The Musk Reckoning

Elon Musk
Elon Musk, C.E.O. of Tesla. Photo: Suzanne Cordeiro/Getty
William D. Cohan
July 10, 2022

A longtime Wall Street banker friend wrote to me on Friday night, after the news that Elon Musk had finally pulled the plug on his $44 billion all-cash deal to buy Twitter, to express his distaste for the whole 10-week spectacle. “This is like watching a train wreck in slow motion,” he wrote. “What a clown.” 

I asked if, in his forty-plus years of M&A experience, this banker had ever seen anything before like what Elon had just done: thoroughly embarrassing and discrediting himself by signing a merger agreement to buy a company and then reneging on that deal in a fit of buyer’s remorse. “Yeah,” he replied. “When he tried to take Tesla private,” a reference to Elon’s last pathetic M&A failure, in 2018, when he tweeted that he was going to buy Tesla for $420 a share and that he had “funding secured” to do it. Elon did not, of course, have “funding secured,” and paid a $20 million fine, among other penalties, for misleading shareholders.

But Elon has well and truly screwed the pooch this time. As a result of this little stunt, he and his companies—Tesla, SpaceX, The Boring Company—will now be as big pariahs on Wall Street as Donald Trump, as a result of all his shenanigans over the years. Who on Wall Street is going to want to do business with Elon after he ginned up a takeover of Twitter, signed a legally binding agreement to do so for $44 billion in cash, put the biggest banks to work on the deal (and thereby used their credibility to help legitimize his offer) and then manufactured a half-assed excuse for why he no longer wanted to do it?