马斯克对决推特

David Sacks (00:00:00): You got, like, moisturizer all over your face? Are you moisturizing? Jason Calacanis (00:00:03): I am. My skin is so dry. I just got over having food poisoning, and I'm like, I dehydrated. Okay. Hold on. Let me get this off camera off. David Sacks (00:00:10): Look at this guy. You got makeup on? Jason Calacanis (00:00:12): It's not makeup. It's moisturizer dipshit. David Sacks (00:00:14): That's just as bad. Jason Calacanis (00:00:15): Reason you look like the fucking crypt keeper, and I look spy and young and Schpelt, because I do a little skincare routine. Okay? Give me a fucking break. David Sacks (00:00:22): Look at him. Jason Calacanis (00:00:23): He turned David Sacks (00:00:23): off his camera because he's in whatever he's doing. -- Jason Calacanis (00:00:25): embarrassed. I just don't need you telling that David Sacks (00:00:27): -- Jason Calacanis (00:00:29): Zach isn't a fucking good mood. Just a lot of up 15¢. Why are you so fucking happy, dummy? David Sacks (00:00:34): Well, the markets are closed today. It's good Friedberg. So I have my stock portfolio can't be down because the markets are closed. Jason Calacanis (00:00:39): And Jesus. Praise Jesus. David Sacks (00:00:41): Yeah. It's a good Friday if the market's a closed my portfolio can't go down anymore. Jason Calacanis (00:00:45): It's truly a good Friday. Your portfolio will rise again. David Sacks (00:00:48): and needs to be resurrected. Jason Calacanis (00:00:51): The weather winner is wide. Rainman, David Saxon. Speaker 3 (00:00:59): We open source it to fans and they discover reason. Jason Calacanis (00:01:02): Love you. Nowadays, he works in DNA, but in the nineties all he cared about was the MDMA, the Duke of DNA, the Titan of Tempe, Shepherds of the soy boys. He turns water into wine and dollars into dimes. He's a foolio for Coolio. The Sultan of Science of South David Friedberg. Welcome. I have never done drugs just for the record, but go on. No. Of course not. Of course. None of your behavioral problems in high school had to do. David Sacks (00:01:31): Yeah. Neither is Jason. Jason Calacanis (00:01:33): No. Absolutely. Not not this morning. He's the VC who loves Bree. He'll sell you the sleeves off your vestee. He's enthralled with green wall. He eats uppers for supper, the rain man himself, David Saxx. David Sacks (00:01:46): Alright. Thank you. Jason Calacanis (00:01:46): You're welcome, Dan. Alright. Coming around the bend. That time piece, what does it do? It reminds him of how much more money he has than you. Sweater is worth 6 times. Laura Pianna is above his line. Your supervillain with that 1985, Sasakiya, he be chilling. There it is. He loves facts just like junkies love crack. He's your dictator. Shamalff probably happens. That works. I'm, like, becoming the M and M of intros. I mean, I'm I'm rhyming shit. Chamath Palihapitiya (00:02:15): It's really solid, bro. I gotta sit. Jason Calacanis (00:02:17): I'm I'm working shopping it. Shout out to Nick, and one person on Twitter of a 100 gave anything. Chamath Palihapitiya (00:02:23): I'm moving into my spring sweater season. My spring sweater collection. Jason Calacanis (00:02:27): Oh, wait. Hold on a second. I just got a call. yeah. Confirm. We know what he gives a fuck. Fucking Christ. He's the king of the unanean. Chamath Palihapitiya (00:02:39): I don't think it's a name at all. Jason Calacanis (00:02:40): This matters to exactly one person. No. No. The person selling you the Twitters. Chamath Palihapitiya (00:02:45): That's not that I I think if you took a poll on Twitter, there's a lot of people who silently hate it but love it. David Friedberg (00:02:50): I think Jason Calacanis (00:02:51): there's a lot more who hate it. Let's get to all the news. So much news going on. Chamath Palihapitiya (00:02:57): All the news, where should we start, Jason? Jason Calacanis (00:02:59): On the final -- I'm trying to think about Was there any news topic this week? Because, obviously, the war in Ukraine has obviously got everybody in America. Oh, wait. No. I'm sorry. That that's not important anymore. or on to the next thing. David Sacks (00:03:11): There's only one issue. Jason Calacanis (00:03:13): Elon put it in a bid to buy Twitter outright on Thursday and take the company private into deal worth David Sacks (00:03:18): 43 $1,000,000,000. Jason Calacanis (00:03:22): The most breaking news when we're taping this on Fridays at 11 AM when we typically tape this is that the board of directors, you know, the professional board of directors has decided they Chamath Palihapitiya (00:03:34): would like to get personally sued. Jason Calacanis (00:03:36): Yeah. I mean, this is the motion same thing. I woke up and read this, and I was like David Sacks (00:03:40): -- Jason Calacanis (00:03:40): Okay. They're creating a poison pen. I'm I'm sorry. A poison pill. That's gonna give Twitter's existing shareholders the ability to buy more shares if Elon hits 15 percent of the company at a discount. Chamath explained the concept of a poison pill just generally speaking. And then give us your because everybody knows what's going on. But, like, here we are on this. Whatever I don't know if this is the 7th or eighth inning of this saga or it's second. But where do you think we are in this saga? And then what happens on Monday and describe a poison pill? Chamath Palihapitiya (00:04:11): A poison pill is basically a defensive maneuver that a board of directors uses to prevent a hostile takeover. And basically, the simple way it works is it allows the board to create enormous amounts of new shares and effectively dilute the potential hostile acquirer so that it becomes economically unfeasible for them to get enough shares to get controlled. The way that they do that is that they basically give everybody except a person that crosses a certain ownership threshold. So let's use Twitter as an example. So the Twitter's poison pill basically says that if you get to David Sacks (00:04:52): 15%, Chamath Palihapitiya (00:04:54): you're essentially locked out from a right that then everybody else has that effectively allows them to buy another share of stock at, I think, it's a David Sacks (00:05:03): 50% Chamath Palihapitiya (00:05:04): discount. And so what it does is it creates an incentive to essentially almost double the fully diluted shares outstanding of the business. And what that does is it makes it almost impossible for the person with 15%. to then go and acquire what's necessary to get to 50%. Yep. There are different kinds of poison pills. There's things that you can do with debt. There's things that you can do with equity. But that's the thing that that Twitter did. I think the if anybody's interested in it, Nick, maybe you can just bring it up. But you can Google on Wikipedia there's a phenomenal article called Revlon versus McCandruin Forbes. And McCandruin Forbes was the holding company of this very prolific dealmaker in the seventies eighties nineties named Ronald Perlman. And what happened was he was a CEO of a company called Pantry Pride. And Pantry Pride made an unsolicited hostile takeover bid for Revlon, which made makeup. And basically, you know, there was, like, 40 to 45 bucks a share. The board instituted all these poison pills. The price kept escalating then a private equity firm stepped in, also tried to compete for the asset. All along the way, there was enough shenanigans that essentially what what what Ronald Perlman did was sue Revlon, which went to Delaware court And from it basically came the current framework of law that we use in this situation. And basically, what it means is that board directors have these fiduciary obligations to their shareholders. And in some cases, these are very broad fiduciary obligations, meaning do the right thing. But in some really narrow circumstances, All of that collapses, and their sole focus is to get the best price. And what a director and a board of directors typically wants to do in a situation like this is not end up in that second bucket. They wanna keep all their options available. They don't necessarily want to sell to one person, you know, They're probably gonna assume they're gonna get fired from the board. They wanna stay on for different reasons, etcetera, etcetera. Chamath Palihapitiya (00:07:07): And so right now, what Twitter and their advisers are trying to do is basically stay in that first bucket, have all of the options available to them and not be forced to run an auction. And I think what Elon will try to do is essentially use the public pressure that's going to build and the existing shareholders who own stock at 40 somewhat dollars, a chance to basically get, you know, a 20% payday by selling it to Elon for 54 bucks or 53 whatever the price was? And the Twitter board now will have to justify how whatever they come up with is better than this because then if they don't, and they're still exercising this broad fiduciary obligations. You know, one thing I'll tell you as a public company director. it is a horrendous process when you get sued, and these guys will be in court for years. And the the incremental pressure that this Twitterboard has is that they can be held personally liable here. So I think it's getting very complicated, Jason Calacanis (00:08:10): very competitive. On