The saga of Elon Musk’s effort to buy Twitter took another twist today when Elon threw in the towel and agreed to proceed with the purchase under the original terms, which amount to around $44 billion. With a trial on Twitter’s effort to force Musk to proceed with the transaction scheduled for later this month, Musk’s retreat could be a tactical gambit. But my guess is that he has decided that he might as well proceed with the deal, for the reason that made him to want to buy the company in the first place: his commitment to free speech.
The Wall Street Journal is unimpressed with Musk’s apparent capitulation from a business perspective:
In a sobering turn of events, Elon Musk prepares to eat his own words. He had better hope they act as a corpse reviver.
Just days before his scheduled trial and after months of painful dispute, Mr. Musk agreed in a filing Monday to buy Twitter TWTR 22.24%▲—which he once suggested was a dying platform—for his original offer price of $54.20 a share. Twitter’s stock soared 22% by Tuesday’s close—after averaging a 24% discount to the offer price since the deal was first announced on April 25.
His poorly timed original offer came in the midst of a precipitous meltdown in the online advertising market: Stocks of the parent companies of Google, Facebook and Snapchat have averaged a 34% decline since the announcement of the Twitter deal. If Twitter’s stock simply tracked the Nasdaq Composite since before Mr. Musk expressed interest in the company, the shares would be trading around $30 now—45% below Mr. Musk’s price.
So the acquisition doesn’t make a lot of sense as a business deal. But did it ever? Twitter has never made much money, and Musk is no doubt right that the platform is infested with lots of bots. But Elon uses and likes Twitter, and I don’t think he ever would have been interested in buying it if he hadn’t wanted to make it a free speech platform. That goal is still attainable.
Some of Elon’s texts have been made public in connection with the litigation, and it turns out that one of his ex-wives, an actress named Talulah Riley, encouraged him to buy the platform:
The newly uncovered texts revealed that Riley encouraged Musk, 51, to buy Twitter and overhaul its moderation policies. The actress also expressed her views on political issues, including her desire to combat which she referred to as “woke-ism.”
“Can you buy Twitter and then delete it, please!? xx,” Riley … wrote in one text dated March 23.
Notably, that was some years after the couple divorced for the second time.
“Please do something to fight woke-ism.” she wrote in another text, “I will do anything to help! xx.”
Riley also decried Twitter’s decision to permanently ban the account belonging to right-wing satirical site The Babylon Bee, which was de-platformed after the outlet refused to delete a tweet referring to Rachel Levine, the transgender Biden administration official, as “man of the year.”
Riley referred to The Babylon Bee’s suspension as “crazy,” according to Bloomberg.
“Raiyah and I were talking about it today,” Riley said. “It was a f–king joke. Why has everyone become so puritanical?”
It would be rather sweet if Musk decided to spend $44 billion to please his double-ex wife. Be that as it may, I doubt that there is any mystery about his U-turn in the Twitter litigation. Rather than continuing to fight in court, he can proceed with his original plan and acquire the platform. If he is paying $10 billion too much, so be it. He can afford it, apparently.
So this takes us back where we started–with the possibility that there may actually be a social media platform where conservative speech is not suppressed. That would be a very good thing, and it likely would re-invigorate Twitter and thus make it more valuable. I, for one, would go back to using Twitter if it were politically neutral, as would many others. So maybe Elon won’t lose as much money as now seems likely. In any event, I hope the deal proceeds to completion. And I can’t wait to see the hysterical reaction of Twitter’s liberal employees if and when Musk takes the helm.