Musk and Twitter

[NeilT]

I thought I'd follow my own suggestion and create a topic for this where we can discuss what we think about it.

So Musk sold more shares than he technically needed to, in order to gather a block of money.  Although he does retain (as far as I understand it), the same % shareholding in Tesla, which he has gained from his compensation award package.

Then he decided to follow his comments by buying into Twitter for, if I remember correctly, just under 10%.

After taking that level of investment he then collected together a bunch of investors and created an offer package on which he would also commit another trance of his stock.

First Twitter tried to block any further acquisition of stock and a hostile takeover with a poison pill clause.  Then they decided to entertain his bid and tied him into a legal commitment to buy, or pay a $1bn forfeit.

Musk then followed up aggressively, as is his way, clearly stating his goals for the company going forward and also his view of free speech.  The most interesting part of this for me was when he came out and stated that he would want to turn Twitter into the WeChat of the West.

Then Musk started focusing on the details.  OK everyone knows Twitter has a bot problem.  But if you are going to bet the business on a payments model you'd better know how many millions of people might actually be using that model.

This is where the wheels started to come off.  First and foremost Twitter have been providing statements to the SEC and their advertisers on a % of bots with no backup data and no details on how they determined that value.  As time went on Musk became more and more insistent that Twitter quantify their bot numbers with data and, I suspect, the formulae on which those data were created.

Twitters main response seemed to be "it's complicated" although I might be maligning Twitter for that, but that is how it appears.  Finally they gave Musk the data stream on which they were basing their bot numbers.

Musk didn't appear overly impressed.  Now we're talking about a guy who created zip2, was deeply involved in the creation of PayPal from a development perspective and does coding for both SpaceX and Tesla.  Someone who not only knows about the data stream and how to manipulate it to create the desired result, but someone who can actually write successful code to manipulate it.

The final result was that Musk is now withdrawing from the deal and is claiming a breach on the part of Twitter in not being able to provide sufficient data about their operations for him to determine whether the business is worth what he bid.


That's the history as we see it.

For me there are several take away's from this.

- Musk clearly wanted to pick up Twitter and expand both business and revenues for an existing platform
- However Musk, also, clearly needed this business to be what it is supposed to be.
- Whilst Musk had entertained building a new platform to replace Twitter, he didn't really want to spend the time starting, building and growing a new platform.

That's fairly obvious to me.

The next bit is very much speculation.

Whilst Musk was willing to buy Twitter to get a rapid start, there are real benefits to making the bid and not buying the product.

Let's be realistic here.  Titter has had less than $5bn in seed capital.  Yes it has had revenues to build itself up, but putting in even $8bn into a new product would, potentially, net far more money back than buying Twitter.

So, speed and ease aside, why buy Twitter in the first place, after all Musk could suck close to half the daily users of Twitter onto his own platform simply from followers.

Unless.

50% or more of those followers are actually bots and scammers who would not get onto his new platform.  Something it is important for Musk to know.

Then there is the profile and marketing he got from the attempt to buy twitter.  He's laid out his stall about a WeChat clone which doesn't have bots and has minimal scammers.  It's backed by solid cash and enough to get any new company and app going with a bang.  Do we know how many CEO's of companies, who provide solutions like WeChat functions, contacted him about bolting on to Twitter?  Do we know if they are likely to go with a new platform if Musk launches one?


Musk clearly believes Twitter has lied to him and to the world about the state of bots and scammers.  He may win the fight in the courts and he may not.  However I expect one thing is sure, even if he pays the $1bn, he will have gained at least that much in knowledge and risk avoidance and future contacts with companies who would want to do business with him.

I expect Twitter is taking such a strong litigation approach because they recognise the danger of so many billions of $ targeted at taking their business away.

Just my take, feel free to disagree with me.

[oren]

Your take totally misses the point of financing the deal. $44B in cash is a very large sum. Imho the bot story is just an excuse to back down. Musk found out he had to leverage himself pretty sharply to finance the deal, which was way too expensive for most external investor tastes, especially given the recent souring of speculative market sentiment. And then came the day when Tesla shares tumbled 12% in direct reaction to the deal, and I think that's what broke the camel's back. Imho the deal was highly idiotic from the beginning, and even Musk in his ego stupor realized this eventually and decided to cut his losses and limit exposure to the maximum of $1B, probably much less.

[Sigmetnow]

From:  https://twitter.com/renatakonkoly/status/1546555939997863936

[NeilT]

You may be right Oren, but we really won't know.  Certainly the economic climate made his offer much less sensible as the economy started to head south, inflation went up and people started looking for ways to shed costs.  Which would hit the monetisation of Twitter pretty hard.

Then again, in times of inflation, you want to invest in something which will grow ahead of inflation.  Which depreciates your initial investment pretty sharply and leaves you in a much better situation then if you just left your money where it was.

I do think that the crash of Tesla shares has had something to do with it.  Even if it put a much stronger focus on the value of what he was buying which lead to greater scrutiny which could not be answered.

There is also, always, the possibility that Musk is using this to set the shorts up for another barbeque.  Tesla shares have been driven massively lower.  The next earnings call is going to be WAY below Q1, shares are going to fall again.

Until Q3 results.

Shorts are going to start taking positions again.  They're going to get burned.  All over again.  This falls into one of my Brothers sayings.  "we enjoyed making that mistake SO much we decided to do it all over again".

Musk is a chess player in a predominantly checkers landscape.

[NeilT]

Coming back to this after the latest Tesla shareholders meeting. Musk sated that buying Twitter would save about 3-4 years on his plan.

What is his plan?  Well his plan is to create the equivalent of WeChat.  Well actually after his last statement it is even more.

X.com was one of the first online banks.  Designed to make money out of interest differentials on loans and on fee differentials on money transfer transactions.  It was not designed to be a traditional bank which charged for services, it was supposed to be free and that the bank made money at the back end.

After Musk's recent revelations he wants to go further than WeChat.  He wants a platform which is Chat, Bank, Payments and a platform for businesses to sell their wares on.

Think Twitter, Banking, Paypal and Amazon Market.  All in one app all on your phone.  Also it would allow you to pay for travel parking etc, just like WeChat.

The scope of it is astronomical.  Should he achieve this, it will make Amazon look like a rounding error.

If there is one think Musk does not do, it is think small.

Musk was ousted from CEO of X.com, then reinstated after the merger which led to PayPal then ousted again.

This come Musk will not come in with Millions, he will come in with Billions.  It will be far harder to oust him.

Personally I think he needs to start from scratch as a private company without trying to buy Twitter and make it private.  For 200m users, that seems to be the least effective way of doing it.  If he has to pay $1bn to break the deal, I think he will have gained more than $1bn worth of value in doing what he has done with Twitter.

He needs a good name.  Perhaps he should raid some more SF films for good corporation names...

[Sigmetnow]

—- REAKING: Elon Musk has filed a total of six Form 4s with the SEC tonight showing that he sold 7,924,107 $TSLA shares worth about $6.9 Billion.

Weighted average price was $869.09.
The sales took place on August 5th, 8th and 9th.

8/9/22, 9:32 PM. ➡️ https://twitter.com/sawyermerritt/status/1557178073426034694
Detailed info at the link.
 

< Are you done selling?
 
Elon Musk
Yes.
In the (hopefully unlikely) event that Twitter forces this deal to close *and* some equity partners don’t come through, it is important to avoid an emergency sale of Tesla stock.
8/9/22, 10:53 PM. https://twitter.com/elonmusk/status/1557198421206769664
 
< so if the twitter deal doesnt close, will you buy Tesla stock again?
Musk: yes
https://twitter.com/elonmusk/status/1557199046741094400

[Sigmetnow]

—- Elon Musk’s counterclaim suit against Twitter.
Twitter thread:

Clearly, from Twitter SEC filings, mDAU is the key metric. It is the key metric for its business rev. And its market value;
mDAU is an ad hoc metric, created to protect Twitter's interests. No competitor uses something similar.
 —
2/ When @elonmusk requested more information about spam and fake accounts; Twitter provided a vague response.
Then provided outdated data;
Then offered a fake data set (not real "firehose");
Then provided a cleaned data set where they already suspended the malicious accounts …
[Thread continues at the link: 8/5/22, 1:52 PM. https://twitter.com/andst7/status/1555612797844717569 ]

Elon Musk
Good summary of the problem.
If Twitter simply provides their method of sampling 100 accounts and how they’re confirmed to be real, the deal should proceed on original terms.
However, if it turns out that their SEC filings are materially false, then it should not.

< I wonder what's SEC doing here?! Are they even investigating these dubious claims that are made by Twitter? Ridiculous.
Elon Musk
Good question, why aren’t they?

