• Mushroom Alpha
  • Posts
  • What were you doing the moment Elon bought Twitter?

What were you doing the moment Elon bought Twitter?

We were naked and crying…just kidding.

April 26, 2022

MUSHROOM ALPHA

Good day folks. Crypto never sleeps and neither do we. Just another day in paradise drinking from the firehose of crypto news and serving you fresh sparkling water.

Today's Topics:

  • Twitter Takeover

  • Sam Bankman-Fried calls out Yield Farming

  • Tool Tuesday - Alpha from Twitter

  • Quick Crypto Headlines

Elon buys Twitter

Elon proves once again that he is a man of action. His acquisition of Twitter is one of the biggest tech buyouts of all time. Talk about going big!

Here is a timeline of events:

Jan 31, 3022 - Elon was quietly enjoying a breakfast burrito when he decided to begin accumulating Twitter shares. More on this later as he failed to disclose his ownership to the SEC within 10 days of hitting 5%.

Mar 14, 2022 - Between many a breakfast burrito he now owned a 5% stake in Twitter.

March 24, 2022 - Elon starts asking his Twitter followers for public opinion on the Blue Bird app. Up till now we are still unaware about his Twitter shares.

April 4, 2022 - The world learns via SEC filing that Elon now owns 9% of Twitter making him the largest individual shareholder.

April 5, 2022 - Current CEO of Twitter Parag mentions Elon will join the board. Meanwhile the other board members limit Elon from buying more than 14.9% of the company as a board member.

Apr 9, 2022 - Elon says “Thanks, but no thanks.” on joining the Twitter board.

April 10, 2022 - Parag tweets out that Elon won’t be joining the board but is mum on specifics.

Apr 11, 2022 - A few shareholders decide to sue Elon for not disclosing his Twitter stake to the SEC by the deadline.

Apr 14, 2022 - Elon makes a “best and final” offer for the paltry sum of $43 billion.

Apr 15, 2022 - The Twitter board adopts a “poison pill” to try block a takeover.

Apr 19, 2022 - Elon asks Morgan Stanley if they would join him for breakfast burritos and LBO talks.

Apr 21, 2022 - Funding Secured. This time for real.

Apr 24, 2022 - Elon and the board talk and eat breakfast burritos.

Apr 25, 2022 - Twitter agrees to be acquired by Elon for his offer of about $44 billion. Guess “best and final” works huh?

The deal will close later in 2022. For now here are the top “feature requests”:

  • Edit button - Twitter said they are already working on this

  • Long-form tweeting - Yes we are sick of 20 tweet threads

  • Kill the bots - Check

  • Authenticate users - Double thumbs up

  • Open-source the algorithm - Considering 0.00001% of the population can read this type of code…not too sure about this one

  • More free speech - Easier said than done

Who are the winners?

Breakfast burritos - Always winning.

Elon - Always winning by our count. See SpaceX, Tesla, and PayPal.

Early Twitter shareholders - Jack and other large shareholders will be fine.

Twitter users - If Elon is able to pull off the changes.

Who are the losers?

Recently appointed CEO Parag might get fired - (Although he would get paid $39 million)

The Twitter Board - They are all effectively out when the company becomes private.

Other top Execs not named Parag - We see Elon cleaning house.

Some Twitter employees - It is hard to see a scenario where there is no layoffs or a mass exodus of talent.

Twitter users - If Elon opens the floodgates and “free speech” ruins the platform.

Our take: 

This is net bullish for Twitter in the next few years. If the platform grows and thrives, Elon can IPO again and make boatloads of cash. Perhaps Twitter offers tokens or becomes a DAO? We can only hope.

We are not Elon fanboys. The dude knows how to run a business. Case in point HERE.

Sam Bankman-Fried explains Yield Farming

During an interview on Bloomberg's “Odd Lots podcast” Sam dropped probably one of the best explanations on Yield Farming even a child could understand. Pretty controversial piece if you ask us. Basically he is agreeing that DeFi is a Ponzi scheme. Given he is the CEO of a major exchange it is pretty shocking.

Our (made up) fictional version:

Matt Levine: What is yield farming?

SBF: Let me really dumb it down for you. You have a box. You put crypto like ETH in the box and then take it out. You get an IOU for having put it in the box. You can then redeem that IOU back for a token.

Matt Levine: Uh. WTF? This should be zero?

SBF: Goes on into detail about float, returns, etc

Matt Levine: So this is a Ponzi scheme?

SBF: Sure that is one way of looking at it.

Funny thing is after reading this most of us will still continue to chase Yield and Farm till we die!

Also between SBF and Vitalik, who is the king of casual T-shirts?

Tool Tuesdays - Alpha Leak from Nansen AI Office Hours

Nansen AI is a very interesting tool investors can use to scope out wallets to make informed decisions.

Two very interesting explainers on how to use:

Projects mentioned in the thread: League of Kingdoms (LOKA) and GuildFI

Questions we ask before we get into any game project:

1) Is it fun? Look at youtube videos if short on time.

2) PLAY THE GAME - Would you play with NO token earnings?

3) Is the user base growing? - Search Discord, Telegram, Reddit, and Twitter.

4) What are the payment mechanics?

5) How much can you earn per day/week?

Quick Crypto Headlines

Mushroom Mic Drop. We jumping out like Mario!

Was this email forwarded to you? Sign up here.