> "if my offer is rejected i will reconsider my ownership in twitter."
Thats an immense amount of selling pressure on the stock... This is a threat. He's negotiating with a gun to their head.
Thats an immense amount of selling pressure on the stock... This is a threat. He's negotiating with a gun to their head.
It's also worth noting that the stock price is almost unchanged today as of this writing, which tells you that the market thinks he's not serious, or his lowball offer is going to be laughed out by the board, which significantly reduces the amount of "insane pressure" he's exerting.
I'm not debating whether that will happen, just contending your first statement.
I'm contending the claim that the implicit (and completely pro forma!) threat in his SEC filing places "insane pressure" on the Twitter board. The the possibility of a 20+% stock price change will not play a large part in their calculations. It's just not a big deal in the context of such a volatile stock.
The dude makes stocks move when he tweets memes. I think it's fair to say he's got some... extra pull.
What we do know is that it's not a 1 to 1 mathematical if one buys 9% it moves 10$ if one then sells 9% if falls $10. This has historically proven over and over.
Hard to say what the stock would have done without the purchase, but Musk has both the threat of dumping his shares on the market AND the threat of him announcing that he's dropping his shares. A case could be made that he has at least $17 of influence on share price, but my guess is that the market frenzy will drag it lower if Musk backs out.
1. Purchase began March 14th 2022 https://www.sec.gov/Archives/edgar/data/1418091/000110465922...
Note: Please correct me if I misunderstand the meaning of the filing. I read it as Musk began buying up shares March 14th, and finished near the end of March, then reported Friday/Monday April 1/4. I don't think he bought and announced the same day. Musk owns ~73M shares, and trading volume was ~15M on the 13th, then jumps to ~35M/day over the next few days before settling down at ~15M/day again. https://finance.yahoo.com/chart/TWTR#eyJpbnRlcnZhbCI6ImRheSI...
It seems spectacularly unlikely to me that a demonstrably impatient person with a pre-existing thesis about Twitter would take the time to investigate and learn new things about its product/financials/culture/governance.
It also seems unlikely that a person with a known strong stomach for legal and ethical "flexibility" would be especially bothered by anything they did learn, assuming they took the trouble. But YMMV.
"They're taking Twitter to Isengard!"
Even if there are 0 actual facts open to the public that prove this, the optics suggest that this narrative can be made. He moved the stock 30%+ in a few days by publically buying in. If he sells it, why wouldn't it give up all of the gains he brought (and maybe more)?
I don't know what he thinks he stands to gain by buying Twitter. Can a rocket scientist/electric car guru really get into tweets + advertising?
Twitter is like... an aggregator of a bunch of people tweeting. The people tweeting aren't being paid by Twitter to tweet (like journalists are for Washington Post, even if it's like $75 for an opinion piece/basically blogspam)
I feel like that's a pretty big difference?
Twitter can control what is being read by deciding what is promoted by their algorithms and what gets buried down.
These are just few examples. We can't pretend that Twitter is a fully decentralised service and that there's no one pulling the strings.
That said, I don't think this is primarily about buying twitter being profitable, but that he is motivated by a mix of politics, fun, and funny. I also don't think he's likely to get that into the day to day of running twitter, just because he's already busy with Tesla and SpaceX.
I don't disagree. It's just that... what are his plans for Twitter? Add an edit button? Tweak the algorithm that delivers timelines? None of that is really complicated. Those could be 6 month roadmap projects.
> but that he is motivated by a mix of politics, fun, and funny
1/3rd of his net worth on a company seems odd.
Twitter likely decided to not allow him onboard just because of his constant shitposting about the company, his volatility, and really just wanting Twitter to be his sounding board for whatever offensive things he has to say, so they're trying to ensure he can't try and takeover as we speak.
Let's separate two concerns:
1) Belief system – whether you philosophically support Elon's take over or not
2) Objective facts, corporate finance and legal aspects of what's going on
All I can see in this thread is 1) masquerading as 2).
Indeed. One would have hoped that Hacker News would be immune from Reddit/Twitter-style "Anything I don't like is illegal/unconstitutional", but apparently not.
