Last month Elon Musk said he was putting his $44bn bid for Twitter “on hold”. Now the Tesla billionaire is switching from neutral to reverse gear, or at least threatening to do so. A legal letter to Twitter’s board says he reserves his right “to terminate the merger agreement”.
This development will surprise precisely nobody because Musk has been bleating about Twitter’s bots – meaning spam and fake accounts – almost from the day he signed the formal takeover terms. The point is that the quarrel is manufactured. If Musk was truly worried about how the company measures the number of bots on its site, the opportunity to demand detailed information was before he signed on the line in April.
That’s perhaps not how negotiation goes. But then fortunately we don’t have The Guardian finance editor doing negotiations for us – however much our own diplomats seem to take this path.
Musk is just doing the old GBS thing. Now we’ve settled the concept, you’re for sale, all we’re doing is haggling.
“Measures” the number of bots? Why not just *count* them? Are we talking about Guardian journalists and literacy again?
Twitter is an ancient Silicon valley institution that has swallowed enormous amounts of money and never made a profit. Its worth is surely closer to zero than $44 billion, no matter how many bots there are.
I may be mis-remembering this, but I thought twitter did give Musk a percentage figure for the number of bots on the app. Elon thinks this number is too low and has asked for detailed figures of how they came to this number so he can calculate the worth of the product.
If they are exaggerating the number of real people reading the ads they re very naughty boys. And Twitter is worth a lot less.
Musk is being more canny than that. Twitter has stated to the SEC – in corporate releases – how large the bot problem is. So, that’s an official, legal, statement…..
My theory is he doesn’t want to buy Twatter at all. How much would it cost to set up a new platform? Nothing like the cost of buying the Twat. But he’s doing a fine job of destroying the Twat credibility both as a platform & as a business venture. Creating a gap in the market.
“ I may be mis-remembering this, but I thought twitter did give Musk a percentage figure for the number of bots on the app. Elon thinks this number is too low and has asked for detailed figures of how they came to this number so he can calculate the worth of the product.”
Once he’s agreed heads of terms based on their supplied information he’s entitled to see the evidence for those numbers as part of his due diligence process.
How could anybody think that a deal like the purchase or sale of Twitter would be done on the basis of a handshake and an A4 sheet of paper covering the claims of the vendor?
‘Just sign here, Mr Musk, and we’ll give you the keys to the building.‘
Fuck me, these people are stupid.
If anything was certain about this it was that the purchase process would take a long time and involve many lawyers, accountants and bankers burning the midnight oil and working out the true value.
If anything, I think the value is zero – it loses money, so if Musk were to buy it he would at least in the short term be servicing the debt on whatever portion of $44 billion he borrows to buy the company and paying the vast wage bill for a large bunch of wispy bearded cunts who hate him into the bargain.
But then, he operates in a rather more rarefied intellectual and financial sphere than I do – probably a similar distance as I am from the Guardian’s finance editor.
‘ My theory is he doesn’t want to buy Twatter at all. How much would it cost to set up a new platform? Nothing like the cost of buying the Twat.’
That’s true of any business. The value is in the customers list/market presence/brand identity not the goods and chattels. Hence the dispute, just how many real customers on the lists and hence its value?
@jgh
It’s a pretty gnarly modelling exercise to estimate what percentage of accounts are “bots”. Bear in mind the tweets to be analysed are in all kinds of languages and any pattern of behaviour you look for will match false positives and miss false negatives. I think it’s fair to call that a problem of measurement rather than counting.
@bis
Well in terms of the tech, yes, cheaper to replicate what twitter has done rather than buy it. The problem is overcoming the network effects. Even if the bid has shone an unflattering light on twitter, it hasn’t persuaded tens of millions of the most active users to jump ship. I don’t think MuskSocial would get the traction it would need to pay for itself. Ultimately the power of twitter seems to come down to a few million bigger name accounts that pump out the content that keep everyone else there – and they don’t want to move off because they all like being connected with peers (eg journalists, PR people and politicians keeping track of “what’s going on” in “the conversation” before the media have got a report out) and MuskSocial isn’t going to parachute them all across. I have no doubt millions of Musk fanboys, free speech proponents and so on would give his product a go, but I don’t see what would keep them around.
It’s not a platform like Facebook that most people use to stay in touch with friends and family and arrange get-togethers (I’ve heard a lot of people say the Events management is the one feature that’s still keeping them locked into FB) without really caring whether the big names are on it. Twitter is much more about disseminating information, opinions, jokes, memes or whatever. And you want to see those things from people who can do it in a wittier or more informed way than you and your mates, because you’ll get bored of each other’s brainsplurges pretty quickly.
Blokes of a certain age will remember how British electronics giant Ferranti was holed under the waterline by buying a company that turned out to be an illegal arms smuggling front for the CIA.
Twitter is also a Deep State asset, as proved by their special intervention in the 2020 US election/coup. It’s not profitable because it’s not really meant to make money. It’s also blocked in China, because the Chinese are only interested in supporting their own data-hoovering panopticon nightmare police state. And younger people are uninterested in the platform – Tik Tok and Instagram are where the cool kids hang out now. Twitter Millennials, Gen Xers and Boomers are getting old.
