Inside Twitter, employees told me today, there’s a mood of exhaustion. Rank-and-file staffers have little to no faith in the board, or in CEO Parag Agrawal, whose moves yesterday to fire the company’s highly respected heads of product and revenue look even more erratic.

Casey Newton reporting

The wrong guys got fired. Instead of an overmatched CEO, Parag Agarwal, Kayvon Beykpour (product lead), and Bruce Falck (revenue lead) got shown the door because CEO wanted to take the company in a new direction. I would have shown the big honcho the door. But again, the board is quite feckless. (Read: Musk or not, Twitter CEO has to go.)

Except for the CEO, no one in the company believes that firing these two executives was a good decision. Kayvon, who co-founded Periscope, was well regarded in the company and helped wrangle a good product strategy for the company. The palace intrigue is coming at a time when Elon Musk is once again turning Twitter into his pet pinata. What many see as waffling or wobbling is just a technique to get a better deal for Twitter.

The market meltdown has made Twitter less valuable.

In a research note about Twitter, Hinderberg Research which is short Twitter stock pointed out that Nasdaq is down about “~17.6%, implying a Twitter price of ~$31.40 per share without a deal.”

Musk knows that, and he also knows that there isn’t another buyer. So, this is a good chance for him to get the asset for cheaper and loaded with less debt.

The current deal for Twitter will be funded by $20.1 billion in equity from Elon, $7.1 billion from other investors, and the remainder of $19.25 billion via debt. It makes sense for Elon to lower the leverage — about 8.6 times EBIDTA per a Wall Street Journal report. More debt means the more difficult it will be for Twitter to become a more robust business that doesn’t rely on advertising — a stated goal for Musk.

He also knows no one with real skin in the game is in charge of Twitter. The board (apart from Jack Dorsey’s 2.4 percent) owns less than 0.2 percent of the company and is weak. And the CEO is out of his depth.

As someone wise once said — you don’t get to be rich or stay rich by spending your money, and you do it by getting a better deal.

May 13, 2022. San Francisco

Bully Pulpit

This is the third in my ongoing series of posts about Elon Musk’s quest to buy Twitter. In the first of the series, I pointed out that Twitter’s CEO might be woefully out of his depth, and the board has failed to do its job. Twitter founder and former CEO, Jack Dorsey agreed with me. I later pointed out that, there is no (motivated) buyer (just yet) other than Musk. In this third piece, I point out that Elon’s intentions are entirely self-serving. And why not. What’s the point of having billions if you can’t protect your self-interests. Continue reading Bully Pulpit

Musk or Not, Twitter CEO Needs To Go

Twitter is in middle of a tumultuous time as a company. It is in play, thanks to an offer Elon Musk. It is a company that has underperformed as a business. It has anemic new user growth. The revenue targets are optimistic. Does Twitter have the right captain to navigate the company through the stormy seas. Is the CEO Parag Agarwal, who replaced Jack Dorsey, the man for the job? Continue reading Musk or Not, Twitter CEO Needs To Go

04.04.2023 Musings

Sometimes, when sitting quietly, enjoying a cooling cup of perfectly crafted pour-over coffee, I find myself staring at the back of my hand. In front of my eyes lies a landscape akin to the red sand of the American Southwest that lay baking under the scorching sun after a week of rain. You can see … Continue reading 04.04.2023 Musings

person holding white ceramic sink
Photo by Priscilla Du Preez on Unsplash

The EVs — electric vehicles are everywhere. More SPACs are touting their fantastic future where they sell millions of vehicles. Elon Musk is the wealthiest guy in the world. Everything is so lit, except no one wants to talk about the elephant in the room — rare earth metals and the pollution that comes with mining them. And nothing is more precious for this new EV future than Lithium — the stuff at the heart of our connected future.

It is why the US needs to figure out how to control its rare-earth destiny and become less reliant on overseas suppliers and processors — read China. And that’s why every eye has been on the Thacker Pass Mine, a Lithium mine in Nevada. The mine can generate over 66,000 tons of Lithium a year for about four decades, the company behind the mine brags. But it will come at a substantial environmental cost. And that has got a wide variety of people up-in-arms.

Maddie Stone, writing for Grist, outlines the legal, social, and climate challenges against the Thacker Pass Mine in her deeply reported story, The Battle of Thacker Pass. I hope you read it.

About a month ago, I wrote about the state of Starlink, the satellite broadband division of SpaceX, and speculated that I won’t be surprised if “the Starlink network evolves into Tesla’s very own broadband backbone, connecting all Tesla vehicles.” Elon Musk, the CEO of both Tesla and SpaceX, threw cold water on that theory in a tweet. 

However, a new FCC filing shows that Starlink wants to offer connectivity to aircraft, ships, large trucks, and RVs. They picked the right target market for sure — the broadband choices on ships and aircraft are pretty meager. Mobile broadband is non-existent when you are using those modes of transportation.

However, I wouldn’t dismiss the Tesla vehicle network that quickly, despite what Elon said. In a January 2020 call, he said that in some years. Tesla could have Starlink terminals. Anyway, since Tesla has concrete plans to make trucks, so that would be a good start of Tesla’s backbone. Connecting its future big-boy trucks (Cybertruck) and moving trucks could help Tesla finetune the hardware for Starlink. 

And if the trajectory of all silicon has shown us anything, it is that miniaturization happens quickly. And capabilities increase even faster. I still remember the roof-sized dishes we needed to get satellite television. Those dishes are much smaller now. 

Ever wondered why Elon Musk is so high on Starlink, the low orbit internet access centric satellite constellation his company, Space X is building? It is because despite all the talk about Mars colonies, for now, communications is what will pay the bills and keep SpaceX growing. And it could be a lot more disruptive by lowering the cost of satellite communications and by being more inclusive. Imagine what if it cost $100,000 to build and launch a satellite — and you can imagine the rest. Read this astute analysis of the Starlink phenomenon by Casey Handmer.  (Also: Who is Casey?)

Tesla’s SolarCity gamble has gone wrong

“If he hadn’t bailed out SolarCity, his whole debt-laden empire might have cracked. Yet without the bailout, Tesla would be far more healthy….In the second quarter of this year, SolarCity installed only 29 megawatts of solar panels—far below the 10,000 megawatts in annual installations that Musk had promised.”

Vanity Fair

Bethany Mclean who made her name writing about Enron long before others is explaining the challenge faced by Tesla and Elon Musk due to the 2016 SolarCity acquisition. The much ballyhooed Solar Roof is a flop, and the whole thing seems to be coming apart at seams. Worth a read from a reporter, who has a habit of finding big stories before others.

Read article on Bethany Mclean