♪ >> time for a quick check of the headlines. western allies promised to send more artillery to ukraine. russian forces have begun an assault in the east, which could slice ukraine in two. >> we have helped deliver not just from our stocks, but stocks of other nations, 50 million rounds of small arms and ammunition. 50 million. that is the kind of stuff the ukrainians are literally using every single day since the

invasion began. all of that will be factored into this package going forward. >> russia is urging ukrainian troops in a steel product -- planting mariupol to come out. moscow says the troops will begin wednesday. it is the last remaining stronghold of ukrainian forces inside the besieged city. the un security council met to discuss the humanitarian situation in ukraine. the secretary-general called for a four day truce, saying 12 billion people are in dire need. ukraine's nuclear agency released a video showing positions abandoned by russian forces in the chernobyl zone. the site of the world's worst atomic disaster is still highly radioactive. ukraine's government says russian troops would have been exposed to radiation.

students are among at least 15 people killed by bombs set off at two schools in afghanistan's capital. it happened in the neighborhood. no group claimed responsibility. the taliban was accused of attacking the area. police in sri lanka have used live rounds against protesters blocking a highway, killing one person, the first reported death in demonstrations requesting the resignation of the prime minister. there are shortages of food, fuel and medicines. those where the headlines. the news continues after inside story. ♪

>> will elon musk take over twitter? the billionaire made a controversial offer but is facing many hurdles. what would a possible takeover mean for the platform? this is inside story. welcome to the graham. -- the program. twitter's board armed itself against a possible takeover after elon musk said he wants to buy twitter. he made a $43 billion offer and says the social media giant needs to be taken private to grow and become a platform for

free speech. the twitter board is fighting back. it adopted a so-called poison pill plan that will prevent anyone from owning more than for -- a 15% stake in the company, allowing people to buy shares at a discount. musk increased his stake to 9%, making him twitter's largest shareholder. musk calls himself a free speech absolutist, opposed to any restrictions on what someone can say on social media. he's posted tweets saying he thinks twitter is headed in the wrong direction. it isn't the first time he railed against twitter, claiming it represses free speech. news of the bid set the internet on fire. among those responding, a saudi arabian investor who tweeted, saying as one of the major shareholders in twitter, he

rejected a takeover bid by elon musk. he said, i don't believe the offer by elon musk, $54.20 per share, comes close to the intrinsic value of twitter given its growth prospects. let's bring in our guests. from indiana, we have tim hubbard, professor of management at the university of notre dame. from atlanta, jim, social media lead at glass wing benches. from new york, william, a former mergers and acquisitions investment banker. thanks for joining us. i would like to start with you, mr. anderson. what's at stake? how important is twitter for the public discourse? why is this takeover bid by a lawn musk -- be -- by elon musk

-- >> its importance seems to exceed its performance financially. it has been a mediocre investment i think. i think most analysts would say from a financial perspective. but it is embroiled in many of the most consequential discussions around politics, the economy, etc. and in many ways elon musk is correct in this is an under leveraged asset. i don't think he is wrong going after it. >> tim, elon musk said this is about ensuring there is an arena for free speech so we can talk freely within the bounds of the law. do you think he is serious about the takeover bid or is he making a point? >> i think he is making a point. if you think about what he wants twitter to achieve, free speech and an open platform for everybody, to move the company in that direction, i don't necessarily he needs to buy --

think he needs to buy the company. showing it is possible to buy twitter puts twitter in a position where they have to think, how can we set the users up in order to avoid the need for a takeover by somebody like elon musk? >> william, so far the board of twitter responded by triggering the so-called poison pill plan. explain what that is and what it means. >> what it does is, it will allow other shareholders to buy shares of twitter stock less expensively than they are currently trading for in the market if elon musk buys around 15% of the twitter stock. these poison pills are merely a way, a hurdle if you will for a hostile acquirer to buy a company. i don't think they have ever

actually been invoked. i don't think there has been a time when shareholders actually bought shares of stock in the company at a discount to try to prevent a hostile takeover. so what they end up being is another hurdle that a potential acquirer has to get over and forces the potential acquirer to deal directly with the board of directors. >> how will this play out? do you think this will just be a hurdle for elon musk? he tweeted, love me tender, referring to a song but maybe also to a tender offer. >> everything hinges now on whether he can raise the financing. he has already spent $2.6 billion of his own money. if he needs another $40 billion, we think he is the world's richest man, so can he raise say

