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Speaker 1: Now from our nation's capital. This is Bloomberg Sound on.

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Speaker 1: Our private sector has now recovered all of the jobs

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Speaker 1: lost during the pandemic and added jobs. On top of that.

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Speaker 1: Your wage growth was seeing some of the biggest gain

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Speaker 1: in the lowest income earners, which is good. Obviously, we're

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Speaker 1: still dealing with inflation. Bloomberg Sound on politics, Policy and

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Speaker 1: perspective from DC's top names. Is it possible that he

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Speaker 1: decides not to step down? So much of the Democratic

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Speaker 1: base has been demoralized with Biden? Sometimes, I think unfairly

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Speaker 1: because he's not seen as being angry enough. Bloomberg Sound

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Speaker 1: On with Joe Matthew on Bloomberg Radio. All of the

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Speaker 1: jobs lost in COVID restored, according to the White House.

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Speaker 1: Welcome to the fastest hour in politics, as we check

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Speaker 1: under the hood of a stronger than expected jobs report

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Speaker 1: today and what it means for inflation and the Biden

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Speaker 1: administration's economic agenda. Joining us to discuss in just a moment,

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Speaker 1: Austin guls Be, former Chair of the White House Council

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Speaker 1: of Economic Advisors. Later it may be the biggest economic

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Speaker 1: story that no one is talking about. Enhanced subsidies for

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Speaker 1: Obamacare are set to expire at the end of the year.

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Speaker 1: Democrats are worried about the potential impact and whether they

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Speaker 1: can find a solution in time. We'll talk about it

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Speaker 1: with the architect of the Affordable Care Act, Professor John Grewbery,

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Speaker 1: economist at m I T. And our signature panel is

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Speaker 1: in place on a Friday, Bloomberg Politics contributors Rick Davis

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Speaker 1: and Genie Chanzano helping us distill all of the news

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Speaker 1: over the course of the hour, and first we update

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Speaker 1: the markets on a Friday here and in the wake

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Speaker 1: of the jobs report of mixed finish for Wall Street,

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Speaker 1: little changed actually in the end, the S and P

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Speaker 1: five hundred down three points, the Dow Industrial Average down

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Speaker 1: forty six, but the NASDAC finished higher, up four team,

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Speaker 1: making for the longest wind streak on the NASDAC since November.

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Speaker 1: All three indexes banked games for the week. The NASDAK

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Speaker 1: was actually the big winner of four point six percent

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Speaker 1: this week, the S and P two the ten year

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Speaker 1: note yielding three point oh seven percent. Traders reacting to

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Speaker 1: us stronger than expected jobs report, which we're going to discuss.

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Speaker 1: As I mentioned in a moment with Austin Gulsby, showing

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Speaker 1: payrolls up by three hundred seventy two thousand jobs. Estimates

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Speaker 1: were calling for two hundred and fifty k, the unemployment

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Speaker 1: rate holding steady at three point six percent. So President

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Speaker 1: Biden spoke to the job gains today in an event

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Speaker 1: at the White House. Here he is, our private sector

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Speaker 1: has now recovered all of the jobs lost during the

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Speaker 1: pandemic and added jobs. On top of that, we have

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Speaker 1: more Americans working today in the private sector than any

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Speaker 1: day under my predecessor, more today than any time in

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Speaker 1: American history. Labor Secretary Marty Walsh was also upbeat when

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Speaker 1: he appeared on Bloomberg after the release of the report,

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Speaker 1: but he tried to maintain little perspective fears. The Secretary

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Speaker 1: the waves growth was seeing the biggest well some of

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Speaker 1: the biggest gain and the lowest income earners, which is good. Obviously,

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Speaker 1: were still telling with inflation and and and the wage

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Speaker 1: growth isn't quite keeping up with inflation. But I think

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Speaker 1: what we want to do is actually bring inflation down.

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Speaker 1: Let's get into that and get into the fine prints

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Speaker 1: and the messaging from this White House with someone who

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Speaker 1: has been their former chair of the White House Council

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Speaker 1: of economic Advisors now Professor of economics at the University

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Speaker 1: of Chicago's Booth School of Business. That's Austin Gouls being

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Speaker 1: welcome Stirt back to Bloomberg. Thank you for having me back.

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Speaker 1: Always our pleasure. Today's jobs report shows unexpected strength in

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Speaker 1: hiring from last month. Does this make you feel more

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Speaker 1: confident that we can avoid a recession? Yeah, a little bit.

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Speaker 1: I mean it was a pretty amazing report. Uh, the

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Speaker 1: unemployment rates three point six percent, and you don't normally

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Speaker 1: put up three hundred and seventy two thousand new jobs

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Speaker 1: a month when the unemployment rates already that law. Um,

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Speaker 1: And this follows on We've been month after month, we've

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Speaker 1: been having these these big jobs reports. If if we

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Speaker 1: keep having jobs numbers like that, no one will say

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Speaker 1: it's a recession. It's not. It's not a recession if

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Speaker 1: jobs are growing like that. Um. But we we're definitely

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Speaker 1: not out of the woods. Hopefully it's a sign of

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Speaker 1: soft landing. But you know, the Fed is raising rates

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Speaker 1: as fast as as any time in in Hodern memories.

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Speaker 1: Does this put you in the seventy basis point camp

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Speaker 1: or were you already? Yeah? That from from their language,

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Speaker 1: I think seventy five base points is quite likely, and

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Speaker 1: um more than two thirds of the recessions in the

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Speaker 1: United States since World War Two, since we've been keeping track,

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Speaker 1: have started because the Fed raised interest rates faster than

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Speaker 1: the economy can handle. So at a moment where they're

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Speaker 1: raising rates like that, you know, it might not be

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Speaker 1: a knife's edge, but it's it's definitely not. There's there's

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Speaker 1: not a lot of mark and for error wage growth.

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Speaker 1: If they go too far, it could be a problem. Yeah,

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Speaker 1: of course there's concern about wage growth here. And I

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Speaker 1: don't mean to sound cold, but average hourly earnings up

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Speaker 1: over five from a year ago. Raised a lot of eyebrows.

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Speaker 1: This is good for workers, of course, Austin, but the

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Speaker 1: inflationary aspect is not. Do you see wages pressing here?

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Speaker 1: Tell me why? Well, because it's less than prices. I mean,

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Speaker 1: I thought you were gonna say that there are critics

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Speaker 1: on the wage side because the real wage continues to fall.

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Speaker 1: But there's no evidence in this report of a wage

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Speaker 1: price spiral. I mean the way wages are up less

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Speaker 1: than prices are up, So you don't see a tight

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Speaker 1: market exacerbating the inflation problem. So far, not a wage

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Speaker 1: price FIRL. Absolutely not like I say, the real wage

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Speaker 1: is falling. We've we've never had the unemployment rate below

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Speaker 1: four in this country, and real wages were going down,

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Speaker 1: not up. Normally, when the unemployment rate is that low

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Speaker 1: and the labor market is this type, there's a dramatic

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Speaker 1: increase in the bargaining power of workers, and their real

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Speaker 1: wage goes up, their wage goes up faster than businesses.

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Speaker 1: Prices go up, and the business profit margins shrink. And

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Speaker 1: that's that's what happened in the in the years before COVID,

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Speaker 1: That's what happened at the at the mid two thousand's,

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Speaker 1: before the financial crisis, that's what happened at the end

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Speaker 1: of the nineties. All of those were periods where people say, Wow,

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Speaker 1: what a type labor market. We have to pay people

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Speaker 1: more than our prices are going up, so we're getting squeezed.

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Speaker 1: For all of the smoke that's coming from the business

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Speaker 1: sector about labor shortage, it's pretty notable that business margins

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Speaker 1: have increased and the real wage has not. If you're

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Speaker 1: an employer and you're paying five more than you were

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Speaker 1: a year ago, doesn't that become inflationary? Your prices are

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Speaker 1: up eight percent and your costs are up five percent,

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Speaker 1: so your profit margin got bigger. It could become a problem.

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Speaker 1: You should never make too much about trends from one

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Speaker 1: month's numbers, but for wages to be up five percent,

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Speaker 1: which is a decrease, and to be up less than prices,

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Speaker 1: As I say, the good news on the inflation front

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Speaker 1: is that's that's not what a wage price spiral of

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Speaker 1: inflation looks like. And you've at least seen inflation starting

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Speaker 1: to come down and the world price of oil starting

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Speaker 1: to come down. Hopefully that continues. The participation rate fell

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Speaker 1: last month just a bit, but specifically the rate for

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Speaker 1: workers to fifty four hit a four month low. The

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Speaker 1: number of America is not in the labor force rose

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Speaker 1: to the highest level that we've seen this year. How

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Speaker 1: come people are not coming back to work the way

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Speaker 1: many expected or hoped. Ye, yes and no, I mean

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Speaker 1: as I say, don't don't make too much out of

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Speaker 1: any one month's number. Overall, there's enough astounding unexpected increase

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Speaker 1: of people coming back to work and the for the

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Speaker 1: much remarked upon rising to quit rate. It's worth emphasizing

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Speaker 1: that the vast majority of people that have quit their jobs.

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Speaker 1: Quit their job not to go home, but quit their

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Speaker 1: job because they had another job that paid more than

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Speaker 1: the job they had before. So we'll have to see

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Speaker 1: if this monthly blip is an indicator that participation is

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Speaker 1: actually going down. If you have two openings for every

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Speaker 1: job seeker, though, is that a good thing or not? Well,

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Speaker 1: you know, compared to what I mean, I it's good

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Speaker 1: for the worker, but how about the broad economy. Yeah,

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Speaker 1: it's excellent for the worker. The fear you have for

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Speaker 1: the economy is that could something a situation like that

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Speaker 1: could lead to a wage price spiral if you're already

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Speaker 1: starting from a period of high inflation. And in a way,

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Speaker 1: the large number of vacancies compared to the how many

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Speaker 1: unemployed workers there are gives the FED hope that they

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Speaker 1: can do their so called soft ish landing, that you

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Speaker 1: could reduce the number of job vacancies without actually increasing

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Speaker 1: the number of unemployed people. And that would be a

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Speaker 1: that would be a great accomplishment. And you know, given

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Speaker 1: the numbers like what we're seeing this month, it definitely

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Speaker 1: seems more doable um and and a little less of

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Speaker 1: a risk of stagflation from your compared last year I

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Speaker 1: want to ask you, Austin, to be about the messaging

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Speaker 1: around all of this. As President Biden refers to the

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Speaker 1: Putin price hike and Americans see their prices continue to

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Speaker 1: rise his approval ratings. I don't need to tell you

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Speaker 1: how would you advise this administration in how to talk

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Speaker 1: about these challenges. You know, I always say, don't don't

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Speaker 1: ever ask message advice from a guy with a PhD.

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Speaker 1: You've done. Your first thing i'd say is don't ask me.

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Speaker 1: But you know, it does feel like the administration has

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Speaker 1: tried several explanations with varied success, and certainly in the

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Speaker 1: polling people expressed that they don't think the economy is

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Speaker 1: good as high as share if not more people say

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Speaker 1: it's going badly in the economy, as said so in

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Speaker 1: the middle of the Great Recession. So that's been very

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Speaker 1: How that's happening when the unemployment rate is three point

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Speaker 1: six percent? Is is is odd? And you've got the

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Speaker 1: second odd thing happening in the polling data where big

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Speaker 1: majorities say, asked, how's the economy, they say bad, but

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Speaker 1: when asked about their personal situation they say good. So

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Speaker 1: we've never had a bigger difference between the my own

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Speaker 1: finances are okay. The economy overall is no good. So

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Speaker 1: I kind of think, no matter what you say, as

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Speaker 1: long as the unemployed, as long as the inflation rate

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Speaker 1: is as high as it is, and until we start

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Speaker 1: seeing progress on the inflation rate, I kind of think

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Speaker 1: it might not make any difference what you say or

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Speaker 1: what how you describe it. Should Democrats seek a reconciliation

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Speaker 1: bill this year or is is that the wrong message? Uh?