So where’s the growth going to come from? Apart from bots, obvs.
Musk should steer clear of Twitter, whatever his feelings about ‘free speech’ or whatever. It is more media than tech, he could get badly burned by this. He should stick to rockets and cars, which he understands and has a strong foothold in.
This could end in tears for him.
My guess is that he wanted to sell Tesla shares without crashing the market for them. In which case the Twitter offer was just a feint. He may be a fairground fantasist but he’s not a fool. Barnum and Bailey with brains.
I won’t be surprised if he ends up in the clink, mind, for annoying the wrong sort of people.
BIS,
“My theory is he doesn’t want to buy Twatter at all.”
Someone on Twitter suggested that what Elon was doing was looking for a way to sell a load of Tesla stock without it looking like he was selling up and trashing the price. So, “hey lads, I’m selling these shares so I can buy Twitter” then, you cancel the sale.
If Elon had just sold $8bn of shares without a good reason, the bubble would have started to burst…
He had to first give Twitter a high-enough, serious-enough offer that they would do the work of appeasing his demands. That $44 billion is his bargaining chip. They’re not going to provide him with all that confidential and controversial data when there’s only a chance that he may go through with the purchase. Elon’s shown he’s very intent on going through with the purchase, as long as they meet his reasonable conditions. He needs to be sure this is a valuable company he’s buying, after all.
@johnnybonk
Not sure I agree with that. Despite the ability to post images and videos on Twitter, it is still primarily a mass-texting platform. The bread-and-butter for Twitter is engagement and targeting for advertisers. It’s one thing for them to place ridiculous limits on speech and opinions, which already limits the amount of reach advertisers can get. But it’s far worse to have bots and artificially created follower mills to boost Joe Biden’s popularity. If I were an advertising firm or a political consultant paying for a Twitter account for my brand, I would be getting a lawsuit ready the minute I saw those follower numbers drastically decrease in May.
Elon has expressed interest in getting rid of the advertiser model altogether which, even as someone who works at and advertising agency, I agree with wholeheartedly. Unfortunately, advertisers and infrastructural tech companies (such as Amazon Web Services) have violated the trust of their customers in recent years. They’ve shown us that they will sabotage your business at the drop of a hat if it’s politically convenient for them, regardless of profitability.
Twitter’s success (or the success of Meta, YouTube, etc.) should depend solely on how well they facilitate conversation (which attracts users), how little they interrupt the user experience (which keeps users), how many impressions/views they can promise brands, and the value of the user data they provide these brands, without violating user privacy. Instead, these tech companies have failed in each of those categories, resorting to censorship and lying to customers.
So Elon’s musing about a $2-3 payment plan is fairly reasonable. Tech companies, along with reducing censorship, also need to find ways to bring in revenue without being dependent on the Establishment to survive. They need to build their own server farms, or at least partner with web hosting services who don’t play politics. They need to move away from advertising revenue to avoid the influence of mocha latté activism. A platform shouldn’t lose $3 billion in a week because 12 people decided to retweet a hashtag.
In any event, pretty sure if Elon can co-found PayPal, optimize electric cars and solar panels, and get astronauts to the ISS, he has a chance at reviving a little tech company. It’s said that simply getting the fundamentals right is 80% of the battle, so just correcting Jack Dorsey’s bullshit decisions would make their stock more valuable.
Fair point a serious offer gives you access to a lot of information, lots of NDA confidentiality agreements to sign, but you can’t remove knowledge once it’s shared. Bound to be plenty of opportunities to use that information in such a way that doesn’t violate the legal agreements including what appears to be the bizarre practice of negotiating the deal for Twitter publicly on Twitter.
Maybe shouldn’t rule out this is Musks idea of a bit of fun and something to do on the weekends
@Steve
+1 on Ferranti. There’s still bits of it left in Edinbugh, mostly aerospace and mostly foreign owned
An idea for Musk, buy Twitter and Gab, rename Gab to Twitter Gab. Migrate all users to Gab platform/data centre and close Twitter sacking all staff
” If Musk was truly worried about how the company measures the number of bots on its site, the opportunity to demand detailed information was before he signed on the line in April”
This guy doesn’t know what he’s talking about. Before he signed in the dotted line he was a nobody the board could ignore.
Once they both signed the LOI then Twitter had some obligation to answer his questions.
“Kevin B
June 7, 2022 at 10:07 am
I may be mis-remembering this, but I thought twitter did give Musk a percentage figure for the number of bots on the app. Elon thinks this number is too low and has asked for detailed figures of how they came to this number so he can calculate the worth of the product.”
He did, then they did, then he said ‘I don’t believe you so show me how you’re calculating that’s, and they said ‘ oooo, we can’t tell you how we got that number – it involves proprietary information.’
@Pcar
That’s not how rebranding works.
Gab Social has so much unwarranted bad press, the average Joe (especially the invalids who comprise most of Twitter’s users) would believe their platform is being transformed into a Nazi haven, and they would join one of the new leftist options like Mastodon. Sure, they follow an extreme ideology, but it’s a mainstream one. NPCs love being accepted by the powers that be.
@oaidfaiodjf
Fair point, the NPCs are irrational
Thanks for Mastodon info