Why is the IPO price the relevant metric? In fact, I would argue that exactly because it's been such a poor investment since the IPO, the fact that he's willing to offer a premium over recent market prices is a positive. Then again, I don't own any Twitter, so my views are irrelevant in that sense.
One major point of going public is to give the first investors liquidity. The banks and funds that supported this financing event (the buyers at IPO) are the ones being pitched: Vanguard, Morgan Stanley, BlackRock, Fidelity, etc. They might have bought the dip but only after buying into the IPO.
TWTR started trading 8.4 years ago at 45/share (after being priced at 26). SPY was priced at 180 and is today at 440. Gold was down near 1200 and is now at 1900. Twitter grew in value at 2.2%/yr before inflation while the S&P index grew 11%/yr. Factoring in the IPO pop (which screws the VCs), Twitter would have grown at 9.1% per year.
(The banks also have strategies that earn them more at IPO, so they probably are earning slightly more than 10% per year on their investment.)
In short, Twitter is not keeping up with the broader economy at Musk's price. You're telling the investment banks, mutual funds, and most-senior vested employees that their company has the same worth as a low-risk government bond or a bar of metal.
> In short, Twitter is not keeping up with the broader economy at Musk's price. You're telling the investment banks, mutual funds, and most-senior vested employees that their company has the same worth as a low-risk government bond or a bar of metal.
Exactly! The stock has been a terrible investment since IPO, and Twitter management has done a terrible job of unlocking value. It's current management that has failed to keep up with the broader economy. Musk thinks he can do a lot better if he has full control. Musk's price is a reflection of how poorly current management has done; he is not trying to compensate you for future growth.
If you think current management can drive the share price much higher, then you should not sell to Musk. If you think current management is just going to be more of the same, Musk is giving you a big premium over where the stock had been trading, and you should take his offer.
If Musk thinks Twitter will be worth $400 in five years' time, then he can realize that value for himself. He'd be very foolish to offer you that price now.
His companies and investments have done well by VC standards. It's probably a "not great" idea to refuse his offer.
I also understand his point about mismanagement from a anecdotal user perspective: I hate the platform but not the concept.
- Horrendous UX (Why can't I see the context of a tweet?)
- Seemingly crappy bot policing (Really? You, "Megan, Warrior, mother, wife, respect all animals, bless our troops, go cowboys [football][usaflag][fingerhorns]" really have 4138 followers and 4087 followed? Plus, the first follower I click has the same corny bio style, 4112 followers and 4056 followed, and only retweets political tweets?)
- Creates aggressive echo chambers and lopsided arguments. (Influential user blasts another, their army of followers comment and like each others comments, blasted user's entire dialogue gets buried under army's despite having valid arguments.)
- I'm sick of seeing the thoughts of politicians and celebrities.
I think we agree on Twitter generally but I don't really get your examples. I also have the "Minimal Twitter" extension installed, and use Twitter exclusively on desktop so that certainly may color my opinions.
1. Seeing the context is as easy as clicking on the tweet. Tracking multiple threads off the same initial tweet would be nice if it were easier, but I'm not sure the UX would work for something like that (it's not an easy problem).
2. 100% agreed that the bot policing is garbage.
3. I think this is part of the chronological aspect of threads and replies, I'm not sure how you fix this without having an algorithm decide which tweets to show, which has its own host of problems.
4. I only see these when someone I follow retweets it, which is almost always something political. I honestly don't remember the last time I've seen a celebrity tweet, but that might be because of the extension I've installed.
Or they realized that their initial expectations were inaccurate. The market in general sure did, so why not the IPO investors? It boils down to how they perceive the opportunity cost of the decision, not how they valued the company a decade ago.
Because that's probably when the GP bought in, and the GP is mostly concerned about what their return would be from this.
A 54% premium on the current price is absolutely in the ballpark of "tremendous potential." If you think it's not, it's easy to vote against this. I'm not sure I buy Elon's "the company has to be private to make these changes" argument, and if there was a path for current public shareholders to remain private shareholders and potentially reap the rewards of a future acquisition or second IPO, I think a lot of them would be all for it.
Snowwrestler in this context, I've always taken it to mean two comments above whatever comment says "GP" (grandparent/grandposter of current comment). But I've seen GP/OP used in slightly different contexts which is sometimes a bit confusing admittedly.
