The Musk Texts - Timeline and Insights
It’s been an eventful couple of weeks for those who follow Tesla and the hijinks of its CEO, Elon Musk. I’m hoping to do a separate post on AI Day and the “Tesla Bot” / “Optimus” project. For now, I wanted to share something I wrote on the airplane over the weekend, basically my notes piecing together the timeline of the Musk Twitter acquisition offer.
Last Thursday I read through the full log of messages released in a Delaware court filing. I shared some initial thoughts on Twitter (e.g., here and here) when I was about halfway through them. I’ve seen a few snippets highlighted here and there on Twitter, and a lot of “hot takes”, but very little in the way of insightful analysis. I wanted to understand the context of these messages better, so I decided to piece together a timeline of publicly known events relevant to his Twitter acquisition offer and map them to these messages.
The full timeline is below, but it’s very long. I hope it might be interesting to some (perhaps in lieu of reading through the 40 pages of blurry text in the court documents), but first I’ll give the TL;DR version as best I can.
Musk started buying shares in January, around the same time he tweeted annoyance at Twitter’s product priorities and spam issues
He claims the EU told Starlink and other ISPs to block access to RT (Russia Today) which he did not take kindly to
For what it’s worth, I agree with him that governments of free countries should not demand that ISPs block access to foreign media
He called RT “entertaining” and said “lots of bullshit, but some good points too”
Lots of people egged Musk on, telling him to buy Twitter, before we had any real indication that he was considering such a move
It’s really hard to figure out what he was thinking
In one light, it looks like Musk’s decision to make a takeover offer was impulsive, perhaps a bluff, and perhaps part of a temper tantrum
On the other hand, why did he start buying shares in January? What was his goal, assuming he had one? My best guess is he was buying influence, without any real strategy or plan other than a presumably sincere belief that he could steer Twitter in a better direction
(I suspect a lot of us think we could do this, but few have $44 billion lying around to try and prove it)
It blows my mind that he was texting Parag, without warning, about his intent to make a takeover offer and then two minutes later tells his brother “I think a new social media company is needed that is based on a blockchain and includes payments”. WHO DOES THIS?
One message above all others sinks his case, in my opinion. Before even making the formal offer, he says that he wants to buy the company because drastic action is needed, and adds “this is hard to do as a public company, as purging fake users will make the numbers look terrible, so restructuring should be done as a private company”
If Twitter had said in its public filings that its mDAU number may be off by up to 5% because of bots/fake accounts/etc, and Musk believed the number was not higher than that, then why would he believe that purging fake users would make the numbers look “terrible”?
To me, this shows that Musk believed Twitter had a much bigger problem with “fake users” than <5% (never mind the whole mDAU versus DAU mess or anything Twitter had ever claimed, even). I think this makes it pretty clear that his primary argument for why he should be allowed to back out of the deal was completely disingenuous
Elon thought he had some brilliant ideas about “blockchain social media”, and discussed this with his brother Kimbal who seemed enthusiastic (though also pointed out some real problems, but mostly dismissed them)
However, he switched his stance on this very suddenly between April 23rd and April 25th, when he wrote “Blockchain twitter isn’t possible”, presumably after consulting with a competent engineer
He also said he’d meet with Sam Bankman-Fried “So long as I don’t have to have a laborious blockchain debate” (I lol’d)
Musk is nothing if not a car salesman. This is never more apparent than when he tells multiple people that the deal is “oversubscribed” and makes it sound like he’s doing them a favor by making room for them to get in on it. As far as we can tell from these messages, he does this with the very first person he reaches out to about joining him on the deal
He even tells Reid Hoffman that he’ll “make room” for him in the deal because they are friends (to the tune of $2B), and then a few hours later messages someone else out of the blue to ask if they want in on the deal
I’ve come to suspect this is less of a negotiation tactic, and more about Musk’s ego. He doesn’t want to be seen as needing help. In fact, I bet he got less help financing the deal because of this approach versus if he’d been straight with people
Musk was regretting the deal and talking about “due diligence” within ~2 weeks of making the offer
Maybe he truly didn’t realize he’d made a no-contingencies offer? It was certainly a dumb idea
I thought it illuminating to piece together a timeline which combines the major events revealed in these court documents with other publicly available information – in particular, Musk’s SEC filings and tweets. Musk has long been a Twitter “super user” and has on many occasions criticized the company or made suggestions about how it could be improved. Here I will focus on events beginning at the start of 2022.
