Tesla’s (TSLA) CEO Elon Musk knew he had to change things at Twitter (TWTR) to free speech. His hostile
but generous takeover of Twitter on a $54.40 bid will do that. Twitter investors get to cash out of a
company that does not make money and is plagued with fake users.
Elon Musk gets more control of a social network he may use to further communicate to his fans.
The issue arises when considering the financial support from bankers. He is pledging his TSLA stock as
collateral. If TSLA stock falls by too much, it would pressure the electric vehicle stock further. In addition,
Elon is already running several companies. This includes SpaceX and The Boring Company.
Twitter is a big mess. Its Board of Directors initially demonstrated to shareholders that it would not
maximize the stock’s value. Fortunately, it did not use a poison pill when it decided the stock price
offering is fair.
When Musk shakes up the Board, and the management, and re-evaluates the executive pay rates, it
could weaken Twitter’s business model. Already, the social networking activity risks falling. Facebook,
Instagram, and Snap are all vying for the user activity. Tesla’s CEO may need to pick which company to
focus on. This adds more risk for Tesla shareholders.
