You mock attempts to share critical feedback with you. It is clear you don't value criticism. It is plain to see why someone who doesn't value criticism wouldn't understand why someone else would value it. Nevertheless, plenty of intelligent people consider soliciting critical feedback of their ideas to be among the most important things they can do.
I eagerly await the day you present concrete evidence of your claims that many here are being paid by Elon Musk to promote him, but I grow more and more certain with your every reply that you have no such evidence. If you did have the evidence, you would collect a hundred dollars quickly. Since you don't, you call me a fool and pretend I speak drivel. I could call you a liar for that, but I won't. I think you are confused enough that you believe your own false claims. I completely forgive your insults.
However, I must insist you not see yourself as wise in your own eyes. You who proclaim that others should not "think for even a moment" have no place whatsoever mocking at cultists.
I eagerly await the day you present concrete evidence of your claims that many here are being paid by Elon Musk to promote him, but I grow more and more certain with your every reply that you have no such evidence. If you did have the evidence, you would collect a hundred dollars quickly. Since you don't, you call me a fool and pretend I speak drivel. I could call you a liar for that, but I won't. I think you are confused enough that you believe your own false claims. I completely forgive your insults.
However, I must insist you not see yourself as wise in your own eyes. You who proclaim that others should not "think for even a moment" have no place whatsoever mocking at cultists.
Bless your heart for caring so much. I do not.
I would spend 15% of my net worth on free speech. Wouldn't you?
A lot of people downvoting, so I'll expand; It's fair to give the benefit of the doubt given that Tesla is helping combat climate change and SpaceX is about becoming multi-planetary. These are civilization level problems and solutions.
The idea is to make twitter a TRUSTED public square. He suggests open sourcing the algorithm and making all moderation actions visible to the public. Makes sense as transparency is needed to rebuild trust in the platform.
A lot of people downvoting, so I'll expand; It's fair to give the benefit of the doubt given that Tesla is helping combat climate change and SpaceX is about becoming multi-planetary. These are civilization level problems and solutions.
The idea is to make twitter a TRUSTED public square. He suggests open sourcing the algorithm and making all moderation actions visible to the public. Makes sense as transparency is needed to rebuild trust in the platform.
TSLA is helping rich people think that they are helping combat climate change, whilst keeping their unsustainable car centric lifestyle.
Tesla has replaced two million gasoline cars with electric cars, and given its current growth rate, this number will likely be massively larger in a few years.
Musk has since long ago pursued a publically disclosed plan for Tesla, for the company to release progressively more affordable electric vehicles, so the current growth rate in number of vehicles sold could very well be sustained for years to come.
Beyond Tesla's own sales, its success has sparked massive investment by other carmakers to push their electric vehicle manufacturing timetables forward. There is no reasonable case to be made that Tesla has not had a massive impact on pushing the world to replace gasoline vehicles with electric ones. And most people consider that to be good for the environment, even if you now don't.
Musk has since long ago pursued a publically disclosed plan for Tesla, for the company to release progressively more affordable electric vehicles, so the current growth rate in number of vehicles sold could very well be sustained for years to come.
Beyond Tesla's own sales, its success has sparked massive investment by other carmakers to push their electric vehicle manufacturing timetables forward. There is no reasonable case to be made that Tesla has not had a massive impact on pushing the world to replace gasoline vehicles with electric ones. And most people consider that to be good for the environment, even if you now don't.
If you live in an area that primarily gets electricity from coal plants, the break even point for a Model 3 to gas cars is 80,000+ miles [1]. EVs aren't some magic carbon-negative solution, and the politics Musk plays to get raw materials are a net negative for the planet as a whole.
[1]https://www.reuters.com/business/autos-transportation/lifeti...
[1]https://www.reuters.com/business/autos-transportation/lifeti...
> If you live in an area that primarily gets electricity from coal plants
That's a rather extreme assumption. The article you linked to also gives the more representative figure of 14,800 miles for "U.S. average energy mix (23% coal-fired, plus other fossil fuels and renewables)".
To put things in perspective there are only 12 states that are majority coal powered (according to 2017 numbers[0]):
[0] https://stacker.com/stories/3356/states-producing-most-elect...
[1] https://electrek.co/2019/10/21/tesla-model-3-100000-miles/
[2] https://www.findmyelectric.com/blog/how-long-does-a-tesla-ba...
That's a rather extreme assumption. The article you linked to also gives the more representative figure of 14,800 miles for "U.S. average energy mix (23% coal-fired, plus other fossil fuels and renewables)".
To put things in perspective there are only 12 states that are majority coal powered (according to 2017 numbers[0]):
1. West Virginia - 93.2%
2. Wyoming - 85.7%
3. Missouri - 79.8%
4. Kentucky - 78.2%
5. Indiana - 73.2%
6. Utah - 70.5%
7. North Dakota - 64.5%
8. Nebraska - 59.8%
9. Ohio - 57.2%
10. Wisconsin - 55.1%
11. New Mexico - 54.8%
12. Colorado - 54.3%
[0] https://stacker.com/stories/3356/states-producing-most-elect...
[1] https://electrek.co/2019/10/21/tesla-model-3-100000-miles/
[2] https://www.findmyelectric.com/blog/how-long-does-a-tesla-ba...
> If you live in an area that primarily gets electricity from coal plants, the break even point for a Model 3 to gas cars is 80,000+ miles [1]. EVs aren't some magic carbon-negative solution, and the politics Musk plays to get raw materials are a net negative for the planet as a whole.
[1] https://www.reuters.com/business/autos-transportation/lifeti...
Do you have a bone to pick with EVs? This seems cherry-picked/straw man to me.
The 80k+ you refer to assumes electricity is sourced 100% from coal, which happens never in the US.
Even West Virginia, a haven for coal, it’s only 88%. Wyoming is also in the 80s. There are a few in the 50-70 range, but most states are sub-35, with many being 0.
[edit] For our most populous states, CA checks in at 0.1%, NY 0.1%, FL 7%, and TX 16%.
https://www.nei.org/resources/statistics/state-electricity-g...
This article shows how US sources of electricity have changed in the past 20 years or so.
https://www.nytimes.com/interactive/2018/12/24/climate/how-e...
Contrary to what you state, I would say that EVs are doing a good job at lowering overall emissions from passenger vehicles, and this will become more true as renewables increase their percentage in our electricity production mix.
[1] https://www.reuters.com/business/autos-transportation/lifeti...
Do you have a bone to pick with EVs? This seems cherry-picked/straw man to me.
The 80k+ you refer to assumes electricity is sourced 100% from coal, which happens never in the US.
Even West Virginia, a haven for coal, it’s only 88%. Wyoming is also in the 80s. There are a few in the 50-70 range, but most states are sub-35, with many being 0.
[edit] For our most populous states, CA checks in at 0.1%, NY 0.1%, FL 7%, and TX 16%.
https://www.nei.org/resources/statistics/state-electricity-g...
This article shows how US sources of electricity have changed in the past 20 years or so.
https://www.nytimes.com/interactive/2018/12/24/climate/how-e...
Contrary to what you state, I would say that EVs are doing a good job at lowering overall emissions from passenger vehicles, and this will become more true as renewables increase their percentage in our electricity production mix.
Even if that 80,000+ miles point is true it’s still better than a gasoline car over its lifetime and completely dishonest because who the hell is buying a Tesla and living in an area with 100% coal fired power? Germans?
The “U.S. average energy mix” comparison of 14,800 is much more accurate.
Not to mention the equation gets more and more favourable to EVs with each passing year.
The “U.S. average energy mix” comparison of 14,800 is much more accurate.
Not to mention the equation gets more and more favourable to EVs with each passing year.
I really don't appreciate people on HN posting wildly inaccurate links, I think that's something we need to be discouraged from doing. Second, are you unaware of solar panels?
A lot of assumptions there that things will continue to get cheaper, cost in manufacturing will drop, battery range will continue to improve, charging stations continue to proliferate, the grid respond to the burden, and no missteps in captialization and expansion cause it all to collapse.
Extremely safe assumptions given the investments being made by Tesla, not to mention other carmakers. The electric grid responding to the burden is almost certain as well, given the history of the grid handling decades of rising year-over-year energy usage in most localities.
As for mistakes, the company can afford many small to intermediate missteps and still accomplish what I described, because the company's momentum is already pushing it to accomplish these achievements.
As for mistakes, the company can afford many small to intermediate missteps and still accomplish what I described, because the company's momentum is already pushing it to accomplish these achievements.
Optimistic!
The grid has not responded well, that is history. Fast Charging stations are a huge draw, and home recharging raised the bar for substations everywhere. It will take decades to respond.
Battery advances - well that's a crystal ball I don't care to gaze into.
And company momentum is a myth. Cash flow is king - the day you don't make payroll, you close. It's a markov chain with a terminating condition. Play any markov game long enough and you reach that node and its all over. So a gamble every time.
The grid has not responded well, that is history. Fast Charging stations are a huge draw, and home recharging raised the bar for substations everywhere. It will take decades to respond.
Battery advances - well that's a crystal ball I don't care to gaze into.
And company momentum is a myth. Cash flow is king - the day you don't make payroll, you close. It's a markov chain with a terminating condition. Play any markov game long enough and you reach that node and its all over. So a gamble every time.
I have seen no numbers to support the claim that mass installation and employment of charging stations will have an extraordinary impact on electricity usage, beyond the normal annual increases that the grid has been able to facilitate.
As for batteries, you don't have to bet on battery advances, just the scaling up of manufacturing, which is already underway.
As for batteries, you don't have to bet on battery advances, just the scaling up of manufacturing, which is already underway.
Do you have data supporting that Tesla replaced 2 million gasoline cars? Selling electric cars does not mean that the buyer has gotten rid of their gasoline-powered cars, and it's not uncommon for one person to own multiple cars.
I have no reason to assume Tesla encouraged more people to become car owners. That would be quite the expensive status symbol for a non-car owner to take up. And those who own a gasoline-powered car buying a Tesla as a second vehicle would still reduce usage of the first vehicle.
So assuming that most of those two million sales weren't in lieue of the sale, or at least use, of gasoline powered cars, doesn't seem reasonable to me.
But let's be extremely conservative in our praise of Tesla, and say that the company took one million gasoline powered cars off the road and replaced them with electric cars. That is quite the accomplishment if you accept the premise that electric vehicles are better than gasoline-powered ones for reducing the impact on climate.
So assuming that most of those two million sales weren't in lieue of the sale, or at least use, of gasoline powered cars, doesn't seem reasonable to me.
But let's be extremely conservative in our praise of Tesla, and say that the company took one million gasoline powered cars off the road and replaced them with electric cars. That is quite the accomplishment if you accept the premise that electric vehicles are better than gasoline-powered ones for reducing the impact on climate.
Apart from the last sentence, you're not really addressing the grandparent's point, and that last sentence is not a very convincing argument.
> It's fair to give the benefit of the doubt given that Tesla is helping combat climate change and SpaceX is about becoming multi-planetary
I don't think it's reasonable to give the benefit of the doubt to [highly debatable claim] based on uncritically accepting other [highly debatable claims].
I don't think it's reasonable to give the benefit of the doubt to [highly debatable claim] based on uncritically accepting other [highly debatable claims].
Replacing gasoline-powered cars with electric ones helping combat climate change is "highly debatable"?
Replacing gasoline-powered cars with electric vehicles is potentially part of combating climate change, but this depends a lot on the specifics of manufacturing etc. [1]
Regardless, "helping combat climate change" is at best an incomplete description of Tesla, in the same way that Nestle is not perfectly captured by "Good food, good life" ; these are potential side-effects, rather than inarguable core missions.
We should be wary of accepting the slogans of profit-driven organisations as the truth. Wendy's is focused a lot more on selling than locating beef, for example.
[1] https://www.forbes.com/sites/timabansal/2021/05/13/how-green...
Regardless, "helping combat climate change" is at best an incomplete description of Tesla, in the same way that Nestle is not perfectly captured by "Good food, good life" ; these are potential side-effects, rather than inarguable core missions.
We should be wary of accepting the slogans of profit-driven organisations as the truth. Wendy's is focused a lot more on selling than locating beef, for example.
[1] https://www.forbes.com/sites/timabansal/2021/05/13/how-green...
It's a very significant part of combating climate change, without which there is no hope of achieving zero carbon, and no company has done more to make that happen than Tesla.
One can praise Tesla while still acknowledging that it should not be blinded trusted to always work in the public interest, and also while recognizing Tesla's contributions alone are not enough for human civilization to get to zero carbon.
Minimizing how significant Tesla's contribution has been relative to other carmakers', and in fact, the vast majority if not all other companies in general, is not an honest way of addressing these inadequancies and challenges you highlight, and suggests to me a motivation unrelated to environmentalism behind it.
One can praise Tesla while still acknowledging that it should not be blinded trusted to always work in the public interest, and also while recognizing Tesla's contributions alone are not enough for human civilization to get to zero carbon.
Minimizing how significant Tesla's contribution has been relative to other carmakers', and in fact, the vast majority if not all other companies in general, is not an honest way of addressing these inadequancies and challenges you highlight, and suggests to me a motivation unrelated to environmentalism behind it.
Replacing a gas powered car with an EV in an area served by coal power is definitely not helping either air pollution or climate change. It's only moving emissions from the tail pipe to a smoke stack. An EV is only a net negative CO2 producer if you charge it from renewable sources. Even then it'll only be a net negative only after the break-even point for the CO2 produced by the construction of the EV and charging system.
This is like saying that taking the first step is useless because there are more steps to take before you get to destination.
It's widely understood that switching to EV is part of a larger package of policies that can get society to zero carbon but it is nonetheless an absolutely necessary part of any zero carbon future. Tesla's role in pushing that forward is highly commendable, by any reasonable standard.
> It's only moving emissions from the tail pipe to a smoke stack.
I kinda like A LOT not having tail pipe smoke around me all the time on the streets...
I kinda like A LOT not having tail pipe smoke around me all the time on the streets...
I think a couple million gives you more than plenty to create as many WWW platforms for promoting as much free speech as you want. No need to burn so much money to also buy the brand name of one specific ISP.
No? Because this has nothing to do with free speech. Twitter is a clout farm and he wants to own it.
Musk cares about free speech in the same way as the US South cares about states’ rights.
Excellent analogy
No, comparing Musk to slavery is probably not an excellent analogy. Jesus Christ
You’ve misunderstood the analogy.
The analogy is about misusing a high minded principle to further selfish - or even morally negative - ends.
It is, indeed, a good analogy.
The analogy is about misusing a high minded principle to further selfish - or even morally negative - ends.
It is, indeed, a good analogy.
He didn't misunderstand the analogy, it's obvious what was meant. He's pointing out that comparing Musk's intentions to slavery is absurd, which it is. It's a crap analogy because:
a. Nothing Musk is doing or wants to do with Twitter is immoral.
b. Even if you disagree the scale is totally wrong, but in analogies the sense of scale matters.
a. Nothing Musk is doing or wants to do with Twitter is immoral.
b. Even if you disagree the scale is totally wrong, but in analogies the sense of scale matters.
Yeah, rsync (great username) is correct in my meaning
Pearl-clutching!
Some fine example of antebellum Southern imagery there.
I love practical joke, keep 'em coming!
Some fine example of antebellum Southern imagery there.
I love practical joke, keep 'em coming!
Are you familiar with some of the recent allegations at Tesla : https://www.theguardian.com/technology/2022/feb/18/tesla-cal...
Everyone agrees that "free speech" should have limits (e.g, not be free) but nobody agrees on where those limits are.
[deleted]
The majority of US citizens agree with the very narrow limits on free speech defined by the Supreme Court. Only a fringe minority want much stricter limits, or no limits at all. Twitter could potentially align their content policy to match US law and stop censoring legal content, although that would make it less valuable to some advertisers.
> The majority of US citizens agree with the very narrow limits on free speech defined by the Supreme Court
Do you mean to say that the majority of people believe this is how private companies should operate? If so, Id love to hear your reasoning for thinking that, because I would disagree heavily.
Saying racist stuff is legal, but its still going to get you kicked out of almost every bar, with few to no complaints from other patrons.
Do you mean to say that the majority of people believe this is how private companies should operate? If so, Id love to hear your reasoning for thinking that, because I would disagree heavily.
Saying racist stuff is legal, but its still going to get you kicked out of almost every bar, with few to no complaints from other patrons.
>I would spend 15% of my net worth on free speech. Wouldn't you?
I totally believe that you would do that, I don't believe that Musk would do that, a guy so petty he once cancelled someone's Tesla order after he dared to make a 'rude post' on the internet, with an interesting justification about the nature of private businesses' ability to discriminate:
https://twitter.com/elonmusk/status/694802955170553861
https://www.theguardian.com/technology/2016/feb/03/elon-musk...
I totally believe that you would do that, I don't believe that Musk would do that, a guy so petty he once cancelled someone's Tesla order after he dared to make a 'rude post' on the internet, with an interesting justification about the nature of private businesses' ability to discriminate:
https://twitter.com/elonmusk/status/694802955170553861
https://www.theguardian.com/technology/2016/feb/03/elon-musk...
Let's not forget the time Musk tried to get a guy to take down a Twitter account that tracks Elon's private jet. If Elon owned Twitter he would just close the account himself.
https://www.businessinsider.com/elon-musk-offered-5k-remove-...
https://www.businessinsider.com/elon-musk-offered-5k-remove-...
Musk offered him money because he was concerned about his safety. Which is a very legitimate concern. See John Lennon.
It certainly wasn't an attempt to silence a critic, which is the thing people say he'll start doing when he gets control of Twitter.
It certainly wasn't an attempt to silence a critic, which is the thing people say he'll start doing when he gets control of Twitter.
How having some twitter account affect his safety? That twitter account just re-post data that is completely public already.
Imagine someone stood outside your house and tweeted every time you left your house. They're not doing anything wrong, anyone can walk down the street and see if you leave your house.
Would you be happy knowing that all the criminals in your area now have easily accessible information on when you're home or not?
There's nothing stopping someone doing that. It's only someone gathering information that anyone else could and tweeting it. Just because you can do something, doesn't mean you should.
Would you be happy knowing that all the criminals in your area now have easily accessible information on when you're home or not?
There's nothing stopping someone doing that. It's only someone gathering information that anyone else could and tweeting it. Just because you can do something, doesn't mean you should.
> Would you be happy knowing that all the criminals in your area now have easily accessible information on when you're home or not
I would gladly accept that in return for hundreds of billions, with which I could afford some former special forces bodyguards. And house guards for when I'm not home.
I would gladly accept that in return for hundreds of billions, with which I could afford some former special forces bodyguards. And house guards for when I'm not home.
I guess you don't understand that your answer actually backs up the reason why it shouldn't be allowed to happen.
Publishing his location in real time affects his safety in a country where any whacko with a prior criminal history can get a gun. There certainly are plenty of people with serious grudge against Musk.
The data isn't "completely public". It takes non-trivial skill and effort to access this data.
I sure don't know how to do it.
It significantly rises the bar from "a whacko" to "a whacko with technical skills to access FAA monitoring system"
The data isn't "completely public". It takes non-trivial skill and effort to access this data.
I sure don't know how to do it.
It significantly rises the bar from "a whacko" to "a whacko with technical skills to access FAA monitoring system"
ADS-B is literally public data. There are several public exchanges that provide feeds without filtering and any person with one hour of time can access this data in real-time.
When some billionare buy private jet he is aware about fact that his jet can be easily tracked. If person decide to be a public figure he have to deal with fact that he'll be tracked around.
When some billionare buy private jet he is aware about fact that his jet can be easily tracked. If person decide to be a public figure he have to deal with fact that he'll be tracked around.
If he closes that guy's account, that would be egregiously hypocritical. But I don't see anything wrong with merely offering somebody money to shut up.
Musk is not supportive of free speech worldwide. Only in the US and Canada, where he knows he can get away with it.
There's no reason Twitter can't hypothetically make a lot of money.
> While Twitter does not report its average revenue per user, one independent analyst pegged Twitter’s ARPU at about $17 in 2020, around one third of Facebook’s.
Twitter is being mismanaged or at least not living up to the theoretical potential when compared to its peers. It might never get to facebook ARPU levels, but it can approach it
https://digiday.com/media/the-rundown-twitter-bets-on-long-f...
> While Twitter does not report its average revenue per user, one independent analyst pegged Twitter’s ARPU at about $17 in 2020, around one third of Facebook’s.
Twitter is being mismanaged or at least not living up to the theoretical potential when compared to its peers. It might never get to facebook ARPU levels, but it can approach it
https://digiday.com/media/the-rundown-twitter-bets-on-long-f...
Toss away ethics and sure, it can reach the same nefarious levels of facebook. but as it stands, Twitter is a place of morals and that is their undoing. Twitter has barely if ever been profitable.
A place of morals! Well, lots of other people think Twitter is a place of immoral 1984-esque dystopianism that they want no part of. Those people have money too, and if Musk takes over and cleans house they might well turn up and start doing things that can be exploited for profit, like making interesting tweets about things.
Oh absolutely. Morals are mostly cultural. if we decided that it was moral to sacrifice humans, then it would be. What Musk plans and is doing however, is entirely unethical.
AHAHAHA good one! This is some hilarious post-irony.
It's also possible that Twitter could easily make money and the company is intentionally avoiding that, for tax purposes or whatever.
If you are holding yourself out as a growth company but also paying dividends, it creates a mixed message, because if you are growing shouldn't the money be better spent on growth than just giving it back to the shareholders?
If you are holding yourself out as a growth company but also paying dividends, it creates a mixed message, because if you are growing shouldn't the money be better spent on growth than just giving it back to the shareholders?
Twitter is not a growth company by any metric: Users, revenue, or stock price. If they could easily generate lots of revenue right now with their current management, they absolutely would already be doing it.
If Twitter is losing $180 million per year, and they have 7500 employees, and each employee costs on average $100k [0] fully loaded ($750mm/yr), you could become profitable by reducing your payroll by 50% (laying off half their employees).
My guess is layoffs aren’t considered as an option since it would signal that they’re throwing in the towel and don’t believe in their own growth trajectory.
[0] Average salary here is a conservative guess
My guess is layoffs aren’t considered as an option since it would signal that they’re throwing in the towel and don’t believe in their own growth trajectory.
[0] Average salary here is a conservative guess
Yes, but typically when you're losing money like that you show user growth on the other side to justify it. Twitter doesn't have that.
[deleted]
He made an offer in modest excess of the book value for a company that is probably overvalued to begin with. He knows this. The board knows this. Every investor with half a brain knows this.
It makes it impossible for the board to say no without having a good reason. They have a fiduciary duty to examine the offer and determine if it is best for shareholders to cash out at this price. And the answer to that is it probably is because Twitter has never had a good path to long term profitability.
So yes, he is having a laugh. I am sure if they agree he will find the money. He just doesn’t care. He sees a poorly run company that is making decisions against his freedom of speech ethos. It is an easy target.
It makes it impossible for the board to say no without having a good reason. They have a fiduciary duty to examine the offer and determine if it is best for shareholders to cash out at this price. And the answer to that is it probably is because Twitter has never had a good path to long term profitability.
So yes, he is having a laugh. I am sure if they agree he will find the money. He just doesn’t care. He sees a poorly run company that is making decisions against his freedom of speech ethos. It is an easy target.
This freedom of speech angle is such a crock. How is the world richest man setting the rules of discourse on someone else's platform freedom?
It's akin to buying your way into the opinion section of every newspaper if not in magnitude, certainly in direction.
If he really cared about freedom, he'd just make a new platform with the $54B. But it's not about that. At best it's a laugh, at worst it's about control.
It's akin to buying your way into the opinion section of every newspaper if not in magnitude, certainly in direction.
If he really cared about freedom, he'd just make a new platform with the $54B. But it's not about that. At best it's a laugh, at worst it's about control.
He believes in freedom of speech until someone tracks his jet, then he is more than ready to use his wealth to pressure them into silence.
How do you equate "freedom of speech" with "publishing Musk's physical location in real time" ?
In general we have laws against tracking individuals.
What he does seems legal but it doesn't make it good or ethical.
FAA didn't create a plane tracking system so that a kid can put this info on a map in real time. It's a legitimate security risk for those planes and people who use them. It's an abuse of the system.
In general we have laws against tracking individuals.
What he does seems legal but it doesn't make it good or ethical.
FAA didn't create a plane tracking system so that a kid can put this info on a map in real time. It's a legitimate security risk for those planes and people who use them. It's an abuse of the system.
The twitter account published the location of the plane using publicly available information. It could have also published the information of one of Virgin Atlantic's plane.
In fact it's not even Musk's plane, he just owns the company that owns the plane, Falcon Landing LLC. The twitter account didn't actually know if it was Elon Musk being flown or a bunch of burros being ferried back and forth between US states.
>FAA didn't create a plane tracking system so that a kid can put this info on a map in real time.
You're right, the FAA made the system open so that anybody could do this, not just this kid.
In fact it's not even Musk's plane, he just owns the company that owns the plane, Falcon Landing LLC. The twitter account didn't actually know if it was Elon Musk being flown or a bunch of burros being ferried back and forth between US states.
>FAA didn't create a plane tracking system so that a kid can put this info on a map in real time.
You're right, the FAA made the system open so that anybody could do this, not just this kid.
You can fight for freedom of speech while still wanting people to not say things/do things that you feel puts your personal life at risk.
Freedom of speech has to come with some caveats or its dangerous as it can be used as a weapon.
Freedom of speech has to come with some caveats or its dangerous as it can be used as a weapon.
Twitter is a weapon. its economic condition is only secondary in consideration IMHO.
Let me add some detail to your comment.
Twitter is a media weapon, and Musk knows this. This is a platform for Musk to push his agenda.
Twitter is a media weapon, and Musk knows this. This is a platform for Musk to push his agenda.
If you recognize something is a weapon, you will want to prevent it being used against you, AND potentially want to use it yourself against someone else. They usually go together but not always. You could want people to not have guns without yourself wanting a gun, for example, but still feel "if there's a gun, I want it to be in my control."
Yes, and it's a special weapon such that the more successful one operates it, the more revenue ot generates. A lot better than say missiles for a non violent option.
He wants to open the platform and add transparency features to the actions the platform takes. He also wants to open source the algorithm.
Why is it that people that have an agenda assume that steps towards neutrality are simply an opposing agenda?
Why is it that people that have an agenda assume that steps towards neutrality are simply an opposing agenda?
People with an agenda may not be honest in what they say in their indignation, either consciously or unconsciously.
Everything is an agenda even if you like the agenda.
Twitter is not a weapon. Most of the world does not give a hoot about anything that is going on twitter. You might get some new come up in celebrity gossip but that's really about it
Most people in the world don't have subscriptions to the NYTimes, but the influence of that newspaper seems undeniable. Percentage of the global population paying attention seems like a poor measure of influence, not least because actual influence is not fairly distributed through the global populations. Influence over 100 US senators counts for much more than influence over 100 US plumbers.
> Most of the world does not give a hoot
Correct, but journalists, politicians and companies do, which is all it needs. Twitter has been way more influential than it deserves to be for a while now.
Correct, but journalists, politicians and companies do, which is all it needs. Twitter has been way more influential than it deserves to be for a while now.
It does matter. A lot of people live in a bubble in which Twitter’s loudest voices are a reflection of the “common sense”. That is why so many governments monitor it.
The period between the Arab Spring and Jan, 2021, seems to argue otherwise, no?
[deleted]
Is HN a weapon too?
I don't think Musk is the guy that cares about making more money with a business. 20 years ago anybody would have told you that the odds of being successful starting an electric car company or a rocket company are 0.
With Twitter all he seems to care about is the idea, the name, the userbase and some of the technology. I don't think turning $45b into $100b is a top priority, there are easier ways doing that.
With Twitter all he seems to care about is the idea, the name, the userbase and some of the technology. I don't think turning $45b into $100b is a top priority, there are easier ways doing that.
The technology ?
What, pray tell, other than ad tracking is their technology?
If you remove the ads and the surveillance, Twitter is 60 lines of Perl.
What, pray tell, other than ad tracking is their technology?
If you remove the ads and the surveillance, Twitter is 60 lines of Perl.
> If you remove the ads and the surveillance, Twitter is 60 lines of Perl.
If you remove ads and surveillance Twitter isn't 60 lines of Perl. Just their frontend, without even getting into problems of scale, is already much heavier than sixty lines. It also happens to have been an influential technology export [1].
You can find more than sixty projects, not just sixty lines of Perl, open sourced by Twitter. While some of them are related to ad tracking and surveillance not all of them are [2]. Although I haven't checked, I would be shocked if any of them are below sixty lines.
The idea that modern tech companies can be replaced with sixty lines of code is exceedingly naive. There are certain problems that naturally come up at scale like the regular failure of hardware, hot users, persistent dedicated attacks by intelligent malicious actors, and regulatory requirements around data handling which, even taken alone rather than together, demand more than sixty lines of code to adequately address.
Twitter may be simple in theory, but you are quite clearly provoking a straw man conception of the value of Twitter's technology. If you weren't, you wouldn't need to lie or exaggerate to the point of absurdity.
[1]: https://getbootstrap.com/2.0.2/ [2]: https://opensource.twitter.dev/projects/
> What, pray tell, other than ad tracking is their technology?
The person you are responding to is largely repeating first-party accounts of motivation - Elon says he believes that producing greater transparency in algorithmic moderation and active moderation at Twitter, understood as a technology owned by Twitter, is a core ideologically rooted reason for the takeover. You can get this first party account of motivation by listening to the TED interview with Elon Musk which covers the topic of why he feels Twitter should be taken private and why he feels it would benefit from having its moderation practices be incredibly transparent to the point of open sourcing the entirety of Twitter and making their moderation process public.
If you remove ads and surveillance Twitter isn't 60 lines of Perl. Just their frontend, without even getting into problems of scale, is already much heavier than sixty lines. It also happens to have been an influential technology export [1].
You can find more than sixty projects, not just sixty lines of Perl, open sourced by Twitter. While some of them are related to ad tracking and surveillance not all of them are [2]. Although I haven't checked, I would be shocked if any of them are below sixty lines.
The idea that modern tech companies can be replaced with sixty lines of code is exceedingly naive. There are certain problems that naturally come up at scale like the regular failure of hardware, hot users, persistent dedicated attacks by intelligent malicious actors, and regulatory requirements around data handling which, even taken alone rather than together, demand more than sixty lines of code to adequately address.
Twitter may be simple in theory, but you are quite clearly provoking a straw man conception of the value of Twitter's technology. If you weren't, you wouldn't need to lie or exaggerate to the point of absurdity.
[1]: https://getbootstrap.com/2.0.2/ [2]: https://opensource.twitter.dev/projects/
> What, pray tell, other than ad tracking is their technology?
The person you are responding to is largely repeating first-party accounts of motivation - Elon says he believes that producing greater transparency in algorithmic moderation and active moderation at Twitter, understood as a technology owned by Twitter, is a core ideologically rooted reason for the takeover. You can get this first party account of motivation by listening to the TED interview with Elon Musk which covers the topic of why he feels Twitter should be taken private and why he feels it would benefit from having its moderation practices be incredibly transparent to the point of open sourcing the entirety of Twitter and making their moderation process public.
I can't think of better way to diminish one's own technical skills than to make a claim that twitter is '60 lines of perl'. Let's see, let's even take one tiny component of twitter, realtime push notifications across a distributed system, can you do that in 60 lines of perl?
It's less about the number of lines of code to replace/replicate it, more about the existing user base size & the fact that Twitter is _the_ place where conversations about any topic happen these days.
The world being as unpredictable as it is, the conversation may also move to another medium tomorrow.
The world being as unpredictable as it is, the conversation may also move to another medium tomorrow.
Obligatory _Sounds Easy_: https://danluu.com/sounds-easy/
Doing anything on Twitter scale has significant technical challenges.
Doing anything on Twitter scale has significant technical challenges.
He's absolutely a guy who cares about making money.
There's no way he gets into Tesla without giant government cash incentives.
There's no way he gets into Tesla without giant government cash incentives.