> They don't have time to follow the law, they're too busy with you and Tesla…
Elon Musk
So it seems

 

▪️I've read Elon's 165-page counter-suit and Twitter's 127-page reply to it.
▪️If Twitter could easily provide the mDAU data without forcing a MAE (Material Adverse Effect), why didn't they provide it on May 6 when Elon's team first requested it? Why 3+ months of stonewalling? 🤔
 
< Agreed. Why are so many people stating he has no leg to stand on with his suit? Looks clear to me. He based the offer on the SEC reports. When the SEC disclosure information wasn't making sense he asked for more information and they wouldn't provide it. Looks like a clear out.

▪️It's worse than that: 3 days after signing the deal with Elon, Twitter materially restated (lowered) their mDAU figures in their SEC filings (!), due to "overcounting" (!!).
▪️Twitter management knew this, but kept it secret from Elon's team during the negotiations. (!!!)
pic.twitter.com/xVvwvjPasC [Textpic from the lawsuit]
 
Elon Musk
Yeah, not cool

8/6/22, 4:58 PM https://twitter.com/elonmusk/status/1556021804283592705

Basically, @Twitter is deliberately overstating its self-professed "key" performance metric (mDAU) for revenue growth by at least 40%
If this misrepresentation is not deemed to reasonably result in a Material Adverse Effect, then nothing can.

8/6/22, 3:33 PM. https://twitter.com/ajtourville/status/1556000449362264065

 
—-

Andrea Stroppa
We should not forget that the topic of fake and spam accounts on Twitter is a 10-years-old issue. Nobody cared despite the work of independent and academic researchers. For years reports showed higher estimates compared to Twitter's own
 —
The deal evaluation is based on Twitter SEC filings. If Twitter is in good faith, it should just provide evidence of its official claims. Otherwise, it's possible that for years Twitter underestimated (on purpose?) its own fake and spam accounts

8/6/22, 4:32 AM. https://twitter.com/andst7/status/1555834138959253504

  —-

Elon Musk
I hereby challenge @paraga to a public debate about the Twitter bot percentage.
Let him prove to the public that Twitter has <5% fake or spam daily users!

8/6/22, 12:15 PM. https://twitter.com/elonmusk/status/1555950698252181507

[NeilT]

Yes in the end this will come down to the court's interpretation of misleading statements which materially affect the value of the company.

Twitter does, however, have a real issue here.  If they have knowingly misled the SEC for years, then the board is going to be in real trouble.

Also the very fact that this counter suit has been made will materially effect the value of Twitter on the market and investors.  Because if they cannot prove what they say, then revenue will fall dramatically.  Impacting the value of the company.

As the largest single investor in Twitter, his own counter suit may damage his investment.  Meaning that he would also have a right to sue both Twitter and the Twitter board.

It would appear to be an open and shut case.  Twitter has been falsifying (or at very best not working to hard to prove), their mDAU numbers and has been reporting this to the government, their advertising customers and the shareholders.

If that doesn't materially impact the value of the company against the original offer I don't know what will count in a court of law.

[vox_mundi]

Elon Musk Pitches Lofty Goals In a Magazine Run by China’s Internet Censorship Agency
https://www.theverge.com/2022/8/13/23304250/elon-musk-pitch-magazine-china-cyberspace-cac-censorship-agency-tesla-spacex-neuralink

Elon Musk pitched sustainable energy, brain implants, and space exploration in an article published in a Chinese magazine run by the country’s internet watchdog and censorship agency, according to a translation from Yang Liu, a reporter for the Chinese state press agency, Xinhua. (via WSJ reporter Karen Hao).

Formed in 2013, the Cyberspace Administration of China (CAC) is in charge of creating and enforcing policies surrounding online content, user data, and digital security. The CAC later created a magazine that, according to China Media Project senior researcher, Stella Chen, typically includes regulatory announcements and research on internet policy. The magazine was initially called New Media before it was rebranded as China Cyberspace earlier this year.

The July issue of China Cyberspace features articles from Musk and Ant Group CEO Eric Jing Xiandong, the company that runs the Chinese payment service Alipay. Liu provides an English translation of Musk’s article in a post on his Substack newsletter, Beijing Channel. Musk says he was invited by the magazine to share his “thoughts on the vision of technology and humanity,” and then proceeds to describe and promote the technology used by the companies he owns — Tesla, SpaceX, and Neuralink — that he believes can “help achieve a better future for humanity:”

... Musk’s appearance in a publication run by the CAC conflicts with his outspoken advocacy for free speech, the very concept that inspired his decision to purchase Twitter (which he’s now trying to back out on over an argument about bots). Over the years, the CAC has implemented a number of policies designed to censor and restrict speech online. The CAC’s Cybersecurity Law, for example, requires social platforms to take down content that contains “prohibited information,” or else face punishment from the CAC.

Last year, the CAC pushed for the removal of the Chinese ride-hailing app Didi from app stores, and demanded that Apple remove a popular Quran app from its Chinese App Store. The CAC also launched a hotline for users to report “illegal” comments about the Chinese Communist Party, and recently proposed laws that would require social platforms to review every comment posted by users.

[NeilT]

So a Chinese magazine asks for Musk to do an interview.  We know that Tesla does not advertise but does get significant traction from media exposure of Musk.

China is Tesla's largest single market.

He's supposed to say NO.

I think not.  I've stopped reading the Register and the Verge on Musk.  Also the Guardian mainly.  Their entire coverage is tainted by their ideology and their dislike of Musk.

Not worth the cognitive dissonance.

Musk is not feuding with Twitter over "bots".  Musk is in litigation with Twitter over whether Twitter lied to the SEC, their shareholders, their advertising clients and, in the end, Musk; over their revenue model and the reality of the future revenue streams on which their valuation is based.

This is hardly "an argument over Bots".  It is, potentially, exposing shady business practise and corporate dishonesty.

[Sigmetnow]

A judge has ordered Twitter to hand over documents to Elon Musk from a former executive who was potentially responsible for counting spam/bot accounts.

Twitter Must Hand Over to Elon Musk Documents of Former Executive, Judge Rules

A judge ordered Twitter to hand over to Elon Musk documents from a former executive potentially responsible for counting spam/bot accounts. According to the assumption, he is most closely associated with this duty and can shed light on the real situation with the platform.



Twitter was ordered to provide Elon Musk with documents from a former Twitter executive, Kayvon Beykpour, who according to the buyer was a key figure in counting the number of spam/bot accounts on the platform, according to a ruling by Chancellor Kathaleen McCormick of the Delaware Court of Chancery on Monday.

He served as General Manager of Consumer Product until May 2022. Beykpour was described in Musk's court filing as one of the leaders “most intimately involved with” spam/bot account counting, so he is expected to shed light on the real state of affairs at the platform. It is worth noting that the court did not order Twitter to release information about other employees who were included in the list.



Beykpour was fired by Twitter in May while he was on parental leave. …

https://www.tesmanian.com/blogs/tesmanian-blog/twitter-must-hand-over-the-documents-of-the-employee-responsible-for-counting-spam-bot-accounts-to-elon-musk-the-judge-ruled

[nadir]

So a Chinese magazine asks for Musk to do an interview.  We know that Tesla does not advertise but does get significant traction from media exposure of Musk.

China is Tesla's largest single market.

He's supposed to say NO.

I think not.  I've stopped reading the Register and the Verge on Musk.  Also the Guardian mainly.  Their entire coverage is tainted by their ideology and their dislike of Musk.

Not worth the cognitive dissonance.

Musk is not feuding with Twitter over "bots".  Musk is in litigation with Twitter over whether Twitter lied to the SEC, their shareholders, their advertising clients and, in the end, Musk; over their revenue model and the reality of the future revenue streams on which their valuation is based.

This is hardly "an argument over Bots".  It is, potentially, exposing shady business practise and corporate dishonesty.

You know that all those arguments are inventions. Elon Musk made a “final” “unconditional” offer to buy Twitter as is. He actually argued that the only way to transform Twitter was to purchase it and to make it private.

That his initial offer turned to be ruinous and that he realized about it after the fact is basically his own fault.

Read below.

[nadir]

Your take totally misses the point of financing the deal. $44B in cash is a very large sum. Imho the bot story is just an excuse to back down. Musk found out he had to leverage himself pretty sharply to finance the deal, which was way too expensive for most external investor tastes, especially given the recent souring of speculative market sentiment. And then came the day when Tesla shares tumbled 12% in direct reaction to the deal, and I think that's what broke the camel's back. Imho the deal was highly idiotic from the beginning, and even Musk in his ego stupor realized this eventually and decided to cut his losses and limit exposure to the maximum of $1B, probably much less.

This sounds about right to me as well.

