Elon Musk just pulled off a master class in trolling with a tweet that sent Silicon Valley’s notoriously woke tech workers diving for their nearest safe space. And while it may be fun and games for the world’s richest man, there are some real-world consequences.
The billionaire’s four-word post — “I made an offer” — ricocheted from Wall Street trading floors to Washington’s top financial cop. Twitter called an emergency board meeting to fend off Musk’s $43 billion hostile takeover bid, and the financial press made it their top story.
Only the world’s richest human, with the reach of 81 million Twitter followers, could be the provocateur of a scheme right out of HBO’s “Succession.” But the Tesla CEO’s maneuver has some real consequences that will send the stock price into a roller coaster ride and ultimately hurt mom-and-pop investors.
“My conclusion, Elon Musk is f—ing with the SEC,” billionaire entrepreneur Mark Cuban said in a tweet. “Prices go up. His shares get sold [at a] profit. SEC like WTF just happened.”
Musk has been battling the Securities and Exchange Commission over regulatory investigations into how one of his tweets may have manipulated the stock price of Tesla. And now his hostile takeover bid for Twitter will impact the company’s 764 million shares traded on the New York Stock Exchange.
The stock dropped 1.5% on Thursday to $45.08, well below its 52-week high of $73.34. Wall Street seemed to indicate it wasn’t taking Musk’s bid all too serious, especially since the buyout offer of $54.20 a share was a subtle reference to his love of marijuana. (The digits 420 refer to April 20, or 4/20, the unofficial holiday for weed culture — his 2018 bid to take Tesla private had a $420 share price).
It doesn’t even matter if Musk’s offer is an epic troll or a serious intent to put the company into new management. The wild card is that he has the financial means to use his own money and raise financing to acquire the company, and Twitter can stall but ultimately must put shareholder value first in the face of a competitive bid.
He’s the largest individual shareholder of the company. The rest is owned by giant mutual funds giants like The Vanguard Group — which recently bulked up its stake above 10% and now holds the most shares in the company — along with Morgan Stanley, BlackRock and State Street. So, any gyrations in the company’s stock performance hurts the retirement accounts of millions of American investors.
The deal terms also seemed to stick it in the eye of investors and the SEC. There were no indications in regulatory paperwork filed that this was his “best and final” (as he put it). The buyout terms included a clause that allows him to withdraw or modify the bid at any time. He also said publicly on Thursday, he could increase the offer or sell everything.
The hostile bid also didn’t follow the follow the mold of corporate raiders like Carl Icahn, who bought airline TWA in 1988 and then sold it in pieces for a massive profit. Icahn, who famously tangled with Hollywood’s Netflix and Lionsgate, only bought companies with the intent to sell them at a big profit for investors.
Musk’s motivation for buying Twitter seems to be focused on the product, not the business fundamentals. He wants an edit button to correct posts that might have a misspelling. The self-proclaimed “free speech absolutist” wants to end the practice of muting or banning users, which Twitter does in the cases of hate speech or, more famously, former President Donald Trump.
In a recent tweet, he said “Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy. What should be done?” He attached a poll that asked if a new platform was needed.
Musk has a huge army of fan boys, especially among the “tech bros” who proliferate in Silicon Valley startup culture. He’s become an icon in the tech world, known as a visionary after launching Tesla, SpaceX and The Boring Co.
There were also supporters inside Twitter who were openly and secretly rooting for Musk to have a bigger influence on the social media company, one employee said a few hours after Musk announced the takeover plan.
“I woke up this morning with the same feeling as when I woke up the day after Trump beat Hillary,” said the employee, a supporter of Hillary Clinton’s presidential campaign. “I thought he could shake things up … but never thought he’d try to be the owner… This may be the most epic troll ever.”