Weirton, West Virginia
May 17, 2022
Musk said that his offer to buy Twitter is not a way to make money. None of us believed that. Some say the fake account issue is a way for him to renegotiate the price. We don’t know the terms of the $1 billion breakup fee but we do know he waived detailed due diligence. We also don’t know what Twitter is repping to.
Personally, I suspect his potential lenders are asking questions about how they are going to get paid and wondering how many actual living people use Twitter.
Full disclosure — I don’t use Twitter. Never have and never will. I’m still transitioning from email to text messaging. 😳🤪
Billionaires become billionaires by making smart investments and creating more value for the businesses they operate than other people are able to create. Musk had a game plan when he made the offer for Twitter and as you suggest he certainly expected to make money. It is possible he strongly suspected the assets were significantly impaired and anticipated he would be able to negotiate the price down during or after due diligence.
The primary asset of Twitter is its subscriber base. Twitter generates revenue by selling advertising, allowing others to send their own messages to its subscriber base, and by selling information about its subscribers to other companies. Without subscribers, Twitter has no value.
Every potential business acquisition goes through…