Ahh. how is it possible to collapse when your net worth is 350 something billion? He could lose 99.9999% of his wealth and still have more money than most. Plus he has multiple companies in play. So his risk isn’t tied 100% to Twitter.
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Margin loans are a fast way for billionaires to go bankrupt. Ask the Hunt brothers (Silver Thursday Definition).
I know someone who was once worth over $2B who now has a negative net worth and spends all his time fending off creditors.
But there are many other ways things can end apart from a purely financial collapse. Aubrey McClendon is just one example.
Interesting. But doubtful. The Hunt brothers tried to corner the silver market ( very different story).
Ah ok according to wikipedia Audbrey McClendon (whom I’ve never heard of)
On March 1, 2016, McClendon was indicted by a federal grand jury on charges of conspiring “to rig bids for the purchase of oil and natural gas leases in northwest Oklahoma”.[1][2] He died the following day, March 2, 2016, in a single-vehicle collision.[3][4]
Seems as farfetched to compare Elon Musk to any of these people as it would be to say that he’ll end up in history as famous as Edison. All different life stories. High achievers and people who are very wealthy all. Otherwise, I don’t see any connections.
One thing I will say, if Elon Musk tried to take a margin loan on 350 billion, it would make the news!! I’d guess chances of a margin call that big happening are next to zero. But anything is possible.
That is pretty much as likely as him losing his entire portfolio.
is that ALL potentially-market moving tweets, or just those related to Tesla, which was the specific instance of the SEC investigation and penalty?
Not to mention if Elon is right and Twitter does have xx number of bots/spams, i.e., significantly more than what Twitter has publicly announced in its SEC filings, perhaps Elon could claim to be a whistleblower both against Twitter and the SEC, the former for falsifying public statements, and the latter for not doing its job to at least spot check material numbers in SEC filings!
Where’s the popcorn?
But then maybe he is discovering that making policy on content moderation (or lack thereof) is more difficult than it seems at first glance. Bot / spam / scam control is hard to do when (for example) the algorithm is open for bot writers to find loopholes in. Also, if the platform is dedicated to freedom of speech, should bots (or implicitly their writers) have it? Of course, there is also the minefield of what (if anything) should the platform do when something happens like a terrorist live-streams the act of terrorism on social media, since any action or inaction could generate a strong negative reaction which could drive away users and advertisers.
It could be both. He could be rethinking the whole purchase and figures the ‘easier’ way to get out and avoid a $1b walk-away fee – since he waived due diligence – is to claim that Twitter’s SEC filings are false and those filings were material to his purchase offer. If he can ‘prove’ it, then he potentialy also avoids any shareholder suits for manipulating Twitter’s stock price and any SEC investigations for doing same.
Meanwhile, Twitter collapses.
Why does this follow? You could equally well say “Facebook collapses” because its share price is down by about 50% since last fall. Yes (in Mark Zuckerberg’s words) Twitter is the “clown car that fell into a gold mine” but it’s still in a gold mine, however incompetent the management has been.
The share price would reflect future earnings, or lack thereof.
If the company has only a portion of the daily users it claims, it can lose whatever respect it has. And once that’s gone, social media fans would be onto the next great ‘town square’ thingy. (FB has losing business for awhile as folks are moving on.)
Personally not convinced its a gold mine. (Obviously, Elon thinks/thought differently.) Daily users – however defined – is a small fraction of FB, yet Twitter has not been growing. Eventually, journalists one of their largest market segments, will tire of tweeting to each other.
His purchase of Twitter is tied to his ownership of Tesla stock, so one can argue that tweets about the deal are fair game.
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perhaps that makes sense, but as long as he is correct in his claim about misleading/false public statements by Twitter, it’s a two-fer as Twitter stock goes down and any impact upon Tesla stock declines as well. If he is not correct, the SEC and current Twitter shareholders will have a field day just on Twitter manipulation alone.
People don’t realize there are over a billion Twitter accounts, but the reported monetizable daily average users is only about 20% of that number.
Studying followers or accounts that have tweeted recently doesn’t correspond to the mDAUs and there’s no evidence that what Twitter says about the mDAUs (which are not individually identifiable to the outside world) is untrue.
Musk is just playing games. The question is whether he wants to reduce the price or walk away completely.
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Since the info is confidential to Twitter, of course there is no public evidence. But that doesn’t make Elon’s claim untrue. Is it 5% fake mDAU’s, or 20% or 50% or some other number
Of course he wants to reduce the price, either way. But he also could use bad reported mDAU numbers to walk away without incurring much of a financial hit to himself of the Tesla stock that he has pledged.
We just need to grab the popcorn and watch this publicly unfold.
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All of this is based on Elon Musk. There is absolutely no evidence otherwise, is there, that the mDAUs are overstated? If so, could we please have some sources?
Hopefully, Snoop Dogg will come to the rescue on this deal “that is on temporary hold.” 
(nb: I don’t like citing to the NY Post, but it’s the only version of this story that was suitable for CC!):Snoop Dogg says he might have to buy Twitter while Elon Musk's bid is on hold
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None of the M&A lawyers or bankers who’ve examined the terms of this deal would agree with you. He waived due diligence and there’s no material adverse change (this disclosure has been there for years).
Maybe Twitter’s board will compromise on price to avoid a court case lasting months or years, but they won’t let him walk away.
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Twitter will definitely compromise on the share price, but how much will they compromise is the question.
The Twitter board obviously has a responsibility to its shareholders to maximize its stock value, so they could easily be sued by their shareholders, if they let Musk walk w/o a compromise.
Twitter seems screwed either way, selling to Musk for a cheaper price or breaking up with Musk.
Alternatively, they could try this:
https://www.bloomberg.com/opinion/articles/2022-05-16/the-trump-spac-is-in-business
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Social media are great places to build a following, or whip up a frenzy. However, a lot of the current societal ills can be traced to, or at least partially blamed on social media. They’ve already become political targets around the world and likely to become much bigger targets in the future. Musk, as a self-professed free speech absolutist, is going to exhaust his energy and time (not to mention his money) if he acquires Twitter. He doesn’t appear to be someone who would champion a cause to the detriment of everything else, so the deal is probably dead.
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It sucks for Elon that he waived his right to due diligence, but he’s still holding all the cards. If he pays the billion and walks, Twitter’s stock price goes down the toilet and they get thrown to the wolves. Elon can keep those lawsuits at bay by restoring Twitter’s credibility. I think there’s room to renegotiate since their stock price tanked 20% in the last week or so.
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Are you suggesting that he did this to be altruistic? So was that the grand design behind this deal?
Besides Musk and his uncorroborated statements, where is the evidence that the amount of mDAUs were overstated?
Also, you do realize Musk himself owns a significant amount of Twitter, and he too will take a beating if the Twitter share price goes down? Elon needs to be worried about Tesla stock, which has lost $475/share in the last 12 months.
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I wouldn’t say altruistic, but Elon isn’t stupid. And Twitter came back and said, “We can’t prove 5%…it’s too hard.” Due diligence waiver or not, that’s a material misrepresentation if they’re admitting that they can’t prove the terms they negotiated and filed with the SEC. That’s grounds for a major lawsuit. On the other hand, Twitter can simply avoid all of that drama and just settle for a lower price.