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Speaker 1: They probably should on the grounds of what's in the bill,

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Speaker 1: not on the grounds of inflation, because you know, it's

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Speaker 1: a whole separate topic. But if you pass a bill

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Speaker 1: that has actually increases on high income people to pay

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Speaker 1: for it, that should have very little impact on how

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Speaker 1: much the economy is overheated. So I think just spin

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Speaker 1: that into the inflation discussion is Yeah, I don't know.

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Speaker 1: It's funny because the President says that will help the

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Speaker 1: lower prices, Republicans say it'll make inflation worse. It's hard,

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Speaker 1: hard to get a straight answer, So I think you're right.

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Speaker 1: I kind of think both sides because inflations what's on

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Speaker 1: people's mind. It feels like both sides are trying to

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Speaker 1: spin an inflation story about it, and I think it

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Speaker 1: has very little to do with it. Appreciate the insights

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Speaker 1: as always. Austin Gulsby, We thank you for being with

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Speaker 1: us on Bloomberg. Yeah, great talking to you. Yet. President

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Speaker 1: Biden says today's jobs report is proof that his economic

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Speaker 1: plan is working, and again Republicans say the very opposite.

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Speaker 1: So let's get into the politics around this. We'll do

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Speaker 1: it next. As we assemble the sound on panel, Rick

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Speaker 1: Davis and Genie Schanzano are ahead on the fastest hour

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Speaker 1: in politics. We'll check traffic for you on the way.

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Speaker 1: Glad you're with us. As I remind you as ever

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Speaker 1: to subscribe to the sound on podcast. You can do

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Speaker 1: it easily, especially if you showed up late on this Friday.

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Speaker 1: Stay with us. I'm Joe Matthew in Washington. This is Bloomberg.

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Speaker 1: This is Bloomberg sound On on Bloomberg Radio. The headline

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Speaker 1: on the terminal, Biden says, private sector employment has fully recovered.

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Speaker 1: Just think about that, after the way things felt two

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Speaker 1: years ago in the throes of COVID, when people weren't

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Speaker 1: leaving their houses. You think we'd have a parade to

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Speaker 1: celebrate that kind of news. All the jobs are back

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Speaker 1: to pre COVID, but of course it's not two years ago,

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Speaker 1: with historically high inflation, now, a war in Europe, deep

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Speaker 1: political divisions, malaised stare I say, it's just a different world,

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Speaker 1: and that's why we assemble our panel to talk it out.

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Speaker 1: Rick Davis is back with us. Jennie Chanzano here to

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Speaker 1: Bloomberg Politics. Contributors make up our signature panel. Uh and Brick,

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Speaker 1: I'll start with you on this job's report. My goodness,

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Speaker 1: a headline like that you think would get a president

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Speaker 1: reelected without even thinking about it. But when you look

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Speaker 1: at the rest of the environment that we're in here,

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Speaker 1: it doesn't even make a splash today, does it. I

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Speaker 1: don't think people will believe what he's saying. I mean,

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Speaker 1: it's obviously a good report, he's obviously excited about it.

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Speaker 1: It's an accomplishment of his administration to get to this point.

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Speaker 1: I mean, you know, above pre pandemic levels. Nobody thought

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Speaker 1: this was going to happen, certainly this time. But when

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Speaker 1: you look at other tracking mechanisms like the Mission Consumer Index,

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Speaker 1: which tracks political success also, um, you know, it's the

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Speaker 1: worst it's ever been. And we've seen some bad ones,

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Speaker 1: including when I was running a presidential campaign in the

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Speaker 1: middle of a you know, massive global economic downturn. And

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Speaker 1: it's worse than that. I mean, it's at the lowest

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Speaker 1: point in its recordings since the nineteen fifties, so consumers

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Speaker 1: aren't buying it. So when he says, hey, this is

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Speaker 1: great news, I'm not sure anybody's going to agree with him. Well,

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Speaker 1: I want to be fair with what he said as well.

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Speaker 1: Let's listen as he did celebrate, of course, and and

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Speaker 1: and and said even more than we played for you

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Speaker 1: about what's going right with the economy. Listen to President

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Speaker 1: Biden framen this uh in terms of his own economic

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Speaker 1: agenda while also kind of balancing everything else going on.

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Speaker 1: I know times are tough, prices are too high, families

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Speaker 1: are facing the cost of the limit crunch. But today's

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Speaker 1: economic news confirms the fact, and my economic plan is

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Speaker 1: moving this country in a better direction. Jeanie Schanzano, is

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Speaker 1: that enough? Is he qualifying it the right way? When

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Speaker 1: I was listening to the President, I was I kept thinking,

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Speaker 1: you know, he needs to explain why if the headlines

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Speaker 1: are good and the report is really good, he's right

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Speaker 1: about that, why does it feel so bad, and it

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Speaker 1: sort of sounds like a bad country song, but that's

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Speaker 1: literally the message that politically he needs to be able

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Speaker 1: to commune a song. He's singing those the Putin price hike,

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Speaker 1: that's right. And I'm not sure that that gets to

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Speaker 1: explaining it, because you know, I was listening to the

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Speaker 1: president then the headlines throughout the day, and every single

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Speaker 1: one of them them said great job numbers. But and

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Speaker 1: of course the rule is anything before a butt is

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Speaker 1: a lie. So great job numbers be damned. Nobody cares

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Speaker 1: about that. So he's going to have to do a

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Speaker 1: better job explaining this, and you know, it's a hard

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Speaker 1: thing to explain, and he also needs people and his

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Speaker 1: surrogates out there explaining why there's still a They don't

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Speaker 1: we don't all feel so good about this. We have

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Speaker 1: breaking news on the terminal that I have to mention

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Speaker 1: that has nothing to do with what we're talking about.

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Speaker 1: Elon Musk, this is real. Elon Musk terminates Twitter merger agreement.

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Speaker 1: The buyout is off. Twitter stock right now is down

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Speaker 1: seven percent after hours, and we'll keep tabs on this

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Speaker 1: for you as we learn more. Of course, we're talking

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Speaker 1: politics here as we wrap up the week in Washington,

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Speaker 1: and the President said a lot more than he did

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Speaker 1: about jobs today. This was actually an event that had

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Speaker 1: to do with the end of Roe v. Wade uh

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Speaker 1: the right to life. It's it's an executive order that

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Speaker 1: he signed, and I'll let the President speak to it

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Speaker 1: here to try to protect some rights for women. Here's

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Speaker 1: what he said. The executive order directs HHS to identify

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Speaker 1: ways to expand access to reproductive health services Mike I

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Speaker 1: u d s birth control pills, emergency contraception, and equally important,

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Speaker 1: this executive order protects patient privacy and access to information.

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Speaker 1: He spoke passionately about this and directed people to the

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Speaker 1: mid term elections. This was essentially what he said. The

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Speaker 1: fastest and only real way to solve this is to

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Speaker 1: elect two more Democrats to the Senate. Here's the President.

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Speaker 1: I don't think the Court, or for that matter, of Republicans,

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Speaker 1: who for decades of wish to extreme agenda, have a

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Speaker 1: clue about the power of American women, but they're about

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Speaker 1: to find out. In my view, it's my hope and

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Speaker 1: strong belief that women will in fact turn out in

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Speaker 1: record numbers to reclaim the rights that have taken from

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Speaker 1: them by the court. And let me be clear, Well,

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Speaker 1: I wish it had not come to this. This is

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Speaker 1: the fastest route available record numbers, Rick Davis, Is he right? Look, Uh,

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Speaker 1: he's going to find out in six months, so we'll see.

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Speaker 1: But the reality is, uh, you know, we've been just

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Speaker 1: talking about the number one issue in America today, which

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Speaker 1: is inflation, is not abortion. He had a good opportunity

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Speaker 1: to talk about it today in the context of a

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Speaker 1: really positive jobs report, just the way Gulsby just did

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Speaker 1: with you on the air and made it sound like

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Speaker 1: it was a much more positive impact, uh, and that

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Speaker 1: there's a plan going forward that will give us a

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Speaker 1: soft landing on inflation. And he did none of that.

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Speaker 1: He stepped on his own positive message by by pivoting

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Speaker 1: to arguably a more niche issue and abortion, which will

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Speaker 1: be the headline rather than what he was talking about

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Speaker 1: with jobs today. He's he's suggested this before, Jennie, that

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Speaker 1: that there will be record turnout and turn expectations upside

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Speaker 1: down in November because of that singular issue, because of

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Speaker 1: the Row ruling. And we've talked a lot about how

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Speaker 1: Democrats can mobilize the base. How does he actually make

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Speaker 1: that happen. How does he realize it? Well, he does

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Speaker 1: what he did today, he tries to use the bully pulpit.

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Speaker 1: I think many people on the progressive left are saying,

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Speaker 1: why didn't he do this too? You know earlier, we

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Speaker 1: knew the decision was coming out. Why not that day?

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Speaker 1: Why the next day he didn't say, you know, the

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Speaker 1: EO today is not you know, anything really new. Um.

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Speaker 1: So people feel like he should have done it much earlier.

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Speaker 1: And then to Rick's point, he could have spent the

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Speaker 1: time today talking about the good jobs the number. So

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Speaker 1: he had to combine these two things, which is never good.

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Speaker 1: But on the issue of mobilization, after the Casey decision

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Speaker 1: was the year of the women. Women did come out

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Speaker 1: in larger numbers. We do command a large force at

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Speaker 1: at at the voting box, so it could be that

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Speaker 1: they are able to get them out, but we simply

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Speaker 1: don't know if that's going to happen. We have to

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Speaker 1: look at the reality and abortion opponents have long been

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Speaker 1: well organized and on the left that they're going to

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Speaker 1: have to catch up to that, and this is going

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Speaker 1: to be a test for them. Well, we've talked about

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Speaker 1: the test in the suburbs here women in the suburb's

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Speaker 1: rick and and that's obviously who President Biden is talking

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Speaker 1: about here. Is he being presumptuous though, with the way

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Speaker 1: they feel about this? Yeah? Look, I mean, you know,

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Speaker 1: politics is the opposite and equal reaction of force, right,

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Speaker 1: And so you're gonna go out and rally your base

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Speaker 1: to um make the next election count on this issue. Uh.

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Speaker 1: And and that's gonna that's gonna just mobilize Republican voters

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Speaker 1: in the same way. Right, there are a lot of

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Speaker 1: suburban women who were pro life, and and if they

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Speaker 1: believe that the objective of the Democratic Party is to

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Speaker 1: pass a um um uh you know, a national row

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Speaker 1: um bill that will secure abortion uh nationally, then they're

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Speaker 1: gonna be motivated to to turn out. And so it's

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Speaker 1: a it's a non linear exercise, right, I mean, like

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Speaker 1: it's not just for Democrats. And and so every time

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Speaker 1: these messages go out from the President, you know, it's

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Speaker 1: kind of a red flag for Republican pro life voters.

