Dominating the headlines are crime…war…inflation…and Elon Musk. Newspapers have their ‘foreign affairs’ sections. Finance. Local news. Classified. And Musk.
Bloomberg’s ‘Musk Desk’ reports:
‘Billionaire entrepreneur Elon Musk kept investors in the dark this weekend, floating a cryptic tweet with the word “tender,” a likely wink-and-nod reference to a potential tender offer to Twitter Inc. shareholders for control of the company.
‘The world’s richest person caused a stir last week after he filed a $43 billion proposal offering $54.20 a share for the social network, which led Twitter to adopt a so-called poison-pill provision on Friday to make it harder for Musk or a group of investors to acquire more shares.
‘If Twitter directors ultimately reject him, the world could learn whether Musk was truly threatening a direct appeal to shareholders or had just added the 1956 Elvis Presley hit “Love Me Tender” to his playlist.’
The SEC must have a Musk department too. Even on Easter weekend, it was investigating Elon. There are so many laws on the books, even an average person is said to break six of them before breakfast. A man as active as Elon must break dozens of them.
Here’s BizPacReview:
‘After Thursday’s surprise announcement by Elon Musk that he was offering to buy Twitter lock, stock, and barrel for a cool $43 billion, now there’s news that the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) are opening an investigation into both Tesla and Elon Musk, including how he acquired his controlling stake in Twitter.
‘The news was first reported by Fox Business’s Charles Gasparino.
‘“[Musk] is under investigation,” he explained. “A joint investigation, by the DOJ and the SEC over lots of stuff, including some of the stuff involving how he went about accumulating his shares on Twitter and how he disclosed that, whether he properly disclosed his intentions—which was obviously a full takeover—also some of this stuff with Tesla, you know, disclosures there…”’
The law of rules
Did Musk break the law?
Probably. Even with a whole team of high-priced lawyers following you around, you’re still likely to run afoul of something. Your team of lawyers will tell you it’s OK. The SEC…or FTC…or FCC…or WTF…will take a contrary view. Then, your lawyers can battle their lawyers until the issue is finally settled.
Yes, dear reader, inflation dogs us everywhere. We inflate our laws…reducing the value of each one while making everything potentially illegal. We inflate our money, ‘printing’ more and more, as each dollar loses value. We inflate our knowledge, too; the more we think we know, the less we actually do know.
And to protect itself from Musk, the Twitter board threatened to inflate its own shares. It’s called a ‘poison pill’ provision. Seems a little underhanded to us, but corporate boards can decide to give out extra shares to existing shareholders. In theory, no matter how many shares Elon is able to buy, the existing shareholders will always have more. How it works, exactly, we don’t know. We’re not sure it ever works, either. Merely threatening it is enough to make the bidder back off.
Playing the blame game
The ‘poison pill’ gambit is essentially an ‘inflation’ of the shares, rendering each one worth less than it used to be.
In effect, it’s what the Fed has done to the US’s money.
Joe Biden attempts to shift the blame:
‘What people don’t know is that 70 percent of the increase in inflation was the consequence of Putin’s price hike because of the impact on oil prices. Seventy percent.’
But The Washington Post calls him out:
‘The individual items in the CPI report make for grim reading. Meat, poultry, fish and eggs rose 13.7 percent from March 2021 to March 2022, used cars and trucks rose 35.3 percent, airline fares rose 23.6 percent, butter jumped 12.5 percent, coffee rose 11.2 percent and apparel rose 6.8 percent.’
What did Vladimir Putin have to do with the price of eggs in Cleveland? How is he responsible for higher prices on used cars…or coffee?
Wait…The Post continues:
‘Gasoline prices rose 48 percent, while overall energy prices rose 32 percent.
‘Energy makes up only 7.547 percent of the basket of goods in the CPI, so even with that big jump, how does Biden get to 70 percent?’
Even The Post — an apologist for Washington — has a hard time swallowing the ‘Putin done it’ excuse.
It wasn’t Putin who slipped the poison pill into the US’s morning coffee. It was the Fed. And our guess is that it has a lot more where that one came from.
Regards,
 |
Bill Bonner,
For The Daily Reckoning Australia
