Twitter Is within the Fallacious, and Musk Should Make That Case. Large Time.

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OK, one other open letter to Tesla (TSLA) honcho Elon Musk.

After my Actual Cash column of April 28, Elon determined to drag his provide for Twitter  (TWTR) on July 8. I’m not boastful sufficient to imagine it was my column that ignited his determination. However breaking apart is tough to do, and within the big-money world of big-time attorneys like Elon’s at Quinn Emanuel and Skadden Arps and Twitter’s at Wachtell Lipton, this was by no means going to be a simple exit. Because the listening to in Delaware Chancery Courtroom looms on Oct. 17, the sport modified Thursday with a wonderful scoop on Twitter from Reuters.

I’m now linking to the unique Reuters article right here. It’s horrifying.

Whereas what I view as Twitter’s selective censorship, overt left-wing bias and normal environment of stupidity offend my aesthetic sensibilities, allegations associated to tweets related to little one pornography are past expression. It’s sickening past phrases. Because the Reuters article notes, 40 firms have determined to drag advertisements on Twitter, and there might be extra to come back.

That stated, Elon, TWTR inventory nonetheless stays greater than 20% beneath your provide worth reflecting the market’s skepticism in your deal. On the day you supplied for TWTR, Meta (META) shares closed at $210.18. At present the shares are quoted at $138.61, a 34% decline in that interval. With out your provide, TWTR shares can be within the $20s, if not beneath. You’re paying at the least double what a standard, non risk-arbitrageur tech investor can be paying for TWTR now. The Valley is a small place. Ask round. And why have not another bids for Twitter materialized? I believe everybody is aware of you are proper concerning the smapbots.

What to do now? Go huge on the trial. Get “Mudge” Zatko, get mother and father of youngsters impacted by this, hell, even get Donald Trump to testify. I believe it’s a honest assertion to say he likes consideration, as do you. Get all of them within the court docket in Delaware. 

As I discussed in my final open letter, what hangs within the steadiness right here shouldn’t be Twitter, which has lower than zero redeeming societal worth in my guide, however, the truth is, Tesla. As of your final Type 4 sale submitting, your holding of Tesla was (pre-split) 155,039,044 million shares. With over a billion excellent of Tesla (3.1 billion post-split) your possession proportion is approaching 15%.

As Jack Dorsey bemoaned to you within the pre-offer textual content messages that had been reported this week, Tesla, like Twitter, has no dual-class share construction. So, in contrast to Zuckerberg, you aren’t unassailable. Should you proceed to push your holding of TSLA beneath 15% to fund your TWTR buy and the Nasdaq continues to plummet with rising rates of interest, it’s not inconceivable that you would be pushed out from the corporate you’re keen on. Even geniuses can not face up to too many 30% nine-month share worth plunges, as we now have seen from TSLA in 2022. They kicked out Steve Jobs from Apple (AAPL) (though he finally returned triumphantly.) It could occur to anybody.

So, that is the place my recommendation is. As I wrote in my final open letter, Twitter shouldn’t be the hill to die on. As a father of so many children, you will need to know that this can be a line that may by no means be crossed, but seems to have been an issue for Twitter for a protracted whereas. Administration has not solely failed to resolve that drawback, from the skin it would not even seem that they’ve tried as exhausting as they need to to take action — though an promoting boycott may change what appears to me like an absence of urgency.

All of us make errors. Clearly the overwhelming majority of us can by no means comprehend what it’s wish to make a $44 billion mistake, such as you did along with your TWTR provide, however there’s nonetheless time. It is time to drop the massive one. Now make the case in Chancery Courtroom in Wilmington.

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