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Speaker 1: And and so whether you can gain a significant advantage,

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Speaker 1: and it has to be significant this cycle, because Democrats

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Speaker 1: have are very much in a down cycle. Uh. And

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Speaker 1: and they're gonna have to really create a multiple effect

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Speaker 1: on this, and I just don't see abortion that It's

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Speaker 1: never had that kind of impact on politics, and it's

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Speaker 1: unlikely to have it now as we spend time with

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Speaker 1: our panel, Rick and Janie or with us, Welcome to

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Speaker 1: Sound On on a Friday, the fastest hour in politics.

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Speaker 1: I feel like I've buried the lead here and it's

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Speaker 1: where I started with Austin Goulsby. This report led a

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Speaker 1: lot of smart people today to say, hey, you know what,

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Speaker 1: this is not a recession and we're not about to

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Speaker 1: go into a recession. Is that the best news that's

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Speaker 1: buried in today's stream of headlines? Genie? It is very

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Speaker 1: good news. You know, the job numbers are very good,

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Speaker 1: the unemployment rate is very good. The fact that it

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Speaker 1: may have you know, we may not see a recession

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Speaker 1: is very good. It's going to mean more interest rate hikes, though,

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Speaker 1: and that's that's the bad news. That's the butt and

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Speaker 1: what comes after the butt, and that's you know what

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Speaker 1: the president really and not just him, but his surrogates

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Speaker 1: have to do a good job of explaining, you know,

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Speaker 1: why we can't feel and why we're not feeling so

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Speaker 1: good about this yet, and I think you know the President,

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Speaker 1: I didn't hear him talk about oil prices, gas prices dropping,

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Speaker 1: Googles be talked about that, shipping prices dropping, mortgage rates dropping.

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Speaker 1: There's some good news out there. He's got to keep

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Speaker 1: talking about that and keep reminding the American people he

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Speaker 1: has a plan and we're headed in the right direction,

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Speaker 1: which you know when you look at the data. In fact,

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Speaker 1: we are, but you've got to make the case over

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Speaker 1: and over. Stay with us. Ricking Genie are here for

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Speaker 1: the hour our sound on Signature panel on Bloomberg Radio.

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Speaker 1: I'm Joe Matthew in Washington. If you're just joining us,

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Speaker 1: We've got a big breaker. It's a pretty amazing headline

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Speaker 1: to see. Actually a lot of people predicted it, but

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Speaker 1: it's different when it happens. Elon Musk terminates Twitter merger agreement.

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Speaker 1: It's right there, says his advisers. Sent a letter to

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Speaker 1: Twitter formally notifying the company that he's killing the deal.

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Speaker 1: Includes the letter to Twitter and an amended third teen

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Speaker 1: D filing, which is why we've got it. And we

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Speaker 1: talked with somebody who's on the beat here and I'm

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Speaker 1: sure a very busy moment for man deep seeing Bloomberg

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Speaker 1: intelligence tech analyst with the headline, man, deep, did you

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Speaker 1: expect to see today? Well after yesterday, I think the

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Speaker 1: Washington Post news it was kind of getting to a

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Speaker 1: point where the uh, it was getting closer to our

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Speaker 1: termination talking about bots a lot in the last couple

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Speaker 1: of hours. I mean, the big story before this was

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Speaker 1: was about the bots. Right, he didn't believe what he

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Speaker 1: was hearing. Yes, And look, I think the market, uh,

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Speaker 1: where it is right now with regards to you know,

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Speaker 1: the other social media names and the evaluations for those companies.

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Speaker 1: It was seemingly obvious that Elon Months had overpaid given

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Speaker 1: the market, uh circumstances, and uh, I think he was

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Speaker 1: looking to get out of the deal. Now the bod situation,

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Speaker 1: you could argue, you know, and I'm sure there will

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Speaker 1: be a suit you know from Twitter. Uh they will

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Speaker 1: end up suing Months on on this. But look, on

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Speaker 1: a standalone basis, you will see Twitter stock really go

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Speaker 1: down to maybe around dollars who knows. And I think

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Speaker 1: from that standpoint, uh, there could be another buyer if

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Speaker 1: if they and and look, it could be a large

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Speaker 1: one of the large tech companies that uh may think

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Speaker 1: you know, Twitter has become cheap enough and it's it's

429
00:25:01,320 --> 00:25:04,919
Speaker 1: an attractive asset for the long term. So that is

430
00:25:04,960 --> 00:25:10,359
Speaker 1: one possible scenario. But I think Twitter will inevitably sue

431
00:25:10,440 --> 00:25:13,400
Speaker 1: Musk in this case because he has terminated the agreement

432
00:25:13,720 --> 00:25:16,879
Speaker 1: here down six percent now six and a quarter percent,

433
00:25:16,920 --> 00:25:19,600
Speaker 1: and after hours trading as we follow shares of Twitter

434
00:25:19,720 --> 00:25:23,600
Speaker 1: here in real time on Bloomberg. Do you think he

435
00:25:23,680 --> 00:25:26,439
Speaker 1: ever actually meant to buy this company or was this

436
00:25:26,520 --> 00:25:29,439
Speaker 1: a ploy to change the makeup of Twitter to become

437
00:25:29,440 --> 00:25:34,600
Speaker 1: a hero for free speech. I think the time when

438
00:25:34,600 --> 00:25:38,359
Speaker 1: he announced the murder, he felt like, you know, he

439
00:25:38,480 --> 00:25:42,080
Speaker 1: had the funding and look, you know, he saw he

440
00:25:42,160 --> 00:25:45,359
Speaker 1: sold a bunch of Tesla's talk and he had a

441
00:25:45,400 --> 00:25:49,560
Speaker 1: few private investors joined him in the bid. But the

442
00:25:49,640 --> 00:25:52,720
Speaker 1: market has changed so much over the course of the

443
00:25:52,800 --> 00:25:56,879
Speaker 1: last two months that you know where the public equity

444
00:25:57,400 --> 00:26:02,159
Speaker 1: market valuations are. It's seemingly obvious that, you know, forty

445
00:26:02,200 --> 00:26:06,080
Speaker 1: four billion dollars was a very high price, uh, given

446
00:26:06,160 --> 00:26:09,960
Speaker 1: the market conditions, and uh he that's why he's walking back.

447
00:26:10,000 --> 00:26:14,120
Speaker 1: I mean, the box situation is really not the make

448
00:26:14,240 --> 00:26:17,320
Speaker 1: or break factor here, at least in my opinion. But

449
00:26:17,760 --> 00:26:20,480
Speaker 1: that's what he's alluding to in terms of, you know,

450
00:26:20,520 --> 00:26:23,520
Speaker 1: what has changed materially after he has announced the deal,

451
00:26:24,240 --> 00:26:26,359
Speaker 1: Twitter had been talking layoffs. If it were not for

452
00:26:26,400 --> 00:26:32,040
Speaker 1: Elon Musk Well, so Twitter always had that cost structure problem,

453
00:26:32,160 --> 00:26:35,440
Speaker 1: and for any prospective buyer of the company, they would

454
00:26:35,480 --> 00:26:40,240
Speaker 1: have easily recognized the fact that their revenue per employee

455
00:26:40,880 --> 00:26:44,160
Speaker 1: was much lower and the cost structure was bloated somewhat,

456
00:26:44,359 --> 00:26:47,440
Speaker 1: you know, compared to the other social media platforms. So

457
00:26:47,800 --> 00:26:51,280
Speaker 1: I think Twitter would have had to do that anyways,

458
00:26:51,480 --> 00:26:54,760
Speaker 1: But he made that point, you know that why does

459
00:26:54,800 --> 00:26:59,840
Speaker 1: a tech company like Twitter, you know, needs so many engineers,

460
00:26:59,840 --> 00:27:03,480
Speaker 1: and why is the margins higher than there they were?

461
00:27:04,000 --> 00:27:06,479
Speaker 1: You know, the force announced to deal boy, how about it?

462
00:27:06,800 --> 00:27:09,359
Speaker 1: Uh Man Deep thank you so much for the insights.

463
00:27:09,440 --> 00:27:11,880
Speaker 1: We'll let you get back to filing on this as

464
00:27:11,920 --> 00:27:14,440
Speaker 1: we continue our coverage of course on the terminal and

465
00:27:14,560 --> 00:27:17,160
Speaker 1: here on the radio with the panel. Rick and Genie

466
00:27:17,280 --> 00:27:19,840
Speaker 1: and and I just would love to ask you both

467
00:27:20,000 --> 00:27:23,520
Speaker 1: just quickly your thoughts on this. Rick, you obviously you

468
00:27:23,560 --> 00:27:25,879
Speaker 1: work at Stone Court Capital. You have a good feel

469
00:27:26,320 --> 00:27:29,080
Speaker 1: for this side of the business. When something falls apart

470
00:27:29,160 --> 00:27:31,720
Speaker 1: like this, does it screen lawsuits to you? Yeah, I

471
00:27:31,720 --> 00:27:33,880
Speaker 1: think that's the first thing you think about, is there

472
00:27:33,960 --> 00:27:36,600
Speaker 1: there's a billion dollar breakup fee. That's not small change,

473
00:27:37,080 --> 00:27:39,760
Speaker 1: and uh, I'm sure Twitter is gonna want to get

474
00:27:39,760 --> 00:27:43,000
Speaker 1: their hands on that as quickly as possible. So, Um,

475
00:27:43,000 --> 00:27:47,280
Speaker 1: regardless of whether Musk was sincere in this bid or

476
00:27:47,840 --> 00:27:50,680
Speaker 1: whether it was a shield for other business activity, Um,

477
00:27:50,960 --> 00:27:53,000
Speaker 1: he's probably gonna pay a price for it, but he

478
00:27:53,040 --> 00:27:56,960
Speaker 1: can afford the billion dollars. So, Jenny, there's there's a

479
00:27:57,000 --> 00:28:00,960
Speaker 1: personality story here as well, beyond the business. In the

480
00:28:01,000 --> 00:28:05,639
Speaker 1: financial aspects here, we've been talking about babies being born

481
00:28:05,920 --> 00:28:08,960
Speaker 1: the last couple of days. Uh, we're talking about boring

482
00:28:09,080 --> 00:28:12,399
Speaker 1: under l a going back to Mars. You add this

483
00:28:12,520 --> 00:28:16,280
Speaker 1: bizarre saga to Elon Musk's biography, is it just going

484
00:28:16,320 --> 00:28:19,600
Speaker 1: to be a footnote? You know, He's he's got so

485
00:28:19,720 --> 00:28:21,920
Speaker 1: much to offer, it's hard to tell. It's a big

486
00:28:21,960 --> 00:28:24,600
Speaker 1: story today. Um, but he I'm sure has a lot

487
00:28:24,640 --> 00:28:26,840
Speaker 1: to come. But you know, as you you step back,

488
00:28:26,920 --> 00:28:29,520
Speaker 1: not only you know has he overpaid as Mondep was

489
00:28:29,560 --> 00:28:33,080
Speaker 1: just talking about, um, but of course who wants to

490
00:28:33,160 --> 00:28:36,280
Speaker 1: take on Twitter? He has now made himself the king

491
00:28:36,400 --> 00:28:39,480
Speaker 1: of free speech in the world. And you can't be

492
00:28:39,600 --> 00:28:42,000
Speaker 1: the king of free speech when you own the platform.

