Elon Musk Effectively Admits That He Set Fire To More Than Half Of Twitter’s Value
from the great-job-everybody dept
For months, Elon Musk has been promising the rapidly dwindling workforce at Twitter that he’d give them stock grants. He’d promised that those grants would come on March 24th, and I can tell you that when normal business hours ended on the 24th with no details, some of those remaining employees were pissed off. However, it was just Musk in typical fashion, being late. Late at night an email was sent to employees on “the state of Twitter 20” which also included the details of the grants.
The details, as laid out in the Wall St. Journal, are that employees will get grants that vest over a period of four years, with a 6 month cliff (i.e., nothing vests for the first six months, so try not to anger him or he’ll fire you and you’ll get nothing) and there will be regular opportunities to cash out.
But the key part is that Musk says the equity grants will be doled out with a company valuation of $20 billion. Remember, just five months ago he paid $44 billion for it, meaning he’s admitting that he more or less set $24 billion on fire in five months. That’s impressive.
Elon Musk said Twitter Inc. employees will receive stock awards based on a roughly $20 billion valuation, less than half of the $44 billion price he acquired the company for last year, according to an email reviewed by The Wall Street Journal.
Being the master of spin, hype, and marketing that he is, Musk concocted a story about how the valuation of Twitter may go up to $250 billion in a few years:
Mr. Musk in the note to staff said he was optimistic about the social-media company’s future. “I see a clear, but difficult, path to a >$250B valuation,” meaning stock granted now would be worth 10 times more, he said.
I mean, at this point, all of these valuations are just in Musk’s head. The only way you know for sure is when the shares are either available on the public market, or there’s some sort of outside investment that values the company. So, these numbers are somewhat meaningless. The company could be worth $10 billion or $1 billion or $50 billion.
But the fact that Musk is effectively admitting that he thinks the valuation is around $20 billion is a pretty huge admission of failure. He took an asset that he (perhaps stupidly) valued at $44 billion and knocked off more than half the value. And given that he’s prone to overhyping his own works, he’s almost certainly over-estimating the value. Great job.
Also, I’m curious how the other equity holders feel about all of this. Now, all of them have more money than they could ever use, so maybe they don’t care one bit about this, but I remember hearing from some people how Musk had the “Midas touch” and they seemed confident that he’d take their $500 million to $2 billion contributions and turn it into much more. And here he is, just five months later, admitting he’s basically set fire to that money.
As for the claim that he’ll get it up to a $250 billion valuation, well, anything is possible. But to date, given that he’s driven away many advertisers, made the site much more fragile, made it significantly less welcoming in terms of inviting back the most abusive users and filling everyone’s feed with about 5 times more ads than before, bet big on the Twitter Blue program that very few people seem interested in… it’s reasonable to wonder just how he thinks the site will be valued at $250 billion outside of his head.
Filed Under: elon musk, stock grants, valuation
Companies: twitter
Comments on “Elon Musk Effectively Admits That He Set Fire To More Than Half Of Twitter’s Value”
Have a negative value with debts being more than it is worth,
“ He took an asset that he (perhaps stupidly) valued at $44 billion …”
perhaps???
Re: Say My Name
Count our blessings. Can Anyone here put a face or name on Yahoo?
“In February 2008, Microsoft made an unsolicited bid to acquire Yahoo for $44.6 billion.[37][38] Yahoo rejected the bid, claiming that it “substantially undervalues” the company and was not in the interest of its shareholders.” WIKI
In 2008, we received an offer for $160k for this house. In 2020, we received an offer of $800k for this house “as-is”. The “market” is an intoxicated ass
On the plus side...
…at least there’s something he can do effectively
Actually, if Twitter continue to lose half its value each six months, it will worth 250 million dollars in few years…
Re:
Bold of you to assume it’ll even be around in a few years, given how Elon seems intent on wrecking the service as fast as possible.
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Re: Re:
It wasn’t going to be around in a few years as it was, dumbass.
Re: Re: Re:
Why wouldn’t it? It was at least somewhat popular and generally breaking even in terms of profits.
What would have caused it to go out of business?
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Re: Re: Re:2
No, it wasn’t. Masnick claimed that, but spoiler, Masnick lies sometimes. Pretty frequently, actually.
Re: Re: Re:3
The fun thing about just how often Matthew makes factual statements where he claims I lie, is just how easy it is to show the factual data that proves Matthew is lying.
https://csimarket.com/stocks/single_growth_rates.php?code=TWTR&net
Since 2018 Twitter has had 15 profitable quarters, compared to 4 unprofitable quarters. The company did take a big hit in Q2 of 2020 which was because of an accounting move to deal with a noncash deferred tax asset (interestingly, Wall St. reacted positively to that quarter’s announcement, because all of the underlying data was good).
So, yeah, the numbers don’t lie. I don’t lie. Matthew does. The company was running effectively break even, with most quarters profitable in the last four years, and a few quarters would dip under.
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Re: Re: Re:4
Ahahahahahaha, your own citations don’t even support your thesis.
It’s also laid out very inconveniently for someone trying to understand the numbers, maybe that’s why you choose it?
Also weirdly just missing huge chunks of data?
What an interesting set of data to pick? Does it tell you if they were losing money? No. Does it tell you how much money was lost? No. Does it let you misrepresent a net loss as a win if the loses were clustered? Yes! (also again, this site is weirdly missing data) Why 2015?!?
This is a much better site:
https://csimarket.com/stocks/single_growth_rates.php?code=TWTR&net
It only has data going back to 2012 but it shows that twitter lost $221M over that time.
Year Net Income ($) Net Income In $ Billion Inflation-Adjusted Income ($ Billion) Income-Change From Previous Year ($ Billion)
2012 -79399000.00 -0.0794 -0.09
2013 -645323000.00 -0.6453 -0.7506 -0.565923 (712.7494%)
2014 -577820000.00 -0.5778 -0.6614 0.06748 (-10.4572%)
2015 -521031000.00 -0.521 -0.5957 0.056769 (-9.825%)
2016 -456873000.00 -0.4569 -0.5158 0.064127 (-12.3084%)
2017 -108063000.00 -0.1081 -0.1195 0.348837 (-76.3487%)
2018 1205596000.00 1.2056 1.301 1.313696 (-1215.2599%)
2019 1465659000.00 1.4657 1.5534 0.260059 (21.5709%)
2020 -1135626000.00 -1.1356 -1.189 -2.601326 (-177.4801%)
2021 -221409000.00 -0.2214 -0.2214 0.914191 (-80.5029%)
It absolutely was not.
