Bloomberg financial columnist Matt Levine, an actual lawyer who obviously knows about what might (or might not) happen with the Elon Musk-Twitter mess, has a column up about the topic:
I think it is helpful to start with the big picture. Elon Musk is the richest person in the world, and, like many other rich people, he has some unusual and expensive hobbies. One of his hobbies is that he sometimes likes to pretend that he will acquire public companies.
He seems to find this fun, and why not? When he pretends that he’ll buy a public company, it creates a big drama with him at the center of it. He gets to boss people around, mobilize legions of bankers and lawyers and financing sources and random hangers-on hoping to get the deal done, and then when he gets bored he can tell all those people to go home. “Haha got you,” he can say, and they can all have a good laugh, or he can anyway.
This is an expensive hobby! When Musk pretended in 2018 that he was going to take Tesla Inc. private, he had to pay the US Securities and Exchange Commission a $20 million fine and stop being the chairman of Tesla’s board. You’re not really supposed to go around pretending that you will buy a public company; the SEC sometimes considers that securities fraud. But Musk is very rich and he can easily afford to pay $20 million for his little joke. His appetite for pretending to buy public companies was, apparently, undiminished.
I tell you what though. I have learned my lesson. The next time Elon Musk announces that he is going to buy a public company — and he will do it again! — I will know not to believe him. I will definitely know not to write about it.
There’s a lot of stuff in this column I did not know. Much of it is over-my-head financial-speak, although still interesting.
You can read the rest here.