"Someone buying up shares of a company before he announces a hostile takeover is inside information and thus illegal!" Good grief.
"I am going to dump 1/10th of the company that I very publicly acquired if they don't do what I want them to do" feels like manipulation since he's controlling the value of such a large amount of it.
But is it illegal to be willing to lose money if a threat isn't met?
Furthermore, would it be illegal for him to dump his shares, allow the trajectory to tank the price further, then rebuy when it bottoms, rinse and repeat?
No, you are allowed to sell your shares if you don't want them anymore.
Unless you think he just woke up today and said: You know what, I'm going to buy Twitter! Which, I mean.. given Elon maybe that's what happened. But if it was premeditated then he has clearly been acting on insider information.
Elon is. He bought shares, then put in an offer which drives his existing shares up. Perhaps you can argue until he sells them he isn't acting.. perhaps.. but if he sells them today, are you still telling me he isn't acting on insider information?
A principal shareholder is a person that directly or indirectly owns or controls more than 10% of any class of voting shares or securities of a company. The principal shareholder has the authority to vote using those voting shares.
Elon has less than 10% share (9.2%), so he's not an insider. Probably he stayed under 10% because of this law.
No it's not.
Step 2: You buy shares in the company
Step 3: You publicly disclose you will buy the company, driving it's share price up
Step 4: You sell those existing shares now that the price has gone up.
That is trading on insider information.
If you have an intention to actually buy and make a good faith effort and fail, that's just business.
You and I have very different definitions of the word "amazing"
> "overwhelm or confound with sudden surprise or wonder," 1580s, back-formation from Middle English amased "stunned, dazed, bewildered," (late 14c.), earlier "stupefied, irrational, foolish" (c. 1200), from Old English amasod, from a- (1), probably used here as an intensive prefix, + *mæs (see maze). Related: Amazed; amazing.
"amazing" never meant "this is of surprisingly high quality and good"
There is a strange circular logic to saying words mean something new because they are commonly used in a new way and at the same time telling somebody how they're using a word is wrong because it doesn't match this new meaning.
1. Causing great surprise or wonder; astonishing. 1.1 [informal] Startlingly impressive
Did pointedly ignoring common usage add anything here?
Yes, there are plenty of words going though the natural process of dilution. Providing some backpressure is, I think, useful to the language to preserve the richness of meaning. I'm responding directly to a discussion about the meaning of a word not interjecting into another conversation with a "well, actually..."
When you're writing a dictionary, words mean what people use them to mean. I'm not writing a dictionary.
However it may still be use in some limited contexts, or historical contexts, its modern day usage is almost always with a positive connotation.
I think it is good to be reminded of the higher quality meaning of words that are falling into bland generic meanings. Words do change and there's nothing wrong with that, but some changes are better than others and the degeneration of specific strong meanings to generic common place ones isn't something that should be celebrated.
Look at the Great Vowel Shift, or how creoles, pidgins and patois develop and evolve. Language isn't static, and in the case of "amazing" its current vernacular usage has changed to almost always have a positive connotation.
For instance Twitter stock was $60 last october, if they didn't ask for at least that it would be shortchanging shareholders and also imply a declining company.
He is a sociopath. The fact that a sociopath wants to be a king of social media is disturbing.
Once Elon has full control of Twitter, they can always leave and go start their own platform.
I don't hate Twitter like I hate Facebook (mainly for ideological reasons and their propensity for exploitation) but god damn is their interface and entire product model annoying.
Since there would no longer be any public investors in Twitter after this, that does not actually matter as far as the present investors are concerned.
Someone much smarter than I could likely argue that the "threat" of Elon possibly pulling out his investment in a company is affecting the stock price, and now suddenly Elon is in control of the direction of the stock, even though the underlying fundamentals have not been changed.
https://www.sec.gov/files/Market%20Manipulations%20and%20Cas...
