We’reTexas

Yes, but I experienced heavy coastal elitism when I had just graduated and was trying to get my foot in the door on the Hill (granted, this was also during the recession when kids were flooding the Hill looking for internships/jobs). It was the only time I’ve ever wished I’d gone the east coast private route.

Well, to be clear, that new option tranche has a five-year lockup. It’s not in itself a near-term source of liquidity. That said, without looking at Tesla’s policy if assume the underlying shares could be pledged, thus allowing him to pledge other shares. The margin call collateral numbers will be determined at funding, and while there will be a minimum LTV level I’d imagine something gets worked out.

Lol, did Elon seriously push for a shareholder vote when a tender would be faster?

Hell if I know. I wouldn’t disagree that there’s a lot of bloat at public tech companies. But my point wasn’t that they had any issue with Elon, just that if Twitter isn’t competitive with all-cash comp folks will leave.

Oh yeah, I saw that too. His point was irrelevant. Directors have a fiduciary duty to shareholders and they take it seriously, and there are always strike suits in these deals. I can guarantee you that when Twitter received the bid their outside counsel promptly read them in on their duties and liabilities. My earlier concerns about SL were that sponsors tend to not give a shit about formalities and that they would dig in to protect their own position.

? Twitter has minimum stock ownership guidelines for this reason, which is a standard corporate governance practice. But in general boards should be comprised of independent directors, and they are rarely going to have a material stake in the company. FWIW one of their largest holders literally has a board seat.

Elon would be personally on the hook for $1B annually for his margin loans. Half of the bank debt will ultimately need to be raised on the HY markets, but that’s looking like $1B too. And yes there’s obviously risk with the margin loan, but keep in mind the secured bank debt will have liens on Twitter shares as well.

Comp won’t be an issue for senior management but I wonder if Twitter as a whole will be able to stay competitive from a talent perspective without a broad-based equity comp program. Talent competition is fierce right now and my friends there just say they’ll take their equity acceleration and peace out. I certainly wouldn’t go to a private Twitter.

Escoda, imo

Got it, thanks both. 25-30% wouldn’t be an issue, but damn with rates right now not looking like a feasible idea.

How much more are secondary/investment rates looking than primaries?

Oh, that’s not an outside date. They just won’t give a commitment for a margin loan for more than a month given the volatility of the collateral. Technically the banks can extend it five more months. And it would be impossible to close by early May. He has to have the tender open for at least twenty days. I’d guess late June if this goes anywhere.

This is actually an interesting problem. He sold $10B under his 10b5-1 over the course of two months to minimize impact on the stock. If he sold $10B in one day, that would depress the stock, and as Tesla’s CEO and largest holder I’d figure he’d consider the impact to its shareholders and market cap. I’m not a trader, but I wonder if that’s even possible. Presumably, given his record of holding TSLA, he’d want to wait until he has certainty the deal will close before liquidating. Assuming he can even do that in a short period and is fine with the impact, there’s the issue of whether he’s in Tesla’s blackout period or otherwise has MNPI. The more practical option is to enter into a new 10b5-1 right now since Tesla’s window just opened. But if the deal falls through, he’d have sold $20B of his company for nothing - would he be ok with that? Maybe you can structure the 10b5 to increase volume in connection with the launch of a tender offer? I don’t know. But that’s the practical problem he faces going it alone.

Where are you getting some sort of May deadline? He has until April 25 to actually sign the bank commitments (because it looks like he hasn’t). And if he does, the outside date for a deal is in October. And again, there is no allure of a Midas touch here - the banks will have a first lien on all of Twitter. Elon still has to get the board to take him seriously.

