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Elon Musk and his Yes Men

 


I take today's subject from a recent article in SLATE by Jonathan Fischer. Fischer's article was written prior to Musk's surrender this weekend -- Musk seems now to have decided to proceed with his Twitter purchase on the original terms, at great expense.

The Fischer article involves in the first instance the litigation between Musk and Twitter, over whether Twitter was going to be able to get a court order requiring Musk to buy them out as he promised early this year. 

Such orders for specific performance are rare, and it looked when Fischer wrote that the management of Twitter would probably have to be satisfied with receiving some of Musk's billions for their troubles. It wouldn't have been a shabby consolation prize, though.

Fischer takes that as his start point. He then tells us that the Chancery Court in Delaware has released a lot of text messages to and from Musk bearing on the litigation over Tesla. 

Fischer has been pouring over the texts and what he concludes from them is that there is a moral to be taken from the billions that Musk stands to lose. The moral: don't surround yourself with a bubble of yes man, an echo chamber for your fancies. They will only support your folly. What you want is someone around you who can tell you uncomfortable truths.

In this case, that telling might have gone this way, "Uh, boss, with respect -- you know that everybody is expecting Federal Reserve interest rate hikes, don't you?  You should know, too, that when they happen the hi-tech industries, like social networks, are likely to be negatively affected. They thrive on cheap loans. So the price that you've stipulated for the purchase of Twitter stock? There is a very good chance it is going to look absurdly high very soon. Don't do this." 

Musk has a bubble. He never heard such voices. And when the predictions he never heard started coming true, he bailed. That is all on him. If he does proceed with the deal (and I'm still not willing to bet the farm on it) it will be enormously expensive vis-a-vis what anyone believes the company is actually worth. 


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