The Prof G Pod with Scott Galloway Bonus Episode: Elon Musk v. Twitter — with William Cohan
May 25, 2022
William Cohan, a founding partner at Puck and former M&A investment banker, dives deep into Elon Musk's tumultuous Twitter acquisition. He explores Musk's potential options for backing out and the implications for shareholders amid declining stock values. Cohan discusses the intricate legal challenges and financial strategies at play, shedding light on the tensions between secured debt and equity contributions. The conversation uncovers the high-stakes world of mergers, raising questions about corporate practices and Wall Street's view of Musk.
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Market Anticipation
- The market anticipates Elon Musk asking for a price cut on Twitter.
- This is because the current stock price is much lower than his offer.
Board's Dilemma
- Elon Musk's actions, such as violating agreements, put the Twitter board in a difficult position.
- The board now needs to hold him accountable while also considering negotiation.
Twitter's True Value
- Twitter's market value, without Elon Musk's involvement, would likely be around $20 per share.
- Musk waived due diligence and offered $54.20, significantly higher than the estimated natural value.