493
00:28:42,320 --> 00:28:44,959
Speaker 1: So if he wanted to maintain that, and my senses,

494
00:28:45,040 --> 00:28:47,160
Speaker 1: that was more important to him than owning Twitter. He

495
00:28:47,280 --> 00:28:48,960
Speaker 1: had to step away from this, and of course he

496
00:28:49,040 --> 00:28:51,440
Speaker 1: was over paying and he gets much more out of

497
00:28:51,480 --> 00:28:55,200
Speaker 1: his ev businesses and his other businesses. Is clearly an

498
00:28:55,200 --> 00:28:58,280
Speaker 1: excuse to get out of this, and it's a it's

499
00:28:58,320 --> 00:29:01,080
Speaker 1: a probably the biggest breakup fee in the world if

500
00:29:01,120 --> 00:29:03,000
Speaker 1: you can imagine and imagine if they take him to

501
00:29:03,040 --> 00:29:04,959
Speaker 1: court and ask for all forty four billion of it.

502
00:29:05,280 --> 00:29:08,680
Speaker 1: You know what this means, Rick, Donald Trump not coming

503
00:29:08,720 --> 00:29:12,040
Speaker 1: back to Twitter. Yeah, that's probably the big political news.

504
00:29:12,080 --> 00:29:13,800
Speaker 1: I wonder if truth social is going to go up

505
00:29:13,840 --> 00:29:17,400
Speaker 1: in price. Uh, you know, I'm sure Donald Trump sitting

506
00:29:17,400 --> 00:29:19,840
Speaker 1: there going dang. I was gonna hopefully get on Twitter

507
00:29:19,920 --> 00:29:24,480
Speaker 1: before my big presidential announcement. But the reality is that, um,

508
00:29:24,520 --> 00:29:27,000
Speaker 1: you know, this whole idea of free speech, Um, you know,

509
00:29:27,000 --> 00:29:28,680
Speaker 1: I think a lot of people were really worried about

510
00:29:28,680 --> 00:29:33,640
Speaker 1: his definition of free speech and uh and and unabated, uh,

511
00:29:33,720 --> 00:29:36,800
Speaker 1: nonpoliced activity on the web is exactly what got us

512
00:29:36,840 --> 00:29:39,000
Speaker 1: in trouble on January six. You know, when we when

513
00:29:39,040 --> 00:29:41,800
Speaker 1: we saw the attack on the Capitol So I think

514
00:29:41,840 --> 00:29:45,280
Speaker 1: that's only going to continue the debate, especially on Capitol Hill.

515
00:29:45,640 --> 00:29:48,680
Speaker 1: What kind of regulations do these platforms need to have,

516
00:29:48,920 --> 00:29:52,360
Speaker 1: and and and what kind of government intrusion into that

517
00:29:52,400 --> 00:29:54,120
Speaker 1: world is there going to be? Because I don't think

518
00:29:54,160 --> 00:29:56,000
Speaker 1: it's a question of if it's only going to be

519
00:29:56,040 --> 00:29:59,640
Speaker 1: a question of what Genie, there was a whole free

520
00:29:59,640 --> 00:30:02,920
Speaker 1: speech a conversation that that this started that we've alluded

521
00:30:02,920 --> 00:30:06,360
Speaker 1: to here a little bit. Um is it over? Now?

522
00:30:06,920 --> 00:30:09,960
Speaker 1: Does anyone else? I mean, man Deep mentioned there could

523
00:30:09,960 --> 00:30:12,720
Speaker 1: be another buyer here. Certainly if if Twitter bleeds out,

524
00:30:12,760 --> 00:30:14,640
Speaker 1: maybe somebody comes along to buy it. But we now

525
00:30:14,720 --> 00:30:18,360
Speaker 1: know how complicated this is. If you're buying that algorithm, boy,

526
00:30:18,400 --> 00:30:20,720
Speaker 1: you've got a lot of pressure to deal with this

527
00:30:20,840 --> 00:30:22,640
Speaker 1: in a certain way. Is everyone going to kind of

528
00:30:22,680 --> 00:30:26,120
Speaker 1: forget that whole part of a conversation. I don't think

529
00:30:26,120 --> 00:30:28,480
Speaker 1: they'll forget it. I think there will be other buyers,

530
00:30:28,520 --> 00:30:31,280
Speaker 1: Oh oh please, just for us. Could Donald Trump be

531
00:30:31,320 --> 00:30:33,280
Speaker 1: among that? I just hope. I don't think he can

532
00:30:33,320 --> 00:30:36,000
Speaker 1: afford it, Yeah, I don't think he can afford it,

533
00:30:36,040 --> 00:30:37,959
Speaker 1: but maybe he has friends who can. But I do

534
00:30:38,040 --> 00:30:40,520
Speaker 1: think there's gonna be other buyers. Um And I do

535
00:30:40,600 --> 00:30:42,680
Speaker 1: think that Bob iss you will continue to be a concern.

536
00:30:42,760 --> 00:30:45,320
Speaker 1: But again, I don't think there's real clarity on the

537
00:30:45,360 --> 00:30:49,160
Speaker 1: fact that this was what, you know, what pushed Elon

538
00:30:49,240 --> 00:30:51,640
Speaker 1: Musk out of the deal. It seems that for a

539
00:30:51,680 --> 00:30:54,080
Speaker 1: long time he has been looking for a way out

540
00:30:54,360 --> 00:30:56,880
Speaker 1: and he has finally found one and he's gonna have

541
00:30:57,000 --> 00:30:59,080
Speaker 1: to now pay the price for that. And on the

542
00:30:59,240 --> 00:31:01,360
Speaker 1: and on the you know, the issue of free speech

543
00:31:01,360 --> 00:31:03,880
Speaker 1: and an absolute free speech that is going to continue

544
00:31:03,960 --> 00:31:07,120
Speaker 1: to be a huge political discussion in this country and

545
00:31:07,120 --> 00:31:09,800
Speaker 1: around the world. It kind of made him a political

546
00:31:09,840 --> 00:31:12,960
Speaker 1: figure in a way that he was not before. Uh Rick,

547
00:31:13,360 --> 00:31:15,960
Speaker 1: is there a future for that side of Elon Musk?

548
00:31:16,000 --> 00:31:17,920
Speaker 1: Now that he's moving away from Twitter, he goes back

549
00:31:17,960 --> 00:31:21,320
Speaker 1: to SpaceX and Tesla. But my goodness, he was he

550
00:31:21,360 --> 00:31:24,520
Speaker 1: was tweeting about not just free speech, but never voting

551
00:31:24,520 --> 00:31:27,240
Speaker 1: for a Democrat again, and a lot of people were listening. Yeah,

552
00:31:27,240 --> 00:31:29,400
Speaker 1: a lot of people were listening. I mean, he's got

553
00:31:29,440 --> 00:31:33,400
Speaker 1: a massive Twitter following. Uh he is influential to a

554
00:31:33,480 --> 00:31:38,080
Speaker 1: large segment of society and many voters. So sure, I

555
00:31:38,120 --> 00:31:41,760
Speaker 1: think he remains a figure in the political world now

556
00:31:41,800 --> 00:31:44,520
Speaker 1: that he's sort of entered it. Uh, he doesn't have

557
00:31:44,560 --> 00:31:47,040
Speaker 1: the platform that he was going to have at Twitter,

558
00:31:47,240 --> 00:31:50,640
Speaker 1: but he certainly does have a presence on Twitter that

559
00:31:51,240 --> 00:31:54,680
Speaker 1: is is only compared to a few individuals. So he's

560
00:31:54,680 --> 00:31:57,120
Speaker 1: gonna he's gonna use his voice. And it wouldn't surprise

561
00:31:57,160 --> 00:32:00,520
Speaker 1: me that he doesn't have more investments in this area

562
00:32:00,600 --> 00:32:04,480
Speaker 1: to continue to push his brand of free speech. I mean,

563
00:32:04,800 --> 00:32:08,000
Speaker 1: start a new platform, sure, I mean he's he's started

564
00:32:08,000 --> 00:32:10,520
Speaker 1: a lot of platforms. I mean most we we we

565
00:32:10,560 --> 00:32:14,200
Speaker 1: know about his cars and his in his in his space.

566
00:32:14,320 --> 00:32:18,040
Speaker 1: But he's born tunnels under l a, He's putting solar

567
00:32:18,080 --> 00:32:20,720
Speaker 1: panels on roofs, He's doing all kinds of things. So, uh,

568
00:32:20,840 --> 00:32:24,440
Speaker 1: he is unstoppable in as an entrepreneur, and I wouldn't

569
00:32:24,440 --> 00:32:26,720
Speaker 1: be surprised that he shows up somewhere else here. I'm

570
00:32:26,720 --> 00:32:29,320
Speaker 1: looking at his Twitter feed. He hasn't said anything in

571
00:32:29,320 --> 00:32:31,840
Speaker 1: twenty three hours. The last tweet from Elon Musk super

572
00:32:31,840 --> 00:32:34,920
Speaker 1: fired up for future product development with our awesome Tesla team.

573
00:32:35,000 --> 00:32:36,720
Speaker 1: Such an honor to work with them, certainly had nothing

574
00:32:36,800 --> 00:32:39,800
Speaker 1: to do with Twitter, who shares We continue to follow

575
00:32:39,840 --> 00:32:43,240
Speaker 1: after hours heading lower, but off their lows at least

576
00:32:43,280 --> 00:32:46,200
Speaker 1: of the session. Here, we're down a little bit less

577
00:32:46,200 --> 00:32:48,720
Speaker 1: than six percent, a little more than two dollars a share.

578
00:32:49,320 --> 00:32:51,600
Speaker 1: Uh Man Deep mentioned the stock could go down to

579
00:32:51,920 --> 00:32:55,600
Speaker 1: twenty five dollars. That would be painful. It's still just

580
00:32:55,800 --> 00:32:59,840
Speaker 1: below thirty five dollars this year with the losses. He

581
00:33:00,240 --> 00:33:04,280
Speaker 1: today the Big Tech team leader, Sarah, thank you for

582
00:33:04,320 --> 00:33:06,200
Speaker 1: stopping what you're doing to talk with us. We didn't

583
00:33:06,200 --> 00:33:10,440
Speaker 1: think we'd be having this conversation this afternoon, or did you.

584
00:33:10,480 --> 00:33:14,440
Speaker 1: Oh I knew something something was cuming, something of brewing.

585
00:33:14,560 --> 00:33:18,080
Speaker 1: But you know, we've said over and over again that

586
00:33:18,120 --> 00:33:21,280
Speaker 1: it's not as simple as Elon much saying he doesn't

587
00:33:21,280 --> 00:33:24,080
Speaker 1: want to buy Twitter anymore. There has to be a

588
00:33:24,200 --> 00:33:28,920
Speaker 1: materially adverse effect um that changes the nature of the

589
00:33:28,960 --> 00:33:33,000
Speaker 1: company since he bought it in order to justify leaving.

590
00:33:33,120 --> 00:33:36,400
Speaker 1: And I just wonder, you know, Twitter has said that

591
00:33:36,440 --> 00:33:39,520
Speaker 1: they are definitely going to bring Elon Musk to court

592
00:33:40,160 --> 00:33:44,040
Speaker 1: and fight so that he has to go through with

593
00:33:44,120 --> 00:33:46,920
Speaker 1: this deal. I just don't know if the boss argument

594
00:33:46,960 --> 00:33:49,240
Speaker 1: is going to be enough um for him to get

595
00:33:49,240 --> 00:33:52,760
Speaker 1: out of it. And and the maybe the stronger argument

596
00:33:53,080 --> 00:33:57,480
Speaker 1: in his letter his team's letters to Twitter is about

597
00:33:57,520 --> 00:33:59,720
Speaker 1: the fact that Twitter has had to do a lot

598
00:33:59,760 --> 00:34:02,640
Speaker 1: of of cost cuts and changes in its business, a

599
00:34:02,640 --> 00:34:04,760
Speaker 1: lot of a lot of changes to the structure of

600
00:34:04,800 --> 00:34:07,640
Speaker 1: firing of a couple of senior leaders. You mean since

601
00:34:07,720 --> 00:34:10,360
Speaker 1: the bid or or or over the past period of

602
00:34:10,400 --> 00:34:14,040
Speaker 1: time here since the bid, over the cost few months

603
00:34:14,440 --> 00:34:16,840
Speaker 1: we were just talking about that, which so would that

604
00:34:16,880 --> 00:34:19,400
Speaker 1: have happened? Would layoffs have been on the conversation without

605
00:34:19,400 --> 00:34:23,280
Speaker 1: Elon Musk, Well, I I think that they might have still.

