This is a shit sandwich

Elon MuskI've been thinking about Twitter a lot. The platform has so much potential but it's not living up to it. The algorithm is the problem. People should be able to see why they're seeing what they're seeing.

Parag AgrawalI agree. We're working on transparency. Would you like to join the board? We'd love to have your perspective.

Elon MuskLet me think about it. I'm not sure a board seat is the right mechanism. The change needs to be more fundamental.

Parag AgrawalWhat do you have in mind?

Elon MuskI'm not sure yet. But the current approach isn't working. Free speech is essential to a functioning democracy. Twitter is the de facto public town square. It needs to be protected.

Elon MuskTwitter needs to be taken private. The public market incentives are wrong. They're optimizing for quarterly ad revenue instead of the quality of discourse.

Jack DorseyI've been saying that for years. The advertising model is fundamentally broken for a public conversation platform. It creates perverse incentives that no amount of policy can fix.

Elon MuskWhat if I just bought it?

Jack DorseyI think you should. I tried to get the board to take it private years ago. They wouldn't go for it. But if someone external forces the issue, they'd have to consider it.

Elon MuskThis is a shit sandwich. I eat the shit sandwich. I'm not sure why I'm doing this but here we are.

Michael GrimesYou're doing this because you believe in free speech and you want to fix the platform. And because you can. Not many people can write a $44 billion check.

Elon MuskI guess. But this is going to be incredibly painful. I'm not looking forward to it. The amount of work it's going to take to fix this company is insane.

Michael GrimesWe'll get the financing done. Morgan Stanley is committed. Bank of America is in. The debt markets are nervous but we can structure around it.

Elon MuskGood. I want this to move fast. I don't want to spend two years negotiating. Make it happen.

Elon MuskI'm buying Twitter. Are you interested in participating?

Larry EllisonHow much do you need?

Elon MuskI'm looking for $7 billion from outside investors. I'm putting in $27 billion myself.

Larry EllisonI'll do a billion. No questions asked. Just tell me where to wire it.

Elon MuskThat's it? You don't want to know the business plan?

Larry EllisonI've known you for 20 years. You don't need a business plan. You need a check. I'm writing it.

Elon MuskYou could potentially do the whole thing yourself. I'm interested in hearing your ideas.

Sam Bankman-FriedI'd be happy to chat. I have a lot of ideas about what Twitter could be. Blockchain-based authentication, on-chain payments, decentralized content moderation. The platform is fundamentally a protocol problem.

Elon MuskInteresting. How much could you commit?

Sam Bankman-FriedI could probably do $5-8 billion. Maybe more depending on the structure.

Elon MuskWhat's your timeline?

Sam Bankman-FriedI can move fast. Crypto moves fast. I can have the money ready in two weeks.

Elon MuskWe need to cut costs immediately. Twitter is a reverse funnel. We need to turn it right side up.

Jason Calacanis100%. I've been thinking about this. The headcount is insane. You could cut 50% and the product would improve. The bloat is the problem. There are whole teams that produce nothing. It's a jobs program.

Elon MuskAgreed. We need to be aggressive. Day one.

Jason CalacanisI'm ready. Put me in coach. I've been preparing for this my whole career.

Elon MuskWhat do you think about the verification system? Pay to play?

Jason CalacanisAbsolutely. $20 a month. Blue check becomes a subscription. Kills the bots overnight and creates a revenue stream. It's brilliant. The bots can't scale if every account costs $20.

Elon MuskThat's what I was thinking. $8 though. Make it accessible. Higher volume, lower price.

Jason CalacanisEven better. $8 is the sweet spot. Mass adoption. You'll get 50 million subscribers in the first year. That's $5 billion in annual recurring revenue. The entire Twitter ad business is only $5 billion. You double the revenue model overnight.

Egon DurbanElon, the debt syndication is going to be tough. The banks are nervous. The commitment letter is solid but the market is moving against us.

Elon MuskHow bad?

Egon DurbanThey could lose $500 million or more on the debt if they can't syndicate. Morgan Stanley is committed but they're not happy about it. The debt markets are basically frozen for deals like this. You're asking banks to hold $13 billion in debt they can't sell. It's unprecedented in this market.

Elon MuskThat's their problem, not mine. They signed the commitment letter. They're big boys. They knew the risks.

Egon DurbanThey're going to try to renegotiate. Be prepared for that.

Elon MuskThey can try. The commitment letter is ironclad. I'm not renegotiating a single term.

Elon MuskThey're lying about the bots. The mDAU numbers are fake. We have them on fraud. Twitter says 5% of accounts are bots. The real number is at least 20%. Maybe 30%.

Musk attorneyElon, the merger agreement doesn't have a financing contingency. You waived due diligence. The bot issue is going to be hard to prove as a material adverse effect.

Elon MuskI don't care. They misrepresented the business. I'm not closing. They lied about the fundamental metric of the company.

Musk attorneyYou should understand that the Delaware Chancery Court almost never lets buyers walk away from signed deals. The standard for a material adverse effect is extremely high. In the entire history of Delaware Chancery, only one buyer has ever successfully invoked an MAE to terminate a deal. One. In 2008. And that was a very different set of facts involving a company that lost 40% of its revenue overnight.

Elon MuskThen we'll see them in court. I'm not afraid of litigation. I've been sued more times than I can count.

Musk attorneyYou've never been sued in Delaware Chancery. It's a different animal. The judges are specialists. They've seen every trick. They don't tolerate games.

Musk advisorYou're going to lose. The judge is going to order specific performance. You'll close the deal on worse terms than if you just close it now. You're paying $1 billion in legal fees either way. Close the deal.

Elon MuskWhat if she doesn't order specific performance?

Musk advisorShe will. Every precedent in Delaware says she will. You signed a seller-friendly merger agreement with no financing contingency and no diligence condition. You have no leverage. Zero. The only question is whether you close now or close after a trial where all your texts become public. Every text you've sent about this deal will be on the front page of the Wall Street Journal.

Elon MuskFine. What's the least bad option?

Musk advisorClose now. At $54.20. The banks are already underwater. Your investors are committed. Twitter's board wants this done. Don't make it worse by fighting a battle you can't win.