It’s funny that Musk explains specifically why he is doing this - just like he always does - but people are so deeply cynical they don’t even realize they are ignoring it and coming up with more Machiavellian explanations.
Probably because "just like he always does", he is probably lying.
He lies quite a lot about his business intentions and reasoning. It's not surprising that people don't trust him and wonder what the real reason is, since no one believes the reason he's giving (other than uncritical Musk fanboys).
He lies quite a lot about his business intentions and reasoning. It's not surprising that people don't trust him and wonder what the real reason is, since no one believes the reason he's giving (other than uncritical Musk fanboys).
Musk literally published the "master plan" for Tesla over time, and has largely executed on it, and described the goal of rocket reusability for the purpose of colonizing Mars forever ago.
Are you sure that you're not confusing failed predictions with malevolent lying?
Are you sure that you're not confusing failed predictions with malevolent lying?
I'm talking about specific statements that claim things that end up being entirely false. His claims about Tesla full self-driving and taking Tesla private in 2018 are pie-in-face obvious lies Musk has told, but there are any other number of half-truths, exaggerations, and misleading statements he's made over time that make me confident that yes, Elon Musk is a malevolent liar.
What examples do you have then?
Do you have any examples?
"I think we will be ‘feature-complete’ on full self-driving this year, meaning the car will be able to find you in a parking lot, pick you up, take you all the way to your destination without an intervention this year. I am certain of that. That is not a question mark." - Elon Musk in 2019
Lie. Full self-driving is not feature complete in 2022, and won't be for years.
"Am considering taking Tesla private at $420. Funding secured." - Elon Musk in 2018 https://twitter.com/elonmusk/status/1026872652290379776
Lie. Funding was not secured. Musk is still doubling down on this one.
There was an incident where the EPA gave the Model S a range of 391 miles, and Musk got upset and claimed the left the key in the ignition overnight, which the EPA denies. Musk provides no evidence, but neither does the EPA, so I guess this one is "Makes weird claim contradicting a government agency that has no reason to lie", but I am inclined to believe the EPA over Musk. (https://www.theverge.com/2020/5/1/21244556/elon-musk-lie-epa...)
These are a small sampling of examples, you can look at Musk's statements over time about Tesla, the Hyperloop, and his future intentions regarding the various bizarre whims he adopts monthly, and there's tons of stuff where exaggerates and overstates, but also plenty where he straight up lies and completely misrepresents the truth. Particularly with anything Tesla related, he's actually more straight up about SpaceX capabilities, for whatever reason.
Lie. Full self-driving is not feature complete in 2022, and won't be for years.
"Am considering taking Tesla private at $420. Funding secured." - Elon Musk in 2018 https://twitter.com/elonmusk/status/1026872652290379776
Lie. Funding was not secured. Musk is still doubling down on this one.
There was an incident where the EPA gave the Model S a range of 391 miles, and Musk got upset and claimed the left the key in the ignition overnight, which the EPA denies. Musk provides no evidence, but neither does the EPA, so I guess this one is "Makes weird claim contradicting a government agency that has no reason to lie", but I am inclined to believe the EPA over Musk. (https://www.theverge.com/2020/5/1/21244556/elon-musk-lie-epa...)
These are a small sampling of examples, you can look at Musk's statements over time about Tesla, the Hyperloop, and his future intentions regarding the various bizarre whims he adopts monthly, and there's tons of stuff where exaggerates and overstates, but also plenty where he straight up lies and completely misrepresents the truth. Particularly with anything Tesla related, he's actually more straight up about SpaceX capabilities, for whatever reason.
Your first example is just him being wrong, not lying. The second example is him being an idiot, I would not class it as a lie. Perhaps he thought he had secured funding and/or was high. Why is it so trendy to hate on musk? Just because he has money?
Exactly. There are a lot of things to critize about Musk - but it's also undeniable that he has done very impressive and useful things. Lately, dunking on his every move has become somewhat of a folk's sport (or easy clicks for "journalists").
NTs projecting their own thinking / motives onto autistic people is a pretty major thing.
The other way around seems very common too. Autistics trying to understand the behavior of NTs by implicitly assuming the NTs think in ways similar to themselves, then expressing frustration when the observed behavior of the NTs doesn't match the inaccurately modeled expectation.
In fact I'm not sure this really has much to do with NTs and autistics. I think this sort of dynamic occurs all the time even between people who are very similar (but never identical!) to each other.
In fact I'm not sure this really has much to do with NTs and autistics. I think this sort of dynamic occurs all the time even between people who are very similar (but never identical!) to each other.
The twitter buy isn't about money its about power. Money is only a proxy for power. Controlling the largest distribution source of worldwide news is a pure power play.
>>...the largest distribution source of worldwide news>>
That's not really true is it? My understanding is that it's actually the smallest of its immediate peers in social media. And perhaps the same in the field of the broader definition of media.
As a separate issue, my personal sentiment on social media, like a number of others I know, is that it has all become a steaming pile of toxic garbage, not unlike the pile of junk mail I dutifully retrieve from my physical mailbox once a month (and even then only so that the mail person has room to add more). My concern on a deal like this is that if that sentiment takes off in the mainstream a property like Twitter could experience a MySpace style collapse overnight.
That's not really true is it? My understanding is that it's actually the smallest of its immediate peers in social media. And perhaps the same in the field of the broader definition of media.
As a separate issue, my personal sentiment on social media, like a number of others I know, is that it has all become a steaming pile of toxic garbage, not unlike the pile of junk mail I dutifully retrieve from my physical mailbox once a month (and even then only so that the mail person has room to add more). My concern on a deal like this is that if that sentiment takes off in the mainstream a property like Twitter could experience a MySpace style collapse overnight.
Over the next week, mark down every time you see the following news:
1. News such as an HN post which is a ... twitter link
2. News in an article or on TV that reverences a ... twitter link
3. Social media referencing a ... twitter link
There's a lot more than appears at first, even if you aren't consuming news on Twitter or Tik Tok a lot of it is being broken there.
1. News such as an HN post which is a ... twitter link
2. News in an article or on TV that reverences a ... twitter link
3. Social media referencing a ... twitter link
There's a lot more than appears at first, even if you aren't consuming news on Twitter or Tik Tok a lot of it is being broken there.
This is what I was referring to. Sure there are infinite other sites but Twitter is where it is being broken and where majority of all the journalists live. It is currently the site with status and clout for important news. Will that change? Always possible but it is the site du jour.
It's also the site for the unimportant news that journalists decide to transform into "important" news. Too many "click bait" news stories end up being "xxx is outraged" and the story links to 3-4 random twitter comments
Ok gotcha. So largest by volume of breaking stories used as opposed to users.
Yes, social media has become toxic but a lot of people use it to get their news and information.
Twitter is a great way for Musk to get into social media without having to get users and build the infrastructure. He can compete at a worldwide level with Facebook on day one.
Twitter is a great way for Musk to get into social media without having to get users and build the infrastructure. He can compete at a worldwide level with Facebook on day one.
Weibo is bigger. Wechat too.
How much global news comes out of either of those? That's the point of the parent comment.
Weido and Wechat may have more users, but they aren't newsmakers. Just like there's more people at a Def Leppard concert than in the White House, but the White House makes news.
Weido and Wechat may have more users, but they aren't newsmakers. Just like there's more people at a Def Leppard concert than in the White House, but the White House makes news.
They're not news makers? Yes they are.
They are largely irrelevant to the rest of the world as a source of news except to see what the government line is and as a pulse taker of Chinese population tolerance to policy. They are a propoganda news source controlled by the Chinese Government for the Chinese population. Large population for sure, and highly impactful to controlling that population but only viable for the CCP.
Good luck buying wechat as someone without Chinese citizenship.
Good luck buying WeChat without the proper connections to the ruling class in China in the first place.
[deleted]
Facebook is also far far bigger than Twitter. Yet Elon is content with ignoring it, and so was Trump (who is suspended into 2023 [0])
[0] https://www.npr.org/2021/06/04/1003284948/trump-suspended-fr...
[0] https://www.npr.org/2021/06/04/1003284948/trump-suspended-fr...
Facebook amplifies, it doesn't create. People link to twitter threads from HN all the time, rarely if ever do they link to FB posts.
Nobody cares about Facebook, even though it's hugely used it's a dead letter.
Nobody cares about Facebook, even though it's hugely used it's a dead letter.
Facebook is a dying site and it isn't for sale. Irrelevant to the options.
Weibo and Wechat are also not available for sale, so what's your point?
Also irrelevant to the conversation.
My rebuttal was to this comment, which implied that size was an overriding factor of importance. That comment was a rebuttal to you. So I'm not sure what you even want to argue about.
https://news.ycombinator.com/item?id=31110766
Please learn how comment threads work.
https://news.ycombinator.com/item?id=31110766
Please learn how comment threads work.
Twitter operating income for 12 m/e 31 Dec 2021 was negative.
The operating income of a superyacht is also negative. But billionaires keep buying them.
Some people get to a point in their lives where the numbers no longer matter.
To its shareholders, Twitter is a business. To someone who can buy Twitter, it's a hobby.
The operating income of a superyacht is also negative. But billionaires keep buying them.
Some people get to a point in their lives where the numbers no longer matter.
To its shareholders, Twitter is a business. To someone who can buy Twitter, it's a hobby.
If he was simply a finance guy, then yes, it wouldn't make sense.
However he is into multiple businesses that are deeply embedded with politics and governments. Electric cars, space program contracts, telecommunications - all need the right kind of governments to succeed. Twitter has shown to have large effect in politics, it makes quite a bit of sense to own and control that thing if you like to own and control the government.
If his motives are purer, it also makes sense to try to improve the society with a portion of your wealth. You don't have to donate your money to the cancer society, you can engage in philanthropy through building something good instead.
However he is into multiple businesses that are deeply embedded with politics and governments. Electric cars, space program contracts, telecommunications - all need the right kind of governments to succeed. Twitter has shown to have large effect in politics, it makes quite a bit of sense to own and control that thing if you like to own and control the government.
If his motives are purer, it also makes sense to try to improve the society with a portion of your wealth. You don't have to donate your money to the cancer society, you can engage in philanthropy through building something good instead.
I mean, arguably, most of the valuation of his companies are dependent almost entirely on his presence on social media -- Twitter being an essential piece of that.
I mean Tesla P/E is like 209. 209!! GM PE is at 6.
Where does this tremendous difference come from? A Tesla evangelist would say, well Tesla is doing self driving, Tesla is doing electric cars, it's the future of technology! Then they go buy shares. Or join Tesla as an engineer and work 90 hour weeks.
Where does this enthusiasm come from? Surely it isn't from the actual technology in the cars, which is and has never been distinguished to such a degree from competitors. Before you go and say that Telsa had electric cars first, go look at how many units they shipped: while they were making promises, they were not physically manufacturing or delivering that many cars; by the time Tesla did ramp up production to the scale promised by their media image, consumers could buy electric cars from Ford, Toyota, GM.
Simply put, most of this stellar valuation is based entirely off of the media sensation of Tesla, which is completely and inextricably bound to the media sensation of Elon Musk. This $50bn or whatever Elon is paying for Twitter is basically fabricated from whole cloth not by technology or fundamentals -- but from Elon's Twitter itself!
This is a common pattern to Elon's business ventures, and I would argue, it's the primary reason for the success of Musk companies. The playbook is simple:
1. Be Elon Musk
2. Make an insane promise, probably on Twitter
3. Convince redditors to buy shares in the venture;
4. Meanwhile, convince redditor STEM people (engineers, programmers, and so on) to work like dogs to make the venture possible;
5. Stay in the news cycle [Post on Twitter] about the venture.
6. Keep doing (5) until the technology is possible (this can actually happen sometimes, because of step 4!). If it's not possible, extend the hype cycle due by doing more of (5); if it's never possible, either bail out the venture using shares from a different venture, or shutter it -- and make sure Elon newswire isn't paying attention to the fact that it failed, by doing another (2)!
If you can do a few of these things at once, you can get basically all redditors to give you their money to hire all redditors to attempt this insane shit (Mars? Humanoid Robots? Brain Computer Links???). I'm thoroughly convinced that nobody on planet earth except for Elon Musk can do it. It's actually incredible what he's able to accomplish. And no, I'm not talking about the technology.
I mean Tesla P/E is like 209. 209!! GM PE is at 6.
Where does this tremendous difference come from? A Tesla evangelist would say, well Tesla is doing self driving, Tesla is doing electric cars, it's the future of technology! Then they go buy shares. Or join Tesla as an engineer and work 90 hour weeks.
Where does this enthusiasm come from? Surely it isn't from the actual technology in the cars, which is and has never been distinguished to such a degree from competitors. Before you go and say that Telsa had electric cars first, go look at how many units they shipped: while they were making promises, they were not physically manufacturing or delivering that many cars; by the time Tesla did ramp up production to the scale promised by their media image, consumers could buy electric cars from Ford, Toyota, GM.
Simply put, most of this stellar valuation is based entirely off of the media sensation of Tesla, which is completely and inextricably bound to the media sensation of Elon Musk. This $50bn or whatever Elon is paying for Twitter is basically fabricated from whole cloth not by technology or fundamentals -- but from Elon's Twitter itself!
This is a common pattern to Elon's business ventures, and I would argue, it's the primary reason for the success of Musk companies. The playbook is simple:
1. Be Elon Musk
2. Make an insane promise, probably on Twitter
3. Convince redditors to buy shares in the venture;
4. Meanwhile, convince redditor STEM people (engineers, programmers, and so on) to work like dogs to make the venture possible;
5. Stay in the news cycle [Post on Twitter] about the venture.
6. Keep doing (5) until the technology is possible (this can actually happen sometimes, because of step 4!). If it's not possible, extend the hype cycle due by doing more of (5); if it's never possible, either bail out the venture using shares from a different venture, or shutter it -- and make sure Elon newswire isn't paying attention to the fact that it failed, by doing another (2)!
If you can do a few of these things at once, you can get basically all redditors to give you their money to hire all redditors to attempt this insane shit (Mars? Humanoid Robots? Brain Computer Links???). I'm thoroughly convinced that nobody on planet earth except for Elon Musk can do it. It's actually incredible what he's able to accomplish. And no, I'm not talking about the technology.
All essential parts, but I guess the really key part that makes this okay is #4 - 'make the venture possible'.
I don't buy in at those PEs, but I clearly should have as the track record has shown has shown. The future remains uncertain, his goals are still incredible to the point of being uncredible, and his delivery on those goals has been real and incredible. What a conundrum, no wonder people are talking about it so much. ¯\_(ツ)_/¯
In the meantime we have reusable space rockets and actual progress on a process of transformation away from ICEs.
I don't buy in at those PEs, but I clearly should have as the track record has shown has shown. The future remains uncertain, his goals are still incredible to the point of being uncredible, and his delivery on those goals has been real and incredible. What a conundrum, no wonder people are talking about it so much. ¯\_(ツ)_/¯
In the meantime we have reusable space rockets and actual progress on a process of transformation away from ICEs.
Yes, I have a similarly mixed view of Musk.
On the one hand, my god what they are doing at SpaceX, Starlink, (and even some parts of) Tesla are incredible! And I suppose without Musk playing carnival barker, these things aren't possible.
On the other hand... the approach is so slimy and really should not be celebrated the way it is.
It's a similar feeling with Martin Shkreli. He did some fraud, but he also gave all the money back to investors and started the ongoing conversation about Rx pricing.
On the one hand, my god what they are doing at SpaceX, Starlink, (and even some parts of) Tesla are incredible! And I suppose without Musk playing carnival barker, these things aren't possible.
On the other hand... the approach is so slimy and really should not be celebrated the way it is.
It's a similar feeling with Martin Shkreli. He did some fraud, but he also gave all the money back to investors and started the ongoing conversation about Rx pricing.
> Twitter operating income for 12 m/e 31 Dec 2021 was negative.
Twitter is a lever to all the journalistic organizations on Earth. Its impact is not measured by its operating income.
Twitter is a lever to all the journalistic organizations on Earth. Its impact is not measured by its operating income.
Everyone talking about "free speech" is buying the spin hook line and sinker.
Anyone remember the Musk tweet about how his AI is so much better than anyone in the market realizes?
Did no one notice that this is all happening within a month or so after Twitter added a dislike button?
Would both positive and negative sentiment data for one of the largest under-monetized repositories of social data have any value to an eccentric billionaire with some major AI R&D focus?
He's not buying Twitter to defend the first amendment.
He wants the data for his AI stuff. That's just not nearly as popular a PR slant.
Anyone remember the Musk tweet about how his AI is so much better than anyone in the market realizes?
Did no one notice that this is all happening within a month or so after Twitter added a dislike button?
Would both positive and negative sentiment data for one of the largest under-monetized repositories of social data have any value to an eccentric billionaire with some major AI R&D focus?
He's not buying Twitter to defend the first amendment.
He wants the data for his AI stuff. That's just not nearly as popular a PR slant.
Thinking what would Buffett do in this situation is relevant misunderstands (tho perhaps just tongue-in-cheek) both Buffett's managerial and investing approach as well as Musk's.
Twitter and WaPo are the things you spend the money you've made on, not the things that make you money.
I suspect Elon wants Twitter data to train an AI/GPT-3. Also if you look at how he uses Twitter, he believes in the tweet resonance idea of being able to signal certain group or individuals with memes. He thinks that may be a key element in the future of human collective consciousness.
Whoever controls the largest online space where people talk practically own the next election-
If I got to skate on securities fraud over and over I'd be rolling around on the floor pissing myself with laughter too.
> Personally, I think Musk is having a bit of a laugh.
He's definitely demonstrating how toothless the SEC is. It's just good at empty threats. I'm not sure what the bigger joke is: the SEC or the financial industry's multiple private watchdog corporations like FINRA which masquerade as public regulatory bodies.
He's definitely demonstrating how toothless the SEC is. It's just good at empty threats. I'm not sure what the bigger joke is: the SEC or the financial industry's multiple private watchdog corporations like FINRA which masquerade as public regulatory bodies.
Warren Buffett was never going to make Tesla and SpaceX what they are so I don’t see the relevance of the comparison.
He wants Twitter as a media asset. Twitter is the new public square. Controlling it means power.
He wants to control the new public square by... not banning as many people?
Yes. I don’t think this is the gotcha you’re treating it as.
I think it’s a legitimate point. If something is a public square, banning certain viewpoints from it is a huge deal.
Either Twitter is a private company and they can ban whoever they want for whatever reasons they want, or they’re a public square and we need to make sure that everyone can read the tweets they want to read.
I’m fine with either option, but I’d prefer a little less hypocrisy from everyone who praised Twitter when they banned certain accounts. You can still follow terrorist groups on Twitter but the previous US president is banned. That is insane, and I don’t care how many people disagree with that statement. It’s still true.
Either Twitter is a private company and they can ban whoever they want for whatever reasons they want, or they’re a public square and we need to make sure that everyone can read the tweets they want to read.
I’m fine with either option, but I’d prefer a little less hypocrisy from everyone who praised Twitter when they banned certain accounts. You can still follow terrorist groups on Twitter but the previous US president is banned. That is insane, and I don’t care how many people disagree with that statement. It’s still true.
I’m not anti free speech.
> Why he thinks Twitter is worth $45b is beyond me.
It may be beyond you, are you also saying it's beyond all Twitter's investors too? Have you asked them?
It may be beyond you, are you also saying it's beyond all Twitter's investors too? Have you asked them?
We don't have to.
By generally accepted rules of engagement the totality of investors think that Twitter is worth 30% less than what Musk is offering.
That's the difference between Twitter's market cap and Musk's very tender offer.
There's no better way of asking investors how much they value a stock than by allowing them to bid in an open market.
By generally accepted rules of engagement the totality of investors think that Twitter is worth 30% less than what Musk is offering.
That's the difference between Twitter's market cap and Musk's very tender offer.
There's no better way of asking investors how much they value a stock than by allowing them to bid in an open market.
I see I thought that was the market cap.
All that shows is that you don't have the slightest idea on how companies are valued?
Purchases like Twitter aren't about a return on investment.
Purchase like Twitter are to seize the platform; period.
Dissenting opinions, and bans, then become whatever the owner of the platform desires.
How do people not see the actual value of Twitter, which goes well beyond money.
Purchase like Twitter are to seize the platform; period.
Dissenting opinions, and bans, then become whatever the owner of the platform desires.
How do people not see the actual value of Twitter, which goes well beyond money.
musk buying twitter is not like throwing money into an incinerator
So if the stock price stays above $50 he has not lost any money
So if the stock price stays above $50 he has not lost any money
I'm just afraid he's gonna let Trump back on and start the gear up for 2024 and continue that craziness in the US of what I though was settled in 2020.
Some things are actually more important than money -- Twitter can offer enormous power in setting a national narrative even if little economic benefit for Musk.
Some things are actually more important than money -- Twitter can offer enormous power in setting a national narrative even if little economic benefit for Musk.
In what possible universe would you think that any craziness in the US settled in 2020?
> Twitter can offer enormous power in setting a national narrative
I'm always skeptical about this. Twitter is dominated by journalists, celebrities, and tech people. Only about 23% of American adults have twitter accounts. Only 46% of those even open it daily. Of the active users 10% account for ~95% of tweets. Among those, ~70% identify as Democrats, and certainly aren't going to be swayed by Trump getting back on twitter.
It just isn't clear to me that twitter even matters in the realm of US politics. Voters just aren't really there, and when they are they predominantly aren't engaging. When they do, they're mostly democrats tweeting at one-another.
I'm always skeptical about this. Twitter is dominated by journalists, celebrities, and tech people. Only about 23% of American adults have twitter accounts. Only 46% of those even open it daily. Of the active users 10% account for ~95% of tweets. Among those, ~70% identify as Democrats, and certainly aren't going to be swayed by Trump getting back on twitter.
It just isn't clear to me that twitter even matters in the realm of US politics. Voters just aren't really there, and when they are they predominantly aren't engaging. When they do, they're mostly democrats tweeting at one-another.
Less than 2% of the American public has a subscription to the New York Times. Would you say the nytimes doesn't matter in the realm of US politics?
Well, since you asked I think they probably have less influence than they would like to think.
Now they are syndicated in a number of other papers, discussed broadly on social media, cable news, local tv news, and across a number of new podcasts. Their reach is probably a good bit greater than the ~5 million subscribers. I would also note that 100% of subscribers are getting news from the NYT, because well obviously, so that's something. They do seem to have some sway on Democratic primaries sometimes, and do seem to shape opinions among a certain class of people. What does that all add up to? I don't know. Do they matter in the realm of US politics, probably, but I'm no sure how to quantify it.
Now they are syndicated in a number of other papers, discussed broadly on social media, cable news, local tv news, and across a number of new podcasts. Their reach is probably a good bit greater than the ~5 million subscribers. I would also note that 100% of subscribers are getting news from the NYT, because well obviously, so that's something. They do seem to have some sway on Democratic primaries sometimes, and do seem to shape opinions among a certain class of people. What does that all add up to? I don't know. Do they matter in the realm of US politics, probably, but I'm no sure how to quantify it.
I tend to agree with you, I guess I’m in the minority. I think a lot more political manipulation happens on Facebook.
I'm not sure I buy the manipulation line either. People seek out information that fits their overall world view. It's hard to grapple with anything that challenges your beliefs. Insofar as people engage with bullshit on Facebook its probably because they already believe a particular thing, or it fits their existing beliefs. I highly doubt that facebook posts are changing a lot of minds. I'm also skeptical that it spurs very many people to actions they wouldn't otherwise take.
A lot of the news articles talking about the effects of facebook focus on how many people "saw" a particular post. Given how those impressions are gathered, I'm no convinced that a significant percentage of those impressions resulted in people actually reading the post or even the headline, let alone that resulting in any real world outcomes.
I think the people that build social media applications want everyone to think that they have the power to shape discourse and outcomes, and newspapers who's ad revenue is undermined by social media also want us to believe social media is dangerous. Those two things do not make it true.
A lot of the news articles talking about the effects of facebook focus on how many people "saw" a particular post. Given how those impressions are gathered, I'm no convinced that a significant percentage of those impressions resulted in people actually reading the post or even the headline, let alone that resulting in any real world outcomes.
I think the people that build social media applications want everyone to think that they have the power to shape discourse and outcomes, and newspapers who's ad revenue is undermined by social media also want us to believe social media is dangerous. Those two things do not make it true.
There are ~260 million adults in the US. That gives 60,000,000 Twitter users and 28,000,000 daily users. (I don't think "active users" is useful---it's about readers, not writers. Further, many of the important writers are not from the US.)
In 2020, Biden received 81,000,000 versus Trump's 74,000,000; the difference is 7,000,000.
Facebook may well be more powerful, but Twitter is still matters.
In 2020, Biden received 81,000,000 versus Trump's 74,000,000; the difference is 7,000,000.
Facebook may well be more powerful, but Twitter is still matters.
> but Twitter is still matters
I REALLY doubt it. Of the 28,000,000 daily users, mind you that means they open it once a day, 70% get news from the app. Of those only 37% say it increases their political engagement. This is roughly 7 million people who report any change in political engagement in the US as a result of looking at twitter. These people are overwhelmingly democrats living in big cities. I'm just not convinced that such a narrow, concentrated slice (2.7% of adults) of the the US population is really that big of a deal.
Now you could make a case that twitter maybe matters more in other places outside of the US, but that's not really related to the trump/no trump issue that I was replying to originally.
I REALLY doubt it. Of the 28,000,000 daily users, mind you that means they open it once a day, 70% get news from the app. Of those only 37% say it increases their political engagement. This is roughly 7 million people who report any change in political engagement in the US as a result of looking at twitter. These people are overwhelmingly democrats living in big cities. I'm just not convinced that such a narrow, concentrated slice (2.7% of adults) of the the US population is really that big of a deal.
Now you could make a case that twitter maybe matters more in other places outside of the US, but that's not really related to the trump/no trump issue that I was replying to originally.
[deleted]
hunterb123(1)
He has 250 billion. He can afford a 20-40 billion dollar laugh once or twice.
I agree it won't happen, but not because Musk isn't serious. This filing is dated April 20. It is a holy day for Musk — that's not a joke, only an exaggeration. I think we can take as a given that anything Elon Musk does on 4/20 which is serious on the face of it, is serious absolutely.
01100011(3)
He's said time and time again it's not about the economics.
It's hard to put a price on the propaganda machine and it's network effect.
It's not really about making money with Twitter.
- edit -
@McLaren_Ferrari: I disagree it's a misguided purchase, it makes sense to me from his stated goals.
But maybe you can sell the world's richest man your financial consultant nightclub analogy and save everyone.
It's hard to put a price on the propaganda machine and it's network effect.
It's not really about making money with Twitter.
- edit -
@McLaren_Ferrari: I disagree it's a misguided purchase, it makes sense to me from his stated goals.
But maybe you can sell the world's richest man your financial consultant nightclub analogy and save everyone.
I think it's very interesting that the subtext is that no one believes he will run Twitter at a loss; it's not his nature. If making Twitter better while making money is possible, Elon's the one who could do it.
He can make Twitter worth more, while using it as his personal soapbox. It's actually rational.
Then it's once again a misguided purchase.
Trump didn't own any media back in 2015-2016. He won because he sucked the air out of the room by making hyperbolic statements and riffing off the huge news cycle generated by his hyperbolic statements.
A good and effective PR team and a charismatic deliver is all you need and it comes for much less than 40B.
This is what kids learn in nightclubs fairly early: if you want to command the club you want to be a DJ. Owning the club will leave you with both a huge hole in your pocket and in the shadow of the DJ every given Friday.
The answer to Musk "problems" is to become a good public speaker and work on his in person social game, not monopolizing an online platform on which he has by far the biggest account already. Pushing on a string that's what it is. That's about the only thing he can do to expand his virality, owning the platform is kinda redundant.
Real life still happens offline (thankfully)
Trump didn't own any media back in 2015-2016. He won because he sucked the air out of the room by making hyperbolic statements and riffing off the huge news cycle generated by his hyperbolic statements.
A good and effective PR team and a charismatic deliver is all you need and it comes for much less than 40B.
This is what kids learn in nightclubs fairly early: if you want to command the club you want to be a DJ. Owning the club will leave you with both a huge hole in your pocket and in the shadow of the DJ every given Friday.
The answer to Musk "problems" is to become a good public speaker and work on his in person social game, not monopolizing an online platform on which he has by far the biggest account already. Pushing on a string that's what it is. That's about the only thing he can do to expand his virality, owning the platform is kinda redundant.
Real life still happens offline (thankfully)
But what if the DJ convinces his audience to invest in a much larger and more expensive night club at an extraordinary premium. Then it might make sense to buy the original night club just to protect the DJ’s scheme.
My math is that Musk’s twitter activity very reasonably increased Tesla’s market cap by more than 5% which is what he is offering to pay.
My math is that Musk’s twitter activity very reasonably increased Tesla’s market cap by more than 5% which is what he is offering to pay.
I don't think Twitter is special.
Going back to Trump I think that he going quiet after losing was not an effect of him being banned from Twitter as much as it was about the post defeat depression, mixed with fear of retribution for Jan. 6th now that he was out of office and also a part of him wanting to be Presidential and not critique his successor.
There are no rules in Twitter that prevent Musk from engaging in Pumps&Dumps so he'd have to do something Trump-esque to be banned. Spending 40B to secure the capability of inciting violence and unlike Trump avoid getting banned seems way out of whack. Besides inciting violence doesn't pump a stock.
Going back to Trump I think that he going quiet after losing was not an effect of him being banned from Twitter as much as it was about the post defeat depression, mixed with fear of retribution for Jan. 6th now that he was out of office and also a part of him wanting to be Presidential and not critique his successor.
There are no rules in Twitter that prevent Musk from engaging in Pumps&Dumps so he'd have to do something Trump-esque to be banned. Spending 40B to secure the capability of inciting violence and unlike Trump avoid getting banned seems way out of whack. Besides inciting violence doesn't pump a stock.
Can someone who understands finance ELI5 the section about the financing:
"A debt commitment letter"
"A separate debt commitment letter"
"An equity commitment letter"
Am I understanding it correctly that effectively $0 is coming out-of-pocket for purchasing Twitter?
Why can't anyone do this? I'll promise you a bunch of debt and equity, too.
> "To finance the Proposed Transaction or a Potential Offer, entities related to the Reporting Person have received commitment letters committing to provide an aggregate of approximately $46.5 billion as follows:"
"A debt commitment letter"
"A separate debt commitment letter"
"An equity commitment letter"
Am I understanding it correctly that effectively $0 is coming out-of-pocket for purchasing Twitter?
Why can't anyone do this? I'll promise you a bunch of debt and equity, too.
The debt is banks agreeing to loan Musk $3 billion because they know he's good for it. The second letter is banks agreeing to margin $12.5 billion against an unspecified amount of Musk's stock, and the last is Musk pledging the rest (or something like this).
You can promise all you want, but you have to get the bank to be willing to pony up the money - but what you're describing can and does happen - leveraged buyouts were common in the past. https://en.wikipedia.org/wiki/Leveraged_buyout
You find a company with no debt (say, TLSA) and you believe it is undervalued, so you convince banks to loan you enough money to buy TSLA and pledge TLSA itself as the collateral. If the purchase goes through, you now own TLSA and a TLSA sized debt. If it doesn't, nothing much happens.
You can promise all you want, but you have to get the bank to be willing to pony up the money - but what you're describing can and does happen - leveraged buyouts were common in the past. https://en.wikipedia.org/wiki/Leveraged_buyout
You find a company with no debt (say, TLSA) and you believe it is undervalued, so you convince banks to loan you enough money to buy TSLA and pledge TLSA itself as the collateral. If the purchase goes through, you now own TLSA and a TLSA sized debt. If it doesn't, nothing much happens.
It's not that weird if you think about it.
I don't have a million dollars, but I can buy a million dollar house. A bank promises to lend me a million dollars contingent on buying the house and then the loan will be collateralized by the house, which I don't own yet.
