This is great work… now what does it look like if insiders received $54.20 per share on a company that was failing and knew it was failing? What would it look like if Tesla’s primary investor was over leveraged and had $6B invested in a company that was about to go belly up before Tesla’s CEO bought it?
"Apple, Twitter's top advertiser ... On Saturday, Apple ads started reappearing on feeds, a clear sign the world's most valuable company restated its advertising program"
and
"... reporter Zoe Schiff said Amazon plans to resume advertising on Twitter at $100 million per annum, pending security tweaks to the company's ads platform."
Diversifying from Tesla was probably the right move. But had he played this better he could have gotten Twitter for much less. He let his ego get the best of him.
Thank you for another great article. Your work has become my favorite part about Friday mornings.
I appreciate your careful and candid analysis. If it were a poker game, I would say you’ve calculated the pot odds perfectly post-flop and now we’re all excited to see the river.
But I would also add that Elon is a creative force (Or at least an accomplished director of the creative forces of others, probably both) and has a Steve Jobs-esque ability to create value out of thin air.
Examples abound. In the case of twitter he has mentioned the inevitable inclusion of his x.com app, which he describes as potentially the most valuable financial institution on the planet. Certainly, a banker would assign a value of precisely $0 to this statement. But the artist/engineer of such an app might just view the twitter community as the perfect captive audience to unleash it upon and see obvious value where most see nothing.
Ad revenue is one thing. Transaction revenue from each user is orders of magnitude greater.
It seems Elon has the ability to bring a ‘Wild Joker’ to the table, confounding the standard calculus, and disrupting the status quo. I look forward to seeing how it all pans out!
"Directionally, this is good (for cash flow)." - Likely good for the business as well. I'd say there are plenty of companies that should be "Musked" (or "Ichaned" from when he fired a whole SG&A building).
As for the business, Social media as a service doesn't sound too bad. I would love seeing a company, besides AMZN, dedicated to the consumer.
Operationally and realistically, much of the "perceived value" is just that: perceived. The agitation happening and making advertisers leave - and much exaggeration on the front of "leaving twitter for good" - is an ideologically driven, non-fact-based movement.
However, since twitter has nothing else but its user base, this will be an interesting one, indeed. If users bleed, advertisers bleed out, nevermind the biased agitation on either side.
The slashing of headcount is an Excel-based exercise indeed and numbers don't cover operational quality of axed personnel. That is the most critical point - besides hardware/real OPEX, there is a soft factor attached to headcount numbers. Axe just the wrong person(s) and down the drain we go.
Great analysis Bear, thank you for this. An owned and controlled advertising/messaging platform with a user base of relevant consumers at any size (and especially that of Twitter) is potentially a very valuable tool for a diversified entrepreneur. Hard to quantify the scale of the impact on the upside but certainly net benefit for the owner across their various existing, or imaginable future products.
Late comment here, but this was a really great post and I wouldn’t mind seeing more financials-focused deep dives like this in between the more macro-focused ones. Something like digging into the recent Thoma Bravo and/or Vista take-privates could be interesting (despite the market declines, many of them still seem expensive to me).
Thanks for the deeper dive, Bear. Much respect for holding your word too!
This is great work… now what does it look like if insiders received $54.20 per share on a company that was failing and knew it was failing? What would it look like if Tesla’s primary investor was over leveraged and had $6B invested in a company that was about to go belly up before Tesla’s CEO bought it?
One report of an advertisers returning ... Monday Dec 5th. One of the biggest problems you identified is being addressed.
https://www.zerohedge.com/technology/musk-tells-90000-listeners-twitter-space-apple-ads-full-resumed-after-spat
"Apple, Twitter's top advertiser ... On Saturday, Apple ads started reappearing on feeds, a clear sign the world's most valuable company restated its advertising program"
and
"... reporter Zoe Schiff said Amazon plans to resume advertising on Twitter at $100 million per annum, pending security tweaks to the company's ads platform."
Whatever the outcome, it will be a fun one to watch - indeed!
Awesome work Big Bear!
Diversifying from Tesla was probably the right move. But had he played this better he could have gotten Twitter for much less. He let his ego get the best of him.
Thanks for the report.
Your best article so far. It`s amazing how you are able to juggle different perspectives at the same time. Charlie Munger would be proud. :)
Thank you for another great article. Your work has become my favorite part about Friday mornings.
I appreciate your careful and candid analysis. If it were a poker game, I would say you’ve calculated the pot odds perfectly post-flop and now we’re all excited to see the river.
But I would also add that Elon is a creative force (Or at least an accomplished director of the creative forces of others, probably both) and has a Steve Jobs-esque ability to create value out of thin air.
Examples abound. In the case of twitter he has mentioned the inevitable inclusion of his x.com app, which he describes as potentially the most valuable financial institution on the planet. Certainly, a banker would assign a value of precisely $0 to this statement. But the artist/engineer of such an app might just view the twitter community as the perfect captive audience to unleash it upon and see obvious value where most see nothing.
Ad revenue is one thing. Transaction revenue from each user is orders of magnitude greater.
It seems Elon has the ability to bring a ‘Wild Joker’ to the table, confounding the standard calculus, and disrupting the status quo. I look forward to seeing how it all pans out!
Love your micro-analysis!
"Directionally, this is good (for cash flow)." - Likely good for the business as well. I'd say there are plenty of companies that should be "Musked" (or "Ichaned" from when he fired a whole SG&A building).
As for the business, Social media as a service doesn't sound too bad. I would love seeing a company, besides AMZN, dedicated to the consumer.
All the best!
Operationally and realistically, much of the "perceived value" is just that: perceived. The agitation happening and making advertisers leave - and much exaggeration on the front of "leaving twitter for good" - is an ideologically driven, non-fact-based movement.
However, since twitter has nothing else but its user base, this will be an interesting one, indeed. If users bleed, advertisers bleed out, nevermind the biased agitation on either side.
The slashing of headcount is an Excel-based exercise indeed and numbers don't cover operational quality of axed personnel. That is the most critical point - besides hardware/real OPEX, there is a soft factor attached to headcount numbers. Axe just the wrong person(s) and down the drain we go.
Great analysis Bear, thank you for this. An owned and controlled advertising/messaging platform with a user base of relevant consumers at any size (and especially that of Twitter) is potentially a very valuable tool for a diversified entrepreneur. Hard to quantify the scale of the impact on the upside but certainly net benefit for the owner across their various existing, or imaginable future products.
Late comment here, but this was a really great post and I wouldn’t mind seeing more financials-focused deep dives like this in between the more macro-focused ones. Something like digging into the recent Thoma Bravo and/or Vista take-privates could be interesting (despite the market declines, many of them still seem expensive to me).