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Breaking Down Twitter's Endgame (Podcast)

By Daniel ShvartsmanStock MarketsApr 18, 2022 12:09
Breaking Down Twitter's Endgame (Podcast)
By Daniel Shvartsman   |  Apr 18, 2022 12:09
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"Twitter", mentioned on our site or anywhere else, often starts a conversation about everything but the stock. Scan comment sections on our Twitter Inc (NYSE:TWTR) content here or any investing website, and you'll find a discussion that veers far from the investing lane. It hasn't become a meme stock, totally disconnected from fundamentals and focused on narratives, but it has been a meme company, a representation of something beyond $$ and business strategy.

Elon Musk is a similar sort character - it's hard to talk about him without opinions not directly related to his companies or the market flying in. Combine the two, as in recent events, and you get a discussion that quickly spirals out of control, with feelings about Twitter as a company, platform, or social force clashing with thoughts on Musk's business acumen, political behavior, or true intentions in offering to buy the company for $54.20/share.

On the podcast I co-host, The Razor's Edge, we have talked a lot about Twitter. Last week we talked about how there wasn't so much Musk could do to shake up Twitter, and how the mid $50s range that shares peaked at a few weeks ago was a fair value. Since then, Musk made his offer in that fair value range and raised doubts about his financing at a Ted Talk, Jack Dorsey subtweeted his old board, and said board adopted a poison pill plan including a rights offering that also backs into the famed $420 number one way or another. Noise that is related to the fundamental story, but at some point clouds it all.

We talked about Twitter again this week, in an episode recorded on Sunday, April 17th. We focused on the fundamental argument for why Musk's offer may actually be a fair price. We focused on the business argument for why Twitter would benefit from going private as a way to clarify their strategy and move from their jack of all trades status to a more focused platform. And we discussed Dorsey's lurking presence in all of this, which is maybe a side topic but was still interesting to me.

The discussion is focused on Twitter and the dynamics of this offer and the company's strategy. It's not as much about the noise, which I hope makes it more useful. And this is a fast moving situation, but I think the discussion on how to avoid anchoring and the importance of a focused strategy might be useful to investors in other situations as well.

If you are reading this in the app, look up The Razor's Edge on your favorite podcast platform to listen to this episode.

Topics Covered

  • 3:00 minute mark – How the surrounding situation has changed and the case for the Elon Musk offer
  • 15:30 – Why the current price of offer is ok and avoiding anchoring
  • 28:00 – The private company angle and Twitter’s needed transformation
  • 40:30 – Jack’s presence in all of this

Disclaimer I have no positions in stocks mentioned. Akram's Razor is long TWTR. Nothing on this podcast is meant as investment advice.
Breaking Down Twitter's Endgame (Podcast)

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Breaking Down Twitter's Endgame (Podcast)

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