A lot of people are wondering what’s going to happen next in the Elon/Twitter saga.
Here is a 🧵 on what the process looks like & why I’m bullish on Elon owning Twitter.
Twitter can’t just say “sold” or “not sold.” Public companies must go through a rigid process whenever (1)
they receive a tender offer.
Twitter must now form an independent committee with its own advisors to evaluate the offer & determine the “entire fairness” of the offer, which will prob require them to run a sale process. Essentially, they will have to shop around the offer. (2)
The deal is also contingent on Elon obtaining debt (Elon said he would take debt, which he should), which is a big hurdle.
No other offer is going to come even close to the price Elon is offering, making it highly unlikely a shareholder would sue if they took Elon’s offer. (3)
When Elon rejected the board seat, the price dropped, making the offer premium look even sweeter. And also highlighting that Elon controls a good bit of Twitter’s share price. Which is a huge turn off to potential buyers.
As for debt, it’s probably (4)
going to be a $20BN+ financing package, which will require a fairly large group of lenders.
The collateral for the lenders is Twitter post-acquisition so the underwriters need to get comfortable with what that exactly means. Loan values that high need to go to investment (5)
committees, go through internal controls & compliance, regulatory approvals, etc. Lot of red tape here.
For purposes of the “entire fairness” standard, the burden is on the acquirer (Elon) so the events leading up to the offer will be scrutinized, to include the arguable (6)
stock price manipulation from the back & forth over the board seat.
So how do I think it will play out?
I am bullish on Elon owning Twitter at the end of this journey. (7)
Elon might get frustrated with the process which the board & management could lean into to elongate to try & push him away— but, there’s no way they’ll come to the conclusion that the price is not fair. (8)
I could also see a truly independent committee come to a swift conclusion that it’s fair & get to a shareholder vote ASAP w/in statutory & regulatory guidelines.
But, absent Elon getting frustrated with the process and walking away, I think Twitter will be his. (9)
This is such a new frontier—it’s not even a hostile takeover, it’s a gift-wrapped takeover from a single individual shareholder. Not an institutional sponsor, but the world’s richest man.
Elon is playing games that no one else can play. (10)
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There are two primary functions of the executive: (1) campaigning & (2) governing. Trump is excellent at the former (one of the best), but very undisciplined with the latter.
Since 2020, this country has fallen into total disarray. In 2024, we will need a strong governor. (1/6)
Trump started his term w/ advisers like Steve Bannon & ended it w/ Fauci & Birx.
He let Paul Ryan run the entire legislative agenda from 2016 to 2018.
In 2018, Trump signed the First Step Act which was a jailbreak bill built on CRT after he was lobbied by Kim Kardashian. (2/6)
Trump also assigned key national security roles to establishment Neocon swamp rats like Tillerson, Bolton, McMaster, Mattis, & Coats.
If that’s not enough, Trump endorsed Paul Ryan & John McCain in 2016, Mitt Romney in 2018, McConnell & Graham in 2020, & Dr. Oz in 2022. (3/6)
Republicans have a very solid opportunity to establish a filibuster-proof Senate majority (60+ seats) by 2024. Given a favorable 2022 turnout, 2024 looks ripe for a big Republican gain. [1/4]
In 2022, the best case scenario is Republicans hold all incumbent seats, and then pick up, in order of likelihood: (1) NV, (2) GA, (3) AZ, and (4) NH. [2/4]
In 2024, the Senate election map looks even more favorable.
Very likely Red: WV, MT, OH
Lean Red: AZ, NV, WI
Toss-up: MI, PA
Lean Blue: VA
Now that Elon has the financing, he can execute what’s called a “tender offer.” The tender offer bypasses the board and goes direct to shareholders. (1)
The offer stays open statutorily for at least 20 business days.
The tender offer is quicker than the original offer Elon made to the board.
Elon appears to be pushing the tender route to avoid the board’s blocking maneuvers.
Now, Elon needs a coalition of shareholders to (2)
accept his offer. The board has two options to respond:
1. They might use the original offer & call a special meeting to vote on it which elongates the process & buys them time.
2. They might feel like they have shareholders on their side & let the tender offer go through. (3)
next 2 yrs that newly elected R governors like Youngkin (who won w/o Trump) are stealing from Heavy D’s playbook (which they should bc it’s a winning playbook).
Big Ron won FL in ‘18 by .4% against Andrew Gillum. He might win his re-election in ‘22 by 10 points. Floridians [2/9]
love him & Florida is the envy of the rest of America rn.
Heavy D has 2 yrs to show us why he should be the ‘24 nominee which is eternity in politics, but he is clearly proving himself thus far.
So, if 2 yrs is an eternity in politics, why would T want Big Ron to concede [3/9]
1. Disability: getting 100% is not hard. The rate for a 100% single guy is $3,332.06 / mo (UNTAXED). This is equivalent to $4,165.08 / mo if you were taxed. There is your first $50k / yr in passive income. If you are struggling w/ [1/5]
claims, hire a VA lawyer (will pay for itself). DM me if u need refs.
2. Voc Rehab & Employment:
covers 100% of school & certs (eg bar exam). Alternatively, can provide grants (free $) to start a business (up to $100k / yr for 3 yrs if you have *solid* plan). Provides BAH [2/5]
all yr (GI Bill doesn’t) +2 months post-grad for “job hunting”.
3. GI Bill: covers school and BAH. But there is bipartisan support for GI Bill to cover costs of starting a business. A pilot program was launched July 2021. So don’t use GI Bill until after VR&E is used up.