$40 billion that he needs, or say, assuming he can raise some a bit, let's say he needs to raise, can put in another $20 billion of his own money. can he raise another $15 billion from third parties to make this possible? if he can, it is game, set, match. he will buy twitter whether anyone wants him to or not. if he can't raise the money, it is a moot point. >> does he have that kind of money if he is the world's richest man? >> theoretically he does, but we don't know how much of his tesla stock, which is the foundation of his wealth, how much of that tesla stock, worth around 175 billion dollars, he has already pledged or margined or hypothecated to someone else for various loans, pay taxes or live

his life, for spacex or the boring company, his other projects. it is unknown how much of that he has already pledged. the question is, how much is left unpledged? at what point does he risk his value in tesla to buy twitter? i think he is a lot of things but i don't think he will risk what he has built in tesla to buy twitter. >> jim, he has talked a lot about the takeover bid being purely for the good of society. for the good of humanity almost. what would lead him to make those sorts of statements? what is going on behind the scenes at twitter in terms of algorithms that has become such an issue? >> it is funny, elon musk is one of the most consequential entrepreneurs of our generation. i will give him that. trying to understand what's going on in his mind is an

exercise in frustration. he tweeted, love me tender. if anyone thinks he is tweeting about a song, let's not kid ourselves. he is playing a game. he is clever. i think he enjoys getting difficult and unpredictable. he has latched onto, you mentioned the algorithms and free speech. those are the things he has latched onto. for such a brilliant man, he has been maddeningly nonspecific about what he wants to accomplish around free speech other than, i advocate for free speech around algorithms rather than i advocate for opening up algorithms. those are complex topics that involve a lot of sub -- subtleties. i think the idea of owning twitter is more interesting to him than the reality would be. >> tim, would you agree with that? >> i completely agree owning twitter is not as luxurious as

fighting with twitter and proposing buying twitter. if we think about elon musk and what he wants to accomplish, he wants to do things that will push humanity forward. going to mars and electrifying vehicles, these types of grand challenges are where if he spends his time, he can cement his legacy. taking over twitter and spending his time instead at twitter is important for free speech around the world, but at the same time he might view his time better spent hopefully trying to accomplish some of these big problems that only he is prepared to tackle. >> william, twitter wants to double its revenues by 2023 with $315 million monitor -- 315 million monetize a bowl daily active users. how ambitious are those plans? how has twitter compared to facebook from a profitability's

-- profitability standpoint? >> twitter is woefully unprofitable. you said at the beginning of the show that it is not a great business. it is not a great business. it has punched above its weight. last year, if you don't do the add backs, which twitter would like you to do, it made about $56 million in earnings for interest, taxes, depreciation, and key metrics of profitability on wall street. they had a $750 million legal settlement as far as that, so if you add that back, maybe they did something like $800 million in 2021. in previous years it was around $950 million.

