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April 16, 2022 - Freedomain Radio - Stefan Molyneux
25:03
ELON MUSK vs TWITTER POISON PILL!
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Sorry, good evening, and welcome to Friday Night Live.
Okay, I'll do a little bit of an update on Twitter, Elon Musk, the Saudis, and the poison pill, and then we'll go to audio calls, because I keep promising that, and then fall into deep and retrous love with my own voice and end up not doing it.
So sorry about that. We're back.
We will get that done.
Okay, so let's talk about what's going on with Elon Musk and with Twitter.
So, as you probably know, he got 9 point something percent of the company and...
He asked for a seat on the board.
They said no, if I remember rightly, and the reason...
If you have a seat on the board, you're limited to 15% ownership of the company, which, of course, doesn't give you much control at all.
You get some influence.
Biggest shareholder? Come on, hit me.
Hit me with who's the biggest single shareholder?
Individual. On Twitter.
Biggest single shareholder on Twitter.
Does anybody know? Because, you know, very much committed to free speech and women's rights and minority rights and very pro-gay and all of that.
Actually, the biggest single is a prince in Saudi Arabia.
Saudi Arabian prince. Yeah, Vanguard is a hedge fund or something like that.
No, the biggest single individual dude shareholder is...
Yeah, it's a Saudi prince.
So, that's great.
You know, they've had gays and witches and so on.
So, this is who the left is reduced to defending.
This is who the left is reduced to defending.
Oh, God. I mean, is there a bottom where people bounce, where they look around at the company they keep and they say...
Fuck! This is horrible.
Where have I ended up?
Where has my ideology dragged me to?
What fetid layer of bouncing Dantean hell have I cratered through?
When you look around and you say, ooh...
That's who I'm defending now, really?
How far... I remember watching the movie Reds with Warren Beatty many years ago, and he ends up in some desert with some crazy people.
And you just look around and say, how the hell did I get...
Well, how did I get here?
How the hell did I get here?
I've really studiously tried to avoid that, where you make moral compromise after moral compromise based upon your hatred of virtue, and then you just wake up one day and say, the fuck am I doing here?
What am I doing here?
And maybe for some leftists, they look and they say, well, this is who we're defending now, really?
You know, like the Disney don't say gay thing, and then they literally remove homosexual references to everything going to China.
No moral. And it actually became horribly boring, of course, talking about this stuff.
This is one of the reasons why. I just gave up on politics.
It's just like, it's so boring saying, oh look, they had this moral outlook, they have this moral absolute, which they've just completely violated, again, for the sake of power.
Right? So...
Yeah, it's pretty wild.
I mean, they're incredibly enraged at Russia, and yet, what's going on in Shanghai?
You've got 27 million people locked into their apartments with their pets being killed.
Nobody says a bucket word.
The moral contempt, I feel, for these supposed moralists can scarcely be measured by anything short of infinity.
I'm telling you that straight up.
All right. So, yeah, let's talk a little bit about...
What's going on with...
Oh, and by the way, just before I forget, shout out to Tal Warwick.
Is that his name? 6hexenhammer666.
Became a father for the very first time, I believe, just this last week.
So if you can get a message through to him, please tell him my congratulations and remind him to check out the Peaceful Parenting, although I'm sure he'd be all of that.
Dr. Chris Martinson reported yesterday, a 40% surge in working-age adult deaths, 18 to 65, is reported in 2021 to 2022.
Yes, that's right. Daddyhammer666.
I'm not sure that that's how I'd introduce myself to my child, but anyway.
So, yeah. Congratulations.
I hope he enjoys it. Parenting is the greatest thing.
Except, at the moment, talking to you this Friday night, because that's what I'm choosing to do, so that must be the highest priority that I have right now, which I agree.
So, okay, let's talk about what's going on, because it's pretty wild what is going on.
So, okay, so Elon Musk wants to take over Twitter, and he wants to take over Twitter, and I believe when he says this, he says, look, I don't care about the economics.