606
00:34:24,040 --> 00:34:25,560
Speaker 1: You know, that's some of the guidance we're getting, just

607
00:34:25,600 --> 00:34:28,040
Speaker 1: that it is a tough time in the advertising market

608
00:34:28,160 --> 00:34:30,120
Speaker 1: right now That is going through it. Twitter is going

609
00:34:30,200 --> 00:34:32,799
Speaker 1: through Google going through it. But you know, maybe not

610
00:34:32,840 --> 00:34:35,399
Speaker 1: to the extent they're sort of in limbo right now

611
00:34:35,400 --> 00:34:37,600
Speaker 1: with Twitter. They've been waiting for this deal to go through,

612
00:34:38,080 --> 00:34:40,319
Speaker 1: and there's not that much that they can materially change

613
00:34:40,320 --> 00:34:44,000
Speaker 1: about the business and um, and that's one reason probably

614
00:34:44,000 --> 00:34:47,000
Speaker 1: why they had to make these changes. Um. But Elon

615
00:34:47,080 --> 00:34:49,719
Speaker 1: Musk has has been in communication there, his team has

616
00:34:49,760 --> 00:34:53,480
Speaker 1: been in communication with Twitter this whole time. In my

617
00:34:54,040 --> 00:34:56,279
Speaker 1: from my perspective, it looks like he just he got

618
00:34:56,320 --> 00:34:59,319
Speaker 1: cold feet here and doesn't want to go through with it,

619
00:34:59,360 --> 00:35:02,640
Speaker 1: but he already the deal almost it's almost too late.

620
00:35:02,719 --> 00:35:06,960
Speaker 1: So they're accusing though Twitter if not not complying with

621
00:35:07,040 --> 00:35:09,840
Speaker 1: its obligations. Right. They say Twitter did not give Elon

622
00:35:09,960 --> 00:35:13,359
Speaker 1: Musk the the information he requested and that gives them

623
00:35:13,360 --> 00:35:15,960
Speaker 1: the out. As you know, he continues to doubt their

624
00:35:16,000 --> 00:35:19,880
Speaker 1: their claims about the number of of of bots uh

625
00:35:20,080 --> 00:35:23,319
Speaker 1: that are actually out there? Does that not stand up

626
00:35:23,360 --> 00:35:27,040
Speaker 1: in court? Well, you know, we'll have to see. Elon

627
00:35:27,120 --> 00:35:31,360
Speaker 1: Musk has a good track record of getting his way legally. Um.

628
00:35:31,400 --> 00:35:34,759
Speaker 1: But I think that that you usually you do due

629
00:35:34,840 --> 00:35:39,480
Speaker 1: diligence before you sign a deal contract um. And And

630
00:35:39,560 --> 00:35:41,799
Speaker 1: Elon Musk waves the right to look at a lot

631
00:35:41,840 --> 00:35:46,800
Speaker 1: of the internal documents at Twitter, and Twitter has handed

632
00:35:46,800 --> 00:35:51,120
Speaker 1: over access to the fire hose of public tweets. Um.

633
00:35:51,160 --> 00:35:53,319
Speaker 1: But they've also said listen, you know, we can't really

634
00:35:53,640 --> 00:35:56,200
Speaker 1: no one on the outside can really answer this question

635
00:35:57,040 --> 00:36:00,719
Speaker 1: of of how many bots there are on Twitter. And

636
00:36:00,760 --> 00:36:03,960
Speaker 1: in fact, I think it's almost impossible for anyone period,

637
00:36:04,040 --> 00:36:07,239
Speaker 1: even people on Twitter, to answer that question because the

638
00:36:07,320 --> 00:36:10,840
Speaker 1: definition of what is a bot It just vary depending

639
00:36:10,840 --> 00:36:12,640
Speaker 1: on who you talk to. So I really think it's

640
00:36:12,640 --> 00:36:15,239
Speaker 1: a tough spot for the company, and certainly if the

641
00:36:15,280 --> 00:36:18,280
Speaker 1: deal doesn't go through, it could be um, could be

642
00:36:18,360 --> 00:36:21,000
Speaker 1: even worse. Yeah, that's a heck of a business model.

643
00:36:21,000 --> 00:36:25,080
Speaker 1: The stocks down and after hours trading. Could it be

644
00:36:25,160 --> 00:36:28,799
Speaker 1: much more severe as we move ahead? I think you know,

645
00:36:28,840 --> 00:36:32,239
Speaker 1: things could could definitely get worse from here. Um. We

646
00:36:32,400 --> 00:36:37,080
Speaker 1: may we may see Twitter have to file lawfood next Um,

647
00:36:37,160 --> 00:36:39,600
Speaker 1: and we'll just have to see how it how it

648
00:36:39,640 --> 00:36:43,960
Speaker 1: works out. I I think you know it's it's so

649
00:36:44,880 --> 00:36:49,200
Speaker 1: it's very rare for somebody to agree to buy an

650
00:36:49,239 --> 00:36:54,280
Speaker 1: individual person to agree to buy a company for forty

651
00:36:54,320 --> 00:36:59,399
Speaker 1: four billion dollars and not want it after. It's just

652
00:36:59,719 --> 00:37:03,319
Speaker 1: it's such a rare situation, you guys. I just so,

653
00:37:03,400 --> 00:37:05,319
Speaker 1: what are you allowing? I don't know that. I don't

654
00:37:05,320 --> 00:37:07,399
Speaker 1: know that we can we can draw on any past

655
00:37:07,480 --> 00:37:10,480
Speaker 1: experience here? Um? What am I? What am I looking for?

656
00:37:10,800 --> 00:37:12,640
Speaker 1: What are you allowing for? With that in mind? What?

657
00:37:12,640 --> 00:37:16,120
Speaker 1: What could happen in your wildest dreams here? Well? I

658
00:37:16,120 --> 00:37:19,279
Speaker 1: mean I think that that he could be held to it, right,

659
00:37:19,280 --> 00:37:22,279
Speaker 1: he has a financing lined up, he could be Um,

660
00:37:22,560 --> 00:37:25,440
Speaker 1: he could find a way out. Some of these arguments

661
00:37:25,560 --> 00:37:31,000
Speaker 1: may work. Um, and you know, there could be there

662
00:37:31,040 --> 00:37:34,560
Speaker 1: could be some other kind of of partial ownership they

663
00:37:34,560 --> 00:37:39,160
Speaker 1: could bring, bring him to the negotiating table, maybe Twitter's board. Um,

664
00:37:39,440 --> 00:37:42,560
Speaker 1: you'd rather than go to court ends up getting Elon

665
00:37:42,640 --> 00:37:46,239
Speaker 1: muss to to come in and come up with some

666
00:37:46,920 --> 00:37:51,439
Speaker 1: you know, investment option or some other version of a deal,

667
00:37:51,560 --> 00:37:54,919
Speaker 1: or a deal at a lower price. Um, And maybe

668
00:37:55,000 --> 00:37:57,480
Speaker 1: that that latter option would be the most likely. Is

669
00:37:57,520 --> 00:38:00,200
Speaker 1: that you know, they say, hey, you know, we still

670
00:38:00,239 --> 00:38:02,680
Speaker 1: want you to buy Twitter. Maybe we could do it

671
00:38:02,719 --> 00:38:06,520
Speaker 1: for a little less. Wouldn't that be something falling right?

672
00:38:07,000 --> 00:38:09,959
Speaker 1: I love your imagination, Sarah Fryar. How about the idea

673
00:38:10,000 --> 00:38:13,080
Speaker 1: of other buyers? Who is there anyone likely on that list?

674
00:38:13,440 --> 00:38:16,319
Speaker 1: Twitter was kind of hoping that somebody might show up

675
00:38:16,440 --> 00:38:19,440
Speaker 1: to to try to outbid Elon Musk at the beginning.

676
00:38:19,840 --> 00:38:21,680
Speaker 1: That obviously isn't going to be in the cards. But

677
00:38:21,680 --> 00:38:25,920
Speaker 1: if we're starting from scratch, anyone sound realistic? Well, I

678
00:38:25,960 --> 00:38:30,399
Speaker 1: think that they're they're not gonna do much better I

679
00:38:30,440 --> 00:38:34,919
Speaker 1: think than than fifty twenty a share. But maybe there's

680
00:38:34,960 --> 00:38:38,160
Speaker 1: a less dramatic buyer that could come to the table.

681
00:38:38,239 --> 00:38:43,160
Speaker 1: I UM don't think that we would be able to

682
00:38:43,160 --> 00:38:47,319
Speaker 1: see you know, somebody like Meta or Alphabet do it.

683
00:38:47,360 --> 00:38:50,320
Speaker 1: Because there's so much antitrust pressure. Washington wouldn't let that

684
00:38:50,360 --> 00:38:52,879
Speaker 1: happen with one of the big tech companies. Microsoft isn't

685
00:38:52,880 --> 00:38:55,680
Speaker 1: going to get to that. Yeah, any of the big

686
00:38:55,719 --> 00:38:59,480
Speaker 1: tech companies would be very tricky. So so um, you know,

687
00:38:59,520 --> 00:39:02,840
Speaker 1: Twitter's on on the hunt for a suit or before

688
00:39:03,360 --> 00:39:08,160
Speaker 1: in the past we've seen Disney sales Force, Google consider it.

689
00:39:08,920 --> 00:39:13,279
Speaker 1: I I really think that this story could could get wilder,

690
00:39:13,440 --> 00:39:16,640
Speaker 1: or you know, something could could fizzle, and then Twitter

691
00:39:16,640 --> 00:39:19,719
Speaker 1: will be back to back to the drawing board with

692
00:39:19,760 --> 00:39:23,800
Speaker 1: itself and trying to make trying to make a business

693
00:39:24,320 --> 00:39:27,000
Speaker 1: that gets the shares that got to fifty four twenty,

694
00:39:27,120 --> 00:39:30,400
Speaker 1: which is the really tough thing. Boy, Sarah, thanks so

695
00:39:30,480 --> 00:39:33,040
Speaker 1: much for chiming in here. This is great to be

696
00:39:33,080 --> 00:39:36,759
Speaker 1: hearing from the entire Bloomberg universe. You know, we've had

697
00:39:36,800 --> 00:39:39,120
Speaker 1: a lot of people who have been working on this

698
00:39:39,200 --> 00:39:41,880
Speaker 1: story since this all started, and I'm guessing most of

699
00:39:41,880 --> 00:39:44,879
Speaker 1: them are as shocked as you are. Jeff Feely joins

700
00:39:44,960 --> 00:39:47,760
Speaker 1: us right now Bloomberg News legal reporter with the headline

701
00:39:47,840 --> 00:39:51,839
Speaker 1: must Twitter buy out? Fight poses question of who might

702
00:39:52,239 --> 00:39:55,839
Speaker 1: sue first, Jeff, it's inevitable that we're going to court.

