First Twitter squared up to fight Musk’s bid and then appeared to cave. I would wage that Dorsey thought about it again and figured it would be a great exit strategy.
Insiders have around 12% of the shares and would have fantastic returns. Being a very technological group of insiders, they can move on to other projects. In the meantime, they have rid themselves of a significant burden. What do I mean about a burden?
Twitter is burdened by the free speech issue, just like Facebook. Zuckerberg is stuck between a rock and a hard place. Everyone wants free speech, but each person’s idea of free speech varies widely. Where does the line get drawn? Right now Twitter and Facebook are stuck in the middle. No matter how they arbitrate between their many fragmented members, they are the bad guy. You can see that in Facebook’s low current P/E.
Musk believes that free speech should be like the old town square style where views were openly aired in public. That sounds great, but in the old town square, people put themselves physically at risk in front of their neighbors and others when they aired their views. The internet is like the guy behind the building throwing rocks. Their risk is minimal since they are in the shadows. In other words, there is a huge difference.
Another consideration is the extremes that are able to be aired. Facebook struggles with these issues. For example, some people would agree and others would not that a terrorist should be able to post killings on the internet. Be careful for what you ask for!
Musk could get free advertising for Tesla is another argument, but at what cost? The benefit of free advertising could be quantified, but the cost of all the problems involved in “refereeing” the content will be difficult to quantify.
Musk is a smart guy. Betting against him has proven to be a bad deal, but this might be too much even for Musk.
Like the old song, Jack Dorsey should “take the money and run”. Thank you very much!
Be smart, be well-read, be aware and be successful.