January 21 – Musk tweets out his annoyance at Twitter’s introduction of their absurd “NFT profile picture” feature. He says “this is annoying”, and follows up with “Twitter is spending engineering resources on this bs while crypto scammers are throwing a spambot block party in every thread!?”
January 24 – The first of the recently released text message exchanges occurs. However, they’re only an exchange with a member of SpaceX’s executive support staff, describing some trouble with Musk’s Twitter account (it sounds like Twitter locked it after some hacking attempts, and he had to reset his credentials).
January 31 – Musk begins buying up Twitter shares, apparently buying chunks of them almost daily.
March 5 – Antonio Garcias messages Musk to praise him for a tweet he posted regarding free speech, presumably referring to this:
During this exchange, Musk tells Garcias that the EU passed a law banning Russia Today, and that SpaceX was told to block access to it via Starlink. Musk also says he finds RT “quite entertaining”, and adds “lots of bullshit, but some good points too”. No direct discussion of Twitter in this conversation.
March 14 – Musk reportedly crosses the threshold of 5% ownership of Twitter, triggering a requirement that he file a form with the SEC and make his purchases public.
March 24 – Musk tweets that he is worried about “de facto bias” in “the Twitter algorithm”, asking “how do we know what’s really happening?” He follows this up with a poll asking followers to agree or disagree with the statement that “Twitter algorithm should be open source”.
Someone named “TJ” (reportedly, his ex-wife Talulah Riley) sends Musk a text to praise his tweet/poll and asks, “can you buy Twitter and then delete it, please!?”, followed shortly thereafter by “Or can you buy Twitter and make it radically free-speech”? Musk replies, “Maybe buy it and change it to properly support free speech.”
Minutes later, Musk receives a message from Joe Lonsdale, who praises Musk’s “Twitter algorithm should be open source” tweet – which he refers to as a statement Musk made rather than a poll.
Sadly, nobody ever texts me to praise my tweets 😢
March 26 – Musk tweets that Twitter is “failing to adhere to free speech principles”, and asks “is a new platform needed?”
Jack Dorsey messages Musk with a link to the tweet and answers “Yes, a new platform is needed. It can’t be a company. This is why I left.”
Musk replies: “Ok”, followed by “What should it look like?”
Larry Ellison tells Musk, “I’d like to chat with you in the next day or so… I do think we need another Twitter 👍”
Jack and Musk discuss what should be done about Twitter. Jack proposes that a new platform should be built as an “open source protocol”, funded by a foundation which doesn’t own it but advances it, without an advertising model, and decentralized to avoid government interference. Musk says “super interesting idea.” Jack encourages Musk to get involved, and the two arrange a phone call.
From here, things move fast.
March 27 – Musk is connected with Parag Agrawal (Twitter CEO), Bret Taylor (Twitter chairman), and Martha (head of Governance for the board) to discuss the prospect of him “being involved and on board”.
March 29 – Musk receives a message from Will MacAskill, who mentions that Sam Bankman-Fried has been "potentially interested in buying [Twitter]”, Musk asks, “Does he have huge amounts of money?”
March 30 – Parag messages Musk about arranging a meeting.
Mathias Döpfner texts Musk and says, “Why don’t you buy Twitter? We run it for you. And establish a true platform of free speech. Would be a real contribution to democracy.”
Musk responds, “Interesting idea.”
Martha, chair of Twitter “NomGov”, introduces herself and asks to schedule a chat.
