Will Elon really buy Twitter? 🦉

Wisdom Letter #137

Apr 17

So Elon has been raising hell on Twitter over the last 2 weeks.

But before I get to him, I have a quick update for you.

My writing course will be released tonight. If you remember I announced the pre-sale a few weeks ago.

It’s the complete guide to writing online in 2022.

There I teach:

How to find your unique voice.
How to build a writing habit
Storytelling principles.
Copywriting principles
How to write great long-form blog posts, Twitter threads, sales pages, etc.
How to get high-paying gigs.
And a lot more….

It’s incredible!

It’s the most actionable course you will ever find. There are 29 exercises across 18 sections.

64 people have already bought it, and it’s also started getting 5-star reviews.

I’ve surprised myself with the quality of the course😄

And people are loving it as well:

Himanshu Goel 🚀 @himanshugoel_me

@ayushtweetshere Ayush jst read.. I woke up to see a Gumroad notification of the book. Downloaded it & started reading.. with my half eyes closed still, I skimmed it actually & brother what have u done with this book? Didn’t expect it to be so… …amazing! Absolutely loved it. Deep reading now

After getting decent traction, a couple of days back I raised the prices of the course for the 8th time in 4 weeks 😅

But…

if you want it, you can still get it at half the price for the next 24 hours.

I’m also launching a video course and community for people who want to make money with their writing.

You can get it all at a no-brainer price here 👇

Make money with words ✍️💸

PS: There’s a 100% money-back guarantee if you don’t find value in the content.

You’ve got nothing to lose. Literally 🤷

Also, this Tweet from Naval is on point:

Naval @naval

Which games you play is more important than how well you play them.

I’ve found online writing to be the best game to play in 2022. It has the potential to build more leverage than any other game right now.

Trust me. This is the game to play in 2022.

Help me teach it to you.

Now, let’s talk about Elon.

So a couple of weeks back Elon Musk bought a 9% stake in Twitter. He became the largest shareholder of the company.
And started running polls like these:

Elon Musk @elonmusk

Do you want an edit button?

Lol, there are deeper issues at Twitter than the edit button.
Issues like suppression of speech and the control of the public narrative.
Elon strongly feels that Twitter is the town square of the world, and the current executive team isn’t doing enough to uphold the spirit of free speech.
For a while, he even considered building a Twitter competitor himself:

Elon Musk @elonmusk

Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy. What should be done?

Elon Musk @elonmusk

Free speech is essential to a functioning democracy. Do you believe Twitter rigorously adheres to this principle?

But that will be a herculean task.

There have been numerous attempts to compete with Twitter and all have failed.
For better or for worse, Twitter is the best we’ve got in the name of a global town square.

Side note: If you still think it’s just a silly app to pick fights with random people, you need to read an essay I wrote last year:

The Promise of Twitter

Now, back to Elon:

Twitter’s executive team was smart in that they immediately offered Elon a seat on the board:

Parag Agrawal @paraga

I’m excited to share that we’re appointing @elonmusk to our board! Through conversations with Elon in recent weeks, it became clear to us that he would bring great value to our Board.

If you sense a hostile investor, bring him on your side by offering him a board seat.
Smart move Parag 👏
But there’s a regulation that prevents board members from owning more than 15% of the company.

Of course, once Elon realized this, he backed away.

He wants affirmative changes to the product, not a seat on the board and a 15% ownership cap.

Parag Agrawal @paraga

Elon has decided not to join our board. I sent a brief note to the company, sharing with you all here.

Elon Musk decided not to join the Twitter Board. We were excited by the opportunity to collaborate and clear about the risks. We believed the best path forward was having Elon as a fiduciary of Twitter where he, like all board members, must act in the best interests of our company and our shareholders. The board offered him a seat (contingent on a background check and formal acceptance). The effective date was 4/9, but the same day Elon shared that he will no longer be joining. I believe this is for the best. We will always value input from shareholders and remain open to his. Our goals and priorities are unchanged. Let's tune out the noise and stay focused on what we’re building.

3 days after this Elon made an official offer to buy Twitter.

Read highlights of the texts he sent to the company executives:

Ayush 🙏 @ayushtweetshere

OMG 🤯 @elonmusk offers to buy 100% of Twitter for $41B 🔥

Some people will call this a hostile takeover.

The price Elon is offering is 54% higher than the market price. He wants to buy back all the shares from the market and take the company private.
That is the only way to make any changes to the product. Which might be true.

Because when even slight product changes start impacting investor sentiment, it becomes hard to innovate on a product.

But can he really take the company private?

Can he really buy Twitter?

More importantly, should he?

Not if the board members have their way.

