Les Billets de Monocle

We got Eloned

18 May 2022

Elon Musk, who used to be "our good friend Elon Musk", has done a 180° on Twitter: In the end, he doesn't know if he wants to buy anymore.

Reason given: too many fake accounts (spam) on Twitter.
The stock lost -27% as a result.

After taking our first profit, we put a line back in at $46 (his offer is at $54).

What we think: at this new price ($37), we have just increased the line which now represents 4% of the fund.

Because the contract he signed is legally binding. And since he already had a bad reputation after his troubles with the SEC, Twitter's lawyers have strengthened this contract. For example, market downturns or bad Twitter numbers are specifically excluded reasons for Musk to get out of the deal.

Secondly, it's not going to be easy to imagine Musk in court trying to explain to the judge that the company he wanted to buy two weeks ago with his billionaire friends is no longer an interest for him - being the richest man in the world is not an advantage in some situations.

Well, because at this new price ($37), Twitter is not very expensive.

My idea - for what it's worth: Musk follows the example of Bernard Arnault - another richest man in the world - who wanted to get out of the Tiffany deal in 2020 - Covid obliges. The result: after much discussion, LVMH did buy Tiffany, at a price of $131.50 instead of the initial $135.0.

That is 2.5% lower. "No big deal" as they say.

Have a good week

Charles

Disclaimer

This presentation is a promotional document. The content of this document is communicated by and is the property of Monocle Asset Management. Monocle Asset Management is a portfolio management company approved by the Autorité des Marchés Financiers under number GP-20000040 and registered with the ORIAS as an insurance broker under number 10058146. No information contained in this document should be construed as having any contractual value. This document is produced for information purposes only. The prospects mentioned are subject to change and do not constitute a commitment or a guarantee. Access to the products and services presented here may be subject to restrictions for certain persons or countries. Tax treatment depends on individual circumstances. The fund mentioned in this document (Monocle Fund SICAV) is authorized for marketing in France and possibly in other countries where the law permits. Before making any investment, it is advisable to check whether the investor is legally entitled to subscribe to the fund. The risks, costs and recommended investment period of the funds presented are described in the KIDD (key investor information documents) and the prospectus, available free of charge from Monocle Asset Management and on the website. The KIDD must be given to the subscribers before the subscription. Past performances are not a reliable indicator of future performances. Monocle Asset Management cannot be held responsible for any decision taken or not taken on the basis of information contained in this document, nor for the use that could be made by a third party. The investor may lose all or part of the amount of capital invested, as the funds are not capital guaranteed.

To unsubscribe or for any information request, you can email us at monocle@monocle.lu

Fermer

How to invest?

Important to know