703
00:39:55,920 --> 00:39:59,239
Speaker 1: But how does it start. Well, it just depends on

704
00:39:59,280 --> 00:40:03,560
Speaker 1: who's got the trigger finger. Musk is Mr Musk is

705
00:40:03,600 --> 00:40:07,480
Speaker 1: known as being a very aggressive individual. I wouldn't put

706
00:40:07,480 --> 00:40:10,120
Speaker 1: it past him to try to file something preemptively to

707
00:40:10,239 --> 00:40:14,120
Speaker 1: ask a delaware judge. Hey, bless my my decision to

708
00:40:14,239 --> 00:40:18,000
Speaker 1: nix this. I'm in the right. Twitter could easily also

709
00:40:18,239 --> 00:40:21,080
Speaker 1: pull the trigger first. To some degree, they got the

710
00:40:21,120 --> 00:40:26,080
Speaker 1: stronger hand. They've got an agreement sitting there, signed, sealed, delivered,

711
00:40:26,120 --> 00:40:30,200
Speaker 1: and negotiated, and you know, it's going to be difficult

712
00:40:30,280 --> 00:40:34,880
Speaker 1: to prove that this bot issue is a material adverse

713
00:40:35,000 --> 00:40:38,680
Speaker 1: change that sinks the deal because there were just as

714
00:40:38,719 --> 00:40:41,479
Speaker 1: many bots before, right, and Twitter says it already gave

715
00:40:42,080 --> 00:40:45,560
Speaker 1: Musk the info and he's obligated now to complete the deal.

716
00:40:45,560 --> 00:40:48,120
Speaker 1: As you point out in your piece, that's right. The

717
00:40:48,200 --> 00:40:52,680
Speaker 1: number of bots hasn't changed. And you know it's according

718
00:40:52,719 --> 00:40:55,680
Speaker 1: to the tech team, folks, it's not unusual to have

719
00:40:55,760 --> 00:41:00,359
Speaker 1: difficulty segregating out the humans from the robots, you know,

720
00:41:00,480 --> 00:41:04,680
Speaker 1: or the non human stuff. You gotta have some really

721
00:41:05,360 --> 00:41:09,719
Speaker 1: bad stuff to get a material adverse change. Ruling in Delaware.

722
00:41:09,840 --> 00:41:15,000
Speaker 1: We've only had one clear one. So what does that

723
00:41:15,040 --> 00:41:17,920
Speaker 1: mean for Elon Musk. It means that it means that

724
00:41:18,000 --> 00:41:20,800
Speaker 1: he's going to have a very tough road to ho

725
00:41:21,040 --> 00:41:25,000
Speaker 1: on this. You know, Sarah was talking about the possibility

726
00:41:25,040 --> 00:41:28,320
Speaker 1: of him being drawn back to the negotiating table based

727
00:41:28,360 --> 00:41:31,600
Speaker 1: on what you just described. Uh, you know, the legal

728
00:41:31,640 --> 00:41:35,360
Speaker 1: mess that could follow, and maybe there's a lower buying

729
00:41:35,440 --> 00:41:37,960
Speaker 1: price in the end. Is this Is this another bizarre

730
00:41:38,000 --> 00:41:41,520
Speaker 1: negotiating point. Yes, this has done all the time. I

731
00:41:41,600 --> 00:41:46,800
Speaker 1: call it arbit larbitrage by lawsuit or negotiation by lawsuit.

732
00:41:47,440 --> 00:41:50,520
Speaker 1: Somebody's gonna have to file because we're you know, we

733
00:41:50,640 --> 00:41:53,319
Speaker 1: got this game of chicken right here. In the end,

734
00:41:53,440 --> 00:41:56,920
Speaker 1: this could be nothing more than the markets have moved

735
00:41:57,000 --> 00:42:01,400
Speaker 1: evaluations off. You guys got to cut the Twitter of course,

736
00:42:01,920 --> 00:42:05,920
Speaker 1: is saying hold on, buddy, you negotiated this, You had

737
00:42:05,960 --> 00:42:09,080
Speaker 1: smart lawyers. You're the smartest guy in the world. You know,

738
00:42:09,160 --> 00:42:11,560
Speaker 1: you're the richest guy in the world. What do you

739
00:42:11,600 --> 00:42:15,480
Speaker 1: mean we've got to get a new price. Well, I'll

740
00:42:15,480 --> 00:42:17,440
Speaker 1: tell you what, fifty four dollars this year it seems

741
00:42:17,440 --> 00:42:20,120
Speaker 1: a far way off. We're below thirty seven right now.

742
00:42:20,840 --> 00:42:23,760
Speaker 1: We're down seven percent after hours. What the heck happens

743
00:42:23,760 --> 00:42:27,239
Speaker 1: on Monday when the markets reopen Here in old boring Delaware,

744
00:42:27,280 --> 00:42:32,719
Speaker 1: we call that fires remorse. Well, I'll tell you what

745
00:42:33,520 --> 00:42:36,879
Speaker 1: I earlier. We talked to man Deep on the air

746
00:42:36,920 --> 00:42:38,680
Speaker 1: about this. He says it could go down to twenty

747
00:42:38,719 --> 00:42:43,759
Speaker 1: five if that happened, wouldn't Twitter maybe turn around and say, hey,

748
00:42:43,840 --> 00:42:47,120
Speaker 1: let's find another buyer here? This is this is obviously

749
00:42:47,160 --> 00:42:51,040
Speaker 1: selling it a discount. I mean, you're beyond my legal expertise,

750
00:42:51,120 --> 00:42:55,319
Speaker 1: but common sense would say, yes, I don't mind going

751
00:42:55,360 --> 00:42:58,200
Speaker 1: beyond your your expertise here because I think it'd be

752
00:42:58,239 --> 00:43:02,239
Speaker 1: fun to take you completely off the rail. Uh at

753
00:43:02,239 --> 00:43:04,560
Speaker 1: this point, Jeff, because you're fun to talk to. But

754
00:43:04,960 --> 00:43:07,560
Speaker 1: I think I think my colleague that just was on

755
00:43:08,160 --> 00:43:10,680
Speaker 1: said it fast. I mean, they've tried this before, They've

756
00:43:10,680 --> 00:43:15,480
Speaker 1: looked around, and you know, there's no ice cream sitting

757
00:43:15,480 --> 00:43:20,440
Speaker 1: there waiting for anybody to scoop up. Understood, But is

758
00:43:20,480 --> 00:43:23,080
Speaker 1: Elon Musk laughing right now while we're talking about this,

759
00:43:23,200 --> 00:43:24,920
Speaker 1: knowing that he's going to end up buying Twitter at

760
00:43:24,920 --> 00:43:29,200
Speaker 1: a lower price. I saw something that said he thrives

761
00:43:29,440 --> 00:43:34,640
Speaker 1: in the environment of chaos. So is he laughing? Probably?

762
00:43:34,680 --> 00:43:36,879
Speaker 1: I saw him on the stand and he thinks he's

763
00:43:37,000 --> 00:43:42,600
Speaker 1: terribly funny, believe but but you know this is this

764
00:43:42,719 --> 00:43:45,440
Speaker 1: is billions of dollars, serious business. I wouldn't be laughing.

765
00:43:45,880 --> 00:43:48,600
Speaker 1: He's talking on Saturday Night and Sun Valley, right, he's

766
00:43:48,600 --> 00:43:51,919
Speaker 1: talking at the closing Sun Valley the Big Closer. Does

767
00:43:51,960 --> 00:43:54,200
Speaker 1: he mention this or is that a legal liability? I'm

768
00:43:54,239 --> 00:43:57,200
Speaker 1: asking you that seriously. Yeah, well, I think he's not.

769
00:43:57,280 --> 00:43:59,040
Speaker 1: I think he has to not say a word. I

770
00:43:59,160 --> 00:44:02,400
Speaker 1: can't point about this. Yeah, I would say again, I

771
00:44:02,440 --> 00:44:04,640
Speaker 1: don't you know, I'm not a complete m and a lawyer.

772
00:44:04,680 --> 00:44:07,799
Speaker 1: I just play one on TV. But you know it's

773
00:44:08,440 --> 00:44:11,719
Speaker 1: I think he's got to not say a word. Find

774
00:44:11,800 --> 00:44:15,200
Speaker 1: Jeff's column on the terminal Musk Twitter buyout fight, pose

775
00:44:15,280 --> 00:44:17,920
Speaker 1: this question of who might sue first, and you can

776
00:44:17,960 --> 00:44:20,480
Speaker 1: see a little more where Jeff is going here. Jeff,

777
00:44:20,480 --> 00:44:23,520
Speaker 1: you need to have your own show. Yeah, yeah, that's

778
00:44:23,520 --> 00:44:25,319
Speaker 1: what I need. I need to get paid twice, have

779
00:44:25,360 --> 00:44:28,279
Speaker 1: a radio show and do what I do. Yeah, it's

780
00:44:28,320 --> 00:44:30,120
Speaker 1: get paid twice. I like the world you live in,

781
00:44:30,200 --> 00:44:34,600
Speaker 1: Jeff Feely fantastic. I delighted that we got Jeff's comment

782
00:44:34,719 --> 00:44:38,360
Speaker 1: in there as we reassembled our panel, Rick Davis, Jeanie Chanzano,

783
00:44:38,440 --> 00:44:41,920
Speaker 1: Bloomberg Politics contributors, we didn't know we'd be talking about

784
00:44:41,920 --> 00:44:43,839
Speaker 1: this this evening. We had a whole different plan as

785
00:44:43,880 --> 00:44:47,680
Speaker 1: a matter of fact. But this really is something here, Rick,

786
00:44:47,760 --> 00:44:56,000
Speaker 1: with your experience in the investment world, is this hardball negotiating? Yeah, well,

787
00:44:56,080 --> 00:44:58,239
Speaker 1: who knows if it's a negotiation. I mean, I think

788
00:44:58,239 --> 00:45:01,760
Speaker 1: you'll almost might not take You have to take us

789
00:45:02,280 --> 00:45:05,440
Speaker 1: at his word, which is he's walking away from this transaction.

790
00:45:05,480 --> 00:45:07,960
Speaker 1: And as Jeff was saying, there are all kinds of

791
00:45:08,000 --> 00:45:11,400
Speaker 1: consequences legally to that, depending upon who files first, and

792
00:45:11,440 --> 00:45:13,920
Speaker 1: who's angry, and and and if there's a scoop of

793
00:45:13,960 --> 00:45:16,160
Speaker 1: ice cream laying around for somebody else to pick up.