somewhat less than $1 billion. i don't know, i haven't looked at facebook's p&l lately but they probably do $1 billion in a week. apple probably does $1 billion in a day. that is an exaggeration, of course, but twitter is not a great business. one of the things elon musk has talked about in his tweeting leading up to this offer or surrounding it is that he wants to take ads off the platform. that might be great for the user experience but it will decimate the p&l of twitter. i don't know how he can propose taking this company private and decimating the p&l. >> could it be a great company? could it be a moneymaking business? with elon musk, i believe stocks in twitter are up more than 20% since elon musk disclosed his

stake on twitter on april 4. it is like just having him involved attracts investment and hype and excitement. could it go want to do great things? -- go on to do great things? >> the fact that he made an offer for the company and the stock price goes up is not the same as the company generating profitability. i think a bigger problem is not going to be a great company. the bigger problem, if elon musk is the dog that catches the car, is he going to do things that alienate many of the users on twitter that make it relevant? what makes twitter so relevant is the great debate that takes place all day, every day. if he does things like bring back donald trump, for example, he is going to alienate something like half to two

thirds of his users and they will drop off the system and go somewhere else. he will lose them. they aren't going to be monetize of. -- monetizable. i don't know what he has in mind. i don't see his vision making this company great. >> tim, as we mentioned, a major shareholder in twitter said in 2015 he had a 5.2% stake. he tweeted his opposition to the take older -- the takeover, saying the offer doesn't come close to the intrinsic value of twitter. you think for him it is a cash thing, or might has saudi -- might sonny have pressured the prince into opposition as elon musk implied? is there more going on? >> i'm sure there is more going on. all boards of directors have their own intrigue and dynamics

and twitters is somewhat legendary for having palace intrigue. i'm sure there'll are lots of dynamics. i doubt for a lot of people involved that it is really about the cash, whether it be the kingdom of saudi arabia or elon musk frankly. twitter, this goes back to the point of twitter punching above its weight class, it is an important platform and there are lots of people who would be interested in having either a de facto control or absolute control over what goes on and the moderation decisions that are made. i suspect that is a big chunk of the opposition as well, just a sense of, if elon musk owns twitter and makes it more valuable, that is not going to reflect well on the previous board of directors who almost certainly will be pushed out. and who didn't unlock that economic potential. >> tim, you are an assistant professor of management. how would you describe elon

musk's management style? >> i think he is the type of person who is a problem solver. he involves himself in projects and businesses that are technically advanced and rather than shy away from the technical problems that plague the technologies he is developing, he brings together a group of smart people that are able to tackle the problem in a way that other companies just aren't. if we think about how he is able to reuse rockets and develop battery technology, that other companies can't, i think his leadership style really is that excitement, bringing together people who are able to really tackle these deep problems. that is unique. that puts him in a position where he is a bit of a visionary, able to control the discourse but also as he is developing these technologies and these companies, he is finding ways to take those technologies and use them in other areas and industries in ways that weren't necessarily thought of in the beginning.

so his management style is very much bringing people together that are very smart to tackle problems that are very complicated. >> what about his unpredictability? if you are a major shareholder in the companies he owns, anything he says, you don't know what people say or do next. is that not an issue? >> that is absolutely an issue. that is the noise if you will around the innovation and foresight he has. if you think about chief executive officer's, if you sit down with a typical ceo, you will ask them about an industry look out for a few years, but what the company will do in five years. when you sit down with elon musk you ask, where is humanity going to be in 2050? that is a different thing. the antics he puts out are very disturbing at times, very controversial, but at the same time, the core of what he is

doing is really big. it is really trying to advance humanity. so i feel like at times, we like to talk about those things but at the same time we really should be focusing on the good things he is doing and those are quite numerous. >> william, speaking about what elon musk tweeted, he tweeted jack dorsey leading the board of twitter meant the board collectively owned almost no shares in twitter and therefore, i quote, their economic interests are not aligned with shareholders. does he have a point? >> absolutely he has a point. aside from jack dorsey, who is leaving the board in may, jack dorsey has around 2.25% ownership stake in twitter. the rest of the board has way less than 1% ownership stake. they don't, they are fiduciaries for shareholders, but in terms