[Sigmetnow]

Elon Musk Pitches Lofty Goals In a Magazine Run by China’s Internet Censorship Agency

Despite all the media hysteria, Musk calls the article below a “Reasonably accurate translation” of his remarks.  If you’ve followed his remarks over the years, there is nothing new here.
 
https://twitter.com/elonmusk/status/1559689693528293379

“As promised, EXCLUSIVE translation of @elonmusk's article in China Cyberspace. Musk goes over his endeavours in clean energy, robot, brain-machine interface technology and space travel for a Chinese audience.”
https://twitter.com/yangliuxh/status/1558461586703917061

Elon Musk's article in China Cyberspace, exclusive digital version & translation
Excerpt:

I want to do everything we can to maximize the use of technology to help achieve a better future for humanity. To that end, any area that contributes to a sustainable future is worthy of our investment. Whether it's Tesla, Neuralink, or SpaceX, these companies were all founded with the ultimate goal of enhancing the future of human life and creating as much practical value for the world as possible—Tesla to accelerate the world's transition to sustainable energy, Neuralink for medical rehabilitation, SpaceX for making interstellar connections possible.

https://beijingchannel.substack.com/p/elon-musks-article-in-china-cyberspace

[NeilT]

You know that all those arguments are inventions. Elon Musk made a “final” “unconditional” offer to buy Twitter as is.

Incorrect.  He made this offer in good faith for Twitter as it was reported to be by their filings to the SEC and their shareholders.

Having gained access to some of the data that Twitter provides he has come to learn that as it was reported to be was a fabrication created by the management (see best and final point D), to generate more ad revenue and make the company look more healthy than it actually was.

I have had to listen to waaaay more comments about Musk the liar and Musk the charlatan and how Tesla was all a scam than I ever want to hear again.  Just go back to the original cars, cars, cars thread and look at the comments from GoSouthYoungins.  Every one of them turned out to be false and disinformation, driven by a deep dislike of one person.  Tesla was not a fraud, yes Tesla was growing, yes Tesla CAN make a profit and a LOT of profit, NO Tesla was not going bankrupt and the Shanghai factory would not be a mud field whilst Tesla was being torn apart in the bankruptcy courts.

I'm hearing the same thing all over gain.  "I don't like Musk so he is a liar and a charlatan and he's only doing this because of the drop in Tesla share value".

I'm sticking my stake in the ground.  This is not true and we shall see how the court action goes in the long run.

One thing you can be absolutely certain of.  If Musk is forced to by Twitter at a price it is not worth, because the management and the employees have colluded in lying about the health of Twitter, there wont' be One Single employee, currently in twitter today, still working in Twitter in 5 years.

So perhaps the Twitter employees might actually want to try and stop their own management destroying their jobs???

Who is the monster here?

[gerontocrat]

One thing is for sure - Musk is Hi-Tech savvy, including all the tricks media firms use to gloss over "imperfections" in their business model and published statements.

So what went wrong with the "due diligence" performed on Twitter before he made his offer?

Lies, damned lies & SEC filings?

[NeilT]

Lies, damned lies & SEC filings?

Possible.  Or Musk talked it through with his legal team and discussed the likelihood that the figures are falsified and that he would need to walk away.

Musk intends to build this kind of business.  He could have done it from scratch but that takes a lot of time and effort to get it off the ground.  Time much better spent with Tesla and SpaceX.

There were always going to be two possible outcomes of this.  First was that Twitter were telling the truth and the company was worth the offer.  Second was that Twitter were telling porkies and that he would need to pull out and do it from the start.

Here's the real kicker though.  All those Analists wittering on about how Twitter might take his focus away.  Whereas, in fact, buying Twitter outright is the less focus diverting thing that could happen.  If he has to start his own new company and drag it up from the ground, it will take 10 times the focus Twitter will.

This was never just about buying twitter.  What he learns through this is worth far more to him than the cost of Twitter.  If it is all above board and true, then the deal will be worth a very large fortune.  If it is the way it looks to be, then he will have learned that Twitter is not worth buying and that he will have to do it the hard way.

Either way what he wants to create will be worth a very large fortune.  It will just take another 4-5 years and a LOT of his focus.

[phelan]

If it is all above board and true, then the deal will be worth a very large fortune.  If it is the way it looks to be, then he will have learned that Twitter is not worth buying and that he will have to do it the hard way.

This sure sounds to me like a solid description of "due diligence", and everyone is very clear that Musk waived his right to due diligence in the original purchase agreement.

I don't see any reason why his team couldn't perform proper "due diligence" before making the offer, instead of making the offer and then learning "that Twitter is not worth buying". 

It will be interesting to see which team of lawyers is better.

The below article seems to point to Musk seeking a discount on the purchase after his stock holdings lost value...

https://www.forbes.com/sites/abrambrown/2022/06/07/elon-musk-twitter-buyout-takeover-bots-purchase-acquisition-spam/

And the latest bit about Twitter not sharing its bots data with him is especially thin, those experts say. “There isn't a specific term in the merger agreement that obliges Twitter to do what Musk is asking, and so Twitter is not breaching the agreement if they refuse,” explains George Geis, a corporate law professor at the University of Virginia. “Most merger agreements do have an obligation on the sellers’ part to assist the buyer with due diligence. But Musk waived that.” Yes, he certainly did forgo his right to due diligence back in April when he first struck a deal with Twitter’s board.

But what if Musk isn’t searching for a sure-proof legal case? What if he just wants: “Leverage,” says Geis. “My sense is that at some point maybe a week or two ago he asked his lawyers to take a closer look and said, ‘Get me real leverage on the transaction.’”

This is why it doesn’t really matter whether Musk is correct about the bots or whether Twitter is. Musk doesn’t need to be correct and win a trial. He merely needs to find something to get a case going and wrap up Twitter in time-consuming litigation. And he’s likely already found enough to do that, those same experts say. Musk can afford to wait and afford the million-dollar fees his Skadden, Arps lawyers will accumulate; publicly traded Twitter doesn’t have the same luxury of limitless time. Twitter’s board may have once viewed selling the company to Musk for $54.20 a share as a sensible fulfillment of its fiduciary duty to investors—particularly since the stock market has plunged since the deal was approved. But does forcing the business into a perilous state of years-long limbo—as the courts sift through Musk’s case—fulfill the same duty? Even if the board agrees, shareholders may not. The deal still needs to go to investors for a vote, which will happen at some later date this year.

Predicting how this game of chicken ends—a contest that has already proven so unpredictable—seems to beg the possibility of getting a face full of egg. For the sake of a fulsome discussion, though, here’s an educated guess at the outcome: If the markets stay depressed, the Twitter car slams on its proverbial brakes first, and the board renegotiates. The company simply has more to lose than Musk in the lengthy process of involving some Delaware judge in the process.

Two more points to bolster this conclusion. A couple weeks ago, Musk rejiggered the financing he needs for his bid, removing a risky margin loan from the package of $45 billion-plus in equity and debt. Generally, you do not muck around with changing the terms of financing you do not intend to need. Then there is the plain, time-tested fact that most fine-print M&A disputes almost always end with the two parties making up and consummating the transaction. Ask a lawyer (or several), and they can generally only point to one or two examples that wound fully through the legal system. As it happens, in the most recent example from 2018, a court did allow German healthcare company Fresenius to walk away from its purchase of Akorn, a generic drug manufacturer, though the scale of Akorn’s problems do seem drastically greater than even the most fluffed-up figure about bots on Twitter.

Yet Fresenius-Akorn is the exception. More often than not, things generally conclude as they did for LVMH when it bought Tiffany & Co.. The two luxury companies sued each other in 2020 after LVMH tried to scupper a deal to buy Tiffany, citing the pandemic’s effects on the jeweler’s business. In the end, they settled out of court once Tiffany agreed to a slightly reduced price, less than 3%.

[oren]

I have had to listen to waaaay more comments about Musk the liar and Musk the charlatan and how Tesla was all a scam than I ever want to hear again.  Just go back to the original cars, cars, cars thread and look at the comments from GoSouthYoungins.

While GSY was a major pain and a prime example of bias in posting, and Musk does suffer from a large supply of unfair negative bias, why not also consider the case of posters for whom Musk can never ever do anything wrong, such as make mistakes and not admit them (decide to buy useless Twitter for huge shitload of money he cannot truly afford, think he has funding secured to take Tesla private), delude himself with some tech promise he cannot quickly deliver (millions of Robotaxis by end of whatever past year), oversell a product or its timeline or its usefulness (Solar Roof). And so on.
Such cases do happen, you know, even if rarely, and it sometimes gets tiresome to read endless defenses of Musk even when he is clearly in the wrong.
I recommend more objectiveness, in general and in particular.

[crandles]

I have had to listen to waaaay more comments about Musk the liar and Musk the charlatan and how Tesla was all a scam than I ever want to hear again.  Just go back to the original cars, cars, cars thread and look at the comments from GoSouthYoungins.