"Intentional interference with the free forces of supply and demand"
He put money down (a lot of money down!), but that doesn't give him the right to manipulate the stock price purely based on the fact he has a stake on it or not; in fact it gives him a duty not to do so, because he now has a motive/vested interest in profiting off of it. There's rules to follow and forms to file to protect against that, and he's already has one lawsuit against him in that vein: https://www.nytimes.com/2022/04/14/business/twitter-lawsuit-...
If he's prematurely saying what direction he's going to go one way or another, that's another thing. You don't see Vanguard tweeting "we're going to invest in this company if X happens and divest if not" to the general public, especially if they're trying to influence X to happen.
This essentially why he got in trouble with Tesla for tweeting he wanted to take it private at $420/share, immediately making the stock price jump up, even though he did not have "funding secured" and did not take it private. And he almost lost the ability to be a CEO or on a board of a public company for 10 years because of that!
Because Vanguard is a passive fund. Activist funds do this all the time.
This clause is explicitly not intended to do what you imply, it does not restrict this particular action by Musk at all.
Maybe, but he's also being sued over a violation of market manipulation rules with regard to non-disclosure of his recent Twitter purchase, and that's not the first problem he’s had with those rules.
“Elon Musk” and “securities rules” don't really go together.
My quick analysis was that in the absence of any other news, his buying really had no serious impact.
https://www.sec.gov/Archives/edgar/data/1418091/000110465922...
Is this a lot or a little impact for buying close to 10 percent of a large cap stock? It's hard to say. I'd say it's a bit lower than i would have expected. Nonetheless, it provides somewhat of a floor if musk decides to sell his stake.
Edit: https://www.sec.gov/Archives/edgar/data/0001418091/000110465...
Musk bought between Jan 31 and April 1. Market was up 2.8% and Twitter was up 11.5%. So the impact was less. 7.8% beta adjusted.... Really not much...
I can meet you in SF if you want signatures.
d. If the deal doesn’t work, given that I don’t have confidence in management nor do I believe I can drive the necessary change in the public market, I would need to reconsider my position as a shareholder.
i. This is not a threat, it's simply not a good investment without the changes that need to be made.
ii. And those changes won't happen without taking the company private.
https://www.sec.gov/Archives/edgar/data/0001418091/000110465...
Were I a Twitter stockholder I might perceive a different emphasis.
He might be heard to say those again, but dollars speak louder than words. Musk can say anything, anytime. What he does with his money demonstrates what he believes.
Possible.
At the end of the day, results matter and SpaceX has shown results.
He may have just run out of good places to put it.
It is possible he thinks he can use Twitter to drive politics, and maybe government spending, in directions he favors.
On the other hand, it's possible Musk is just getting revenge for Twitter censoring his friends at the Babylon Bee...
Or maybe he wants to turn Twitter into a bully pulpit, and drive government spending where he thinks it should go... That's the 4D chess argument.
What are you talking about? He literally offered up the Tesla patents to anyone who wants to use them: https://www.tesla.com/en_GB/blog/all-our-patent-are-belong-y...
And:
>On June 12, 2014, Tesla announced that it will not initiate patent lawsuits against anyone who, in good faith, wants to use its technology. Tesla was created to accelerate the advent of sustainable transport, and this policy is intended to encourage the advancement of a common, rapidly-evolving platform for electric vehicles, thereby benefiting Tesla, other companies making electric vehicles, and the world. These guidelines provide further detail as to how we are implementing this policy.
https://www.tesla.com/legal/additional-resources#patent-pled...
While selling all his shares would make the price dip short-term, no one who knows his tactics will take that as a serious commentary on the viability of Twitter itself.
It's a toy gun pointed at their head.
He could maybe maybe start a competitor, but I doubt it would work.
1) He doesn't have the energy for another serious project 2) It would end up being something else, which frankly might be welcome, but it won't replace twitter.
Journalists etc. around the world are not going to flock to a 'free speech' platform with little moderation.
They 10x will not do it if Trump is on it, and gaining traction, for example.
They won't validate a new project by their presence if he is involved.
People avoid Trump's 'truth' platform because they don't want it to have a critical mass of legitimacy.
If 50% of people, and 75% of public voices who despise Trump stay off the platform, it cannot develop a critical mass.