I don't have a million dollars, but I can buy a million dollar house. A bank promises to lend me a million dollars contingent on buying the house and then the loan will be collateralized by the house, which I don't own yet.
This is a good analogy, but for it to apply to this situation, the house would have to be on property that has oil or lithium deposits. Once you have the property, it pays for itself, like the profits from Twitter would in this case.
If it ends up not being profitable, the bank takes back the house (or Twitter, or more likely the TSLA stock Elon put up as collateral)
If it ends up not being profitable, the bank takes back the house (or Twitter, or more likely the TSLA stock Elon put up as collateral)
I don't know if its that meaningful of a distinction. The property does generate profits in that you could rent it out. But yeah, you can finance traditional businesses like that. Buying with debt is generally a good idea because you juice your returns with someone else's money. Of course you give up some fixed amount and take first loss but in general debt is absolutely necessary to make the economics work.
If you can buy a valuable asset for $1 and have a bank cover $9 and it yields 10% return, you're making $1 from $1 invested (minus interest) compared to someone that bought it outright (making $1 on $10 or 10% return). The bank has no upside. If you invest in something bad though or the rate is too high the math changes and you lose 100% if the asset ends up being worth <= $9. That's leverage
If you can buy a valuable asset for $1 and have a bank cover $9 and it yields 10% return, you're making $1 from $1 invested (minus interest) compared to someone that bought it outright (making $1 on $10 or 10% return). The bank has no upside. If you invest in something bad though or the rate is too high the math changes and you lose 100% if the asset ends up being worth <= $9. That's leverage
The biggest danger of leverage is the "margin call" or calling the loan - the most common form of leverage people are exposed to prohibit this calling - if you buy a house today on a normal 30 year fixed mortgage in the USA, the bank cannot call the loan if you continue to make payments, even if the house value drops way below the original amount collateralized.
In some states, such as California, a purchase loan is non-recourse, so you could walk away (and many did in the last housing downturn) and the bank can't do anything beyond take the house.
This means if you can weather the downturn you don't get wiped out, you borrowed 80% of the house to buy, put 20% down, it went down 30%, you were underwater, but continued to make payments, and now it's up 20% above where you started.
Margin loans against stocks, etc do not have this, so if you borrowed against $1k worth of stocks you had, and they dropped in value below what the bank wants you to keep as collateral, they can force you to sell at the lower price (or produce more cash/collateral). This means that with leverage you could be right in the long term but wiped out in the short term.
In some states, such as California, a purchase loan is non-recourse, so you could walk away (and many did in the last housing downturn) and the bank can't do anything beyond take the house.
This means if you can weather the downturn you don't get wiped out, you borrowed 80% of the house to buy, put 20% down, it went down 30%, you were underwater, but continued to make payments, and now it's up 20% above where you started.
Margin loans against stocks, etc do not have this, so if you borrowed against $1k worth of stocks you had, and they dropped in value below what the bank wants you to keep as collateral, they can force you to sell at the lower price (or produce more cash/collateral). This means that with leverage you could be right in the long term but wiped out in the short term.
Yea this seems like a significant amount of unnecessary risk for an asset that is unlikely to get better. I wonder how much of a recession/downturn would trigger a margin call for that amount.
Yeah, fair enough. Musk could either "rent" Twitter and pay the money back with profits or "live in" Twitter and direct it toward some other purpose and use his other activities to pay back the debt. So my mineral rights addendum was unnecessary.
On a related note, I always find the loans where the borrower takes on personal liability are in a completely separate category of risk. Anytime you put yourself in a situation where you could possibly ruin your future prospects or mortgage your future labor to a financial institution is much different than your net worth (and your investors' principal) simply going to zero.
On a related note, I always find the loans where the borrower takes on personal liability are in a completely separate category of risk. Anytime you put yourself in a situation where you could possibly ruin your future prospects or mortgage your future labor to a financial institution is much different than your net worth (and your investors' principal) simply going to zero.
If you rent it out, then the house can pay for itself, theoretically
What about repayments?
You still have to pay off your debt to the lender according to the plan set out in the loan agreement, where will these come from?
You haven't crossed the finish line by securing the loan, you cross it by transferring the title to your name and repaying the loan (principal + interests) fully.
You still have to pay off your debt to the lender according to the plan set out in the loan agreement, where will these come from?
You haven't crossed the finish line by securing the loan, you cross it by transferring the title to your name and repaying the loan (principal + interests) fully.
All the funds raised would become loans to Twitter -- So Twitter as a company would repay those loans.
Or a margin call, for Elon Musk if Tesla stock goes down in price, and he will be forced to sell billions in shares to pay for it.
I wonder what Tesla shareholders think about all this ;-)
I wonder what Tesla shareholders think about all this ;-)
They do. That's why they have a policy that you're not allowed to borrow more more than 25% the value of the stock
> Tesla has a policy in place of letting directors and officers only borrow up to 25% of the value of their stock. And Elon Musk has already pledged about 88 million shares against indebtedness, according to Tesla's 2021 proxy filing. That leaves him with only another 85 million shares to raise debt with.
https://www.barrons.com/articles/tesla-ceo-elon-musk-twitter...
> Tesla has a policy in place of letting directors and officers only borrow up to 25% of the value of their stock. And Elon Musk has already pledged about 88 million shares against indebtedness, according to Tesla's 2021 proxy filing. That leaves him with only another 85 million shares to raise debt with.
https://www.barrons.com/articles/tesla-ceo-elon-musk-twitter...
Great find! Is this normal policy at other companies? On the surface, it seems like a good idea. If you pledge 100%, and the company share price takes a dive, you might be inclined to do crazy things with the company to try to recove the share price!
Something akin to it is common, and the SEC may even require "large shareholders" to file when they've encumbered their shares, but I don't know the details.
It's about the downward pressure on the stock if he has to sell, not only because of highly visible profile but the amount of shares pledged :-)
Is there anything TSLA shareholders might try to protect themselves from this eventuality?
Any sort of hedging strategies we can expect a lot of money to flow into?
Any sort of hedging strategies we can expect a lot of money to flow into?
Frank McCourt's tenure as owner of the Los Angeles Dodgers is a good illustration of this dynamic. He purchased the team with effectively no cash, he and his family proceeded to treat it as a collateral asset to take out lines of credit to buy themselves personal luxury goods, bankrupted the team, then when the league forced him out, he sold for a profit and made a few billion dollars anyway thanks to the value of MLB television contracts and that's just the way being rich works, I guess.
That is the way that betting correctly on the future value of an asset works. There are many people who have lost money the same way because the value of the asset went down and so they walk away with nothing.
If the downside is walking away with nothing on a bet that you put nothing on, then I think it’s always worth the risk
Sure, but those kinds of deals are rare, especially absent corruption.
A cursory Wikipedia search shows the baseball team owner referenced above put up significant real estate as collateral.
A cursory Wikipedia search shows the baseball team owner referenced above put up significant real estate as collateral.
Yes, all the downside falls on the lenders because that's how investing money works. If you can get someone to loan you hundreds of millions, you should (in a purely economic sense) take it because all you can lose is everything you have.
He used effectively no cash but pledged his Boston parking lots as collateral for the debt. So if he had defaulted on the debt his lenders would have gained ownership of the Dodgers AND of the Boston parking lots.
Excellent explanation. To add to that - this is a typical example of an asymmetrical transaction for the lender(s). If Musk+Twitter are successful, lenders’ upside is limited by the debt interest and if Musk+Twitter fail - they are left with a huge underperforming asset on the books. This is nothing new for the banks - essentially it is a potential foreclosure on a defaulted mortgage, just on a different scale, so the risk will be priced into the loan conditions.
This is what I find funny about all those people shouting "No, Elon can't pay for taxes, it's all tied up in stocks!!1!"
If you are stock-rich and you can buy stuff on the collateral for that: normal people can't really do that. Ordinary people have a much harder time buying more stuff than they have the cash for. Or at least on worse terms when they do take out a loan.
Being rich is cheaper than being poor. Is it really so awful to change that?
If you are stock-rich and you can buy stuff on the collateral for that: normal people can't really do that. Ordinary people have a much harder time buying more stuff than they have the cash for. Or at least on worse terms when they do take out a loan.
Being rich is cheaper than being poor. Is it really so awful to change that?
No one is saying Musk literally can't afford to pay taxes. He can borrow against his ownership. But if you have a company that goes from 0 -> 100, and you get taxed 35% on that, and then the company goes from 100 -> 50, you kind of got screwed. That $100 is a made-up number.
Suppose there is a company with 200 shares, half of which you own. The last trade price was $1 per share, meaning you have $100. But you can't necessarily dump your shares for $100 because the $1 was based off the last trade. So on the margin you can sell a share for $1, but you won't necessarily be able to sell all 100 shares for $100.
Imagine you own a home that went from being worth $1 million to $2 million. Did you MAKE $1 million? Should you pay taxes on that delta as soon as the home's value became $2 million? It makes more sense to wait until you sell it and pay taxes on the net you made. Otherwise it's more complicated and you could end up paying taxes on $1 million when you end up selling it for a lot less. You could have a tax credit I guess but you're unlikely to have the IRS cut you a check for the money you paid that turned out to never be actualized.
Suppose there is a company with 200 shares, half of which you own. The last trade price was $1 per share, meaning you have $100. But you can't necessarily dump your shares for $100 because the $1 was based off the last trade. So on the margin you can sell a share for $1, but you won't necessarily be able to sell all 100 shares for $100.
Imagine you own a home that went from being worth $1 million to $2 million. Did you MAKE $1 million? Should you pay taxes on that delta as soon as the home's value became $2 million? It makes more sense to wait until you sell it and pay taxes on the net you made. Otherwise it's more complicated and you could end up paying taxes on $1 million when you end up selling it for a lot less. You could have a tax credit I guess but you're unlikely to have the IRS cut you a check for the money you paid that turned out to never be actualized.
Yes, taxing unrealized gains as if they were income would be silly.
Most proposals to tax giant piles of wealth in the market look nothing like what you've described. A wealth tax is more like: pay 1% per year on the current market value of your portfolio, if that amount is over $100 million.
Money attracts money. Wealth taxes are an attempt for reverse that effect and force some of that money to trickle down.
That said, any attempt to implement a wealth tax will probably be struck down as unconstitutional because moneyed interests want it to be declared so.
Most proposals to tax giant piles of wealth in the market look nothing like what you've described. A wealth tax is more like: pay 1% per year on the current market value of your portfolio, if that amount is over $100 million.
Money attracts money. Wealth taxes are an attempt for reverse that effect and force some of that money to trickle down.
That said, any attempt to implement a wealth tax will probably be struck down as unconstitutional because moneyed interests want it to be declared so.
> Most proposals to tax giant piles of wealth in the market look nothing like what you've described
Wealth tax is different and I think it makes more sense compared to unrealized capital gains. But its not true no one is proposing an unrealized capital gains tax
> Biden’s fiscal 2023 budget request released Monday would impose a 20% minimum tax on the unrealized capital gains for households worth at least $100 million.
https://www.bloomberg.com/news/articles/2022-03-28/manchin-p...
Wealth tax is different and I think it makes more sense compared to unrealized capital gains. But its not true no one is proposing an unrealized capital gains tax
> Biden’s fiscal 2023 budget request released Monday would impose a 20% minimum tax on the unrealized capital gains for households worth at least $100 million.
https://www.bloomberg.com/news/articles/2022-03-28/manchin-p...
California famously insulates people from additional property tax burden on highly-appreciated real estate - and it's clearly still a popular policy among the people benefiting, but it gets a lot less defense from people who don't own those houses than the status quo here gets from people who aren't stock-based-billionaires.
Wealth is closely correlated enough to power that it's worth encouraging people to turn those on-paper gains into liquid forms - even if only to avoid "losing" if the stock then slides back from 100 -> 50. Especially since he can leverage it to spend in other ways!
Wealth is closely correlated enough to power that it's worth encouraging people to turn those on-paper gains into liquid forms - even if only to avoid "losing" if the stock then slides back from 100 -> 50. Especially since he can leverage it to spend in other ways!
Doesn’t this already happen to some extent with property taxes? You pay tax on the appraised value of the property. If it later goes down, you just pay less from that point onward. It doesn’t seem like a problem.
To me, taxing wealth and only wealth seems like the most straightforward route to a truly progressive tax system. That’s not to say it’s simple or straightforward in an absolute sense, but neither is taxing income, is it?
At a high level, taxing wealth instead of income or transactions ensures that rich people are paying their share, while maximizing upward mobility so that people can become rich more easily. Think about how much easier it would be to become wealthy without income taxes, sales taxes, property taxes, taxes on corporate profits, etc. etc.
This is what we should optimize for imho: making it as easy as possible to become wealthy. Sure, there details to figure out, as with any approach, and maybe some rich people will face some difficult choices or be forced to sell assets; I’m ok with that and it seems well worth the tradeoff.
To me, taxing wealth and only wealth seems like the most straightforward route to a truly progressive tax system. That’s not to say it’s simple or straightforward in an absolute sense, but neither is taxing income, is it?
At a high level, taxing wealth instead of income or transactions ensures that rich people are paying their share, while maximizing upward mobility so that people can become rich more easily. Think about how much easier it would be to become wealthy without income taxes, sales taxes, property taxes, taxes on corporate profits, etc. etc.
This is what we should optimize for imho: making it as easy as possible to become wealthy. Sure, there details to figure out, as with any approach, and maybe some rich people will face some difficult choices or be forced to sell assets; I’m ok with that and it seems well worth the tradeoff.
Wealth taxes and land value taxes seem like the most sane way to fund social programs. Extract a bit of value from the people who have runaway wealth (but not so much that their wealth can't continue to grow), and use it to help the economically downtrodden become more upwardly mobile (education, healthcare, basic social safety nets.)
Pair it with a hefty pigeuvian carbon tax and you could probably do away with income taxes entirely.
(A nondistortionary VAT to replace sales taxes and corporate income taxes would be nice as well.)
Pair it with a hefty pigeuvian carbon tax and you could probably do away with income taxes entirely.
(A nondistortionary VAT to replace sales taxes and corporate income taxes would be nice as well.)
Like Georgism? Which, by the way, imagines the land tax alone being enough to eliminate personal income taxes.
https://en.wikipedia.org/wiki/Georgism
https://en.wikipedia.org/wiki/Georgism
Yes, I am a Georgist.
He has paid huge taxes ($11B worth, the highest tax payment ever) when he converted capital to income last year.
Nobody disputes that it’s a nice idea to make life easier for the poor. The mechanics of how you actually do it are the hard part.
Nobody disputes that it’s a nice idea to make life easier for the poor. The mechanics of how you actually do it are the hard part.
As with anything, complaining is the easy part indeed. I don't have the answers either.
The funny thing is that hoards of people will come to defend a rich dude who really doesn't need it while poor people constantly get fucked over and could use a little bit of defending.
One improvement could be to just have a higher tax bracket (like the US had decades ago) and build more stuff for the common good. What doesn't help is that from my side of the big pond, the US sounds like a third world country if you are below middle-class. Can't judge if that is true for myself, but hey.
The funny thing is that hoards of people will come to defend a rich dude who really doesn't need it while poor people constantly get fucked over and could use a little bit of defending.
One improvement could be to just have a higher tax bracket (like the US had decades ago) and build more stuff for the common good. What doesn't help is that from my side of the big pond, the US sounds like a third world country if you are below middle-class. Can't judge if that is true for myself, but hey.
> hoards of people will come to defend a rich dude who really doesn't need it
I don’t know if that’s a fair characterization generally, but it’s not the case with me and it’s actually a frustration/lament I have when discussing this topic.
I’m not particularly a fan of Musk or any of the current crop of billionaires or their companies. But I care about the principles and the practicalities.
There’s this tendency to say “There are terrible problems in the world. We need to fix them with money. Where can we get money from? Billionaires!”
But when you do the maths, i.e., total up all the wealth that billionaires have and divide it by all the people/causes in the world who “need more money”, you end up with basically nothing.
And that’s before you consider what the billionaires’ companies are doing - which in many cases involves things like making phones/goods/software/knowledge cheaper/free, which benefits everyone including poor people, making electric cars affordable and ubiquitous, which will benefit all humanity and the environment long into the future if it leads to climate change abatement, and creating millions of jobs including many for low-skilled people, and also that these companies do generate vast amounts of tax in the form of sales taxes, income/payroll taxes, and capital gains taxes when shareholders liquidate their shares, and you find that it’s not necessarily true that taking money away from these companies/owners would be net beneficial for society anyway; it could easily make the problems worse.
And now for the obligatory disclaimer - yes I know there are plenty of valid concerns about the merits and ethics of what companies do, and worker pay/conditions and externalities and other issues; but these are matters for regulators and consumers to consider and are separate from the principle of how billionaires should be taxed or how beneficial it would be for billionaires to be taxed more.
I’m also not in the U.S., and I see plenty of dysfunction in that country as well as many others - though we also see many people, including some of the world’s poorest people desperate to move there for a better life.
For what it’s worth I devote a large number of my brain cycles to contemplating how life could be better for the worst-off; I’ve spent much of my adult life dealing with health challenges that caused great difficulty in achieving steady employment and financial security, which I’ve now largely overcome, and do I think a lot about how the principles that helped me could be applied more broadly, including for people far worse off that I ever was. At this stage I find myself thinking there are certain things that could work, but a lot of it is just really really hard.
I don’t know if that’s a fair characterization generally, but it’s not the case with me and it’s actually a frustration/lament I have when discussing this topic.
I’m not particularly a fan of Musk or any of the current crop of billionaires or their companies. But I care about the principles and the practicalities.
There’s this tendency to say “There are terrible problems in the world. We need to fix them with money. Where can we get money from? Billionaires!”
But when you do the maths, i.e., total up all the wealth that billionaires have and divide it by all the people/causes in the world who “need more money”, you end up with basically nothing.
And that’s before you consider what the billionaires’ companies are doing - which in many cases involves things like making phones/goods/software/knowledge cheaper/free, which benefits everyone including poor people, making electric cars affordable and ubiquitous, which will benefit all humanity and the environment long into the future if it leads to climate change abatement, and creating millions of jobs including many for low-skilled people, and also that these companies do generate vast amounts of tax in the form of sales taxes, income/payroll taxes, and capital gains taxes when shareholders liquidate their shares, and you find that it’s not necessarily true that taking money away from these companies/owners would be net beneficial for society anyway; it could easily make the problems worse.
And now for the obligatory disclaimer - yes I know there are plenty of valid concerns about the merits and ethics of what companies do, and worker pay/conditions and externalities and other issues; but these are matters for regulators and consumers to consider and are separate from the principle of how billionaires should be taxed or how beneficial it would be for billionaires to be taxed more.
I’m also not in the U.S., and I see plenty of dysfunction in that country as well as many others - though we also see many people, including some of the world’s poorest people desperate to move there for a better life.
For what it’s worth I devote a large number of my brain cycles to contemplating how life could be better for the worst-off; I’ve spent much of my adult life dealing with health challenges that caused great difficulty in achieving steady employment and financial security, which I’ve now largely overcome, and do I think a lot about how the principles that helped me could be applied more broadly, including for people far worse off that I ever was. At this stage I find myself thinking there are certain things that could work, but a lot of it is just really really hard.
How would you change it?
I imagine there’s a reason people feel more comfortable lending to Elon than to people with a smaller amount of assets, and that it’s not “lol fuck poor people”.
I imagine there’s a reason people feel more comfortable lending to Elon than to people with a smaller amount of assets, and that it’s not “lol fuck poor people”.
Tax the proceeds at loan origination (1099-whatever filed by whomever is providing the cash based on pledged assets). How you pay the loan back if the collateral declines in value is your problem (or the bank’s problem, depending on the amount in question).
High level, it closes a financial engineering loophole (buy, borrow, die [1]). The taxable event is when you get liquid, and a loan is liquidity. The tax code requires a patch, that’s all.
[1] https://youtu.be/8pBPZMUcsh0
High level, it closes a financial engineering loophole (buy, borrow, die [1]). The taxable event is when you get liquid, and a loan is liquidity. The tax code requires a patch, that’s all.
[1] https://youtu.be/8pBPZMUcsh0
Would taxing the loan reset the cost basis, then? Or are you suggesting taxing the same gains twice (or more than twice if someone repeatedly takes out and pays back a loan against the same assets)?
I agree buy, borrow, die is a problem but the “weird” feature of tax law that makes that possible is the step up in basis. (Getting rid of that has its own challenges I’m sure.)
I agree buy, borrow, die is a problem but the “weird” feature of tax law that makes that possible is the step up in basis. (Getting rid of that has its own challenges I’m sure.)
Given how fast heirs squander their wealth, it may not be worth the government fighting it too much, especially as the side-effects cause all sorts of howling (grandpa dies, dad inherits farm, has to sell it to pay the tax bill).
Shooting from the hip, sure, the broker could record this as a cost basis adjustment and report that attribute along with the rest of the form reported to the IRS.
Oh, sure, I thought GP meant the opposite (make it easier for non-rich people to take loans on assets) but this makes more sense.
Guess that is implied but not really what I meant. Poor people don't have much assets so it wouldn't do much.
My issue with the whole "Elon has to pay taxes" thing is that there are loads of people (fans?) fighting over why he shouldn't have to. It's the richest dude in the world, he really doesn't need defending for everyday people.
I also like the cool stuff he does, don't like the non-cool stuff he does, as I do with a lot of people really
My issue with the whole "Elon has to pay taxes" thing is that there are loads of people (fans?) fighting over why he shouldn't have to. It's the richest dude in the world, he really doesn't need defending for everyday people.
I also like the cool stuff he does, don't like the non-cool stuff he does, as I do with a lot of people really
One proposal could be to also allow taxes to be payed in stocks.
When those bits of stock bits are then transferred to ordinary people, they would be entitled to a bit of the dividends of eventually all companies.
Not thought this all the way through and I'm very much not an economist, so there are lots of impracticalities.
In a way, it's the opposite of 'cease the means of production': distribute the 'means' of capitalism.
When those bits of stock bits are then transferred to ordinary people, they would be entitled to a bit of the dividends of eventually all companies.
Not thought this all the way through and I'm very much not an economist, so there are lots of impracticalities.
In a way, it's the opposite of 'cease the means of production': distribute the 'means' of capitalism.
> If you are stock-rich and you can buy stuff on the collateral for that: normal people can't really do that. Ordinary people have a much harder time buying more stuff than they have the cash for. Or at least on worse terms when they do take out a loan. Being rich is cheaper than being poor. Is it really so awful to change that?
What you are talking about is reputation and it will always be a part of the dynamic. It happens at the poverty level too. In any poor community there are people you trust and people you don't.
What you are talking about is reputation and it will always be a part of the dynamic. It happens at the poverty level too. In any poor community there are people you trust and people you don't.
> If you are stock-rich and you can buy stuff on the collateral for that: normal people can't really do that
They do it with homes all of the time, what are you talking about?
They do it with homes all of the time, what are you talking about?
Has it ever not been so? Is it really possible to change it?
https://en.wikipedia.org/wiki/Iron_law_of_oligarchy
https://en.wikipedia.org/wiki/Iron_law_of_oligarchy
The problem of the rich not paying taxes because they're stock-rich and use the stock as collateral to take out loans to buy a new yacht could be solved by taxing unrealized gains.
Of course, this tax increase could be offset by also allowing unrealized losses to act as a tax deduction.
Of course, this tax increase could be offset by also allowing unrealized losses to act as a tax deduction.
The thing about an unrealised gain is … that is hasn't yet been realised. It doesn't exist yet. It could (and often does) vanish like smoke later on, and become a loss. When people propose to tax unrealised gains, do they also propose to reimburse those taxes when the gains become losses? Do they intend to continue taxing realised gains?
They usually propose some sort of mark-to-market and tax the value, but outside of markets like the stock market, and somewhat the housing market, it can be really really hard to determine the value of something.
Should the 1st tweet NFT be taxed at its last sale price? The recent failed bid price?
Should the 1st tweet NFT be taxed at its last sale price? The recent failed bid price?
> When people propose to tax unrealised gains, do they also propose to reimburse those taxes when the gains become losses?
Did you only read the first line of my comment? I specifically said that unrealized losses should also be a tax deduction.
Did you only read the first line of my comment? I specifically said that unrealized losses should also be a tax deduction.
I … am a moron. Somehow completely missed that.
Hah it's great. We had a national scandal along these lines.
1- Saudi company borrows $7B from Turkish banks to buy 55% of Turkey's largest internet and telephone provider.
2- Drive the provider into $4B debt (it was debt free when bought)
3- Pay the new holding company $9B in dividends
4- Don't pay the initial money borrowed to purchase the company.
5- Somehow borrow another $4B from Turkish banks to pay the new debt, and pocket that money as well.
6- Government creates a consortium of banks to bail the provider because its too big to fail.
Outcome: Provider is in debt, banks lost all the money, banks needs to spend unknown amount to get the provider back into a functioning state.
1- Saudi company borrows $7B from Turkish banks to buy 55% of Turkey's largest internet and telephone provider.
2- Drive the provider into $4B debt (it was debt free when bought)
3- Pay the new holding company $9B in dividends
4- Don't pay the initial money borrowed to purchase the company.
5- Somehow borrow another $4B from Turkish banks to pay the new debt, and pocket that money as well.
6- Government creates a consortium of banks to bail the provider because its too big to fail.
Outcome: Provider is in debt, banks lost all the money, banks needs to spend unknown amount to get the provider back into a functioning state.
Yeah, sadly private equity does the same frequently. Sometimes, I cannot belive it is legal!
This breaks down to:
a) $21 billion of Elon's ("Reporting Person"; see item #1) own money
b) $12.5 billion in margin loans arranged by Morgan Stanley
c) $13 billion in debt from Morgan Stanley
a) $21 billion of Elon's ("Reporting Person"; see item #1) own money
b) $12.5 billion in margin loans arranged by Morgan Stanley
c) $13 billion in debt from Morgan Stanley
Can someone ELI5 margin loans? How is it different than using an asset as collateral?
As the other poster said, it's a special type of collateralized loan where since everything is known, it can be done automatically.
You can get approved for a margin account at TD Ameritrade right now, and then later decide to margin some shares for whatever reason. The bank doesn't need to check your collateral because it knows how much it is worth at any given moment when the market is open.
Mortgage loans are not nearly as formalized, and the bank will send out an appraiser to verify that the property is worth an amount that they're willing to loan against.
And once you get past that, it becomes very hand-wavy; banks making loans to governments, non-profits, private companies, etc will all have their internal departments that make decisions about how much the risk is and what premium they'd need to charge.
You can get approved for a margin account at TD Ameritrade right now, and then later decide to margin some shares for whatever reason. The bank doesn't need to check your collateral because it knows how much it is worth at any given moment when the market is open.
Mortgage loans are not nearly as formalized, and the bank will send out an appraiser to verify that the property is worth an amount that they're willing to loan against.
And once you get past that, it becomes very hand-wavy; banks making loans to governments, non-profits, private companies, etc will all have their internal departments that make decisions about how much the risk is and what premium they'd need to charge.
A margin loan is just a loan where securities are the collateral asset.
The major feature of a margin loan versus other types of loans collateralized by assets is that the value of the underlying security (collateral) is tracked and depending on the terms of the margin loan, the lender has the right to issue a "margin call" demanding additional collateral or cash if the underlying securities have declined in value. These rules, called "house requirements," vary from lender to lender.
The major feature of a margin loan versus other types of loans collateralized by assets is that the value of the underlying security (collateral) is tracked and depending on the terms of the margin loan, the lender has the right to issue a "margin call" demanding additional collateral or cash if the underlying securities have declined in value. These rules, called "house requirements," vary from lender to lender.
Margin loans use commonly traded commodities, normally stocks. Because they are easy to value (compared to a house) and liquid they are easier to get. However, because they are easy to value, they get compared to the loan value constantly. You'll be allowed to borrow X% of the values of your shares. If they go up, you can borrow more money. If they go down, you have to immediately pay off part of that loan. Since X < 100%, you can do so by selling shares (but of course, that decreases the amount of the collateral you have again), but you could also just deposit cash or pay it another way. They normally are more than happy for you to not have to sell shares if you deposit money.
Ok that makes sense, but I thought his other loan from MS was also using his stock as collateral?
If you're MS, why would you want to treat stock as "normal" collateral instead of using a margin loan? Is that Elon only feels comfortable using so much of his stock for a margin loan, and wants to use the rest as "normal" collateral (but is then getting less favorable terms for it)?
If you're MS, why would you want to treat stock as "normal" collateral instead of using a margin loan? Is that Elon only feels comfortable using so much of his stock for a margin loan, and wants to use the rest as "normal" collateral (but is then getting less favorable terms for it)?
I have no idea why MS would choose to mix-and-match. Maybe the margin department has a global limit and that's hit by giving most of it to Musk? Maybe the margin department only covers the amount of Musk's stock they think they can sell in a margin call without causing the stock to tank? Maybe the other loan was using SpaceX stock (margin would only apply to public stock)?
It's also possible that Elon is getting a lower rate for the non-margin loan, but at a much worse multiple (putting up far more shares as collateral).
But that's all making stuff up.
It's also possible that Elon is getting a lower rate for the non-margin loan, but at a much worse multiple (putting up far more shares as collateral).
But that's all making stuff up.
> (including, with respect to the Margin Loan Facility a condition which requires that the borrower thereunder satisfy a maximum loan to value ratio of 20%, which is expected be satisfied by the contributions of a portion of Mr. Musk’s unencumbered shares in Tesla, Inc. to such borrower)
Musk is putting up some of his Tesla stock as collateral on the loans. The effect of this is pretty similar to if Musk had sold his Tesla stock and used the money to buy Twitter, but avoids some of the tax and regulatory consequences of doing that.
Musk is putting up some of his Tesla stock as collateral on the loans. The effect of this is pretty similar to if Musk had sold his Tesla stock and used the money to buy Twitter, but avoids some of the tax and regulatory consequences of doing that.
Banks are chartered by the government, thus should be prohibited from giving loans against publicly traded stocks, at least at rates less than the applicable capital gains tax, otherwise these loans are nothing more than government sanctioned tax loopholes for the rich.
This sounds like an interesting point but I don't understand it. Why is it worse to give a loan against a building for less than the capital gains rate then it is to do so for a public stock. Can you explain or link to an explanation?
Thank you.
Thank you.
Although they are both subject to capital gains taxes there are many differences between real estate and publicly traded stock.
As a preliminary matter, as investment vehicles publicly traded stock is a liquid asset, whereas real estate is an illiquid asset. Generally one invests in liquid investments so that they can be readily converted into cash when needed.
From the tax perspective a building/building owner would at all times be subject to continue paying property taxes. If there were some equivalent wealth tax for stock holders then at least society wouldn’t lose out entirely on this kind of tax avoidance scheme designed for the rich, but I’d still probably prefer these billions in bank loans go to qualified home buyers before lending it to the world’s richest man to circumvent a taxable event.
As a preliminary matter, as investment vehicles publicly traded stock is a liquid asset, whereas real estate is an illiquid asset. Generally one invests in liquid investments so that they can be readily converted into cash when needed.
From the tax perspective a building/building owner would at all times be subject to continue paying property taxes. If there were some equivalent wealth tax for stock holders then at least society wouldn’t lose out entirely on this kind of tax avoidance scheme designed for the rich, but I’d still probably prefer these billions in bank loans go to qualified home buyers before lending it to the world’s richest man to circumvent a taxable event.
Not really. The loan isn't really income: the borrower gets $X, but is also on the hook for $X plus interest. It costs him money.
It doesn't cost him anything, because the interest rate on the loan is virtually guaranteed to be less than the appreciation rate of the underlying asset.
This has only been true during our surprisingly low interest rate environment over the last 20+ years.
It could change rapidly and people can get wiped out quite quickly when it does.
It could change rapidly and people can get wiped out quite quickly when it does.
Don't confuse consumer and central interest rates for discretionary loan interest rates. The ultra-rich have been taking out ultra-low interest stock-backed loans to cover their living costs and obligations for over a century, and no billionaire has ever been "wiped out" by interest loan.
