Elon Musk takeover over Twitter is not a "free speech" crusade, but a battle with Hedge Funds. All eyes on Tesla/Twitter prices and the NASDAQ index, stagflation beatdowns just warming up. Musk may set off a wave of volatility on the Twitter share price, while funds begin to short Tesla once again.
(Chart 3)
Wayward rightwing billionaire and so called self confessed libertarian who has recently bought a 9.2% stake in Twitter, which by his own definition was in protecting 'free speech' with his rapid fire 'troll' tweets, in its reiteration of a conspiracy that 'cancelled' and 'banned' right wing opinions on Twitter are undemocratic. Is fueled by an overblown paranoia that Marxism is taking over America, are indeed laced with hate more than not.
Twitter, is an über-Capitalist money making machine and a public listed company on the NASDAQ, which shareholders require checks and balances, particularly after former President of America Donald Trump used the social media platform in his attempt at arranging a failed coup in Washington on 6th January 2021. In which 5 people died And therefor was promptly kicked off Twitter .
Yet, as analyzed in my article Cults of the Culture Wars, Twitter was rather tardy in its crackdown of hate speech on its social media platform before the 'coup' and after, until high profile 'right' wing' pundits began to push the envelope of baiting the so called 'left wing conspiracy' did the clamp down on misinformation and hate speech beginning in 2021. Twitter is not a democracy per se, it is by definition constructed for celebrities' to promote themselves, whilst it gives us all the impression that we are rubbing shoulders with the illustrious of society. And it is Twitter's algorithmic systems that require clicks for ad revenue and a lot clicks to make money, so censorship is a secondary requirement to the traffic a Tweet can create, not the other way around.
Which brings us to the market reaction, that if anything has started to create volatility in the company's share price, as Elon Musk has issued a threat of taking over Twitter as a majority shareholder. He also refused to sit on the board, after becoming the company's largest shareholder, albeit he was knocked off by the investment holding company group Vanguard Group, who now own 10.3%. Which makes the whole episode intentionally or appear to be a hostile takeover of Twitter by Musk.
Still, Musk is considered the largest individual shareholder of Twitter at over 73 million shares, with the two other institutional investment funds, investment bank Morgan Stanley and the behemoth investment firm Black Rock Inc, which between them both, not including Vanguard Group, own over 14% of Twitter at a combined 119 million shares of the social media giant. What will be interesting in this saga of excess and feigned social/political jostling by Musk, is how he will maneuver in reducing the investment bank/s power over the Twitter share price, since he does not attend to trade Twitter, but rather own them as an attempt to take over the company, as the three main institutional holders of the Twitter's share price develop and sell investment products from their Twitter holdings.
Although Vanguard Group, Black Rock Inc and Morgan Stanley Bank are not hedge funds, they manage them, so if there going to be a battle over Twitter with the worlds riches man and the mega Trillion dollar funds that hold the majority of Twitter shares, this melodrama is less about free speech but more about his ongoing battle with Hedge Funds that want to send Tesla down to the bottom, as one of the most overvalued companies in the world.
Chart 1. Twitter and Tesla share prices, note the jump in Twitter's price after Musk bought up, yet it sold thereafter so did Tesla's share price.
Chart 2. Tesla five year chart, which has burned out so many short positions by the various hedge funds that were betting against the electrical car company. Easy money and low interest rates pushed indexes higher in 2020 and 2021, however, it ends. Thanks to Central Bank/s inspired inflation, U.S Dollars and rates are going up and speculation is going down. Fair value for Tesla is probably within the $300 range.
Chart 3. NASDAQ futures and Tesla share price on a three months chart, prediction within a month, is for a 4% drop from 1380 to 1314, as growth/speculation stocks enter back into a bear market, i,e stagflation beatdown. Dragging everything else down with it.
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