that note of personal liability, you have directors insurance. So how come that piercer -- Doesn't Chamath Palihapitiya (00:08:17): cover it. Doesn't cover it. Jason Calacanis (00:08:18): Have there been examples of this happening? Chamath Palihapitiya (00:08:20): Yeah. DNO Insurance is is kind of like DNO Insurance is their directory and officer insurance is is a layer of protection that we all have as public company directors. We actually also have it as private companies. Yeah. Yeah. But the the amount of coverage changes. But what I'll tell you is d and o coverage tends to be relatively nominal because the risk profile doesn't really, you know, include these kinds of tail events. And now what you're talking about is David Sacks (00:08:45): $10,000,000,000 Chamath Palihapitiya (00:08:49): of equity value that's going to either get created for existing shareholders or get taken away. And typically what courts will do is that they will look at the amount of money and they will start to think about you know, compensatory and punitive damages is a function of how much money was was made or lost. And so you're talking about a realm of of of risk now for these directors that's well beyond what D and O insurance will cover. Jason Calacanis (00:09:13): So When if a lawsuit did happen, Shamalff, you have to find damages. So if the board found a better offer, great. But if this thing goes down on Monday, Elon sells his shares, and it goes down to 30, now you have the opposite effect. Go ahead, Freeburn. David Friedberg (00:09:27): So I'll say 2 things. One is, in all these cases, by the way, the board is indemnified by the company, so the individual board members I don't know if there's ever been a point in history when an individual board member's had to pay out of pocket for liability associated with their actions as a board member and as a fiduciary. except when they've done something to benefit themselves outside Jason Calacanis (00:09:47): of the David Friedberg (00:09:47): company. Now, in this case, the the job of the board is to use their best judgment to do what they believe to be in the best interest of creating the most value possible for the shareholders. It's very simple when the stock price is at 30 and someone says, I'll give you 50 bucks to say, oh, well, obviously getting 50 bucks is in the best interest of the shareholders. Let's assume though that you're on that board and you know about some super secret plan that you believe in the next 30 days is gonna get the stock price to 60. and your belief in that plan and your understanding of that plan gives you a good rationale for having a debate as a board that this deal doesn't make sense at 50, we should hold out until we finish our plan over the next 30 days, get the stock up to 60, And then we'll see if someone comes in and says, hey. I'll give you even more than than David Sacks (00:10:37): 60. Jason Calacanis (00:10:38): Could be something on the product road map. Right? David Friedberg (00:10:40): This is the complicated point. It's not just about the current price. And there was a history in the eighties nineties, early nineties when stocks would drop tremendously for market volatility reasons or or various some bad news event someone quits the board, macro, and all of a sudden the stock price drops, and you have a hostile buyer that says, oh my god. This company looks super cheap, I'm gonna come in and buy it while it's cheap, and I'll offer them a premium to the current share price. And the share price recently may have been much higher than the price that's being offered, And the board says, you know what? We're gonna get back to that share price because the market will pick up again. The the things we're working on are gonna grow us out of this hole. And so it's very hard for us to sit here as and I know that I want everyone here on this the Zoom to suspend your reliance to Elon and belief that Elon will do a better job just for one second and just think about the board members, they've all been working on quarterly plans, strategic plans, etcetera, with the current CEO. And as a board for Twitter, that gives them a point of view that says may give them a point of view that says, hey. You know what? We can get back to 70 bucks a share. So remember, it was only a few months ago Twitter's stock was trading at 70, the stock price dropped with market compression we've all experienced, and then Elon's come along and said I'll offer you guys 54 bucks. And the board's like, wait. A few months ago, we were at 70. We have all these great things we're working on. And so I'm I'm just trying to paint the other side for everyone that this is not just like a clear cut obvious deal, it's their judgment at this point that they should get more for the stock given where they think the company said and where the stock price will will eventually get to. Jason Calacanis (00:12:08): Alright. Going to you, Saks, David Sacks (00:12:10): You know? Jason Calacanis (00:12:10): Heard from Friedberg to suspend this belief that the greatest entrepreneur on the planet running 2 of the most important companies is not more qualified to run Twitter than the courtesy now. David Sacks (00:12:22): I'm not gonna suspend my display. Let me make the case for the clear cut for the Clearcut case here. David Friedberg (00:12:27): Sorry. Let me just say something. He could be better at running this company, Jason Calacanis (00:12:30): but share David Friedberg (00:12:31): okay. He will be better, Jason, but the shareholders don't benefit from that. because he buys the whole company for 50 they do. David Sacks (00:12:37): Well, hold hold on. Yeah. David Friedberg (00:12:38): They're getting $54 of cash. They do not have any ownership in Twitter after Elon takes over. That's the deal that's on the table. So if I, as a shareholder, get David Sacks (00:12:47): $54 David Friedberg (00:12:48): a cash, I don't care if Elon does a better job running Twitter down the road because I have no interest. Jason Calacanis (00:12:52): Sun relief. One fact check on that. One fact check on that. He said he wants to bring along David Friedberg (00:12:56): as many of the shareholders as possible. That's a thing he said. That's not actually in the proposal. Right? So As a board member, I have to look at the proposal on the table, which is I gotta take $54 a cash -- Okay. David Sacks (00:13:06): -- David Friedberg (00:13:06): for my shirts and give up all the upside. Jason Calacanis (00:13:08): Saks looks like he's gonna explode. David Sacks (00:13:09): Fair enough. Look. here's the reason why fiduciary duties exist. Let's just explain where this concept comes from. There is fundamentally a principal agent problem. This is what known as between stockholders and the people running the company. So in other words, the owners of the company are the stockholders. Okay? They appoint agents, managers to run the company for them, but those managers can be conflicted. They have an incentive not just to get the highest share price for the stockholders, but to pocket personally as many benefits as they can. And the whole reason why judiciary duty was invented is to per event, that agency problem. So if the board members or the c o of the company are just looking out for themselves and trying to pocket personal benefits excessive compensation, or turning down an offer to sell the company for a much higher price, that would be a breach to their fiduciary duty because they're looking out for themselves. Prag knows that if Elon buys this company, he is out of a job. His head is on the chopping block. He is fired right away. Elon has made that clear, he said, In this letter, on this SEC filing on Thursday, I have no confidence in the comp in the management of the company. If I'm unable to buy the whole thing, and take it private, I will dump all my shirts. It's all or nothing for him. So Parag is interested in preserving his job. If Elon wins this battle, Parag is gonna have the shortest executive career since that pope who got poisoned, okay, to borrow a line from Wall Street. So he is incentivized to fight this thing whether it's in the interest of shareholders or not. Now -- Chamath Palihapitiya (00:14:43): What do you think the incentives of the board are? David Sacks (00:14:45): I think they're the same. These guys who love the power they derive from being on this board. We know Twitter has enormous cultural power. These guys They enjoy all the benefits they get. They probably do get some compensation being on the board, but they enjoy being in this very exclusive club that wields enormous power over our culture, and they have no incentive to give that up. And by the way, how much of the company do they really own? not that much. David Friedberg (00:15:13): If you look at the wealth of the people on Twitter's board and we know all the people on Twitter's board, their wealth is significantly greater than whether Twitter stock sells for 60 or 70. So and and I think that we all know that these are all sophisticated actors. They are all high integrity people, we all personally know many of the people on Twitter's board. I don't think that it you know, look, maybe there's a -- They're conflicted. David Sacks (00:15:35): They're conflicted. It's got nothing to do with integrity. Jason Calacanis (00:15:38): the matter is. David Friedberg (00:15:38): But you could say the same about any board, Saks, that it's David Sacks (00:15:41): -- No. Be because it's different. Listen. When we're on a board okay. because I'm on plenty of boards. we own a huge percentage of the company. So when somebody makes a takeover offer to buy one of our companies, we are thinking like stockholders. We're fundamentally aligned. Jason Calacanis (00:15:55): You have massive skin in the game. Yeah. We have David Sacks (00:15:57): massive skin in the game. These people on the board, what skin of the game do they have? Most of them are these directors who are disappointed, and it is it's like a club. These guys it's all big back scratching club. These guys are all Jason Calacanis (00:16:08): on you think they're motivated by the influence of being a Twitter David Friedberg (00:16:12): board member. Of David Sacks (00:16:12): course. Why David Friedberg (00:16:13): do they Jason Calacanis (00:16:13): do it? The nexus of power. Why do they sit David Sacks (00:16:15): on the way David Friedberg (00:16:15): forward? shaping up Jason Calacanis (00:16:16): to be as a nexus of and who controls the power David Friedberg (00:16:18): of the winner. David Sacks (00:16:19): None of them own much of Twitter. None of them own much of Twitter. David Friedberg (00:16:21): I do a 100% agree with Saxx. I've always believed what I think Carl Icahn said or or whoever it was that The board should be represented by the biggest shareholders. The the the the folks who actually have skin in the game, the folks who actually care about the share price having some nominal number of shares issued to you as a board member of a public company showing up, you know, patting each other in the back. It's certainly, generally speaking, leads to non founder led companies ultimately dying because there is no motivation and incentive and drive from anyone. Chamath Palihapitiya (00:16:51): Let me take the other side partially. I think you're mostly right. I would never join a public company board that I did not own a significant piece of Right. And I and I have never. Right. Now the reason to be on a public company board is that unlike a private company, the single biggest advantage, there are many of being public. But the single biggest advantage of being public is that you have a lower cost of capital. So if you have an ambitious company, An ambitious leader and an ambitious plan to build and compound value, you cannot do it privately forever. You must do it in the public markets because there's an infinite amount of capital that's available and an infinite amount of ways in which you can raise capital relative to you being private. So with that being said, when you are public, I think the best boards are the ones that are sort of 5050 split between the biggest shareholders and people who are very much experts in a handful of things, and I just wanna be specific. In a Peppa company board, you have to have a lot of focus these days on things like governance audit because you have to attest to these financial statements. Right? cybersecurity becomes a huge one because you have to disclose these risks. And so I think that it really behooves boards to have a few experts who can chair those committees? Compensation tends to be another one, as David mentioned, that can be a real hot button. But there are experts you can find. They're not gonna own a large piece of the company, but they're gonna do a really good job of managing those things that minimizes risk for the business. So that then the rest of all of of the board, which are the large shareholders, can really use their influence and strategic understanding of the business to build huge equity value. When those things come together, you have great outcomes. But I I do I really agree with you. Chamath Palihapitiya (00:18:47): If you stack the board and, you know, we've we've had this issue. Public boards in America got perverted over the last sort of last few decades to being these little badges of status that people would collect. And now, you know, we're starting to see a real pushback on what's called overboarding. right where these distinguished folks will pick up 567 boards. All of a sudden, that's the fastest way to make 3, 4, 5, 6,000,000 a year. How can you sit on David Sacks (00:19:13): 5 Chamath Palihapitiya (00:19:13): or 6 company public company boards? It's impossible in add any value. David Sacks (00:19:16): Exactly. And do you think did did you think those people get appointed to boards by standing up to the CEO Right? Chamath Palihapitiya (00:19:22): No. The opposite. Right. David Sacks (00:19:23): -- Speaker 6 (00:19:23): to see David Sacks (00:19:24): a safe vote for the CEO. David Friedberg (00:19:25): So let me ask you guys a question. What do you think is the right thing to do as companies that go public mature and their ownership base disperses. So, you know, in Europe and Asia, many companies go public. Families own them for a very long period of time, as you guys know. They're they they remain significant owners. They don't sell off the shares. In the US, traditionally, as companies have gone public, the shares, the founders, the original investor, because we have a lot of venture capital in this in this country historically compared to other countries. So those owners end up selling off their shares and they get dispersed and a long tail of owners end up owning the bulk of the shares, how do you think those companies can be best represented on the board Given that there isn't concentrated ownership in public companies generally mature public companies in the US like Twitter, the largest, you know, owner is Vanguard with 5,000,000 other investments and then Jack Dorsey, he only owns 2%. What do you guys think is the right thing to how do you create good alignment with board members that that could be better, you know, placed and better suited here? David Sacks (00:20:26): Well, I think one of the ways that you do it is that when somebody wants to step up and acquire a concentrated position because they have a plan for the company, you don't stand in the way and completely thwart that. David Friedberg (00:20:35): Your job isn't to assess their plan because your job is to assess the dollars you're getting paid today for your shareholders. then whatever they're gonna do with it, it's their thing. But are you getting a fair price? Is it? David Sacks (00:20:45): Elon is willing to put massive skin in the game in order to basically fix this company and get the best value. David Friedberg (00:20:51): We all agree, but that's not about the shareholder's sex. Like, I agree with you. I think Elon should own and run Twitter. David Sacks (00:20:56): Well, let let's evaluate. Right. David Friedberg (00:20:57): Right. Yeah. David Sacks (00:20:57): Let's let's let's let's evaluate this poison pill for a second. Okay? So Elon comes in. He starts buying up the stock. The premium he's proposing is something like a 50 selling percent premium from when he started accumulating. 54%. 54% was, like, a 38%. About a 40% discount. From the time Jason Calacanis (00:21:14): from the David Sacks (00:21:14): time from the time he basically made the offer. And by the way, the stock is going right back to that previous level if they turned down this proposal. Okay? So he's made them a good offer. Okay. Now I think it'd be acceptable for the board to say, okay, this offer is attractive but we need to shop this. We're gonna run a process and we're gonna see who else is out there And if there's nobody better, then we're you know, why wouldn't we take this? David Friedberg (00:21:37): There's one thing that's left over that you didn't mention. The thing that's left over, you're right. They absolutely have responsibility to shop it and find the best price. But what's left over is their judgment that the company's stock price will get above that level. They have the they have the ability and the right to do that and the board. The board can look at the deal, and they can say, you know what? We believe that the this business in the future is gonna be worth a lot more than what we're being offered for cash today. Chamath Palihapitiya (00:22:04): The problem with that argument is that this Jason Calacanis (00:22:06): is what Chamath Palihapitiya (00:22:10): activist firms use all the time in reverse. The inverse of the argument is more powerful. You've been a director with purview into all these confidential plans that has effectively caused this company to tread water for 5 years Why should we believe you now? Mhmm. And that argument is way more credible than, actually, you can really trust us this time. Because if you look at the tenure of all these folks, you know, the last sea change that happened on the Twitter board was when Elliott pushed to add, I think, 2 or 3 directors. Yeah. Yeah. But in the absence of that, I think David is largely right. These are status games. And when status games ultimately play out over years, They either play out in the stock price one one way or the other. And in this case, what's true is that this is a languishing stock that has largely been going sideways. independent of anything that's been happening -- And what David Friedberg (00:23:03): about the Faxamot that that less than 