Elon Musk’s attempt to “own the libs” led him to dramatically over-pay for the small-but-influential social media platform Twitter. With the verve of a businessman that drinks his own Kool-Aide, Elon blindly pursued a deal that had him paying at least 3x more than the value of the company. Defenders may argue that at the time of the deal tech stocks were at an all time high, but high or not, unless a company is seeing exponential growth or has chocolate and peanut butter synergy with its buyer, nobody pays 44x EBITDA for a company.
But Elon wasn’t alone in his bid. He had backers; equity backers, debt financing backers and personal backers. This article exposes the people who willingly ignored the bad logic of the deal and, instead, decided to fund their personal racehorse. Indeed, they overlooked their fiduciary responsibility to their companies in an effort to cozy up to Elon.
Before I share the list of CEO’s who blithely ignored logic and signed over millions and billions of dollars to support the ego of a man that desires adulation while supplying very little value in return – let’s take a look at Elon Musk’s track record prior to the deal.
- Flouts Covid protocols and keeps Tesla’s assembly lines open during a worldwide pandemic.
- Tweets misleading and non-compliance statements about coronavirus, suggesting scientifically unproven chloroquine and hydroxychloroquine as potential treatments. Tweeting that young people are immune. Tweeting complaints about lockdowns.
- Tesla, and in turn Elon Musk, were found guilty of unfair labour practices by engaging in union busting strategies and threatening legal action if employees talked to the media. (Oh the irony that he calls himself a free speech absolutist…)
- Female Tesla employees cite Elon Musk when suing Tesla for relentless sexual discrimination in their workplace.
- Tesla lost a $137,000,000 discriminaton suit “alleging a hostile work environment and racial harassment, and said “daily racist epithets” such as the n-word were used in the factory”.
- A private jet masseuse files a sexual misconduct claim asserting that he asked for a happy ending to his massage – Elon pays $250,000 for her silence.
- Moves to Texas to save $2,000,000,000 in personal taxes. This is the tax system that paid for the schools that educated the bulk of the SpaceX and Tesla workforce. (He was worth 25.6 billion at the time of the move.)
- While personally saving 2 billion dollars in taxes by moving to Texas, Tesla happily received 5 billion in regulatory credits from the government.
- He was sued for fraud by the SEC when he tweeted that he was going to take Tesla private in an unabashed effort to boost Tesla’s stock price.
- Called the British diver Vernon Unsworth – who saved a group of boys trapped in a cave in Thailand a ‘pedo-guy’ after the diver suggested he was trying to use the crisis as a publicity stunt.
- Screams about the value of free speech all while paying thousands of dollars to someone to stifle their right to publish Elon’s private jet location.
- Fathers children with two different women within weeks of each other.
So – in summary, the following people financed one of the worst business deals in history in order to support a man who has at best, shown an egregious lack of character, and at worst, is a racist, sexist, labour-busting, fraudulent, fake news disseminating, can’t keep it in his pants, egomaniac. The investments made by the following people have given Elon complete control of one of the most influential social media platforms in the world.
Debt Financiers Representing about 13 BILLION DOLLARS
These debt financiers are the most appalling because they not only backed one of the worst business deals ever, they’ve also PROMISED NOT TO SELL THE DEBT. Most banks, when sitting on a very large pile of shit, will offload said shit at a discount to get it off their books. But these banks, still kowtowing to the man they decided to make king, have promised not to sell the debt, which will ultimately cost their companies more money just to keep Elon in the power position. If they did what-every-bank-would-typically-do in this situation and sell the debt, Twitter’s value would essentially be knocked down to 7 billion and Elon and his equity partners would be on the hook to pay enormous interest payments to the buyers of the debt (typically vulture funds). If they miss a payment, the vulture funds could (and would) take over Twitter – meaning they would kick Elon out. Listen to William Cohan on Puck News Podcast for the details.
Here are the equity partners – these are the companies that flagrantly spent their clients money so they could be part of his ‘bro-culture”.
Reuters Chart: Factbox: Who is financing Elon Musk’s $44 billion deal to buy Twitter?
| Equity Investor | Equity Commitment | |
| A.M. Management & Consulting | $25 million | |
| AH Capital Management | $400 million | |
| Aliya Capital Partners | $360 million | |
| BAMCO | $100 million | |
| Binance | $500 million | |
| Brookfield | $250 million | |
| DFJ Growth IV Partners | $100 million | |
| Fidelity Management & Research Company | $316 million | |
| Honeycomb Asset Management | $5 million | |
| Key Wealth Advisors | $30 million | |
| Qatar Holding | $375 million | |
| Sequoia Capital Fund | $800 million | |
| Strauss Capital LLC | $150 million | |
| Tresser Blvd 402 LLC (Cartenna) | $8.5 million | |
| VyCapital | $700 million | |
| Witkoff Capital | $100 million | |
| Litani Ventures | $25 million | |
| Saudi Arabian investor Prince Alwaleed bin Talal | $1.89 billion (34,948,975 shares) |
And finally…I would like to offer a special mention to the following investors who could have taken their money and ran – but instead decided that, they too, wanted to bask in the glory of Elon’s egomania.
18 million shares – approx 1 BILLION
Jack Dorsey
Lawrence J. Ellison Revocable Trust
1 BILLION
Lawrence J. Ellison
“When people show you who they are, believe them the first time.”
~Maya Angelou
Since his completion of the worst deal in history, Elon has continued to show his true colours by firing top executives ‘for cause’ and letting go 50% of the Twitter staff, including staff responsible for content curation, human rights and ethics. He jumped head first into a fake news conspiracy theory regarding the break in at Nancy Pelosi’s home – tweeting a link to a fake-news claim that her husband was drunk and was in a fight with a male prostitute (this tweet has since been deleted). Ironically, this tweet came after he tweeted “Twitter obviously cannot become a free-for-all hellscape, where anything can be said with no consequences”. Now, as advertisers head for the hills, he does what only a true authoritarian would do – he tries to bully them, after he complained about advertisers leaving the platform due to activists, he vowed to name and shame them if they don’t come back.
Elon will soon learn that advertisers, unlike the financiers above, can’t buck against public opinion and lean into toxic bro culture. Twitter is primarily a brand platform which means that it is not a must buy for advertisers. Ironically, he bought Twitter in an effort to control the narrative but instead he has inadvertently created his own guardrails. Guardrails that will imprison him more than any content moderator could. If he continues on the same tack, declaring the right for free speech as he stifles contrasting opinions and spreading right wing fake news, he will blow the business up. It’s time for his backers to put down their beer and accept their fiduciary responsibility, saving Twitter and placing Elon in his own personal hellscape.
References
https://www.cnn.com/2020/04/29/tech/elon-musk-twitter-coronavirus/index.html
https://www.washingtonpost.com/technology/2021/03/25/tesla-nlrb-ruling/
https://www.washingtonpost.com/technology/2022/11/05/jack-dorsey-elon-musk-twitter/
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