I was speaking the other day with a billionaire hedge fund manager, one of the dozen or so most powerful people on Wall Street, to get some fresh insight into the ongoing Elon Musk-Twitter hostage negotiation. Was it real, as I’ve contended, or was it all bullshit, as many others have suggested? “I love it,” he said. “I think it’s great.”
This investor went on to say that the offer was a great boost for activist investing, which he feared might have been proclaimed dead “prematurely” what with Bill Ackman’s recent pronouncement that he was pretty much abandoning the activist approach to investing, in favor of investing in great companies and sticking with them for the long haul, like his hero, Warren Buffett. “This is actually a really good time for real, old-school activism,” he added, surmising that Elon is surely enjoying the mountain of attention he’s getting from making an offer for Twitter. “I’ve observed it in myself,” he continued, “like the dopamine receptors and the neurological response that you get from it. I’m sure he’s getting a rush out of it. And probably, when you get to his stage”—meaning his level of extreme wealth—“anything that gives you that kind of stimulation” is exciting.
Musk may be getting there. Indeed, all that stands between him and Twitter, the strange prize he covets, is proving to the company’s board of directors, and its financial advisors at Goldman Sachs and JPMorgan Chase, that he has the $40 billion or so he needs to buy the 90.9 percent of Twitter’s stock he doesn’t already own. It’s not known outside his tight circle how much O.P.M.—that’s Other People’s Money—he needs to pull this off. While Musk’s ownership stake in Tesla is worth around $173 billion these days, it’s not clear how much of that stock Musk has already encumbered and how much he still has available to sell or to margin, or to rehypothecate, to raise the money he still needs. One thing is for sure: It won’t be as easy as it may look from the outside, even though his $255 billion net worth is nearly six times what he theoretically needs to buy Twitter.