While GSY was a major pain and a prime example of bias in posting, and Musk does suffer from a large supply of unfair negative bias, why not also consider the case of posters for whom Musk can never ever do anything wrong, such as make mistakes and not admit them (decide to buy useless Twitter for huge shitload of money he cannot truly afford, think he has funding secured to take Tesla private), delude himself with some tech promise he cannot quickly deliver (millions of Robotaxis by end of whatever past year), oversell a product or its timeline or its usefulness (Solar Roof). And so on.
Such cases do happen, you know, even if rarely, and it sometimes gets tiresome to read endless defenses of Musk even when he is clearly in the wrong.
I recommend more objectiveness, in general and in particular.

I completely agree with the thrust of this post. However, I am not sure you are following your own advice for more objectiveness:
We don't know twitter is "useless" for Musk's purposes.
I suspect Musk did agree to pay too much for twitter but a) "cannot truly afford" doesn't seem objective to me, and b) "huge shitload of money" may well imply more of an overpayment than might be the case.

"think he has funding secured to take Tesla private"
That is not going well for him with a pre-trial ruling that it was inaccurate and reckless. There was nothing concrete about financing from Saudi Arabia's sovereign wealth fund at that time.

Having said that is not looking good for Musk, I will note that with such an upcoming trial, I wouldn't expect Musk to admit he didn't have funding secured. However, it would be good for Musk fans to admit that there is at least a potential problem here rather than defending everything Musk says, does, tweets and writes...

[phelan]

FWIW, my personal opinion is that Musk never intended to actually buy Twitter.  He is/was mad at the use of Twitter to track his private plane, along with a few other things that perhaps haven't been publicized as much.  One could see the argument from an oligarch such as Musk that Twitter could be used for organized resistance against the upper class.

IMHO this situation is similar to Peter Thiel taking down Gawker after he was outed.  Used the courts to bankrupt Gawker, then finance friends bought it on the cheap and buried it.  Gawker had problems, but also spoke truth to power, so the right-wing oligarchs took it down.

Quite honestly, it's the only reason I've paid attention to this Musk/Twitter saga.  If this is actually a straight-forward business deal, it's boring and uninteresting, to me at least.  The way Musk is talking about the bots though, it sure seems like he thinks when the trial is done no one will take Twitter seriously anymore.  At this point, it's hard to take anything Musk says seriously, but if he is correct then there must be a joker up his sleeve, and if that joker is enough to bring down Twitter that's interesting.

[cognitivebias2]

Nice to see some balanced commentary/analysis. 

[NeilT]

OK let's try and align a few things.

With Tesla when did Musk put a foot wrong?

1. He allowed Eberhardt to be CEO.  Something he regrets bitterly
2. He admitted that the design decision (remember that Musk took the CTO slot), to use the Lotus chassis and the AC motors was a complete fiasco
3. He thought that building the Model 3 in volume would be more about "JFDI" than about the tens of thousands of minor problems that would need to be solved in order to come to volume.  It cost him 2 years of his life and, probably, another relationship
4. He thought it would be clever to put out a tweet on taking Tesla private using a 4:20 meme.  My thoughts on this?  He had funding secured but not at 4:20 or anything like it.  Note he says he had "funding secured" but he doesn't say he had it secured at 4:20.  It was a monumental screwup which played into the hands of those who wanted to bring the company down.
Note Musk has Publicly called out the SEC for LYING and not a single word has been said about it.
Tell me.  If you call out a government agency as scum and a bunch of liars who knew that they were lying and you are not telling the truth, what happens to you?

Try thinking about that for 5 minutes

5. He thought that self driving was, again, a simple matter of working harder than everyone else.  In fact he did not realise that solving self driving was about solving almost All AI problems except for lucid self awareness.  This has cost Tesla billions to rectify and has forced them to, yet gain, create one of the most advanced Vertically integrated AI teams in the world.

Musk was not lying, he was simply as inexperienced in the problems involved in what he was trying to do as he was when he tried to create the first Roadster out of a bunch of existing ICE parts and motors which were not sufficiently well designed for the job.

Whereas almost all other self driving companies are quite simply lying to themselves and everyone else.  Not only are they nowhere near where Tesla is today, they are trying to change the narrative to match their capabilities rather than change their capabilities to meet the narrative.  The reason for this is that they are all stuck in the same "local maximum" that Tesla was stuck in.

So whilst Musk screwed up in a big way, he wasn't lying to anyone.  Not even himself.  He was simply unaware of the sheer scale of the challenge.  He owns up to this and takes the responsibility for it.  The fact that people cannot understand what he is saying does not make him either a liar or a charlatan.

Now to Twitter.

What he wants to do to Twitter is the difference between shopping without the web and shopping with the web.  It is that fundamental.  Care to state the $ value of shopping with the Web?  If you don't understand what he wants to do, then take the above statement as something extremely close to the truth.

In this case you have to calculate what value Twitter is to Musk.  The most valuable thing for Musk right now is Time.  There is, quite literally, no commodity which has more value to Musk.  Not the value of his Tesla shares, not the value of his SpaceX shares.  I know this one because time is the most valuable commodity in my life too.

So when Musk says "We can do this without Twitter but it will take 5 more years", you have to translate that into "50% of my time for the next 5 years will need to be devoted to a Twitter clone if I don't buy Twitter".

If you look at it this way, buying Twitter for 20% to 25% of Musk's net worth, balanced against the time it will take him to do it from scratch, is not a big ask.  First he can afford it alone, second there are other investors who will go in with him.

Let's stop this BS about "he can't afford it" right now.  He can if he wants to spend that money.  It comes down to risk.  If he spreads himself too thin then there are sharks circling waiting to force him out.  All the people who decry him also fail to recognise that Musk owns another $45bn worth of SpaceX.  Something he could also leverage.  Notably he owns over 50% of all SpaceX stock and over 75% of SpaceX voting stock.  How much do you guess he will be worth when Starlink goes IPO???

If Twitter is lying to everyone, then why would Musk pay tens of billions more to buy it than it is worth. That is total idiocy.  If he wants to pay to reduce the call on his time, then he should pay what it is worth. Not some company that has been pumped on falsified reports in order to increase revenue.

If what Musk says about Twitter is true, not only is he not lying, not scheming and not breaking the law;  Twitter is doing all of those and Musk, by some perverse nature of hating him, is getting the blame.

Granted I do believe that Musk took a flyer on Twitter in full knowledge of the fact that it might fail and he might have to do it alone.  But that is hardly illegal or immoral and it doesn't make him scum, a charlatan or a criminal.

Something that needs to be really CLEAR.  Total inwards investment to Twitter is under $5bn.  So the difference between $5bn, which Musk has already more than that in Twitter stock today and the full offer from Twitter; gives you an idea of just how much Musk values his time.

That's my view.  I doubt I would like him as a friend.  I would hate to work for him.  But I am not blind to what he has done for his companies and this world; nor where he wants to go.

[phelan]

Tesla, Space-X, Starlink, etc. are all "private" companies that would not could not exist without massive public subsidies.  Hard for me to buy all the eco-friendly hype when it's largely the USA government providing these subsidies (especially at first), and they've shown time and again they couldn't care less about being eco-friendly.  Without significant amounts of American taxpayer money funneled into Musk's projects, we wouldn't be talking about them. 

Electric cars are a desperate (last-ditch?) attempt to keep the happy motoring lifestyle.  The happy motoring lifestyle is simply not compatible with the earth's climate long-term, much like current industrialization across the globe is incompatible with earth's climate.  We need to be transitioning away from cars, not building slightly less bad cars.  But that is not compatible with the USA as currently structured, so here come government subsidies for electric cars as oil becomes more scarce.

Space-X is nothing more than the US Gov't privatizing large parts of NASA.  I suspect Musk was chosen because he is willing to grind his workers to the bone for little $$$, so the rockets and what not get built cheaper than the government could do it for, since government employees need $$$ and good benefit packages and solid unions and what not.  Also, the privatized part allows the US government to push behind the scenes for nations within the US orbit to use Space-X for their rocket needs, without it screaming USA GOVERNMENT ROCKETS.

With that background, it's very hard for me to take Musk seriously about some social network he wants to build, or turning Twitter into a free speech haven.  He's not buying Twitter because he believes in free speech, he's buying it to shut down free speech - like some kid tracking his private plane.  If he can destroy Twitter rather than buy it, that's even better for Musk.  I don't care what he says, I watch what he does.

ETA:  https://twitter.com/parismarx/status/1167410460125097990

Happy to have this confirmed: the goal of Hyperloop was to get California’s high-speed rail canceled. Musk and the Kochs, both trying to halt a transition away from automobiles.

For Musk, fantasy technologies are preferable to real solutions.

[nadir]

I have had to listen to waaaay more comments about Musk the liar and Musk the charlatan and how Tesla was all a scam than I ever want to hear again.  Just go back to the original cars, cars, cars thread and look at the comments from GoSouthYoungins.

