00:00:53.000His spirit, his love of this country, he's done an amazing job building one of the most powerful youth organizations ever created, Turning Point USA.
00:01:02.000We will not embrace the ideas that have destroyed countries, destroyed lives, and we are going to fight for freedom on campuses across the country.
00:01:13.000Brought to you by Andrew and Todd at Sierra Pacific Mortgage.
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00:01:25.000If you want the best example of the fascist left, which is the inevitable conclusion of liberalism, I'm not even going to mention the author that wrote it, right, Connor?
00:02:04.000One of the reasons why they hate Musk so much is because Musk was never, he never commented on this stuff before.
00:02:11.000He just kind of built his businesses for years quietly and kind of was friends with all people, but he always had that kind of that Iron Man Tony Stark vibe.
00:02:20.000But the reason they really hate Musk is that they believe they're entitled to Musk's loyalty.
00:02:28.000They believe that who is Musk to think that he could betray us?
00:02:33.000Who is Musk to think that he could defy us?
00:04:17.000Cut five, Fox Business on how a board's obligation is to the shareholders, play cut five.
00:04:22.000It's been surprising how quickly this has happened, but a board is supposed to take care of shareholders.
00:04:28.000You see, any other way the board's going to get this stock to 5420 or the company management with the board behind it is going to get 5420 on its own?
00:04:38.000And if not, then how can any of these other concerns that they have become secondary to maximizing value for shareholders?
00:04:46.000And that's exactly right, because Twitter has not operated as a company for quite a while.
00:04:50.000This has exposed Twitter for not being a regular run company.
00:07:41.000The Urban League says the worst thing for civil rights would be the fact that people would actually get their civil rights back.
00:07:50.000TheGuardian.com, Robert Reisch, says, quote, billionaires like Musk use their vast wealth to build a world unconstrained by laws, shareholders, or accountability.
00:08:00.000Musk has now put together the $46.5 billion financing package to buy Twitter, two-thirds of it from his own assets and one-third from bank loans secured against Twitter's assets.
00:08:09.000It's the biggest acquisition financing ever put forward for one person.
00:08:52.000For too long, tech platforms have amplified, this is real, amplified disinformation extremism with no accountability.
00:08:58.000The European Union is poised to do something about it.
00:09:01.000I now urge our transatlantic allies to push the Digital Services Act across the finish line and bolster global democracy before it's too late.
00:09:08.000Watch the left all of a sudden be all on board for tech censorship now that Elon Musk owns the platform that used to be so valuable.
00:09:17.000They are going to be marching in the streets.
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00:11:29.000Now, I want to, however, just touch on a little bit of what just happened in France.
00:11:34.000So, France had their elections on Sunday, and it was a runoff election between Emmanuel Macron and Maureen Le Pen.
00:11:41.000Macron, of course, is the low testosterone beta male who calls himself a prime minister, who is steadily running France into the ground.
00:11:50.000He ran as kind of a moderate business type, but he's been anything but that.
00:11:55.000Macron is a spokesperson for the World Economic Forum.
00:11:59.000If you want another type of president that Pete Buttigieg would ever be, unfortunately, I don't think he ever will be president, but he might be.
00:12:22.000I do not like the recent political stances that France has taken, especially over the last couple of decades.
00:12:30.000France has become increasingly socialistic.
00:12:34.000It has become very much, let's say, postured to be against the working man.
00:12:43.000And so Maureen Le Pen sought about trying to fix that.
00:12:46.000So Marine Le Pen is being slandered by the media, being a far-right person and all this sort of stuff.
00:12:51.000Marine Le Pen was just trying to push back against the World Economic Forum's dominance over France and French culture and the French way of life.
00:13:02.000France has changed dramatically because of mass immigration.
00:13:06.000The French language is largely under attack.
00:13:11.000And these are all things that were on the ballot.
00:13:13.000Now, Emmanuel Macron has recently kind of run to the center in anticipation that Maureen Le Pen was going to try to exploit these things.
00:13:22.000So the election was on Sunday, and Emmanuel Macron won.
00:13:26.000However, I got to tell you, Le Pen did a lot better than people think.
00:13:31.000She got more than 40%, or people thought she would do.
00:13:34.000She got more than 40% of the vote in France.
00:13:38.000This is Maureen Le Pen's concession speech with an English translation, Play Cut 7.