March 31 – Musk, Bret, Parag, and Martha arrange a meeting in San Jose at a private residence, and afterward, they all agree it was a great discussion.
April 1-2 - Musk is introduced to Sam Bankman-Fried via text message, and it sounds like they arranged a call – but this is not confirmed and the conversation is not discussed in text message after.
April 3 – Musk connects his assistant Jared Birchall with Martha, a representative of the Twitter board, to discuss paperwork for Musk to “hopefully” join the board. Everyone, including Parag, expresses enthusiasm for this (though of course this does not mean everyone was actually enthusiastic about it). Jack sends a message saying “I heard good things are happening”.
April 4 - Musk’s investment in Twitter is made known to the public.
Musk receives several messages congratulating him.
One set of messages has a redacted sender identity, and includes messages which read:
“It will be a delicate game of letting right wingers back on Twitter and how to navigate that (especially the boss himself, if you’re up for that)”
“I would also lay out the standards early but have someone who has a savvy cultural/politicy view to be the VP of actual enforcement.”
I’m awfully curious who this person is and why their name is redacted. Based on the document, it actually looks like the document may not name this person at all, and only has their phone number (all phone numbers are redacted), perhaps because this person’s number was not in Musk’s contact list. The document appears to use the names Musk gave to contact entries (e.g. “Sam BF” and “Martha Twitter NomGov”).
The filing does not appear to show Musk responding to those messages.
Throughout the day, Musk communicates back and forth with Twitter representatives to discuss the proposal that he join the board. Amidst this, someone named “Kyle” asks Musk if he can “bust us out of Twitter jail now lol”, and Musk replies that he does not have that ability.
At 3:51PM (CDT), Musk sends a message to the Twitter representatives which reads:
“Thank you for considering me for the Twitter board, but, after thinking it over, my current time commitments would prevent me from being an effective board member. This may change in the future. Elon”.
Less than an hour later Joe Rogan shows up in Musk’s messages, asking “Are you going to liberate Twitter from the censorship happy mob?”, to which Musk replies, “I will provide advice, which they may or may not choose to follow”.
Only a few hours later, Parag tells Musk that he should have an updated agreement in his e-mail. Musk replies “approved”.
April 5 – Around 1AM, Parag sends Musk a draft tweet announcing that Musk will be joining the board. Musk approves, and around 7:30AM, Parag tweets the announcement.
Lots of folks, including Jack, send Musk messages thanking him for joining the board. Jack tells Musk that Parag is an “incredible engineer”, but adds “the board is terrible”. Musk asks him about having a call to talk “confidentially”, which apparently happens shortly thereafter. Musk thanks him for the call, and after a brief exchange of pleasantries, says “Please be super vocal if there is something dumb I’m doing or not doing. That would be greatly appreciated.”
Nice to know even the richest man in the world can feel some imposter syndrome.
Parag messages to say that he too just talked to Jack, and that he (Parag) wants to set up another call with Musk. Musk says, “would be great to unwind permanent bans, except for spam accounts and those that explicitly advocate violence”, but Parag ignores this and proceeds to schedule a call.
April 6 - Ira Ehrenpreis reaches out and offers to give Musk tips if he’s interested in joining certain committees. Musk responds “Haha, I didn’t even want to join the Twitter board! They pushed really hard to have me join.”
In an exchange with Gayle King, who asks Musk for an edit button, Musk says “The whole Twitter thing [sic] getting blown out of proportion”, and “owning ~9% is not quite control”. He also says “Twitter should move more to the center, but Parag already thought that should be the case before I came along.”
Mathias Dopfner message Musk and send along a huge message seemingly detailing his view of how Musk should handle Twitter:
Musk doesn’t appear to respond to any of this.
April 7 - Parag asks Musk if he can arrange a Q&A with employees. Musk says “It would be great to get an update from the Twitter engineering team so that my suggestions are less dumb.” Parag agrees to arrange this ahead of the Q&A.
