Elon Shock Therapy & Ackman’s Mistake

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Happy Sunday, and welcome back to Dry Powder.

At long last, we seem to have reached the end of the beginning of Elon’s drawn-out Twitter takeover. But in signature fashion, the world’s wealthiest man is mixing things up until the very end. In today’s issue of Dry Powder, my analysis of Elon’s proposed, cold-blooded culling of 75 percent of Twitter’s workforce; notes on Bill Ackman’s Netflix misery; and why BlackRock’s Ukraine “reconstruction fund” might be more than just a reputation-burnishing maneuver. Thanks for reading.

Bill

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Elon Shock Therapy & Ackman’s Mistake

Massive cost-cutting is only the first of the palliatives planned for Musk’s privately-owned Twitter. Plus, the inside conversation on Wall Street about Netflix’s stock rebound and Larry Fink’s Marshall Plan.

WILLIAM D. COHAN

After six months of delays and high drama, Elon Musk’s takeover of Twitter is expected to close no later than Friday, the final deadline that judge Kathaleen McCormick has given him to complete the $44 billion transaction, unless he wants to find himself back in court. Of course, this is just the end of the beginning as it pertains to Elon’s real headache, which will be to wring more cash out of a company for which he obviously overpaid and, presumably, to eventually make himself and his investors whole and then some.

That’s no easy task. Twitter is a 16-year-old company that didn’t turn its first profit until 2018 and is barely generating enough free cash flow to keep its new crop of creditors at bay. If the deal closes, Twitter’s leverage will be...

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