More importantly it was losing money recently, quite a bit in 2020 and 2021, actually.
That literally doesn’t matter, at all. Why are you pretending that matters? (To lie)
I have literally shown you to be lying. Just now. I mean, nothing you said was actually wrong, it was just misleading and cherry picked to be misleading as hell.
Re: Re: Re:5
A drop in income does not necessarily mean a loss, and all you have shown is changes in income. Where is are the actual profit and loss figures?
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Re: Re: Re:6
just click on the link. It’s in billions (tho -.221 B sounds weird)
Why didn’t you click the link?
Re: Re: Re:7
So, all it documents is income, and changes in income over the years. It is missing the other half of accounting to determine profit and loss. Accounting 101 defines p&l as the difference between income and expenditure, so the source you are using cannot be used to determine profit and loss, as it does not show expenditure.
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Re: Re: Re:8
Actually, no, the link provides net income, which is sometimes called “net profit”, and it is Gross Income (mostly the same as revenue) – expenses. Net Income is actually a more precise term than just “profit”, and also what you are referring to in this case.
So no, first year accounting student, there is no missing “other half”. …..are you going to take the test again?
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Re: Re: Re:8
Hey, my actual apologies, it was brought to my intention (by a douchebag) that I shared the same link twice, rather than the link I was actually talking about, and that wasn’t fair. Sorry.
https://www.netcials.com/financial-net-profit-year-quarter-usa/1418091-TWITTER-INC/
Re: Re: Re:5
Hey Matthew. Your link is the same as mine.
Anyhoo, I highlighted from 2018 forward because the question was whether or not the company has been breakeven or if it’s losing cash. It was unprofitable for many years, but from 2018 forward it was mostly profitable quarter to quarter. As I noted (and you oddly pretend I did not) there was a very large “loss” in 2020, but it was a paper loss due to an accounting of a noncash tax deferment. Which I stated, and you conveniently clipped out.
That’s why the stock actually went up after the announcement of that large loss, because the underlying fundamentals were still good, especially regarding cashflow.
So, no, I stand by what I said, because it was correct. You have to go all the way back to 2012 to make your argument, and ignore the fact that the major “loss” you show in 2020 was the result of an accounting issue, which didn’t hit actual cash flow.
Again, what I said was absolutely accurate and true. Since the company reached profitability in 2018, it was mostly profitable in nearly every quarter, with a few underwater quarters, including the big one I mentioned, and which you pretended I didn’t mention.
I’m sorry you seem unable to read financial statements, but it just reminds everyone how totally full of shit you are.
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Re: Re: Re:6
You’re right, copy and paste error. Here’s the link I thought I was sharing:
https://www.netcials.com/financial-net-profit-year-quarter-usa/1418091-TWITTER-INC/
Yeah, I don’t really care how you want to cherry pick and parse it, your goal here is to misrepresent. They have had truly wild swings in income but they have, on balance, lost money.
You really shouldn’t. It was not correct. It was cherry picked and purposefully misleading.
The last 10 years as a publicly traded company seems a pretty reasonable timeframe. This was just the first set of reasonably complete long-term data I could find. It’s not like I hunted and pecked for a set of data that said what I wanted like “15 profitable quarters, compared to 4 unprofitable quarters.” What is that nonsense? It’s just the last 10 years of data. Simple, clean.
Yeah, I don’t care and have no idea why you think we should, either. The point is NOT to cherry pick the data. I know that’s hard. This is part of why long-term data, like say over ….10 years, is so important. 2021 was also losing, btw.
I will say this data is swingy af. 2018 and 2019 were HUGE up years. but ALL other 8 years were down years. That matters in the same way “15 profitable quarters, compared to 4 unprofitable quarters.” matters, which is to say, not at all, it’s just a way to slice it and probably misrepresent it. But they lost $221M over 10 years. Not the hugest % but yeah, it’s significant. Also that they lost the last 2 years matters.
No, it wasn’t. They didn’t reach anything. Looking at the graph, they peaked. They were losing money for a long time, made money in 2018-19, then started losing money again. That’s it.
I’m actually not sure which “mention” you’re mentioning here, but you’ve had a lot of “mentions” most of which were unimportant and some were FUD. I’m not pretending you didn’t say them, I’m actively accusing you saying them, like an idiot.
Yeah, see, that would be a good example, cuz none of that matters, actually. All you’re saying is that the profits are spread out and the loses concentrated, and that doesn’t fucking matter, at all.
Oh, you got a special excuse for the loss in 2020? Unrelated to precipitous gains in 2019? Well press x to doubt but they lost money in 2021, too. Accounting gimmicks are accounting gimmicks, they take money from one place or time and put it in another. They lost money over all.
Y’know, I think I’m doing OK. Step 1 is to ignore every piece of shit lie you “explain” or “mention” on the subject.
They lost fucking money Masnick. They were losing money, at the time of sale, Masnick. Learn to read financial statements.
Re: Re: Re:7
That link shows the same data my link showed, confirming the accuracy of it.
I didn’t cherry pick. I chose 2018 because that’s when the company first hit profitability. So it seemed like a reasonable starting point to look at how profitable it had been since then, and the answer is… that it has been slightly above breakeven, and not massively losing money nor at risk of going bankrupt.
No, it really doesn’t if the question is how much trouble was the company in today, and to respond to your claim that it was going out of business. The data simply does not support that.
The question to understand, from a quarterly to quarterly basis, how is the company doing, and the data showed that the company was mostly doing pretty well, with a few down quarters, including one massive, non-cash charge. Which I’ve now explained in every single comment on this, which you continue to ignore.
That’s simply not true if you look at cashflow. And you’re hiding numbers in aggregate by looking at the yearly statements, not quarterly. Again, if you look at quarterly, and look at cash flow, the company was not in trouble. I wouldn’t say it was doing fantastically well, but it wasn’t burning cash or anything.