90 days ago, it was trading at David Sacks (00:23:07): $70 Chamath Palihapitiya (00:23:07): a shot. David Sacks (00:23:08): -- Jason Calacanis (00:23:08): during the COVID bump -- Yeah. David Sacks (00:23:09): -- Jason Calacanis (00:23:09): everybody was betting stocks. I mean, let's look at the history of Friedberg. It was $69. Guys, just remember, I'm David Friedberg (00:23:16): hold on. You I'm sorry. You have Jason Calacanis (00:23:18): to give some context. January 3rd, 2014, the stock was trading at $69. The fact that it got a a ridiculous bump like the entire mark did during the Robinhood Stonks, you know, heyday during COVID means nothing, David Sacks (00:23:33): I think. That was market beta, not their Jason Calacanis (00:23:36): performance. Exactly. Chamath Palihapitiya (00:23:37): That's exactly that's exactly what I was gonna say. This if you could actually point to some alpha, meaning there was a strategic misstep or something that happened that was fixable, a a better example would be let's just say that there was a let's just say that in that that Twitter instead was not a technology company, but a pharma company, because this this example would be easier to understand. The stock is at $69, and you get some interim results from your phase 3 trial. People misread it and the stock tanks. Meanwhile, the stock market broadly speaking is at the same level. You could say, well, that negative alpha can actually be fixed because of our strategic plan. But what Saks just said is more true in this case. In this case, what's irrefutable is that there's been a broad based drawdown in the markets. There is nothing that you can point to. that says this is something inside of Twitter's control to get the stock back to David Sacks (00:24:31): $69. Chamath Palihapitiya (00:24:32): Meaning, 69 3 months ago is actually David Sacks (00:24:36): 38 Chamath Palihapitiya (00:24:36): or $40 today. We're we're we're at an apples to apples even comparison. So from there, the real question is, This 20 or 30 percent premium to this, can you actually show a plan? I think the right thing for Twitter's board to do just to be very precise is the following. They have to take Elon's offer and they have to create a go shop. I will go and try to get a better price. They won't be able to. And the reason they won't be able to is not a single person who is capable of stepping up with David Sacks (00:25:07): $43,000,000,000. Chamath Palihapitiya (00:25:08): would ever get it through regulatory muster. Not gonna happen in my opinion. And anybody with the 43,000,000,000 who could buy it will never take it on. Meaning, Could Comcast show up? Sure. Could Disney show up? They'll never even look at it. Jason Calacanis (00:25:23): No. They're not The people Chamath Palihapitiya (00:25:24): for whom this asset is strategic, Apple. Facebook. Google. Can ByteDance. Amazon can never get it done. So Nina Khan, no Breno. David Sacks (00:25:34): I think that's probably right, Jamath, but there is chance. David Friedberg (00:25:36): So I just wanna finish. Jason Calacanis (00:25:37): I just wanna finish. So from who? Chamath Palihapitiya (00:25:39): So hold on. Just let me -- Okay. I gotta Jason Calacanis (00:25:40): finish, Matthew, and then Saks who? Chamath Palihapitiya (00:25:42): So I think, basically, it's like, Elon, thank you. We're gonna create a go shop. We'll try to find the best offer. I don't think any offer comes in. But then I think what they can do, Friedberg, is if there is this magical plan to shoot rainbows up their ass, they should actually put that to a shareholder vote and let people decide. And I think that a really fair thing to do that also allows them the credibility in the air cover to say, look. We actually have been working on a plan. We think that that will create an amazing amount of shareholder value, and we just want shareholders to be able Jason Calacanis (00:26:15): to see that, compare it to Elon's offer and decide for themselves. Who's the white knight, if any, but I heard Comcast? We know that big tech can't do it because Selena Kahn, and then we'll go on to the next topic the next nuance here. Sachs, do you have anybody, a financial player, anybody who who it's a dark horse in your mind, somebody you know? David Friedberg (00:26:33): I think it could be Disney. Jack is on the board of Disney. There was a lot of relationships. Sorry. Go ahead. Jason Calacanis (00:26:38): They tried to buy it. Bob Eiger said he bailed on it. David Sacks (00:26:40): Listen. I think there's a lot of companies that could be interested in Twitter. I think you you create the period to shop it to see. And by the way, listen. Jason Calacanis (00:26:48): I think David Sacks (00:26:49): I think this administration does not wanna see Twitter become a free speech company again. And so the political winds will blow towards letting I think Twitter be acquired by a Big Tech company even if it means Big Tech, it's bigger. Speaker 6 (00:27:05): So I David Sacks (00:27:06): think that I think they will put Lena Con on pause to allow Google to buy this company if that's what it comes down to. Jason Calacanis (00:27:12): You're kidding me. Your conspiracy theory is that -- I will bet David Friedberg (00:27:15): it's gonna cut one against this. Will you take a 100 to one odds against I David Sacks (00:27:18): understand you even comes down to it. Lots over themselves. Jason Calacanis (00:27:21): You were saying Biden's gonna whisper and Lina Konzier. Put your thumb on the scale and let Google buy this thing. Chamath Palihapitiya (00:27:27): I'm just saying. The dems can Jason Calacanis (00:27:29): own it. The libs can David Sacks (00:27:30): -- I'm saying I'm saying if it was a choice, if it was choice between Chamath Palihapitiya (00:27:33): What David's saying is my enemy's enemy is my friend. And so instead of having Elon's stated goal, guess what David is saying is instead of having Elon's stated goal of having a free speech platform, at scale exist on the Internet, which they may believe is even the bigger threat to political power, they'd rather it go into the hands of companies that will acquiesce to them at least on the margins. David Sacks (00:27:55): But -- No question about it. Jason Calacanis (00:27:56): Biden with Talena Kahn to put her thumb on the scale. Come on. David Sacks (00:27:59): It's the blesser of 2 evils. Jason Calacanis (00:28:01): You believe that conspiracy From David Sacks (00:28:02): their point of view. Chamath Palihapitiya (00:28:03): I do not personally, but I but I'm David Friedberg (00:28:05): trying to explain. I'm just trying not. This feel like I'm on damn radio, but go on. Yeah. David Sacks (00:28:09): It's like -- Listen. Chamath Palihapitiya (00:28:10): Yeah. Where's my tin David Sacks (00:28:11): -- Speaker 6 (00:28:11): What is this all about? Chamath Palihapitiya (00:28:12): Where's my tin for me? David Friedberg (00:28:13): Like and and by the way, I just wanna I just to go back David Sacks (00:28:16): -- Speaker 6 (00:28:16): What is this all about? David Sacks (00:28:17): -- David Friedberg (00:28:17): sent you guys hold on one second. I just sent you guys the revenue chart for for Twitter. It may not be that impressive relative to enterprise software companies and others. But I and I'm I wanna be really clear. I am not arguing against this deal. I'm trying to give you guys the perspectives that we all have a a really kind of honest dialogue about this. why this board may actually stand on their own two feet and win with shareholders by saying, you know what? Look. Our revenue's been going up. We're continuing to grow revenue. We're continuing to grow usage on the platform. We've got all these products that we're working on. There's a real reason that we're gonna make more than $54 a share over the next 12 to 18 months as we start to deliver this year's numbers and we start to deliver these product features that we've all been sharing and talking about in the progress we've been seeing. And that's the that's honestly, I think the most likely kind of middle ground here is that this board has enough to stand on by looking at the fact that it doesn't matter if the stock's gone up and down. What matters is that they've been in their minds steadily improving the business and continuing to improve the business, and it is an iconic asset that the market should own not a single person and yada yada. And I think that's gonna be part of the case. David Sacks (00:29:21): Let me make two points. First, the problem with Friedberg argument is that there's no limiting principle to this. Any board at any time could always claim that they've seen the magical plan, and therefore, they can reject the bid. David Friedberg (00:29:33): You're right, by the way. David Sacks (00:29:34): That's a problem with it. Jason Calacanis (00:29:35): And -- Agreed. David Sacks (00:29:36): -- and particularly in this case, we have to look at the track record of this management team, which it barely exists. but also this culture at Twitter. Okay? This is a company that's language for years. The culture look. This culture a decade. This culture has been so inept that in response to Elon's takeover offer, they gave all the employees a day of rep. Jason Calacanis (00:29:59): because Oh, no. That's a reoccurring monthly