Elon Musk takes over Twitter

That is what I have been posting.

They have a bit of a prisoner's dilemma, because if he walks away, the next two years are going to be hell for that board and whoever is in the C suite while they litigate.

But even with how much the price of Twitter stock has come back since he created the uncertainty, it's still trading at between 150 and 200 times earnings. I know it's meaningless to a lot of people when I talk about valuations (which got way out of whack due to Fed policy since the financial crisis), but as I type this, by comparison Facebook is trading at about 16 times earnings (it has come back a lot with the bubble popping, and the stock is down close to 50 percent from its peak). If Twitter was being valued at a similar multiple -- and it's not growing the way that Facebook still even is, which is why I think that would still be a rich valuation -- its stock price would be more than 90 percent lower than what it is today. That is the magnitude of how much an overpay Musk's offer was. Twitter's owners hit the jackpot.

I'd guess they are sitting there deciding how much they would be willing to take below what he owes them to just get it done. I wonder if privately they have even had that conversation with him. But if he has sobered up to the fact that he overpaid by 50 to 75 percent (at the least) and thinks they are going to come down there, they have no incentive except to tell him pay up or see them in court.

 

Billions of dollars worth of subsidies and interest-free loans to SolarCity, SpaceX and Tesla over the years, most of it made possible by legislation that was pushed by Democrats. Milllions of dollars of lobbying from SpaceX and Tesla a year. Hundreds of thousands dollars worth of campaign contributions a year, overwhelmingly given to Democrats.

He is no longer a democrat, because they aren't open for business to benefit him anymore. So he is willing to toss them overboard, just like that.

BTW, I am not using the word subsidy loosely the way others do. I'm not talking about a tax code provision that reduced what they had to hand over (if they had earned anything, which his companies mostly haven't done over time). I mean money that his companies didn't earn that was given to them.

 

That too. He was fine when he didn't earn any income. All of his wealth is tied up in Tesla stock, which until recently he had never sold. With interest rates negative in real terms, he has borrowed heavily against the value of his stock, and that is not a taxable event.

Cap gains are one thing, he'll actually have to pay some tax this year. But some of the democrats have been talking about a wealth tax (unconstitutional, but different conversation) that would potentially hit him on the value of his unrealized gains.