Yeah, but the main “concentrated” loss was a ONE TIME NON-CASH charge. That’s what I keep telling you and which you keep ignoring.
By the way, the other big “loss” was due to the FTC fine. More of which may be on the way.
You’re so transparently ignorant Matthew. I know how to read financial statements. I’m trying to explain them to you, but you continue to wallow in your ignorance.
Re: Re: Re:8
It shows it a lot clearly and makes it harder for you to fudge.
100 % did
It absolutely was not, it allowed you to cherry pick. You picked a high watermark year and that allowed you to ignore the losses prior and wash out the loses since.
That is a massive lie, that is only even vaguely true when you outrageously cherry pick the window oh so precisely
No, that doesn’t matter at all, actually, you’re just trying to spin a story where the financial loss isn’t as bad for some reason. But it was.
Cashflow is nice. Companies will sometimes sacrifice profit (through capital outlays) to increase their cashflow….when they’re startups. Twitter was not a start-up.
Fuck no, yearly is fine, and there’s no reason to look at it quarter by quarter unless you’re trying to cherry-pick to mislead and say dumbshit like “Twitter has had 15 profitable quarters, compared to 4 unprofitable quarters”
You keep on saying that, and I haven’t IGNORED it at all, I’ve told you it isn’t relevant. Since you seem to think it’s so important, why haven’t you linked to a story about it? By any chance is it related to the huge erroneous profit the year prior? Accounting artifacts (which you seem to be insisting this is) tend to balance out. Which would, btw, make it not just irrelevant for total money lost but completely meaningless. Both the spike and the dip were illusory.
Funny, so do I. That’s why I’m calling out your bullshit.
Oh, you’re trying to help little ole me? How nice! Except I’m well familiar with how you “explain” things at this point. It’s sorta like Bill Clinton “explains” things. It’s just gaslighting. You’ve “explained” that there was nothing suspicious about weekly meetings with gov agencies and “censorship is free speech” and you’re just fucking lying.
Re: Re: Re:9
Die mad.
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Re: Re: Re:6
Oh, as someone pointed out the top line wasn’t a total loss, just last year.
They lost $1.07 Billion over 10 years. Not $221M
Yeah, cool,. go on about how “they were up 72 of the last 15 quarters” as if any of that matters or changes the raw numbers, dipshit.
https://www.netcials.com/financial-net-profit-year-quarter-usa/1418091-TWITTER-INC/
Re: Re: Re:7
Oh look, another subject Matt the “Genius” doesn’t understand. Do you really think accounting is as easy as just adding numbers up?!?
How about you go an look up what “deferred tax assets” are and how they affect the summarized net income. Perhaps then you’ll understand why everyone says Twitter’s net profit between 2012-2022 was -$0.22 billion.
Of course, I doubt you will because you are allergic to being wrong and you will instead double down while calling everyone dumbass.
Re: Re: Re:3
Since Masknick has already shown why you’re lying(again), I’ll just repeat my question that you failed to answer:
Why wasn’t Twitter going to be around?
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Re: Re: Re:4
Not only did Masnick not show that, it’s literally sad he convinced you he did. I would have thought his cherry-picked data was too transparent to fool anyone.
Twitter has lost $221M since 2012. 2020 and 2021 were particularly disastrous. See above.
Re: Re: Re:5
Jesus christ, you can’t read even your own source.
According to the very first table in your link, they lost $221M in 2021, not since 2012. If they had only lost 221 million in nine years, that wouldn’t be that bad.
But if we take the net income numbers from the same table and add them up(something you’re clearly incapable of), we’ll see that since 2012, Twitter has had a combined net loss of ~$52M.
Technically a lack of profit overall, but not even close to being enough to put them out of business, as you suggested.
So I implore you, once again: Stop. Fucking. Lying.
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Re: Re: Re:6
I don’t have time for this, nor care enough about what you think.
https://www.netcials.com/financial-net-profit-year-quarter-usa/1418091-TWITTER-INC/
Oh, no, I believed the top number with doing arithmetic.
They actually lost $1.07 Billion. (not $52M, you seemed smart for a half second there. You do know that’s worse, right? Losing 1.07 billion is worse than losing 221 million?
About what, undercounting how much money they lost? OK.
Re: Re: Re:7
I guess we found out you suck at arithmetic, then.
Except they didn’t, based on the numbers in your own source.
I don’t know what’s worse: that you can’t do basic additions, or that you’re too stupid to know it.
Re: Re: Re:7
Holy shit, Matthew. You’re actually right about the total losses. I apologise for my mistake. Evidently, my spreadsheeting skills aren’t up to snuff anymore.
With that being said, there was still no indication Twitter was sinking into debt on a scale that would’ve necessitated going bankrupt a few years down the line.
So while your premise is correct, your conclusion is not.
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Re: Re: Re:8
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Re: Re: Re:8
Holy goal shifting, batman. I have no idea what their cash reserves looked like (probably googleble) but they were losing money fast enough they couldn’t have lasted that long. I really don’t feel the need to “prove” what year they’d go under…they’d either find a new revenue stream, cut costs, or lose. This was pretty well known at the time Musk made his offer.
I think I’ll just take my win and move on.
Suprised you even know what a spreadsheet is tho.
Re: Re: Re:8
No, he wasn’t. Look up deferred tax assets and you’ll understand.
Re: Re: Re:7
How much time do you spend telling us you don’t have time for this?
Re: Re: Re:2
Bennett just hoisted himself on his own petard, by saying that Twitter won’t be around in a few years…. not the normal sewage that comes out of his Elmo-loving mouth, I’m sure we’ll agree.
But to answer your question, Elmo is busy assuring everyone that he’s in control of the largest NPO ever made in the history of mankind. Non Profit Oganization. As in, doesn’t make any money, or what it does make, it reinvests back into itself. That’s his schtick, and he’s gonna stick to it.
As required by law, every prospectus you see when thinking about investing in something has these words: Past performance is not an indicator of future performance. Words to live by, and for once, Bennett has correctly stated the case – Twitter is quickly heading towards “Also Ran” status. Or maybe even “DNF”, if Elmo has his way about it.