thing. They haven't -- Yeah. David Friedberg (00:30:02): No. They don't. Did it relate? David Sacks (00:30:03): -- Speaker 6 (00:30:03): boys were so stressed Jason Calacanis (00:30:04): out. The boys Speaker 6 (00:30:05): were so stressed out David Sacks (00:30:06): they told him to stay at home and it easy. Okay? Speaker 6 (00:30:08): This is this is a David Friedberg (00:30:10): week -- You don't Jason Calacanis (00:30:11): know the emotional labor it takes to deal with this. David Sacks (00:30:15): This team is weak Okay? Soft. And it's soft. Jason Calacanis (00:30:19): Workplace and weak. David Sacks (00:30:21): And Elon would give the whole company an enema and fix this thing, and is why they don't want him taking over. David Friedberg (00:30:27): But listen David Sacks (00:30:27): -- You are you David Friedberg (00:30:28): are a 100% right, but it but that's not the point. David Sacks (00:30:30): It's not the question at hand. But this is why this is why you should not let this board and this CEO invoked some magical plan that they don't have, that they never came up with, and they would never come up with because this is a big excuse So they're not out of a job. Okay? But now let me let me go wait. Wait. Wait. I never got a chance to make the second point. Let me respond to the Tinfoil hat thing. So listen, what is this story really about? It's about free speech. It's what it's about for Elon. He said in this takeover and then at the speech that he gave at Ted, that listen, this is not about economics for me. Twitter needs to be the Open Town Square, It is the marketplace for ideas. We're gonna make it a free speech platform. We're gonna open source the algorithm so people know when they're being canceled. They know why they were taken down. Is that algorithmic? Was that a human intervention? This is what it's about for you all. It's also what it's about hold on. It's also what it's about for all the elites, for everyone observing this, for everyone who's criticizing it. Listen. Look at the look at the React, We we haven't talked at all about the hysterical reactions to all of this news that happened. I mean, there was a fan fantastic tweet here. Well, business insider said that Elon Musk attempt to buy Twitter represents a chilling new threat. Billionaire trolls taking over social media. This is one problem. Back in 2013, Business Insider's headline was Billionaire Jeff Bezos, Washington Post by Marks a fascinating cultural transition in America. So these guys are completely hypocritical. When it's a billionaire that they like, they praise it. When it's when it's a billionaire sporting free speech, they oppose it. That's what's going on. You had Jeff Jarvis with this insane -- Jason Calacanis (00:32:07): Professor Jeff Jarvis? David Sacks (00:32:08): Yes. Saying today on Twitter feels like the last evening in a Berlin night up at the twilight of Weimar Germany. I mean, somehow, these people think that the reinstitution, the restoration of free speech, is somehow like the the end of Weimar, Germany. And then I think probably the best example was this tweet by Max Boot, where he says that for democracy to survive, we need more content moderation, IE censorship, not less. So in the war mind of all of these elites in the media, the corporate media, they think that for democracy to survive, they need more censorship. This is -- The Jason Calacanis (00:32:47): first thing the Democrats ever did is give the Republican Party free speech. That was our issue. How we gave it to you guys is just insane. David Friedberg (00:32:54): By the way, this is your bias in evaluating this deal. I wanna point that out. You you talk about the board's bias, but you do have a bias on on and that's not really the question at hand. the question at hand is $54 the fair price to pay for this company. No. Jason Calacanis (00:33:07): I know. But that is also about free speech. There is another issue at its core. David Friedberg (00:33:11): That's not that's not it. Sorry. Jason Calacanis (00:33:12): I well, I agree. It's not about the deal, but that is why Elon's buying the company. David Friedberg (00:33:16): I agree. I agree. I agree. He's not doing this. We're pointing out that we we all criticize the board. And we all criticize them for not taking the deal. We're motivated generally because we wanna see the deal happen. We wanna see Elon do it. Chamath Palihapitiya (00:33:27): I wanna be I wanna be very clear. Couple things. First of all, the stock is basically the same price it was in December of David Sacks (00:33:33): 2013. David Friedberg (00:33:35): Right. Right. Jason Calacanis (00:33:36): Okay. So what happened in the market during bedtime? Chamath Palihapitiya (00:33:40): It went absolutely up and to the right in a violent manner. Jason Calacanis (00:33:43): Right. So if you had a strategy to not grow and you deployed it, could you actually achieve this performance? So I'm Chamath Palihapitiya (00:33:50): I'm just saying that's just an objective fact that we have to keep in mind. Yes. Whatever Whatever whatever has happened has collectively not worked. And it is it is systematic. Meaning, the underperformance is not a quarter. not in a month, but whatever has happened here collectively inside this business has not been working for nearly a decade. Okay. So just getting all the emotion out, that's a fact. Right. Okay? And so at some point, people will say, well, the devil I don't know is better than the devil I do know. because devil I do know is destroying money for me at a at a horrific rate, which if you look at how the S and P is compounded since 2013, versus now I mean, my gosh. If you had done a spread trade of long the S and P in short Twitter, you would have made a fortune. Jason Calacanis (00:34:34): How about long Tesla's short Twitter? Chamath Palihapitiya (00:34:36): Well, I'm just trying to give the just the general market. No. I'm just trying to give you the general market math. Right? Forget even any individual spouse. Jason Calacanis (00:34:42): So David Sacks (00:34:42): -- And and and look. Friedberg, it's not just ideological here. think we all agree on the correct economic thing to have happened here, which is that the Twitter board should run a process. They should see if there's a better bid out there. If there is, You play for the bigger bid, make Elon come up on the price. Okay? But if there's not a better bid, Elon's offer is the best deal on the table, I think you take it. That's what economically should happen, but it's not gonna happen. And the reason it's not gonna happen is not because of superior economics or a magical plan. It's gonna be because the The board members on this country club, they call a board. Their interest is to stay on that board. Parag's interest to stay as CEO. and all the elite observers and the media, all the people denouncing Twitter -- I'm Jason Calacanis (00:35:22): gonna give you guys the number. David Sacks (00:35:23): -- want this to want censorship to remain in place. That is what's going on. David Friedberg (00:35:26): me one second. I wanna ask one question, Seth. Okay, Rupert. You have a lot of Bitcoin? You have a big amount of Bitcoin? David Sacks (00:35:31): Some? David Friedberg (00:35:32): Bitcoin's pretty much for Bitcoin's reading like 40,000. If I said I'm gonna buy out all your Bitcoin for 45,000, would you take it? David Sacks (00:35:40): Well, that's a it's a different situation because you can't You can't make an offer for that. And -- But what does Mike say? David Friedberg (00:35:46): Let's just see my answer is here. Here's the difference. David Sacks (00:35:48): Here's the difference. There's no principal agent problem in that context. Jason Calacanis (00:35:52): I know. David Sacks (00:35:52): It's a fully decentralized person. Speaker 6 (00:35:53): But you David Friedberg (00:35:54): have a point of view on on on Bitcoin. I no. Forget about the structure. I'm I'm coming to you, and I'm saying, hey, Saxx. I wanna buy all your bitcoin for 45,000. What's your answer? It's trading David Sacks (00:36:02): 40. Speaker 6 (00:36:02): That's not that's not that's not David Sacks (00:36:03): a that's not a share that's not a share David Friedberg (00:36:05): of stock. Chamath Palihapitiya (00:36:05): Put it put it to a vote. David Friedberg (00:36:07): Yeah. I'm trading then put it Chamath Palihapitiya (00:36:08): to a vote. Right. Let every single shareholder decide then put it to a vote, and we'll see. David Sacks (00:36:12): Yeah. And by the way, Freeport, there's no limits on your ability to go on the open market and buy Bitcoin. So if you do wanna try and acquire a 100 percent of Bitcoin, go on the open market and acquire it. Jason Calacanis (00:36:23): I mean, there are people trying to build big positions exactly. David Sacks (00:36:26): So go do that. But there are huge limits. Jason Calacanis (00:36:28): I just I David Friedberg (00:36:28): just want There Speaker 6 (00:36:29): are hold on. David Sacks (00:36:29): There are big limits on the ability of Elon to go on the open market and just keep buying up all of Twitter. And the push And now it just wasn't pill. Now this poison pill, they've stopped it. Jason Calacanis (00:36:38): Do you agree with the poison pill Friedberg? David Friedberg (00:36:39): See, Jake, Al, hang