of actually having any skin in the game, they have zero skin in the game. i would add, for your viewers, the prince, who may have owned something like 5% of twitter at one time, no longer does. i'm not sure what he owns at the moment. i'm not sure how relevant it is that he is tweeting about his view of elon musk's offer. he is not involved anymore. he is not on the board. he has no influence. he is not a large shareholder. i'm not sure why anybody would listen to him at the moment. but that key here is, some of the big shareholders that are out there, which are big retail asset management companies like blackrock, morgan stanley, vanguard which is the largest shareholder at 10%, i think they

are all likely, if this financing can be firmed up, if elon musk can prove to his financial advisor morgan stanley, if he can prove to goldman sachs who is representing the twitter board and the twitter board, that he has this financing lined up, then those big shareholders, vanguard, blackrock, are going to go and take this money and run. this is the best thing that has happened to twitter in years. >> jim, let's go down the road and imagine, what would a twitter with elon musk having a controlling stake, what would that look like? what changes could we see? i know he has called to remove advertising and dropping the w from the name twitter but what would that look like? >> it would be wildly unpredictable. that is part of the excitement.

you think he has made twitter relevant in a way that the topic of twitter, not his -- just what is going on on twitter, the topic of the company on the platform itself. in many ways that would be a net positive. everybody is on the edge of their seat wondering what elon musk will do next. pragmatically he has said he doesn't agree with the advertising oriented business but as william said, that is 95% of their revenue. if anybody could pull off a fundamental transformation of a company's revenue model, saying we are 95% ad dependent and we want to be 5%, that is the kind of big thing elon musk could pull off. they could turn twitter into a subscription business. there are many things they could do that aren't tweaking around the margins and trying to get 20% growth but fundamentally changing the nature of the company. i would expect at least those things to be under discussion for someone like elon musk. whether that is a big enough legacy, as tim said, is that

what he wants to spend his time and how he wants to leave his mark, rebranding and reformulating what constitutes twitter? that is the open question. >> tim hubbard, where is this headed? does it at the very least continue to bring to the fore the question of free speech on social media, or how do we moderate speech on social media to keep people safe, to stop information? how do you see this playing out? >> if we stand back and think about what is already happening, we are having the discussion on free speech right now and i think even if he doesn't go through with the buyout of twitter, he has already made a mark and already had everybody stand back and think about free speech and what it means and what happens when a company decides to regulate speech. and a lot of times, we think about these social media companies as firm companies that aren't going to be changing very much, so if they take a stance on free speech, that might be

controversial, a lot of times we kind of go, ok. and we move along our day. at this point, he is making us stand back and look at twitter, look at facebook and other companies that are working to regulate speech to some extent, and actually say, well, you can actually come in and change the firm. you can buy out the firm and change the board of directors, you can change out management and drastically change the position of the company. >> is that putting another one man in control? if it is about decentralization and putting, making everything transparent, is that not counterintuitive when what he is looking to do is having a controlling stake? >> one key thing, having a controlling stake, a lot of the social media companies, the interest in them risises and fas at times and even if he comes in and has great visionary ideas and is able to make changes, it doesn't always mean those

changes will be for the better. there is always a risk in him coming in. that is the hard part i think to gauge, what are the benefits? but what are the potential risks in terms of user base and interest in twitter? it will definitely keep it in the news and keep it something that we will be talking about but at the same time, i'm not sure how users will change their level of interaction with the company. >> we have about a minute left. where do you think this is headed? what is your take? >> if elon musk can raise capital he needs to prove to the twitter board of directors and goldman sachs that he has the $40 billion that he needs to make his $54 20 cents offer real, it is his company. there is clearly no one else coming along to buy this company. there is no question that $54.20 is a fair price for this

company. $43 billion for a company that makes $1 billion per year is plenty generous, plenty fair. if he can arrange for the financing and prove he's got it, it is over. >> we believe it there. thank you very much for joining us. tim hubbard, jim anderson and william cohen. you can see the program any time by visiting alj azeera.com. you can join the conversation on twitter. for the whole team, goodbye for now. ♪

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