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Re: Re: Re:3
“It wasn’t”. As in “it wasn’t going to be around in a few years before Musk took it over” Reading comp is important.
Re: Re: Re:
…said nobody capable of even grade-school arithmetic, ever.
Re: If Twitter can lose half its value in 5 or 6 months...
There isn’t much stopping it from losing the other half within 6 months. By the time those stock awards are redeemable, there might not be anything left to offer, or anyone left on to receive it.
Re:
Nah, he’s speed running failure. Just in the last few weeks, he’s announced that he’s removing the old verification checkmark (something many consider to be one of the “killer features” for Twitter as it encouraged engagement and discouraged fraud at very little cost), he’s introducing a new checkmark feature for businesses (priced at $1k/month, something most small/non-profit businesses won’t be able to afford even if it gives them some advantage), and charging insane amounts of money for APIs (which drove a lot of traffic when they were free, and no hobbyist/small business would be able to pay even if they were doing it with the expectation of any income).
Add that the the general stability and other problems the site is increasingly experienced and the haemorrhaging of staff and institutional knowledge over the last few months, I’d be surprised if it were worth anything like as much.
'And a free pony for all employees in year five!'
The details, as laid out in the Wall St. Journal, are that employees will get grants that vest over a period of four years, with a 6 month cliff (i.e., nothing vests for the first six months, so try not to anger him or he’ll fire you and you’ll get nothing) and there will be regular opportunities to cash out.
Bold of him to think that the company will still exist in four years, at this rate I’d be highly skeptical that it will last even one and were I an employee being offered stock in a company that the boss is burning down around me would probably not serve as a great motivator.
I wonder if he realizes that while he may have bought himself six months with some people he also just gave them the perfect time to finally bail and find a new job…
Re:
Yeah but he wants something in return for that pony.
NOT “value” HOW MUCH HE PAID. it wasn’t even worth the 10 billion stope HELPING him by accepting his dillusions
Re:
Perhaps he should’ve made a different offer—or paid the billion-dollar breakup fee—if he didn’t think Twitter was worth $40 billion.
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All valuations are just in somebodies head
This is more silly gossip shit from you over Musk.
Cute.
Making money was never the point. The point was to stop the hideous ideological based censorship. That was before we knew about the hideous government directed censorship (some of it based on ideology).
$44B was a highball designed to make it happen fast, and it turned out to be probably worth less than that. And the valuations equity grants have only a vague relation to what a companies actual worth is. Which you all admit to.
So really this is just you throwing shade at Musk over…nothing, really.
Y’know how much Twitter was likely to be worth in 5 years as it was going? Zero, most likely.
But now it might be worth something, and we know that there was an organized effort to circumvent the 1st amendment.
And you’re big mad about it, aren’t you?
Re:
All your concerns have been addressed in the past, please stop huffing glue, your friends are worried.
There was no ideological based censorship if significant scale on twitter, people just looked at twitter employees being mostly left leaning and assumed that must mean they were censoring conservatives.
This was untrue, no matter how desperate you are to pretend otherwise.
Re: Re:
Many marginalized people get censored, intentionally or not.
Twitter is not the internet. There will always be free speech. This is a nonissue.
Re: Re: Re: Mouth breathers take note!
THIS!
As with AOL in the dim, distant past, no one website or web service is the entirety of the internet. Those of you who think otherwise, you are to be pitied, but not molly-coddled.
Think on that.
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Re: Re: Re:2
This is actual nonsense. Just because you were ONLY banned from twitter doesn’t make it NOT censorship (even when the government wasn’t involved). Free speech still matters within an individual, large SM platform.
No one said Twitter was all the internet.
I may have found it, the one guy dumber than Strawb.
Re: Re: Re:3
Steve Case, is that you?
Re: Re: Re:3
No, from a societal point of view, it actually doesn’t even if you think it should. You will never have the unfettered, uncontrolled, free speech anarchy you so desperately crave on any privately-owned platform, because every single one eventually learns you need to have effective moderation in place or the whole place will be ruined by assholes. And it will always be the site owners that get to decide what speech they will and won’t allow based on their own priorities, not yours. My house, my rules, there’s the door.
Matty responds: OMG you so fucken dumb!
Re: Re: Re:4 My house, my rules, there’s the door.
So last millennium.
At least since RFC 1174, every Joe & Jill’s node has throughput, or at least since Clinton signed the Violent Crime Control and Law Enforcement Act and Bush the USA PATRIOT Act with “sneak and peek” search warrants: search a home & seize material without the knowledge or consent of the owner or occupant…… everyone is required to leave their front and back door open. Here in South Central LA, we have no back door since it was torn off, and the front door has been unlocked for twenty years
See Terry Gilliam’s ‘Brazil’ https://youtu.be/nSQ5EsbT4cE
P.S. Want more? https://leb.fbi.gov/articles/featured-articles/sovereign-citizens-a-growing-domestic-threat-to-law-enforcement
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Re: Re: Re:4
So, first of all hard disagree and secondly, I think you missed the point where I was refuting the idea that it couldn’t be “censorship” if it was just on one platform. Which is not what the word means but some leftist retards seem to want to pretend that it does.
So,
yes, actually. Exactly that.
Re:
Making money was never the point.
Well, then he sure is doing great losing money, that’s for sure.
Re:
So thanks for confirming that all the claims made by Musk fans like you that Twitter was eventually going to break even were complete horseshit.
I mean, that much was already clear given how all you guys do is troll harder than China’s 50 cent army and make it a point of pride, but thanks for admitting it anyway.
Not as mad as you.
Enjoy your new existence surrounded by enbies and BBCs, you straight white waste of space.
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Re: Re:
How? Why? How does that fucking make sense to you? Making money can not be the point, but it can still make money. How dumb do you have to be to think those are contradictory?
Honestly, that legitimately seems unlikely. He spends hours finding the most pathetic excuses to trash talk Musk and then spends hours writing sometimes PAGES about it. (this blog was mercifully short)
Re: Re: Re:
You have a higher page count of repeated nonsense just in comments, so probably a valid observation
Re: Re: Re:
And you spend hours trolling the comments. Do you not realize what your obsessive behavior over a blog you clearly despise indicates about you?
“Who’s the more foolish? The fool or the fool who follows him?”