00:13:43.000The French are showing tonight a wish for a strong counterpower against that of Emmanuel Macron for an opposition that will continue to defend and protect them in the face of the degradation of their purchasing power, attacks on liberty, putting into question our public service and our social system.
00:14:01.000Now, she did 17 points better in this run against Macron than she did previously.
00:14:07.000We're seeing trends like this all over Europe.
00:14:09.000And the same way that Brexit was an early indicator for a red wave that came here in America, I believe that Maureen Le Pen doing better in France than people would have thought is an early indicator as well.
00:14:23.000Now, the French system is parliamentarian.
00:14:26.000However, I do think they elect their prime minister through a national election.
00:14:31.000I could be mistaken, though, because I don't know if they were voting for Le Pen or Macron or for the party.
00:14:36.000It's certainly different than in the United Kingdom.
00:14:53.000We'll feel good about the French election, number one.
00:14:56.000Number two, I tried to talk to him last night.
00:14:58.000We've spoken to staff, but he was at the Anglo Tower having a good time.
00:15:03.000So I'm going to be talking to him today.
00:15:05.000There used to be a time where someone would leave a party to go take a phone call from the United States president, regardless of what they were doing.
00:15:13.000I want you to listen to what you just heard here.
00:15:14.000Joe Biden says, Yeah, I tried to get on touch with him.
00:15:16.000I talked to his staff, but they said he was too busy.
00:15:19.000So Macron just says, I'll call him later.
00:15:22.000Our oldest ally, the French, says, I'll call him later.
00:16:08.000Just go to mypillow.com and click on the new radio listener specials and get deep discounts on all my pillow products, including the towels.
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00:16:26.000We have David Sachs joining us momentarily, who is one of the most experienced merger and acquisition experts in the country, a phenomenal entrepreneur, investor in many internet technology firms.
00:16:43.000He's a general partner of Kraft Ventures and previously was the CEO and founding and product leader of PayPal and then the founder and CEO of Yammer, which was acquired by Microsoft.
00:16:55.000So he knows all about kind of this merger and acquisition world.
00:16:59.000He has also participated in early stage venture funding, angel investments, including Facebook, Uber, SpaceX, Palantir Technologies, Airbnb.
00:17:45.000You know, they say they've been working through the weekend here.
00:17:48.000Take us inside of what would be happening in that room in the room right now as this deal kind of gets put together.
00:17:54.000Yeah, I think it's really interesting, and it's a little bit surprising to me that it's actually happening.
00:18:00.000I was skeptical that it would actually happen.
00:18:03.000You know, when Elon first announced this deal, I mean, it was an unsolicited offer to take over the company.
00:18:10.000The board of directors indicated that it was a hostile offer.
00:18:14.000They were not interested in taking it.
00:18:16.000And as a result of that, you saw a lot of pressure being put on them from various quarters.
00:18:21.000You saw, you know, DeSantis as a shareholder through Florida Pension Funds threatened to sue the board for a breach of food street duty.
00:18:30.000You saw House Republicans send a letter to Twitter to hold all their records, which implied that they might have hearings on it.
00:18:40.000Elon kept ratching up the pressure by threatening to do a tender offer if they refused his bid.
00:18:47.000So there was a lot of sort of brinksmanship over the last couple of weeks.
00:18:50.000And it now looks based on reporting we've seen in the Wall Street Journal and other publications that they're in the final stages of a negotiation here in which Elon would be able to acquire the company and then presumably take it private.
00:19:04.000So it looks like Elon's takeover here, which really started as an unsolicited hostile takeover, is going to succeed.
00:19:13.000That's based on at least the public reporting of it.
00:19:15.000Yeah, so I mean, I was skeptical and I was cynical.
00:19:19.000I mean, I just feel most deals fall apart, you know, just kind of before they happen for a lot of different reasons.
00:19:26.000But Elon seems to be doing this for an ideological reason, not a financial reason, which is interesting because the Twitter board seems to be primarily ideological and not financially driven.
00:19:35.000I mean, who on earth would have to wait as long as they've had to wait?
00:19:38.000Like, well, let me see whether or not, you know, $52 a share is a good deal or not.
00:19:43.000So you kind of have this ideological undercurrent kind of while you have a business transaction unfolding.
00:19:50.000Has there ever anything ever been like this before?
00:19:55.000I think you're exactly right that Elon is motivated here by the desire to restore Twitter to its status as a free speech platform.