While GSY was a major pain and a prime example of bias in posting, and Musk does suffer from a large supply of unfair negative bias, why not also consider the case of posters for whom Musk can never ever do anything wrong, such as make mistakes and not admit them (decide to buy useless Twitter for huge shitload of money he cannot truly afford, think he has funding secured to take Tesla private), delude himself with some tech promise he cannot quickly deliver (millions of Robotaxis by end of whatever past year), oversell a product or its timeline or its usefulness (Solar Roof). And so on.
Such cases do happen, you know, even if rarely, and it sometimes gets tiresome to read endless defenses of Musk even when he is clearly in the wrong.
I recommend more objectiveness, in general and in particular.

Well said, man. I suspect you hate my endorsement, but at least we agree on this and on climate change.

[phelan]

Last piece I forgot to mention on this Twitter/Musk saga...

The political discourse in the US is largely carried out in the media and social media.  Facebook and Cambridge Analytica were largely helpful to Trump and the Republicans, but Twitter and Reddit were largely on the side of the Democrats in 2016 and 2020.  Twitter banned Trump as soon as it could, for example, along with banning many other right-wing figureheads. 

Musk has given indications he is going to get more involved in American politics.  The causes he has taken up recently have been on the "conservative" side of American politics, even though Tesla had given him a good name on the "liberal" side.  Taking Twitter out of public discourse, or buying it and forcing the company to "switch teams" as it were, is just one part of what I suspect is a multi-pronged attack on the Democrats.  If I had to guess, Musk and Thiel are working together on this.

[nadir]

As a matter of fact, Musk supports “the Left side of Republicans” (impossible to know what he means by that) and “the Right side of the Democrats” (this is more clear, at least for this case we have his explicit support to Manchin no less, and his constant mocking toward Bernie Sanders, to whom he hates to his guts).

[phelan]

I agree he says that, but his actions seem to indicate he is leaning pretty right of center.

American politics is broken anyways.  It's just a matter of which team of oligarchs your politicians support.  I guess Musk decided to switch sides.

[crandles]

Tesla, Space-X, Starlink, etc. are all "private" companies that would not could not exist without massive public subsidies. 

...

Space-X is nothing more than the US Gov't privatizing large parts of NASA.  I suspect Musk was chosen because he is willing to grind his workers to the bone for little $$$, so the rockets and what not get built cheaper than the government could do it for, since government employees need $$$ and good benefit packages and solid unions and what not.  Also, the privatized part allows the US government to push behind the scenes for nations within the US orbit to use Space-X for their rocket needs, without it screaming USA GOVERNMENT ROCKETS.

Want a reality check on that?

Of 37 launches so far this year, how many have involved US government paying?

2 are for National Reconnaissance Office i.e. spy satellites.
1 for NASA re astronauts to ISS
1 for NASA re cargo to ISS

There is also
1 for Axiom Space - tourists to ISS so some US government/NASA involvement but Government is not paying for the launch.

That leaves 32 of 37 launches

Even on the 4 or 5 launches where US government paid / were vaguely involved:
 
This doesn't mean money SpaceX receives is a subsidy, SpaceX won contracts against competitors that couldn't match the price and / or standard of service SpaceX charges.

"grind his workers to the bone for little $$$"
Yeah right, get real: SpaceX and Tesla are the number 1 and number 2 place where engineers want to work.

This may mean that SpaceX can get the very best engineers at less of a premium than other competitors might have to pay. If they want to be/stay there, maybe these very best engineers are very effective in what they do. This is a very different situation to 'grind to the bone'. Who was it that said something like: Cynics are all the same - they know the cost of everything and the value of nothing.

[phelan]

https://www.businessinsider.com/elon-musk-list-government-subsidies-tesla-billions-spacex-solarcity-2021-12#the-energy-department-loans-tesla-465-million-in-2010-9

However, over the years, Musk's companies — Tesla Motors, SpaceX, and SolarCity — have received billions of dollars from government loans, contracts, tax credits, and subsidies. According to a Los Angeles Times investigation, Musk's companies had received an estimated $4.9 billion in government support by 2015, and they've gotten more since.

Here are the headlines I pulled from the article:

-The Energy Department loans Tesla $465 million in 2010

-SpaceX receives $15 million from the state of Texas in 2014

-Nevada provides $1.3 billion in tax breaks and other incentives for a new Tesla "Gigafactory" in 2014

-As of 2015, Tesla had sold $517 million in environmental credits to competitors per a federal mandate. Tax credits for consumers also helped them sell more cars.

-SolarCity receives $497.5 million in grants, in addition to tax credits, by 2015

-New York State put $750 million toward a SolarCity plant in Buffalo in 2016

-Tesla accepts "certain payroll benefits" from the federal government's $600 billion 2020 pandemic stimulus

-SpaceX signs a $653 million contract with the US Air Force in 2020

-SpaceX lands a $2.89 billion contract with NASA in April 2021

All of that doesn't even include things like charging the government extra for infrastructure development, like this article details:  https://spacenews.com/spacex-explains-why-the-u-s-space-force-is-paying-316-million-for-a-single-launch/

SpaceX is however charging the government for the cost of an extended payload fairing, upgrades to the company’s West Coast launch pad at Vandenberg Air Force in California, and a vertical integration facility required for NRO missions.

The price “reflects mostly the infrastructure,” Shotwell said.

Shotwell noted that the Aug. 7 contract does not completely cover all infrastructure expenses and other costs will be included in future Phase 2 bids. 

“This one was front loaded because the Space Force wanted this capability deployed quickly,” said Shotwell.

------
ETA:  https://www.grid.news/story/technology/2022/04/30/elon-musk-hates-the-government-his-companies-love-it/

Tesla and SpaceX have received more than $7 billion in government contracts alone and billions more in tax breaks, loans and other subsidies, an analysis by Grid found. In recent years, Tesla has sold at least $6 billion worth of government-backed electric vehicle credits, Grid found. These sales have twice in recent years made the difference between the company posting a profit instead of a loss, according to an analysis by Trefis, a financial data firm.

Musk’s fortunes began to change that fall, when SpaceX succeeded on its fourth rocket launch. What followed was a $1.6 billion contract from NASA to resupply the International Space Station.

Musk was later asked about getting that news in an interview with “60 Minutes.”

“I couldn’t even hold the phone. I just blurted out, ‘I love you guys!’” said Musk.

“They saved you — financially and even emotionally,” said correspondent Scott Pelley.

When a clip of the interview went viral on Twitter in 2021, Musk reiterated his feelings. “I do love NASA, always have,” he tweeted.

NASA has since given SpaceX $5.4 billion. The relationship not only earned SpaceX money but also respect and trust in the industry, said Laura Forczyk, a space consultant.

“SpaceX is newer, but it’s proven itself primarily through those contracts,” said Forczyk. “It was really the NASA contracts that got it through those early years.”

[phelan]

"grind his workers to the bone for little $$$"
Yeah right, get real: SpaceX and Tesla are the number 1 and number 2 place where engineers want to work.

Say what you want, I know someone who worked there.  He was exposed to something that caused severe and permanent health problems, and ended up moving to a different aerospace firm where he worked 50% fewer hours and made more money.  Unfortunately still deals with whatever happened to him physically at SpaceX.

https://futurism.com/the-byte/engineering-subreddit-tearing-elon-musk-apart

Another common criticism was that Musk's employees generally have to work long hours under not-great conditions. That makes his companies a great place to work for those who are believers in the promises and benefits of electric cars and reusable rockets, but also makes it hard to stay put for long without burning out, the engineers said.

"I’ve worked with NASA/Contractor launch engineers at [the Kennedy Space Center] who moved to SpaceX," another Redditor replied. "They seem to regret the move due to toxic work culture, little training and team integration, insane hours, and low pay. You earn more per month because you work 80 hours a week but the hourly rate is low. I think SpaceX tends to attract young engineers fresh out of college who don’t have a comparison of what is a good work environment."

[oren]

The government has thrown taxpayer money and beneficial regulations at far worse industries and corporations than Tesla and SpaceX. Nothing good came out of it.
Elon Musk on the other hand almost single handedly generated a new industry of fully-electric vehicles, and another one of reusable rockets. Even if done with some initial government help, this doesn't take away from the achievements.
Yeah, this won't save us, but at least give credit where credit is due. And it will make a small dent in the collective damage to the environment.
Saying we need to stop consuming is nice, but ain't happening, and not because of Elon Musk.

I find the above series of posts by Phelan to be highly biased.