Re: Re: Re:2
Matt lacks the capacity for that level of self-awareness.
Re: Re: Re:3 Capacity, or lack thereof
What we in the industry call “Several transistors short of a complete circuit”.
Re: Re: Re:2
That he’s a serial harasser.
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Re: Re: Re:2
Y’know, that’s a good point, I’m making more of effort to just get in, state why Masnick is a fucking idiot, and get out, ignoring most of you dumb fuckers. That’s really what takes the time.
Re:
“Making money was never the point. The point was to stop the hideous ideological based censorship. That was before we knew about the hideous government directed censorship (some of it based on ideology).
…
Y’know how much Twitter was likely to be worth in 5 years as it was going? Zero, most likely.”
So you’re saying Musk blew fifty billion to ‘solve’ a ‘problem’ you think was going to solve itself in five years time?
Like this revisionist history where Musk is nobly riding to the rescue of various assholes like yourself, and damn the cost, this isn’t about business it’s about principle, is laughable. Musk had to be sued by Twitter to compel him to follow through on his offer, and he tried desperately to weasel out of it until it became very clear that he was going to get his ass handed to him in court.
You might think Mr. Musk blew 44billion to unban a fifth-rate ‘satire’ site from a single social media system. You’re certainly credulous and silly enough. But I think you’re just lying and frantically looking for any means to-hand to prop up your ‘Elon was right and you’re all too dumb to smell his greatness’ silliness.
The shift between ‘You’re all idiots who can’t run a business like Elon!’ to ‘You’re all idiots who don’t realize it wasn’t about the money’ works better when you don’t attempt both plays in the same post.
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I'm not angry I'm just disappointed
Mike,
I expected better of you than this lazy reporting. As other have mentioned what Elon paid doesn’t mean it is what he thought the present market value was at that time. Potential data points of real market value:
Twitter’s market cap on January 28th, 2022 (right before Elon reportedly started buying shares): $28.2B
April 1st, 2022 (right before Elon announced he acquired 9.2% of Twitter): $31.47B
September 30th, 2022 (right before Elon announced he would go through with the acquisition): $33.55B
Similarly it has been reported that, Elon tried to negotiate for $31B as the purchase price during the lawsuit.
If I’m steel manning the argument, the best valid market price we have is the one prior to him acquiring a large number of shares ($28.2B on January 28th, 2022). Using that date and the $20B “valuation” Twitter has lost 29% of it’s value.
In comparison over that same time period (January 28th, 2022 to today):
Facebook has lost 37%
Amzn has lost 34%
Goog has lost 25%
Netflix has lost 14%
Apple has lost 12%
So while I’m happy the 29% loss is his and not mine, Twitter appears to be performing in the middle of the pack when compared to FAANG making it very hard to claim he set fire to the value of the company.
Re:
I mean, market value is literally what someone is willing to pay for something, so you go by the last actual data point. And in this case, that’s $44 billion.
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Re: Re:
Yeah, you’re kinda lying on purpose here. “Value is what someone will pay” is a general truism but Market Value is estimation of what you can “expect” to sell something for. Houses, for example, are sold above and below market value all the time. So is gold. Twitter was publicly traded and none of the fundamentals changed between GregSJ’s point and Musk’s buyout but for Musk’s interest. Buyout’s are OFTEN said to be above “market value”, actually, this one unusally so but still.
What really bugs me about you (generally) is that you KNOW all this, you’re twisting things to mislead on purpose. It’s a weird kinda smarmy shittiness.
Just as you pretend there is no evidence that there wasn’t a vast 1A abrogation scheme going on. What motivates you to be so shitty and too-smart-by-half about either, I dunno, but it’s super fucking shitty.
Re: Re: Re:
The projection is strong here. This is literally the theme of every comment you make. Your lack of self awareness is astonishing.
Re: Re: Re:2
Because it’s always projection with these fuckers.
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Re: Re: Re:2
None of this is intelligent.
Re: Re: Re:3 Intelligent?
And just where do you suppose all these rebuttals are taking their cue from, eh? They’re all just stooping to your level, but sadly for them, they don’t have your experience. Time in grade, and all that.
Which is exactly why you think you’re winning.
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Re: Re: Re:4
Sure buddy.
I really do.
Re: Re: Re:5
You’re the meme of the guy in the corner at the party thinking to himself, “they don’t know I’m so much smarter than them. I should spend a lot of time telling them and insulting them. That will show them how much of a winner I am!”
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Re: Re: Re:6
Oh don’t be silly. I’m less mean in person (because I have to see those people again) but most people realize very quickly that I’m smarter than them.
Re: Re: Re:7
Them saying it doesn’t make it so. After all, people say the same thing to children.
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Re: Re: Re:8
ok buddy. If that makes you feel better.
For what it’s worth, That Sumgai seems slightly dumber than you.
Re: Re: Re:9
That would make him about 17 times smarter than you, then.
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Re: Re: Re:10
oh, my, I am defeated
Re: Re: Re:11 Not yet, anyway
No you’re not, not yet anyway.
In fact, you can’t be defeated, can you? Not at this juncture in your life.
You know, I used to be exactly like you – I thought I was smartest man in the room, and I just ignored everyone who called me an asshole. Then one day, probably about the time you were born, I woke up and realized that I wasn’t the smartest asshole in the room, I was actually the assholiest smart guy in the room.
And you know how the rest of the crowd finally convinced me of that? By never cursing me, never insulting me, never belittling me, never even attempting to make me feel like what I was…. an asshole. It was the most humiliating self-realization I ever concluded, that I was at fault, not the rest of the world.
So, a well-experienced word of advice for you, from a friend;
When you came in there several months ago, the first words out your mouth were to insult the ring leader of this place, and then you “stepped up your game” by calling all of us liars and worse. Win friends and influence people? Not like that you won’t. (All these rebuttals should be sufficient evidence of that.) Win at all costs, even when called upon to back up your assertions? Why should you bother, because you’re the smartest guy in the room, right?
Look, I’m not here to inveigle you into repeating your most-oft skipped class, Persuasion 101, but don’t you think that you might convert more of us to your point of view if you were to be a little more polite, a little bit less insultive, a tiny bit more humble. I think a smart person would probably ponder that idea, don’t you?