794
00:45:16,200 --> 00:45:19,560
Speaker 1: But uh, I I now have a new business theory,

795
00:45:19,600 --> 00:45:22,160
Speaker 1: the scoop of ice cream theory. I like it. I

796
00:45:22,280 --> 00:45:25,600
Speaker 1: love it. Uh And so um so, look this is

797
00:45:25,600 --> 00:45:27,960
Speaker 1: gonna play out. And I do think Saturday will be

798
00:45:28,000 --> 00:45:30,439
Speaker 1: interesting to see what Elon must says, because I mean

799
00:45:30,520 --> 00:45:32,680
Speaker 1: he is not used to listen to lawyers. I mean,

800
00:45:33,360 --> 00:45:35,839
Speaker 1: anybody you would talk to would say, lawyer up, now

801
00:45:36,320 --> 00:45:40,040
Speaker 1: do no more. Further damage. Don't give anybody an opportunity,

802
00:45:40,120 --> 00:45:43,080
Speaker 1: and this guy will not take that advice. I mean,

803
00:45:43,160 --> 00:45:45,680
Speaker 1: we could learn all kinds of interesting new things from him,

804
00:45:45,680 --> 00:45:48,440
Speaker 1: and and he does win more than he loses, you know,

805
00:45:48,480 --> 00:45:50,960
Speaker 1: in the court of loss. So you have his a

806
00:45:50,960 --> 00:45:53,720
Speaker 1: fixed legal team or or I mean, my goodness, when

807
00:45:53,760 --> 00:45:55,640
Speaker 1: if you're the richest person in the world, you're not

808
00:45:55,960 --> 00:45:59,439
Speaker 1: you're not hiring new lawyers, are you. Oh? First of all,

809
00:45:59,800 --> 00:46:01,839
Speaker 1: he got a fixed legal team, but he has also

810
00:46:01,880 --> 00:46:04,640
Speaker 1: got access to every lawyer in the world, and and

811
00:46:04,640 --> 00:46:06,640
Speaker 1: and and if you are the richest man in the world,

812
00:46:06,719 --> 00:46:09,120
Speaker 1: you don't care how many lawyers you have. It's just

813
00:46:09,560 --> 00:46:13,000
Speaker 1: it's a rounding air. So for him, he's gonna find

814
00:46:13,000 --> 00:46:16,200
Speaker 1: people who can do the best possible job of representing him,

815
00:46:17,040 --> 00:46:20,040
Speaker 1: regardless of what whether it's a suit that he's filing

816
00:46:20,040 --> 00:46:23,520
Speaker 1: against uh Twitter, or whether Twitter is coming after him

817
00:46:23,600 --> 00:46:26,319
Speaker 1: or shareholders. Remember there are a lot of shareholders who

818
00:46:26,320 --> 00:46:29,680
Speaker 1: have seen since his offer their value and Twitter go

819
00:46:29,719 --> 00:46:31,880
Speaker 1: down in half, and they're not going to be very

820
00:46:31,920 --> 00:46:34,440
Speaker 1: happy about this. So the third party out there are

821
00:46:34,480 --> 00:46:37,360
Speaker 1: all the shareholders are sitting there looking us. Wait a minute,

822
00:46:37,840 --> 00:46:41,320
Speaker 1: you know we have we have a lawsuit waiting to file.

823
00:46:41,880 --> 00:46:46,399
Speaker 1: Then there's the workforce genie, and they have been through

824
00:46:46,440 --> 00:46:50,160
Speaker 1: a tumultuous time here. Uh, you know, it's been outrage

825
00:46:50,680 --> 00:46:54,880
Speaker 1: for some Elon Musk did address the workforce layoffs have

826
00:46:55,000 --> 00:46:59,200
Speaker 1: been have become a reality and a lot of questions

827
00:46:59,239 --> 00:47:02,560
Speaker 1: about what they might be headed for. Uh, how do

828
00:47:02,600 --> 00:47:06,960
Speaker 1: you recover from that level from a management standpoint when

829
00:47:07,000 --> 00:47:10,600
Speaker 1: when you've got a workforce that's been traumatized. Yeah, it's

830
00:47:10,600 --> 00:47:12,840
Speaker 1: gonna be difficult, and it's going to depend, of course

831
00:47:12,840 --> 00:47:16,480
Speaker 1: on if you know, Elon Musk eventually ends up coming

832
00:47:16,480 --> 00:47:18,799
Speaker 1: back into this deal or somebody else takes it, and

833
00:47:19,080 --> 00:47:22,160
Speaker 1: who the management ends up being. And of course, you know,

834
00:47:22,840 --> 00:47:26,880
Speaker 1: this idea that he could use this body issue and

835
00:47:27,080 --> 00:47:31,400
Speaker 1: use that as a material adverse effect is hogwash. He

836
00:47:31,560 --> 00:47:35,200
Speaker 1: himself tweeted in late April that if the bid succeeded,

837
00:47:35,480 --> 00:47:38,440
Speaker 1: they're going to defeat the spam boxer die trying. So

838
00:47:38,480 --> 00:47:41,520
Speaker 1: how could he now flip around or his lawyers better yet,

839
00:47:41,800 --> 00:47:44,680
Speaker 1: and say that this was a materially adverse effect. So

840
00:47:45,040 --> 00:47:47,799
Speaker 1: you know, he has himself in quite a bind. But

841
00:47:47,920 --> 00:47:51,399
Speaker 1: I do think that he's going to say something if

842
00:47:51,440 --> 00:47:53,799
Speaker 1: you know, if you follow Elon Musk. I mean, he

843
00:47:53,920 --> 00:47:56,560
Speaker 1: may very well say something out in Sun Valley, and

844
00:47:56,600 --> 00:47:58,920
Speaker 1: there's a lot of people out there with him, including

845
00:47:59,040 --> 00:48:02,040
Speaker 1: one of our favorite, other favorite, Joe's Joe Mansion. So

846
00:48:02,080 --> 00:48:04,680
Speaker 1: it's why the gathering out there. And you know, when

847
00:48:04,760 --> 00:48:06,359
Speaker 1: the first time they tell him not to speak, he's

848
00:48:06,360 --> 00:48:08,480
Speaker 1: probably going to say something right away. All right, we

849
00:48:08,520 --> 00:48:10,600
Speaker 1: don't have much time left here, but we're gonna add

850
00:48:10,640 --> 00:48:13,439
Speaker 1: one more voice to this conversation. Rick and Jeanie stay

851
00:48:13,520 --> 00:48:16,080
Speaker 1: right where you are as Kurt Wagner joins us Bloomberg

852
00:48:16,080 --> 00:48:20,200
Speaker 1: News tech reporter who's literally been filing on this in

853
00:48:20,239 --> 00:48:22,200
Speaker 1: real time, and I appreciate you getting on the line

854
00:48:22,200 --> 00:48:25,040
Speaker 1: with us here, Kurt. What's going through Elon Musk's mind tonight.

855
00:48:27,800 --> 00:48:31,279
Speaker 1: I guess he's finally got what he wanted, which is,

856
00:48:31,600 --> 00:48:33,879
Speaker 1: you know, to to get out of this deal, which

857
00:48:33,920 --> 00:48:36,440
Speaker 1: is what it feels like he's wanted for a couple

858
00:48:36,440 --> 00:48:38,480
Speaker 1: of weeks. Now. I thought that he would try to

859
00:48:38,520 --> 00:48:42,320
Speaker 1: renegotiate the price. Um maybe he did behind the scenes

860
00:48:42,360 --> 00:48:44,239
Speaker 1: and that didn't work, so he said, Okay, I'm gonna walk.

861
00:48:44,280 --> 00:48:46,520
Speaker 1: I don't know, but I think if you followed this,

862
00:48:46,600 --> 00:48:48,959
Speaker 1: you could tell that from the last few weeks, he's

863
00:48:49,000 --> 00:48:52,840
Speaker 1: really been uh, you know, backtracking from this original excitement

864
00:48:52,840 --> 00:48:57,080
Speaker 1: of buying Twitter in late April to constantly kind of uh,

865
00:48:57,160 --> 00:48:59,640
Speaker 1: you know, pouring water on this deal. And do you

866
00:48:59,680 --> 00:49:02,200
Speaker 1: believe he did want to buy it ulgitimately? At one

867
00:49:02,239 --> 00:49:05,120
Speaker 1: point this was a real effort to buy this company.

868
00:49:06,800 --> 00:49:08,520
Speaker 1: It's hard to say that it wasn't if you're willing

869
00:49:08,560 --> 00:49:11,279
Speaker 1: to go you know, I don't know, I guess I

870
00:49:11,440 --> 00:49:13,040
Speaker 1: it's hard for me to imagine the kind of person

871
00:49:13,040 --> 00:49:15,680
Speaker 1: who would go through this whole thing without having an

872
00:49:15,680 --> 00:49:18,080
Speaker 1: intention of doing it. But think of what has happened

873
00:49:18,120 --> 00:49:20,759
Speaker 1: at the stock market over the last two months, right,

874
00:49:20,800 --> 00:49:23,359
Speaker 1: I mean, the Twitter deal he made in April looked

875
00:49:23,360 --> 00:49:25,480
Speaker 1: a lot different than what a Twitter deal would look

876
00:49:25,480 --> 00:49:28,760
Speaker 1: like today. And obviously he didn't know that at the time. Okay,

877
00:49:28,800 --> 00:49:33,359
Speaker 1: so could this go back to the drawing board? Well,

878
00:49:33,400 --> 00:49:35,960
Speaker 1: I don't know, because right now he signed a merger agreement.

879
00:49:36,000 --> 00:49:39,759
Speaker 1: Twitter said that it's planned and planning to enforce that

880
00:49:39,880 --> 00:49:43,400
Speaker 1: merger agreement. I don't think it's really in Twitter's interest to,

881
00:49:43,800 --> 00:49:45,880
Speaker 1: you know, give him a lower price when he's already

882
00:49:45,880 --> 00:49:48,799
Speaker 1: agreed to buy it for a share so I think

883
00:49:48,800 --> 00:49:50,640
Speaker 1: this is going to a court more than it is

884
00:49:50,680 --> 00:49:53,680
Speaker 1: going back to a negotiating table. Yeah, we have quite

885
00:49:53,680 --> 00:49:56,600
Speaker 1: an escapade here in court coming up. How long does

886
00:49:56,680 --> 00:49:58,239
Speaker 1: that take? Do we have any sense? I mean, is

887
00:49:58,280 --> 00:50:01,840
Speaker 1: this tied up in court for for years? Kurt? I

888
00:50:01,880 --> 00:50:04,960
Speaker 1: don't know, because this isn't something that happens very often. Um.

889
00:50:05,280 --> 00:50:07,879
Speaker 1: The question I asked a few weeks ago, and most

890
00:50:07,880 --> 00:50:10,560
Speaker 1: of the response I got from people was like, we're

891
00:50:10,560 --> 00:50:13,120
Speaker 1: not really sure because we haven't seen you know, this

892
00:50:13,200 --> 00:50:16,680
Speaker 1: is rare, right, So it's possible they settle. I would

893
00:50:16,719 --> 00:50:19,280
Speaker 1: probably think both sides would be very eager to settle

894
00:50:19,360 --> 00:50:22,040
Speaker 1: to avoid doing something that could take you months, if

895
00:50:22,040 --> 00:50:24,600
Speaker 1: not years. Um. But you know, a lot of this

896
00:50:24,680 --> 00:50:27,480
Speaker 1: is sort of uncharted, I think, especially with the big

897
00:50:27,560 --> 00:50:30,400
Speaker 1: names that are involved, Kurt. We just got a statement

898
00:50:30,400 --> 00:50:34,200
Speaker 1: from Twitter. It's probably in your email from chairman Brett Taylor.

899
00:50:34,560 --> 00:50:36,960
Speaker 1: This is the official line from the company and the

900
00:50:37,000 --> 00:50:39,520
Speaker 1: first we're hearing of it. The Twitter board is committed

901
00:50:39,520 --> 00:50:42,720
Speaker 1: to closing the transaction on the price in terms agreed

902
00:50:42,800 --> 00:50:45,200
Speaker 1: upon with Mr Musk. Sounds a lot like what Kurt

903
00:50:45,280 --> 00:50:48,000
Speaker 1: was just saying, and plans to pursue legal action to

904
00:50:48,200 --> 00:50:51,120
Speaker 1: enforce the merger agreement. We are confident we will prevail

905
00:50:51,440 --> 00:50:55,360
Speaker 1: in the Delaware court. Uh, they do have quite a

906
00:50:55,400 --> 00:50:58,520
Speaker 1: leg to stand on here, Kurt. They say they already

907
00:50:58,560 --> 00:51:02,279
Speaker 1: gave all of the inform nation that Elon Musk requested,

908
00:51:02,320 --> 00:51:04,360
Speaker 1: so it's now up to Musk to prove they did not.

