![]() This stupid number is more meaningful than it may seem. Back in April, when he made his first bid, he proposed to take Twitter private at $54.20 a share, a weed reference, and that is ultimately what he paid. The precise depth of the hole was determined by a gag. And this is where Elon Musk now finds himself: deep in a hole. It is therefore the worst possible moment in recent memory to acquire an unprofitable tech company, especially if you paid a high price for it and took on a lot of debt to do so.Ī mine with nothing left to mine is just a hole in the ground. The financial floodplains of Silicon Valley are drying up it is a time of layoffs, hiring freezes, down rounds, and cratering stock prices. The worst inflation since the early 1980s has got the Fed rapidly cranking up rates. ![]() In today’s macroeconomic environment, the appetite for such risks has subsided. Gorged with capital, investors spent many years pouring money into tech firms that don’t make money in the belief that someday they would. But it continued to attract investment, thanks to the low interest rates engineered by the Federal Reserve to ease the pain of the 2008 global financial crisis and its long aftermath. Twitter has long been bad at making money, clownishly bad. Now there is a new clown behind the wheel, and the gold’s all gone. Mark Zuckerberg once called Twitter a clown car that fell into a gold mine.
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