Parag soon tells Musk that his e-mail to employees about the Q&A / AMA leaked, and that he’s happy to talk about it. Musk replies that this was expected and agrees to sync up. Musk adds, “I love our conversations!” He later says, “I have a ton of ideas, but lmk if I’m push too hard. I just want Twitter to be maximum amazing.”
This is where Musk says he wants to learn more about the Twitter codebase, and then says (in a fashion similar to many inexperienced and arrogant junior engineers) that he prefers interfacing with “engineers who are able to do hardcore programming” rather than “program manager / MBA types”. Parag handles this pretty gracefully, though he’s perhaps a bit patronizing (which I can’t really blame him for).
April 8 - Musk and Parag apparently have a call to discuss engineering at Twitter. Afterward, Musk sends Parag an image, presumably of another Musk-impersonating spam account, and says “I am so sick of stuff like this.” Parag says, “We should be catching this” (of course, they never have).
April 9 – At 3AM, Elon messages Kimbal Musk to say:
“I have an idea for a blockchain social media system that does both payments and short text messages/links like twitter. You have to pay tiny amount to register your message on the chain, which will cut out the vast majority of spam and bots. There is no throat to choke, so free speech is guaranteed.”
“The second piece of the puzzle is a massive real-time database that keeps a copy of all blockchain messages in memory, as well as all message sent to or received by you, your followers and those you follow.”
“Third piece is a twitter-like app on your phone that accessed [sic] the database in the cloud.”
“This could be massive.”
Musk apparently goes to bed thinking he’s come up with a brilliant alternative to Twitter.
When he wakes up, he tweets:
Now here’s the moment where I’d love to know what was going on in inside Elon’s head. On one hand, he thinks he has an idea for a Twitter replacement. On the other hand, he’s about to tell Parag that he’s doing to make an offer to buy Twitter.
Parag sends a message to Musk at about 10AM in response to the above tweet. He’s understandably frustrated, and walks a line between diplomacy and passive aggression:
“You are free to tweet “is Twitter dying?” or anything else about Twitter – but it’s my responsibility to tell you that it’s not helping me make Twitter better in the current context. Next time we speak, I’d like to you [sic] provide you with perspective on the level of internal distraction right now and how it [sic] hurting our ability to do work. I hope the AMA will help people to get to know you, to understand why you believe in Twitter, and to trust you – and I’d like the company to get to a place where we are more resilient and don’t get distracted, but we aren’t there right now.”
Musk responds immediately with three messages:
“What did you get done this week?”
(I imagine Parag throwing his phone at a wall at this moment)
“I’m not joining the board. This is a waste of time.”
“Will make an offer to take Twitter private.”
With uncanny timing, just 7 seconds later, Kimbal responds to Elon’s earlier 3AM tweets and says:
“I’d love to learn more. I’ve dug deep on Web3 (not crypto as much) and the voting powers are amazing and verified. Lots you could do here for this as well.”
Elon answers within two minutes:
“I think a new social media company is needed that is based on a blockchain and includes payments”
TWO MINUTES APART, Elon says he’s going to take Twitter private and that he thinks a new social media company is needed. Two minutes!!!
I find this fascinating. I would love to know what was going on in his mind at this moment. I think one possibility is that he was basically having a temper tantrum. And/or, perhaps, the message about taking Twitter private was a bluff. A way to say, “do what I want, or else”. Or maybe in this moment he thought doing his crazy blockchain thing was his path forward, and this “take private” claim is just an attempt to blow up his relationship with Twitter and set up his exit from the board and perhaps even his investment.
In a truly surreal bit of timing, Parag, presumably having acquired a replacement phone from AppleCare+ in record time, asks “can we talk?” while Kimbal sends Elon several messages about his idea.
“Would have them pay w a token associated w the service? You’d have to hold the token in your wallet to post. Doesn’t have to [sic] expensive it will grow over time in value”
“Blockchain prevents people from deleting tweets. Pros and cons, but let the games begin!”
