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Comment by onphonenow | Hacker News Reader

The reality is folks valued his potential input. That said I think a board role was a bad fit. He'd have to agree not to acquire more stock (he could personally easily buy 51% of twitter - 4% of his net work probably).

Also, he's too strong minded.

A recap of his ideas:

* A limited edit button. * Move it to a paid service * No ads to avoid corp pressure to censor voices.

My guess - he'd be in a conflicted position if he ever wanted to start / do his own social network. And these changes are WAY outside of the comfort zone of FTC etc.

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> My guess - he'd be in a conflicted position if he ever wanted to start / do his own social network.

That would likely take his time away from other things he cares more about, such as Tesla and SpaceX. Whereas buying up Twitter stock – even buying 100% and taking it over completely – doesn't take up much of his time at all. Even a board seat would have only been a modest time commitment, far less than starting a new social media company from scratch would be.

> And these changes are WAY outside of the comfort zone of FTC etc.

Why would those changes be outside the FTC's "comfort zone"?

FTC's chief concerns are (1) consumer protection, (2) antitrust/competition. I don't see how the changes you mention would impact either.

> Why would those changes be outside the FTC's "comfort zone"?

I am also confused. Perhaps foregoign Ad-tech revenue would be against the supposed fiduciary duty?

That's really only an issue if enough of the shareholders decide to sue or you're straight up abusing your position (i.e. embezzling).

Otherwise, you can always make some stuff up about it being a long-term strategy. But, fundamentally, making a bad call isn't a violation of fiduciary duty (unless there's documents saying you know it will tank beforehand and you do it anyway).

That would also be an issue for the SEC, not the FTC.

A fair point.

I'm not sure how the FTC would be involved here. My understanding is that the exchange between twitter and most of its users doesn't rise to the legal designation of "trade" (excluding twitter blue users, of course), unless the OP meant the FTC would get involved between Twitter and their advertisers.

It's about 7% fwiw (although it would cost him some more in taxes to get the cash to do so, he'd have to sell Tesla and realize gains).

Couldn't he take out a loan using his Tesla stock as collateral, and use that to fund a purchase of Twitter? That way he'd avoid selling any stock (and having to pay taxes on the sale), although he'd have to somehow fund the interest payments on the loan (which could be done through smaller stock sales, which would incur taxes, but he'd still pay less tax selling to fund the interest than selling to fund the principal.)

Rich people do this to buy yachts and sports cars (for I dunno, tens of millions), but borrowing $15 billion? I'm kinda skeptical any banks would bite here.

The collateral would be a huge portion of his Tesla stock, enough that a crash in TSLA could put the whole loan at risk.

To quote Oracle's 2021 definitive proxy statement, "As of September 13, 2021, Mr. Ellison, Oracle’s Founder, Chairman, CTO and largest stockholder, had pledged 317,000,000 shares of Oracle common stock as collateral to secure certain personal indebtedness". On that date, ORCL closed at US$87.91. So Larry Ellison had pledged approximately US$27 billion of ORCL stock to cover his personal loans. That doesn't tell us how big those loans actually are, but obviously the loan principal is in the billions not millions – it could easily be over US$10 billion. So if banks are willing to lend Ellison a few billion, why not Musk too?

Also, Musk may be able to find some co-investors (fellow billionaires, private equity, etc) who believe that Twitter would do better with a Musk-selected executive leadership team than with its current one, and so would be willing to support Musk in taking control.

Tesla could loan him money against his stock. Not only that, but he could repay the loan in stock. This was a very popular C-level perk at a bunch of companies.

Blackrock

(a) He can quit the board anytime. “Potential“ is not inherently a conflict of interest.

(b) A social network full of only Elon Musk fans (maybe call it Government-Subsidized Emerald Mine) would be a pretty thin slice of humanity.

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