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00:00SINGH FROM BLOOMBERG INTELLIGENCE, AND KURT WAGNER JOINING US FROM BLOOMBERG NEWS. KURT, FROM SOMEONE WHO HAS BEEN FOLLOWING AND COVERING THIS COMPANY CAN ELON MUSK HIMSELF, HOW DO YOU THINK THE WAY THIS HAS PLAYED OUT AND THE DRAMA IT IS PUTTING ON THE COMPANY? KURT: DOESN ' T THIS JUST FEEL AT THE MOST TWITTER THING OF ALL TIME TO HAPPEN? IT IS THIS DEAL THAT CONTINUES TO BE A ROLLER COASTER. AND THE FACT THAT WE NOW HAVE ELON COMING OUT AND SUGGESTING I MIGHT BE INTERESTED IN NEGOTIATING A LOWER PRICE FOR THIS DEAL EVEN THOUGH I JUST OFFERED SOMETHING ELSE A FEW WEEKS AGO. IT JUST ALL FEELS LIKE THIS IS KIND OF CASCADING IN A NEGATIVE WAY FOR TWITTER. I ALWAYS HAVE SAID THAT THE WORST CASE SCENARIO FOR THEM WOULD BE IF THIS DEAL FALLS APART AND THEY ARE LEFT STANDING THERE WITHOUT ANYONE TO COME ACQUIRE THEM, AND IT FEELS LIKE THAT IS BECOMING MORE LIKELY EVERY DAY. TAYLOR: MANDEEP, SIMILAR TO WHAT WE HEARD FROM KURT, I WAS HEARING FROM DAN IVES SAYING EARLIER, THIS WORST-CASE SCENARIO, THEY ARE GOING TO BE LEFT AT THE ALTAR ALONE. HOW DO YOU THINK ABOUT THE LACK OF NO BIDDERS, AND IS THIS ELON ' S WAY OF NEGOTIATING DOWN IN PRICE? MANDEEP: I DO THINK HE DOES NOT HAVE A WAY OUT OF PAYING THAT $1 BILLION IN BREAKUP TERMINATION FEE IN CASE HE WANTS TO WALK AWAY. BUT AT THE SAME TIME, THE ODDS OF THE DEAL HAPPENING ARE HIGHER THAN THEY WERE PROBABLY THREE WEEKS BACK WHEN THE DEAL WAS ANNOUNCED. THE REASON I SAY THAT IS BECAUSE AT LEAST HE HAS 6.5 BILLION DOLLARS IN COMMITMENTS FROM CORE PARTNERS. AND WHAT HE REALLY WANTS TO DO HERE IS TO MOVE AWAY FROM THAT MARGIN LOAN. SO RIGHT NOW HE DOES NOT HAVE ABOUT $12 BILLION $13 BILLION IN FINANCING. HE HAS ALREADY SOLD A BUNCH OF STOCKS. THAT IS ABOUT $11 BILLION. HE HAS A $6.5 BILLION IN COMMITMENTS. SO HE REALLY WANTS TO MOVE AWAY FROM THAT $12.5 MILLION MARGIN LOAN. THAT IS WHAT I THINK HE IS LOOKING TO RENEGOTIATE HERE TO BRING THAT PRICE LOWER. TAYLOR: VERY INTERESTING. KURT, I THINK AT THE HEART OF THIS ISSUE COMES DOWN TO THE PERCENT OF USERS THAT ARE REPRESENTED BY BOTS. WHEN YOU THINK ABOUT TWITTER, WHETHER THAT NUMBER IS 5% OR 20%, RELATIVE TO META, SNAP, TIKTOK, THE OTHER SOCIAL MEDIA COMPANIES YOU COVER, HOW DOES THAT BOT RELATIONSHIP FIT INTO THIS NARRATIVE? KURT: YEAH, HE TALKED A LOT ABOUT THAT TODAY. HE WAS AT A CONFERENCE IN MIAMI. OUR BLOOMBERG REPORTERS WERE NOT AT THE CONFERENCE BUT WERE ABLE TO LISTEN IN AS IT WAS HAPPENING. AND HE BROUGHT THIS UP. HE WAS SAYING THIS IS AN ISSUE. I DON ' T BELIEVE THAT BOTS ARE LESS THAN 5% OF THE TWITTER USER BASE, WHICH IS WHAT TWITTER SAYS. AND FACEBOOK SAYS SOMETHING SIMILAR, TO BE CLEAR. THIS IS NOT A UNIQUE SITUATION FOR TWITTER. BUT ELON HAS HAD AN ISSUE WITH BOTS. HE HAS MADE IT PART OF HIS CAMPAIGN OF HOW HE IS GOING TO CLEAN UP THE SERVICE AND WHAT HE WILL DO TO CLEAN UP TWITTER. HE SAYS HE BELIEVES IT IS HIGHER AND WE HAVE SEEN THE TWITTER CEO GOING BACK AND FORTH WITH ELON TODAY TRYING TO EXPLAIN HERE IS HOW WE MEASURE BOTS, AND ELON REPLIED WITH A POOP EMOJI. HE CLEARLY WAS NOT INTERESTED IN THE EXPLANATION, AND I THINK THAT IS A BIG SIGN AS TO WHY HE IS SAYING THIS IS ON HOLD. HE WANTS MORE ANSWERS. TAYLOR: YOU ARE NOT ALLOWED TO USE THAT EMOJI WITH ME. KURT: I WOULD