“If you did use your own token, you would not needs [sic] advertising it’s a pay for use service but at a very low price”
“With scale it will be a huge business purely for the benefit of the users. I hate advertisements”
“There are some good ads out there. The voting component of interested users (only vote if you want to) could vote on ads that add value. The advertisers would have to stake a much larger amount of tokens, but other than there [sic] is not charge for the ads. It will bring out the creatives and the ads can [sic]politically incorrect/art/activision[sic!]/philanthropy”
Musk doesn’t respond, but “likes” the “with scale…” message.
Meanwhile, Bret Taylor from the Twitter board tries to get Musk on a call. Instead, Musk replies:
“Please expect a take private offer”
“Fixing twitter by chatting with Parag won’t work”
“Drastic action is needed”
“This is hard to do as a public company, as purging fake users will make the numbers look terrible, so restructuring should be done as a private company”
“This is Jack’s opinion too”
That piece I bolded seems pretty damning for Musk’s case (if you buy that he even has one to begin with), by the way. Between this and his earlier complaints about spam, it sure seems like he believed the spam problem was substantial and that there must an awful lot of fake users as, in his own words, purging them would make the numbers look terrible. Can he argue that purging up to 5% would make the numbers look terrible? He might try. But Twitter already says the mDAU number is off by up to 5%, so in what way would decreasing the number by 5% (while removing the ”up to 5% are fake” caveat) make the numbers look bad? I don’t buy it.
Bret pleads with Musk to get on a call to talk about all of this. Meanwhile, hilariously, Kimbal keeps going on the blockchain thing:
“Voting rights could also crowdsource kicking scammers out. It drives me crazy when I see people promoting the scam that you’re giving away Bitcoin. Lots of bad people out there”
April 13 - Musk sends a message to Bret Taylor saying:
“After several days of deliberation – this is obviously a matter of serious gravity – I have decided to move forward with taking Twitter private. I will send you an offer letter tonight, which will be public in the morning. Happy to connect you with my team if you have any questions. Thanks, Elon”
April 14 - Musk tells someone named Steve Davis:
“My Plan B is a blockchain-based version of Twitter, where the “tweets” are embedded in the transaction comments. So you’d have to pay maybe 0.1 Doge per comment or repost of that comment.”
This is sent along with a link to a tweet where Musk pointed to the SEC filing for the Twitter acquisition offer. Steve replies saying he’s not sure which plan to root for, but that he knows blockchain engineers who can help with Plan B.
Gayle King tells Elon that his offer to buy Twitter is a “gangsta move”.
Sam BF slides in to say he’d love to talk about Twitter (maybe they hadn’t done so after all?), and shares a link to a post on “how blockchain + Twitter could work”. At the same time, Michael Kives messages to say “Could be cool to do this with Sam Bankman-Fried”.
Several others message encouragement to Musk.
Jason Calacanis tells Musk that he should raise his offer to $54.21, “the perfect counter”. He says that Musk could easily clean up bots and spam. He asks why blue checkmarks are limited to the elite.
Bret tells Musk that the board is considering his offer.
April 15 - Jason Calacanis sends Musk his calculation of Twitter revenue per employee, suggesting it is far too low. He says “sharpen your blades boys”, and recommends that Musk institute a “2 day a week Office requirement” as this will result in “20% voluntary departures”. Weeks later, Musk takes this idea and applies it to Tesla.
Jason makes fun of the terrible feature list for Twitter Blue (Twitter’s premium subscription offering) at launch. Musk says “Yeah, what an insane piece of shit!”
April 16 - Jason and Musk sarcastically make fun of Parag being on vacation in Hawaii for ten days. “No reason to cut it short… in your first tour as CEO”, Jason says.
Joe Lonsdale relays that Governor Desantis is supportive of Musk buying Twitter and suggests Musk or someone from his side connect with Desantis.
Jason says he is starting a DAO and that “Money goes to buy twitter shares, if you don’t [win] money goes to open source Twitter competitor” with gratuitous smiley faces.
April 17 – Bret lets Musk now that the board is continuing to review his offer.
