Tech Brew Ride Home - Fri. 04/15 – Twitter To (Poison) Pill Elon?

Starting point is 00:00:00 On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the Tech meme right home for Friday, April 15th, 2022. I'm Brian McCullough today. Twitter's board is contemplating a poison pill to ward off Elon Musk. The U.S. says North Korean hackers were behind that big Axi infinity theft. Mark German lists the Macs that are in line to get the next M2 chips and, of course, the weekend long-rate suggestions.

Starting point is 00:00:55 Here's what you miss today in the world of tech. Sources are telling various outlets that Twitter's Board of Directors is considering a poison pill after Elon Musk's bid to buy the company. Another plan apparently under consideration is merely saying that the offer is too low, quoting Bloomberg. A poison pill defense strategy allows existing shareholders the right to purchase additional shares at a discount, effectively diluting the ownership interest of the hostile party. Poison pills are common among companies under fire from activist investors or in hostile takeover situations. Included in Musk's securities filing, disclosing the bid was a script of text he sent to the company. In it, he said, quote,

Starting point is 00:01:41 it's a high price and your shareholders will love it, end quote. But at least one prominent investor said the offer was too low and the market reaction appeared to agree. Saudi Arabia's Prince Al-Walid bin Talal said the deal doesn't, quote, come close to the intrinsic value, and quote, of the popular social media platform. Speaking later Thursday at a TED conference, Musk said he wasn't sure he, quote, will actually be able to acquire it. He means Twitter. He added that his intent was to also retain, quote, as many shareholders as is allowed by the law, end quote, rather than keeping sole ownership of the company himself. Twitter shares dropped 1.7% in New York on Thursday, reflecting the market's view that the deal is likely to be rejected or to fall through, end quote.

Starting point is 00:02:27 And the information is reporting that Twitter's board views Elon Musk's takeover offer as unwelcome, suggesting that the company will indeed fight the bid. Quote, one person close to the situation said that the board wanted to support CEO Parag Agrawal who only assumed the role in November. Meanwhile, Musk hasn't provided details of his plans for Twitter or his financing for the deal. Meanwhile, one banker said the board was well positioned to fight the Musk offer. While the offer looked good on the face of it, there are questions about whether it is a legitimate offer, the banker said.

Starting point is 00:03:00 They added that Musk faces major challenges arranging financing, giving that Twitter's own business can't support the debt levels that Musk may have to raise to fund the offer. Twitter's board could face shareholder lawsuits if it rejects the offer outright, but boards have wide latitude to reject deals they feel don't properly value the company. But the banker said that Musk's volatile reputation would be a good reason for the board to reject the offer. The other risk for the board is that rejecting Musk's offer could prompt action from

Starting point is 00:03:28 activist investors. Activist Elliott Management took a stake in Twitter two years ago, but eventually reached a peace settlement with the company after it agreed to governance changes, end quote. The United States Treasury says North Korea-backed hacking group Lazarus is tied to that theft of cryptocurrencies worth more than $600 million from the Axi Infinity linked Ronan Bridge, quoting Coin Desk. The Treasury Department added an Ethereum address to its sanctions list on Thursday. Wallet profiler Nansen had labeled the sanction address as a, quote, Ronan Bridge Exploiter when checked by CoinDesk Thursday. It held 148,000 ETH at publication time. CoinDesk independently confirmed that the wallet is tied to the Ronan exploit.

Starting point is 00:04:18 Cryptoanalyx firm Chainalysis tweeted that the address quote was involved in the Ronan hack, end quote. Tracing firm Elliptic estimated that 14% of the stolen funds had already been laundered by Thursday. Ronan Network said in a blog post that the FBI had linked Lazarus with the validator breach and that the Treasury Department sanctioned the funds. A Treasury Department spokesperson said the department had worked with the FBI to investigate the Lazarus Group and advanced persistent threat 38, another North Korean entity believed to use malicious programming to steal funds. Identification of the wallet will make clear to other VC actors that by transacting with it, they risk exposure to U.S. sanctions. This demonstrates Treasury's commitment

