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Comment by voisin | Hacker News Reader

Must be a bitter pill to swallow given how the markets have performed since his bid, which was already at a premium. Huge win for investors.

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At the price being paid it's one of the dumbest acquisitions, by price, by any entity (individual or corporation) in the past 30 years that I've been watching markets closely.

Twitter would be lucky to be trading at $20 / share minus the supporting bid. Musk overpaid by a minimum of $15 billion because he doesn't properly control his impulse problems. There were numerous ways he could have proceeded more slowly in pursuing a purchase, without so tightly locking himself into that grotesque price tag.

Let's put his stupidity into perspective: $15 billion was his total net worth five years ago. It was half his net worth a bit over two years ago.

Next up, Tesla's stock is going to sink considerably from where it's at. It'll just amplify the pain of this over-pay.

Tesla spends $0 dollars on marketing (not really, but still).

Twitter is Teslas marketing department, and probably the marketing department for other Musk firms.

Musk gets to make sure this very valuable entity remains valuable.

Lots of press outlast are being turned into sponsored non-profits.

Seems Musk wants a similar model for this non-profiting for-profit.

I agree this is a smart move (or rather, salvaging an impulsive decision) if Musk uses Twitter to increase the value of SpaceX and Tesla by an amount greater than the premium between Twitter’s enterprise value and his purchase price.

Hard to believe that people still see this as a smart move. Musk has been acting really erratically the last couple of years and was due to fall flat on his face. He's now done that in possibly the worst way. I'm really not sure what happened to the guy, if you read any of the material that was published in the course of the lawsuit, he just seems to act totally unprofessional. I find it really hard to understand how someone like that has achieved what he has. His decision making just seems impulsive most of the time.

> I find it really hard to understand how someone like that has achieved what he has.

I think it's just strong evidence that a lot of rich people got lucky once and managed to leverage that into getting richer because so much of life becomes Easy Mode at that point. Immediately not being subject to the "Boots" theory, but at scale, makes a huge difference.

I think there's a strong argument that Musk actually made a few smart decisions - right time, right place for electric cars. But reading some of the documents that have come out of this make it seems like he hit his limits a long time ago and is now floundering along uselessly.

To me it's just another strong argument that we shouldn't tolerate billionaires and they should be taxed out of existence until they're merely "extremely incredibly wealthy" and not nation-states unto themselves.

Honestly once you have so much money that you can no longer spend it all, any extra immediately goes into making you even richer. You eventually are able to sustain your luxurious life just from interest and investment returns, potentially requiring 0 work from you. There's no reason we should be accepting this when people are starving and homeless.

All of these rich folks in those papers seem that way. Super impulsive and a touch of FOMO.

> Twitter is Teslas marketing department, and probably the marketing department for other Musk firms.

40B+ to scaffold a marketing department?

Well, the market cap of Tesla is currently over $700B, so spending 6% of your market cap on marketing isn't that crazy.

But in this case I don't think Musk is playing checkers, when everybody else is playing chess.. I think he was just doin drugs, and tweetin twetes.

> Well, the market cap of Tesla is currently over $700B, so spending 6% of your market cap on marketing isn't that crazy.

Until you account for how grotesquely overvalued TSLA is, anyway

6% of market cap is huge. That's not 6% of revenue. Imagine Apple spending $140B on a marketing department.

Blue check all the hodlers

> Next up, Tesla's stock is going to sink considerably from where it's at.

Dragging the rest of the stock market with it.

It’s like that domino meme, where the tiny brick is “19 year old writes bot tracking Musks private plane” and the huge brick being “stock market crashes”

Right, Snap, somehow similar and also unprofitable social media company is down 67% since April 14 when Musk disclosed his offer. Twitter stock would likely experience similar kind of drop in this period.

I think that's not the right lens to view it through. To me, this is more like a turbo charged version of Bezos buying the Washington Post. Twitter might be totally insignificant in terms of eyeballs/dollars compared to TikTok, but it is extremely important in cultural terms. It's not just about money but about influence. Also, Twitter was horrendously mismanaged for many years, probably because none of the key execs or board had enough skin in the game. Elon can probably terminate or "manage out" 80%+ of the employees without harming the underlying business meaningfully, so you can't really just look at historical financials here.

Bezos paid $250M for the WaPo. Much more like a hobby purchase than Musk blowing such a huge fraction of his net worth on a company that's unlikely ever to be profitable.

> Elon can probably terminate or “manage out” 80%+ of the employees without harming the underlying business meaningfully

People keep saying insane stuff like this as if the site just runs itself. That is absolutely not the case.

Even if this were true, do you really think it takes 7,500 employees?! Because apparently thats how many employees they have over there.

On the plus side, it gave Elon Musk a chance to sell some Tesla earlier in the year.

Won't be a bitter pill if he can offload most of the expenditure by selling it to Saudi Arabia, which would probably love to own such an influential chunk of the "public square."

Potential buyer is offering what they think is current market price. Something like like $15-$20 per share than $52 per share. Musk would sell with huge loss.

There's effectively zero chance that CFIUS[1] would allow the KSA to purchase Twitter.

[1]: https://home.treasury.gov/policy-issues/international/the-co...

What if he sells an API to Saudi and Russia and beyond to essentially hide criticism?

Censorship as a service...

As I understand it, MBS and Co. prefer to drown out the criticism rather than censor it, so they already have that API, and a crusade against bots would put it at risk. Granted, it's possible that Elon isn't committed to shutting down bots so much as shutting down non-friendly bots.

You appear to understand wrong: “Ex-Twitter employee found guilty of spying on Saudi dissidents.” Happened in 2018, verdict this year. https://amp.theguardian.com/us-news/2022/aug/09/twitter-saud...

This doesn't contradict what I wrote.

They already are a major shareholder. And I presume they can (or could in the future) have stakes in other Musk companies. That might predispose a private Musk Twitter to offer access (for example, provide access to private customer information on dissidents, something Saudi Arabia is very interested in [1]) in ways that a public Twitter might not.

[1] https://amp.theguardian.com/us-news/2022/aug/09/twitter-saud...

Being a major shareholder is different than having a controlling stake, which is implied by your comment that Musk "can offload most of the expenditure by selling it to Saudi Arabia."

Prince Alwaleed bin Talal is a major shareholder. He will probably keep his shares.

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