Om Malik

May 13, 2022May 14, 2022

Inside Twitter, employees told me today, there’s a mood of exhaustion. Rank-and-file staffers have little to no faith in the board, or in CEO Parag Agrawal, whose moves yesterday to fire the company’s highly respected heads of product and revenue look even more erratic.
Casey Newton reporting

The wrong guys got fired. Instead of an overmatched CEO, Parag Agarwal, Kayvon Beykpour (product lead), and Bruce Falck (revenue lead) got shown the door because CEO wanted to take the company in a new direction. I would have shown the big honcho the door. But again, the board is quite feckless. (Read: Musk or not, Twitter CEO has to go.)

Except for the CEO, no one in the company believes that firing these two executives was a good decision. Kayvon, who co-founded Periscope, was well regarded in the company and helped wrangle a good product strategy for the company. The palace intrigue is coming at a time when Elon Musk is once again turning Twitter into his pet pinata. What many see as waffling or wobbling is just a technique to get a better deal for Twitter.

The market meltdown has made Twitter less valuable.

In a research note about Twitter, Hinderberg Research which is short Twitter stock pointed out that Nasdaq is down about “~17.6%, implying a Twitter price of ~$31.40 per share without a deal.”

Musk knows that, and he also knows that there isn’t another buyer. So, this is a good chance for him to get the asset for cheaper and loaded with less debt.

The current deal for Twitter will be funded by $20.1 billion in equity from Elon, $7.1 billion from other investors, and the remainder of $19.25 billion via debt. It makes sense for Elon to lower the leverage — about 8.6 times EBIDTA per a Wall Street Journal report. More debt means the more difficult it will be for Twitter to become a more robust business that doesn’t rely on advertising — a stated goal for Musk.

He also knows no one with real skin in the game is in charge of Twitter. The board (apart from Jack Dorsey’s 2.4 percent) owns less than 0.2 percent of the company and is weak. And the CEO is out of his depth.

As someone wise once said — you don’t get to be rich or stay rich by spending your money, and you do it by getting a better deal.

May 13, 2022. San Francisco

April 25, 2022April 25, 2022

There is a fundamental difference between form and meaning. Form is the physical structure of something, while meaning is the interpretation or concept that is attached to that form. For example, the form of a chair is its physical structure – four legs, a seat, and a back. The meaning of a chair is that it is something you can sit on.This distinction is important when considering whether or not an AI system can be trained to learn semantic meaning.
Scott Aaronson

April 18, 2022April 26, 2022

Catalina Islands. Made with iPhone. (c) Om Malik

“When people become engrossed in what they are doing, they enter a state that is called ‘flow. Flow can be achieved by engaging in mental or physical activities that we value and that require us to concentrate fully to use our skills.
When we enter a state of flow, we become absorbed and focused, and we experience momentary enjoyment. When we leave a state of flow, we are often surprised by how much time has passed.
Learning which activities might enable someone to enter a state of flow requires asking questions and listening. People tend to thrive on healthy engagement and challenge. “
John Dattilo, Penn State.

A handful of things get me in the “flow.”

I find myself in the flow when observing, thinking, and writing — primarily for private consumption. For a while in my life, my public writing brought me into a flow state. I would know that it is time for me to return to the writing arena when I find myself in the “flow.”

For now, I am just busy filling up my journal.

My camera is an excuse for me to slow down and observe. But in reality, I am just out of my routine. It is an opportunity to be alone with the rest of the planet. When I am out in nature and watching the planet’s rhythms, I start getting into the “flow.”

Photographs are simply the outcome of that state of “flow.”

What gets you in the flow? Is there a magic formula for flow?

Yale University researchers seem to think so.

“These principles underlying flow may be unconscious but they are not random — and work within a biological system that can be described in mathematical terms,” said David Melnikoff, formerly of the Yale Department of Psychology now of Northeastern University, corresponding author of the paper published in in the journal Nature Communications today.
The basic equation underlying their computational theory of flow is relatively simple: it computes the mutual information between desired end states and means of attaining them, a quantity expressed as I(M;E). Exercise is one example they use to illustrate the concept.
When people exercise, they have a desired end state, say, losing five pounds. People also have a means of attaining their end state, perhaps jogging. Whether they jog and how often and far is the means and is informative of whether they will achieve their end state.
“Our theory says that the more informative a means is, the more flow someone will experience while performing it. The formula is a way of mathematically quantifying exactly how informative a particular means happens to be.”
Optimizing I(M;E) is also a key goal of artificial intelligence programmers. In essence, AI experts are trying to build machines that behave like people in flow states, the authors argue.
Yale University Research

April 18, 2022. San Francisco.

April 16, 2022

FUNDING SECURED pic.twitter.com/bcsLT8bJEE
— beeple (@beeple) April 14, 2022

POISON PILL pic.twitter.com/7R0Rp8AcHC
— beeple (@beeple) April 15, 2022

Since everyone has decided that Elon Musk’s $54-a-share offer for Twitter is just a troll, the question remains who else can buy the company? Is there a suitor who can digest Twitter and deal with all its baggage? Or is the company destined to be a middling underachiever?

Twitter had adopted the poison pill plan that would make it difficult for Musk to achieve its goals and increase his stake beyond 15 percent ownership of Twitter. If he increases his stake to above 15 percent, then Twitter has the right to sell more shares to other buyers at a discount. That is, Twitter will find a white knight. The New York Post reported that private equity giant Thoma Bravo was considering a bid. The firm, which manages $100 billion, definitely has the resources to friend Twitter and mute Musk.

If not Thoma Bravo, then some other private equity firm could make a bid for Twitter. They obviously would know that they are buying an underperforming asset and squeezing out operational inefficiencies. A PE buyer would likely find a better management team than one currently in place, something the current board of directors should have done anyway.

Musk or Not, Twitter CEO Needs To Go

When viewed with a broader lens, Twitter doesn’t have many options. Apple won’t want the mess on its hands. Thanks to its size and corporate needs, it is already threading a needle when it comes to political pressures across the globe.

Facebook and Google have their problems, and both companies are already dealing with anti-trust problems. I would put Amazon in the same category — they too are on a public enemy shortlist in Washington DC and Brussels. Previously rumored suitors such as Disney are likely to stay away from Twitter which has become a political hot potato.

The one realistic option for Twitter is Microsoft, which has the resources to pull off the deal. More importantly, it has friends in high places — Washington DC — to get the deal approved by the regulators. And ultimately, it might now be such a bad option for the company to be part of Microsoft.

The last path is something I suggested yesterday — get a new CEO, one who is capable of fixing the company’s fundamentals, making it more efficient and ultimately profitable. A strong player could start by putting together a syndicate of investors — both private and strategic to push Musk back into its corner of the Internet.

And if that does happen to pass, in a few years, we might look back at Musk’s bid for Twitter as the best thing that happened for the company. Given Twitter’s history of meandering mediocrity, I am not holding my breath.

April 16, 2022. San Francisco