Elon Musk has money to buy Twitter — now what?

I’m a little annoyed that Elon Musk actually raised his money for Twitter because I was so excited to say “Where’s the money, Lebowski?” a lot of times. But fine, he found the money, according to the documents he filed with the SEC.

So Musk is planning to pay $21 billion himself. The rest of the money, according to the letters of commitment, is coming from Morgan Stanley and assorted other banks. In one letter, the banks are offering $13 billion in loans to Twitter; the second offers a $12.5 billion personal loan against Musk’s Tesla stock, which I’m sure will just thrill Tesla shareholders. The dates on these letters are, you guessed it, April 20th or 4/20, blaze it, etc.

These letters give his bid more gravitas than before (when it was “idk I’ll find the money somewhere I guess but lol 420 is funny”) but the market still isn’t taking Musk’s offer of $54.20 a share seriously. Shares were $47.08 as of the close of trading on April 21st; that’s up from before the whole Musk saga started, but if investors thought this was real, we’d see trading closer to the offer price.

I do think it’s interesting that there’s no one else majorly involved in this financing deal — you’d think some private equity firms would belly up to the bar here. Reportedly, Apollo Global, a huge buyout firm, was looking at doing so. Private equity firm Thoma Bravo was also considering its options.

So, what gives?

There are a few potential things going on. Thing one is that Musk said publicly that his Twitter bid was “not a way to make money.” Firms like Apollo Global and Thoma Bravo are very much about ways to make money. I imagine that may have scared off some funding for Musk. Whoopsie.

Thing two is that Twitter’s board seems to oppose Musk’s bid. The board, which includes Jack Dorsey, did deploy their poison pill after all. The poison pill, otherwise known as a “shareholder rights plan,” basically dilutes Musk’s shares by giving everyone else more shares. More Twitter shares make it harder to buy Twitter. The board hasn’t yet said anything about rejecting Musk’s offer but that poison pill seems like a hint.

One way to make Musk go away is to get a better offer. It’s possible that Apollo Global, Thoma Bravo, and a few other people are talking to Twitter’s board as I type these very words. It’s a big world. Who knows? If that is indeed happening, we should expect to hear about a counteroffer shortly.

Thing three: firms like Apollo Global and Thoma Bravo look at their options all the time. That’s their job! They think about deals, and then they make some of them! So maybe they looked and were like, “ha Bob Iger is right, the nastiness is extraordinary” and then went to go look at some other deals.

Now, if Musk buys Twitter, I feel like we all have a vague idea of how this goes. First, a lot of Twitter employees quit because Musk’s companies are notoriously miserable places to work. Second, Musk tweets about a bunch of shit and then does some of it — which may or may not include reinstating Donald Trump on Twitter, getting rid of all the spam bots, and adding a fart button. Third: uh, maybe profit?

But, maybe not! The deal as constructed includes $1 billion in debt servicing costs every year, Bloomberg’s Matt Levine points out. That’s an awful lot of money for a company that, ummm, lost money last year.

There are other potential corporate gymnastics at work. Musk has formed three holding companies for his Twitter bid, all named for an old idea of his: X.com, the original name for what became PayPal. This could offer Musk an opportunity to combine all his companies — Tesla, the Boring Company, Neuralink, and SpaceX — into one big company that, idk, shoots lasers out of its eyes.

Now, let’s imagine a bid from Apollo Global, Thoma Bravo, or someone else wins. I think we see something radically different, and much more in line with Elliott Management’s ideas. Elliott Management, you may recall, is a scary firm that took a big stake in Twitter last year, got itself some board seats, and very likely was part of the reason why former CEO Jack Dorsey stepped down. (Getting rid of Jack Dorsey was one of Elliott Management’s stated goals.)

Let’s review what Elliott Management wanted, shall we? No Jack Dorsey and more product innovation. It did eventually get the CEO it wanted in Parag Agrawal, and I guess NFT profile pics count as product innovation? But I’d bet the place they actually wanted the innovation was around the ads — otherwise known as “where Twitter makes its money.” Right before Elliott Management got in, there were “bugs” around Twitter ads that meant the company took a hit to its revenue.

Twitter has been a massive cultural force and kind of a lousy business. That’s because it’s smaller than Facebook and Google, which also compete for ad dollars. So it’s losing: Twitter had $5 billion in revenue last year — whereas Google had $257 billion and the artist formerly known as Facebook had $117 billion.

There are ways to fix that. Twitter did acquire Revue, a newsletter platform (where This Week in Elon initially lived). It also started Twitter Blue, a subscription service that gives users new features, like changing the color of the app icon and undoing tweets. There’s probably room to expand both of those offerings, giving Twitter another revenue stream besides advertising.

This seems more profitable than banning bots, but what do I know? Maybe the fart button is what Twitter was missing all along.

Of course, one possible outcome is that no one buys Twitter, and this seems to be the outcome shareholders are betting on. The private equity firms sniff at Twitter, as others have before, and decide against buying it, as others have before. The board rejects Musk’s offer and he launches a tender offer and Twitter’s management poison-pills the thing. This all ends with Twitter still a public company, where it will have to deal with all the same problems it had before, except Agrawal maybe needs some therapy because, wow, this was a lot. What can I say? We love to have fun on Twitter dot com!

Correction April 22 7:38PM ET: Corrects a “million to billion” mistake