00:20:05.000He did polling of Twitter's users and it basically indicated that he wanted Twitter to be an open town square and that he thought the censorship had gone too far.
00:20:15.000I think that is his main interest here.
00:20:18.000I don't think he's doing this just to make money.
00:20:22.000And I think by the same token, there was a lot of resistance by the Twitter board, also for ideological reasons.
00:20:28.000You have to understand most of the people on the Twitter board don't own much, if any, of Twitter.
00:20:35.000And he pointed this out in a number of tweets that the majority of the board members own little to no Twitter stock.
00:20:43.000So they're on this board because it's like a sinecure.
00:20:46.000They're on the board because it's a status badge.
00:20:49.000They're on the board because it gives them influence and power.
00:20:52.000It's like being in a very exclusive country club.
00:20:58.000And so because of that, I think that it helped create pressure on them.
00:21:03.000I think at the end of the day, those board members don't want to spend the next couple of years in lawsuits defending why they turned down a bid that represented a substantial premium to the share price and why they breached their fiduciary duty because everyone understands they have these ulterior motives, but those ulterior motives are not sort of legally valid reasons to reject a superior bid.
00:21:27.000So ultimately, it looks like based on the reports today, this board is going to cave into the pressure and do the right thing, which is to accept the premium to the share price and accept Elon's bid.
00:21:39.000Yeah, I mean, it shouldn't, we shouldn't be in a world where you have to overthink this, but Twitter is not your typical company.
00:21:45.000I mean, they say they're a company, but they're closer to, in my personal opinion, like a Democrat super PAC with a college board attached to it, right?
00:21:53.000Which is, it's kind of like a bunch of people that kind of just sit on the board and they get football tickets or whatever, and they don't want to do much.
00:22:00.000And they're really kind of been surprised by this entire thing.
00:22:03.000But kind of walk us through kind of the technical details, though, of what's been happening the last couple of days.
00:22:06.000They say they've been kind of in and out of meetings.
00:22:24.000So here's basically what's happened over the last two weeks.
00:22:26.000And I think it was only 11 days ago that Elon made what was called, I think that what the M ⁇ A people called a public bear hug letter.
00:22:36.000They have a lot of colorful language in that sort of hostile takeover world.
00:22:40.000He basically publicly declared his desire to make an unsolicited bid for Twitter at $54.20 a share, which at the time he made the offer represented, I think, a 38% premium to the share price, but really it was a 54% share price since he started accumulating stock.
00:22:57.000And he had acquired somewhere between 9% and 10% of the company.
00:23:01.000So he sort of began this bear hug and started this pressure campaign on Twitter saying, look, I've made an offer here.
00:23:10.000Your share price has languished for years.
00:23:12.000This represents a substantial premium.
00:23:16.000What happened since then is the board adopted a poison pill to basically stop him.
00:23:21.000And what the poison pill does is it the way it works is that the one that Twitter adopted, it says if any shareholder acquires 15% or more of our stock, every other shareholder but that person basically will get additional shares in the company at a discount, at like a 50% discount.
00:23:42.000And so what it does is it dilutes down the ownership of that 15% holder.
00:23:47.000They can't really go to 20%. or 40% ownership or 51%, which is what they need to take over the company, because as they go up, the other shareholders get more and more shares at a discount.
00:23:58.000So the poison pill was adopted by the board as a defense against a hostile takeover.
00:24:04.000These things have been around for a long time.
00:24:08.000I personally think that maybe they shouldn't be legal.
00:24:11.000I don't personally think they're a good idea, but Delaware courts have upheld them.
00:24:16.000And so the board adopted this poison pill.
00:24:20.000And the idea of the poison pill was basically to thwart Elon, essentially acquiring enough stock on his own to take over the company, essentially forced Elon to negotiate with the board.
00:24:34.000So that's basically what's been happening is he's been negotiating with the board and he's been reaching out to individual shareholders, sounds like one by one and trying to get them on his side.
00:24:43.000The other thing Elon did, just I think it was a few days ago on Thursday, is he he released a debt commitment letter from seven major banks sort of coordinated by Morgan Stanley.
00:24:56.000Basically, he was saying, I've got the money.
00:24:58.000You know, you can't reject my bid by saying it's not real.
00:25:03.000First of all, he's the richest guy in the world.
00:25:05.000He's putting up a lot of his Twitter stock as collateral.
