The Musk Trap

Update: Nope, looks like Musk’s bid for ownership of Twitter is still ongoing. Maybe he’s sincere. I have no idea what he’s thinking…but then again, he’s made hundreds of billions of dollars from being audacious and doing things that I would have written off as ridiculous. There’s a reason he’s where he is and I’m where I am.

I’m not saying I know enough about this subject for my opinion to have value, nor am I saying that this is definitely what’s going on, but as soon as I heard that Musk had made the offer to buy twitter, this was my immediate thought:

This is a ruse. There’s no way he thinks they’ll actually sell to them. So why did he make the offer?

Let’s see – he buys 9 percent of the company’s shares for about 3 Billion dollars.

The price of the stock immediately jumps 27%. Then the announcement that he’s been offered a board seat, followed quickly by his turning down the offer, and then the subsequent buyout offer.

Again, I don’t buy that he actually believed that the Twitter shareholders…many of whom are liberal “usual suspects”…would consent to a buyout?

I don’t think he’s that naïve, but what he is, is a shrewd businessman. This morning, Twitter stocks jumped up almost $5 a share, then started tapering back down and is actually now a little negative from yesterday.

What I have to wonder is if Musk’s 73 million shares were some of those that were sold at over $50 a share this morning, netting him a tidy profit of about $350 million.

Granted, that would be a drop in the bucket to him, but you don’t get rich by turning down free money.

So he realizes he’s stuck with a cubic butt-ton of shares of a company he realizes he’s not going to be able to strongarm into change like he’d hoped, so he makes an announcement that he knows is going to drive the value of his shares up and then dumps them as soon as the price gets high enough to make him a tidy profit.

Seems like a good strategy to me.

I guess we’ll know in a few days if the news breaks that he mysteriously no longer owns 9.2% of Twitter and has moved on to other things.

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