But don’t feel bad, it took me 50 years to open my eyes, and it’s been 26 more years practicing what I preach…. and I’m still not as ‘there’ as I should be. You have an opportunity that I no longer have, to work on becoming a ‘nice guy who happens to be smart’, and many years ahead of you to enjoy the fruits of having shed yourself of all this anguish over being an asshole.
What do you say to that, amigo?
Re: Re: Re:12
I’ve literally been here 20 years, or close. Before the “Streisand effect” thing, anyway.
Did you ever consider that I was actually pretty old, and had determined being “nice” was a waste of time?
Apparently not.
Re: Re: Re:13 Two days later.....
… we’re now on page four (4) – and you’re still beating this particular bush?
Sigh. At least no one can say that I didn’t try.
Re: Re: Re:14
You really should not have.
Re: Re: Re:15
You claimed to be at least 35, lol, but somehow still not old enough to be considered a boomer, but apparently that still doesn’t prevent you from flying into a rage when someone drops the “ok, boomer” remark at you.
It matters very little how old you are. You’re a waste of space who fights to die on the shittiest of hills for the worst possible dregs of conservative monkeys.
Re: Re: Re:7
I can entirely believe you exclusively keep company with idiots.
Re: Re: Re:7
Most people who are extremely intelligent don’t have to go around and tell people how smart they are, especially in the comment section of a blog with a bunch of internet randos.
The way that you always try to tell everybody how smart you are just shows a glaring insecurity of yours.
Re: Re: Re:8
A lot of people who run into people like Matt here and that has to deal with his type in real life on a regular basis will quickly realize it’s just easier to nod and play along because the alternative is dealing with an asshole out to prove them wrong in everything.
I’ve run across his type on occasion and for the really unrepentant smartasses I just give them enough rope to hang themselves professionally since its so easy to do due to their belief in their own intellectual superiority.
Re: Re: Re:9
Because of thst, he’s never realized that he’s the dumbest person in any room he’s in.
Re: Re: Re:10
He believes he’s a physicist, when in reality he hasn’t shown any ability to handle even grade-school arithmetic.
Re: Re: Re:9
Oh, sure, that totally happens.
And then your Canadian SO said “good job, honey!”
Re: Re: Re:10
More believable than your wife and kids. It’s pretty clear at this point all you have is a blow up doll with Elon’s face scribbled on in Magic Marker.
Re: Re: Re:7
Oof, the cringe is strong with this one.
Re: Re: Re:8
I was being sardonic.
But it’s also true, so you caught me.
Re: Re:
Ah, but the last data point was that Elon was not willing to pay $44 billion. There just was this morose signature on a contract that was too hard to argue away.
Re: Re: Re:
Then why did he sign the contract to buy it at $44bln?
Re: Re: Re:2
Or rather,
Why did Elon Musk agree to buy Twitter at that inflated price, then try to waffle out of it after getting cold feet instead of paying the breakup fee, then try to waive due dilligence, only to have the DELAWARE CHANCERY COURT tell him to honor the damn contract?
Re: Re: Re:2
Look up “morose” in a dictionary. Also the signature was not the last data point.
Market value is not what some idiot agree to pay at some point in the past. If $44bn had been the market value, Twitter could have just gotten another buyer instead of nailing Musk to his morose signature.
Re: Re: Re:3
I know what morose means mother fucker…
and Elmo GLEEFULLY signed that contract thinking he could run a social media company better than the management that was in place at the time he agreed to buy it.
It was AFTER he signed the deal that he realized what a stupid fucking mistake he made and tried to get out of the deal.
So why do you feel the need to whitewash what a stupid fucking idiot Elmo was in buying Twitter for $44bln?
What do you think he is he going to do for you because you are here in the Techdirt comments sections trying to be his white knight?
Re: Re: Re:3
It kinda is. “Market value” literally just means the amount for which something can be sold in a given market.
Musk was willing to pay $44bn, therefore Twitter’s market value at the time was $44bn.
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Re: Re: Re:4
Can be sold. Not what it was sold one time. Otherwise nothing could ever be sold below or above market value.
You are, essentially, buying into Masnick’s lie.
Re: Re: Re:5
I’m not even going to say anything about Econ 101, ’cause you’ve amply demonstrated that such is well above your pay grade.
Re: Re: Re:4 but Muskrat is unique
Now Twitter’s value is $44B only if there’s another Musk type moron out there that will pay that amount. Sadly for him, there isn’t. I wonder if there would be a bidder for $20B either.
Some enterprising soul could buy Twitter, reinstate the mods, boot the trolls, and try to woo back the advertisers but given the enormity of the task, they would probably demand a heavy discount on the purchase price.
Re: Re: Re:5 Value, redux
Well, there is that little thing called taxes. The reality is two-fold here:
a) the IRS is not going to be deterred by current worth, alleged or provable, they’re going to go on the value at the time of purchase. And that’s only because not even a year has passed since said purchase, so they have nothing else to go on;
b) State/county/city taxes. These vary all over the landscape, but rest assured, like the IRS, these government entities will also not be deterred by inferences of ‘current value’. The reasons for that should be obvious, but if not, just ask.
All of this is to say, there’s always more to valuation than meets the eye of the beholder. Lesson learned.
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Re: Re: Re:6
Jesus Christ, you’re actually dumber than strawb.
Taxes have nothing to do with how much a company is worth (beyond that they are often an operating expense) but the IRS doesn’t tax “worth” it taxes income, which in this case is a realized profit. If bought at $44B and sold $46B that you’d have $2B of taxable income (in the simple case).
Federal wealth taxes are actually banned by the constitution, btw. (they had to ammend it to allow income taxes)
But holy fuck that was stupid.
Re: Re:
In that case Twitter is not worth $44 billion.
Or even the $20ish billion that Musk claims it is worth.
Why?
There is a simple rule of thumb for loans with collateral. You can get between 80% and 50% of worth of the collateral in loans. $9.7 billion of the loans are supported by 100% of Twitter as collateral (There is a reason that the other $3.3 billion has almost subprime levels of rent). That made twitter at that time worth $20 billion according to the banks.