NEVER. TAYLOR: MANDEEP, YOU HAVE BEEN COMMENTING ON THIS SIMILARLY. YOU TAKE A LOOK AT THE BOTTOM UP ANALYSIS OF THESE COMPANIES, FUNDAMENTALS, REVENUE GROWTH, PROFITABILITY. HOW DO YOU THINK ABOUT THE PERCENTAGE OF BOTS, THE IMPACT ON THE HEALTH OF THIS COMPANY? MANDEEP: CLEARLY IT IS A BIGGER PROBLEM WITH TWITTER. YOU TAKE OUT, LET ' S SAY, 5% OF THE USERS ARE BOTS. SO THE AMOUNT HE PAYS PER USER GOES UP. YOU LOOK AT A COMPARABLE LIKE SNAPCHAT OR PINTEREST, RIGHT NOW IT IS CLOSE TO $100. THE $44 BILLION DEAL COMES DOWN TO AROUND $200 FOR TWITTER. TWITTER HAD THIS PROBLEM OF BASICALLY EXAGGERATING THEIR USER NUMBERS AND THEY HAD TO KIND OF COME OUT AND SAY THE ACTUAL USER NUMBERS ARE NO ARE -- ARE LOWER. IT IS NOT A NEW PROBLEM BUT CLEARLY IF YOU ARE VALUING A COMPANY BASED ON THE TOTAL NUMBER OF USERS, YOU HAVE TO THINK ABOUT REVISING THE PRICE LOWER BECAUSE THE ACTUAL NUMBER OF USERS ARE LOWER. TAYLOR: JUST A FOLLOW ON THIS, I THINK WE ARE HAVING A BROADER DISCUSSION IN THIS BROADER DISCUSSION IS UNDERWAY ABOUT IF THAT PRICE TARGET SET A FLOOR FOR HOW WE THINK ABOUT VALUING THESE COMPANIES, AND THE BROADER MARKET IS TELLING YOU AT LEAST TODAY AND THE LAST FEW WEEKS, WE ' RE RETHINKING VALUATIONS ON EVERY LEVEL, NOT JUST BECAUSE YIELDS ARE HIGHER AND THE DISCOUNT RATE FALLS, BUT THE BIG VALUATIONS OF GROWTH AT ANY COST. HOW THEN IS THIS PLAYED OUT, AND ALSO THINKING ABOUT THE WAY WE ARE VALUING THESE COMPANIES AND THESE TECH COMPANIES? MANDEEP: CLEARLY, SOCIAL MEDIA COMPANIES AREN ' T REALLY GROWTH COMPANIES ANYMORE. IF YOU HAVE TO THINK ABOUT GROWTH, REALLY, THE NEXT LEG OF SOCIAL IMMEDIATE WOULD BE MORE ON THE METAVERSE SIDE. RIGHT NOW VALUATIONS HAVE GONE DOWN EVERYWHERE. BUT I THINK TWITTER IS NOT A HIGH-GROWTH COMPANY ANYMORE. YES, IT CAN SUSTAIN ITS EBITA, BUT WE ARE NOT TALKING ABOUT 40%, 50% GROWTH EVEN IF IT GOES PRIVATE. SO THAT IS THERE. WE HAVE TO THINK ABOUT WHICH IS ACTUAL GROWTH GOING FORWARD AS OPPOSED TO WHAT CAN GENERATE FREE CASH FLOW TO PAY OFF THE INTEREST PAYMENT. TAYLOR: KURT, COME BACK IN HERE. I THINK AS WE THINK ABOUT PUSHING THIS STORY FORWARD, WHAT DO YOU WANT TO SEE NEXT? WHAT CAN WE DO PRIVATE THAT WE COULD NOT DO PUBLIC? WHAT DO YOU WANT TO SEE IN TERMS OF LEADERSHIP? WHAT ARE YOU REALLY LOOKING FOR TO UNDERSTAND IF THIS COMPANY CAN REALLY TURN IT AROUND? KURT: I THINK THE BEST WAY TO GROW THE BUSINESS IS NOT GOING TO BE TO ABANDON ADVERTISING ALTOGETHER, WHICH IS WHAT FEELS LIKE ELON KIND OF WANTS TO DO. HE ' S TALKED ABOUT A SUBSCRIPTION PRODUCT, I THINK THAT IS FINE. BUT REALLY WHAT YOU NEED TO DO IF YOU ARE TWITTER IS YOU NEED TO FIGURE OUT HOW TO GET THE KIND OF USER DATA THAT WORKS WITH TARGETED ADS, THAT WORKS WITH DIRECT RESPONSE ADS. THAT IS WHAT FACEBOOK AND GOOGLE DO REALLY WELL, IT IS SOMETHING TWITTER HAS ALWAYS STRUGGLED WITH. THEY ALREADY HAVE AN AD BUSINESS, THEY HAVE ADVERTISERS WHO ARE INTERESTED, THEY JUST NEED MORE GRANULAR DATA TO DO THAT TYPE OF STUFF. IT IS EASIER SAID THAN DONE, BUT I THINK THAT IS THE ONE THING IF THEY CAN FIGURE THAT OUT, I THINK THE BUSINESS CAN REALLY BENEFIT FROM THAT. TAYLOR: MANDEEP, DO YOU AGREE? MANDEEP: CLEARLY THINKS OF SCRIPT AND ' S IS PART OF THE STORY HERE. WE HAVE SEEN, SUBSCRIPTION BUSINESSES ARE NOT EASY.

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