ALISHIA SECKAM: Elon Musk has found funding for the big ticket on his wish list. Negotiations began because investors were wooed by the financing details that Musk released. Now it’s not just talk; Musk and Twitter have signed a $ 44 billion deal.
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There have been divergent thoughts about the price tag. You have active long-term shareholders with higher price expectations, short-term investors who say that Twitter should accept the offer or only ask for a small increase.
Craig Antonie from AnBro Capital now joins me with his bid. Thank you so much, Craig, for your time this morning. Now that the deal only needs to be approved by shareholders, how close in your books is the offer that has been accepted, to the intrinsic value of Twitter, given its growth prospects?
CRAIG ANTONIE: Good morning, Alishia, to you and your listeners. Thanks for having me. I’m always happy to be here. Twitter itself has always been a pretty interesting investment. As a fund manager, we have always considered it to fall into the bucket for a company that is a good idea and a great concept, but not necessarily a good investment. If you look at the company’s performance over time and the shares’ performance since the IPO, it has not really done much. It has been a bit of a dysfunctional business for many, many years. I believe that the opportunity to become private enough now is the right thing for shareholders in the very short term.
It is clear what Elon Musk decides to do with it in the long run and the opportunities he sees in it, however, may mean that shareholders today do not see the benefits of it if e.g. five or 10 years.
ALISHIA SECKAM: Absolutely. As you say, stock market value has lagged rivals for the longest time. However, the offer is still well below $ 70 [per share] mark that Twitter had acted last year once. That said, we have comments that say if public markets do not value a business, one will acquire it.
Let’s talk beyond better terms and price tags. Can you see Musk being able to turn things around? Many people [are] indicates that they believe Elon can create value with Twitter by reducing costs [and] improving the business model. Do you agree?
CRAIG ANTONIE: Well, I think if there’s anyone you’d probably want to back up in public markets, it’s a guy like him. He has a bit of a Midas touch, and whatever he seems to touch turns to gold. The one thing about him is that he is a productive user of the platform.
He has 84.5 million followers. Maybe he uses it as much as he does, he sees both the potential and the stumbling blocks that Twitter has to offer, and he clearly has an idea that things could be done better.
He said yesterday, after the agreement was announced, that freedom of speech is the foundation of a functioning democracy, and that Twitter is the digital city square of this democracy. He probably thinks things are not being managed as well as they could be or should be, and I assume he has some ideas there to make things better.
In the end, he is a businessman. He has put a lot of money into this business now and I am sure he would like to make money. Like I said, you would probably support him as the one guy to do that. He has been given the thumbs up by Jack Dorsey, the founder and former CEO of Twitter, that he is the right guy for the job. So let’s see; time will tell.
ALISHIA SECKAM: Absolutely. Can you see any past violations, U.S. regulatory ghosts, coming back to haunt him while we watch this deal being finalized?
CRAIG ANTONIE: Well, it’s never impossible. The one thing we have learned on our journey as fund managers at AnBro is that…
sometimes the people who make the biggest difference in the world, good or bad, tend to be a little different than the normal human being. They are often mavericks, they do things differently, sometimes to do great things.
You have to think a little differently than the normal man on the street, and evidence has shown that [Musk] have previously stepped many toes over the toes. That is probably not going to change, especially now that he in theory holds the keys to the kingdom in terms of public discourse on a platform like Twitter.
But I think we have to see. It’s another one that will never go away with a guy like this. He is never far from controversy.
ALISHIA SECKAM: Absolutely. Well, Craig, as we look at this development track, do you see that it encounters things like landmark fines under the EU’s new content rules? This makes it a very tough regulatory environment for these tech players and social media platforms, especially to operate in.
CRAIG ANTONIE: Yes, it certainly does. I believe that social media platforms have an enormous responsibility for society as a whole. Something like Twitter, for example, is a great idea and a great concept if you think people of any race, color, or belief can share and express an opinion, thought, or opinion in a single place and in real time.
Clearly, information management is something that is very important across social platforms. If you look at things like checking the truth and accuracy and credibility of the information, it’s important. I think it has often come with the big regulators. They want to ensure that these platforms are used responsibly and not irresponsibly. There are lots of examples around Twitter and Facebook and Pinterest – yes, not Pinterest, I mean rather TikTok – and these other places where you have bots coming out and they do creepy things like trolling and spreading misinformation. I think this is something regulators obviously need to be on top of and want to be on top of. I assume this is not going to go away; maybe it just takes it another way.
ALISHIA SECKAM: Absolutely. Well, what’s your approach, Craig, to technology stocks at the moment? Do you still find value out there? Yesterday we saw the Nasdaq rise higher and ended 1.3% for the good at its close. Investors were apparently excited about what they could expect or could expect as we got these technology companies releasing their earnings reports during this week.
CRAIG ANTONIE: Yes. The next few days will be quite big from a technological and earnings perspective. Some of the bigger ones come out. I think when you look at the markets and how they have behaved over the last few months, the technology stocks and the growth stocks in particular have fallen significantly. Something we have looked at in the past is how to look at the growth that these companies have delivered and their prospects for growth for the next five or 10 years, for example, and there is certainly an abundance of opportunities that are started to appear. in that room.
So yes, the next batch of numbers is likely to be quite important from a market movement in a day-to-day perspective. The feeling towards that space has been very negative lately and better results or better than expected results might help.
But in the long run, we believe that there is definitely still room if one is looking for above-average growth and companies that can really deliver exponential returns to shareholders.
ALISHIA SECKAM: Yes. We have, as you say, a number of large American technology companies [coming]. The highlight of this week’s corporate calendar is Microsoft and Google out today. Facebook tomorrow. Apple and Amazon on Thursday.
Let’s leave it there, Craig. Thank you so much for joining the line this morning. We have got Craig Anthony from AnBro to give us his bid on Twitter and the deal that Elon Musk has been able to enter into.