Elon Musk wants out of Twitter for obvious reasons. The deal turned out to be a huge financial loss for him, even a threat to his entrepreneurial ambitions. Twitter looks less attractive as a turnaround project. Tesla stock, which he would have to sell to complete the purchase, plummets. The economy is heading into deep waters.
It’s not entirely irrelevant that the $8.5 billion he’s already sold (after Tesla stock fell nearly $200) now looks like a beneficial trade given Tesla’s continued decline. Now should he give up this highly useful money to buy Twitter shares on even less favorable terms? No thank you.
Its legal basis is not strong. Still, he’s Elon Musk. He circled around the Securities and Exchange Commission and got away with it because of his overwhelming influence on the investing public. Hopefully, Musk’s circularity singularity will also work with Twitter, his attorneys, and the Delaware Chancery. Impressed by his iconic mojo, they let him off his stride.
On the other hand, the rule of law may be annoying, but it protects us all. Trying to get out of a deal he signed, with plenty of sound advice from bankers and lawyers, by slandering the business he no longer wants to own by inventing dubious subterfuges, is not going to be seen as Mr Musk’s finest hour in stay in memory. That the Musk circularity singularity might one day start working in reverse is a risk associated with this debacle.
For one, Tesla still seems an overvalued electric car company by most standards, despite having lost $450 billion since April while Mr. Musk dizzily followed his social media acquisition. Voters recognize that EV tax breaks benefit the wealthy rather than the environment. His former idolaters in the press have gotten mad at Mr. Musk since he criticized Twitter for the wrong things, like sacking Donald Trump and covering up Hunter Biden’s laptop story.
The save-the-planet hype that filled Ashlee Vance’s recent Musk bio has always been a double-edged sword because it over-promised.
Mr. Musk is a gifted entrepreneur, one of a kind, but the market he identified for electric cars by capitalizing on the lithium-ion battery revolution was made possible because there was a lithium-ion battery revolution.
The market he identified for cheaper access to space exists because there’s always a market for cheaper ways of doing important things, like putting satellites into orbit.
He didn’t invent or discover in the baby boomers and their descendants the deep vein of romance about electric cars and space travel that could monetize the Musk magic through the fanboy bidding on Tesla’s publicly traded stock to create the net worth he used to support other ventures.
It makes everything easier and gets investors throwing money at you.
And yet, Mr. Musk seemed to have dozed off a little during the polarity reversal of recent months, as inflation and interest rates soared and companies with very high multiples to meager recent earnings like Tesla and Twitter fell out of favor.
Within a month of signing the Twitter deal, he spotted a “super bad feeling” about the economy and ordered Tesla to cut its payrolls by 10%. He told a club of Tesla enthusiasts that the company’s new factories in Germany and Texas are losing billions due to supply chain problems. “Both the factories in Berlin and Austin are huge money furnaces right now. OK? It’s really like a huge roar, it’s the sound of money on fire.”
At a time like this, how would a sane person feel if forced to spend money on an overpriced, long-term turnaround project like Twitter? Pretty sick. And Mr Musk would need to sell another $25 billion in Tesla stock to complete the Twitter purchase when he may have more pressing gaps to fill his business portfolio.
Nobody in their right mind wants them to do this now, except for Twitter shareholders.
The only mystery is why Mr. Musk embarked on this primrose trail in the first place, from mouth movement or over-indulgence in the limelight, or some mysterious reason that causes a viewer to throw up their hands. Like every commenter in America, my first guess was that Mr. Musk wasn’t serious about Twitter, his interest would quickly fizzle out. As much as he was right that Twitter ached for imaginative leadership, however much he may have been the one to deliver it, the threat to companies in which he has a much larger financial, emotional, and intellectual stake was evident from the start .
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https://www.wsj.com/articles/elon-musks-narrow-twitter-escape-social-media-acquisition-eletric-car-space-tesla-11657917894 Elon Musk’s Narrow Twitter Escape