That isn't how these mechanisms work from a legal standpoint and ignores many of with-strings-attached realities of this kind of financing.
On the flip side, selling the assets would have no strings attached to the cash.
Further, it is definitely not guaranteed as you assert.
On the flip side, selling the assets would have no strings attached to the cash.
Further, it is definitely not guaranteed as you assert.
> at least at rates less than the applicable capital gains tax
So if you don't sell the stock and thus have no applicable capital gains tax, then you can be loaned NaN dollars?
So if you don't sell the stock and thus have no applicable capital gains tax, then you can be loaned NaN dollars?
The big difference is the lending terms will surely require the borrower to do something such as sell assets or deposit more money if the value of the collateral (and/or the asset being purchased) falls below a certain amount.
Borrowing against your shares is like taking out a mortgage on your home. You still get to live in it (dividend + voting rights), and you are still exposed to swings in value. And you can end up underwater.
It's a little bit different.
Most of the ultra-wealthy live on debt. Here's the basic scheme:
- Let's say I own $10B in startup.com stock, but haven't sold it. My income tax burden is $0.
- If I sell the stock, and taxes are 40% in my country, I get $6B, and the government gets $4B.
- If I keep the stock, and borrow against it, I pay no taxes, but I do pay finance fees (e.g. interest). The finance fees work out to less than taxes.
The trick is to never realize gains or income. Debt lets you do that.
One more trick is that a lot of purchases are "investments." If I buy a mansion, yacht, and Picasso on debt I can use them. When I'm bored of them, I sell them, and pay off that debt. I've probably made money on the mansion and Picasso, and lost money on the yacht.
I've paid a little bit of interest and a little bit of tax, but much less than I would have otherwise.
Most of the ultra-wealthy live on debt. Here's the basic scheme:
- Let's say I own $10B in startup.com stock, but haven't sold it. My income tax burden is $0.
- If I sell the stock, and taxes are 40% in my country, I get $6B, and the government gets $4B.
- If I keep the stock, and borrow against it, I pay no taxes, but I do pay finance fees (e.g. interest). The finance fees work out to less than taxes.
The trick is to never realize gains or income. Debt lets you do that.
One more trick is that a lot of purchases are "investments." If I buy a mansion, yacht, and Picasso on debt I can use them. When I'm bored of them, I sell them, and pay off that debt. I've probably made money on the mansion and Picasso, and lost money on the yacht.
I've paid a little bit of interest and a little bit of tax, but much less than I would have otherwise.
What you describe sounds pretty much the same as “if I start with a paid off house and take out a mortgage on it…”
One big difference is that you are constantly paying property taxes on the house, levied as a proportion of its total value, making the mere ownership of it a financial burden. Stock ownership comes with no such burden.
Another is that, should the need arise, stock can be sold at the drop of a hat. It is liquid and fungible so a stock-collateralized loan is seen by banks to be a very safe investment. Houses are not.
Another is that, should the need arise, stock can be sold at the drop of a hat. It is liquid and fungible so a stock-collateralized loan is seen by banks to be a very safe investment. Houses are not.
You left out the portion where you get the money to pay the principal and interest. Either you actually sell some of that stock, or you work a job to get that money. Either way you that income will be taxed.
Or continually roll the debt over, borrowing more money and more money. Then, when you die, your estate can sell the assets to cover the debt, but that avoids taxes.
I'm no expert but in other parts of the thread people are saying that interest is tax deductible. So you sell just enough stock to cover the interest and the capital gains are not taxed because they are offset by the interest deduction.
You still have to pay down principal at some point.
In this case explicitly I suspect it has more to do with the uncertainty of the deal going through AND not wanting to incur the tax penalty ALONG with the share penalty (liquidating $30 billion in TSLA would affect its price for sure). If you sold the shares to raise the cash, paid the tax, and then the deal didn't go through and bought the shares back, you'd be out the tax (with a stepped-up cost basis to be sure).
In this case explicitly I suspect it has more to do with the uncertainty of the deal going through AND not wanting to incur the tax penalty ALONG with the share penalty (liquidating $30 billion in TSLA would affect its price for sure). If you sold the shares to raise the cash, paid the tax, and then the deal didn't go through and bought the shares back, you'd be out the tax (with a stepped-up cost basis to be sure).
> - If I keep the stock, and borrow against it, I pay no taxes, but I do pay finance fees (e.g. interest). The finance fees work out to less than taxes.
I'm not following the whole lifecycle. You borrow against your stock, spend that money, and then repay the loan using stock? Without having technically sold the stock?
I'm not following the whole lifecycle. You borrow against your stock, spend that money, and then repay the loan using stock? Without having technically sold the stock?
You don't have to repay the loan (for a very loooong time).
Let's say you have 10 million in stock.
A typical margin account allows you to borrow up to, say, 40% of that. That's 4 million dollars.
Let's say you borrow $1 million and spend it. Currently interest rate on a margin loan is under %2. So every year the amount you need to repay grows by $20k (2% of $1 million, for simplicity I don't count compounding).
So in 10 years that would be $1.2 million to repay. But you're authorized for $4 million.
If in those 10 years the value of stock doubles to $20 million, then you're authorized to borrow $8 million - the amount you can borrow grows faster than the amount you need to repay.
To be clear: eventually you have to repay it but in the corner case it could be done when you die.
There are of course caveats. If interest rate increases dramatically, then the amount to repay will grow much faster etc. but you can see how e.g. if you have $10 million then you could borrow and spend $100k to live a good life and never have to sell your stock to fund your life (especially if stocks keep going up faster than interest rate, inflation and your spending habits)
Let's say you have 10 million in stock.
A typical margin account allows you to borrow up to, say, 40% of that. That's 4 million dollars.
Let's say you borrow $1 million and spend it. Currently interest rate on a margin loan is under %2. So every year the amount you need to repay grows by $20k (2% of $1 million, for simplicity I don't count compounding).
So in 10 years that would be $1.2 million to repay. But you're authorized for $4 million.
If in those 10 years the value of stock doubles to $20 million, then you're authorized to borrow $8 million - the amount you can borrow grows faster than the amount you need to repay.
To be clear: eventually you have to repay it but in the corner case it could be done when you die.
There are of course caveats. If interest rate increases dramatically, then the amount to repay will grow much faster etc. but you can see how e.g. if you have $10 million then you could borrow and spend $100k to live a good life and never have to sell your stock to fund your life (especially if stocks keep going up faster than interest rate, inflation and your spending habits)
Very interesting. And the total income works out to more than, say, an index fund?
You repay the loan with the next loan because you have $10b in stock but only took out a $10m loan. In the meantime the stock appreciates some more or you have more vested stock.
I guess the risk here would be that the stock goes to 0, you get margin called AND you are now on the hook to pay taxes.
I guess the risk here would be that the stock goes to 0, you get margin called AND you are now on the hook to pay taxes.
> You borrow against your stock, spend that money, and then repay the loan using stock? Without having technically sold the stock?
I know Ken Lay did that exact chain of events a lot to cash money out of Enron before it's bankruptcy.
I know Ken Lay did that exact chain of events a lot to cash money out of Enron before it's bankruptcy.
You don't repay the loan using stock. You repay it with cash from other sources (possibly thrown off by the new investment) or you keep the loan open and continue to pay interest on it.
Unlike a home a publicly traded stock is supposed to be immediately liquid. I really don’t think the banks should be giving rich people loans against publicly traded stock to facilitate a tax avoidance scheme, these billions of dollars would have been better of being loaned to home buyers.
You know how you only work for companies who pay you salary instead of companies who don't?
Aligned self interest is the engine of capitalism.
You don't care if society would be better of if you donate your time and skill to company X for free. You care that company Y will pay your for your time and skill and that's why you work company Y.
The good of society doesn't enter your calculus. Only the good of throwawaycities
Similarly the banks don't care what is optimal way to allocate capital for the good of society (apparently as decided by you).
They care about their self interest. Their business is providing loans so they provide loans to people most likely to repay those loans.
From the perspective of the bank, margin loans are the safest loans they can give because the collateral is fully liquid and under the control of the bank i.e. the moment the borrower crosses margin loan threshold, he gets margin call and the bank sells his stock to ensure the loan gets repaid.
Study the wildly successful economies of communist countries to see what happens when people think they know better that free market what should or should not be allowed in the economy.
So far good intentions have vastly inferior economical results than lightly regulated free market where, for example, participants decide what kind of loans they want to make.
Aligned self interest is the engine of capitalism.
You don't care if society would be better of if you donate your time and skill to company X for free. You care that company Y will pay your for your time and skill and that's why you work company Y.
The good of society doesn't enter your calculus. Only the good of throwawaycities
Similarly the banks don't care what is optimal way to allocate capital for the good of society (apparently as decided by you).
They care about their self interest. Their business is providing loans so they provide loans to people most likely to repay those loans.
From the perspective of the bank, margin loans are the safest loans they can give because the collateral is fully liquid and under the control of the bank i.e. the moment the borrower crosses margin loan threshold, he gets margin call and the bank sells his stock to ensure the loan gets repaid.
Study the wildly successful economies of communist countries to see what happens when people think they know better that free market what should or should not be allowed in the economy.
So far good intentions have vastly inferior economical results than lightly regulated free market where, for example, participants decide what kind of loans they want to make.
In a certain central european country they had 5% yield govermnent bonds, combined with 1-2% lombard loans for private banking clients they invented a financial perpetuum mobile.
His approach has been to leverage and leverage and leverage forever. Wonder where he would be in a parallel scenario with a recession in, say, 2018
I assume he also retains the voting rights associated to the Tesla shares.
That's literally what people do when they buy a house, except in that case, that debt is probably backed by Elon's Tesla stock.
Yes, but the hoi-polloi don't get to write off their mortgage interest as a tax deduction.
"The rich have all of the money and pay none of the taxes. The middle class pay all of the taxes and have none of the money. The poor are there just to scare the shit out of the middle class so they keep going to those jobs."
—George Carlin, 1937-2008
UPDATE:
As some replies have pointed out mortgage interest on a primary residence is permitted in some form in six countries: The Netherlands, Switzerland, the United States, Belgium, Denmark, and Ireland. If you live in one of these six countries, my comment does not apply to you. If you live in any of the nearly 200 other countries in the world, it does.
YMMV: "Your Mortgage-interest-deductiblity May Vary."
"The rich have all of the money and pay none of the taxes. The middle class pay all of the taxes and have none of the money. The poor are there just to scare the shit out of the middle class so they keep going to those jobs."
—George Carlin, 1937-2008
UPDATE:
As some replies have pointed out mortgage interest on a primary residence is permitted in some form in six countries: The Netherlands, Switzerland, the United States, Belgium, Denmark, and Ireland. If you live in one of these six countries, my comment does not apply to you. If you live in any of the nearly 200 other countries in the world, it does.
YMMV: "Your Mortgage-interest-deductiblity May Vary."
> Yes, but the hoi-polloi don't get to write off their mortgage interest as a tax deduction.
What a strange example to pick. That's, like, THE major write-off that most people have. It just gets obfuscated by the fact that most people don't go over the standard deduction.
What a strange example to pick. That's, like, THE major write-off that most people have. It just gets obfuscated by the fact that most people don't go over the standard deduction.
I think this varies between jurisdictions. I believe it is deductible in the USA, but not here in the People's Republic of Kanuckistan, although there are ways around the limitation, depending on your appetite for the risk of a drawn-out battle with the Canada Revenue Agency.
Up here, home mortgage interest is only deductible if the home is used to generate income, so it does not apply to people who use a home as their primary residence. But what if you have a home office? What if you use it as an AirBnB some of the time?
If you ask a tax accountant whether Canadian home mortage interest is deductible, they will answer "a definite maybe." But it's actually "no" for most people who don't structure their home ownership around qualifying for a deduction.
Up here, home mortgage interest is only deductible if the home is used to generate income, so it does not apply to people who use a home as their primary residence. But what if you have a home office? What if you use it as an AirBnB some of the time?
If you ask a tax accountant whether Canadian home mortage interest is deductible, they will answer "a definite maybe." But it's actually "no" for most people who don't structure their home ownership around qualifying for a deduction.
That second part is huge and people don't account for it correctly. It really hasn't mattered much in the era of super-low loan rates, but the amount that your mortgage is deductible is only the difference between the standard deduction and the itemized deduction.
My mortgage interest became "worthless" for that when the standard deduction was raised. I'm still better off than before, but that particular part of the benefit is gone.
My mortgage interest became "worthless" for that when the standard deduction was raised. I'm still better off than before, but that particular part of the benefit is gone.
The standard deduction for California did not change, unlike the temporary change on the federal side enacted for 8 years beginning with 2018. Also CA did not change the limits on the amount and type of loan interest that is deductible.
Since California by many measures is large enough to equate to a "country", It would be fair to add it to the list of places where primary residence (and a second home too) mortgage interest is largely deductible.
Since California by many measures is large enough to equate to a "country", It would be fair to add it to the list of places where primary residence (and a second home too) mortgage interest is largely deductible.
> The rich have all of the money and pay none of the taxes.
This is demonstrably false. But then again, you don't expect factual accuracy from a comedian.
> As some replies have pointed out mortgage interest on a primary residence is permitted in some form in six countries: The Netherlands, Switzerland, the United States, Belgium, Denmark, and Ireland.
This Wikipedia sourced list is obviously not exhaustive. And interest deduction is allowed in the US which is the relevant case here.
This is demonstrably false. But then again, you don't expect factual accuracy from a comedian.
> As some replies have pointed out mortgage interest on a primary residence is permitted in some form in six countries: The Netherlands, Switzerland, the United States, Belgium, Denmark, and Ireland.
This Wikipedia sourced list is obviously not exhaustive. And interest deduction is allowed in the US which is the relevant case here.
> mortgage interest on a primary residence is permitted in some form in six countries
And China[1]. And India[2]. (Although I don't know either country's housing market and therefore don't know how to interpret upper limits).
Between the US, China and India, it seems like most people and the biggest economies do that.
[1] https://www.chinadaily.com.cn/a/201812/23/WS5c1e2dc0a3107d4c... [2] https://www.bankbazaar.com/tax/mortgage-tax.html
And China[1]. And India[2]. (Although I don't know either country's housing market and therefore don't know how to interpret upper limits).
Between the US, China and India, it seems like most people and the biggest economies do that.
[1] https://www.chinadaily.com.cn/a/201812/23/WS5c1e2dc0a3107d4c... [2] https://www.bankbazaar.com/tax/mortgage-tax.html
[deleted]
According to the link:
> The Netherlands, Switzerland, the United States, Belgium, Denmark, and Ireland allow some form of the deduction.
That's six out of roughly 195 countries in the world. Perhaps you live in one of them, but billions don't.
> The Netherlands, Switzerland, the United States, Belgium, Denmark, and Ireland allow some form of the deduction.
That's six out of roughly 195 countries in the world. Perhaps you live in one of them, but billions don't.
The origin of this conversation is a US citizen who is purchasing a US company.
Elon Musk lives in one of them though, si that's not very relevant. You should take it up to your own government if you want to make it happen wherever you live, not be against Musk doing the same
Elon has a lot of equity in ownership of tsla, spacex, etc, no doubt plenty of other things. Instead of selling for cash and buying Twitter with cash, he’s taking out loans based on assets he owns.
On top of that there will probably be “imaginary money” where a bank will give him money to buy Twitter with Twitter as collateral, but not the whole thing, just part. I.e. loans against his personal capital will provide a kind of down payment for loans against the value of Twitter.
In this scale it’s called leverage, banks loaning you a multiple of assets you’re willing to risk.
It is quite common for people with extreme net worth to take loans out against assets instead of selling them.
On top of that there will probably be “imaginary money” where a bank will give him money to buy Twitter with Twitter as collateral, but not the whole thing, just part. I.e. loans against his personal capital will provide a kind of down payment for loans against the value of Twitter.
In this scale it’s called leverage, banks loaning you a multiple of assets you’re willing to risk.
It is quite common for people with extreme net worth to take loans out against assets instead of selling them.
> It is quite common for people with extreme net worth to take loans out against assets instead of selling them.
Especially when selling those assets would require paying capital gains taxes.
Especially when selling those assets would require paying capital gains taxes.
Doubly so when the interest on these loans is tax deductible. This is why he and most other wealthy people pay 0 taxes - he never has a taxable event, like selling stock. He just uses his stock as collateral to take out loans and writes off the interest.
Musk paid the largest tax bill in history last year.
Facts are not needed, sir. Feelings matter most.
We know that no companies pay tax (ignore the billions paid in tax), and no rich people pay tax (ignore the billions paid in tax), so therefor all taxes must be paid by me personally.
Or so the arguments go.
We know that no companies pay tax (ignore the billions paid in tax), and no rich people pay tax (ignore the billions paid in tax), so therefor all taxes must be paid by me personally.
Or so the arguments go.
At the end, where does he get money to pay interest?
Margin loan against your stock is more like a line of credit.
Once you upgrade your brokerage account to include margin loans you're allowed to borrow up to, say, 40% of the value of your stock (I simplify, the exact rate is dynamic).
Say you have $1 million in stock.
You're allowed to borrow up to $400k. You have a line of credit of $400k.
Say you borrow $100k. And in this context "borrowing" is simply transferring money from your brokerage account to your bank account. There's no additional paperwork as in most loans.
Let's say over 5 years you accumulate $10k interest (interest rates are really low, can be below 2% right now).
You don't have to "repay" that $10k or the principal. You now owe $110k which is well below $400k limit.
It's a line of credit, you can still borrow additional $290k.
In the limit that line of credit would only have to be settled when you die.
Once you upgrade your brokerage account to include margin loans you're allowed to borrow up to, say, 40% of the value of your stock (I simplify, the exact rate is dynamic).
Say you have $1 million in stock.
You're allowed to borrow up to $400k. You have a line of credit of $400k.
Say you borrow $100k. And in this context "borrowing" is simply transferring money from your brokerage account to your bank account. There's no additional paperwork as in most loans.
Let's say over 5 years you accumulate $10k interest (interest rates are really low, can be below 2% right now).
You don't have to "repay" that $10k or the principal. You now owe $110k which is well below $400k limit.
It's a line of credit, you can still borrow additional $290k.
In the limit that line of credit would only have to be settled when you die.
I'm assuming they sell just enough stock to pay the interest.
If the interest paid is tax deductible, then the selling of the stock won't result in a tax needing to be paid.
If the interest paid is tax deductible, then the selling of the stock won't result in a tax needing to be paid.
More loans. As long as the stock's value is going up he can pull more equity out
This is where the weird negativity around billionaires taking loans is odd, even as someone who doesn't particularly like Musk. Sure, if their stock holdings keeps increasing in value, they can handle the loans easily and come out ahead on the deal. But that isn't a given, so what is the issue?
Reed Hastings would currently being losing a lot under this scheme.
Reed Hastings would currently being losing a lot under this scheme.
Personally, my issue is that taking loans against equity is the reason billionaires don't pay any income tax. Sure, they should be able to take loans in order to keep their voting share, but not as a tax loophole.
For a long time this always felt awkward to me but I was never able to pin-point exactly what was wrong. Then I found georgism, with its claims of not needing any income and capital gains taxes, and it was even harder to quantify.
But I think now I've been able to work it out. There's actually two different types of loans but we treat them equally. The first is the nice type, the 'I built a factory, used that factory to pay back the loan with interest', that loan is a positive sum loan, the company wins, the bank wins, and the community wins. The second are loans for land, loans for stock, and other similar loans - these are zero-sum loans. The company can win, the bank can win, but someone is losing, and as is the community.
And so the real problem with this if you track how the money flows - a possible scenario is that a company might take out a bond, use the money for that bond to buy its own stock. The people who sold that stock and got that money might then go out and buy a house, the people who sold that house - you betcha, put that stock into an index fund, which includes a larger and larger share of the companies buying their own shares. Now that their share price is raised, they have more equity, and can once again take out another bond to do it again. It's a positive feedback loop. Each cycle is inflating the bubble. Valuations end up not being based on actual productivity, but on assumptions as to how money will flow through the markets.
We're at a stage now that the stock market flows of funds is only positive because of the stock buybacks. Companies that aren't buying back their stocks are going out of business. The Russel 5000 is getting punished despite the s&p recovering. We're at a stage now where north of 40% of all money is being held behind passive flows. We're now seeing the consequences of that with things like Netflix - when the stock does drop, it drops quickly and massively. Average volatility might be down considerably, but peak volatility is up massively.
But I think now I've been able to work it out. There's actually two different types of loans but we treat them equally. The first is the nice type, the 'I built a factory, used that factory to pay back the loan with interest', that loan is a positive sum loan, the company wins, the bank wins, and the community wins. The second are loans for land, loans for stock, and other similar loans - these are zero-sum loans. The company can win, the bank can win, but someone is losing, and as is the community.
And so the real problem with this if you track how the money flows - a possible scenario is that a company might take out a bond, use the money for that bond to buy its own stock. The people who sold that stock and got that money might then go out and buy a house, the people who sold that house - you betcha, put that stock into an index fund, which includes a larger and larger share of the companies buying their own shares. Now that their share price is raised, they have more equity, and can once again take out another bond to do it again. It's a positive feedback loop. Each cycle is inflating the bubble. Valuations end up not being based on actual productivity, but on assumptions as to how money will flow through the markets.
We're at a stage now that the stock market flows of funds is only positive because of the stock buybacks. Companies that aren't buying back their stocks are going out of business. The Russel 5000 is getting punished despite the s&p recovering. We're at a stage now where north of 40% of all money is being held behind passive flows. We're now seeing the consequences of that with things like Netflix - when the stock does drop, it drops quickly and massively. Average volatility might be down considerably, but peak volatility is up massively.
> Sure, they should be able to take loans in order to keep their voting share
Why is that?
Why is that?
The issue is that loans are ways of realizing gains on investments that aren’t taxed.
A proposal to correct this is to require that when you use an asset as collateral for a loan you have to reassess its value and pay capital gains taxes on the increased basis between when you acquired it and took out the loan.
Basically there needs to be friction and taxation with equity transactions like these loans.
A proposal to correct this is to require that when you use an asset as collateral for a loan you have to reassess its value and pay capital gains taxes on the increased basis between when you acquired it and took out the loan.
Basically there needs to be friction and taxation with equity transactions like these loans.
> What follows seems like Elon is "paying" for Twitter with... imaginary money.
The vast majority of money is "imaginary" in the sense that it's just liabilities on some bank's balance sheet, AKA bank deposits.
> Why can't anyone do this? I'll promise you a bunch of debt and equity, too.
Anyone can do this. Nothing is stopping you from writing me a note for $1,000,000 and me writing you a note for $1,000,000. This leaves us both a million richer in assets and a million poorer in liabilities. At that point even hinkier stuff can happen like me using your note as collateral on a loan to further expand my balance sheet. The tricky part is getting third parties to accept our IOUs. US Banks have no such trouble thanks to their membership in the Federal Reserve system. This is one major reason why a banking license is such a huge deal.
The vast majority of money is "imaginary" in the sense that it's just liabilities on some bank's balance sheet, AKA bank deposits.
> Why can't anyone do this? I'll promise you a bunch of debt and equity, too.
Anyone can do this. Nothing is stopping you from writing me a note for $1,000,000 and me writing you a note for $1,000,000. This leaves us both a million richer in assets and a million poorer in liabilities. At that point even hinkier stuff can happen like me using your note as collateral on a loan to further expand my balance sheet. The tricky part is getting third parties to accept our IOUs. US Banks have no such trouble thanks to their membership in the Federal Reserve system. This is one major reason why a banking license is such a huge deal.
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Because the people who wrote those letters don't trust you to pay up if stonks go down by 100x your net worth. They trust Elon, though, because he has more net worth.
I'm taking a broad definition of "trust" that includes "we can sue you and recover the money."
I'm taking a broad definition of "trust" that includes "we can sue you and recover the money."
80s Junk Bond King (and convicted felon*) Michael Milkin tells this story.
He was once talking to an ambitions entrepreneur about funding a buyout with junk, and the entrepreneur asked, "This is a lot of money. How do you know I'll replay it?"
Milkin says he replied, "Because if you miss even a single payment, I'll call your debt and take not just the company, but every single asset you own."
———
* That would be presidentially pardoned convicted felon Michael Milkin. The rules for "righting injustice through pardons" are very different for the rich than the comfortably well off, much less those living paycheque to paycheque.
He was once talking to an ambitions entrepreneur about funding a buyout with junk, and the entrepreneur asked, "This is a lot of money. How do you know I'll replay it?"
Milkin says he replied, "Because if you miss even a single payment, I'll call your debt and take not just the company, but every single asset you own."
———
* That would be presidentially pardoned convicted felon Michael Milkin. The rules for "righting injustice through pardons" are very different for the rich than the comfortably well off, much less those living paycheque to paycheque.
Pardoned by Trump. We should name and shame each one until this stops.
>We should name and shame each one until this stops.
Why should it stop? Do you not believe in redemption? Milken has done (and continues to do) a lot of great charity work with his fortune.
Besides, if you look at what Milken was actually convicted of, it's pretty tame, especially by today's standards. And he spent two years in prison for it. What more do you want?
Why should it stop? Do you not believe in redemption? Milken has done (and continues to do) a lot of great charity work with his fortune.
Besides, if you look at what Milken was actually convicted of, it's pretty tame, especially by today's standards. And he spent two years in prison for it. What more do you want?
I actually like what you're saying, but there is a problem here that is larger than whether it is just that Mr. Milken deserves a pardon. The problem is that justice unequally applied is injustice.
So if we are saying, "Everyone convicted of a felony who serves their time and who then rehabilitates themselves should be pardoned," I'm all for it. And in my jurisdiction (Canada), people can apply for Federal pardons, and many receive them. There is a standard way to do it, a standard procedure to follow, and in theory, everyone is treated equally by the system.
The injustice comes in if there is a special fast-track for a pardon one gets by hob-nobbing with your fellow wealthy oligarchs, one of whom is elected President and gives you a personal pardon. That's a bad look that suggests that all felons are equal, but some felons are more equal than others.
Likewise, I am extremely leery of talking about "doing great charity work." Reputation laundering is my preferred term, and again this is not something available to all citizens. Nobody gives a crap if some felon donates $1,000 to a soup kitchen, but donate $1,000,000 and you get called a "philanthropist."
I'm all for charity and doing good works, but I'm not for giving philanthropists anything special in terms of justice that people who can't afford to be philanthropists get.
IMO, the answer is not to burn Milken's pardon, it's to pardon more convicted felons who do their time and then turn their backs on whatever criminal acts they used to commit.
So if we are saying, "Everyone convicted of a felony who serves their time and who then rehabilitates themselves should be pardoned," I'm all for it. And in my jurisdiction (Canada), people can apply for Federal pardons, and many receive them. There is a standard way to do it, a standard procedure to follow, and in theory, everyone is treated equally by the system.
The injustice comes in if there is a special fast-track for a pardon one gets by hob-nobbing with your fellow wealthy oligarchs, one of whom is elected President and gives you a personal pardon. That's a bad look that suggests that all felons are equal, but some felons are more equal than others.
Likewise, I am extremely leery of talking about "doing great charity work." Reputation laundering is my preferred term, and again this is not something available to all citizens. Nobody gives a crap if some felon donates $1,000 to a soup kitchen, but donate $1,000,000 and you get called a "philanthropist."
I'm all for charity and doing good works, but I'm not for giving philanthropists anything special in terms of justice that people who can't afford to be philanthropists get.
IMO, the answer is not to burn Milken's pardon, it's to pardon more convicted felons who do their time and then turn their backs on whatever criminal acts they used to commit.
Yeah we need more pardons not less, and we need blanket laws that forbid making hiring, etc decisions based on convictions (AND forbid lawsuits around hiring) more than X years ago.
People are afraid to expose themselves to liability for hiring a felon, even if said felony is ages ago, because if something goes wrong everyone will say "well you shouldn't have hired a felon."
People are afraid to expose themselves to liability for hiring a felon, even if said felony is ages ago, because if something goes wrong everyone will say "well you shouldn't have hired a felon."
100% agree with you and the parent, but it should not be at the whim of a governor/president.
I believe in redemption, and I think US jail sentences are extremely excessive. That is an issue for voters.
I do not believe in random justice where connected people can be pardoned even if they deserve so when there are literally millions in jail who could be as deserving.
Sadly important today, pardons can be corrupt. Trump several times promised pardons for people willing to go to jail for him. And he delivered on those pardons.
So yes I believe in redemption, but not by executive decree. That belongs in a time when we had kings with real power.
Finally, the prison time is often from a plea bargain (I do not like those either but different story). So the time sentenced to does not always have a meaning.
I do not believe in random justice where connected people can be pardoned even if they deserve so when there are literally millions in jail who could be as deserving.
Sadly important today, pardons can be corrupt. Trump several times promised pardons for people willing to go to jail for him. And he delivered on those pardons.
So yes I believe in redemption, but not by executive decree. That belongs in a time when we had kings with real power.
Finally, the prison time is often from a plea bargain (I do not like those either but different story). So the time sentenced to does not always have a meaning.
None of which means he deserved a pardon.
Ah, so it's a reputation/wealth-based thing. That makes sense.
By that logic though -- if you're a billionaire, could you try to buy every profitable company on borrowed money?
Eventually you'd make the money back and since you don't have to pay anything out of pocket, you effectively have $INFINITY dollars to bargain with.
By that logic though -- if you're a billionaire, could you try to buy every profitable company on borrowed money?
Eventually you'd make the money back and since you don't have to pay anything out of pocket, you effectively have $INFINITY dollars to bargain with.
When he requests debt from the banks he needs to show that his current owned assets are worth more than his current debt _and_ the new requested debt. They wouldn't loan the hypothetical billionaire infinity dollars, unless the billionaire has infinity dollars in assets that aren't offset by previous debt.
It's not reputation based. Musk as requested secured enough loans to pay with cash. His ownership in SpaceX/Tesla is the collateral (as well as his Twitter shares if he buys them).
He has no "infinity" of anything. It's called leverage and it probably maxes out around 60-70% of everything he owns.
He has no "infinity" of anything. It's called leverage and it probably maxes out around 60-70% of everything he owns.
seems crazy to take that much leverage when you are worth $200B.
the shorts must be salivating at a chance to force a margin call on him, just for fun. Would have been better to just do a tesla twitter merger for free.
The "make the money back" part is what prevents it.
Musk has 100 billion of TSLA say.
He mortgages it to buy TWTR. Now he has 100 billion of TSLA, -40 billion loan against it, and 40 billion of TWTR. He could mortgage TWTR and buy something else, but it would have to be smaller, because the banks won't loan 100% of the value of the thing.
Or he'd have to make another $40 billion and pay off the first loan to mortgage it again.
Think of it as trying to use mortgage properties in monopoly to continue buying other properties.
Musk has 100 billion of TSLA say.
He mortgages it to buy TWTR. Now he has 100 billion of TSLA, -40 billion loan against it, and 40 billion of TWTR. He could mortgage TWTR and buy something else, but it would have to be smaller, because the banks won't loan 100% of the value of the thing.
Or he'd have to make another $40 billion and pay off the first loan to mortgage it again.
Think of it as trying to use mortgage properties in monopoly to continue buying other properties.
>He could mortgage TWTR and buy something else, but it would have to be smaller, because the banks won't loan 100% of the value of the thing.
Unless you're on robinhood: https://www.bnnbloomberg.ca/robinhood-traders-discover-glitc...
Unless you're on robinhood: https://www.bnnbloomberg.ca/robinhood-traders-discover-glitc...
Robinhood is the exception that proves all the rules.
Maybe we'll see a wallstreetbets post "Musk couldn't take TWTR private but I did via robin hood bug"
Maybe we'll see a wallstreetbets post "Musk couldn't take TWTR private but I did via robin hood bug"
Banks don't like loaning multiple times with the same collateral
You could try but it'd probably work out for you about as well as when the hunt brothers tried to buy up all the silver on earth.
Each new loan would have increased scrutiny due to the other loans you carry.