Twitter’s board members can deploy a “poison pill” regulation. A poison pill is designed to prevent takeover attempts by devaluing the company’s own shares.
Basically, Twitter’s share price and valuation will fall, which will lead to the value of Elon’s stake falling as well.
This is a good thread about the Poison Pill and how it was used by Netflix back in 2012:

Trung Phan @TrungTPhan

Twitter just adopted a poison pill in response to Elon’s $43B takeover bid. Netflix did a similar maneuver in 2012 to thwart Carl Icahn. Here’s how it played out:

Elon has threatened to sell his 9% stake if the board doesn’t let him buy the company.

This sell-off can also lead to a massive fall in Twitter’s share price, and a major loss of value for the current shareholders.
It’s interesting to note that Twitter’s board members themselves don’t hold a lot of Twitter stock.
They don’t stand to lose financially if the stock price falls.

Chris Bakke @ChrisJBakke

Elon Musk is in for a bad time. I’m not sure he’s prepared to take on a couple PhDs, a few MBAs, and a Baroness who use Twitter once a year (to reset their passwords) and collectively own 77 shares of the company.

This is what Elon says:

Elon Musk @elonmusk

@ChrisJBakke Wow, with Jack departing, the Twitter board collectively owns almost no shares! Objectively, their economic interests are simply not aligned with shareholders.

This is the real conversation we should be having:

Whose interest do we care about here?

Is this merely a financial transaction?
1 person buying a company?
Then we should only care about shareholders, and find out ways to make sure that they get the most gains from their shares.
In that case, this is a fair deal and the board has to agree to it.

But is it really a financial issue?

Or is it about the interest of humanity?
Of protecting free speech and democracy?
As Elon himself said, Twitter is the world’s town square and it must uphold free speech.
The same argument can be used against him.
Why should the world trust Elon with its town square?
Just because he’s a cool billionaire?

Does it really make sense for a company like Twitter to be private?

In control of 1 person?

That’s what the board members have to decide.

Yes, control of the narrative and protecting free speech are major issues, but the best way to deal with them is to have more driven people on the board and in executive positions.
Not to entrust 1 person with all the responsibility.

A line from The Dark Knight comes to mind:

“The last man entrusted with the responsibility of protecting Rome during times of war, was named Ceaser, and he never gave up that power”

Is Elon the protector we are giving away too much power to by allowing a takeover like this?

These are hard questions and I don’t have the answer to them.

Sure Elon will open-source Twitter’s algorithm. And that’s great.

But the challenge here isn’t the algorithm, the challenge is the people on the platform.

It’s damn hard to run a social network.

Don’t listen to me, listen to this guy.

Yishan was the CEO of Reddit. Some great nuances and stories of trauma here 👇

Yishan @yishan

I've now been asked multiple times for my take on Elon's offer for Twitter. So fine, this is what I think about that. I will assume the takeover succeeds, and he takes Twitter private. (I have little knowledge/insight into how actual takeover battles work or play out) (long 🧵)

Elon needs to realize he is not dealing with machines and robots anymore.

If he runs Twitter, he will be dealing with real people.

Real people with complex emotions and insecurities. Which can lead to online hate.
Real people with vested interests. Which can lead to misinformation campaigns.
Real people with sensitive minds. Which can lead to suicide and self-harm.

Is he ready to take on the mantle of managing the global conversation?

He open-sourced Tesla’s patents, and that allowed others to innovate, awesome move 👏

But if he open-sources Twitter’s algorithm people will use that information to drive their own agenda.

It’s not the same 🤷

To somebody like Elon, Twitter’s problems can look like engineering problems, and he can build engineering solutions for them.

But in reality, these are societal problems, and I’m not sure he is equipped to solve societal problems.

Anyways.

That’s it for today.

This is an important story and we will closely keep an eye on it. Will share updates over the next few weeks.

Do watch Elon’s Ted interview from a few days back, the conversation about Twitter starts at around the 11-minute mark:

More from us:

3 Examples of Founders who scratched their own itch and succeeded🏆 | Listen Up
Dealing with anxiety and procrastination | The Indie Creator
5 Mental models for busy professionals:

Aditi • Mental Models🧠 @Hi_Aadi

5 mental models that can help busy professionals make better decisions. Decisions that improve their - Health 🏃‍♀️ -Wealth 💰 -Relationships 💛 Read on👇

This Week that year:

Mind the Brain | Wisdom Letter #85
Deal With The Climate | Wisdom Letter #33

Important information about your subscription

If you’re a new subscriber, make sure you move us to your primary inbox.

This year we’re doubling down on helping busy folks think better, and live better.

And in the process help you transform your life and become the best version of yourself.

We don’t want you missing any emails just because the email went in your promotions tab.

Hope you find value in your subscription.

Bye 😀

Ayush & Aditi

PS: Grab my writing course here.

PPS:

The Wisdom Project

Will Elon really buy Twitter? 🦉

Wisdom Letter #137

Important information about your subscription

Ready for more?