[phelan]

The government has thrown taxpayer money and beneficial regulations at far worse industries and corporations than Tesla and SpaceX. Nothing good came out of it.
Elon Musk on the other hand almost single handedly generated a new industry of fully-electric vehicles, and another one of reusable rockets. Even if done with some initial government help, this doesn't take away from the achievements.
Yeah, this won't save us, but at least give credit where credit is due. And it will make a small dent in the collective damage to the environment.
Saying we need to stop consuming is nice, but ain't happening, and not because of Elon Musk.

I find the above series of posts by Phelan to be highly biased.

I am absolutely biased (who isn't?).  Car culture needs to end, we won't be going to Mars, and should focus on fixing earth.  We shouldn't be sending fleets of satellites to space and block out the stars just for some internet.  Plus lots of solar hype with no substance.  All of this stuff is a massive distraction from the very real need to make very real changes to the way we live before climate change makes the planet uninhabitable, if not for ourselves than for future generations.

Elon Musk is no savior, he is just a man using the same tools every other oligarch uses to get ahead, including massive media manipulation to make him look good.  I'm just a guy who doesn't buy the greenwashing hype. 

[KiwiGriff]

 

Car culture needs to end, we won't be going to Mars, and should focus on fixing earth.  We shouldn't be sending fleets of satellites to space and block out the stars just for some internet.

"Car culture" is so ingrained in the west it would take the total destruction of our civilization  to end it  any time soon.
Normal humans  can walk and chew gum at the same time going to mars can be done as we transition away from fossil fuels.
 The internet is probably the biggest paradigm change in human condition since the printed word. The guy who works besides me has just signed up to star link. No internet service he does not even get cellphone coverage at his property about 100km from NZ largest city.
Starlink has and will continue to allow the opportunity for millions to connect to the world and take part in the connected paradigm shift.

All I see from you  phelan is your dislike of Musk coloring your judgement well beyond what i would consider reasonable pushing your thoughts into the extremist fringe to support your irrational hate for that one man.

Musk is not a god.
Musk is neither a saint nor a devil he is a man .
I see more support for those who hate him falling into the trap of elevating him to the status of a  a deity than i do for the idea those who are interested in Tesla Starlink Space X and his other endeavors are worshiping Musk the man. 

 

[nadir]

The government has thrown taxpayer money and beneficial regulations at far worse industries and corporations than Tesla and SpaceX. Nothing good came out of it.
Elon Musk on the other hand almost single handedly generated a new industry of fully-electric vehicles, and another one of reusable rockets. Even if done with some initial government help, this doesn't take away from the achievements.
Yeah, this won't save us, but at least give credit where credit is due. And it will make a small dent in the collective damage to the environment.
Saying we need to stop consuming is nice, but ain't happening, and not because of Elon Musk.

I find the above series of posts by Phelan to be highly biased.

I am absolutely biased (who isn't?).  Car culture needs to end, we won't be going to Mars, and should focus on fixing earth.  We shouldn't be sending fleets of satellites to space and block out the stars just for some internet.  Plus lots of solar hype with no substance.  All of this stuff is a massive distraction from the very real need to make very real changes to the way we live before climate change makes the planet uninhabitable, if not for ourselves than for future generations.

Elon Musk is no savior, he is just a man using the same tools every other oligarch uses to get ahead, including massive media manipulation to make him look good.  I'm just a guy who doesn't buy the greenwashing hype.

All true. Look at the absurdity the Boring Company has done in Vegas. The pretext was to create a net of hyper tunnels to end with polluting surface traffic jams. What was unveiled is a ridiculous single tunnel full of Human-driven Teslas, tons more expensive, much less efficient in terms of energy per passenger than a simple bus shuttle, not to speak of a real subway.

The reality is that Las Vegas Loop, so far, has been only good as commercial advertising for Tesla.

[phelan]

All I see from you  phelan is your dislike of Musk coloring your judgement well beyond what i would consider reasonable pushing your thoughts into the extremist fringe to support your irrational hate for that one man.

All well and good.  I think I did a pretty solid job of backing up why I think Musk is a charlatan, and I still think we'll see in a few months if I'm right about what he's doing with Twitter.  Feel free to take it or leave it.  Others posting on this site are obsessing over every little thing he does.  I don't hate the man, tbh I couldn't care less about him.  I'm not getting crypto pumped-and-dumped by him, I'm definitely not buying shares in any of his companies, and my main concern is that he's going to continue to use his media and financial leverage to push the USA even more fascist than the direction it's already trending.

FWIW, I am absolutely opposed to the direction our society is moving.  Technology is not going to save us from runaway climate change.  Neither is the ostrich head-in-sand technique.  I do agree until we reach critical mass of awareness there's going to be little societal pushback.  I've definitely got my hopes pinned on the kids.  The ones I've met genuinely care.

Doesn't matter, I've said my piece, I'll go back to focusing on the sea ice and letting the fanbois have their fun.

[Sigmetnow]

— A contract to provide a service or product is not a “subsidy,” particularly if the price paid is less than the competitors’.

Commercial Crew transportation to the ISS
Boeing has received a total of $4.82 billion from NASA's Commercial Crew Program to date and SpaceX has netted $3.14 billion
https://www.space.com/spacex-boeing-commercial-crew-seat-prices.html
That’s as of 2019, before SpaceX had to take over what would have been Boeing’s flights, because the Boeing Starliner failed not one but two test flight attempts, and experienced multiple thruster failures on the third.  NASA has now extended SpaceX’s contract for additional flights to cover all others that might be needed this decade — leaving Boeing at their original six, none of which has yet flown.
 
Details of the cost difference:

Boeing's astronaut taxi will cost NASA about 60% more per seat than SpaceX's vehicle will, according to a new report by the space agency's Office of Inspector General (OIG).
 
NASA will likely pay about $90 million for each astronaut who flies aboard Boeing's CST-100 Starliner capsule on International Space Station (ISS) missions, the report estimated. The per-seat cost for SpaceX's Crew Dragon capsule, meanwhile, will be around $55 million, according to the OIG's calculations.
 
To put those costs into perspective: NASA currently pays about $86 million for each seat aboard Russia's three-person Soyuz spacecraft, which has been astronauts' only ride to and from the ISS since NASA's space shuttle fleet was grounded in July 2011.

—-

All of that doesn't even include things like charging the government extra for infrastructure development, like this article details:  https://spacenews.com/spacex-explains-why-the-u-s-space-force-is-paying-316-million-for-a-single-launch/

 
Boeing did the same thing, defending its higher Commercial Crew price because it had to develop infrastructure that SpaceX already had with Cargo Dragon.  Hardly unique to SpaceX, and only fitting that customers help pay for functionality they alone may need.

 
Paying SpaceX the development expense for an extended fairing and related infrastructure makes sense because the government will save more than that in the coming years:  Falcon 9 and Falcon Heavy launches are much cheaper than the comparable-lift but expended rocket alternatives from ULA. 

“You pay SpaceX for a taxi ride to space.  You pay other companies for the taxi.”
— Joe Justice

“Just a big fairing”?
“Each [SpaceX] fairing half is a fully capable reentry vehicle with its own thrusters, thermal protection, avionics & sensor suite.”
8/19/22  https://twitter.com/elonmusk/status/1560711872344690691

—-

-SpaceX signs a $653 million contract with the US Air Force in 2020

$653M was the total contract amount. SpaceX and ULA were each awarded about half of that amount.

—-

-SpaceX lands a $2.89 billion contract with NASA in April 2021

This is for the HLS lunar lander!  Blue Origin’s bid was twice as much as SpaceX’s.  NASA could not have afforded that, even if BO’s proposal had been sound.  (It wasn’t).
Apr 26, 2021. Blue Origin revealed that NASA evaluated the company's HLS proposal to cost $5.99 billion, or roughly twice that of SpaceX
https://www.cnbc.com/2021/04/26/jeff-bezos-blue-origin-protests-nasa-hls-award-to-elon-musks-spacex.html

[NeilT]

Here are the headlines I pulled from the article:

OK so in line with what Sig said about government contracts not being subsides plus my own position that government funds for shutdowns and furlough's for covid (available to everyone), I find that your actual list of "subsidies" runs to:

$15m for SpaceX and $3bn for Tesla.

I take a statement from the Tesla Q4 2021 shareholder deck.

generated $5.5B of GAAP net income and $5.0B of free
cash flow in 2021

They followed that with $3.3bn in Q1 2022 and another ~$2bn in Q2 2022.

This angle of Tesla and SpaceX only living on government subsidies is dead and gone.  Even if you added the remainder of the EV credits Tesla has made, since 2015, Tesla is still profitable and vehicle credits are available to every EV manufacturer, not just Tesla.  The only reason Ford, GM and the rest don't have large EV credits to sell is because they don't sell enough EV.  Which is what the credits are supposed to encourage.