This is just, this is the world...
Forum. This is the town square of the entire planet.
And if we have massive amounts of censorship, which I think he perceives there is, then we don't have a democracy, we don't have freedom, we don't have anything, right?
As he himself has said, look, the whole point of free speech is when someone you don't like says something you don't like.
And if they can do that, if people you don't like can say things that you don't like, then you have free speech.
To which I assume the U.S. Constitution agrees with him.
And if you don't let people you don't like say things you don't like, you don't have free speech.
So he put in this offer.
Now, the offer was about 40% above the valuation.
And it's funny because Goldman Sachs said that the target for Twitter is 30 bucks a share.
What was Elon's, 54 or something like that?
And then they said, well, no, it's not high enough.
That's the problem. He said, it's not high enough.
I don't know. It's just, you know, people who turn on a dime without even noticing it.
But like, so when I say something and I get a sense that I've contradicted myself, I get this splinter in the mind's eye.
I get this thorn in the brain.
You know, it's like, oh, got to go back and check, got to resolve it, got to figure it out, got to, you know.
But there's people who just, they just twist and turn.
You know, they're in pursuit of, they're like a cheetah in pursuit of an impala, like a little baby impala, right?
And they're just in pursuit of power.
And if you're in pursuit of an impala and you're a cheetah, you just twist and turn to pursue the impala, right?
It's like you go to your left, or you go to your right, and then the impala goes to your left, so you go to your left, and you go back to your right again, then you double back, right?
Now, if you're just in pursuit of power, changing course is totally fine.
You know, it would be like saying to a cheetah, hey man, you committed to going this way.
Now if you commit to going this way, you can't just change it because the impala changes direction and the, you know, he would say, well of course I can change it.
The whole point is to catch the impala.
It's not to commit to a particular direction.
So when you're in pursuit of power, Switching directions, reversing moral positions.
It's like a cheater going left or right, just in pursuit of power.
And yet people think that there's some objective moral standard that some people operate by, and it's just...
I didn't even know what to say.
Like, it's just no way to figure it out.
Okay, so let's talk...
This is from Yahoo Finance.
Okay, I'll... And again, I'm no big massive financial experts.
I've been through a couple of takeovers.
One non-hostile, one more hostile.
So I've had some experience with this.
So this is no advice.
This is no expertise. Just my thoughts, right?
So this is from today.
Twitter Inc. has adopted a poison pill on Friday to limit Elon Musk's ability to raise his stake in the social media platform as a buyout firm emerged to challenge his $43 billion bid for the company.
So, a poison pill, of course, is named after that cyanide pill that people have if they're spies in enemy territory.
They maybe get cyanide put into a tooth or they have a pill which they're supposed to take if they're captured so they don't get tortured and give up everyone else, right?
So, a new technology-focused private equity firm called Toma Bravo It has more than $103 billion in assets.
Boy, I remember when that was a lot compared to Elon Musk's fortune of, what, $260-odd billion?
Anyway, $103 billion in assets under management as of the end of December has informed Twitter that it is exploring the possibility of putting together a bid, people familiar with the matter said.
Now, I don't know if any of this is real or not.
My personal guess, guess, obviously just a guess, is that The management of Twitter does not want to let Elon Musk lift the kimono and see what's going on.
There's some serious stuff at work here, right?
So, Twitter said in sworn testimony to Congress, we don't censor, we don't shadowpan.
Now, if a true free speech aficionado gets into Twitter and can lift and look at every single thing, and they find out that Twitter lied to Congress, Under their sworn testimony, that could be pretty bad.
I mean, in a theoretically just universe, it probably wouldn't be pretty bad because it's, you know, the way the world is.
But in a theoretically vaguely just universe, that would be pretty bad.
So there could be quite a lot that is going on here in terms of not...
It's not just, well, we don't want free speech on the platform, if that's what's going on.
In my opinion, it is. It's, what if he finds that we've been...