Trump and Gordon Gekko did this
Do you think it's reasonable Elon could secure the funding if he wants to? I'm quite confident he can and I think most reasonable people would agree.
however, I'm not confident "anyone" could secure the funding, so they can't "do this"
however, I'm not confident "anyone" could secure the funding, so they can't "do this"
I am not confident, no.
well, you are incorrect. Per TFA, Morgan Stanley has agreed to lend Musk the money.
That's so unreasonable you should go more into it or just leave it. It's literally the richest man of Earth, banks are falling over themselves to stuff him their money.
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Matt Levine went into it yesterday why funding the Twitter purchase might be hard for Elon Musk.
https://www.bloomberg.com/opinion/articles/2022-04-20/elon-c...
The long and short of it is that the people who would lend him money may not trust him due to his previous (and erratic) statements.
https://www.bloomberg.com/opinion/articles/2022-04-20/elon-c...
The long and short of it is that the people who would lend him money may not trust him due to his previous (and erratic) statements.
He literally provided SEC a guarantee from Morgan Stanley to lend him the money. That's what OP posted.
Not all the money
Matt Levine is great but he's just an entertainer, and not even a day later we have evidence filed with the SEC that he is wrong.
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say more.
he has a net worth over 200B, why couldnt he raise 40B?
he has a net worth over 200B, why couldnt he raise 40B?
Rich people generally get that way by learning how to effectively leverage other people’s money.
why not?
I feel Elon Musk could literally mint NFT of his face and sell them to raise the cash
I feel Elon Musk could literally mint NFT of his face and sell them to raise the cash
about a dozen answers have been posted here, each one missing the point
people are conflating Musk's personal balance sheet with Twitter's. it's not clear to me whether any debt would be recourse to Musk—but in all likelihood, it wouldn't be. "recourse" is a term used to describe what collateralizes the loan. if the loan is recourse to Musk, he'll have to cover the cost if Twitter isn't spitting off enough cash flow to service the debt. if it's non-recourse, then the only collateral available to the creditors is Twitter and its assets (potentially subject to certain carve-outs). most rich people don't do recourse transactions as a risk mitigation measure. however, non-recourse debt is costlier because the universe of collateral available to the lender is slimmer
why can't anyone do this? because Musk has been deemed a better sponsor / steward of capital than your average joe
people are conflating Musk's personal balance sheet with Twitter's. it's not clear to me whether any debt would be recourse to Musk—but in all likelihood, it wouldn't be. "recourse" is a term used to describe what collateralizes the loan. if the loan is recourse to Musk, he'll have to cover the cost if Twitter isn't spitting off enough cash flow to service the debt. if it's non-recourse, then the only collateral available to the creditors is Twitter and its assets (potentially subject to certain carve-outs). most rich people don't do recourse transactions as a risk mitigation measure. however, non-recourse debt is costlier because the universe of collateral available to the lender is slimmer
why can't anyone do this? because Musk has been deemed a better sponsor / steward of capital than your average joe
It means between himself, and a group of others, he has collected enough money to buy Twitter, as evidenced by the letters of intent.
Those are legit. Banks don't sign notes without some intent. They can back out, but they are not meaningless.
It's important so that the current shareholders and the board know that Musk's bid is legitimate, and not something he's just making up.
In order for the banks and others to back him in this bid, he will have had to provide with with a lot of info.
This could be a big PR move, but Musk will have had to hire very expensive bankers to actually go through this as if it were a real thing.
"Why can't you do this?"
Because Goldman and other Private Equity firms won't back you (well, assuming they won't). And they won't give you a letter to the board of Twitter saying they will.
Those are legit. Banks don't sign notes without some intent. They can back out, but they are not meaningless.
It's important so that the current shareholders and the board know that Musk's bid is legitimate, and not something he's just making up.
In order for the banks and others to back him in this bid, he will have had to provide with with a lot of info.
This could be a big PR move, but Musk will have had to hire very expensive bankers to actually go through this as if it were a real thing.
"Why can't you do this?"
Because Goldman and other Private Equity firms won't back you (well, assuming they won't). And they won't give you a letter to the board of Twitter saying they will.
Yeah, the costs to do this are running in the millions, even if nothing ever happens. It was basically a foregone conclusion that Musk can do this, but each bank has to do a bunch of work inside to make sure they're not exposing themselves in ways they don't want to.
Not a foregone conclusion. It's complicated. And banks definitely have to do their due diligence.
If it was Buffet then it would be 'almost a foregone conclusion'.
Not with musk.
Musk has gained $10-30M in free publicity thus far. He's made the front pages of the news everywhere in the world.
He can hardly lose here.
And I'm not a Musk fanboy or anything.
If it was Buffet then it would be 'almost a foregone conclusion'.
Not with musk.
Musk has gained $10-30M in free publicity thus far. He's made the front pages of the news everywhere in the world.
He can hardly lose here.
And I'm not a Musk fanboy or anything.
One difference is Buffet rarely if ever buys anything, Berkshire buys things. And I dare say Berkshire has everything ready to go.
In this case Musk is buying using TSLA (and SpaceX?) shares as collateral, not having TSLA buy.
In this case Musk is buying using TSLA (and SpaceX?) shares as collateral, not having TSLA buy.
I meant Berkshire.
Tesla nor SpaceX would have no reason to buy Twitter, so Musk has to do it himself.
He has Tesla shares, that's kind of a secondary thing.
It's a leveraged buy out - banks and other firms would be going in with him. A bit like you buy a house.
Tesla nor SpaceX would have no reason to buy Twitter, so Musk has to do it himself.
He has Tesla shares, that's kind of a secondary thing.
It's a leveraged buy out - banks and other firms would be going in with him. A bit like you buy a house.
> Why can't anyone do this?
Everyone can do this. Just call your bank and get commitment from them to issue you a $40B loan! Those "commitment letters" are contracts. It's a known bank with known assets saying it's promised to issue a loan in the stated amount for the stated purpose.
It's the same thing that happens when you make an offer on a house. You don't generally come to them with the money "out of pocket", you show them documentation from your bank that details your mortgage contract. But the mortgage doesn't actually exist yet because you don't own the home. It will execute at the same time as the purchase, generally through some kind of escrow process.
Things aren't any different, fundamentally, even five orders of magnitudes higher.
Everyone can do this. Just call your bank and get commitment from them to issue you a $40B loan! Those "commitment letters" are contracts. It's a known bank with known assets saying it's promised to issue a loan in the stated amount for the stated purpose.
It's the same thing that happens when you make an offer on a house. You don't generally come to them with the money "out of pocket", you show them documentation from your bank that details your mortgage contract. But the mortgage doesn't actually exist yet because you don't own the home. It will execute at the same time as the purchase, generally through some kind of escrow process.
Things aren't any different, fundamentally, even five orders of magnitudes higher.
You can. If you have a stock portfolio and your broker allows you to do margin loans you could just withdraw say $12k from your account as a loan without selling any shares and go buy a jet ski.
But if you don’t have sufficient collateral your broker will just tell you to get fucked.
But if you don’t have sufficient collateral your broker will just tell you to get fucked.
Why contact you? Because you are insightful unlike most and there is agreement on some of the insights you wrote. Do you have an email address or a contact method?
Old thread could not be replied to, probably because too many days past.
Old thread could not be replied to, probably because too many days past.
Way more people than Musk can do this. You just need a bank that trusts your ability to pay and who thinks the size of the transaction is worth their time.
1. banks loan elon money
2. elon uses this money to buy twitter
2. elon uses this money to buy twitter
3. Elon pays banks interest each month for said loan money
4. Interest is cheaper than tax Elon would pay if he sold those shares instead of borrowing against them.
4. Interest is cheaper than tax Elon would pay if he sold those shares instead of borrowing against them.
4 is true but doesn’t show how insane of a diff it is. The interest is going to be tiny. It isn’t going to be 3% like what Robinhood charges for any one with at least $2K in Robinhood and $5/mo membership. If Elon is getting sub 1% interest rate. AND he gets to tax deduct that interest. It’s near nothing.
With 4, the more significant factor is not tax avoidance, but the fact that selling 21B$ of shares in a short period would really tank the stock price. the negative effect of that would be more significant than capital gains tax
Re 4: Musk doesn't avoid the tax, merely delays it.
By the time he has to pay it he'll also have to pay tax on the accumulated interest.
He'll pay the interest AND the tax on the principal AND the interest.
By the time he has to pay it he'll also have to pay tax on the accumulated interest.
He'll pay the interest AND the tax on the principal AND the interest.
If you had a signed letter that GS was willing to loan you $43 billion, you'd get taken seriously too. If you want to bid on a house, you'll need a signed letter promising a loan of (house price) on it from a bank to be taken seriously (or cash reserves)
Not to be that guy, but anyone actually can do this with DeFi exchanges using a flash loan. You can borrow infinite capital with no collateral, as long as you can pay it back (plus fees) before the end of the current transaction.
> Why can't anyone do this?
The dude does own 200B + worth of publicly traded equities.
The dude does own 200B + worth of publicly traded equities.
It's very similar to buying a house - you don't get the mortgage first, you get a letter of pre-approval that says the bank is ready to give you a mortgage when you actually buy the thing.
It's even technically more amusing (a pre-approval letter is just the bank saying eh probably we can do this; it's not even required) - the seller will say "We will sell if you have the money", the bank will say "we will give the money if the house is worth X and you have Y downpayment, you will say "I have Y down payment if the bank will give me the money" and the appraiser will say "I think the house is worth X+1-5% (it is always just above the amount needed)".
Then you get a form of a financial standoff where each party checks that they're getting what they want, and you escrow/sign everything.
Then you get a form of a financial standoff where each party checks that they're getting what they want, and you escrow/sign everything.
It's like buying a house with a mortgage. You wouldn't say you're buying a $1MM house for $200k just because you had a 20% down payment.
Exhibit D looks like he's borrowing some money (12.5B USD) with TSLA as collateral, unless I'm misreading it.
Do you provably own quarter of trillion USD of equities? This is exactly what the very stupid people never seem to understand about wealth - net worth is not cash under the mattress (nor on a "Savings" account). Musk (as well as Bezos, Dorsey, etc for that matter) probably has less than a hundredth of a promile of his wealth in cash.
One of the main reasons is that today's cash is in essence a rave-club bracelet - you need it for every day transacitons but as a store of value it is useless to harmful. The whole idea of today's currencies is for the financially illiterate people to get robbed of their savings. You don't become that wealthy by being that stupid.
Edit: I used billion instead of trillion, apologies
One of the main reasons is that today's cash is in essence a rave-club bracelet - you need it for every day transacitons but as a store of value it is useless to harmful. The whole idea of today's currencies is for the financially illiterate people to get robbed of their savings. You don't become that wealthy by being that stupid.
Edit: I used billion instead of trillion, apologies
> The whole idea of today's currencies is for the financially illiterate people to get robbed of their savings.
No it isn’t, the financially illiterate don’t tend to have much savings anyway. The point of controlled inflation is to prevent the financially literate from hoarding cash as an appreciating asset and provide tooling to alleviate economic crisis. Considering your quote I’d question just how financially literate you yourself is.
No it isn’t, the financially illiterate don’t tend to have much savings anyway. The point of controlled inflation is to prevent the financially literate from hoarding cash as an appreciating asset and provide tooling to alleviate economic crisis. Considering your quote I’d question just how financially literate you yourself is.
Yes. I know very well that this is the justification (and a justification can be invented for anything). Now it is your turn to explain to me how does this fact contradict my statement that the drawback of such paradigm is that it makes it useless as a store of value?
Hint: It doesn't - you just stated a completely separate fact as if it is logically incompatible with the original argument.
Hint: It doesn't - you just stated a completely separate fact as if it is logically incompatible with the original argument.
That's not a drawback, it's basically the whole point. Cash is designed to be a bad store of value in the long run because the government wants you to spend it or invest it. Cash is a good store of value in the short and medium run so that people accept it in return for goods and services but a bad one in the long run so that it doesn't make sense to hoard it.
> Now it is your turn to explain to me how does this fact contradict my statement that the drawback of such paradigm is that it makes it useless as a store of value?
Well, nobody contradicted that statement, as that is generally accepted. The contradicted statement is "The whole idea of today's currencies is for the financially illiterate people to get robbed of their savings.", which as (i parse it) is a statement about purpose of such properties of today currencies, so it is contradicted by a different statement about purpose of these properties: "The point of controlled inflation is to prevent the financially literate from hoarding cash as ..."
Well, nobody contradicted that statement, as that is generally accepted. The contradicted statement is "The whole idea of today's currencies is for the financially illiterate people to get robbed of their savings.", which as (i parse it) is a statement about purpose of such properties of today currencies, so it is contradicted by a different statement about purpose of these properties: "The point of controlled inflation is to prevent the financially literate from hoarding cash as ..."
Cash is not a store of value, it's a mechanism of exchange. It never has been a store of value.
It's supposed to be safe but if it has zero risk, then it has zero return.
Inflation is a bit like maintaining the pressure in the pipe of the flow of money.
Inflation also has the effect of discounting debt, which means it is good for borrowers, not lenders. Most people are borrowers, in terms of things like house mortgages and other debts. That's a good thing, but you also don't want wages to have to grow too fast with prices.
It's supposed to be safe but if it has zero risk, then it has zero return.
Inflation is a bit like maintaining the pressure in the pipe of the flow of money.
Inflation also has the effect of discounting debt, which means it is good for borrowers, not lenders. Most people are borrowers, in terms of things like house mortgages and other debts. That's a good thing, but you also don't want wages to have to grow too fast with prices.
Also inflation isn’t linear. It is very possible for controlled inflation to be high one year and then low for the next two to make up for it. This idea that once we’ve inflated the dollar by a percent there’s no going back is false.
I rebutted against the idea that our economic policy is designed to rob the poor or financially illiterate. The exact opposite is true, inflation forces the rich to put their capital to work. Financially illiterate people don’t tend to have enough savings to lose out to inflation, so that point seems moot. The working class, however, overwhelmingly stores it’s capital in retirement accounts (56% of US workers own stocks or bonds[1]) so they aren’t losing their savings to inflation.
Your rhetoric is using lies to pull at peoples emotions, it’s the same thing all right-leaning libertarians spout. It has and will continue to be bullshit.
1. https://news.gallup.com/poll/266807/percentage-americans-own...
Your rhetoric is using lies to pull at peoples emotions, it’s the same thing all right-leaning libertarians spout. It has and will continue to be bullshit.
1. https://news.gallup.com/poll/266807/percentage-americans-own...
Being uninformed does not make one "very stupid".
Not being aware of it and not admitting being uninformed does make you 'very stupid' though.
Watch how fast his numbers fall if he tried to sell a fraction of it.
Watch how fast it falls when people realize how absurd it is for Tesla to be the sixth largest company in the world by market cap, with a trillion dollar valuation. The meme voting era of stocks is coming to a close. The weighing portion of the cycle is coming and it will not be kind.
Watch how fast it falls when people realize how absurd it is for Tesla to be the sixth largest company in the world by market cap, with a trillion dollar valuation. The meme voting era of stocks is coming to a close. The weighing portion of the cycle is coming and it will not be kind.
I'm kinda curious about what would happen if Musk triggered the poison pill. Yeah, his existing stock would be diluted. But... how much? What would it do to the share price?
The poison pill is essentially a gun to the head of all the other shareholders: you're either with us or against us. Help us fight this hostile takeover or get diluted along with Musk. How will people react to that?
Some will jump at the chance to buy discounted shares. Others will be unable or unwilling to buy more, and sell to avoid dilution. But they'll have to sell to people who aren't currently shareholders, because shareholders have a better option. That'll drive the price down, and also reduce the discounted price for shareholders. Will investors that buy in after the poison pill is triggered also get the discounted price? Will existing shareholders wait to buy discounted shares until after the exodus lowers their price?
There are so many feedback loops and non-obvious motivations here. It's possible that Musk could trigger the pill, stand back and watch the stock crater, then buy it cheap. And if the stock does crater, will he then have to compete with other takeover bids?
The poison pill is essentially a gun to the head of all the other shareholders: you're either with us or against us. Help us fight this hostile takeover or get diluted along with Musk. How will people react to that?
Some will jump at the chance to buy discounted shares. Others will be unable or unwilling to buy more, and sell to avoid dilution. But they'll have to sell to people who aren't currently shareholders, because shareholders have a better option. That'll drive the price down, and also reduce the discounted price for shareholders. Will investors that buy in after the poison pill is triggered also get the discounted price? Will existing shareholders wait to buy discounted shares until after the exodus lowers their price?
There are so many feedback loops and non-obvious motivations here. It's possible that Musk could trigger the pill, stand back and watch the stock crater, then buy it cheap. And if the stock does crater, will he then have to compete with other takeover bids?
His stake will be cut approximately in half. We probably don't have to wonder what happens if the rights agreement is triggered; it won't be (it would be the first time in business history one ever had). Doing so would mostly just be a way of setting billions of dollars literally on fire, out of pique.
Yeah, it probably won't be triggered; even Musk would wince at that kind of loss. But that's exactly why we have to wonder, or I do at any rate.
The poison pill seems suspiciously like a free lunch for the board if you only look at the 1st-order effect: Musk is diluted, and loses billions. That right there is enough to stop a rational investor. But it's partially a bluff. The board doesn't hold much stock (except Jack) and the assumption that all the other shareholders will pony up cash to double their exposure is probably wrong. Many will, perhaps most will. But the share price will take a hit, and Musk is free to acquire as much stock as he wants. Maybe he can't get every last share, but he might be able to take control.
Again, I agree with you that it's unlikely to happen, but if there were ever a time to question the conventional wisdom, this is it.
The poison pill seems suspiciously like a free lunch for the board if you only look at the 1st-order effect: Musk is diluted, and loses billions. That right there is enough to stop a rational investor. But it's partially a bluff. The board doesn't hold much stock (except Jack) and the assumption that all the other shareholders will pony up cash to double their exposure is probably wrong. Many will, perhaps most will. But the share price will take a hit, and Musk is free to acquire as much stock as he wants. Maybe he can't get every last share, but he might be able to take control.
Again, I agree with you that it's unlikely to happen, but if there were ever a time to question the conventional wisdom, this is it.
The point of a shareholder rights plan is to force acquisitions to go through an orderly process and end at a maximal valuation for the company. Without them, hostile acquirers can make coercive low-ball bids that punish shareholders who don't tag along, among other bad things. The board has ample reason to believe that the offered price isn't the best one:
1. It's the first offer.
2. Twitter has traded higher very recently --- as have other tech companies, creating a plausible argument that the current share price is a sectoral thing that will correct itself.
3. Little has been done to optimize the short-term share price.
4. It's a valuation Musk assigned while saying he was uninterested in making money from the deal, suggesting that it's the lowest plausible valuation for the company, not the highest.
Musk has a simple next step: he can complete a tender offer and get commitments from a majority of the shareholders. If he can't even do that, the board will have been proven correct. If he can, still more things can happen that could prove the board correct (not least of which would be a higher offer). If nothing happens to prove the board correct, then ultimately Musk will acquire the company, if that's truly his plan.
Not having a "poison pill" seems like malpractice under the circumstances.
1. It's the first offer.
2. Twitter has traded higher very recently --- as have other tech companies, creating a plausible argument that the current share price is a sectoral thing that will correct itself.
3. Little has been done to optimize the short-term share price.
4. It's a valuation Musk assigned while saying he was uninterested in making money from the deal, suggesting that it's the lowest plausible valuation for the company, not the highest.
Musk has a simple next step: he can complete a tender offer and get commitments from a majority of the shareholders. If he can't even do that, the board will have been proven correct. If he can, still more things can happen that could prove the board correct (not least of which would be a higher offer). If nothing happens to prove the board correct, then ultimately Musk will acquire the company, if that's truly his plan.
Not having a "poison pill" seems like malpractice under the circumstances.
I love motivated reasoning like this.
Musk's offer is well above current stock price, within the range of similar take over bids. Certainly nothing that qualifies it as "coercive low-ball bid".
> first offer
Yeah, because no one else is interested in acquiring money-losing business. Board's remedy should be to secure better offer, not a poison pill
> stock price was higher
This is an argument in favor of accepting bid. Investors are telling us that Twitter is a sinking ship. Musk comes in willing to pay well above the current price.
The alternative might just as well be to watch the ship sink lower and lower.
"Poison pill" that dilutes shareholders will not bring stock price higher.
> Little has been done to optimize the short-term share price
Love the suddenly passive voice, trying to not name Twitter board and management responsible for Twitter's bad performance.
At the same implying that they can wave a magic wand and push stock price higher. Makes me wonder: why didn't they?
Again, the remedy for the board and management would be to present a credible plan to improve Twitter business and therefore stock price.
Instead they created a poison pill which, if triggered, will tank the stock price and dilute many existing shareholders (not everyone will decide to give Twitter money for the cheaper stock).
Almost certainly it'll tank the stock price. But more importantly, reduce market cap.
> not the best possible valuation by Musk
Or it is actually the final offer and Musk is not bluffing.
Again, it doesn't matter. Musk doesn't have to come up with better offer.
That's not how any of that works. It doesn't work that way if you're negotiating a salary, a price of a house or a price of a business.
If board can secure a better offer from someone else then Musk will have to up his offer or not buy Twitter.
If not, then this is the best offer Twitter will ever get and it's significantly higher than the current value of the business.
Again, poison pill is not a remedy here.
Musk's offer is well above current stock price, within the range of similar take over bids. Certainly nothing that qualifies it as "coercive low-ball bid".
> first offer
Yeah, because no one else is interested in acquiring money-losing business. Board's remedy should be to secure better offer, not a poison pill
> stock price was higher
This is an argument in favor of accepting bid. Investors are telling us that Twitter is a sinking ship. Musk comes in willing to pay well above the current price.
The alternative might just as well be to watch the ship sink lower and lower.
"Poison pill" that dilutes shareholders will not bring stock price higher.
> Little has been done to optimize the short-term share price
Love the suddenly passive voice, trying to not name Twitter board and management responsible for Twitter's bad performance.
At the same implying that they can wave a magic wand and push stock price higher. Makes me wonder: why didn't they?
Again, the remedy for the board and management would be to present a credible plan to improve Twitter business and therefore stock price.
Instead they created a poison pill which, if triggered, will tank the stock price and dilute many existing shareholders (not everyone will decide to give Twitter money for the cheaper stock).
Almost certainly it'll tank the stock price. But more importantly, reduce market cap.
> not the best possible valuation by Musk
Or it is actually the final offer and Musk is not bluffing.
Again, it doesn't matter. Musk doesn't have to come up with better offer.
That's not how any of that works. It doesn't work that way if you're negotiating a salary, a price of a house or a price of a business.
If board can secure a better offer from someone else then Musk will have to up his offer or not buy Twitter.
If not, then this is the best offer Twitter will ever get and it's significantly higher than the current value of the business.
Again, poison pill is not a remedy here.
I don't know who you're arguing with. I'm describing the rationale for poison pill arrangements (I'm more or less just parroting Matt Levine).
If the board is wrong, and Twitter is worth less than Musk's offer, Musk will eventually get the company --- either because the board will relent after Musk's tender is successful, or because, next year, Musk will succeed in replacing the board.
The rest of your points basically just add words to things I said. It's not the case that I know for a fact Twitter is worth more than Musk's offer. It might be worth less. There is now a process for the market to judge who's right. Nor was Musk's original offer "coercive"; it couldn't have been, because it wasn't even an offer. The coercive offer is an eventuality the pill protects against, not something the pill reacts to. One outline of a coercive offer is "I will pay $54/share until I get enough shares to control the outcome, at which point I will use my control of the company to have it accept $10/share for everyone else". That's the kind of thing a shareholder rights plan prevents.
So, as I said before: if you're right, Musk will end up owning Twitter. If he can't even manage the tender, the board will instead have been proven right.
Of course, if he ends up with the company, the parade of horribles associated in message board consciousness with poison pills will have been debunked (the pill will not have prevented him from acquiring the company). And if he gets the company, but pays more per share for it, the board will, again, have been proven right.
If the board is wrong, and Twitter is worth less than Musk's offer, Musk will eventually get the company --- either because the board will relent after Musk's tender is successful, or because, next year, Musk will succeed in replacing the board.
The rest of your points basically just add words to things I said. It's not the case that I know for a fact Twitter is worth more than Musk's offer. It might be worth less. There is now a process for the market to judge who's right. Nor was Musk's original offer "coercive"; it couldn't have been, because it wasn't even an offer. The coercive offer is an eventuality the pill protects against, not something the pill reacts to. One outline of a coercive offer is "I will pay $54/share until I get enough shares to control the outcome, at which point I will use my control of the company to have it accept $10/share for everyone else". That's the kind of thing a shareholder rights plan prevents.
So, as I said before: if you're right, Musk will end up owning Twitter. If he can't even manage the tender, the board will instead have been proven right.
Of course, if he ends up with the company, the parade of horribles associated in message board consciousness with poison pills will have been debunked (the pill will not have prevented him from acquiring the company). And if he gets the company, but pays more per share for it, the board will, again, have been proven right.
Wait, can't we trigger the poison pill buy buying up a lot of Vanguard?
I feel bad for Twitter employees or potential employees right now.
You KNOW Musk has no intention on converting unvested RSUs to cash. He'll either get rid of them completely while giving everyone a 10% raise (common Twitter TC is 50% cash 50% RSU) or keep everyones cash the same, and tell them their RSUs are now amazing options that will be worth soooo much when Twitter gets relisted in the future
You KNOW Musk has no intention on converting unvested RSUs to cash. He'll either get rid of them completely while giving everyone a 10% raise (common Twitter TC is 50% cash 50% RSU) or keep everyones cash the same, and tell them their RSUs are now amazing options that will be worth soooo much when Twitter gets relisted in the future
To be fair to Musk he made a lot of people at TSLA very wealthy when everyone in the valley was complaining how poor the TSLA comp packages were vs how hard the worked. I mean I don't think Elon saw TSLA take this much of a rocket ride but employees did pretty damn well on their stock.
If employee compensation is 50% RSUs (which have a public value and can be sold immediately once vested, basically making them as good as salary) then what you're saying is Elon might give everyone a 50% pay-cut.
I guess I can only speak for myself at Google which has a similar high percentage of pay as RSUs, but if they suddenly took away everyone's stock grants, nearly everyone would quit.
I guess I can only speak for myself at Google which has a similar high percentage of pay as RSUs, but if they suddenly took away everyone's stock grants, nearly everyone would quit.
Likely also will make deep staff cuts, especially to areas related to content moderation, display algorithms, etc. If this succeeds, I would not be surprised to see a 50% headcount reduction as one of the earliest actions.
Foremost, I don't feel bad for anyone that works at Twitter.
But the scenario that you KNOW is going to happen doesn't seem likely.
But the scenario that you KNOW is going to happen doesn't seem likely.
He's definitely going to burn a ton of existing employees (basically kick them out), and then incentivize new ones with aggressive packages.
It sucks and I wouldn't wish it on my worse enemy. It does make sense though since the mission and culture will be night and day different and would never mesh.
It sucks and I wouldn't wish it on my worse enemy. It does make sense though since the mission and culture will be night and day different and would never mesh.
> He'll either get rid of them completely while giving everyone a 10% raise (common Twitter TC is 50% cash 50% RSU)
Is that possible? I guess it is but wow, I would be beyond livid if my compensation changed due to this.
Is that possible? I guess it is but wow, I would be beyond livid if my compensation changed due to this.
Why would I "know" that? SpaceX is a private company founded by Musk and levels.fyi indicates Software Engineers there receive a hefty amount of stock: https://www.levels.fyi/?compare=SpaceX&track=Software%20Engi...
levels.fyi lets private company employees list their stock option worth as what ever they like, its self reporting
More often these stock options for non-publicly traded companies are not liquid until they IPO. Which a startup engineer at SpaceX completely expects
But the Twitter employees didn't join a startup, and have compared their TC to other liquid comps offered to them. Their leases and mortgages would be based on their liquid comp, which could be cut in half overnight until the next IPO
More often these stock options for non-publicly traded companies are not liquid until they IPO. Which a startup engineer at SpaceX completely expects
But the Twitter employees didn't join a startup, and have compared their TC to other liquid comps offered to them. Their leases and mortgages would be based on their liquid comp, which could be cut in half overnight until the next IPO
Is this scenario something that can happen, or am I missing something?
An agent of Elons buys 15% of the stock triggering the poison pill.
The agent declares publicly he is not an agent, has no intention of selling the stock to Elon, has no business with him, etc - Essentially avoiding being lumped with Elon in the same group.
Does Elon now get to buy 85% of Twitter at a discount?
An agent of Elons buys 15% of the stock triggering the poison pill.
The agent declares publicly he is not an agent, has no intention of selling the stock to Elon, has no business with him, etc - Essentially avoiding being lumped with Elon in the same group.
Does Elon now get to buy 85% of Twitter at a discount?
IIRC that's not how the poison pill is set up. I believe it allows eligible shareholders to purchase $420 worth of new shares at a 50% discount per share of common stock they own (?), or allows the board to effectively double the number of outstanding shares for everyone but the entity (entities?) triggering the poison pill. No existing shares change hands.
This means that the poison pill would not allow Elon to purchase large quantities of Twitter at a discounted price through the poison pill itself.
Edit: Missed a provision of the poison pill allowing for doubling of existing shares without shareholders needing to purchase anything. Also try to clarify that the $420 of new stock may be per existing share owned, if I'm reading these documents correctly.
This means that the poison pill would not allow Elon to purchase large quantities of Twitter at a discounted price through the poison pill itself.
Edit: Missed a provision of the poison pill allowing for doubling of existing shares without shareholders needing to purchase anything. Also try to clarify that the $420 of new stock may be per existing share owned, if I'm reading these documents correctly.
That's gotta tank the share price, though, right? Some shareholders will sell to avoid the dilution, and others will buy, but from the company rather than the market. So the market sees a bunch of sellers and few buyers.
I honestly don't know the answer to your question; this is well outside my knowledge base. Looking at the 8-K Twitter filed [0]. It looks like the stock that shareholders may purchase through the poison pill are 1/1000 of a different class of stock (Series A Participating Preferred Stock, as opposed to common stock), though the intent is that that small fraction should be about the same value as a share of common stock. I have no clue what the effects on the market may be for this option.
Also, I admittedly missed another provision of the poison pill - the board also has the ability to exchange an unexercised right for 1 share of common stock, effectively doubling outstanding shares for eligible shareholders without them needing to make an additional purchase. This may be more
[0]: https://www.sec.gov/ix?doc=/Archives/edgar/data/1418091/0001...
Also, I admittedly missed another provision of the poison pill - the board also has the ability to exchange an unexercised right for 1 share of common stock, effectively doubling outstanding shares for eligible shareholders without them needing to make an additional purchase. This may be more
[0]: https://www.sec.gov/ix?doc=/Archives/edgar/data/1418091/0001...
It's a strictly good deal for everyone except Musk. The price of the new shares are 50% of the price of the current shares and the dilution is 85% (not 100%) . So keeping everything else equal, if before the acquisition there were 100 shares at $10 each, the market cap would be $1,000. If someone hits 15% suddenly you can buy at $5.
The market cap stays the same (nothing about the business has changed) but suddenly there are 185 shares. So the new price per share on the open market is 1,000/185 or $5.41. So just buy the extra shares you can buy and you should be able to sell them on the open market for a profit. The only person who loses out is Musk, would now owns ~half as much of Twitter as he did before.
The market cap stays the same (nothing about the business has changed) but suddenly there are 185 shares. So the new price per share on the open market is 1,000/185 or $5.41. So just buy the extra shares you can buy and you should be able to sell them on the open market for a profit. The only person who loses out is Musk, would now owns ~half as much of Twitter as he did before.
> Is this scenario something that can happen, or am I missing something?
> An agent of Elons buys 15% of the stock triggering the poison pill.... The agent declares publicly he is not an agent...
I'm guessing that would be some kind of fraud or at least a securities law violation.
> An agent of Elons buys 15% of the stock triggering the poison pill.... The agent declares publicly he is not an agent...
