Welcome to this week’s edition of This Week in Chancery Court! Delaware’s moment in the sun continues as the fight between Elon Musk and Twitter shifts from fiery tweets… to fiery legal filings.
Here’s where we are: lawsuits. Twitter wanted to have a trial as quickly as possible. “This very public dispute harms Twitter with each passing day Musk is in breach,” Twitter said in a legal filing. (The company also reported earnings going down, and basically blamed Musk for its weak performance the last three months.) Musk’s team wanted to move the trial to next February so it could run more tests on Twitter’s firehose to figure out… something, something spam bots?
Kathaleen McCormick, chancellor of the Court of Chancery — name a more iconic job title, I’ll wait — ruled quickly on the subject. (She also has COVID-19 because why not add some more chaos to the proceedings!) The trial will start in October, and it will last five days. That’s not quite as soon as Twitter had hoped, but it’s a big win for the company nonetheless.
It sure seems like the overall feeling about this merger has started to change. Twitter’s stock is up almost 10 percent this week, which is a strong signal from investors that they think that, at the very least, Twitter’s going to wring a big payday out of Musk. (Though Twitter’s still trading well below $54.20 a share.) The hedge fund Pentwater Capital has bought big into Twitter recently, making a similar bet. Noted short sellers Hindenburg Research have also taken a long position on Twitter.
But Chancellor McCormick is the only person who really matters going forward because this is a bench trial. Still, out here in the wild, it seems “Elon Musk, the rogue cowboy who plays by his own rules to save the world” is being replaced in many people’s minds by “Elon Musk, the nonstop bundle of directionless chaos.” His cheering section and reply-guy army are still going strong, but the people who matter — and write big checks and decide big lawsuits — aren’t so taken with him anymore.
But wait, sorry. We’ve gotten way too far in without talking about the real Musk news of the week: Yacht Pics! Musk was apparently a recent guest on a yacht with Ari Emanuel in Mykonos, where he was spotted looking — I mean, let’s just say it — pasty as all hell. From the man who likes to talk about all the nights spent sleeping in a Tesla factory, this is not terribly shocking, and as a Fellow Pasty, I’m certainly not here to cast aspersions, but here’s hoping his SPF was strong that day. It’s been hot out there this summer, friends.
The timing of all of this doesn’t feel like a coincidence. Musk has a history of doing relatively harmless tabloid fodder-y things around big business moments, most notably when he made everyone forget about Tesla’s executive turnover and sinking stock price… by smoking a blunt on Joe Rogan’s podcast. Or the April Fools’ Twitter thread that stole headlines from a deadly Tesla crash and concerns about its credit rating. Remember the “funding secured” tweet? Remember how that came right in the middle of a huge production crunch at the company, a string of crashes, and an ongoing SEC investigation? Or the time, right after Insider had requested comment on a story about a flight attendant who says Musk propositioned her for sex, Musk went on Twitter to say he’d be attacked for his newfound Republicanism? Nobody redirects quite like Musk.
Musk tried to laugh the whole thing off but also quickly claimed he was “back in the factory” by the time the photos came out. See, hard work at all costs is kinda his thing — and the thing he likes to force on the people who work for him. This is the guy, after all, who has frequently talked about how vacations will kill you. It’s not exactly a great look to light a bunch of fires at every company you run or hope to run and then just bugger off to Mykonos for a Mediterranean romp.
Anyway, congratulations to whichever paparazzo snapped these photos, which are already climbing the ranks of the most-memed Musk photos. We have Elon Musk, the Golden Triangle of Perfection; Elon Musk, secretly a prototype of the Optimus robot; Elon Musk, Bizarro Captain America. (And in less flattering comparisons, Elon Musk, Immortan Joe.) I could do this all day. It’s amazing.
Also, the yacht is called Zeus, it’s 79 feet long, and it costs a bit over $7.00 a day to rent. This is not important information, but I spent a while researching it, so I figured I’d share.
Back in the factory, it was an interesting week: Tesla reported earnings on Wednesday and said it made $2.26 billion on $16.9 billion in revenue. Both numbers were down from last quarter but up from a year ago. Among other things, the company announced it has sold 75 percent of its Bitcoin, which added $936 million in cash to its balance sheet.
Musk has long promised to be a Bitcoin HODLer: he said exactly a year ago that “I might pump but I don’t dump” and that “I would like to see Bitcoin succeed.” Now, post-dump, he said the sale “should not be taken as some verdict on Bitcoin.” Rather, Tesla was just “concerned about overall liquidity of the company given COVID shutdowns in China.” Which is kind of scary sounding! But he also said he thinks the hardest period is over, and he’s been doomsday prophesying about the economy for a while now, so the explanation didn’t raise the alarm it might normally.
What made less sense? Musk said Tesla also owns Dogecoin and hasn’t sold any of it (yet). Tesla also has about $18.9 billion in easily accessible reserves, so that $936 million sure helps but isn’t going to change the company’s outlook much. It sounds more like an excuse to get out of yet another increasingly bad investment. He also called crypto “a sideshow to the sideshow.”
It’s possible that we’re headed into a relatively quiet period of Elon Doing Things. The Twitter trial has a date, and Musk’s team is surely telling him that all the tweeting he’s doing about it is not helping his case. (Not that Musk is known for doing the reasonable things his reasonable employees tell him to do.) It might be time to batten down the hatches, try and solve some of the many corporate headaches his behavior has caused at Tesla and SpaceX, and I don’t know, run some more searches on the firehose. Or, honestly, drop all of that and get back on the yacht. A little vitamin D might help.