I mean, to me, if you say, we don't censor based on content, we don't shadow ban, we don't any of those kinds of things, if you say that, and then if there's proof inside of Twitter that you do do these things that you've openly stated, literally under oath, that you don't, I mean, first of all, that seems to be kind of perjury.
I'm no lawyer, but it seems to be kind of perjury.
And secondly, it would also seem to be kind of fraud, right?
I mean, that's Theranos-style fraud, right?
Because Theranos says we can do, you know, 100 or 200 tests on a tiny drop of blood.
Wasn't the case. And if a company says we don't censor for politics and we don't shadow ban, then if they do that, isn't that fraud?
Again, That would be my moral understanding was, well, of course it would be freaking fraud.
It would be unbelievably terrible fraud, right?
So there's a lot that's going on here that's more than just, oh, well, you know, there's some free speechy issues and blah, blah, blah, blah, blah.
I think there is genuinely some fear on the part of the executives about what somebody who's really curious and relentless and free speech focused is.
What they would find if they start digging deep into what Twitter's doing and all of that.
So I think there's a lot of...
So I would assume...
Again, just an assumption. I would assume that they need a credible reason to say no to Elon Musk.
And so my guess would be that they got Toma Bravo...
To put in some kind of offer to say, well, we're not saying yes to Elon Musk because the Toma Bravo offer is on the table, and my guess is the Toma Bravo offer will not amount to anything.
I think that they're just using it to say no to Elon Musk, which I think is for reasons that would be pretty obvious.
So on Friday, Twitter has announced that it adopted a poison pill.
Now, again, no financial expert.
This is sort of my understanding of how it works.
So this is the way it's described.
Twitter said on Friday, it adopted a poison pill that would dilute anyone amassing a stake in the company of more than 15% by selling more shares to other shareholders at a discount.
Known formally as a shareholder rights plan, the poison pill will be in place for 364 days.
The move would not bar Musk from taking his offer directly to Twitter shareholders by launching a tender offer.
While the poison pill would prevent most Twitter shareholders from selling their shares, the tender offer would allow them to register their support or disapproval of Musk's offer.
And my understanding is that the Twitter board is not allowing their shareholders to vote on this.
Because, you know... They're so pro-democracy.
Well, of course they're not going to let their shareholders vote on this.
Of course not. Of course not.
Look, I mean, in my view, Twitter interfered in the 2020 election by suppressing the Hunter Biden story, which would have swung the election for sure.
So, I mean, they've already interfered in the election.
The idea that they would let their shareholders vote on this, I mean, come on, not in a million years.
Not in a million years. So...
The poison pill is if somebody gets more than 15% and you can have a maximum of 15% to be on the board as far as I understand it.
If somebody gets more than 15% ownership, then they're not allowed to buy shares at a discount, but other shareholders are.
So I would assume, I could be wrong, but I would assume that basically the board is saying, well, we'll get super cheap shares, which will dilute whatever anyone else is buying to the point where it dips back below 15% or certainly doesn't get to 51% or whatever, right?
So they're basically just diluting by issuing new shares and selling them to themselves or their buddies or some shareholders that they know at a discount.
How the fuck that's legal?
I have absolutely no idea. I mean, that seems to me, it strikes me morally, it's like a market manipulation of the first order.
That you're selling yourself cut-rate shares in order to prevent someone from buying the company.
I mean, I know this stuff started in the 90s, 80s, probably 80s, right?
This is a strategy that started in the 80s.
I think it was used by Papa John's, a couple of other places, right?
It's a strategy that started in the 80s when there was a lot of takeover bids, a lot of that Gordon Gekko, you know, I fired 12 floors of people and the company's doing even better than it used to be.
Or, you know, it's a really good speech in Wall Street.
Michael Douglas like saying, you know, I got like rows and rows and rows of vice presidents.
How can I figure out what the hell they do?
So cleaning house and, you know, companies become ridiculously inefficient over time, particularly with government mandates and HR and diversity mandates.
