Linked List: April 14, 2022

Thursday, 14 April 2022

Elon Musk Makes Play to Buy Twitter Entirely and Take It Private 

Elon Musk, in a letter to Twitter chairman Bret Taylor and filed with the SEC:

I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy.

However, since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company.

As a result, I am offering to buy 100% of Twitter for $54.20 per share in cash, a 54% premium over the day before I began investing in Twitter and a 38% premium over the day before my investment was publicly announced. My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder.

Twitter has extraordinary potential. I will unlock it.

Also from that SEC filing, these bullet points from Musk:

  • I am not playing the back-and-forth game.
  • I have moved straight to the end.
  • It’s a high price and your shareholders will love it.
  • If the deal doesn’t work, given that I don’t have confidence in management nor do I believe I can drive the necessary change in the public market, I would need to reconsider my position as a shareholder.
    • This is not a threat, it’s simply not a good investment without the changes that need to be made.
    • And those changes won’t happen without taking the company private.

Musk can say it’s not a threat, but what he means is that it’s not merely a threat. If Musk pulls out of Twitter I think Twitter’s share price will, at least temporarily, sink.

Peloton Raises Subscription Fees, Cuts Prices for Bikes and Treadmills 

Lauren Thomas, reporting for CNBC:

Effective June 1, the price of Peloton’s all-access subscription plan in the United States will go up to $44 per month, from $39. In Canada, the fee will rise to $55 per month, from $49. Pricing for international members will remain unchanged, Peloton said. The cost of a digital-only membership, for people who don’t own any of Peloton’s equipment, will still be $12.99 a month.

Peloton explained the decision in a company blog post shared with CNBC. “There’s a cost to creating exceptional content and an engaging platform,” the company said. The price increases will allow Peloton to continue to deliver to users, it added. [...]

The price of its Bike will drop to $1,445 from $1,745. The cost includes a $250 shipping and set-up fee. The Bike+ will drop to $1,995 from $2,495. The Tread machine will sell for $2,695, down from $2,845. The Tread cost includes a $350 shipping and set-up fee.

Hey, prices go up. Inflation is running high. OK. But raising the prices only for people who already paid for Peloton’s premium-priced hardware and not for people on the digital-only plan doesn’t pass the sniff test that this is about the cost of content creation. If it were really about content creation costs, they’d raise subscription prices for everyone, or, only for the people who haven’t also purchased Peloton devices that cost $2000 or more.

It’s not like $39/month was cheap. It seems transparently obvious that they’re just soaking their best and most loyal customers — the ones whose hardware purchases have tied them to Peloton. (Unsubscribe and your bike or treadmill still works, but the display becomes useless. Update: Well, not totally useless. The display will still show you basic dashboard stats, like time, resistance, and distance — you just can’t use the display to show classes or anything entertainment-related.)

So the message to prospective new buyers is “We’ve lowered prices on our hardware; buy one today and we’ll squeeze you for more later.” Good messaging.

Easy Come, Easy Go, NFT Edition 

Sandali Handagama, reporting for CoinDesk:

A non-fungible token (NFT) of Twitter founder Jack Dorsey’s first-ever tweet could sell for just under $280. The current owner of the NFT listed it for $48 million last week.

Iranian-born crypto entrepreneur Sina Estavi purchased the NFT for $2.9 million in March 2021. Last Thursday, he announced on Twitter that he wished to sell the NFT, and pledged 50% of its proceeds (which he thought would exceed $25 million) to charity. The auction closed Wednesday, with just seven total offers ranging from 0.09 ETH ($277 at current prices) to 0.0019 ETH (almost $6).

“The deadline I set was over, but if I get a good offer, I might accept it, I might never sell it,” Estavi told CoinDesk via a WhatsApp message on Wednesday.

Yeah, he might never sell it.