First up, Elon’s history.

Elon Musk on a date with his ex Grimes tweeted he was going to take Tesla private at $420 a share, had funding secured and did this in 2018.

There was never any funding secured and Elon Musk was clearly joking doing it.

Issue was it wasn’t reported with the SEC and considered a form of stock market manipulation, which made him have to pay 20 million dollars in fees and lost the spot as chair to Tesla.

Musk also throughout Tesla’s history has made casual pot jokes on social media, where anytime the stock has some milestone that centers on the number “420”, he makes a joke about it.

Elon Musk in his new claim that he wants to buy Twitter, stated his price as $54.20 a share.

Again, another 4/20 joke.

Outside of that, Elon Musk has also adopted visible jokes before, such as promoting Dogecoin, being involved in a visible pump effort and dumping it quickly.

Second, Elon wouldn’t take Twitter private.

Tesla is currently valued at one trillion dollars, which doesn’t make much sense.

At 54 billion in revenue last year, they are still one of the smallest car manufacturers in the US, where globally they only are 2% of the auto market.

Despite that, they are worth more than Toyota, Ford, GM, Honda, Volkswagen and every other automaker combined. With each of those companies still beating Tesla in revenue.

Elon has tried to get the public to attach the company as a tech company, versus a car company and normally does publicity stunts that likely won’t amount to much to create that feeling.

• Does cheap designs for humanoid robots and without a working prototype, says they’ll be on sale in a year.
• Takes a role in the Boring Company, claiming they’ll build tunnels in LA, where so far little progress has been made.
• Has Tesla hold some investment in Hyperloop promising an underground levitating train, with again no progress.

Also, just for Tesla as a whole, he’s been overly optimistic on self driving cars, made claims he can get 500 mile per charge Tesla’s very soon and hasn’t delivered most of his claims.

Where this relates to taking Twitter private is doing a full acquisition wouldn’t make sense, to fit with Elon’s model.

Elon is all about hyping something, selling it to his fan base, get the value inflated and cash out gradually.

The smarter idea for Elon would be upping his stake in Twitter to 17%, matching his Tesla shares and working just to buy board seats for control of the company, appointing himself CEO.

Elon Musk does that and watches the market cap surge, like it did when he first invested. This time though, it could realistically exceed 100 billion dollars and Elon could likely sell enough of his stake to profit on the initial investment, while still owning about 5-10% of the company and getting control.

Third, Elon doesn’t have the money.

His offer is to buyout Twitter at 43 billion dollars.
His reported net worth is 273 billion.

The buyout would be 15-16% of his total net worth.

That said, he doesn’t have that liquid cash, so would have to make a bet against his Tesla stock, which is 170 billion of his net worth.

25% of his Tesla stake, where there’d likely be a loan against the stock to acquire Twitter.

The issue there is what happens if Tesla stock crashes?

My case for why that will happen.

Netflix in 2020 was souring, where they briefly surpasses Disney as the largest media company in the world, despite revenue being only about 30-35% and not having as diversified of revenue.

Today, Netflix is losing credibility as a FAANG stock, where it hasn’t seen growth and is witnessing every large media company pull movies/shows from it to launch their own platform, where it’s expected Disney will have more subscribers on Disney+ by 2025 and more on Disney+/Hulu by 2023.

Tesla is in a similar boat for the electric car market.

• Ford
• Toyota
• GM
• Volkswagen
• Honda

Every auto maker is producing electric cars now and Volkswagen actually surpassed Tesla in Europe for new car sales.

Eventually they’ll be a point where Tesla isn’t over 50% of the US electric auto market and probably wont be the largest electric car maker one day.

If that happens, it’ll be the moment where the stock could crash and they could see a major halt on growth, like Netflix has today.

That moment is very possible to happen and if Elon bet against 25% of his Tesla stake for Twitter, he’d end up losing almost all of his Tesla stake, if the stock took a 50%+ crash.

Which before people saying it’s crazy, it’s basically happened this year to Facebook, a company which has almost as much profit as Tesla has revenue.

Final thoughts

Elon has a foot in the door with Twitter and a clear say for policy there.

He has something which will produce him a positive return and kept his name relevant in PR, while also getting a clear voice in the companies ear.

He doesn’t need to buy it and I doubt with building cars or shooting rockets into space, its of interest.

Plus, the final and obvious reason.

Due to COVID and Elon’s stance on reopening, he has developed a bigger appeal with conservatives in the last year and less with liberals.

If he were to buy Twitter, he’d get a massive demand from that base to bring back Donald Trump’s Twitter account. Something which I doubt he wants to do and if he had the power to do it and didn’t, it’d take his clout in that space and drop it to zero.