on. I wanna explain why that is because this is really important from a corporate governance perspective. So people understand what you're saying is right. But the job of the board is to look out for the interests of all shareholders, particularly minority shareholders, people that own a small stake in the company. if someone came along, let's say a private equity firm owned 60% of a public company, the board can't just act in the interest of the private equity firm. they have to protect the smaller shareholders. And so their job is to say is their upside for the smaller shareholders that their vote should matter more. And that's why we have a board to have that judgment debate and to decide. And I'm not arguing against you as much as I'm explaining what goes on in the lawyers. Okay. meetings with the board. This is what they're telling David Sacks (00:37:19): -- Chamath Palihapitiya (00:37:20): I think they're saying David Friedberg (00:37:20): your job is to look out for all shareholders. So Elon can go out and buy a bunch of shares. But if he doesn't have 30 percent of the shares, the board has to represent the interest for those David Sacks (00:37:28): 30%. David Friedberg (00:37:29): Right. That's how it works. Chamath Palihapitiya (00:37:30): I I think I think what the what what also works and what normally good boards will do. And I don't know whether Twitter will or will not do this, but I'm assuming these are you know, they'll they'll do the right thing here because we do know most of them. they should probably get a fairness opinion. I'm sure Goldman is doing evaluation as we speak. But, again, when you factor in what's happened to this stock over the last decade. And when you factor in the market beta today, it's I think you're going to have a very hard case to make that there is a path to an outcome that's a lot bigger in an obvious way here. And I don't think that that's gonna pass a lot of muster. And so the the the the problem that this board will have is justifying the alternative of not taking this. I think it's going to be harder than you think. Yeah. And I think it's gonna create an enormous amount of backlash where, you know, there is a probably a lot of shareholders that would probably wanna get out. You have to understand, like, why our Vanguard and all these guys owning Twitter, they have to own it through these ETFs that they've created in David Friedberg (00:38:38): That's right. That's right. Chamath Palihapitiya (00:38:39): they don't necessarily have -- They don't they David Friedberg (00:38:41): don't have a point of view on the company. Right. I agree. Chamath Palihapitiya (00:38:44): And so, you know, they're out to just basically so when you really boil it down, How many concerned interested shareholders are there? Well, he's Elon is clearly the largest there. You know? And then after that, it's probably only 30 or 40 percent of the total outstanding equity. David Friedberg (00:39:00): I bet Jack has a really I bet Jack has the linchpin in what's gonna happen here. You know, his point of view on this transaction and whether or not Elan should be the steward of this business going forward and whether this is a fair price for him is gonna sway a big part of how this process is gonna go. David Sacks (00:39:14): Jack owns 2%. Elon owns over 9%. David Friedberg (00:39:16): Yeah. But he my point my my point is I think Jack's gonna be a a big opinion setter in that board discussion. because he's Chamath Palihapitiya (00:39:21): on the ball. Okay. Jason Calacanis (00:39:21): I think they're simpatico and they're friendly. So Just to give you guys a number to react to here, 2021 revenue is David Sacks (00:39:28): 5,000,000,000. Jason Calacanis (00:39:28): They have 8000 employees, back of the envelope, $625,000 per employee in revenue. Just looking at Google, which is the greatest business ever created perhaps in terms of efficiency as we've talked about. They have a 135,000 employees and revenue is 257,000,000,000. which puts them at 2 close to 2,000,000,000 or 2,000,000 per employee. How many people sacks on an operational basis does this business actually need to run efficiently. David Sacks (00:39:55): 8000 -- Yeah. You could fire half those people or more that'd be absolutely no impact to the business. In fact, they probably run better because right now, they probably got too many me's happening with too many people. We all know this. That company -- So -- -- culturally has been broken for a Jason Calacanis (00:40:08): long time. -- comes to you and says, you're my guy. You did Yammer. You're in charge. David Friedberg (00:40:12): Would you run it, Zach? Would you take the senior? Jason Calacanis (00:40:14): Go or she would. He forced you David Sacks (00:40:15): to take the gun. -- out, guys. Come on. Jason Calacanis (00:40:16): Not wrong. But you take the job for David Sacks (00:40:18): 10%? I wouldn't. Jason Calacanis (00:40:19): You're a liar. Would you take the job for David Sacks (00:40:21): 10%? No. I'm done operating companies. I'm sick of it. Jason Calacanis (00:40:24): What if what if your funds got I don't David Sacks (00:40:27): like doing the real work. Chamath Palihapitiya (00:40:28): Wait. Hold on. Hold on. Jason Calacanis (00:40:29): I think Chamath Palihapitiya (00:40:29): I think I think this is time I think this is time where we where we can share David Sacks (00:40:34): -- Not too old. I think it was 6 years ago, 5 years ago, I Chamath Palihapitiya (00:40:35): did approach Twitter with another large investor, but it was more of a friendly activist thing. And David was our nominated CEO. That place apart. Jason Calacanis (00:40:48): Good news. Must turn it all in. Chamath Palihapitiya (00:40:51): But now after that meeting, which which was a little heated, Their VP of Engineering And CTO quit the next day, I remember. Yeah. I was responding. Jason Calacanis (00:40:58): Oh, what? Just that big concept of reporting it to Saks they quit. It raked criminal possibility. David Sacks (00:41:04): You know, it starts with like the NBA. I mean, you get to a certain age. You you're just, you know, it's you're too old. I mean Jason Calacanis (00:41:10): You're the coach. You you'd be David Sacks (00:41:12): filled Jackson. Just I it's flattering. It's flattering, but I'm done. I'm done operating. I'm so sick of all Chamath Palihapitiya (00:41:16): that. Jason Calacanis (00:41:17): Jack, who do you think I David Sacks (00:41:19): go on Zoom calls couple of times a day. It's a great life Jason Calacanis (00:41:22): for me. David Friedberg (00:41:22): Elon can't run it. You've got a lot going on. Who do you think should be the actual CEO, the day to day CEO there? David Sacks (00:41:27): Well, I think Elon would figure I think he would go in and figure it out. I mean, he is obviously an extremely -- Jason Calacanis (00:41:32): But who would be Scott? Who would be on David Friedberg (00:41:33): the ground? David Sacks (00:41:34): Well, he's got a lot people who can probably plug in. You know, that my understanding of the way that things work at -- Matija. -- Jason Calacanis (00:41:41): and -- Check out from his job. David Sacks (00:41:42): You know, SpaceX is He's got some terrific young talent who he appoints to these sort of project manager or product manager positions. David Friedberg (00:41:50): Yeah. And they David Sacks (00:41:50): and he's got, like, 20 of them reporting to him, and they run the company doing a whole sequence of of projects in parallel. Right. So he has, like, a bench, a deep like, Elon is the new GE. Back remember when GE went all tally Jason Calacanis (00:42:03): used David Sacks (00:42:03): to go there. Yeah. The Elon's got so much incredible talent on his bench. He could parachute in some amazing operators there and clean up that place. Jason Calacanis (00:42:09): Let me tell David Sacks (00:42:10): you something. It'd be incredible. Jason Calacanis (00:42:11): the AI team on that self driving team, which I've met, and I've seen their work, like, you know, in private. And it's so impressive that if he took one of the AI people working on self driving and dropped them into Twitter. David Sacks (00:42:23): 1. Jason Calacanis (00:42:24): They would solve the bot problem the spam problem in 30 days with 1. And if god forbid he sent 3, they would solve it in the weekend. The fact that they can't solve spam and bots and other meshugna going on at that company is crazy. Right. David Sacks (00:42:40): You would fix that. By the way, there would be less sort of there would be less problematic content on that site with Elon running it. Why? Yes. Jason Calacanis (00:42:49): There'd be less harassment. David Sacks (00:42:50): There'd be less harassment because he given all the He'd he'd impose an authenticity response. Jason Calacanis (00:42:54): Who is doing the brigading? It's all these bot armies. The problem is they don't want the bots to go because the only sign of life in that business is spammers and you know, all these fake accounts being created. So they're just scared to take that 20 -- Yeah. -- percent hit. David Sacks (00:43:06): But the site would be cleaner without it. But but look, Jason, I I really think that part of the problem with our conversation today is that we're viewing this whole Elon versus Twitter thing purely in