They just become ridiculously inefficient over time.
So how a board can dilute the value of shares is By either themselves or I assume people close to them or other people buying shares at cut rate prices and then I think anybody who's over 15% gets shares super expensive.
I have no idea how you get to sell shares to some people super cheap and some people super expensive.
I don't know how that works.
I don't know how that's possible.
But again, I'm no lawyer.
It's just like, how is that at all?
I don't know. It just seems bizarre.
It just seems bizarre. Wedbush analyst Dan Ives tweeted, It is a predictable defensive measure for the board to go down that will not be viewed positively by shareholders given the potential dilution and acquisition unfriendly move.
So, let's see here.
It remains possible that a private equity firm will boost Musk's bid by partnering with him rather than challenging him.
Musk's criticism of Twitter's reliance on advertising for most of its revenue, however, has made some private equity firms apprehensive about teaming up with him.
This is because a strong cash flow makes financing a leverage buyout much easier.
So just for those of you who don't know, and I'm sure that you do, there's a lot of barriers to getting free speech back on the web.
You know, one of the big barriers is that Apple and Google have their own anti-free speech policies.
So if vile speech, as I've talked about before, is found on your platform, A bunch of activists go to the management at Apple and the management at Google and say, oh my God, there's this terrible stuff on the platform.
And then they go to that company and they say, well, unless you remove this stuff, we're not going to let you in the Apple store, we're not going to let you in the Google store and all of that.
So there's that layer to deal with as well.
It's a long, hard haul to get back to the free speech that used to be there, right?
I mean, it's pretty easy to spill paint.
It's It's pretty hard to clean it up, right?
But now advertising is a problem too, right?
So let's say that Twitter moved to a model where it was four bucks a month to tweet more than ten times or whatever they would come up with, four bucks a month, and maybe that would be on crypto, have it as a crypto option to be as friction-free as possible and reduce your credit card fees and so on, right? So let's say that it was like five bucks a month, ten bucks a month, whatever it would be, to tweet.
Now what's interesting about that is Is that then your revenue is dispersed.
Your revenue stream is dispersed.
And that, if you want to say anything controversial, you cannot have a single pain point.
You can't have a single choke point at all.
You have to spread out your revenue sources.
Because right now, the advertising model lends itself extraordinarily well to censorship, as I'm sure you're aware.
Because let's say you have 100 advertisers that are comprising the majority of revenue coming off Twitter or company ABC or whatever, right?
You've got 100 advertisers.
Okay, well then you simply go to those advertisers and you say, you know, your advertisement is running right next to this horrible thing that someone said.
Do you want that?
Do you want your company, your logo, your reputation to be...
Attached to this horrible thing that someone said and, you know, there's going to be this article and that article and people are going to assume and they're going to, oh, you must support this stuff because you're willing to run ads with this terrible speech around and therefore there's going to be negative publicity, there's going to be boycotts, there's going to be all kinds of complaints and then your shareholders are going to get mad.
So you don't want to have your advertisements next to this terrible thing.
That was said, right?
So you hit those 100 advertisers, maybe you get 40 of them, maybe you get 50 of them, maybe you get 60 of them, but that's enough for the company to say, well, you can't say this stuff anymore.
And now it becomes about activism.
It doesn't become about any objective morality.
It doesn't become about any objective morality, right?
You have a pain point that is really, really precise, right?
Hit here, and the whole thing comes down, right?
Whereas if you are charging users, well first of all it reduces trolls.
It eliminates bots. Charging users just makes perfect sense.
So charging users allows you To make sure that people aren't going to just troll and at least if they're going to troll, they have to pay for the privilege, which they generally don't, right?
It also gets rid of bot activity and it means that you know that people on the platform are real.
But most importantly what it does is it decentralizes your income source to the point where if you've got, I don't know, a billion people paying four bucks a month, Then it's kind of tough to find them and it's kind of tough to pressure them into changing what they say.
