“If you can’t beat them, join them” is loser talk. If you can’t beat them, buy 10% of them, and then they’re the ones who have to beat you.
That, at least, seems to have been Elon Musk’s conclusion, after he ended a month of whining about the social network, on the social network, with a $2.9bn purchase of 9.2% of the social network.
From the Guardian:
Elon Musk has built up a 9.2% stake in Twitter, according to filings with the US Securities and Exchange Commission (SEC) on Monday.
Twitter shares jumped 26% in pre-market trading on the back of the news that the world’s richest person holds shares worth almost $3bn in the micro-blogging platform.
Musk, the maverick boss of Tesla and SpaceX who has an estimated $273bn (£208bn) fortune, owned 73,486,938 Twitter shares on 14 March according to the filing. Those shares were worth just under $2.9bn based on Friday’s closing price, but will now be worth about $3.6bn.
There’s scant further information about the purchase for the time being. The SEC filing, a form called Schedule 13G, is mandatory for anyone who takes control of more than 5% of a given company (which means that, theoretically, Musk could have owned 4.9% of Twitter before now without needing to disclose it). And, crucially, it requires you to commit to being a passive investor. Which is why it was somewhat odd that Twitter’s chief executive Parag Agrawal announced on Tuesday that Musk would be taking up a board seat:
I’m excited to share that we’re appointing @elonmusk to our board! Through conversations with Elon in recent weeks, it became clear to us that he would bring great value to our Board.
— Parag Agrawal (@paraga) April 5, 2022
Musk is a committed user of Twitter. A very committed user. Let’s have a brief overview of the Tesla chief executive’s history on the site:
Twitter is surely close to his heart, as the place he met his (ex?) girlfriend and mother of his (two?) children (look, it’s complicated), Grimes. The tale of their courtship is oft-told: Musk tweeted out an odd pun involving a theoretical AI hellscape before discovering that Grimes was the only other person who had made the same weird joke. He slid into her DMs and that was that.
In his professional life, though, Twitter is almost certainly better remembered as the reason why Musk now legally has to have a lawyer sign off on all his tweets. In August 2018 he tweeted that he had “funding secured” to take Tesla private at $420 a share (the amount apparently picked as an odd weed-culture joke). Since Musk did not, in fact, have funding secured – he had, maybe, had preliminary discussions with a few investors – the US Securities and Exchange Commission made the not-unreasonable argument that he’d illegally communicated false information to investors, slapped him with a fine and forced Tesla to appoint said lawyer.
Summer 2018 was a fertile time for Musk. Just one month before the “funding secured” post, he sent a tweet which, for a normal person, would have resulted in the most legal trouble they’d ever been in for a tweet. The billionaire, who had offered his services to help rescue a boys’ football team that had become trapped in a flooded cave in Thailand, apparently became outraged when a British diver mocked his suggestion of a mini-submarine to help, and responded by calling him “pedo guy”. Despite doubling down on the claim, tweeting “Bet ya a signed dollar it’s true” to one follower, and hiring a private investigator to find out whether the diver really was a paedophile, Musk managed to convince a US court that the claim was a meaningless insult and avoided libel damages.
Running through all the controversial tweets that haven’t resulted in either two children or a lawsuit would take up most of this newsletter, but Musk has also compared Twitter’s new chief executive to Stalin, said that the first two letters of “SEC” stood for “Suck” and “Elon’s”, called the coronavirus “panic” “dumb” in March 2020, obliquely called for an end to restrictions in April that year, and said we should “Nuke Mars”.
If there’s one through line we can take from a tour of his tweeting past, it’s that Musk is one of the few people on the planet who has a more self-destructive compulsion to tweet than I do. But if there’s a second through line, it’s that the man has a massive issue with authority, and a particular issue with the authority of the SEC.
Which takes us back to that Schedule 13G filing. The document’s a shorter version of a much longer, and much more detailed, form called Schedule 13D, which is to be used only if you’ve relinquished direct or indirect control. Doing so lets you avoid disclosing certain things, like how much you paid for the stake, or the source of your funds.
But at the last minute, it looks like Musk blinked. Just hours before this newsletter was published, he filed an updated version of his disclosure, recategorised under 13D, and revealing that he has committed, as part of the agreement that gives him a board seat, not to acquire more than 14.9% of Twitter while sitting on its board, or within 90 days of leaving. It still leaves open the question of why he tried to hide his activist status in the first place, but should be enough to keep the SEC off his back – over this issue, at least.
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