economic and to some degree operational terms. When, really, I think this is also in ideological and cultural battle or struggle. Jason Calacanis (00:43:23): Alright. We'll go to that. Let's do it. David Sacks (00:43:25): And this is why it's really captured the imagination of the public. there look. What is the if you were to sort of zoom out 30,000 foot view, the big struggle of our time politically and culturally is populists versus Adidas. Okay? That's the big battle that's happening. Elon is one of the rare billionaires who's sort of anti elitist. He pokes fun at their pities all the time. This is why they call him a troll. Okay. He wants to restore free speech. Somehow, the elites are now on the side of censorship, like Max Boot said, they believe that in order to protect democracy, they need more censorship. What they really mean is to protect their control over democracy. They need censorship. Why? Because they're greatly outnumbered. There's more populous than Elitis. So if the more democratic this country becomes, the more they are gonna lose power and be kicked out. That is why they are so fiercely resisting the restoration of Twitter as a free speech platform. It means the end of their cultural power. Chamath Palihapitiya (00:44:23): The the Axios headline encapsulates that to a t. I gave you guys the link, Nick, you can show it. The world's richest man, Someone who used to be compared to Marvel's Iron Man is increasingly behaving like a movie supervillain, commanding seemingly unlimited resources with which to finance his mischief making. I mean, what a like, are you really are you serious this is the same guy that's David Sacks (00:44:50): -- Jason Calacanis (00:44:50): That journalism? Chamath Palihapitiya (00:44:51): I mean, this is the same guy that's that's doing more on climate change. It has been doing it David Sacks (00:44:56): 2 Chamath Palihapitiya (00:44:56): you know, 20 years ago when it wasn't popular and satellites. But I I said this to her. and space travel. I and and I said this before, but I just wanna say it again. I think if he does get a control of Twitter and there is A strong reliable moral force for free speech, I think that's actually gonna be his biggest contribution to society. Because independent of all these other things, you know, we want sort of this political philosophy of democracy and capitalism to roughly work together. And I think it sits on top of this fundamental idea that you can say what you think without retribution. And it's only there you can actually seek out different opinions and try different ideas and say things, and most importantly, make mistakes. And right now, we we have such a high cost for making mistakes that it just shuts so many people down and out. And if he does that, that's at actually a really big deal, I think, globally. Jason Calacanis (00:45:53): You know what that Axios headline could have said, Elon Musk spent significant portion of his fortune to restore trust in public square by open sourcing -- But you can't. David Sacks (00:46:04): -- Jason Calacanis (00:46:04): open source hold on. Open sourcing the API and allowing transparent a moderation. No. Chamath Palihapitiya (00:46:11): Jason, that's Jason Calacanis (00:46:12): what he said in his TED took. Chamath Palihapitiya (00:46:13): Jason, they can't because they lose power if Elon wins and gets control of Twitter. David Sacks (00:46:18): Right. Exactly. look. The the the corporate chart corporate journalists like Axios, they don't make a lot of money. What they have is some degree of status, but more importantly, they have influence That's why they do those jobs. And the fact of the matter and and there are influences enhance when other people don't have the right to speak. And the reason why Elon is a supervillain in their eyes is because he's gonna give the people their right to free speech back That is what this is really about, and they are adamantly opposed to that. Now, 10 years ago, 20 years ago, every member of the press would have defended the First Amendment. They saw freedom of speech, freedom of the press as synonymous and fundamental to our republic. Today, they don't believe that anymore. History has been inverted. Glen Greenwood actually had a great paragraph about this. If I could just I know Jason made fun of David Friedberg (00:47:05): the fact Jason Calacanis (00:47:06): that -- -- meanwhile. Yeah. David Sacks (00:47:06): We -- Look. I mean, I'm gonna let Jason Calacanis (00:47:08): you all David Sacks (00:47:08): stand on a minute. But what he said is, that somehow these elites, they somehow inverted history. So now they believe that it is not censorship that is the favorite tool of fascist pirates and authoritarians. Even though every fascist and despot in history, youth censorship is a key means for maintaining power, but they instead believe that it is free speech, free discourse and free thought that are the instruments to repression. So that is what it is about. But but the the irony is that these elites now believe in the use of authoritarian tactics to preserve their cultural power. That's that's about Jason Calacanis (00:47:46): assessment on a platform or hearing opinions they don't like with with, you know, like, actual censorship. There's gonna be harassment, sadly in the world. and you can build tools to mitigate that. I mean, I one of the things I don't understand, you know, I don't know if you know this feature they added last year or so. where you can say only your followers can reply. You know, all these people are complaining about harassment. I never see any of them say my followers can reply. If they did, they would never have anybody reply who they didn't want to reply. The problem would be solved. Okay. Lots more to come on this topic. wanna just get -- That was a long David Friedberg (00:48:19): topic for us. Wow. Jason Calacanis (00:48:20): Well, I mean, it it it it's it is like the perfect topic for us because you have Friedberg of speech. You have markets. You have governance. I mean, it's just everything, entrepreneurship. I just wanna end with yeah. We're here 30 days from now. What is your majority case? What is your majority probability here of what happens? Give it a second. What is the stock trading at? And who's running the company in 30 days sacks your first? David Sacks (00:48:48): Here's what's gonna happen. This goes back to my tin foil theory. I think one of 2 things is gonna happen. Okay? First of all, Elon is gonna be thwarted by these folks. He's not gonna get control of this company. They're the vested interest in stopping him by the board, by the new CEO, and by the corporate media and and and the political elites is too great. They will find a way to stop him. Okay? And one of 2 things is gonna happen. Either, the poison pill will win, and Twitter's stock will be down in the dumps 30 days from now. It'll be the same price it was when he $30. 35 around that price, it's gonna be back in the dumps. And to Chamas point, all these board members are gonna be sued, justifiably so because they did not pursue the best deal of the company. or there's one other possibility that they will find a buyer for Twitter and that the the way they will defeat Elon will be to find another buyer at, you know, the same or greater price. And they will place Twitter in the hands of another company who they regard as culturally safer because that company buys into the regime of censorship. and it might be Disney. It might even be Google. I I'm telling you, I think that if Google were the company to step up, the administration would ultimately support that deal rather than Elon getting the company. And I think they would tell Leonon to stand down in that instance and let it go through. Jason Calacanis (00:50:13): Okay, Lena Khan. You have that. David Sacks (00:50:14): We will find out. And I tell you in 30 days, we will find out how rigged this game is and how deep the corruption goes because they will do anything to stop Elon from acquiring this company, even if it means violating their judiciary duty or violating antitrust law. Jason Calacanis (00:50:28): Okay. There you got it, Alex Jones. Position? Let's go Friedberg. David Friedberg (00:50:33): I mean, I am not Jason Calacanis (00:50:34): at all -- What is the majority case in 30 days? David Friedberg (00:50:36): I'm not at all conspiratorial as Saks. I don't think that this is bad. David Sacks (00:50:40): -- Jason Calacanis (00:50:40): 1st part, Saks. Yeah. David Friedberg (00:50:41): Protect. I think that I think that we have a board of rational actors. I really do. I think that they're gonna do what they think is in the best interest of shareholders in terms of price per share. I think that's how they're gonna operate. They're all super smart, super ethical, high integrity people on that board. Alright. Now, Would I like to see Elon own and operate Twitter personally? Yes, I would. Jason Calacanis (00:51:00): Why? Well, I David Friedberg (00:51:00): think he's gonna be a better operator. He's gonna make that product better. I think he's gonna make the business better. I think it's gonna be David Sacks (00:51:05): -- Chamath Palihapitiya (00:51:06): Better possible. David Friedberg (00:51:06): He's gonna he's gonna have a much more rational view on moderation that I I think has been lost over the last couple of years. I think he'll innovate in ways that we haven't seen in that business in many years. So I I'd be excited for him to own that business as a user of Twitter. That's awesome. But I don't think that I think the board's gonna act rationally. They're gonna try and find the best price. They're gonna reject his offer. I don't think he's gonna up the offer significantly to the point to get it to get it done. They're gonna go ahead and run a long strategic process. 