The banks themselves have, last year, reduced the value of the loans by 20%. That means that the banks think Twitter at that point was/is worth at most $16 billion. And likely less since they rather spread out a loss like that over multiple years as to not impact their annual earnings too much. But we don’t know that for sure so Twitter is worth $16 billion according to the banks.
The market hasn’t been willing to pay even that much for the secured loans and offered 60 percent of the original value. Do note that that doesn’t mean the market thinks that Twitter is only worth $12 billion since it is normal to by this type of debt at a discount to make up for the increased risk of not getting repaid and the extra time & work that needs to be done to get the collateral sold. It does make a nice bottom.
Tl;DR the last actual data points value Twitter between $12 billion and $16 billion. And that was three to four months ago.
Re: Re: Oh please Mike...how much of this is tongue in cheek?
Market value is what someone is willing to pay for it… No, market value is what people are willing to pay for it. One dumb overpayment does not a market make. Musk stupidly locked himself into a wild overvaluation then tried his best to wriggle out of the deal, falsely accusing the sellers of defrauding him and so forth, so he himself was fully aware he wasn’t paying market value. Alas for Mr. Musk, he was still in his mode of believing legal rules don’t ever apply to his eminence gris, or maybe in his case, more apt to say, eminence greasy.
Yes, Musk is deserving of scorn and criticism on any number of fronts, but no, he didn’t “set fire to half of Twitter’s value” and distorting the story in this way only detracts from other more sensible points you’ve made about Musky, such as how he’s made it less safe and used it as his private toy to promote his own screwy world view and punish people he doesn’t like.
Re: Re: Re: Whose market it is, anyways...
Stated even more succinctly, it’s always the buyer who sets the final price. Any verbiage beyond that is just details. 😉
“The company could be worth $10 billion or $1 billion or $50 billion.”
I’m going with no billion, personally.
He’s King Midas all right – in reverse
Re:
King Mierdas: everything he touches turns to shit.
^ I didn’t invent that.
Re: Re:
You may not have invented it, but you sure as Hell deserve the Funny Award of the week!
Re: Re:
Hey, he put up a few enterprises that grew larger than they started.
It’s just in recent years that it appears King Mierdas has touched himself a bit too thoroughly and now seems to be a lot more full of it than one would have imagined previously.
Say what you will, but his track record with Twitter is quite stellar. A shooting star. A trajectory pointing exclusively down.
Startups sometimes lowball valuations to reward employees
It’s a shady practice but sometimes tech startups lowball their valuation / stock price to be able to issue options at low valuations to their employees and management. Cheap options = free money. I’ve even seen options issued at one value while a much higher value was pitched to the VC at the same time.
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Re:
Masnick knows this, he’s just literally making up reasons to shit on Musk at this point.
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Why are you so concerned with how other people spend their own money? Sour grapes?
If he decided to buy Twitter then shut it down, he could: he owns it. It’s his choice.
Let me know when you have billions of dollars, and I will tell you I don’t care what you do with your money, too.
Re:
Apparently you’re concerned with other people concerned with how other people spend their own money.
When someone makes a decision that affects the livelihoods of thousands of other people, criticism tends to occur.
Re: Re: also it's funny
I’ve never used Twitter, started an account once, looked around, bailed, but this is hilarious to watch. Best comedy since the MoviePass meltdown. Stupid capitalism is endlessly entertaining.
Re:
“Why are you so concerned with how other people spend their own money?”
So what is your stance on avocado toast?
Re:
But you’re wasting your effort to tell him that you don’t care, which is the same amount of effort as telling him that you do care. Maybe check your own eye for a beam first?
Re:
“Why are you so concerned with how other people spend their own money? Sour grapes?”
Because the money has impact on thousand of jobs directly, both at Twitter and other companies related to Musk and/or the ecosystem that built up around Twitter, plus the various implications on bullying, abuse and human rights as well as how new itself is understood, disseminated and reported.
This article is just noting that even if Musk is willing to sacrifice all these things on the altar of profit, he’s also failing at that.
“If he decided to buy Twitter then shut it down, he could: he owns it. It’s his choice.”
It is. Then, the rest of us have the right to discuss how stupid that is.
“Let me know when you have billions of dollars”
Only money-obsessed morons like yourself, willing to endless spend your time defending a person whose only notable quality appears to be his bank account, would care. If I earned $1 billion tomorrow that wouldn’t change the validity of my opinion when commenting.
Re:
There are weird, pathetic attempts to defend Elon, and then there’s… this.
Tons of Techdirt stories are about how people/companies spend their money. Tons of media stories are about how people/companies spend their money. Human beings are concerned about or interested in how other people spend their money all the time.
And also, how Musk spent his money directly affected the lives of 7,500 employees and millions of users, so that’s gonna get discussed whether you like it or not.
So what?
If you want to look a smart cookie, you need to get some egg on your face.
Musk says so?
The value at the time he bought was estimated to be roughly 12 billion. He is fantasizing the 20 billion figure.
Re:
He bases values on his ‘feelings’ about his companies.
He and Donald have a lot in common.
Re: oh okay
So Twitter is worth $6B now.
“I see a clear, but difficult, path to a >$250B valuation”
Musk’s “predictions” are almost always lies. Years ago, he claimed that a Tesla could make its owner $30k per year as an autonomous taxi. That buying any other vehicle was foolish. That claim never panned out. There have been many similar bogus claims (like high speed hyperloops, living on Mars “in a few years”, etc.)
The $250B claim is just him blowing smoke up his employees’ (and investors’) asses.
Re:
He has a clear and difficult path, all right.
It’s called, “Asking Daddy Xi to buy Twitter”.
Re:
The only way they’ll come close to achieving that sort of value is if they force every user to cough up a couple hundred bucks or they’ll release their DMs.
Re: Re: good reminder
And that’s why nobody should be subscribing to any of Musk’s silly things. That means he has your credit card info. Does anyone really trust the guy not to raffle that off to the highest bidder?
Re: Re: Re:
FTFY.
After all, a revenue stream is a revenue stream, and Musk has never met a revenue stream that he couldn’t mine for all it’s worth.
Re: Re: Re: Unsecured financial data, what could go wrong?
Even if you could trust him with the information with all the staff he’s canned and driven off do you trust the systems that would end up holding and managing that data?