Musk tells Egon Durban “You’re calling Morgan Stanely to speak poorly of me…”.
April 20 – Musk reaches out to Larry Ellison to ask if he’s interested in joining the Twitter deal. Ellison says he’s in for “a billion… or whatever you recommend”.
Musk, ever the salesman, tells Ellison that the deal is “oversubscribed” but that he can try to squeeze him in. He recommends “maybe $2B or more” and says “I’d rather have you than anyone else”. Ellison expresses enthusiasm.
April 21 – Jared Birchall points Musk to an article about Sam Bankman-Fried wanting to “fix social media with blockchain”. He tells Musk they now have “the right software engineer for you to speak with about the blockchain idea.” Musk wants to know more about him, and Jared tells him that this is a former SpaceX engineer and current CTO at Matter Labs, who apparently also at this time was on the verge of being hired by The Boring Company. A meeting is arranged.
April 23 – Musk tells James Gorman, “I think the tender has a real chance” (referring to his buyout offer)
Jason Calacanis sends a bunch of ideas for Twitter, saying they should do a revenue split with video creators. He proposes 5 teams with 5 “northstar metrics”:
Legacy Opps – uptime, speed
Membership – remove bots, sell “real name memberships”
Payments - % of users who connect a bank account or make a deposit
Creators – Get creators to publish on Twitter first
Transparency – Make “the algorithm” and moderation understandable and fair
Not all of his ideas are terrible.
Calacanis suggests a “hard reboot” of the organization, complains about 12,000 people “working on whatever they want” and “no projects being cancelled?!”. He suggests moving HQ to Austin.
Musk asks if he wants to be a Strategic Advisor “if this works out”. Jason says “Board member, advisor, whatever… you have my sword”.
Jason continues selling his ideas, saying Membership, Payments, and Creators are each “$250b+ markets”. Talks about various membership ideas, including corporate memberships.
Musk says “You are a mind reader”
Jason says “Twitter CEO is my dream job”
April 24 – Bret reaches out to talk.
Larry Ellison says he’s in for $2B.
Elon asks Kimbal if he wants in.
April 25 – Bret reaches out for a “quick check in” again
Bret sends Musk a link to the tweet where he announces to the world that Twitter’s board has agreed to Musk’s offer.
Musk “hearts” that message and says “thank you”.
Jack thanks Musk, and Musk says “I [sic] basically following your advice!”
Calacanis says “hell yeah!” and then shares a bunch of terrible ideas, like letting people pay to broadcast messages to all of their follower’s DMs.
Michael Grimes bugs Musk more about Sam Bankman-Fried, pushing “social media blockchain integration”.
“Blockchain twitter isn’t possible, as the bandwidth and latency requirements cannot be supported by a peer to peer network, unless those “peers” are absolutely gigantic, thus defeating the purpose of a decentralized network.”
He then “dislikes” Michael Grimes’ message trying to sell him on getting Sam on board for $5B by letting him “do the engineering for social media blockchain integration”. Grimes insists that Musk and SBF should still meet, and Musk says:
“So long as I don’t have to have a laborious blockchain debate”
I hear ya, Elon.
Indeed, I appreciate is ability to change his mind with new information, and that he listens to and understands what his smart engineers tell him. On the other hand, I really wish he’d seek such input before speaking out of ignorance or making terrible decisions like accepting Bitcoin payments for Tesla purchases (a decision which fortunately was reversed after Musk discovered that Bitcoin is an ecological disaster - how could he have possibly known?!).
Anyway, back to the messages. Michael says that Sam has a lot of liquidity and claims that Sam even said he could do “up to 10” (billion dollars) at one point. He emphasizes that Sam is a “doer builder like your formula”, and says that he was “second to Bloomberg in donations to Biden campaign”.
In the evening, Elon messages James Musk:
“The bot problem is severe”
Once again, not really helping the case he’d try to make in court a few months later.
April 26 - Jack chimes in to say that he wants to make sure Parag is doing everything possible to build toward Musk’s goals. He praises Parag again and suggests doing a call together and Musk agrees.