This entire arm of reasoning has been long debunked.  Yes Tesla and Solar City needed Government funds to get going.  Just as any totally new industry needs support.  But a Loan is a Loan.  Not a subsidy.  Yes if you take a loan and it is written off by the government then you can call it a subsidy.  However a loan paid back years in advance is just that, a loan.  Also for SpaceX, Musk funded the entire beginning.  It was a NASA Contract for services which made them.  Not subsidies.

I've already said I would not like to work for Musk.  Yes SpaceX took terrible risks, but SpaceX very nearly didn't make it and SpaceX was teetering on the edge for a very long time until it finally matured and then the ability of SpaceX, created at the outset, has created an environment where success is the only defining criteria.  Not how much additional government money you can gain on a cost plus contract.

Go read Launched.  Understand why these engineers want to go to SpaceX or Tesla.  Because they get to DO stuff right away.  Unlike the Space industry prior to SpaceX where an engineering graduate, more often than not, would have to do an apprenticeship of 7 years or more developing a "better nut" for space use.  Reading Launched would go a long way to understanding SpaceX and why the people there wanted to be there.

As for Tesla, they drove their factory and equipment to the limits of tolerance and beyond and damned nearly didn't make it.

If you want things to change in this world, then you need someone who is going to drive change.  You don't drive change from a nice comfortable armchair.  You think Carnegie was "such a nice man" or the others of the same age of "opportunity"?  They drove themselves and everyone around them hard.  Very hard.

Then we get the twitter deal, where Twitter is in no way found with clean hands and it is Musk the monster all over again.

[Sigmetnow]

In an explosive whistleblower complaint obtained by The Washington Post, former Twitter security chief Peiter ‘Mudge’ Zatko alleges the company misled regulators about lax security and spam.
 
Former security chief claims Twitter buried ‘egregious deficiencies’

Twitter executives deceived federal regulators and the company’s own board of directors about “extreme, egregious deficiencies” in its defenses against hackers, as well as its meager efforts to fight spam, according to an explosive whistleblower complaint from its former security chief.

The complaint from former head of security Peiter Zatko, a widely admired hacker known as “Mudge,” depicts Twitter as a chaotic and rudderless company beset by infighting, unable to properly protect its 238 million daily users including government agencies, heads of state and other influential public figures.

Among the most serious accusations in the complaint, a copy of which was obtained by The Washington Post, is that Twitter violated the terms of an 11-year-old settlement with the Federal Trade Commission by falsely claiming that it had a solid security plan. Zatko’s complaint alleges he had warned colleagues that half the company’s servers were running out-of-date and vulnerable software and that executives withheld dire facts about the number of breaches and lack of protection for user data, instead presenting directors with rosy charts measuring unimportant changes.

The complaint — filed last month with the Securities and Exchange Commission and the Department of Justice, as well as the FTC — says thousands of employees still had wide-ranging and poorly tracked internal access to core company software, a situation that for years had led to embarrassing hacks, including the commandeering of accounts held by such high-profile users as Elon Musk and former presidents Barack Obama and Donald Trump.

In addition, the whistleblower document alleges the company prioritized user growth over reducing spam, though unwanted content made the user experience worse. Executives stood to win individual bonuses of as much as $10 million tied to increases in daily users, the complaint asserts, and nothing explicitly for cutting spam.
…

In Zatko’s interpretation, according to the complaint, the 2011 order required Twitter to implement a Software Development Life Cycle program, a standard process for making sure new code is free of dangerous bugs. The complaint alleges that other employees had been telling the board and the FTC that they were making progress in rolling out that program to Twitter’s systems. But Zatko alleges that he discovered that it had been sent to only a tenth of the company’s projects, and even then treated as optional.

If Zatko’s allegations are proven, the company could face substantial penalties — potentially in the hundreds of millions of dollars — said David C. Vladeck, who was director of the FTC’s bureau of consumer protection at the time of the settlement.

“If all of that is true, I don’t think there’s any doubt that there are order violations,” Vladeck, who is now a Georgetown Law professor, said in an interview. “It is possible that the kinds of problems that Twitter faced eleven years ago are still running through the company.” …

https://www.washingtonpost.com/technology/interactive/2022/twitter-whistleblower-sec-spam/

[crandles]

Waiving due diligence seems very foolish, if such things as above could come to light.

My quick reaction is that there doesn't seem anything to help Musk there, just harms twitter value and if Musk is forced to buy it, a bad deal may have just got a lot worse.

[NeilT]

No attempt to control spam users materially affects the mDAU figures.  Because Spam users are not monetizable users, they are a problem to be dealt with.  Twitter said they had removed both Bots and spammers from the mDAU figures.

If this is proven to be true, then Musk's suit is strengthened.

This statement is material.

Executives stood to win individual bonuses of as much as $10 million tied to increases in daily users, the complaint asserts, and nothing explicitly for cutting spam.

Exactly the point Musk is making.  Twitter have chosen to turn a blind eye to spam whilst counting them and also reporting they are controlling them.

Twitter may be based in California but it appears that it's roots in the "Wild West" are still well within sights.

My Brother used to be a test practise director and SDLC specialist.  He used to joke about developers who get up in the morning, put their hat on and boots on one at a time.  Seems to me that the Twitter "Cowboy" culture reaches right to the top.

[KiwiGriff]

I've already said I would not like to work for Musk. 

Me neither
We are all a generation or two past that level of risk taking.
if I was a newly minted engineer straight our of school I would be taking that risk.
Conventional company starting at the basement and looking at years to actually get any chance of making even a minor difference or a Musk company where if you shine you will be accelerated into the heights of your potential in mere months not decades.

The Musk's endeavors only live of subsides is dead and buried.Space X and Tesla can easily continue without another cent of subsidies of any kind .
Tesla is the first new car company to succeed in generations. Space x has re written the potential for space exploration . Space X has driven the cost of leaving earths gravity well  down to the point that interplanetary travel for us "smart apes" is in easy reach.
 We are still only at the beginning of the Musk story. 

[NeilT]

We are still only at the beginning of the Musk story.

Very much the truth.  He chooses good teams and people who can deliver.  He then expects them to get on with it and gets stuck in when they have blockers.

Whilst both Tesla and SpaceX could get on without Musk, both would be harmed by the loss of him.  He provides that drive and sparkle which transforms the companies from another startup to a company with a future which can only be guessed at.

When I read launched I recall reading about the Falcon 1 engine.  He allowed himself to be convinced that the fastest way to get to orbit was to use ablative materials rather than creating the hollow fuel cooled structures of the Saturn V era.  It turned out to be a disaster.

When they started on the Falcon 9 they switched to fuel cooled and it went smoothly and worked perfectly.  Again, the instincts of Musk were right.

He makes his mistakes though.  I'm fairly convinced that he thought AI tech for driving was just a matter of better application rather than a complete rethink.  He even admits that he was wrong and that they had to go back and do it again and again and again....  He also was against an AI robot too.  I think this is because he recognised that to do a robot you really did need to solve real world AI and that he thought it would be a distraction.  We may find out one day.  As soon as he realised that then needed to solve most of real world AI anyway, the robot was on the agenda.

AI day is coming up.  Musk has teased the robot and the "AI people mover".  I'm hoping that we see this in more detail.

When it comes to Twitter my thoughts are all over the place.  He'll tell us eventually, but there are some possibilities.  If Twitter management have lied to the FTC and to the SEC over their security plan and their bots, then things are going to be hard for the company.  This will severely lower it's value.  Potentially allowing Musk to snap it up cheaply.

However if Musk is able to walk away, but Twitter is fatally damaged due to these revelations, it would also mean Musk would have a clear run with a new company he set up.

It is extremely hard to work out exactly what he and his team are thinking.  I'm sure this will become clearer over time.

[phelan]

https://lawprofessors.typepad.com/business_law/2022/08/i-guess-im-writing-about-twitter-again.html

Long blog post, too long to quote in full, definitely worth a read for anyone interested in the case.  Conclusion quoted below:

But let’s switch gears now from issue spotter to practical reality.

Let’s say Musk does amend his pleadings, and does get Mudge’s allegations in as part of a play for fraud-by-omission.

Delaware has a highly developed set of standards for how to interpret merger agreements, and in particular, when to allow parties to walk away from them.  If Delaware allows Musk to walk away based on omissions from SEC filings, omissions that do not add up to an MAE (which is not necessary for fraud), and allows it without a showing of reliance, that would be open season for every reluctant merger partner going forward, creating exactly the kind of deal uncertainty that Delaware strives mightily to avoid.  And that means I can’t really see this claim succeeding.

So what this all adds up to is –

I’ll say it: Musk’s arguments do not appear to be very strong, though there is the wild card of whether Mudge has identified enough problems to qualify as an MAE.

