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Sat Nov 19, 2022, 01:07 PM

So why did Twitter sell?

I missed all that.

15 replies, 867 views

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Arrow 15 replies Author Time Post
Reply So why did Twitter sell? (Original post)
grumpyduck Nov 19 OP
DavidDvorkin Nov 19 #1
edhopper Nov 19 #2
ProfessorGAC Nov 19 #5
Effete Snob Nov 19 #8
ProfessorGAC Nov 19 #9
RockRaven Nov 19 #3
grumpyduck Nov 19 #4
Effete Snob Nov 19 #7
Effete Snob Nov 19 #6
grumpyduck Nov 19 #13
C_U_L8R Nov 19 #10
Clash City Rocker Nov 19 #11
republianmushroom Nov 19 #12
Polybius Nov 19 #14
keithbvadu2 Nov 19 #15

Response to grumpyduck (Original post)

Sat Nov 19, 2022, 01:10 PM

1. They were facing serious financial problems

Grabbing Musk's dough and getting out must have looked like a godsend.

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Response to grumpyduck (Original post)

Sat Nov 19, 2022, 01:11 PM

2. Musk offered twice the value of the company

which was still not making a profit and maybe never would. Why wouldn't they take the deal?

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Response to edhopper (Reply #2)

Sat Nov 19, 2022, 01:18 PM

5. More Than 3X!

Not just twice. He paid $44 billion. They have $14 billion in assets. He also assumed $21 billion in debt.
Then borrowed $11 billion to fund it.
So, it's now $14 billion in assets, $32 billion in debt against $5 billion in revenues.
He obviously didn't figure out that when he took over Tesla the infrastucture was in place for financial success. That is not clear as it comes to Twitter, and there's no evidence at either Tesla or SpaceX that his management abilities were instrumental to their successes.
It's very possible that he bit off more than he can chew.

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Response to ProfessorGAC (Reply #5)

Sat Nov 19, 2022, 01:25 PM

8. Thank goodness he was long on crypto

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Response to Effete Snob (Reply #8)

Sat Nov 19, 2022, 01:26 PM

9. Well Played!

Thanks for the chuckle. Have had the flu for 4+ days.

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Response to grumpyduck (Original post)

Sat Nov 19, 2022, 01:12 PM

3. If someone offers to massively overpay, you sort of have to accept...

$54.20/share was so inflated that the various parties with fiduciary duties were obliged to go along with the sale.

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Response to grumpyduck (Reply #4)

Sat Nov 19, 2022, 01:24 PM

7. And, get this...


It was such a dumb bargain on his part that they sued him to go through with it. He knew he had no case and the consequences would be worse, so he changed course and followed through.

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Response to grumpyduck (Original post)

Sat Nov 19, 2022, 01:21 PM

6. Yo Grumpy


Your business loses money consistently.

Iíll give you billions for it.

Do we have a deal?

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Response to Effete Snob (Reply #6)

Sat Nov 19, 2022, 01:38 PM

13. I don't have a business, but

I do have a bridge in central Nevada that's not doing well at the toll booth...

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Response to grumpyduck (Original post)

Sat Nov 19, 2022, 01:29 PM

10. Time to cash out

And the greater fool was pounding on their door.

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Response to grumpyduck (Original post)

Sat Nov 19, 2022, 01:33 PM

11. I think this was their motivation

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Response to grumpyduck (Original post)

Sat Nov 19, 2022, 02:15 PM

14. They basically had no choice

Any CEO/Board of Directors has little choice when someone offers you 3x the amount of money that the company is worth. That's pretty much what Musk did. They would be bad business leaders. If they didn't sell.

Imagine buying a new bike for $1,000, and you still owed $200. If someone offers you $3,000 and pays the dept you owe, it would be foolish not to sell. Make that profit.

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Response to grumpyduck (Original post)

Sat Nov 19, 2022, 02:36 PM

15. Just think of all the happy stockholders who got out at the right time. Even if not their choice.

I hope they have already been paid.

I wonder if he has gotten all the money from lenders/investors.

Surely they have some clauses about prudent fiscal management.

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