While they’re discussing when to have the call, Musk tells Jack:
“Your help would be much appreciated.”
“I agreed with everything you said to me”.
They arrange a meeting, which Jack helps provide some structure for. They seem to meet for an hour or so. Apparently, it did not go well.
Afterward, Musk says to Jack:
You and I are in complete agreement. Parag is just moving far too slowly and trying to please people who will not be happy no matter what he does.
“At least it became clear that you can’t work together. That was clarifying.”
April 27 - Marc Benioff messages Musk to talk about “Twitter conversational OS - the townsquare for your digital life”. Musk says “Well I don’t own it yet”.
Musk reaches out to Reid Hoffman (LinkedIn co-founder, Microsoft board member) to ask if he wants to join in on the deal.
Hoffman connects Musk with Satya Nadella (Microsoft CEO). They have a call, but nothing is summarized in text. Satya says he’ll pass along Musk’s “Teams feedback” (lol).
Hoffman says it’s “way beyond my resources”, but then ends up talking with Musk about VC funding. Musk repeats his car salesman tactics, saying:
“There is plenty of financial support, but you’re a friend, so just letting you know you’d get priority. VC money is fine if you want.”
April 28 - Hoffman responds asking “if I were to put together $, what size could you make available?”
Musk continues his salesman approach answering “whatever you’d like. I will just cut back others” 🙄
I love how Hoffman plays into this by asking “What would be the largest $ that would be ok?”
Musk responds, “$2B?”
Hoffman says this is probably doable. Clearly Musk should’ve gone higher.
Four hours later, Musk messages David Sacks asking if he and/or his fund want to invest in the deal. So much for it being “oversubscribed”, right?
Sacks says he’s in but doesn’t have a vehicle for it. Says he can set up an SPV (Special Purpose Vehicle) or just do it personally. Says if he does a personal investment it will be “mice nuts” compared to others, but that he’s “happy to support the cause”.
Musk says “up to you”, and Sacks responds that he’s in for both a personal investment and raising an SPV.
Some might read these exchanges as evidence that Musk is a master negotiator (i.e., the way Trump thinks he is). However, I read it more as him protecting his ego - he doesn’t want to be seen as asking for help. He’s the one doing others a favor, etc. It works because people really do want to be in business with him - they’ve seen his literal and figurative rocket ships, and they want a seat.
I’m really curious if he would’ve gotten more help financing the deal if he’d been straight with these folks.
Musk tells Michael Kives:
Twitter is obviously not going to be turned into some right wing nuthouse. Aiming to be as broadly inclusive as possible. Do the right thing for vast majority of Americans.
April 29 - Someone named Steve Jurvetson reaches out to suggest Emil Michael as a candidate for “some kind of CXO under you”, sending a LinkedIn URL.
“I don’t have a LinkedIn account”
(lol, especially given his apparently “friendship” with Reid Hoffman)
“Please send me anyone who actually writes good software.”
Jurvetson responds saying:
“Ok, no management; good coders, got it.”
He then goes on to suggest his son at Reddit (lol), and says he was thinking about who is going to “manage the software people (to prioritize and hit deadlines), and I guess that’s you.”
“I will oversee software development”
May 1 - Musk texts Sean Parker:
Am at my Mom’s apartment, doing Twitter diligence calls
This was interesting to me, as it seems to reveal that Musk didn’t really understand the offer he made - particularly the part about waiving any due diligence.
May 2 - Jason Calacanis is back, pointing to this tweet:
He tells Musk that he can organize an SPV of 250 folks capped at $10M. He says you do need someone to lead the SPV, and Musk replies “Go ahead”.
They discuss this some more. Jason seems to be unsure what he’s talking about.
May 4 - Musk tells Michael Grimes:
“No response from Bret, not even an interest in talking. I think it’s probably best to release the debt tomorrow. This might take a while.”