That doesn’t tell us what will happen, though, because even if Musk is in the wrong here, there’s still the question of remedy – what’s Delaware gonna do about it?  The contract itself seems to give the court only two choices: a billion dollars in damages, or specific performance (require Musk to go through with the deal).  This post is already very, very long, so I’ll just leave with questions:  Is there an adequate remedy at law?  Does that matter?  How much does the parties’ stipulation regarding the propriety of specific performance matter (Section 9.9)?  Does the effect on third parties matter?  Should the damages cap be taken into account when the court selects a remedy?  Can the court award a higher damages figure than $1 billion?  I can tell you that among academics, there’s a far greater dispersion of opinion on this question than on about the merits of who’s right and who’s wrong.

And that is where we are as of this posting, though I am sure matters will change immediately thereafter.

[NeilT]

I can tell you that among academics, there’s a far greater dispersion of opinion on this question than on about the merits of who’s right and who’s wrong.

That is a given.  All too often the rights and wrongs of any particular court case are buried under a mountain of legal "precedent".

There is a very large difference between English and Scottish law.  Under English law the only thing the Judge can rule on is whether or not the ruling is "just".  In Scotland the Judge has another option.  The Judge can also rule based upon whether it is "Equitable" or not.

I'm assuming, by the statement above, that Equity has nothing to do with US corporate law and therefore the decision will be based on a whole raft of technical legal points.

There is, however, something the court might want to think about.  I have a feeling from comments that if Musk's fellow investors pull out the court may only be able to apply the penalty sanction.  This has it's downside.

The Delaware courts are there to protect the investors and employees in companies and ensure that there is a foundation on which US companies can trade and change.

Musk is currently at or very close to being the richest man in the world.  But this is only part of the story.  Musk's wealth is very likely to quadruple or more in the next 10 to 15 years.  Which means he can blow the entire cost of a "Twitter" in his own "justice".

For instance, he currently owns around 9% of Twitter stock.  If he does not go through with it, he will have to sell it.  This could be a hostile sale to hurt investors.

Then he can set up his own competing business.  Looking at the ideas Musk has for this business, it is highly likely that he could bring a competitor to Twitter and win, leaving twitter looking like Alta Vista. Which is not exactly good for the investors in Twitter is it?

Finally if they force Musk to take over the company, there will be a multi year "clean sweep" of the company where virtually every single current employee of Twitter will be replaced.  He'll move the HQ, change the teams, replace staff with software and, happily, get rid of everyone who thinks that calling Musk names is a good career move.

Let's face it.  There is absolutely Zero good news for Twitter when this legal fight is over.  The only good news would be for the investors if Musk is actually forced to buy at the stated price.

That being said, Twitter might then put out a veritable blizzard of court cases against the board, the senior staff responsible for lying to the government and key investors who had a duty to audit the company.

There is no upside in this anywhere.  Had Twitter walked away and let Musk go, then things might be different.

Now?  Pistols at dawn and I can assure you that Musk is one of the last people I'd want to do that with.  Yes the SEC might have got away with it when Tesla was 1 inch from bankruptcy and Musk too.  This is an entirely different ballgame as they say.

[phelan]

I have a feeling from comments that if Musk's fellow investors pull out the court may only be able to apply the penalty sanction. 

The court can definitely force the sale, the money used to make the original offer to purchase Twitter was either Musk's personal equity or loan committments from Morgan Stanley...

https://www.theverge.com/2022/4/21/23033445/elon-musk-twitter-bank-debt-commitment-letter

The funding is provided through two debt commitment letters from Morgan Stanley Senior Funding, in which the bank commits to offering a series of loans worth $25.5 billion. The remaining $21 billion will be covered by Musk himself.

In June Musk changed the funding setup, providing more personal equity and backing away from some of the loans, while also securing $7 billion in outside financing from investors...

https://www.forbes.com/advisor/in/investing/revealed-how-elon-musk-plans-to-pay-for-twitter/

Musk’s original financing package for Twitter comprised $21 billion in cash and $12.5 billion of margin loans secured against his 16% stake in Tesla, together with $13 billion in loans from a consortium of banks.

Musk’s latest round of equity financing has reduced the size of the loan against his Tesla shares from $13 billion to $6.25 billion. This may alleviate the recent pressure on the Tesla share price over concerns that Musk might sell Tesla stock as part of the financing deal.

In addition, the Saudi Arabian investor Prince Alwaleed Bin Talal has agreed to retain his $1.9 billion stake in Twitter, rather than cash out his holding on the takeover.

here are the other primary investors...

The entities providing over $7 billion of funding include venture capital firms, tech moguls, cryptocurrency companies, sovereign wealth funds, property firms and mutual funds.

Larry Ellison, the co-founder of Oracle, topped the table of investors, providing funding of $1 billion. Ellison has been a board director of Tesla since 2018 and was eighth on the Forbes 2022 Billionaires list.

Sequoia Capital Fund, a U.S. venture capital firm focused on technology, committed the second-highest amount of $0.8 billion, followed by the Dubai investment firm, VyCapital, which provided $0.7 billion. The sovereign wealth fund of Qatar also committed to contribute $0.4 billion.

Binance, one of the leading global cryptocurrency exchanges, provided funding of $0.5 billion. Changpeng Zhao, Binance’s billionaire chief executive officer, told CNBC earlier this week: “We’re excited to be able to help Elon realize a new vision for Twitter,” with Binance reportedly hoping to use its blockchain technology to tackle bots.

So a little less than 16% of the current financing package is provided by other investors, but it's clear from the initial funding package that Musk can manage on his own if need be, and yes, the court can absolutely force the sale to go through whether or not that $7 billion in outside financing is available.

------------

Had Twitter walked away and let Musk go, then things might be different.

Twitter has lots of issues, but it would have even more if it let Musk manipulate the stock price with this deal, and then walked away.  That's just bad business, and they would be facing plenty of investor lawsuits if they did that.

[Sigmetnow]

The Australian
Eight in 10 Twitter accounts are fake, says expert
Dan Woods bought more than 100,000 fake followers on the dark web, and says both Elon Musk and Twitter have underestimated the company’s bot problem.
https://t.co/Va7TxxzoI6 (paywalled)

Dan Woods, Global Head of Intelligence at cybersecurity company F5, told The Australian that more than 80 per cent of Twitter accounts are probably bots. This is a massive claim by him as Twitter says only 5 per cent of its users are bots/spams.

Dan has spent more than 20 years with the US federal law enforcement and intelligence organizations.

According to Woods, a former CIA and FBI cybersecurity specialist, both Musk and Twitter have underestimated the bot problem on the micro-blogging platform.

https://www.cnbctv18.com/technology/musk-twitter-cybersecurity-expert-claims-8-in-10-twitter-accounts-fake-14629891.htm

[NeilT]

Twitter has lots of issues, but it would have even more if it let Musk manipulate the stock price with this deal, and then walked away.  That's just bad business, and they would be facing plenty of investor lawsuits if they did that.

To be honest, as the largest single investor, I would have thought that Musk could initiate a lawsuit on Twitter for lying about their mDAU.  Over and above the whole security and lying to the FTC and SEC about their internal controls.

[phelan]

The Australian
Eight in 10 Twitter accounts are fake, says expert
Dan Woods bought more than 100,000 fake followers on the dark web, and says both Elon Musk and Twitter have underestimated the company’s bot problem.
https://t.co/Va7TxxzoI6 (paywalled)

Dan Woods, Global Head of Intelligence at cybersecurity company F5, told The Australian that more than 80 per cent of Twitter accounts are probably bots. This is a massive claim by him as Twitter says only 5 per cent of its users are bots/spams.

Dan has spent more than 20 years with the US federal law enforcement and intelligence organizations.

According to Woods, a former CIA and FBI cybersecurity specialist, both Musk and Twitter have underestimated the bot problem on the micro-blogging platform.

https://www.cnbctv18.com/technology/musk-twitter-cybersecurity-expert-claims-8-in-10-twitter-accounts-fake-14629891.htm

As the article I posted above points out, the number of bots on Twitter is not the same thing as mDAU, which stands for monetizable daily active users, which is an internal statistic they use with advertisers to justify ad spending.  mDAU is the number under discussion here, because it's the metric Twitter reported to the SEC.  Twitter is claiming they work to exclude bots from the MDAU, not that they work to exclude bots from the platform.  Also, the words "monetizable daily active users" should be a clue that number also doesn't include every actual human signed up on Twitter any more than it includes bots. 

[phelan]

To be honest, as the largest single investor, I would have thought that Musk could initiate a lawsuit on Twitter for lying about their mDAU.  Over and above the whole security and lying to the FTC and SEC about their internal controls.

I'm not sure how the details of this current lawsuit make you think that a lawsuit over simply mDAU would have worked out well for Musk.  It's an internal metric, and as such proving it's a lie is very difficult. 

Could you point me to the evidence showing Twitter is "lying to both the FTC and the SEC about their internal controls"?