909
00:51:06,080 --> 00:51:08,799
Speaker 1: I think I think that's right, because again, he the

910
00:51:08,840 --> 00:51:11,440
Speaker 1: agreement is signed, right, so at this point, if he

911
00:51:11,480 --> 00:51:13,960
Speaker 1: wants to break that agreement, he needs to be the

912
00:51:14,000 --> 00:51:17,759
Speaker 1: one to kind of prove that Twitter did something wrong here.

913
00:51:17,960 --> 00:51:21,080
Speaker 1: And um, we don't know exactly what Twitter shared with him,

914
00:51:21,360 --> 00:51:24,160
Speaker 1: but the company clearly, as you just read, is claiming

915
00:51:24,160 --> 00:51:27,040
Speaker 1: that they've shared everything necessary. Um, so I think it's

916
00:51:27,080 --> 00:51:28,480
Speaker 1: going to be up to him to prove that they

917
00:51:28,920 --> 00:51:31,640
Speaker 1: acted in bad faith in some way. How does this

918
00:51:31,680 --> 00:51:36,600
Speaker 1: start Monday morning in court? Um? I imagine it takes

919
00:51:36,640 --> 00:51:39,960
Speaker 1: the lawyers a little bit more time to to uh

920
00:51:40,080 --> 00:51:42,040
Speaker 1: get into a courtroom. But I'm sure there's going to

921
00:51:42,120 --> 00:51:44,800
Speaker 1: be paperwork filed. I wouldn't be shocked at their stuff

922
00:51:44,800 --> 00:51:46,719
Speaker 1: filed by the end of the weekend. That's more what

923
00:51:46,760 --> 00:51:50,040
Speaker 1: I mean. Yeah, incredible, good luck with your coverage this weekend.

924
00:51:50,080 --> 00:51:52,439
Speaker 1: Something tells me Kurt's work and Kurt Wagner, great talk.

925
00:51:52,560 --> 00:51:55,440
Speaker 1: Thank you for being here, Bloomberg News Tech reporter, as

926
00:51:55,480 --> 00:51:58,960
Speaker 1: we bring you as many voices of authority that we

927
00:51:59,040 --> 00:52:02,839
Speaker 1: can on this ory breaking. If you're just joining us,

928
00:52:03,640 --> 00:52:05,880
Speaker 1: it's uh, it's not looking good for Twitter in the

929
00:52:05,920 --> 00:52:10,280
Speaker 1: after hour session, now down nine percent after Elon Musk

930
00:52:11,000 --> 00:52:14,120
Speaker 1: announces that he is pulling out of the deal. Final

931
00:52:14,160 --> 00:52:18,560
Speaker 1: thoughts from Rick Davis and Jeanie Schanzano. Uh, your insights

932
00:52:18,560 --> 00:52:22,000
Speaker 1: in the clutch are ever valuable here, Rick, this is

933
00:52:22,040 --> 00:52:24,520
Speaker 1: going to be an interesting couple of days. As we've

934
00:52:24,560 --> 00:52:27,480
Speaker 1: already pointed out, anything could happen in Sun Valley, and

935
00:52:27,520 --> 00:52:29,680
Speaker 1: every time that Elon Musk walks in front of a

936
00:52:29,760 --> 00:52:32,919
Speaker 1: camera or or I guess a Twitter feed, UH, this

937
00:52:33,080 --> 00:52:36,520
Speaker 1: could change. I'm amazed though, that we haven't seen him tweeting,

938
00:52:36,560 --> 00:52:39,920
Speaker 1: aren't you. Yeah. I mean maybe the lawyers have prevailed

939
00:52:39,960 --> 00:52:42,080
Speaker 1: and gotten him to lawyer up a little bit, but

940
00:52:42,600 --> 00:52:44,400
Speaker 1: I just don't know how long that can last with

941
00:52:44,440 --> 00:52:47,200
Speaker 1: Elon Musk, right, I mean, he's he's more right than wrong,

942
00:52:47,239 --> 00:52:50,120
Speaker 1: and he's not gonna just listen to a bunch of

943
00:52:50,200 --> 00:52:52,880
Speaker 1: lawyers are trying to protect his his interest. He's gonna

944
00:52:52,880 --> 00:52:55,279
Speaker 1: believe that he's got to defend himself, especially because he

945
00:52:55,320 --> 00:52:58,799
Speaker 1: will probably come under withering attack over the weekend and

946
00:52:58,840 --> 00:53:02,040
Speaker 1: he'll pay attention into that, so he'll I'm sure there'll

947
00:53:02,080 --> 00:53:04,560
Speaker 1: be a reaction, Jenie. At one point, there was the

948
00:53:04,640 --> 00:53:07,840
Speaker 1: idea of making Twitter a public trust, essentially that it

949
00:53:07,840 --> 00:53:10,560
Speaker 1: would become a nonprofit. You know, if you really wanted

950
00:53:10,600 --> 00:53:14,040
Speaker 1: to realize the town square, the digital town square concept,

951
00:53:14,480 --> 00:53:16,239
Speaker 1: you have to get the ads off of there. You

952
00:53:16,280 --> 00:53:18,160
Speaker 1: have to get rid of the algorithms and make it

953
00:53:18,200 --> 00:53:21,520
Speaker 1: as pure as you can. Is that conversation come back

954
00:53:21,600 --> 00:53:24,600
Speaker 1: or is that just happy talk? Nobody nobody's going to

955
00:53:24,640 --> 00:53:27,520
Speaker 1: be spending money on that. You know, it is a

956
00:53:27,560 --> 00:53:30,680
Speaker 1: way to address some of the speech issues, but but

957
00:53:30,800 --> 00:53:33,239
Speaker 1: I'm not sure that in this day and age, that's

958
00:53:33,320 --> 00:53:36,120
Speaker 1: you know, a likely scenario. I think, you know, depending

959
00:53:36,160 --> 00:53:39,000
Speaker 1: on what happens with with Elon Musk and with Twitter,

960
00:53:39,400 --> 00:53:41,759
Speaker 1: that if there are other buyers in the offing, this

961
00:53:41,840 --> 00:53:45,720
Speaker 1: is you know, still a very very valuable platform and

962
00:53:45,840 --> 00:53:48,000
Speaker 1: depending how on how much they can get it, it

963
00:53:48,080 --> 00:53:50,120
Speaker 1: is a valuable platform. And I do think you're going

964
00:53:50,160 --> 00:53:52,640
Speaker 1: to have other buyers in the offing if not Elon

965
00:53:52,800 --> 00:53:55,600
Speaker 1: Musk and they renegotiate this thing. And I think this

966
00:53:55,719 --> 00:53:58,640
Speaker 1: makes the weekend a lot more interesting than it otherwise

967
00:53:58,840 --> 00:54:03,040
Speaker 1: was going to be. Sylvia is tweeting at us here

968
00:54:03,120 --> 00:54:06,440
Speaker 1: Jeanie and says what about other buyers, Microsoft, Tech companies,

969
00:54:06,480 --> 00:54:10,400
Speaker 1: Google and so forth? Rick that that's that's a problem

970
00:54:10,440 --> 00:54:12,759
Speaker 1: in Washington though, right as we discussed earlier this hour,

971
00:54:12,800 --> 00:54:16,239
Speaker 1: the antitrust element just makes that impossible. Yeah. Absolutely, Uh.

972
00:54:16,320 --> 00:54:20,839
Speaker 1: The only group of people, uh that Congress dislikes more

973
00:54:20,880 --> 00:54:24,560
Speaker 1: than China is a big tech and likelihood of more

974
00:54:24,600 --> 00:54:26,759
Speaker 1: consolidation is going to be very hard to pull off

975
00:54:26,800 --> 00:54:29,239
Speaker 1: either at the Justice Department, which has a whole new

976
00:54:29,320 --> 00:54:33,080
Speaker 1: of a batch of of of lawyers who were anxious

977
00:54:33,120 --> 00:54:36,239
Speaker 1: to break up big companies, UH to Capitol Hill, who

978
00:54:36,719 --> 00:54:40,040
Speaker 1: want to diminish the power that these groups have over

979
00:54:40,080 --> 00:54:42,439
Speaker 1: the public discourse. And I would say the one guy

980
00:54:42,440 --> 00:54:45,520
Speaker 1: I'm really anxious to hear from his President Biden, because

981
00:54:45,560 --> 00:54:47,680
Speaker 1: his war with the Elon Musk is legendary and I

982
00:54:47,719 --> 00:54:50,359
Speaker 1: can't imagine him not taking a shot into this some Wait,

983
00:54:50,440 --> 00:54:51,920
Speaker 1: you know that's a great point. Are we gonna hear

984
00:54:51,920 --> 00:54:53,680
Speaker 1: from Joe Biden? You know? On his way to the

985
00:54:54,080 --> 00:54:55,879
Speaker 1: on his way to the airplane this weekend when he's

986
00:54:55,920 --> 00:54:59,000
Speaker 1: heading out of town. Jennie, I would hope we don't.

987
00:54:59,120 --> 00:55:01,000
Speaker 1: He should he should have learned his lesson and stay

988
00:55:01,000 --> 00:55:03,040
Speaker 1: out of this, but we very well might because he

989
00:55:03,080 --> 00:55:06,960
Speaker 1: gets very frustrated with Elon Musk obviously, And you know,

990
00:55:07,040 --> 00:55:09,240
Speaker 1: and I think Sylvia does raise a really a really

991
00:55:09,280 --> 00:55:11,839
Speaker 1: good point. But I do agree with Rick. I think,

992
00:55:12,239 --> 00:55:14,600
Speaker 1: you know, this is going to be fascinating to see

993
00:55:14,600 --> 00:55:16,719
Speaker 1: how this plays out in the courts. But you know,

994
00:55:16,800 --> 00:55:19,759
Speaker 1: I think there's still a possibility they renegotiate this thing,

995
00:55:19,800 --> 00:55:22,720
Speaker 1: and this could be in negotiating uh, you know, ploy

996
00:55:22,920 --> 00:55:25,440
Speaker 1: on his part, and they could, uh, you know, settle

997
00:55:25,560 --> 00:55:28,480
Speaker 1: this out of court, because imagine that fiasco if they

998
00:55:28,520 --> 00:55:32,000
Speaker 1: tried to do it in court. Boy, what a conversation, NonStop,

999
00:55:32,239 --> 00:55:36,040
Speaker 1: fastest hour in politics and business depending on the day,

1000
00:55:36,360 --> 00:55:38,200
Speaker 1: Rick Davis, thank you, great to have you back in.

1001
00:55:38,280 --> 00:55:41,640
Speaker 1: Jeanie Schanzano, of course, your insights ever valuable here in

1002
00:55:41,680 --> 00:55:44,839
Speaker 1: the conversation on Bloomberg Radio. Sound On is the name

1003
00:55:44,880 --> 00:55:48,160
Speaker 1: of the program. You should absolutely subscribe to the podcast

1004
00:55:48,200 --> 00:55:50,279
Speaker 1: and be like Sylvia, send us a tweet while we're

1005
00:55:50,280 --> 00:55:52,879
Speaker 1: on the air. You can be part of this conversation

1006
00:55:53,040 --> 00:55:56,799
Speaker 1: as well, following Shares after hours and coming up with

1007
00:55:56,800 --> 00:55:59,000
Speaker 1: more on Wall Street Week with David West and This

1008
00:55:59,080 --> 00:55:59,719
Speaker 1: is Bloomberg