I'm guessing that would be some kind of fraud or at least a securities law violation.
Poison pill is a scheme enacted by Twitter, not SEC or any government agency.
It's not law therefore finding creative ways to go around that poison pill would not violate any laws.
It's not law therefore finding creative ways to go around that poison pill would not violate any laws.
>>> An agent of Elons buys 15% of the stock triggering the poison pill.... The agent declares publicly he is not an agent...
>> I'm guessing that would be some kind of fraud or at least a securities law violation.
> It's not law therefore finding creative ways to go around that poison pill would not violate any laws.
They would if those "creative ways" where themselves violations of the law. The issue isn't subverting the poison pill, it's the lying and secret coordination.
https://www.merriam-webster.com/dictionary/fraud
> Definition of fraud
> 1a : deceit, trickery specifically : intentional perversion of truth in order to induce another to part with something of value or to surrender a legal right was accused of credit card fraud
> 1b : an act of deceiving or misrepresenting : trick automobile insurance frauds
>> I'm guessing that would be some kind of fraud or at least a securities law violation.
> It's not law therefore finding creative ways to go around that poison pill would not violate any laws.
They would if those "creative ways" where themselves violations of the law. The issue isn't subverting the poison pill, it's the lying and secret coordination.
https://www.merriam-webster.com/dictionary/fraud
> Definition of fraud
> 1a : deceit, trickery specifically : intentional perversion of truth in order to induce another to part with something of value or to surrender a legal right was accused of credit card fraud
> 1b : an act of deceiving or misrepresenting : trick automobile insurance frauds
As we all know, Webster dictionary is all you need to know to pass a bar exam.
In your hypothetical example, the agent doesn't have to say anything.
If Larry Ellison buys 15% of Twitter as a favor to his buddy Musk, he is under no obligation to publicly state anything. All he has to do is to disclose any stake bigger than 5%, as per SEC rules.
Twitter board has no power to question Ellison on his motivation.
They can either trigger the poison pill or not.
If they try to include Musk as part of the poison pill, they'll be sued by Musk and the burden of proof will be on Twitter board to demonstrate that Ellison is in cahoots with Musk.
And when you're in front of a judge and the jury, it's a bit more complicated than "because I said so".
In your hypothetical example, the agent doesn't have to say anything.
If Larry Ellison buys 15% of Twitter as a favor to his buddy Musk, he is under no obligation to publicly state anything. All he has to do is to disclose any stake bigger than 5%, as per SEC rules.
Twitter board has no power to question Ellison on his motivation.
They can either trigger the poison pill or not.
If they try to include Musk as part of the poison pill, they'll be sued by Musk and the burden of proof will be on Twitter board to demonstrate that Ellison is in cahoots with Musk.
And when you're in front of a judge and the jury, it's a bit more complicated than "because I said so".
> As we all know, Webster dictionary is all you need to know to pass a bar exam.
Then cite an opinion that found that a deception like the one originally outlined was legal, preferable one at an appellate level.
Because "have an agent do something for you and lie about it to deceive others" does not seem likely to be a sound basis for a legal scheme.
> And when you're in front of a judge and the jury, it's a bit more complicated than "because I said so".
"Can't be proven is court" is quite different than "being legal."
Then cite an opinion that found that a deception like the one originally outlined was legal, preferable one at an appellate level.
Because "have an agent do something for you and lie about it to deceive others" does not seem likely to be a sound basis for a legal scheme.
> And when you're in front of a judge and the jury, it's a bit more complicated than "because I said so".
"Can't be proven is court" is quite different than "being legal."
Right, but the method of averting the poison pill described above would likely violate securities laws around coordinated behavior between market participants.
If the agent doesn’t sell that stock, can it be proven that he is actually an agent?
In principle, sure. Why not? Sue him, subpoena the emails/etc and see if you can find some incriminating statements. There is no guarantee of success, but it could work.
I would think (hope?) that if that were possible, the SEC et al would have sufficient awareness to do all due diligence possible to determine the provenance of the agent in question.
Wait, what am I thinking. I don't need to worry about the SEC... the reputational boost associated with whoever identifies shady behavior first will be huge. Everyone will be bounty-hunting this to death backwards inside out and upside down. It's Twitter and it's umpty billion dollars.
Wait, what am I thinking. I don't need to worry about the SEC... the reputational boost associated with whoever identifies shady behavior first will be huge. Everyone will be bounty-hunting this to death backwards inside out and upside down. It's Twitter and it's umpty billion dollars.
SEC has no mandate (nor should it be interested in) enforcing rules created by Twitter board.
SEC enforces laws created by congress.
"Poison pill" is not a law. It's a rule created by Twitter board.
It merely says "if this happens, we'll do that".
If anything, SEC should be looking into Twitter's board authority to sell stock at half price, which clearly harms shareholders.
And one of the things SEC is supposed to do is to protect shareholders from harm, even if the harm comes from inside the house.
SEC enforces laws created by congress.
"Poison pill" is not a law. It's a rule created by Twitter board.
It merely says "if this happens, we'll do that".
If anything, SEC should be looking into Twitter's board authority to sell stock at half price, which clearly harms shareholders.
And one of the things SEC is supposed to do is to protect shareholders from harm, even if the harm comes from inside the house.
I’m guessing the shareholder rights plan adopted by the board includes a “wolf pack” provision to (mostly) address this scenario and also publicly declaring they’re not colluding with Musk when they are, in fact, secretly colluding would absolutely be fraud.
But an interesting hypothetical: some wealthy benevolent complete stranger who has no ties to Musk whatsoever suddenly purchases 15% in order to trigger the poison pill and allow Musk to buy a huge stake at a discount. I don’t think that would be fraud. (Though I’m really not sure? And there are probably plenty of lawyers who could make a solid argument it is...) And I’m not sure why anyone would ever waste so much money on a random act of kindness(?) for Elon Musk but billionaires have definitely done dumber things with their money just for shits & giggles.
But an interesting hypothetical: some wealthy benevolent complete stranger who has no ties to Musk whatsoever suddenly purchases 15% in order to trigger the poison pill and allow Musk to buy a huge stake at a discount. I don’t think that would be fraud. (Though I’m really not sure? And there are probably plenty of lawyers who could make a solid argument it is...) And I’m not sure why anyone would ever waste so much money on a random act of kindness(?) for Elon Musk but billionaires have definitely done dumber things with their money just for shits & giggles.
Let’s say this happens and Musk buys a lot of the new shares so he now owns more than 15 % too. Does the pill get triggered again?
No there’s usually language that it’s triggered once and that there are no other shareholder rights plans currently in effect. And since the plan states the price at which shareholders are entitled to purchase shares whether or not it was triggered “again” would kind of be a moot point because the price wouldn’t change and there are only so many authorized shares.
And also it’s a silly hypothetical (even for a hypothetical) because I didn’t think it through at all: I’m pretty sure there is typically a cap on how many shares any one shareholder can buy when the pill is triggered. So it wouldn’t really be any help to Musk except that the “threat” of the poison pill would be removed and maybe some investors would be happy to cash in by quickly buying the poison pill shares and then selling to Musk.
Also, if it were triggered I think it would be a bit of a logistical nightmare and things would probably be in flux for a few days before anyone could say who owned how many shares with any certainty.
And also it’s a silly hypothetical (even for a hypothetical) because I didn’t think it through at all: I’m pretty sure there is typically a cap on how many shares any one shareholder can buy when the pill is triggered. So it wouldn’t really be any help to Musk except that the “threat” of the poison pill would be removed and maybe some investors would be happy to cash in by quickly buying the poison pill shares and then selling to Musk.
Also, if it were triggered I think it would be a bit of a logistical nightmare and things would probably be in flux for a few days before anyone could say who owned how many shares with any certainty.
Will be interesting to see if Musk has found a way around the poison pill. There are several theoretical techniques to avoid triggering them but as far as I know none have been tried in practice. There is also the issue of whether a company would actually follow thru and implement a poison pill as there would be lots of fallout.
Anyone have a sense of what might happen?
Anyone have a sense of what might happen?
He hasn’t which is why he’s angling for a tender offer
Are you thinking a tender offer somehow overcomes the poison pill?
Yes, if he launches a tender the offer goes to the shareholders. He wouldn’t need to build a larger stake himself.
A tender offer is a means of building a large stake, so the poison pill would still be active. Therefore, he will not launch a tender offer.
I hesitate to speculate on what Musk will do specifically, but often in a poison pill situation a tender offer will be contingent on the removal of the poison pill. The point of the tender offer is not to buy the shares immediately, but to incentivize shareholders to put pressure on the board to remove the poison pill, then complete the tender offer it's removed.
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Incorrect.
From Matt Levine:
"Musk can launch a tender offer to buy all of Twitter's stock for $54.20 in cash. (Or, of course, some higher number.) The tender offer is a public, binding document filed with the SEC, open to all shareholders, and it will be full of disclosures about his plans and, in particular, his financing. Shareholders will be able to read it and see if he has the money. If it looks like he does, then they will be able to decide if $54.20 is a good enough price. If they think it is, they will be able to tender into his offer, submitting their shares for purchase. He won’t be able to buy them, though, because of the poison pill; the tender offer will be contingent on getting rid of the pill. But if like 90% of shareholders tender into his offer, then that is an important public-relations victory; he can go to the board and say “your shareholders want this deal, let them take it.” And then the board might agree and get rid of the pill, and then the tender offer can close and he can buy the shares."
"Musk can launch a tender offer to buy all of Twitter's stock for $54.20 in cash. (Or, of course, some higher number.) The tender offer is a public, binding document filed with the SEC, open to all shareholders, and it will be full of disclosures about his plans and, in particular, his financing. Shareholders will be able to read it and see if he has the money. If it looks like he does, then they will be able to decide if $54.20 is a good enough price. If they think it is, they will be able to tender into his offer, submitting their shares for purchase. He won’t be able to buy them, though, because of the poison pill; the tender offer will be contingent on getting rid of the pill. But if like 90% of shareholders tender into his offer, then that is an important public-relations victory; he can go to the board and say “your shareholders want this deal, let them take it.” And then the board might agree and get rid of the pill, and then the tender offer can close and he can buy the shares."
I was wondering about this - what's to stop him from creating 3 permanently sealed South Dakota trusts, acquiring 14% in each, and combined with his personal share calling a vote and immediately rejecting the poison pill and firing the board?
IIRC Twitter already has rules about shareholder votes, and it couldn't happen until next year at the earliest. There's no provision for shareholders to call for a vote at any random time.
The lawyers thought about that the day poison pills were invented. It's in the very first lines of the shareholder rights agreement.
Wait what is a permanently sealed South Dakota trust? And how do I get one of those interesting sounding mechanisms.
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Has the board formally rejected his offer yet? The poison pill only applies to a hostile takeover - i.e. if Elon just starts buying up all the shares in the market. If the board accepts his offer to buy the company, the poison pill does not take effect.
What is the poison pill?
If someone buys more than 15% of shares, they can issue more shares to other people to dilute them.
Which other people would get those shares? Would that be considered taxable income for the recipients? If I were a regular shareholder and my shares were diluted without compensation, I'd be pissed...
> Which other people would get those shares?
The offer is extended to existing shareholders.
So if you own 10 stocks you will be allowed to purchase 10 more stocks at a vastly reduced cost.
Something like that.
This way you can screw over the corporate raider without screwing over existing stock holders.
The offer is extended to existing shareholders.
So if you own 10 stocks you will be allowed to purchase 10 more stocks at a vastly reduced cost.
Something like that.
This way you can screw over the corporate raider without screwing over existing stock holders.
The poison pill is blatantly unethical. The fact that it exists as a tactic where a company can target a specific shareholder and dilute them exclusively, while also diluting other shareholders who don't have the money to participate in the poison pill, is yet more proof that the SEC is a garbage organization.
It's been settled corporate law for decades, and it serves a clear purpose: without poison pills, hostile buyers can also do blatantly unethical things, like coercive lowball bids that punish shareholders that don't tag along.
The other shareholders don't need to have the money:
"Another, perhaps more practical provision of the pill says that the board can just exchange each right for one share of stock, for free, meaning in essence that the board can double everyone else’s number of shares of Twitter while holding Musk’s constant, without asking anyone to put in more money." (From a recent Money Stuff.)
It also gives reasons why poison pills were allowed by the Delaware Supreme Court (and not the SEC).
"Another, perhaps more practical provision of the pill says that the board can just exchange each right for one share of stock, for free, meaning in essence that the board can double everyone else’s number of shares of Twitter while holding Musk’s constant, without asking anyone to put in more money." (From a recent Money Stuff.)
It also gives reasons why poison pills were allowed by the Delaware Supreme Court (and not the SEC).
That seems even worse then; it's effectively the board voting to steal shares from a major shareholder in order to increase their own relative stake in the company. How is that not illegal?
What used to happen before there were poison pills, was a corporate raider would say "I want to buy this company, and I offer 100$ per share. If not everybody agrees to sell to me, but I get more the 50% of shares I will replace the board and then offer a merger in which 30$ per share are offered. The board (which I just instituted) will agree to my offer." That means after a raider has the majority of shares he can stiff the remaining minority shareholders. Of course people knew this on the initial offer and were therefore pressured to accept it or risk losing a lot of money later. I assume you agree that making this possible is not in the interest of sharedholders (or companies), although it made some people very wealthy back in the days. The Delaware Supreme Court considered, that such an extreme threat to shareholders justified extreme countermeasures such as the poison pill.
(All of the above just tries to paraphrase Matt Levine, which I can really recommend if one wants to understand such things.)
Why would the newly installed board be allowed to allow a merger with such a low number?
This seems to be the root problem, and it can happen in other scenarios when a coalition controls 51% of the shares. The law needs to protect the minority shareholders.
This poison pill “solution” is just theft.
This seems to be the root problem, and it can happen in other scenarios when a coalition controls 51% of the shares. The law needs to protect the minority shareholders.
This poison pill “solution” is just theft.
If one was ever triggered the diluted shareholder would sue for the direct economic damage they suffered as a result. But they still wouldn't end up controlling the company, they'd just get paid out the cash value that was literally stolen from them-- instead everyone would just lose a lot of money to lawyers... which is why, AFAIK, none has ever been triggered.
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As far as I know it has never been done in practice but is sure seems like it would have a huge amount of fallout for existing shareholders. Would the board actually pull the trigger knowing this? On the other hand poison pills are widely used and have generally been considered a credible defense.
They don't have to pull the trigger; it's already set up. These triggers never get pulled because it's irrational for a hostile acquirer to play chicken with them; it's like playing chicken with a brick wall.
Every other shareholder gets access to the shares. So the effect is: you can buy $420 worth of twitter stock for $210 unless you're elon musk or working in concert with elon musk.
Some poison pills just give the shareholder extra shares -- it's basically a stock split except for the targeted shareholders.
Some poison pills just give the shareholder extra shares -- it's basically a stock split except for the targeted shareholders.
As described above, it would be like a stock dividend or split (except for the 15%) - no income, no capital gains, no dilution.
In reality, this poison pill is more complicated - from Matt Levine: "The main mechanism of the pill is that if Musk or anyone else acquires more than 15% of Twitter's stock, then every other Twitter shareholder will have the right to pay $210 to acquire $420 worth of Twitter stock (at then-current market prices)."
He also points out that this is moot except in the highly unlikely event that it is triggered - in which case, someone screwed up really badly.
In reality, this poison pill is more complicated - from Matt Levine: "The main mechanism of the pill is that if Musk or anyone else acquires more than 15% of Twitter's stock, then every other Twitter shareholder will have the right to pay $210 to acquire $420 worth of Twitter stock (at then-current market prices)."
He also points out that this is moot except in the highly unlikely event that it is triggered - in which case, someone screwed up really badly.
So the discount for existing shareholders is only 50%? That still requires pretty significant investment from their side, what if they can't come up with enough money? Poison pill becomes uneffective, right?
That explanation sounds like they are just giving away shares, which they aren't. Other parties get the _right_ to buy additional new shares at a reduced rate.
> Other parties get the _right_ to buy additional new shares at a reduced rate.
This is effectively the same as giving away shares.
This is effectively the same as giving away shares.
I think that oversimplifies the dynamics drastically.
First off, even if buying the shares at the reduced rate is highly profitable, you do need the cash to buy them. With the 50% that are floating around here that's a significant amount of cash.
Furthermore, with the dilution that's happening the stock price would also drop so while you gain on the reduced shares, you loose on money on your old shares unless Elon keeps buying.
I just don't see that it's the same as giving away shares for free (which is just adding dilution without additional capital costs for the existing shareholder). Feels to me like an all parties lose situation if it's triggered.
First off, even if buying the shares at the reduced rate is highly profitable, you do need the cash to buy them. With the 50% that are floating around here that's a significant amount of cash.
Furthermore, with the dilution that's happening the stock price would also drop so while you gain on the reduced shares, you loose on money on your old shares unless Elon keeps buying.
I just don't see that it's the same as giving away shares for free (which is just adding dilution without additional capital costs for the existing shareholder). Feels to me like an all parties lose situation if it's triggered.
The other shareholders don't need to have the money:
"Another, perhaps more practical provision of the pill says that the board can just exchange each right for one share of stock, for free, meaning in essence that the board can double everyone else’s number of shares of Twitter while holding Musk’s constant, without asking anyone to put in more money." (From a recent Money Stuff.)
"Another, perhaps more practical provision of the pill says that the board can just exchange each right for one share of stock, for free, meaning in essence that the board can double everyone else’s number of shares of Twitter while holding Musk’s constant, without asking anyone to put in more money." (From a recent Money Stuff.)
Ahh, thanks
I don't understand how that's not financial fraud.
What would be fraudulent about that? Companies issue & retire shares all the time, for lots of reasons.
Yeah but they usually don't do it with the express purpose of screwing over an investor - and when they do, there are consequences (like FB).
You're not making a case for this being fraud. Why would this be fraud rather than a sharp-elbow business tactic? "Fraud" has a concrete meaning; for this to be a fraud, one would need to be able to identify precisely of what Musk has been defrauded.
The poison pill clause is part of the shareholder contract, often specified in the articles of incorporation.
The poison pill is fighting off a hostile takeover, by someone who has offered a first-and-final-offer. It would be screwing the other investors to have zero negotiations for a better deal.
Oh, if they execute the poison pill there will be consequences, just not legal ones.
Trust is a big part of stock value, if you don't trust the board is time to sell...
Trust is a big part of stock value, if you don't trust the board is time to sell...
Because fraud requires deception and there’s nothing deceptive about a poison pill that makes the news.
Check out Matt Levine. He has a great series explaining some potential possibilities. https://www.bloomberg.com/opinion/authors/ARbTQlRLRjE/matthe...
Unfortunately paywalled and not sure which Levine article you mean.
Edit: And as best I can tell Levine has been wrong on this situation at every step…
Edit: And as best I can tell Levine has been wrong on this situation at every step…
> And as best I can tell Levine has been wrong on this situation at every step
Perhaps when it comes to the sincerity of Elon's actions, but I'm not aware of when he's been wrong when it comes to Elon's legal options.
Perhaps when it comes to the sincerity of Elon's actions, but I'm not aware of when he's been wrong when it comes to Elon's legal options.
Yeah, OP was asking for legal options and this spells them out. Additionally, Levine has been wrong about which option Elon will pick, but he's also generally been spot on about listing all potential options and also saying "this guy is unpredictable, so who knows."
Likely this one: https://www.bloomberg.com/opinion/articles/2022-04-20/elon-c.... FWIW I believe you can read his content for free if you subscribe to his newsletter (or bloomberg's newsletter?).
The poison pill can be trivially (for certain definitions of trivial) avoided by having several allies buy 14% of shares each, I presume.
You presume incorrectly. Any coordination would make Elon and his allies a “group” which would mean they are collectively treated as an individual.
How do you prove people are in a group of this nature?
You check to see if they are communicating.
How do you that without a search warrant?
Ask, I guess. The people doing the communicating are perhaps committing fraud and endangering their own wealth and freedom if they lie. I'm willing to bet the SEC has regulations that apply to this situation already.
If three large shareholders came in with a similar agenda but did not disclose group status, the SEC would investigate. First, the SEC would request that they turn over communications records. 99.9% of the time, they would. If they didn’t, the SEC would seek a warrant.
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Again, first lines of the shareholder rights agreement. This is something the lawyers thought of approximately 3 minutes after poison pills were invented.
https://www.law.cornell.edu/cfr/text/17/240.13d-5 seems to indicate they have to be explicitly coordinating to be legally defined as a "group" for this purpose (and Twitter's filing highlights this definition), which seems hard to prove. Twitter can't issue a search warrant, the participants would presumably not write any such deal down on paper, and the action is readily explicable by "I think the acquisition is gonna go through and he's offering a premium, so I'd profit".
The financing is in 3 pools. If each could buy 14% and Musk increases his stake to 14% without triggering the poison pill, that’s 56% in total. If they had 56%, could they immediately gain control? This is getting interesting.
I've never had a twitter account and didn't plan on getting one.
But if Musk is successful taking over twitter, my intent is to get a twitter account and start posting the most grotesque and offensive things to see if Musk really is a free speech absolutist. My suspicion is that he is mostly interested in his free speech, not mine.
But if Musk is successful taking over twitter, my intent is to get a twitter account and start posting the most grotesque and offensive things to see if Musk really is a free speech absolutist. My suspicion is that he is mostly interested in his free speech, not mine.
That's pretty hilarious, but I think saying offensive things (and offending people at their expense) to own Elon really is some derangement. I am assuming this is a joke.
I don't get why people are so worked up about this. If you see Twitter, as Elon and millions of other people do, as the "public digital town hall", it is not unreasonable to verify people's identities and let them comment whatever they want so long it is legal.
It does not mean that you or anyone have to subscribe or listen to their crap.
If you don't see it that way, do people really not understand how others see that as gatekeeping, controlling, or dangerous? What is the purpose of Twitter than to you - basically television? To tune in and tune out?
Then, open source the algorithms. Do the same people really not want to know why Twitter chose to show you X information? Wild.
I don't get why people are so worked up about this. If you see Twitter, as Elon and millions of other people do, as the "public digital town hall", it is not unreasonable to verify people's identities and let them comment whatever they want so long it is legal.
It does not mean that you or anyone have to subscribe or listen to their crap.
If you don't see it that way, do people really not understand how others see that as gatekeeping, controlling, or dangerous? What is the purpose of Twitter than to you - basically television? To tune in and tune out?
Then, open source the algorithms. Do the same people really not want to know why Twitter chose to show you X information? Wild.
isn't using social media anonymously a valid use case? (i.e. would you tell me your full name?)
as for open sourcing the algorithms, I consider myself extremely pro-open source (though ofc you're free to draw your own conclusions), but isn't it clear that that might simply allow spammers to game them as efficiently as possible (and to that end, isn't spam also free speech)? one idea that seems reasonable that I've heard proposed is an open marketplace of algorithms that one can choose from (open source and otherwise)
as for open sourcing the algorithms, I consider myself extremely pro-open source (though ofc you're free to draw your own conclusions), but isn't it clear that that might simply allow spammers to game them as efficiently as possible (and to that end, isn't spam also free speech)? one idea that seems reasonable that I've heard proposed is an open marketplace of algorithms that one can choose from (open source and otherwise)
It's not derangement, it's a logical method of protesting if you think that it's valid to ban tweets on subjects like qanon, flat out (dangerous) lies, and stirring up violence on Congress on private platforms
Eh -- it's totally derangement.
Protesting a cause at an innocent persons expense is immature.
It also can escalate into real violence.
Protesting a cause at an innocent persons expense is immature.
It also can escalate into real violence.
Thank you for reading my mind and calling me totally deranged. Very rational and not deranged of you.
Here are some sample tweets I might want to post.
"I'm not saying Elon has killed anyone, but he owns a lot of property where bodies could be buried. Why aren't the authorities looking into this?"
"Fact: Tesla cars are killing more people than any other cause." Yes, it it is patently false, and that is the point.
"People are saying that Elon is forcing his numerous lovers to get abortions. Does anyone know if this is true?" Hey, I'm just asking questions.
I believe twitter accounts allow posting a very short description. I'd probably put something like "Testing the limits of twitter's free speech."
Here are some sample tweets I might want to post.
"I'm not saying Elon has killed anyone, but he owns a lot of property where bodies could be buried. Why aren't the authorities looking into this?"
"Fact: Tesla cars are killing more people than any other cause." Yes, it it is patently false, and that is the point.
"People are saying that Elon is forcing his numerous lovers to get abortions. Does anyone know if this is true?" Hey, I'm just asking questions.
I believe twitter accounts allow posting a very short description. I'd probably put something like "Testing the limits of twitter's free speech."
Look how fast you escalated this:
> People are saying that Elon is forcing his numerous lovers to get abortions.
Yes, this is harmful to Elon’s “lovers” and at their expense (not yours, not his).
Yes, this is deranged.
Yes, people can support your right to say this while thinking you are really immature, thoughtless, and not even remotely creative.
> People are saying that Elon is forcing his numerous lovers to get abortions.
Yes, this is harmful to Elon’s “lovers” and at their expense (not yours, not his).
Yes, this is deranged.
Yes, people can support your right to say this while thinking you are really immature, thoughtless, and not even remotely creative.
I disagree on multiple grounds. Forcing someone to have an abortion is a terrible thing to do and should never be allowed. Having an abortion is not shameful, and so my slander was aimed at Must, not his putative lovers. Second, I didn't say all of them had an abortion, so any individual lover isn't being accused of anything.
I understand you disagree with me. Call me deranged is over the top. Calling me immature and thoughtless and not even remotely creative is also a broadside that you can't possibly know. How about we talk about ideas rather than you psychoanalyzing me?
You have taken great offense that I hypothetically might say something untrue on twitter. Have you spent this much energy combating the actual harmful BS that is actually on twitter? Have you written more about my comment or about Elon Musk calling that scuba diver who helped rescue those kids a pedophile?
I understand you disagree with me. Call me deranged is over the top. Calling me immature and thoughtless and not even remotely creative is also a broadside that you can't possibly know. How about we talk about ideas rather than you psychoanalyzing me?
You have taken great offense that I hypothetically might say something untrue on twitter. Have you spent this much energy combating the actual harmful BS that is actually on twitter? Have you written more about my comment or about Elon Musk calling that scuba diver who helped rescue those kids a pedophile?
Calls of violence, deformation and whatnot are already illegal and partially enforced towards one side of the ideological spectrum.
Although groups like qanon tend to sway naive users to extremism, it would be unfair to silence different thoughts just because it "may" lead to that.
Fight bad ideas with better ones.
Although groups like qanon tend to sway naive users to extremism, it would be unfair to silence different thoughts just because it "may" lead to that.
Fight bad ideas with better ones.
It's a test of the word and motivation of not just a billionaire, but one of the world's wealthiest individuals - one who has publicly insulted and offended many people already.
I think it's more deranged to see such a test as abnormal.
(Also grotesque does not necessarily mean offensive, and you can limit the scope of the content's exposure)
I think it's more deranged to see such a test as abnormal.
(Also grotesque does not necessarily mean offensive, and you can limit the scope of the content's exposure)
Your comment:
> (Also grotesque does not necessarily mean offensive, and you can limit the scope of the content's exposure)
OP comment:
> start posting the most grotesque and offensive things
> (Also grotesque does not necessarily mean offensive, and you can limit the scope of the content's exposure)
OP comment:
> start posting the most grotesque and offensive things
Right, it's not limited to being offensive, and even if it were, you can limit exposure.
Also, testing if a billionaire (who has offended many people on Twitter) is lying is not deranged behavior, which is the point you keep avoiding.
Also, testing if a billionaire (who has offended many people on Twitter) is lying is not deranged behavior, which is the point you keep avoiding.
Dude, the GP said they'd post "the most grotesque and offensive things." Please note the "AND offensive". And yet, you keep trying to deny that the GP's intent is to post offensive things?
> Right, it's not limited to being offensive, and even if it were, you can limit exposure.
What do you mean by limit exposure? How would the GP limit exposure of their grotesque and offensive tweets? And even if they did, wouldn't that defeat the purpose of their test? They are trying to increase exposure and see if Musk will limit exposure.
The GP is stating they will purposely offend people to test their suspicions of someone. They are willing to hurt (with words) innocent people to do this. You're calling this normal behavior. So if Musk takes over, it's okay to start calling black people the n word on Twitter to test Musk? I think that qualifies as "most offensive." And to call this testing behavior abnormal is deranged itself according to your words?
And some of your justifications are it's okay to do because Musk is the world's wealthiest individual and he's already offended others?
> It's a test of the word and motivation of not just a billionaire, but one of the world's wealthiest individuals - one who has publicly insulted and offended many people already.
> Right, it's not limited to being offensive, and even if it were, you can limit exposure.
What do you mean by limit exposure? How would the GP limit exposure of their grotesque and offensive tweets? And even if they did, wouldn't that defeat the purpose of their test? They are trying to increase exposure and see if Musk will limit exposure.
The GP is stating they will purposely offend people to test their suspicions of someone. They are willing to hurt (with words) innocent people to do this. You're calling this normal behavior. So if Musk takes over, it's okay to start calling black people the n word on Twitter to test Musk? I think that qualifies as "most offensive." And to call this testing behavior abnormal is deranged itself according to your words?
And some of your justifications are it's okay to do because Musk is the world's wealthiest individual and he's already offended others?
> It's a test of the word and motivation of not just a billionaire, but one of the world's wealthiest individuals - one who has publicly insulted and offended many people already.
> start posting the most grotesque AND offensive things
Yes, even offensive things. If you are a free speech absolutist, there are no boundaries.
So far you are railing on imagining the worst possible implementation of my idea. I won't speculate why you are that way.
I also think (a) nobody would notice my twitter account, (b) they'd probably block me, which would make my point, and (c) the people who did read my stream while it was active would clearly understand the context of my statements.
Think of it like The Satanic Temple. It exists not to glorify Satan but to test whether laws really are favoring some religions over others, in contradiction to the constitution.
So far you are railing on imagining the worst possible implementation of my idea. I won't speculate why you are that way.
I also think (a) nobody would notice my twitter account, (b) they'd probably block me, which would make my point, and (c) the people who did read my stream while it was active would clearly understand the context of my statements.
Think of it like The Satanic Temple. It exists not to glorify Satan but to test whether laws really are favoring some religions over others, in contradiction to the constitution.
he has fired a lot of his own employees for what they said or posted online, no need to test him more.
Some people think it's fair game to retaliate gainst your own employees because there is no free speech at a company, I would counter that it's a very narrow margin for someone who declared themselve "free speech absolutist" and didn't implement it in their own kingdom.
Some people think it's fair game to retaliate gainst your own employees because there is no free speech at a company, I would counter that it's a very narrow margin for someone who declared themselve "free speech absolutist" and didn't implement it in their own kingdom.
> he has fired a lot of his own employees for what they said or posted online, no need to test him more.
Twitter is not Tesla or SpaceX neither are they considered the same (at all). To expect him to treat everything the same across the board is a disingenuou unrealistic expectation.
Twitter is not Tesla or SpaceX neither are they considered the same (at all). To expect him to treat everything the same across the board is a disingenuou unrealistic expectation.
I think that the characterization of "free speech absolutist" is misleading and facile, and this is reinforced by the idea of testing it with "the most grotesque and offensive things". Very few people are absolutists who would favor a platform that allows everything - kiddy porn and snuff films included.
I think what Musk wants to see is the Overton Window opened up more than it is now, and that's not a bad thing.
I think what Musk wants to see is the Overton Window opened up more than it is now, and that's not a bad thing.
Well Musk may be misleading and facile, but that's how he describes himself in his own words.
Kiddy porn and snuff films are illegal. Musk is a self-described "free speech absolutist" in his own words so it's fair to hold him to that description, and while I do agree it's misleading, Musk is often misleading when it comes to his businesses, so I think the criticism is well earned.
I think that is a worthwhile test and agree banning things like spam or extremely grotesque content means you aren't a "free speech absolutist." However, banning some speech (such as those mentioned above) wouldn't necessarily put him in the camp of only being interested in his own free speech.