Look, his equity commitment is just a piece of paper until he launches a tender. If he can access that cash on his own, it will involve selling a significant amount of stock that will drive TSLA down. And he’d also be on the hook for $1B in annual debt services. That doesn’t seem to be his ideal plan, as he has been shopping for equity commitments and by all accounts having trouble: in particular, BX, Vista and Brookfield have turned him down. So much for the Midas touch. SL (which by all accounts only advised him on the TSLA go-private) and Elliott are now adversarial. Their entire history of operating indicates they will protect their interests as stubbornly as possible. We’re about a fund that tried seize an Argentine battleship as collateral, after all. I don’t care either way what Elon does, I’m just trying to point out that just because he ostensibly has financing doesn’t mean he has Twitter’s board bent over.

Yes, those are commitment letters. Did you actually read them? $21B is from an equity commitment, which is literally Elon committing $21B to himself. Does he have that cash? Matt Levine touched on this exact issue this morning, btw, and it looks like he may. Does he want to spend all his cash? I don’t know, but if you read the exhibits to the debt commitment letters and the equity commitment letter, they clearly contemplate rollover equity and new money from existing holders. The financing commitment letter references a draft OTP shared with the lenders yesterday, so he’s technically ready to go. But it’s not clear if he wants to go with the current financing arrangement.

I’m not so sure. I took a quick look at the docs and he clearly contemplated signing up existing investors (and management?!) to the equity commitment, but he doesn’t have anything yet (and if he did, he should have filed those docs). It’s also unclear where his own cash would come from. So I may have missed it, but it looks like he still has some work to do. Edit: I’d add that he also clearly contemplates acquiring 50.1% of the company and approving the deal himself, so maybe this is the first step in pressuring investors to get in to preserve their power in the deal. But Elliott and Silver Lake won’t roll over easily.

Well, we had just some from Sifnos, which to me is the ideal Cycladic island: quiet and sleepy, bleached-white towns tucked into the hills, secluded beaches and coves. All Greek islands are touristy, but the crowd was more French and Italian vacation homeowners. The beaches of Milos (and you go for the beaches) were packed, with the demographic being more young couples who couldn’t yet afford Santorini and backpackers who came to get a Sarakiniko pic for the ‘gram.

Second Pollonia. Stayed at the Niki-Savaas Suites on the water and it was fantastic. Wasn’t overall a huge fan of Milos but Pollonia was a great town to relax in.

There’s a lot to the calculus, but with decent 2/2’s in the SF metro and LA areas blowing past $1.5M down payments are becoming prohibitive. The idea is to buy into something accessible as an appreciation play and use the property as a rental or STR to largely offset the note.

Well, not for all-cash buyers, which I’d guess comprise a substantial portion of absentee owners. But that does bring an interesting fold to the issue. I used to own in TX but went back to renting in CA. We’ve been looking into an investment property as something to build equity in and get back in the home owning game, but higher rates (and recent rates spike) are making it look unfeasible. Seen a few articles that this is an increasing trend among millennials.

Get a food guide, many of the vendors have been there since the 80’s. Don’t sleep on the gospel tent. Seeing Big Freedia in the middle of the day is only weird for a little bit. Keep an eye out for Indians. Personally I get there early for the local acts and usually skip the headliners to beat the crowds and have some time to rest up before the night shows.

To add on, I see two other similarities Austin has with SF: 1) zoning laws weighted way too heavily towards SFH and 2) a district-based city council, which for purposes of housing reform results in a bunch of NIMBY-finger point and no progress.

I mean, I guess it makes sense that luxury housing would be commonly used as piede-à-terres in major cities, but that doesn’t detract from it being a problem. It’s just unclear to me how much of a problem it is. Vancouver and Oakland recently enacted vacancy taxes, but of course it’s impossible at this point to get a sense of their impacts. One issue that’s clear, though, is that many cities disincentivize renting so much that property owners would rather just pay the taxes. Also, progressive housing activists tend to overemphasize foreign investors as bogeyman to distract from actually building any housing.

Oh for sure, I wasn’t trying to go that far but rather make the point that Texans feel the market forces more immediately and, in theory, should respond accordingly. Everyone wants their property values to increase, but when hit with a 10% increase year after year you’d think folks would support measures that would temper the climb a bit. When limited to 1%, not so much.