Whereas if you've got a billion users or half a billion users versus a hundred advertisers, the advertisers are the single choke point.
Wherein your policies can be changed.
So, right, that's pretty key.
And I don't know, advertising is problematic that way.
And of course, advertising has been central to the web.
And I think, isn't that how the Wall Street Journal got YouTube going and all of that?
If I remember rightly, they just said, oh my God, do you want your logo next to this terrible video or whatever, right?
And then that's just how you get the game going.
And whereas if you charge customers directly rather than sell them advertising, then You can have a much freer organization for a lot longer.
I mean, usually everything turns left, right?
This is an old law. It says every institutional organization that's not explicitly right-wing will turn left-wing over time.
That's just the way it goes. So, yeah, it's pretty wild.
Now, let me ask you this.
Let me ask you this. It's a tech company, right?
So, oh, and by the way, so Twitter went public in 2013.
Now, right, nine years later or whatever, it's 18 cents away from its initial IPO price, right?
It's 18 cents.
Now, if you count inflation, it's down significantly, enormously from 2013.
So, I mean, I know it's been higher and tech stocks are getting hammered for the most at the moment, but...
That's not good. I mean, that's really not...
It's not good management to be 18 cents away from your initial public offering nine years later.
Yeah, oh look, they can print shares.
Yeah, no kidding, eh? No kidding.
So let me ask you this.
If you don't know, if you do know, that's fine.
So how many employees...
Twitter has one job, right?
And I'm not saying their technology is inconsequential.
If you look at the problems that Truth Social is having, right, it's not inconsequential to get this kind of technology up and running.
But how many employees does Twitter have?
Do you know? How many employees does Twitter have?
Big question, right? Just hit me with your guesses here.
If you would be so very kind, I would appreciate that.
Yeah, well, so 10k, you got 10,000 in there.
Sorry, I know there's a little bit of a delay here.
69. Oh, I think you've said that before, because you are a one-joke wonder.
1,000 in the hundreds?
No, 500 or way more?
8 to 12,000? 666 probably?
140? Well, Twitter has 8,000 employees.
Twitter has 8,000 employees.
That's insane.
I mean, that's completely bad.
I don't even know what to say about that.
That's astonishing how many employees they have.
I mean, other tech companies, I remember some tech company sold in the billions with 55 employees.
Now, that's a bit of an outlier, but How many of those 8,000 employees are coders producing value?
I mean, I don't know that they need to do a huge amount of marketing.
Everybody knows Twitter. I don't know, right?
But, yeah, what is going on there?
Now, they have more than $6 billion of cash on their balance sheet.
Annual cash flow is close to $700 million.
But, nonetheless, that is huge.
That is absolutely huge.
The shareholders are kind of pissed, from what I can tell, which is, you know, they're saying, hang on a sec, this is the biggest business decision that Twitter has ever had as a public company, and why wouldn't we get to vote on it?
Now, I mean, if you own shares in Twitter, I must say that my sympathy, if you are concerned about Twitter being slightly less democratic than you might want, my sympathy is like, no, I have no fucking sympathy.
I have no sympathy at all myself.
You've got to be kidding me, right?
They have clearly signaled their anti-democratic nature many, many times.
And do I think that they told the truth to Congress when they said they don't censor or shadow ban?
I would not put a huge bet on that as to it's totally true.
I don't think I'd put a huge bet on that at all.
So, yeah, I think that's important.
Do you remember back in 2019 when two former Twitter employees were charged for spying for Saudi Arabia?
That seemed important as well.
Oh, yeah, WhatsApp had 55 employees when it was acquired for $19 billion.
How the hell does Twitter have 8,000 or more employees?
Yeah, what do they do?
What do they do?
I'm pretty sure that they're not doing a massive amount of hardcore coding to improve.
You know, okay, you've got a bunch of different platforms and so on and code bases and all of that.
Although, you know, I think pretty much you want to write in a code base that translates to various platforms these days.
I mean, like love for graphics or whatever it is, right?
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