I think the flaw in this plans is that you assume that Musk will personally approve every tweet.
There will be moderation.
Musk talked about the need to improve Twitter's handling of spam, bots and scammers.
So clearly if he owns Twitter he will direct the team to eliminate spam, bots and scammers as much as possible.
If you get classified as those, you'll be booted off the island.
And given that your stated purpose is malicious, I say that you should be.
There will be moderation.
Musk talked about the need to improve Twitter's handling of spam, bots and scammers.
So clearly if he owns Twitter he will direct the team to eliminate spam, bots and scammers as much as possible.
If you get classified as those, you'll be booted off the island.
And given that your stated purpose is malicious, I say that you should be.
Lol, I don't think that is necessary. He has already bought his free speech with the ~9% stake.
He is concerned with the Overton window being too tight.
No need to bother, there are plenty of people who will be doing this for you. Your contributions will be mere drops in the grotesque and offensive ocean.
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I don't think Musk has ever claimed to be a free speech "absolutist", he just wants free-er speech for things like political views.
https://twitter.com/elonmusk/status/1499976967105433600
"Starlink has been told by some governments (not Ukraine) to block Russian news sources. We will not do so unless at gunpoint.
Sorry to be a free speech absolutist."I read this as a tongue in cheek jab at people who like to use "free speech absolutist" as a negative descriptor.
Not blocking Russia doesn't mean he is a free speech absolutist even if he says it.
I know I can read minds.
I know I can read minds.
he just wants free-er speech for his OWN political views
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You need to have a significant following for this to have any relevance. If you have a significant following, you have a strong incentive not to post the most grotesque things.
You post things outrageous enough, believe me, a significant following will raise up around it.
I think we're all about to witness the tragedy of the commons in real time if Musk buys twitter. Because there are literally thousands of people in college towns alone all across the US who will descend on Twitter and do this. Probably millions outside of college towns who will do the same. it's too bad.
My bet is we'll end up filing this under "This is why we can't have nice things".
I think we're all about to witness the tragedy of the commons in real time if Musk buys twitter. Because there are literally thousands of people in college towns alone all across the US who will descend on Twitter and do this. Probably millions outside of college towns who will do the same. it's too bad.
My bet is we'll end up filing this under "This is why we can't have nice things".
Similar boat minus the last part. Never had a Twitter, but I’ll join as paying member if Elon buys it.
from what i understand, if your post is within the bounds of the law then you should be fine.
The limits of the right of free speech vary significantly by country (https://en.wikipedia.org/wiki/Freedom_of_speech_by_country, https://www.amnesty.org/en/latest/news/2017/03/uae-prominent...), so I don’t think there is a “the law” on Twitter (whatever its terms of use say about jurisdiction)
Which country's law?
This gets at a core issue for me: how do our national governments govern online spaces that transcend national boundaries?
From what I understand, a large reason the US switched from the Articles of Confederation to the US Constitution was to help resolve inter-state conflict. I wonder if we can resolve inter-national conflict with our current confederation of nations.
From what I understand, a large reason the US switched from the Articles of Confederation to the US Constitution was to help resolve inter-state conflict. I wonder if we can resolve inter-national conflict with our current confederation of nations.
The articles of confederation was the Confederacy’s foundation document that codified how the Confederacy would be run.
AKA “The South” in the US civil war.
Edit: Yup, as pointed out by replies, I got my documents backwards. Sorry!
AKA “The South” in the US civil war.
Edit: Yup, as pointed out by replies, I got my documents backwards. Sorry!
No, it wasn't.
> The Articles of Confederation and Perpetual Union was an agreement among the 13 original states of the United States of America that served as its first frame of government. It was approved after much debate (between July 1776 and November 1777) by the Second Continental Congress on November 15, 1777, and sent to the states for ratification. The Articles of Confederation came into force on March 1, 1781, after ratification by all the states.
https://en.m.wikipedia.org/wiki/Articles_of_Confederation
Edit: I think you're thinking of the Constitution of the Confederate States: https://en.m.wikipedia.org/wiki/Constitution_of_the_Confeder...
> The Articles of Confederation and Perpetual Union was an agreement among the 13 original states of the United States of America that served as its first frame of government. It was approved after much debate (between July 1776 and November 1777) by the Second Continental Congress on November 15, 1777, and sent to the states for ratification. The Articles of Confederation came into force on March 1, 1781, after ratification by all the states.
https://en.m.wikipedia.org/wiki/Articles_of_Confederation
Edit: I think you're thinking of the Constitution of the Confederate States: https://en.m.wikipedia.org/wiki/Constitution_of_the_Confeder...
I understand how you could have this confusion, but if you're going to offer a correction you should double-check yourself first. You can look it up on wikipedia to check yourself and to copy the URL to post in your comment at the same time, two birds with one stone, and you avoid the embarrassment of being wrong.
I appreciate how you answered this and wish I had replied with as much grace as you did. Thank you for showing a different way to respond.
The true test will be if he has Trump's and other fascist's accounts reinstated.
Curious. How exactly do you reconcile the definition of fascism with your use of it?
They don't and can't. The word is bandied about by the left to the point of meaninglessness now.
Here is something grotesque you can post:
"Elon Musk says Tesla hopes to produce a robotaxi with no steering wheel or pedals in 2024"
https://www.businessinsider.com/elon-musk-tesla-build-robota...
"Elon Musk says Tesla hopes to produce a robotaxi with no steering wheel or pedals in 2024"
https://www.businessinsider.com/elon-musk-tesla-build-robota...
Musk makes a lot of (insane) promises - like going to Mars in the next 5 years. Sure.
or selling "Full self driving" packages in Teslas
[deleted]
We are too.
So you haven't cared about free speech at all until you want to lash out to spam others? Cool story, bro... I bet you and your legion of followers will love all your content. Then you'll bitch when people disallow you from commenting on their posts.. But I can't push my speech on others!!! This isn't my definition of free!!!
Please tell me how you determined that I don't care about free speech at all from what I've said. All I said is I have never had a twitter account.
I find the medium to not lead to productive dialog. The only interesting posts I've read are ones where someone essentially ignores the format and writes a long form comment over ten serial tweets. Limiting people to 140 characters (or 2x that now) leads to people spitting out punchy comments that lack any nuance. Rather than a dialog you get either echo chamber if the participants are in agreement, or if the participants are in opposition, a series of tweets attempting to land a body blow on the other.
I find the medium to not lead to productive dialog. The only interesting posts I've read are ones where someone essentially ignores the format and writes a long form comment over ten serial tweets. Limiting people to 140 characters (or 2x that now) leads to people spitting out punchy comments that lack any nuance. Rather than a dialog you get either echo chamber if the participants are in agreement, or if the participants are in opposition, a series of tweets attempting to land a body blow on the other.
I love that this document is dated 4/20, just a coincidence I’m sure!
IIRC that's the date his offer to the board expired. And yes also because 420.
I see a lot of bad faith assumptions made about Musk's supposed plans with Twitter in the case he should control it.
Although I'm not suggesting to trust a character like Musk purely on his words, it's at least interesting to be informed of plans he openly expressed.
First, he clearly expressed there's no economic motive. Which makes sense as Twitter is a terrible investment. A pessimistic interpretation is that it's about prestige, a positive one is that he genuinely wants to improve Twitter, whatever that means. Personally, I think it's a little of both, they are not mutually exclusive.
Regarding free speech, he stated that the first goal was to understand current "censorship" mechanisms and policy, and to make them more transparent. It's hard to disagree with this one no matter your leaning.
Further, he intends to be fully compliant with free speech laws, in every relevant country. There isn't much choice in this matter, but still.
As for what any new policy would look like, he stated that in the case of a grey zone, not censoring it is preferential. The grey zone is not defined, but in any case it means less censorship.
As for any political direction, he stated to have none. His ideal would be for both extreme ends to be equally angry, so in balance. This suggests that it's not some play to revenge-censor the far left or steer things in any explicit political direction.
Other than this, he has plans to improve/cleanup the broken parts of Twitter, like bots.
Like I said, you can take all of these public statements with a grain of salt, and you should. I personally give them the benefit of the doubt, as pretty much all of the "worst case" interpretations make no sense. It's not an economic play. It's not a play to only allow speech that benefits him directly as what possible Twitter speech would benefit him directly, given the position he's already in? He's also not turning it into a 40 billion dollar 4chan, there's just no rational basis for such pessimistic takes.
Perhaps a simpler take is that Twitter is so broken, dysfunctional and toxic that he can't possible make it much worse. And if he still does, let's hope it fully sinks. The world would be improved.
Although I'm not suggesting to trust a character like Musk purely on his words, it's at least interesting to be informed of plans he openly expressed.
First, he clearly expressed there's no economic motive. Which makes sense as Twitter is a terrible investment. A pessimistic interpretation is that it's about prestige, a positive one is that he genuinely wants to improve Twitter, whatever that means. Personally, I think it's a little of both, they are not mutually exclusive.
Regarding free speech, he stated that the first goal was to understand current "censorship" mechanisms and policy, and to make them more transparent. It's hard to disagree with this one no matter your leaning.
Further, he intends to be fully compliant with free speech laws, in every relevant country. There isn't much choice in this matter, but still.
As for what any new policy would look like, he stated that in the case of a grey zone, not censoring it is preferential. The grey zone is not defined, but in any case it means less censorship.
As for any political direction, he stated to have none. His ideal would be for both extreme ends to be equally angry, so in balance. This suggests that it's not some play to revenge-censor the far left or steer things in any explicit political direction.
Other than this, he has plans to improve/cleanup the broken parts of Twitter, like bots.
Like I said, you can take all of these public statements with a grain of salt, and you should. I personally give them the benefit of the doubt, as pretty much all of the "worst case" interpretations make no sense. It's not an economic play. It's not a play to only allow speech that benefits him directly as what possible Twitter speech would benefit him directly, given the position he's already in? He's also not turning it into a 40 billion dollar 4chan, there's just no rational basis for such pessimistic takes.
Perhaps a simpler take is that Twitter is so broken, dysfunctional and toxic that he can't possible make it much worse. And if he still does, let's hope it fully sinks. The world would be improved.
a) Twitter is not a terrible investment. Their fundamentals are strong i.e. growing revenue/profit and any competition has failed to materialise. And we have yet to see the financial impact of their premium offerings e.g. Twitter Blue.
b) We can be pessimistic about Musk's intention because of his past behaviour. At Tesla/SpaceX he has routinely suppressed any free speech and unionism. With Jack Sweeney he tried to buy his silence and he has on a number of occasions filed defamation lawsuits over things people have said. He is not altruistic but instead uses his power to shift the world to his benefit.
b) We can be pessimistic about Musk's intention because of his past behaviour. At Tesla/SpaceX he has routinely suppressed any free speech and unionism. With Jack Sweeney he tried to buy his silence and he has on a number of occasions filed defamation lawsuits over things people have said. He is not altruistic but instead uses his power to shift the world to his benefit.
Even if you're right about the financials (which I doubt), then still it doesn't make any sense for Musk to grow his wealth via Twitter. Surely there's better ways to do that and one can wonder what the point of growing wealth is at this stage.
The way I see it, his plays are "larger than life" plays. It's attaching his name and legacy to solutions to giant, seemingly unsolvable problems. Which so far seem to be problems that actually help humanity forward. Most of them anyway.
If so, one can wonder if it matters whether it's driven by a sense of ego or truly and selflessly wanting to help humanity forward, or a bit of both?
One type of criticism I fully agree with, or at least acknowledge. His methods. The goal may be altruistic, but his methods surely are not. He's ruthless in achieving these goals and has no mercy towards anybody standing in his way.
It's hard to say whether the end justify the means, and it may not even be fully purposeful. He's autistic and had a difficult upbringing. Which doesn't have to be an excuse for everything, but it's something to take into account to paint a full picture. Which is a complex one, and not a simplistic Disney villain stereotype.
I ultimately do agree that he shifts the world to benefit him, but perhaps not in the way you mean it. To benefit him to enable him to achieve the goals, no matter what.
The way I see it, his plays are "larger than life" plays. It's attaching his name and legacy to solutions to giant, seemingly unsolvable problems. Which so far seem to be problems that actually help humanity forward. Most of them anyway.
If so, one can wonder if it matters whether it's driven by a sense of ego or truly and selflessly wanting to help humanity forward, or a bit of both?
One type of criticism I fully agree with, or at least acknowledge. His methods. The goal may be altruistic, but his methods surely are not. He's ruthless in achieving these goals and has no mercy towards anybody standing in his way.
It's hard to say whether the end justify the means, and it may not even be fully purposeful. He's autistic and had a difficult upbringing. Which doesn't have to be an excuse for everything, but it's something to take into account to paint a full picture. Which is a complex one, and not a simplistic Disney villain stereotype.
I ultimately do agree that he shifts the world to benefit him, but perhaps not in the way you mean it. To benefit him to enable him to achieve the goals, no matter what.
I don't believe Musk's free speech claims for a second, he has a long history of regailing the public with grandiose claims and then failing to deliver. I'd bet 100 to 1 that twitter will continue to ban accounts for legal posts.
So its $25.5 billion of debt backed by his Tesla shares and $21 billion from himself, presumably from selling Tesla shares?
I wonder how many will accept the offer - about 30% of ownership have said they're not interested at that price, if he let a few large holders stay on it could be successful - but this would be a kick in the teeth for smaller investors and his retail fans.
I wonder how many will accept the offer - about 30% of ownership have said they're not interested at that price, if he let a few large holders stay on it could be successful - but this would be a kick in the teeth for smaller investors and his retail fans.
> about 30% of ownership have said they're not interested at that price
Why would Musk need more than 51% of voting shares for control of the board?
Why would Musk need more than 51% of voting shares for control of the board?
He wouldn't. Are you saying that 30% of shareholders saying they wouldn't vote for the take over implies that 70% are for it?
Does Twitter even made money? The Wikipedia article claims they went from losing several hundred million in 2017 to making a billion in 2018, but I'm not seeing what change led to that huge turnaround.
They have about $5 billion in annual revenue. Most years they lose money, hence the poor stock performance. Welcome to silicon valley.
> They have about $5 billion in annual revenue
> Most years they lose money
Absolutely grotesque.
> Most years they lose money
Absolutely grotesque.
I haven't dug into the filings, but I wonder how much of that is "actual losses" and how much is "accounting losses to avoid tax".
It's also factually incorrect. The filings are public record.
2021's revenue was ~$5 billion, and if I'm reading things correctly they've posted a profit twice since 2010.
They've posted (admittedly large) losses only 2 quarters since Q4 2017.
https://www.alphaquery.com/stock/TWTR/earnings-history
https://www.alphaquery.com/stock/TWTR/earnings-history
at least historically they had a DI/DS scheme (like many mega corps) so theres probably 10s of millions that are "expensed" to a foreign subsidiary to avoid tax.
Welcome to InQTel
Good, I hope he buys it and shakes things up. Twitter needs a revamp
what does “shake things up” mean?
whenever something like this happens you have to ask yourself why now and what’s in it for Musk (let’s be real: nobody spends this much without an agenda). My fear is that Musk’s endgame is to reinstate a specific account that was banned after some specific events around a specific election. If this is what’s happening he can frack off.
whenever something like this happens you have to ask yourself why now and what’s in it for Musk (let’s be real: nobody spends this much without an agenda). My fear is that Musk’s endgame is to reinstate a specific account that was banned after some specific events around a specific election. If this is what’s happening he can frack off.
It's not just trump, it's likely we'll see other "unfairly censored" people like David Duke, Milo, and Alex Jones.
This will elevate the level of discussion to be more like the highly praised philosophy forum known as 4chan.
I'm sure all the users will appreciate it and not leave immediately.
This will elevate the level of discussion to be more like the highly praised philosophy forum known as 4chan.
I'm sure all the users will appreciate it and not leave immediately.
I don't buy this line. Twitter used to be "the free speech wing of the free speech party." So your theory is that this happened:
1. Twitter is totally open free speech 2. This scares people away and user counts drop 3. Twitter censors and users come back
But this didn't happen. Twitter and other, at the time, free speech platforms like Reddit were experiencing rapid user growth throughout their free speech phases. The "this will scare away users" justification for censorship is used entirely as an ex post facto justification.
1. Twitter is totally open free speech 2. This scares people away and user counts drop 3. Twitter censors and users come back
But this didn't happen. Twitter and other, at the time, free speech platforms like Reddit were experiencing rapid user growth throughout their free speech phases. The "this will scare away users" justification for censorship is used entirely as an ex post facto justification.
No, this is the route that literally every popular social media platform goes through if they want to make money. Having an 'absolutist' stance on free speech is only tenable at smaller scales. As your platform scales up and more people join, so does the amount of people posting things that are borderline illegal, chase off advertisers/other users and so forth.
There's a reason why none of the other purported full free speech platforms ever taking off and it's because they end up so odious that advertisers never go near them and the userbase stalls out. Personally I think most of the people that believe full freedom of speech is possible have never been a moderator of even a small social media platform. If you have two users and one of them is harassing, stalking etc another user you eventually have to make a decision which of the two you want to keep around, and it inevitably involves you censoring one of them.
There's a reason why none of the other purported full free speech platforms ever taking off and it's because they end up so odious that advertisers never go near them and the userbase stalls out. Personally I think most of the people that believe full freedom of speech is possible have never been a moderator of even a small social media platform. If you have two users and one of them is harassing, stalking etc another user you eventually have to make a decision which of the two you want to keep around, and it inevitably involves you censoring one of them.
This is not the argument I was responding to. That was the argument that the platform will lose users, which objectively didn't happen. You are talking about losing advertisers, which is a reasonable theory, but also incorrect. Twitter and Reddit to this day are full of content, e.g. porn, that is absolutely toxic to advertisers, but it doesn't drive advertisers away from the platform as a whole because they have segregated their platforms and allow advertisers to pick and choose where they advertise. An example of this is Google search and Youtube demonetization of controversial videos. Advertisers are certainly an explanation of those policies, but it doesn't explain outright banning content from the platform.
why don’t these “unfairly” censored people build their own platform? oh! it’s hard. much harder than spouting their bs and complaining about “free speech”
They've already made a half dozen platforms, the market has clearly said that the majority of users are happy with Twitter as it is without them.
But it's not good enough, we must be forced to listen to hear how the COVID vaccine is a mind control weapon and why we must fight (((globalists))).
But it's not good enough, we must be forced to listen to hear how the COVID vaccine is a mind control weapon and why we must fight (((globalists))).
> why don’t these “unfairly” censored people build their own platform?
Don't you recognize that this is exactly what happens?
They do end up going to their own corners of the web, and idealogical-activists refuse to leave them alone and try and shut them down wherever they go. Look at how many times Gab, Parler, and other more free speech sites have been shut down.
Don't you recognize that this is exactly what happens?
They do end up going to their own corners of the web, and idealogical-activists refuse to leave them alone and try and shut them down wherever they go. Look at how many times Gab, Parler, and other more free speech sites have been shut down.
I wonder if the world can support a conservative Twitter. I think the problem is that if you're going to spout offensive nonsense it's not as much fun if there is no one around to be offended by it. And while those who are offended will fight it when it's a percentage of their platform, there will be a wave as people abandon what they see as a toxic platform. I mean sure there are platforms like 4chan and The Donald but 4chan's traffic is a fraction of what reddit's is.
Given Elon's predilection for trolling it's odd he doesn't realize those people who are banned don't want to build anything, they just want to watch the world burn.
Given Elon's predilection for trolling it's odd he doesn't realize those people who are banned don't want to build anything, they just want to watch the world burn.
The unfairly banned people have made several platforms, they just never blow up and you don't hear about them. It's like an employee gets fired from target, a well known and established company, so they make their own pseudo target and you're shocked that you've never heard of their small one
Edit: corrected autocorrect miswording
why don’t the platforms blow up? you’d think if these people are banned based on ideological issues only they would accumulate and thrive on these new platforms
It almost sounds like you're implying that most of the conversation is happening on Twitter, that it is the town hall.
Good. Time to break it up and enforce fair rules.
Good. Time to break it up and enforce fair rules.
nope. not implying that.
the reason twitter works and is successful is that you have people from all backgrounds and walks of life. people that get banned don't follow the rules that Twitter has (if the rules are fair, etc, is another discussion, but everyone has to follow the rules)
the reason twitter works and is successful is that you have people from all backgrounds and walks of life. people that get banned don't follow the rules that Twitter has (if the rules are fair, etc, is another discussion, but everyone has to follow the rules)
Sure. But if Elon Musk buys twitter, a private corporation, then he can decide who he platforms. Yet you see tons of people complaining exactly about that possibility here. So your comment is pretty ironic in the context of an entire thread filled with complaints about Musk getting his own platform.
i don't think the comment is ironic.
it's in the direction of "I don't want Musk to mess with Twitter". I personally cannot do anything about it but watch and voice concern, but if enough people see the concern I am voicing maybe this will lead to a better outcome. who knows?
it's in the direction of "I don't want Musk to mess with Twitter". I personally cannot do anything about it but watch and voice concern, but if enough people see the concern I am voicing maybe this will lead to a better outcome. who knows?
I totally agree with that! The thing is, that's exactly what people have been doing only to be constantly dismissed because hey it's a private corporation and they shouldn't complain. The comment I replied to was literally doing just that, mocking people and calling them annoying because they kept voicing their concern for free speech, because they apparently shouldn't even complain since it's not their platform.
Afaik, he views Twitter as the closest thing we have to a genuine public square on the web, and he thinks it’s poorly managed and ideologically captured. Musk also uses Twitter a lot, so it’s believable that he wants it to be something better than what it currently is.
> Afaik, he views Twitter as the closest thing we have to a genuine public square on the web, and he thinks it’s poorly managed and ideologically captured.
For me, this is the thing that bothers me the most: if he thinks it is the closest we have to a public square, why does he think that the richest private individual in the world should decide how it is run?
It seems he's saying "the oligarchy is not running this well so we should make it a dictatorship, not a democracy," which is in his right to say or believe, I just wonder how much we have lost faith in democracy if we agree.
For me, this is the thing that bothers me the most: if he thinks it is the closest we have to a public square, why does he think that the richest private individual in the world should decide how it is run?
It seems he's saying "the oligarchy is not running this well so we should make it a dictatorship, not a democracy," which is in his right to say or believe, I just wonder how much we have lost faith in democracy if we agree.
Who is running it now? A Saudi prince and a bunch of other tech oligarchs? Why would Elon be worse than that? How is twitter a democracy now? Did you cry this much when Bezos (the then richest person) bought the Washington Post?
Isn't the fact that twitter is NOT part of our democracy the crying call of the left? "It's not censorship because it's a private company and they can do what they want (as long as they only censor anything I don't agree with)!"
Oh NO, Elon might make twitter a free speech platform where differing views can be expressed!
Isn't the fact that twitter is NOT part of our democracy the crying call of the left? "It's not censorship because it's a private company and they can do what they want (as long as they only censor anything I don't agree with)!"
Oh NO, Elon might make twitter a free speech platform where differing views can be expressed!
I was talking about the structure of its governance, which I think is currently more like an oligarchy and if Musk buys it, might be more like a monarchy or dictatorship, not like a democracy.
I don't claim that the current oligarchy is doing it well, I don't claim that a Musk monarchy would not do it better, and I don't claim that even a democratic structure would do it well.
I was merely trying to point out the different governance structures and question our collective faith in democratic structures.
I don't claim that the current oligarchy is doing it well, I don't claim that a Musk monarchy would not do it better, and I don't claim that even a democratic structure would do it well.
I was merely trying to point out the different governance structures and question our collective faith in democratic structures.
To be honest, I think you are exactly on the right track. We _do_ have reduced faith in democratic structures.
Allow me to steelman this position a bit for you though. I think the root, gut feel that many Americans have is that they are sick of being pushed around and mismanaged by ineffective, small-minded, out-of-touch bureaucrats. This affliction seems to affect every aspect of our lives. If you have a problem with Comcast, you have to go through a robo call center that makes it physically impossible to actually talk to the people that are authoring your pain. You can't get mad at the person on the phone, because they can rightly say that it's not their fault your bill doubled. And yet, what's left unsaid is that things are specifically arranged this way on purpose.
The social architecture of our society is so "democratic" that there is no responsibility, no human spirit, no .. humanity in the way we deal with things. You can bet that Twitters internals follow this rule, and I'm sure when they talk about the failings they've had as a company, the blame is blandly smeared around. As a democracy fades into a bureaucracy, politics and corporate culture just descends into tee-totalling, cover-your-ass box checking that you're doing everything "by the book". It is the soulless HR department in place of actual values and kinship.
So you might see this newfound lack of faith in democratic structures less as a vote against democracy and more like a vote _for_ humanity. If you put Musk in charge, one thing you know is that there is a dude - a fully human dude, foibles and negative qualities included - who is running things. Looked at from this perspective, you can almost even get your head around what it would be like voting for trump. Okay, maybe not, but maybe you can get a few steps closer.
Allow me to steelman this position a bit for you though. I think the root, gut feel that many Americans have is that they are sick of being pushed around and mismanaged by ineffective, small-minded, out-of-touch bureaucrats. This affliction seems to affect every aspect of our lives. If you have a problem with Comcast, you have to go through a robo call center that makes it physically impossible to actually talk to the people that are authoring your pain. You can't get mad at the person on the phone, because they can rightly say that it's not their fault your bill doubled. And yet, what's left unsaid is that things are specifically arranged this way on purpose.
The social architecture of our society is so "democratic" that there is no responsibility, no human spirit, no .. humanity in the way we deal with things. You can bet that Twitters internals follow this rule, and I'm sure when they talk about the failings they've had as a company, the blame is blandly smeared around. As a democracy fades into a bureaucracy, politics and corporate culture just descends into tee-totalling, cover-your-ass box checking that you're doing everything "by the book". It is the soulless HR department in place of actual values and kinship.
So you might see this newfound lack of faith in democratic structures less as a vote against democracy and more like a vote _for_ humanity. If you put Musk in charge, one thing you know is that there is a dude - a fully human dude, foibles and negative qualities included - who is running things. Looked at from this perspective, you can almost even get your head around what it would be like voting for trump. Okay, maybe not, but maybe you can get a few steps closer.
Ah, just seeing this now.
I appreciate you taking it further and I think I can relate. The frustration with things being too ineffective and the drive to have a human responsible for something. I believe monarchies can be highly efficient, as many other top-down hierarchies. I think the challenge lies in that while one can efficiently help, one can also efficiently harm.
So, yeah, a part of me loves that a human could come in and make it more structured, more "the buck stops here" (ironically from the US President, the leader of a democratic republic), and I also worry about what happens when that person goes in a direction we don't like or a direction that harms or kills us. May seem like an exaggeration for a social media company, however, many genocides have been fueled by language through mass media.
> The social architecture of our society is so "democratic" that there is no responsibility, no human spirit, no .. humanity in the way we deal with things.
This is why I actually believe more in the idea of representative democracy than direct democracy. Yes, not as much responsibility as a single owner, but allocated responsibility to a few while being owned by many.
I appreciate you taking it further and I think I can relate. The frustration with things being too ineffective and the drive to have a human responsible for something. I believe monarchies can be highly efficient, as many other top-down hierarchies. I think the challenge lies in that while one can efficiently help, one can also efficiently harm.
So, yeah, a part of me loves that a human could come in and make it more structured, more "the buck stops here" (ironically from the US President, the leader of a democratic republic), and I also worry about what happens when that person goes in a direction we don't like or a direction that harms or kills us. May seem like an exaggeration for a social media company, however, many genocides have been fueled by language through mass media.
> The social architecture of our society is so "democratic" that there is no responsibility, no human spirit, no .. humanity in the way we deal with things.
This is why I actually believe more in the idea of representative democracy than direct democracy. Yes, not as much responsibility as a single owner, but allocated responsibility to a few while being owned by many.
> Isn't the fact that twitter is NOT part of our democracy the crying call of the left? "It's not censorship because it's a private company and they can do what they want (as long as they only censor anything I don't agree with)!"
Lol, if you think the left is genuinely defending the rights of private corporations, I don't think you know much about the left...
Probably the defining ideological organizing principle of the left is social equality, which is the exact opposite organizing principle of corporations, that being profit over all. Corporations are organized as dictatorships; leftists prefer them to be organized as democracies of, by, and for workers. Corporations censor the free speech of their workers, restricting what they say and how they can organize themselves; leftists want to take away the power corporations have to do this.
Insofar you are hearing anyone you perceive to be on the left supporting the rights of corporations like twitter to do what they want, perhaps consider they are throwing the argument in the face of corporate friendly Democrats and Republicans who have created this situation themselves by granting corporations such power over our lives, and are now only complaining when it hurts them politically.
I'm waiting for the day when that's tackled honestly by those groups, because right now it seems to me that politicians want to force specific companies like Twitter to stop hurting them politically while still maintaining corporate power and the inflow of corporate cash into their reelection campaigns. Thy want to call Twitter a "town square" and a "public good", and carve out exceptions that would specifically limit its power while still maintaining the power of the corporations they prefer to wield it. Meanwhile they will argue vociferously that healthcare, education, housing, even roads and broadband aren't public goods and must be kept privatized or turned into private ventures.
Under our current system (not created by leftists), corporations are people too and have more rights and power than natural humans. Leftists will stop pointing out that corporations have this power as soon everyone else stops arguing that corporations should have this power.
Lol, if you think the left is genuinely defending the rights of private corporations, I don't think you know much about the left...
Probably the defining ideological organizing principle of the left is social equality, which is the exact opposite organizing principle of corporations, that being profit over all. Corporations are organized as dictatorships; leftists prefer them to be organized as democracies of, by, and for workers. Corporations censor the free speech of their workers, restricting what they say and how they can organize themselves; leftists want to take away the power corporations have to do this.
Insofar you are hearing anyone you perceive to be on the left supporting the rights of corporations like twitter to do what they want, perhaps consider they are throwing the argument in the face of corporate friendly Democrats and Republicans who have created this situation themselves by granting corporations such power over our lives, and are now only complaining when it hurts them politically.
I'm waiting for the day when that's tackled honestly by those groups, because right now it seems to me that politicians want to force specific companies like Twitter to stop hurting them politically while still maintaining corporate power and the inflow of corporate cash into their reelection campaigns. Thy want to call Twitter a "town square" and a "public good", and carve out exceptions that would specifically limit its power while still maintaining the power of the corporations they prefer to wield it. Meanwhile they will argue vociferously that healthcare, education, housing, even roads and broadband aren't public goods and must be kept privatized or turned into private ventures.
Under our current system (not created by leftists), corporations are people too and have more rights and power than natural humans. Leftists will stop pointing out that corporations have this power as soon everyone else stops arguing that corporations should have this power.
I have some good memories of using Twitter in the pre-IPO days. Of course we can’t say that the former private ownership was necessary to create an open platform, but I don’t think it was a hindrance in that regard, either. (Would it be different for a megabillionaire to buy the company today? Definitely. Still, there shouldn’t be an unchecked assumption that it’s indispensable for Twitter to be publicly traded.)
I'm not saying the current publicly traded, previous/future private ownership, publicly regulated utility, non-profit, or any other form of ownership and governance would necessarily yield a better result than others. There can be benevolent dictatorships and oligarchies and malevolent democracies and republics. I'm more interested in why we (US specifically) celebrate democracy in public governance but seem to prefer oligarchy or autocracy in corporate governance.
better how?
what experience does musk have to make twitter better and why is this expensive unique so that twitter itself cannot make the changes?
twitter back in the day was awesome until they turned hostile to the 3rd party developers.
what experience does musk have to make twitter better and why is this expensive unique so that twitter itself cannot make the changes?
twitter back in the day was awesome until they turned hostile to the 3rd party developers.
I'd be fine with bringing back most of these banned accounts if the algorithm also died.
Without an engagement-maximizing algorithm that promotes the most divisive content, those accounts would just be preaching to their own choirs. Meanwhile other people could pop in and see just how unhinged and ridiculous they are.