00:25:08.000But in addition to that, he got something like $22 billion in debt and other financing from other sort of top-tier banks.
00:25:17.000So he basically keeps applying more and more pressure by saying, I've got the money.
00:25:22.000And he also said, listen, if you don't take my offer, I'm going to do a tender process, which means making a offer to all the shareholders at this price, which would basically provide a way for the shareholders to indicate directly to the board they want to do the deal.
00:25:36.000Now, the poison pill is very powerful.
00:25:39.000It's a very effective defense and it would have thwarted the tender offer, but it would have put the board in litigation for years.
00:25:47.000And obviously, they just don't have the stomach for that.
00:25:49.000Yeah, so I guess that was going to be my question, which is the poison bill, the way you articulated it sounds like it could have stopped the deal.
00:25:56.000But was it just that so many investment bankers were in their ears saying like, you don't want, you don't want to be in court.
00:26:08.000I think basically Elon can't defeat the poison pill directly, meaning there's no way to force the Twitter board to take the higher offer.
00:26:16.000But if they don't take the higher offer, then, or sort of the offer that has a substantial premium, then they are liable for breach of fishery duty.
00:26:25.000And as the pressure keeps ratcheting up and the offer becomes more real, then their liability increases.
00:26:40.000That by itself probably doesn't create a breach of fusury duty because the board can just say, listen, we don't know if Elon's offer is real.
00:27:07.000And so then, you know, the other thing I suspect happened in the background that no one's talking about is that the Twitter board did what's called a soft market check.
00:27:18.000Guarantee you, they went out into the market and talked to the corp dev execs at all the major tech companies.
00:27:25.000And they asked, Are you interested in being a player here?
00:27:29.000And, you know, and they went to the top private equity firms.
00:28:08.000But at some point, if they don't redeem the pill and take Elon's offer, the lawsuits against them are going to get stronger and stronger.
00:28:17.000And I suspect at the end of the day, they just don't have the stomach for two years of litigation to thwart Elon where there's no better bid on the table.
00:28:40.000I want to ask you just about Elon the person.
00:28:41.000I think that's something that really fascinates our audience to how much you're able to share kind of who would do something like this, right?
00:28:55.000I mean, kind of give us a little bit of a window into what drives this man, the eccentric person who would just spend $42 billion to save free speech.
00:29:06.000I think, you know, Elon is what you see is what you get.
00:29:11.000You know, that's, that's, I've known him for a long time.
00:29:13.000And what you see really is what you get.
00:29:15.000When he says that he's motivated here by a desire to restore free speech to Twitter and make it the open town square, I really believe that's his motive.
00:29:24.000He's also a very effective business person.
00:29:27.000And I think he'll also make money for the company and fix various things that are broken about it as a business.
00:29:33.000But I think first and foremost, his motivation here really is free speech.
00:29:38.000And, you know, what he talks about publicly is what he really thinks.
00:29:41.000You know, he's not really holding much of anything back.
00:29:44.000You saw him lash out the other day about Bill Gates, you know, because Bill Gates put on a half billion dollar short position on Tesla.
00:29:56.000And then I guess Bill tried to reach out to Elon to engage him on some philanthropic cause.
00:30:01.000And Elon asked him if he sold that short position.
00:31:03.000He's just, he's the least like afraid person in the business world that I've ever met.
00:31:09.000He, you know, you have to remember, go back, I think it was, was it like 2008, where he was like a week away from Tesla going bankrupt.
00:31:18.000I remember, and actually, it was Tesla and SpaceX.
00:31:22.000So this was right when the financial crash happened.
00:31:25.000Tesla was one payroll cycle where like one week away from being unable to make payroll.
00:31:31.000And then simultaneously at SpaceX, his rocket company, which I'm an investor in, full disclosure, they had had their third rocket launch and it blew up.
00:31:43.000And he was also very close to going under.
00:31:45.000And somehow he managed to pull it together.
00:31:47.000And in a few weeks, he got the financing he needed to save both companies.
00:31:51.000And then since then, the sky's the limit.
00:31:54.000Tesla is now a trillion-dollar company.
00:32:41.000But, you know, if I were to think back to classical times, I would think somebody who's cut from the cloth, someone like Julius Caesar or Genghis Khan or, you know, Leonidas at Thermopylae, he, you know, he is that type of guy.
00:32:57.000And yeah, I just hope it ends better for him.