Opinion: My bet on Twitter paid off… sort of

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It isn’t often that journalists write about companies or assets they’re personally invested in. And there’s a very good reason for this, namely the clear conflict of interest that owning an asset exposes a journalist to.

Suddenly, a journalist has more biases than they started with — exactly what we don’t want when seeking total objectivity.

This is why it’s necessary to start this piece by telling you that I currently hold less than $2,000 worth of Twitter shares.

I purchased them on April 18, 2022 for an average price of $44.52 a share.

Emotional hedge

It sounds silly, but the reality is I made my Twitter bet out of concern and support, not profiteering.

I’ve made similar bets against my favorite sports teams. This way, if they lose, I get monetary compensation, and if they win I’m so overcome with joy that the material loss is quickly forgotten. Is it a good strategy? Absolutely not. Does it make sense to me? Yes.

Twitter has provided me a platform to meet some of my best friends, indulge in countless hours of laughter (and equal amounts of angry yelling), reach a global podcast audience, and it even helped to land me my current job. I can freely admit I have some level of attachment.

Rollercoaster

April was a wild time for Elon Musk and Twitter. On April 4 it was announced that Musk had bought over nine percent of Twitter shares. The next day he was announced as a new board member. Less than a week later he decided to quit. Finally, a few days after that, he offered to purchase the company for $54.20 a share so he could take it private.

Twitter was trading between $45 a share and $48.50 a share on this news, with few people — myself included — taking Elon’s gestures seriously.

But he kept huffing and puffing, even leading CEO Parag Agrawal to ask employees to ignore the “distractions.” Suddenly, the joke bid felt like a very real takeover attempt.

The bet is made

On Monday, April 18, I decided it was time to make my “emotional hedge.”

The circumstances read something like this: given that Elon Musk is a billionaire who hardly hears “no,” makes knee-jerk decisions regularly, and has the connections and capital to follow through with his acquisition offer, it was time for me to:

1. support the current executives by purchasing some shares, and

2. put myself in a position to profit if Elon Musk did succeed in his takeover bid.

So, I logged into my brokerage account and hit the purchase button.

A losing position feels like winning

Though my $44.52 average purchase price was briefly a monetarily positive trade — with Twitter climbing to over $54 a share only four days later — this success was short-lived. Indeed, using the price of Twitter shares as a gauge, you can see exactly when Elon Musk made it clear he was no longer interested in buying the company: May 12 — 13.

My trade that had been more than 20% in the green was over 25% in the red by late July.

Funnily enough, I found myself discussing the trade more at this point; I was almost excited to become a forced holder of a company I’d vowed to support against a hostile takeover — a diamond hander, the same as the people I’d mocked for clinging to GameStop or Bed, Bath, and Beyond.

It was a silly place to find oneself and in a perverse sort of way brought me immense joy: I’d known that the trade was done on principle and I was sticking to my guns, despite the losses. It was as though I finally understood the absurdity of the r/WallStreetBets or #SilverSqueeze crowds.

But this moment, too, would be fleeting.

Court proceedings and this isn’t fun anymore

Once the buyout was canceled and Twitter let it be known that it would be taking Elon Musk to court to ensure he keeps to his promises, following my Twitter stock price became… less fun.

I suddenly realized the current executives at Twitter wanted nothing more than to sell the platform. The company, which IPOed in 2013, first traded at roughly $45 a share and has never moved much from that point.

To reiterate: if you’d bought shares in the blue bird on the day it IPOed you’d have lost money at the price point at which I purchased. That’s bad. Like, worse than a savings account bad.

From an executive position — in other words, your job is to identify value for shareholders — selling Twitter for $54.20 a share was like catnip.

I had no pony in the race anymore. Instead of the back and forths being exhilarating, seeing Elon’s tweets deriding Twitter and Parag doing anything in his power to make the takeover a reality became… sad and pathetic. I decided to stop following the price action.

And here we are

Like the old adage “a watched pot never boils,” as soon as I became exhausted by the silly arguments about bots, the chancery details, and Elon being Elon, it ended. A few days ago, Elon relented and sent a letter suggesting he would, indeed, buy Twitter for his original offer price of $54.20 a share.

Matt Levine of Bloomberg has done a wonderful job of following the intricacies of the clusterf*ck, with his most recent piece discussing the ways in which the takeover can fail, including possible financing issues for Musk.

This is to say that, while I had strong opinions, they were loosely held, and I’m too damn tired to hold Twitter stock much longer or, for that matter, my opinions. If the deal doesn’t close in a few days — which I suspect it won’t, simply because of Elon Musk — I’ll dump my shares and allow myself to enjoy the relief of no longer giving a sh*t.

At the end of the day, while I’m glad that I made a few hundred bucks on a very stupid gamble, it’s obvious to me that Elon Musk and Twitter deserve each other.

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