Maximizing engagement means maximizing dishonest trolling, hate, fear, controversy for the sake of controversy, and catchy tabloid bullshit. The most engaging content is basically an adversarial attack on higher human cognition. It typically works by bypassing the rational mind and shooting for the amygdala.
Make it a simple timeline again. Nix recommendations in favor of search. Make it just a forum, not an inherently biased Skinner box that sucks out peoples' brains.
I'd support that regardless of who he lets back on the platform, because algorithmic social media is the real problem. Algorithmic social media is what got Donald Trump into the presidency, among many other things.
Without an engagement-maximizing algorithm that promotes the most divisive content, those accounts would just be preaching to their own choirs. Meanwhile other people could pop in and see just how unhinged and ridiculous they are.
Maximizing engagement means maximizing dishonest trolling, hate, fear, controversy for the sake of controversy, and catchy tabloid bullshit. The most engaging content is basically an adversarial attack on higher human cognition. It typically works by bypassing the rational mind and shooting for the amygdala.
Make it a simple timeline again. Nix recommendations in favor of search. Make it just a forum, not an inherently biased Skinner box that sucks out peoples' brains.
I'd support that regardless of who he lets back on the platform, because algorithmic social media is the real problem. Algorithmic social media is what got Donald Trump into the presidency, among many other things.
isn’t it convenient to blame everything on the algorithm?
why spend time actually educating people and giving them the tool of critical thinking when you can create a cesspool that enables and amplifies xenophobia, racism, sexism, you name it.
why call out certain behaviors that are horrendous when you can normalize them and pretend this is part of the normal public forum?
why spend time actually educating people and giving them the tool of critical thinking when you can create a cesspool that enables and amplifies xenophobia, racism, sexism, you name it.
why call out certain behaviors that are horrendous when you can normalize them and pretend this is part of the normal public forum?
Person A walks past you and smiles. Person B walks past and punches you in the face. Which maximizes engagement?
Person A tells you about a new discovery at NASA. Person B tells you the Earth is flat and bombards you with "irrefutable" proof. Which maximizes engagement?
I really do think engagement maximizing algorithms explain much (but not all) of our collective descent into insanity since about 2010-2012 when they became popular.
Person A tells you about a new discovery at NASA. Person B tells you the Earth is flat and bombards you with "irrefutable" proof. Which maximizes engagement?
I really do think engagement maximizing algorithms explain much (but not all) of our collective descent into insanity since about 2010-2012 when they became popular.
He should reinstate all accounts that were banned for political or ideological reasons. Or just straight up do a jubilee of all accounts unless they posted illegal content.
why? what’s in it for him and what does it mean for all the other people in the US and in the world?
ask yourself: why were those accounts banned?
ask yourself: why were those accounts banned?
Ideological warfare. He supports their views. What's in it for the people banning these accounts?
> What's in it for the people banning these accounts?
Money. If your advertisers flee, meeting payroll gets exponentially more difficult.
Money. If your advertisers flee, meeting payroll gets exponentially more difficult.
> why were those accounts banned?
Twitter is/was a ban happy shithole.
It is absolutely trivial to get banned on Twitter. My favorite example is someone I know getting banned for posting pitbull fatality statistics. They were banned for “racism”. Against dogs.
Twitter needs a top to bottom purge.
Twitter is/was a ban happy shithole.
It is absolutely trivial to get banned on Twitter. My favorite example is someone I know getting banned for posting pitbull fatality statistics. They were banned for “racism”. Against dogs.
Twitter needs a top to bottom purge.
I call bullshit. Nobody was banned from Twitter for being racist against dogs. Full stop. Did not happen.
Not going to dox myself via sharing their @. It's banned now so you can't see it anyways. They were attacked by some pitbull advocacy club and likely mass-reported.
The replies were full of people saying things like "this is exactly like how white people post statistics to say black people commit more crime! Report this person for racism!"
It was charts of dog fatalities per year broken down by breed.
The replies were full of people saying things like "this is exactly like how white people post statistics to say black people commit more crime! Report this person for racism!"
It was charts of dog fatalities per year broken down by breed.
I still don’t believe that’s the whole story. Maybe it was automatic due to the large number of reportings. But I’m certain nobody at twitter said “yep, let’s ban him for racism against pit bulls”.
i mean... i can see some automatic system banning some users. does that mean twitter does this on purpose? probably not.
Wouldn't that be a violation of his fiduciary duty, at least in the same way that other people in this conversation have defined fiduciary duty when criticizing the board for adopting the poison pill?
Bringing back the accounts that spew stuff which pushes advertisers away will not make Twitter more financially successful than they are today.
Bringing back the accounts that spew stuff which pushes advertisers away will not make Twitter more financially successful than they are today.
If he takes the company private, does he have a fiduciary duty to it?
That's true, if his intent is to take it private, he could run it into the ground on purpose.
Hell, maybe that's his intent. What if it turns out that rather than being a free speech absolutist, he thinks social media is destroying the world and the best way to solve that is to crush it out of existence, starting with Twitter.
That wouldn't work, of course, but it would be entertaining.
Hell, maybe that's his intent. What if it turns out that rather than being a free speech absolutist, he thinks social media is destroying the world and the best way to solve that is to crush it out of existence, starting with Twitter.
That wouldn't work, of course, but it would be entertaining.
Do his lenders enjoy him runni g the collateral into the ground?
If his agenda is polar opposite of the current agenda, I can't wait to see it. I would love to see him turn Twitter into a free-for-all where all LEGAL under US law material is allowed. Where YOU as an individual can mute/block things you do not want to see. It's incredible this idea today is considered "dangerous".
There are already Twitter alternatives that operate as a free-for-all. So we don't even need to speculate on how that plays out. It is interesting to ponder how Elon thinks that would make him any richer. Or maybe he values the free-for-all concept so highly that he's willing to burn billions of his own money on it when Twitter loses most of its advertisers.
Of course, he may just do the opposite, and start banning people on the left. That would align more closely with how he runs the companies he is currently in control of.
Of course, he may just do the opposite, and start banning people on the left. That would align more closely with how he runs the companies he is currently in control of.
Twitter isn't just a US platform. It's a global one. As part of a global platform that means it has to adhere to laws in countries other than the US. Thing's like EU's anti-terrorism laws or data privacy laws. You could argue that they should strictly adhere only to US laws, but you're effectively arguing for Twitter to outright remove a large portion of its international audience and censor them as well.
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It's dangerous if you can't defend your ideas based on their own merit. So it has to be done through authoritarian censorship and force.
have you ever defended your ideas? against someone that does not do this in good faith? and makes shit up on the fly? and lies when caught? and uses mental gymnastics when shown their are plain wrong?
how many times would you try to debate that person before deciding it’s a waste if time?
how many times would you try to debate that person before deciding it’s a waste if time?
You don't have to debate or acknowledge every idea. That's different then censoring it. I don't debate flat-earthers, but I also don't censor them.
Free speech is measured by the tolerance for speech that you hate.
Free speech is measured by the tolerance for speech that you hate.
Yes, I can't wait to see the place I get real time news updates and tech discussions become a platform for Holocaust denial.
That's some sick shit but I can't see why Twitter cannot allow you to block that garbage from YOUR perspective. I want personal controls for my content.
yes, but fReE SpEeCh! /s
It's EASY to counter Holocaust deniers because there is so much evidence that it happened. It's like debating flat earthers. No problem. Why be threatened by things that are easily debunked in day light?
It's not hard to defeat bad ideas with good ideas. Or you can just ignore it by turning off the channel. That's always an option.
It's not hard to defeat bad ideas with good ideas. Or you can just ignore it by turning off the channel. That's always an option.
> It's not hard to defeat bad ideas with good ideas.
That's a load of crap. You cannot debate with conspiracy theorists. Debates only work when both sides are acting in good faith.
That's a load of crap. You cannot debate with conspiracy theorists. Debates only work when both sides are acting in good faith.
huh. this naive approach is cute. but here is the thing: the amount of effort required to refute bullshit is at least an order of magnitude higher than the effort required to produce it.
we don’t have unlimited time an unlimited attention spans. we also deal with uneducated, easily manipulated people that will just discard anything that does not match their world view and just amplify the bs.
we don’t have unlimited time an unlimited attention spans. we also deal with uneducated, easily manipulated people that will just discard anything that does not match their world view and just amplify the bs.
Correct. No one can deal with all that shit. But it's distributed. You can ignore most of it, or all of it if you want. There are plenty of us autists to overwhelm it.
Sending Flat Earthers off to their own dark corner is how they become entrenched. Leave them in the public square, in broad daylight, so they are exposed to evidence to the contrary. That's how you defeat bad ideas over time.
Sending Flat Earthers off to their own dark corner is how they become entrenched. Leave them in the public square, in broad daylight, so they are exposed to evidence to the contrary. That's how you defeat bad ideas over time.
Empirically, that doesn’t work. Bringing misinformation into the public square simply allows it to spread. It’s almost immune to “evidence to the contrary”, at least for those who are apt to believe misinformation and conspiracy theories.
Empirically, the church is still here, and yet we mostly now hold heliocentric beliefs.
We didn't need to censor anyone to get here.
On longer timescales, the truth wins, because it is real, and everything else is not. False beliefs are persistent but simply can't compete with reality.
We didn't need to censor anyone to get here.
On longer timescales, the truth wins, because it is real, and everything else is not. False beliefs are persistent but simply can't compete with reality.
this approach of letting people air bs and having them be shamed by the level-headed individuals may work if the people airing the bs are just misinformed but
are open to a discussion and changing their mind.
a lot of people, on the internet, are not open to this and will chose the bs over any fact, argument, reason.
a lot of people, on the internet, are not open to this and will chose the bs over any fact, argument, reason.
The problem is that those ideas spread because it’s not in most peoples best interest to challenge them intellectually. It’s in their self interest to promote that material because it feels good emotionally.
It puts the burden on me as a user to combat all the nonsense.
I'll pass. And I'm sure many others will too.
I'll pass. And I'm sure many others will too.
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> My fear is that Musk’s endgame is to reinstate a specific account that was banned after some specific events around a specific election.
Why would he pay 50 billion for that? What does he gain from it? Goodwill? Leverage on Trump in case the latter becomes President again?
Why would he pay 50 billion for that? What does he gain from it? Goodwill? Leverage on Trump in case the latter becomes President again?
one hand washes the other.
the gov already pumped billions of dollars in tesla and space x through different programs. if that pumping increases that would be great, right?
the gov already pumped billions of dollars in tesla and space x through different programs. if that pumping increases that would be great, right?
Elon canceled someones order because of what they said which I consider strong evidence he doesn't fully support others having free speech like he claims
So many others here are saying negative things. I hate that people are even allowed to be billionaires or that they don't pay their fair share in taxes. But I do believe that Elon has a master plan and him buying Twitter is a key element in that plan. Starlink + Dogecoin + Twitter. It all makes sense and I'm in full support.
What makes sense? What do you think the plan is?
In case anyone is wondering where Morgan Stanley is going to get the money for this debt deal, it will look a lot like this:
https://twitter.com/pacday/status/985314558775410688/photo/1
I’m joking, but I’m kind of not… We will see who is actually behind the package, but MUFG and friends have a habit of financing foreigners’ adventures while keeping Japanese companies under-capitalized and starving. (For those not aware, MUFG owns a large part of Morgan Stanley, hence the photo above.)
https://twitter.com/pacday/status/985314558775410688/photo/1
I’m joking, but I’m kind of not… We will see who is actually behind the package, but MUFG and friends have a habit of financing foreigners’ adventures while keeping Japanese companies under-capitalized and starving. (For those not aware, MUFG owns a large part of Morgan Stanley, hence the photo above.)
I doubt the board is going to agree. Musk might want to buy, but they will actively thwart his efforts, even if that's not in the interest of shareholders.
Which goes to underline Musk's point that the board doesn't have the interests of shareholders in mind.
Clearly, the cabal is not interested in losing control of the public narrative.
Clearly, the cabal is not interested in losing control of the public narrative.
Which is a breach of their fiduciary duties.
As I understand it, it's not. The whole thing about fiduciary duty is a bit of a meme. The board can argue that they believe that Musk will run Twitter into the ground and in the long term not selling is a better financial move, and due to the Business Judgement Rule, the court is likely to side with them (whether or not they're actually right).
> The whole thing about fiduciary duty is a bit of a meme.
Fiduciary duty is very much a thing. The Twitter board with such a tiny amount of equity may incur risk from "honest services fraud," if they block shareholders from recieving the material and obvious value of the offer.
https://en.wikipedia.org/wiki/Honest_services_fraud
Fiduciary duty is very much a thing. The Twitter board with such a tiny amount of equity may incur risk from "honest services fraud," if they block shareholders from recieving the material and obvious value of the offer.
https://en.wikipedia.org/wiki/Honest_services_fraud
Not working in the interests of the shareholders is a breach of the board's fiduciary duties (which is simply what I commented based on the parent comment I was replying to).
The issue is indeed always to determine whether a course of action is knowingly not in the interests of the shareholders.
The issue is indeed always to determine whether a course of action is knowingly not in the interests of the shareholders.
> The board can argue that they believe that Musk will run Twitter into the ground
They can’t argue that because it would be completely irrelevant to current shareholders.
They can argue that the long term value is higher than Musk's offer.
They can’t argue that because it would be completely irrelevant to current shareholders.
They can argue that the long term value is higher than Musk's offer.
Courts have traditionally given the board wide leeway to decide what is best. There was the one case (Dodge v. Ford Motor Co) that held otherwise but it's been walked back in recent years.
Which is historically very difficult to prove and enforce.
It's likely going to come down to what Jack, as the largest remaining individual shareholder, says.
He only owns a few percent and has limited cash to buy more.
The point is nobody else has even a percent, and as a founder he can greatly shift the narrative.
Board goes against Musk, shareholders may sleep.
Board goes against Musk and the founder, shareholders may awake.
Board goes against Musk, shareholders may sleep.
Board goes against Musk and the founder, shareholders may awake.
Nobody said he would buy more though
He has a tiny stake and can’t increase it. Therefore Jack has negligible power at this point.
Entirely separate from the politics around why Musk would want to buy Twitter: I don't understand the world in which this would be a confidence-inspiring maneuver amongst Tesla's shareholders. If my reading is correct, a significant portion of Musk's net worth (in the form of Tesla equity) will now be held up in a perpetual money-bleeding venture.
The TLSA shareholders will be more concerned with TWTR bleeding Musk's attention vs bleeding his shares; he's not giving up the shares or control of TSLA.
It's also very likely that if Musk takes TWTR private he then privately sells portions of it to people who would like to be in on it with him. SpaceX is private, for example.
The key is that TSLA is not buying TWTR (which stranger things have happened), it's Musk.
It's also very likely that if Musk takes TWTR private he then privately sells portions of it to people who would like to be in on it with him. SpaceX is private, for example.
The key is that TSLA is not buying TWTR (which stranger things have happened), it's Musk.
> he's not giving up the shares or control of TSLA.
Again, correct me if I'm wrong, but it sounds like he's financing this prospective purchase of Twitter with loans that are backed in no small part by his stored equity in Tesla. He might not be "giving up" shares, but he's effectively introduced an interested party with the ability to seize those shares to recover any losses.
That's the part that would concern me as a Tesla shareholder.
Again, correct me if I'm wrong, but it sounds like he's financing this prospective purchase of Twitter with loans that are backed in no small part by his stored equity in Tesla. He might not be "giving up" shares, but he's effectively introduced an interested party with the ability to seize those shares to recover any losses.
That's the part that would concern me as a Tesla shareholder.
I noticed on the form:
Does anyone know if he still has both of these citizenships? If yes, I am surprised that he is not required to declare them on this form. Maybe SEC does not care about other passports, if already a US citizen.
One idea: Maybe he renounced the others so that he can run a rocket company in the US. As I understand, Space X is crazy strict about security requirements, and many of those are dictated by the US Federal gov't.
For example, in New York City, I knew many Jewish people that were native born US citizens, but also had an Israeli passport. It made it easier to visit Israel (much lower security requirements), and it was an important cultural link for them.
Citizenship or Place of Organization: USA
Does anyone know if he still has both of these citizenships? If yes, I am surprised that he is not required to declare them on this form. Maybe SEC does not care about other passports, if already a US citizen.
One idea: Maybe he renounced the others so that he can run a rocket company in the US. As I understand, Space X is crazy strict about security requirements, and many of those are dictated by the US Federal gov't.
For example, in New York City, I knew many Jewish people that were native born US citizens, but also had an Israeli passport. It made it easier to visit Israel (much lower security requirements), and it was an important cultural link for them.
When you become a US citizen they ask you to renounce other citizenships. At least it was the case the for me.
The Naturalization Oath is "Renounce and abjure absolutely and entirely all allegiance and fidelity to any foreign prince, potentate, state, or sovereignty of whom or which the applicant was before a subject or citizen".
Makes no mention of giving up citizenship or passport-holding, just allegiance.
Makes no mention of giving up citizenship or passport-holding, just allegiance.
I had to pledge allegiance to the queen when I got my canadian citizenship (or maybe my parents did? I was 9 so that would make more sense). So in a way, I'd have to renounce my canadian citizenship to become American, even if in reality you are right that it doesn't happen.
Citizenship is allegiance. Even if the moral doesn't align with the reality anymore, it still is considered to.
Both countries allow it
https://www.cic.gc.ca/english/helpcentre/answer.asp?qnum=356...
https://www.immigrationhelp.org/learning-center/is-u-s-dual-...
https://www.immigrationhelp.org/learning-center/is-u-s-dual-...
I don't think this applies to naturalization. If you're born with the qualifications for citizenship in each, then you are a citizen of both. Apart from being born that way, you may not be able to hold either one or the other, on naturalization.
I suspect it depends on what your original citizenship was. There are a number of countries with which you can have dual U.S. citizenship.
>they ask you to
My understanding is that they can't really enforce this. You can still hold multiple citizenships even if its against the rules.
My understanding is that they can't really enforce this. You can still hold multiple citizenships even if its against the rules.
I have seen this with dual nationals by birth in Japan -- both Japanese and something else. By law, they are required to make a choice at age 20. However, the "by law" part is very hard to enforce if their parents registered for nationality in the non-Japan country after applying for nationality in Japan.
Ref: https://en.wikipedia.org/wiki/Japanese_nationality_law#Dual_...
Ref: https://en.wikipedia.org/wiki/Japanese_nationality_law#Dual_...
What were your other citizenships?
At the least he is not partnering with any fringe elements, but he is very serious about it. This also means if the board says we will sell it to you for $90 bucks he may back off, as coming up with another 40 billion might be very tough even if it’s leveraged.
I am enjoying the cognitive dissonance of Musk skeptics who hate his huge wealth and influence, yet loudly insist it would be a practical impossibility for him to spend 10% of his net worth. Which is it? Does he wield more power than any one citizen should have, or is it all just monopoly money that is hopelessly illiquid? The answer will be whichever one makes you wrong and Elon Musk bad.
The question of whose voices should be allowed on Twitter seems to me to be missing the civilizational problem. It's akin to asking whether only people who graduated from an accredited conservatory of music should be allowed to play in the kazoo section. The answer might seem complicated until you realize that there shouldn't be a kazoo section in the first place. They sound like 8th graders, and adding some terrible musicians isn't moving the dial on that. Find a new instrument.
I know that Musk actually likes Twitter so this would never happen, but wouldn't it be amazing if he bought the company, laid off all the staff with severance packages, and shut the lights off? Then we could let the healing begin...
The question of whose voices should be allowed on Twitter seems to me to be missing the civilizational problem. It's akin to asking whether only people who graduated from an accredited conservatory of music should be allowed to play in the kazoo section. The answer might seem complicated until you realize that there shouldn't be a kazoo section in the first place. They sound like 8th graders, and adding some terrible musicians isn't moving the dial on that. Find a new instrument.
I know that Musk actually likes Twitter so this would never happen, but wouldn't it be amazing if he bought the company, laid off all the staff with severance packages, and shut the lights off? Then we could let the healing begin...
I have no illusions about how well-managed Twitter has been up to this point, but it is bitterly ironic that the narrow, libertarian-adjacent argument that goes something like "they're a private enterprise, they can ban whoever they want, free speech has nothing to do with it" is being tested. What happens when a giant, unaccountable communication monolith is run by a guy you don't like?
I can't stand the man, and I dislike the idea of him owning Twitter. Who knows what's going to happen, whether he'll succeed or not, Maybe he'll put his money where his mouth is re censorship, I don't know, but that there will be an ideological changing of the guard is inevitable, imo. What then? Do we really want these platforms to have so much unaccountable control over the discourse?
I can't stand the man, and I dislike the idea of him owning Twitter. Who knows what's going to happen, whether he'll succeed or not, Maybe he'll put his money where his mouth is re censorship, I don't know, but that there will be an ideological changing of the guard is inevitable, imo. What then? Do we really want these platforms to have so much unaccountable control over the discourse?
> Do we really want these platforms to have so much unaccountable control over the discourse?
Funny how this is suddenly a problem when Elon tries to buy. I agree in principle, but the bias on display is overwhelming.
Funny how this is suddenly a problem when Elon tries to buy. I agree in principle, but the bias on display is overwhelming.
That's exactly my point. I don't think the people who wanted this or that account banned really thought through what they were saying when they were appealing to the private nature of Twitter's ownership.
Freespeech is an inherently libertarian believe I don't think it's the libertarians that are trying to ban people for not being politically correct.
Wondering if there are certain individuals/institutions/organizations that would have vested interests in any of this?
Looking at the amount of money that is spent on nation-level campaigning (for a term length of ~4 years) the sum short would be minuscule when compared to near-global reach to be gained, so maybe the total of folks chipping in one way or another weights in much more p.a. than what currently is "on the table".
Looking at the amount of money that is spent on nation-level campaigning (for a term length of ~4 years) the sum short would be minuscule when compared to near-global reach to be gained, so maybe the total of folks chipping in one way or another weights in much more p.a. than what currently is "on the table".
I think it's a good idea and I hope he suceeds
Why so much interest in this? Isn’t it pretty clear at this point that the Twitter board isn’t interested in selling to him at $54.20?
From my understanding, the board has no (direct) say in this. He's asking the shareholders - i.e. anyone who owns Twitter stock - to sell to him for that price until he has the required majority. All the board can do is put up measures to make this hard (like the poison pill thing).
I hope everyone has been following along with Matt Levine's excellent newsletter: https://www.bloomberg.com/opinion/articles/2022-04-20/elon-c...
> This leaves Musk two main options. One is to negotiate with Twitter’s board and try to strike a friendly deal. This might be hard because the board probably wants more money than Musk is willing to pay, and also because there seem to be strategic and personal disagreements between Musk and the board that might make friendly negotiations difficult. “I am not playing the back-and-forth game,” Musk said in his initial proposal; “I have moved straight to the end.” That’s an annoying way to start negotiations.
> His other option is to pressure the board into dropping the pill, and the classic way to do that is with a tender offer plus a proxy fight
>I guess Musk has a third option, which is to do nothing and tweet mean things about Twitter’s board. Honestly a totally respectable option; $40 billion is a lot of money, owning Twitter seems exhausting, and Musk does have several other full-time jobs. A fourth option would be “buy a lot of stock, trigger the poison pill, and unleash absolute mayhem,” which is not totally impossible given that it is Elon Musk.
> This leaves Musk two main options. One is to negotiate with Twitter’s board and try to strike a friendly deal. This might be hard because the board probably wants more money than Musk is willing to pay, and also because there seem to be strategic and personal disagreements between Musk and the board that might make friendly negotiations difficult. “I am not playing the back-and-forth game,” Musk said in his initial proposal; “I have moved straight to the end.” That’s an annoying way to start negotiations.
> His other option is to pressure the board into dropping the pill, and the classic way to do that is with a tender offer plus a proxy fight
>I guess Musk has a third option, which is to do nothing and tweet mean things about Twitter’s board. Honestly a totally respectable option; $40 billion is a lot of money, owning Twitter seems exhausting, and Musk does have several other full-time jobs. A fourth option would be “buy a lot of stock, trigger the poison pill, and unleash absolute mayhem,” which is not totally impossible given that it is Elon Musk.
That is a serious amount of debt financing and going into margin. This is significant risk for an asset that is unlikely to get significantly better in value. I wonder how much a collapse in Tesla stock would trigger a margin call.
I think Musk is seriously misled about the future of social media.
Twitter is where people go for posting stuff when sitting on a toilet. Even though it may seem like it is where all the newsmakers are at this point in history, imho it doesn't have much of a future.
Everyone else is better off posting Tiktok videos to communicate.
Tiktok (or something similar) is the future of social media where you can see not only what people are literally saying but also how they are saying it... tone of voice, facial expressions (if you wish to reveal it). Video conveys a lot more information in a short time than a block of text ever can... because a block of text has to be given emotional charge, even a hint of intent by the reader... which makes it open to interpretation in many many ways, most of which can be very misleading.
Younger generation is not going back to text based social media.
Twitter is where people go for posting stuff when sitting on a toilet. Even though it may seem like it is where all the newsmakers are at this point in history, imho it doesn't have much of a future.
Everyone else is better off posting Tiktok videos to communicate.
Tiktok (or something similar) is the future of social media where you can see not only what people are literally saying but also how they are saying it... tone of voice, facial expressions (if you wish to reveal it). Video conveys a lot more information in a short time than a block of text ever can... because a block of text has to be given emotional charge, even a hint of intent by the reader... which makes it open to interpretation in many many ways, most of which can be very misleading.
Younger generation is not going back to text based social media.
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Just like his "funding secured" to take Tesla private?
Well, the jury is still out on that. Musk claims funding was secured and he was forced to settle with the SEC.
https://www.youtube.com/watch?v=vzY_jIJaZwk
Hard to really know the facts, but things may not be as they appear. In this case however, he has filed the SEC docs to verify that funding is secured.
https://www.youtube.com/watch?v=vzY_jIJaZwk
Hard to really know the facts, but things may not be as they appear. In this case however, he has filed the SEC docs to verify that funding is secured.
The people Musk said he had funding secured from for taking Tesla private immediately denied it. To the point of saying they’d only had a single conversation with him, and never discussed price
Can you tell us more about the detailed internal discussions that happened between Musk and N other parties concerning possible funding for taking Tesla private? You seem to be an authority on the subject.
“It turned out that he had had a single casual conversation with representatives of a Saudi sovereign wealth fund in which they did not discuss the price of the deal or how much money the Saudis were willing to invest; ultimately Musk settled fraud charges with the Securities and Exchange Commission over this tweet.”
https://www.bloomberg.com/opinion/articles/2022-04-20/elon-c...
https://www.bloomberg.com/opinion/articles/2022-04-20/elon-c...
He had verbal commitment from someone who claimed (and he believed) to have final authority to execute the deal.
They are probably kicking themselves at this point though, given the trajectory TSLA seems to be on at this point.
No, this time he has actual written warranties from banks.
No, this is an SEC filing not a tweet.
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Didn't Twitter already turn down his offer to buy them?
They adopted a poison oil that they can use to discourage a hostile takeover while they consider the offer. The poison pill doesn't necessarily mean the offer will be rejected as it can also put them in a better bargaining position to try and negotiate a higher price.
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I would feel slightly bewildered as a Tesla stock holder — Imagine Tim Cook would do the same with his Apple stock to pull off a takeover.
> the Common Stock, par value $0.000005 per share (the “Common Stock”), of Twitter, Inc.
Does anyone know what the hell this means?
Is this one of those annoying things in the finance world where, back in 1930, this would have been a meaningful number, but nearly a century later, everything is structured completely differently, there's a completely different set of numbers that are meaningful, but we have to keep dragging this legacy set of meaningless numbers around for legal reasons?
Does anyone know what the hell this means?
Is this one of those annoying things in the finance world where, back in 1930, this would have been a meaningful number, but nearly a century later, everything is structured completely differently, there's a completely different set of numbers that are meaningful, but we have to keep dragging this legacy set of meaningless numbers around for legal reasons?
Quite interesting how this is basically a slightly larger personal loan that anyone might take out to make a purchase.
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The Shitbidder in Chief strikes again!
When will people get tired of his stale shitposts and shenanigans?!
Get a hobby, Elon and seriously consider cutting on Twitter usage, it's frying your brain.
When will people get tired of his stale shitposts and shenanigans?!
Get a hobby, Elon and seriously consider cutting on Twitter usage, it's frying your brain.
Seems it would be better for Musk's stated goals to use this money to expand clean energy, SpaceX, and such things instead of buying a social media application.
Why do you think Besos bought the Washington Post for what, $200 million... right after AWS got that $600 million CIA web services contract? Notably there are no more "Top Secret America" investigations looking into how the US government feeds money to defense contractors at the WaPo.
https://en.wikipedia.org/wiki/Top_Secret_America
Is Musk following in Besos steps, or will he really open source the ranking algoritm and increase the character count of posts to paragraph-scale (512-1024 characters)? Time will tell I suppose.
https://en.wikipedia.org/wiki/Top_Secret_America
Is Musk following in Besos steps, or will he really open source the ranking algoritm and increase the character count of posts to paragraph-scale (512-1024 characters)? Time will tell I suppose.
This is also something strange, Musk talks about opening the algorithm but hasn't, as far as I can tell, talked about opening the datasets, models, etc that the algorithm depends on which makes it a bit less useful then it could be. He knows this from his work with Tesla so the lack of clarity is strange to me.
> Why do you think Besos bought the Washington Post
Because it was cheap and he wants to support journalism. Seems a lot more likely than your conspiracy theory.
Because it was cheap and he wants to support journalism. Seems a lot more likely than your conspiracy theory.
If you can point to a single investigative journalism story / series similar in scope and detail to Top Secret America published in the WaPo since Besos acquired it, then I will recant my opinion.
> Because it was cheap and he wants to support journalism.
Sure, WaPa does fantastic journalism- it's obvious that they must be supported for their lengthy history of great pieces.
Sure, WaPa does fantastic journalism- it's obvious that they must be supported for their lengthy history of great pieces.
Twitter is like a cancer, it really gets to some people and overtakes them. I wish Musk would just logout and focus on Starship.
Maybe he's run out of ideas to build there.
What happens to https://twitter.com/elonjet if Elon Musk controls Twitter?
A fun test of Musk's commitment to free speech I guess!
He launches a website?
Seems like such a big gamble for what basically amounts to a logo. He could very well just make his own website.
He's not buying the brand, he's buying the giant userbase.
>what basically amounts to a logo, he could very well just make his own website
Trumps fall in mainstream impact has proved this to not be the case. It used to be we would hear something crazy from him on a daily basis. If the ex president can't make his own website and maintain relevancy, I doubt musk can either
Trumps fall in mainstream impact has proved this to not be the case. It used to be we would hear something crazy from him on a daily basis. If the ex president can't make his own website and maintain relevancy, I doubt musk can either
It would be difficult competing for Twitter's 200 million users if he built a competitor. Much easier to spend the money buying the users themselves.
He's buying the brand and the user base, not the website.
Wait, I thought he made his final offer. It was rejected. Therefore, no deal. How is this still relevant?
Such a bald move
I can't believe this asshole is spending billions so that Trump can get his Twitter account back.
Hopefully he buys it.
It’s a another step toward Human + AI agents. Musk will give users the ability to choose, modify, and control their own algorithms.
> Musk will give users the ability to choose, modify, and control their own algorithms.
Like he does his existing customers or employees?
I can never understand how some people still have such unbridled optimism about what Elon Musk will do next, given how ample the evidence is that he won't. He has quite a track record to base predictions on.
Like he does his existing customers or employees?
I can never understand how some people still have such unbridled optimism about what Elon Musk will do next, given how ample the evidence is that he won't. He has quite a track record to base predictions on.
If he tries to sell 21 billion dollars worth of tesla shares, the share price will collapse.
So no, once again he does not have funding secured. And once again he is trying to bullshit his way around the issue, although this time the bullshitting is a little more sophisticated.
It is still possible that he tries to sell a lot of tesla shares to get the cash to buy twitter, but it is unlikely.