Elon Musk has money to buy Twitter — now what?

I was so excited to say "Where's the money, Lebowski?" that I was annoyed that Musk actually raised his money. According to the documents he filed with the SEC, he found the money.

Musk is going to pay $21 billion himself. Morgan Stanley and other banks are said to be the source of the rest of the money. In one letter, the banks are offering $13 million in loans to Twitter, and in the other letter, they are offering a $12.5 billion personal loan against Musk's stock. The dates on these letters are April 20th and April 20th.

The market still isn't taking Musk, but these letters give him more gravitas than before. As of the close of trading on April 21st, shares were $47.08, which is up from before the whole Musk saga started, but if investors thought this was real, we would see trading closer to the offer price.

I think it's interesting that no one else is involved in this financing deal, and I think some private equity firms would be interested in this. Apollo Global was looking at doing that. The private equity firm was considering its options.

What is it that gives?

There are a few possibilities. Musk said publicly that his bid was not a way to make money. I think that may have scared off some funding for Musk. There is a person wearing a hat.

The board seems to oppose Musk's bid. The poison pill was deployed by the board after all. The poison pill is a plan that gives everyone else more shares in Musk's company. It's harder to buy a company that has more shares. The board hasn't said anything about rejecting Musk's offer, but that poison pill seems to be a hint.

One way to make Musk leave is to get a better offer. It's possible that Apollo Global, and a few other people, are talking on the board. It is a big world. Who knows? We should hear about a counteroffer soon if that is true.

Firms like Apollo Global look at their options all the time. That is their job! They think about deals and make them. Maybe they looked and were like, "Bob Iger is right, the nastiness is extraordinary, and then went to look at some other deals."

I feel like we all have a vague idea of what will happen if Musk buys the company. Musk's companies are notoriously miserable places to work and a lot of employees quit because of that. Second, Musk does some of it, including reinstating Donald Trump, getting rid of all the bots, and adding a fart button, after he wrote about a bunch of shit. Maybe profit?

If our twitter bid succeeds, we will defeat the spam bots or die trying!

— Elon Musk (@elonmusk) April 21, 2022

Maybe not. The deal includes $1 billion in debt servicing costs every year. That is a lot of money for a company that lost money last year.

Corporate gymnastics are possible at work. The holding companies for Musk's bid are named after an old idea of his: X.com, the original name for what became PayPal. Musk could combine his companies into one big company that shoots lasers out of its eyes.

Imagine a bid from Apollo Global, or someone else. I think we see something completely different, and in line with the ideas of Elliott Management. You may recall that the firm that took a big stake in the company last year, and got some board seats, was probably part of the reason why the former CEO of the company stepped down. One of the stated goals of the company was to get rid of Jack Dorsey.

Let's review what Elliott Management wanted. There is no Jack Dorsey and more product innovation. I guess NFT profile pics count as product innovation since it eventually got the CEO it wanted. I bet the place they wanted innovation was around the ads, where they make their money.

It's a lousy business that has a massive cultural force. That's because it's smaller than other companies that compete for ad dollars. Last year, it had $5 billion in revenue, which was less than the $257 billion and the $117 billion that Facebook had.

There are ways to fix it. There is a newsletter platform where This Week in Elon initially lived. It also started a subscription service that gives users new features, like changing the color of the app icon. There is room to expand both of those offerings, which will give the company another revenue stream.

I don't know if this is more profitable than banning bots. Maybe the fart button is what was missing.

One outcome that shareholders are betting on is that no one buys Twitter. Others have done the same thing, but the private equity firms decide against buying it. The board rejects Musk's offer and he launches a tender offer. This all ends with a public company where it will have to deal with the same problems it had before, but maybe it needs some therapy. What can I say? We like to have fun on the site.