So Musk owns Twitter, but he has to borrow substantial sums of money to pay for it. Is there a point at which those lenders can wrest control from Musk so as to not see him completely incinerate their investment? I imagine that, while they probably believed in his Midas touch, they really wanted their investment to go up, not down or away.
Re:
It’s called receivership, but the lenders has to go through a court first.
you can apply this theory to twitter,
https://www.wired.com/story/tiktok-platforms-cory-doctorow/
quote;This is enshittification: Surpluses are first directed to users; then, once they’re locked in, surpluses go to suppliers; then once they’re locked in, the surplus is handed to shareholders and the platform becomes a useless pile of shit. From mobile app stores to Steam, from Facebook to Twitter, this is the enshittification lifecycle.
platforms become worse as they demand more money from users
eg buy this badge pay to get verified
major Advertisers are leaving twitter as it seems to be in a state of chaos after laying off much of its staff
the only hope i can see is if elon decides to sell it
we are at the end of a tech boom
theres no more free money from investors
even tech companys are expected to make a profit
Setting value for Options does not mean Twitter lost value
I think you are being a bit harsh with your judgement declaring that Musk has lost half of the value of twitter. Going from a public to private entity lowers the value of a stock….there is no more any daily trading value for it. Furthermore, you want staff to have the lowest value for options possible, so maybe give him a bit of credit for providing a more realistic value.
Re:
“Going from a public to private entity lowers the value of a stock”
Ok, it seems there is some confusion about what public/private business labels mean.
I thought twitter was delisted. If so, how do you put value on the stock that is no longer listed?
Re: Re: Values
I was going to reply to the OP, but your post more handily lends itself to the following:
A publicly traded stock is worth whatever the market will bear. A private stock, not subject to trades on the open market, can be valued at the desire of the issuer. From the previous year’s worth of “information”, I’ll trust that Musk ‘issued’ stock to his fellow investors, at what they considered to be a fair value, i.e. a valued return on their investment(s).
If Musk wishes to issue stocks or options to his employees, then he gets to value them at the outset. But his valuation presumes that the stocks have value where they can be traded on the open market. If not, then they are as worthless as the paper they are printed on. In this statement, I make the point that if a bank won’t lend money on the presumed value of a stock, given as collateral, then the stock is essentially worthless.
Now to the point: if employees receive stocks or options, then someone is either thinning the pool of available stocks (Musk is divvying out from his own horde), or the issuer has received permission from the SEC to enlarge the number of available stocks. Oh, wait…. the SEC only has a very limited control over private stocks. Some, but not much worth talking about for this discussion.
I’ll be brief – I believe that Musk will find himself in deep kimchee no matter how he handles anything like ’employee benefits/compensation’. Even if not from the SEC, then almost surely from the IRS. Employees are not going to be happy when they learn that they owe a tax on something their employer said was worth $XXX (and the IRS says ‘good enough for us’), but the piece of paper is non-negotiable beyond use as a beer coaster.
Quite the conundrum, eh?
Re:
Musk paid $44bn.
Now, by his own admission, it’s worth $20bn.
The math is fairly simple. Where’s the harshness?
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Re: Re:
Yes.
No, actually.
It’s not simple at all mostly because those aren’t the relevant numbers. Masnick is misleading on this on purpose.
Re: Re: Re:
Don’t you ever get tired of just lying all the time?
The article you’re posting this comment on literally has him quoted as saying that Twitter has a $20bn valuation.
For those of us who actually understand kindergarten mathematics, it is.
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Re: Re: Re:2
No, it doesn’t actually.
I am trying to explain it to you. I can’t understand it for you, too.
Yes….that’s why people with doctorates in physics and mathematics work on wall street as “Quants”. — I’m joking, that mostly involves arbitrage and hedging but the point is you only think this is “simple” because you don’t understand any of it and Masnick lied to you and told you it was 44-20= which, no, it isn’t that at all actually.
It’s been clear to me since Day One that Musk’s ultimate intent was to kill Twitter. Isn’t that the usual goal in any corporate takeover? You load it with debt, then swoop in and take over. Next, you strip it all down and sell anything you can, then cast aside the empty carcass.
Why he’s doing this is anyone’s guess. It doesn’t appear to be a wise financial move, but who cares about the motivations of a narcissistic jackass, particulary when said jackass is the wealthiest man on the planet? As with mass shooters, we should be concerned with the outcome, not the motive. The why is largely irrelevant…
Elon Musk is on a very short list of people we would all be far better off WITHOUT.
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Re:
There’s no extracted value here, nothing of note to sell. You’re just saying things, with no idea of what it actually means.
Re: Re:
Pot, meet kettle.
Re: Musk's Hero
Elmo is what one might call “T. Boone Pickens Lite”. All of the calories, none of the brains.
At least Pickens didn’t spout off any nonsense, he was brutally blunt about his plans for whatever outfit he took over.
The term for Pickens is ‘corporate raider’. The term for Musk is ‘corporate disaster’.
He came in, saddled the company with billions in debt it can never repay, emptied out the cash reserves making the first interest payment, fired the people with the expertise to keep things stable, pissed off users, drove off advertisers, alienated the verified users who were the by selling point for the platform for the benefit of Nazis, opened up the company to a slew of lawsuitd from employees, governments, landlords and business partners and used his reputation and that of twitter to wipe the toilet seat because he fired all the cleaners… And here he is, claiming twitter is worth what it might have been as a functional company, you know, what it was before he worked his magic. Nah, just nah.
He likely wants to try and use stock in the dying husk he created to pay the staff he couldn’t fire the bonuses he can’t get out of paying so has made up a BS value for something he can use as company scrip in the short term.
When you slash your company’s worth by $24 billion (based on the valuation you placed on said company when you bought it), normally you’d come to wonder what you’re doing wrong and try to unscrew everything you did to screw up the company. Elon’s mind isn’t wired that way.
Then again, the going conspiracy theory is that he’s been screwing things up on purpose, ‘cause he was backed into a corner once he realized his leveraging of Tesla stock to help pay for the purchase wound up dragging down that company’s stock price, likely why he tried to back out of buying Twitter in the first place and got sued by Twitter shareholders as a result.
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