May 5 - Musk sends Sam BF a message, seemingly out of the blue, that says “Sorry, who is sending this message?” (lol)
Musk tells more people he’s working on “due diligence on Twitter”.
May 8 - Michael Grimes talks to Musk about a bunch of transition and financing details. He mentions a couple of names in references to certain transition roles.
“Neither were great”
“They asked no good questions and had no good comments”
“Let’s slow down just a few days”
“Putin’s speech tomorrow is extremely important”
“It won’t make sense to buy Twitter if we’re headed into WW3”
Keep in mind that at this stage, Musk has already made a no-contingencies offer which has been accepted.
“Understood. If the pace stays rapid each are good enough to get job done for the debt. Then you hire great for go forward. But will pause for May 9 Vladimir and hope for the best there. We can take stock of where things look after that.”
“An extremely fundamental due diligence item is understanding exactly how Twitter confirms that 95% of their daily active users are both real people and not double-counted”
“They couldn’t answer that on Friday, which is insane.”
“If that number is more like 50% or lower, which is what I would guess based on my feed, then they have been fundamentally misrepresenting the value of Twitter to advertisers and investors”
“To be super clear, this deal moves forward if it passes due diligence, but obviously not if there are massive gaping issues.”
“True use account is a showstopper if actually much lower than the 95% claimed”
There’s no response from Michael Grimes in the released log.
To be clear, Musk had already waived due diligence. It seems like maybe he didn’t realize that? This is ~2 weeks from when he made the offer and Twitter accepted, and so it looks like buyer’s remorse set in pretty quickly. If he’d not been so cavalier in making the offer in the first place, he could’ve had contingencies in place for this. But he didn’t.
It’s also worth pointing out that Twitter has never claimed that “95% of their daily active users are both real people and not double-counted”. The 95% number is in relation to their “mDAU”, or “monetizable DAU” number. Basically, there’s some other non-disclosed number of Daily Active Users. Twitter filters out some number of that, which could be 5% or could be 99% - the accounts they detect as being “fake” or otherwise incapable of seeing ads. The 95% number he’s referring to is what Twitter says they estimate gets through that initial filtering.
Musk constantly misstates this, as do many of his fans who defend him uncritically on Twitter. I don’t get it. It’s not a difficult concept to understand, and I assume people have explained this to Musk over and over (Parag even did so publicly in a Twitter thread at one point).
Now, Musk could argue that their mDAU calculation is off by more than 5%. But that’s usually not what he says, including in the text message above. You could say that’s what he meant, but it clearly isn’t because he talks about guessing the number is much higher based on his feed. This doesn’t make any sense, because he cannot possibly know if Twitter is counting any of those accounts as monetizable.
Bizarrely, he never seems to even ask for data which would let him assess this. In fact, I’m surprised he didn’t suggest that Twitter put a badge on profile pages indicating whether an account was deemed “monetizable” or not. Instead, he seems to continually play up misinterpretations of Twitter’s claims. I can only assume this is because the whole thing was never more than a pretext for trying to get out of the deal.
Now, if it were me, I would not have waived diligence and would have asked Twitter to disclose the raw DAU number to me as well as a bunch of other information before making an offer. He didn’t do that. His offer was reckless.
May 12 - Musk messages Calacanis and basically rips him a new one.
What’s going on with you marketing an SPV to randos? This is not ok.
Jason tries to defend himself, but Musk isn’t having it.
Morgan Stanley and Jared think you are using our friendship not in a good way
This makes it seem like I’m desperate.
Amidst the exchange, Musk randomly texts Jason:
“Yes, I had to ask him to stop”
My guess is he wanted Jason to think that message was meant for someone else (e.g. Michael or Jared) and was misfired, to further drive home the point that other people were pissed.
What I took from this exchange was further evidence that Musk is really concerned about his image. Note his emphasis on how Jason’s actions are making him look desperate.
June 16-17 - Musk texts with an unidentified party about Twitter’s financials, calling into question their forecasts. They agree that “their revenue projections seem disconnected from reality”.