3 months from now, we're still gonna be running that process. That process is not gonna be done. No one's gonna have a real answer. Elon's gonna trail off and do something else, and this whole thing will kind of fade into something -- -- will Jason Calacanis (00:51:39): be trading where in 3 months. David Sacks (00:51:41): 35 -- David Friedberg (00:51:42): Okay. -- bucks a share. David Sacks (00:51:43): 37 David Friedberg (00:51:44): bucks a share? Yeah. Jason Calacanis (00:51:44): What is the majority case here? 30 days, 90 days from now. Chamath Palihapitiya (00:51:49): I think the the 30 days is we're kinda kind of still be here. I don't think much is gonna get figured out in the next 30 days. Yeah. In the next 90 days, I don't think you're gonna see a better offer. I don't think anybody wants to buy this dumpster fire. Because you have to understand this dumpster fire is twofold. Right? On the one hand, you have a whole user usage bot spam harassment problem. And then you have an internal, you know, issue around culture and monetization and all of this other stuff. And so, you know, you have to be really prepared step in and deal with both of these two issues in a really definitive way. I think that that I'm not sure that corporate boards and companies and CEOs have a stomach for all of that. So I don't think there's a better bidder. But I think within 90 days, they're gonna probably first try to reject it. I'm not sure that that's in the best fiduciary interest of shareholders. In fact, I don't think it is. And I think to reject it would be more a sign of ego than a sign of logic. And then I think they are gonna get sued and they're gonna be embroiled in lawsuits for years. Jason Calacanis (00:53:00): So no sale happens. The stock language is again stalemate. disaster. Chamath Palihapitiya (00:53:05): Well, I I think by saying it look. I mean, if you look at the stock, like, a simple stock market analyst would say whenever there's a merger announced, right, at, like, x price, Right? Like, look at Microsoft and Activision. That's a better example. You know, Microsoft announced that the stock was at, like, you know, 57, $58 a share. Microsoft says we're gonna buy Activision I think it was for $95 a share. Right? And if you notice, the stock hasn't gone to 95. Now, typically, merger arb merger arbitrage. What happens is that the stock goes to $1 or $2 of the acquisition price. Right away, almost immediately. Or it goes to within 5 or $10 or 5 or 10 percent, and then it bleeds towards the m and a price as the deal gets closer to certainty. So when there's a big gap, what the market is voting is that the deal's not gonna happen. And so when you look at the gap, Microsoft Activision, it kinda says it's gonna take a long time and there's a risk that it doesn't happen. Similarly, if you look at this Twitter thing, Why didn't it go to 53 bucks a share? It's because a lot of people think that the board's not gonna do the right thing. David Sacks (00:54:06): Agreed. The fix is in. David Friedberg (00:54:08): That's so conspiratorial. Saxx, honestly, do you listen to Alex Jones? David Sacks (00:54:12): The fix is happening in plain sight, Friedberg. Jamonta said it. Jason Calacanis (00:54:16): Why is David Sacks (00:54:16): the price below $54? Listen. I -- When when when a deal is gonna go through, the price goes right up to, like, below that price. The price is well below the score. -- Jason Calacanis (00:54:24): the reason the price isn't going up there is no buyer who wants this asset. It's gonna be years to clean up. Chamath Palihapitiya (00:54:29): No, Jason. Jason. I don't think there's a buyer who wants it. Even you thought that there was another buyer that was gonna come at a higher price? The the the money good thing to do is for people to basically buy that equity to basically bleed into the acquisition process. No. No. Jason Calacanis (00:54:44): I get all that. Yeah. Yeah. Chamath Palihapitiya (00:54:45): And so the fact that that it didn't move at all, in my opinion, is a concerted belief that the board is gonna reject the offer. Jason Calacanis (00:54:54): Got it. Even if there was another offer. Chamath Palihapitiya (00:54:56): And and what they didn't wanna do is buy the stock at 50 have the thing all of a sudden get announced as, you know, we're not gonna take it. Elon dumps his shares. All the people that bought the socket 50 hoping it'll go to 54 would all of a sudden lose a lot of money because the stock would instead be at 34. So the fact that the stock basically didn't move is essentially the market's way of voting This is a head fake. We you should take the offer. The board's not going to, and the stock's gonna tank back to its other its its original price. Jason Calacanis (00:55:26): My prediction is the board tries to fight it. Stock collapses. Nobody thinks it's gonna get done. Elon lowers his offer. and he wins it by the end of the year and gives him a lower offer. You didn't like Jake Keller always with the optimists. We're going David Sacks (00:55:40): 39. That's very Michael Corleone. Jason Calacanis (00:55:42): Yeah. Now the offer's David Sacks (00:55:44): 49, Jason Calacanis (00:55:45): and it goes down $2 every quarter until you guys yes. The end, it's trading at 30. I lower my offer. Chamath Palihapitiya (00:55:52): Jason, if you wanna if you wanna just finish with this little code of the the the Revlon story, it was actually kinda cool. Forceman Little comes in to try to basically give, like, a white knight bid. And what Ronald Perlman did was basically say, I'm just gonna you know, top tick every bid. He he was pretty baller. He's like, I'm gonna top tick every bid. So enforcement would be at 51, and then, you know, promo would be at 5150. No. David Friedberg (00:56:16): They would go to David Sacks (00:56:17): 54. 55. David Friedberg (00:56:19): You know? Chamath Palihapitiya (00:56:19): And so and so he was almost and he exhausted force been like, eventually, they're just through their heads up. They said we can't we can't do this anymore. David Sacks (00:56:26): Yeah. I wanna so I wanna make a couple of movie recommendations real quick because I I tweeted a couple of things Jason Calacanis (00:56:31): that you Speaker 6 (00:56:31): guys know. David Sacks (00:56:31): -- David Friedberg (00:56:31): the gate? David Sacks (00:56:32): there's barbarians that get in Wall Street, and, you know, I tweet these things and they get no likes. So I think people just don't watch old movies. Just one. They came out they came out in the 19 eighties. Wall Jason Calacanis (00:56:40): Street movie is one David Sacks (00:56:41): of the all time great movies. Chamath Palihapitiya (00:56:42): All time great. David Sacks (00:56:43): Probably the best movie a business has ever been made. Oliver Stewart -- -- Jason Calacanis (00:56:46): Wall Street is. Yes. David Sacks (00:56:47): Wall Street is David Friedberg (00:56:48): Margin call is pretty good. I really like Margin call, but, yeah, I agree. David Sacks (00:56:51): Barbarance of the gate was -- David Friedberg (00:56:53): Better book. -- modern book. David Sacks (00:56:54): Yeah. It was a it was a TV movie with James Garner. It was good. I I can give you David Friedberg (00:56:58): guys worth watching Chamath Palihapitiya (00:56:58): too. The book is excellent. Jason Calacanis (00:57:00): The book Chamath Palihapitiya (00:57:00): is excellent. Jason Calacanis (00:57:00): The book is next level. Chamath Palihapitiya (00:57:01): I gotta go eat that, everybody. Love you, Basis. Jason Calacanis (00:57:03): Love you, guys. Gotcha. Speaker 7 (00:57:07): Hey, everybody. We decided to split this epic episode into two parts. One two parts. So we get you all the Elon Twitter discussion out as soon as possible for your Friday night viewing pleasure. Stay tuned for episode David Sacks (00:57:20): 76.5. Speaker 7 (00:57:21): This part 2. Coming out in just a few hours. We're gonna talk about the global food crisis. China's plan for food storage, geopolitics including the French election. And we got a bunch of all in summit talk. Everything is heating up, so stick with us. Jason Calacanis (00:57:38): What winter's ride. Rainman, David Sachs. I don't think we know. Speaker 3 (00:57:45): And it said, we open sources to the fans and they've just gone crazy with it. Jason Calacanis (00:57:58): besties are gone. That is my dog to I miss your driveway. Speaker 3 (00:58:08): We should all just get a room and just have a think you, George, because they're all just useless. It's like this, like, sexual tension, and they just need to release her vowels. David Friedberg (00:58:16): What? You're the VP. What? Jason Calacanis (00:58:19): Pure feet. Speaker 3 (00:58:19): Be your feet. What? Jason Calacanis (00:58:22): We need to get mercies are back.