Elon Musk takes over Twitter

Unfortunately for him, there are a number of things conspiring against that happening. Everything is interelated. The valuation of the company never was tethered to anything fundamental except that the cost of money was kept artificially cheap for so long. When the company finally earned something (only for about 2 years), he was selling fairly expensive cars to paper stock market millionaires, who were also the beneficiaries of the same exact thing his stock price was benefitting from.

Now. ... the Wizard of Oz behind all of it is not only not buying bonds via a quantitative easing program, they are very gingerly trying to reduce the massive balance sheet they built up from doing it. And it should make sense to people that if quantitative easing filled the bathtub full of water, any quantitative tightening (what they are trying to do, even though they won't call it that, and even if they aren't draining the tub of very much yet) is going to have the exact opposite effect that it had when it blew asset prices (with Tesla being a very visible example) higher. At the same time, consumer price inflation is taking a huge chunk out of a lot of people's ability to make ends meet just as the source of their confidence (all of the equity gains in their stock portfolios) are disappating, and it's all because of pressure to deal with the inflation the distorted rates markets have caused, so they have now raised their overnate rate by 450 basis points, and even though that is still well below the runaway inflation they stoked, it takes some of the artificiality out that was driving up stock prices in the first place because there is a "safer" game in town to earn at least some return.

The net result is that demand for his cars is cratering worldwide, even as they are discounting the price of them (which eats any profit margins).

In a slightly less manipulated environment where actual company fundamentals are more of a determinant of stock prices, that just isn't a formula for his company being the most valuable company on earth.

 

When they launched those bond buying programs and then kept doubling down for a decade (because there is no way to extricate yourself and you need to keep escalating it to keep the debt base below from creating a credit crisis, which in turn puts you on the path to a larger credit crisis down the line. ... and we should have learned not allow this to be a matter of "policy" because of what it had already done in the 2000s). ... I was basically doing posts about the path it was taking us societally on threads on here. I thought I was mostly earnest about it.

But I dealt with at least couple of people who did seem to mind what I did. ... trying to turn it into an ideological discussion like it was the politics thread, or they wouldn't address what I was actually saying because honestly. ... yeah, they had no clue what I was talking about (which is fine; this interested me, not them). But it was just reflexive arguing, because that is what people do on anonymous message boards. I had a lot of trouble getting people (including you, TBH) to discuss what I was actually posting at times, and it was mostly "ha ha, he has a tinfoil hat on" kinds of responses, and a lot of lame attempts at smarm. I don't know how many times I saw, "you don't know shit" and dumb personal attacks from someone who clearly had no clue what I was actually posting about. So, yeah. I apologize if I am rubbing you wrong when I recount it, but. ... no, at the time it really wasn't "I don't mind what you did." I have no problem with anyone who was ignoring me (because they weren't interested) or when they responded, wouldn't try to turn it into a message-board pile on. Even better, though, if more people had tried to understand something concrete that has serious implications for them personally, maybe we wouldn't allow the screwing up of the global economy the way we have by thinking there are free lunch ways to prosperity (for which massive bills are going to have to come due).

 

Elon Musk has so much of the equity in Twitter that the others are minority investors with a small case m. They are all freaked out by what is happening, because no, the money they are into it for doesn't give them very much control to "pull strings." Combined, those other equity owners own less than 20 percent of the company. Elon Musk owns more than 80 percent. Any given one of them owns a single digit percentage of the equity.

The rest of that points to the debt financing, and loaning money to someone gives you no control over their equity in the company. That's a simple, here is a loan, you owe $1 billion interest on this date and this date and this date. When the loan comes due you have to pay us back all of what you borrowed.

 

The headline is kind of lame, but if you own some equity. ... I guess you are pulling the financial strings (i.e. you contributed to the financing of the purchase). It doesn't mean you necessarily have much say in what Musk is doing right now.