Twitter HQ…Where Hell Froze Over!
by Jeff Brown, editor, The Bleeding Edge
What an incredible turn of events
As a response to Elon Musk’s offer to acquire Twitter on April 14, Twitter’s board immediately adopted a poison pill defense to ensure the acquisition by Musk wouldn’t happen. I can imagine the board members chortling over the poison pill vote saying, “It’ll be a cold day in hell before Musk takes us over…”
Of course, I’m just paraphrasing. I’m sure much fouler language was used. But the funniest part is that hell did just freeze over. The board was “forced” to accept the offer from Musk at a buyout price of $54.20 a share, or roughly $44 billion. I used the word “forced” for a reason. Twitter’s board made a critical mistake… They left themselves exposed and in a weak position.
They neglected their fiduciary responsibility as members of the board who are supposed to be acting in the best interest of shareholders. That’s where they failed. The way the poison pill was designed would have resulted in a material decrease in the value of Twitter and its share price. The major shareholders of course knew that. The board, in one fell swoop, created enemies of those who they were supposed to be working on behalf of.
Twitter founder Jack Dorsey struggled with his dysfunctional board for years.
He’s a brilliant entrepreneur, but even the best can be stifled by a bad board. And we just got a glimpse of how big the struggle was for him. So with so much hate and distaste for Musk and his beliefs, why did the board capitulate?
The answer is that they had no choice. The 12 days that followed after Musk’s original offer were most certainly a scramble. With an offer like that in the air, it meant that Twitter was “in play.” The board had to canvas the investment banks and private equity markets to see if there were any other possible bidders out there at a higher price… Preferably one that was seen as being less principled than Musk.
Clearly, there were none
Otherwise, the board wouldn’t have agreed to the “no shop” provision in the deal that prohibits Twitter from taking another offer. And the board’s foolish poison pill gave Musk even more influence over the large shareholders of Twitter. The shareholder base was clearly able to force the hand of the board to accept the offer from Musk.
The criticism has been harsh from some. It’s typically along the lines of, “Rich people shouldn’t be allowed to control media companies.” Yet it’s perfectly OK to those critics that Jeff Bezos owns The Washington Post, and Mark Zuckerberg controls Meta (Facebook).
The other tired complaint is that Twitter will now be awash with misinformation and disinformation under Musk’s control. The most ironic part about comments like that is that Google, Facebook, and Twitter all banned scientific research and/or world-renowned epidemiologists, virologists, and cardiologists from their platforms during the pandemic, considering them all to be in the class of “misinformation.” It pains me to even write those words, they are so absurd.
What is it about Musk’s ideas that are so hated by this toxic minority?
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“Twitter has become the de facto town square, and it’s really important that people have both the reality and perception that they are able to speak freely within the bounds of the law.”
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Musk plans to remove the political bias from Twitter’s algorithms and make the source code available in order to prevent "behind the scenes manipulation, either algorithmically or manually.”
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He pledged to defeat the “spambots” that have been used by bad actors and nation-states to negatively influence not only society but also elections.
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The plan is to authenticate all humans who use the platform.
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He believes that freedom of speech is a fundamental right and that it is a necessity for a free and democratic society.
It’s hard to disagree with the above… In fact, this is precisely what needs to happen in order to unleash the value of Twitter. To use Musk’s words, Twitter’s “behind the scenes manipulation” has fomented hate and division, and it has also resulted in a deeply undervalued company.
Musk can and will fix Twitter as a platform
He managed to pick up Twitter at an incredible price. Presuming that Musk takes Twitter public again at some time in the next two or three years, he is going to make a fortune – at least two or three times his investment.
Can Musk fix Twitter? Absolutely. Just have a look at what he’s built to date:
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Tesla (worth $1 trillion) – the world’s most successful clean energy company
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SpaceX (valued at $100 billion) – the world’s most successful aerospace company
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Boring Company (valued at $5.7 billion) – the world's most innovative boring company
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Neuralink (valued at $2.1 billion) – is on the verge of a breakthrough for brain-computer interface technology
Any one of these accomplishments would be an outlier, but four of them? Plus, we know there will be more to come, presuming Musk doesn’t work himself to death.
But the incredible thing about his deal with Twitter is that if he is successful in affecting the changes that he intends, it may very well be the greatest contribution he’ll make… Is the restoration of one of our most fundamental and cherished rights, freedom of speech.
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Tim Moseley