Good intentions, but what exactly is he buying … and what are chances for success?
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These are the questions that I’d usually pose to my MBA students when we were doing an M&A case in class.
Let’s apply them to Elon Musk’s bid for Twitter.
So far, most the reaction to Musk’s bid for Twitter has been at the philosophical / political level: Will his purchase open the town square for open information exchange … or, open the floodgates for existence-threatening “misinformation”.
I buy that Musk’s goal of open discourse is on the up-and-up, so I’m all for his acquisition.
That said, my questions are at more tactical level:
> What exactly is he buying?
> What are his chances of success if he gets “it”?
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On the first question, the simplistic answer is that he’d be buying control of “an up and running communications platform”.
OK, but let’s dissect that a bit.
What are the key component parts?
- A well recognized, valuable brand name?
- An established base of subscribers and advertisers?
- An in-place infrastructure of hardware, software and people?
Which of the above offer enough enough value to justify a $43 billion outlay?
Let’s take them one at a time from a Musk perspective…
The Homa Files 