Musk & Twitter: A Dead Deal?
Musk is now officially trying to back out of this $44 billion offer to buy Twitter and take it public. Oh boy...
Elon Musk is probably one of the most polarizing people on the planet at this point. What’s truly wild in 2022 is he’s now touched so many different things that even his remaining defenders probably won’t see eye to eye on his positions. For instance, I’d wager his right leaning supporters believe he is a free speech absolutist. I’d wager his defenders on the left believe he’s trying to save the planet through the manufacturing and broader adoption of electric vehicles.
Then there are those who believe he is actually neither an environmentalist savior nor a speech freedom fighter and that he’s actually closer to an incredibly skilled conman. Regardless of where you fall on Elon, you’ve probably heard by now that he has cancelled his $44 billion bid to buy Twitter and take it private. This is an outcome that I don’t think is terribly shocking but it opens up many of the same questions people have had about Musk for years; what is this guy even doing?
Before I get to my thoughts on the latest developments in Musk and Twitter, I want to share a short story that I heard some time ago. Despite all of the Twitter memes, Dogecoin pumping, and general trolling of seemingly everything from Musk; there is one person who has helped me form my personal view on Musk and almost nobody has heard of him. His name is Randeep Hothi.
Hothi and Musk
Randeep Hothi is a vocal Tesla skeptic. One of the most underappreciated aspects of Musk’s original plan to buy Twitter may be that many of Musk’s biggest Tesla critics, the “$TSLAQ” community, started and organized on Twitter. Hothi is one of these critics and he used to post anonymously under the Twitter handle @skabooshka. That handle has now been inactive for over two years.
As the story goes, Hothi had always been a loud skeptic of Tesla’s ability to hit full self-driving milestones and posted about that skepticism regularly. In 2019, Hothi saw a Tesla vehicle on the road that was equipped with cameras and data recording devices, so he followed it and documented what he saw. Following that, Tesla filed a restraining order against Hothi and claimed that he had trespassed and endangered the life of a Tesla employee.
Musk’s story was that Hothi was trespassing, stalking, and that almost ran over a Tesla employee with his car. This led to further litigation, a defamation suit from Hothi that was crowdfunded by the TSLAQ community, and a request for access to the data and videos that were attached to the Tesla vehicle during the time of the alleged incident involving Hothi. During Hothi’s defamation suite, the request for video footage of the alleged incident was denied by Musk.
This led to speculation online at the time that Musk was almost certainly lying about the Hothi incident and that, maybe more importantly for TSLAQ, the data associated with the Tesla self-driving test would be very detrimental to Musk and Tesla if it were ever shared in a public setting. This is largely why I have never (and likely will never) truly trust what Elon Musk says. Like most people with a public persona, it might be beneficial to think about what Musk’s true motivations are financially to figure out what he’s actually doing.
Is Musk Simply Distracting Everyone?
When I wrote Bots, Emojis, Hidden Cameras & Hate back in May, I said this about Musk’s newfound questioning of Twitter’s bot figures:
there is just absolutely no way Musk couldn’t have known Twitter’s bot estimate was understated before agreeing to buy the company.
I shared a tweet from before his bot questioning where he specifically cited the bots as a platform problem. Since returning to Twitter, it took me all of 12 seconds to see just how bad the bot issue had gotten since I left in January of 2021. Did Musk ever actually intend to buy Twitter? If so, is the purpose really to preserve speech freedom? It’s hard to say. Here is a list of the legal problems that Musk is currently dealing with:
Dogecoin pumping class action suit
Kimbal Musk insider trading investigation
Musk’s improper Twitter stake filing
That’s just to name a few off the top of my head. There are potentially more I’m forgetting. Interestingly, each of these issues involve Twitter in some way. Musk used Twitter to pump Dogecoin. Kimbal sold Tesla shares valued at nine figures just before Elon tweeted a poll asking his followers if he should sell Tesla shares. Elon’s stock holding filing obviously involves shares of Twitter. All of this has happened while Tesla is facing more scrutiny over its claims of a full self driving future. From Input:
Tesla is trying really, really hard to make the public believe its vehicles will be capable of full autonomy in the near future. CEO Elon Musk has been making this promise for nearly a decade now, though, with no actual release in sight.
And this, ultimately, brings us right back to Randeep Hothi. The Indian-American graduate student who challenged Musk in a defamation suit. The part of that story that I intentionally left out until now is Musk’s defense in accusing Hothi of malicious intent was that he (Musk) has a right to freedom of speech. Hothi was a problem for Musk. As skabooshka, he was a regular poster on Twitter who used that platform to question Tesla’s ability to deliver on full self driving - a feature of Tesla’s vehicles that, to this point, has been nothing more than a carrot on string.
Chuckmate
Maybe Musk’s Twitter bid has always been an elaborate ruse to distract from issues at Tesla and other potential problems that Musk is likely dealing with. Maybe Musk really does think that he will get discovery and Twitter will be forced by a court to provide real bot metrics/methodology. This is what Musk has tweeted in response to Twitter’s board wanting to let the courts sort it all out:
The guy is an amazing troll. I’ve never seen anything like it. As I’ve said this entire process, the likelihood that this deal actually closes is probably not very strong. We’ve gone from Twitter fighting to not sell to now trying to force a sale that the buyer claims to no longer want. In the meantime, the stock has been moved all over the place from a valuation perspective. Investors in Twitter shares have been on a rollercoaster. People have left the company. It’s been a friggin’ circus top to bottom and the show will probably not be over for quite some time.
On top of all of this, Alex Berenson is back on the platform after settling with Twitter in an entirely different lawsuit. He too, wanted “discovery” and we have yet to find out what he actually knows or what he may soon know about Twitter’s potential correspondence with government officials during the jab rollout. Hilariously, Berenson and Musk actually had interaction on this a couple days before Musk pulled out of the deal… on Twitter, of course.
My gut feel on this is simple: I don’t think Elon Musk will ever actually own Twitter. If he does end up owning it, I think it will be at a much lower price. But if I were a betting man, I would actually put money down on a different wager. Twitter was founded 16 years ago. Generally, the Lindy Effect might suggest Twitter will ultimately survive this fiasco since it has made it this far already.
I’m not sure I agree. I think social media platforms come and go. I’ve been back on Twitter now for two months and I don’t see it being any better than it was two years ago. I’d actually argue it’s worse in some areas. New platforms (like TikTok) seem to be generating far more interest with young people. If this deal with Musk does fall through and Twitter can’t force a sale (even at a lower price), I think Twitter could potentially experience investor interest declines. Obviously, that’s purely speculation. This entire post has been for the most part.
Speculate is really all we can do because none of us are in Musk’s head. Does he actually want to build a free speech social media platform through Twitter ownership? Maybe. But his treatment of his critics would suggest otherwise. Is he attempting to finagle a lower purchase price by using Twitter’s bot problem against it? I don’t think that will be the smoking gun that he thinks it will be. Is he trying to distract us from something else entirely? Maybe. Tesla hasn’t delivered and there are some supporters who seem to be losing faith.
Or is this just an extremely wealthy, very bored man having fun by intentionally creating chaos? Maybe someday we’ll find out. One thing is probably for sure; none of this is over.
It’s like watching the Music Man, I know he’s a conman but I’m rooting for him right now.