Starting point is 00:04:56 to use all available authorities to disrupt malicious cyber actors and block ill-gotten criminal proceeds, the spokesperson said. There may be mandatory secondary sanctions requirements on persons who knowingly, directly or indirectly engage in money laundering, the counterfeiting of goods or currency, bulk cash smuggling, or narcotics trafficking that supports the government of North Korea or any senior official or person acting for or on behalf of that government, end quote. Developer logs and sources are telling Mark German that Apple is testing four different M2 base chips in at least nine new Macs, including a MacBook Air, MacBook Pro, MacMany, and Mac

Starting point is 00:05:37 Pro, quoting Bloomberg. The company is testing at least nine new Macs with four different M2-based chips, the successors to the current M1 line, with third-party apps in its app store, according to the logs, which were corroborated by people familiar with the matter. The move is a key step in the development process, suggesting that the new machines may be nearing release in the coming months. The new machines being tested include a MacBook Air with an M2 chip codenamed J413. This Mac will have eight CPU cores, the components that handle the main processing, and 10 cores for graphics. That's up from eight graphics cores in the current MacBook Air. A Mac Mini with an M2 chip codenamed J4773. This machine will have the same

Starting point is 00:06:19 specifications as the MacBook Air. There's also an M2 Pro variation, codenamed J474 in testing. An entry-level MacBook Pro with an M2 chip codenamed J4993, this two will have the same specifications as the MacBook Air. A 14-inch MacBook Pro with M2 Pro and M2 Max Chips, code named J-414. The M-2-Max chip has 12 CPU cores and 38 graphics cores up from 10 CPU cores and 32 graphics cores in the current model, according to the logs. It will also have 64 gigabytes of memory. A 16-inch MacBook Pro with M2 Pro and M2 Max chips, code named J-416, the 16-inch MacBook Pro's M2 Max, will have the same specifications as the 14-inch MacBook Pro version. And a Mac Pro, codenamed J-180.

Starting point is 00:07:06 This machine will include a successor to the M-1 Ultra Chip used in the Mac Studio computer. Apple is testing a Mac Mini with an M-1 Pro chip, the same processor used in the entry-level 14-inch and 16-inch MacBook Pros today. That machine is codenamed J-374. The company has tested an M-1-Max version of the Mac Mini as well, but the new Mac Studio may make these machines redundant. quote. Maybe I was wrong. Maybe the spring thaw in China isn't what I thought. China has banned live streaming of unauthorized video games, particularly of overseas games or competitions that have not

Starting point is 00:07:48 been approved by regulators. Quoting Reuters, in particular, the live streaming of overseas games or competitions should not be carried out without approval. The regulator said, adding that live streamers should resist, quote, abnormal aesthetics and harmful celebrity fan culture. Quote, for a period of time, issues such as chaotic online live streaming and teenage addiction to games have raised widespread concerns in society and effective measures need to be taken urgently, the regulator said in a notice on its website. Daniel Amad, a senior analyst at research firm Niko partners, said while unlicensed games could not officially be released in mainland China, many were promoted on live streaming platforms such as hooya, do you international holding, and

Starting point is 00:08:30 Billy Billy. Earlier this year, Eldon Ring was a hit on Chinese game live streaming platforms reaching 17.1 million cumulative daily average viewers, despite not having a license, he said, end quote. Time for the weekend long-rate suggestions. First up, you've heard of the PayPal Mafia, and these days, as I'm investing, I'm often investing alongside Uber alumni, DoorDash alumni, Airbnb alumni. Every company that's had a successful exit recently has their own investing mafia now. At the Investing 101 substack, Kyle Harrison calls these talent vortexes, and he has a piece discussing

Starting point is 00:09:12 how to identify one that might be adjacent to you. Quote, this idea of a tech family tree is common among startups, but rarely discussed. The idea is that when talented people have worked at other great talent vortexes, you associate with really smart people. Then as you build something, you're able to find the smartest people you worked with before, and try and convince them to join your new company. When it comes to building talent vortexes, I went right to the source and talked with people across companies that have produced high-quality talent. Stripe, Airbnb, Dropbox, Plaid, etc. I was surprised by how consistent the feedback was on what these people saw as the most critical ways of building a talent vortex and how similar they were to some of the things that Jimmy Soni mentioned

Starting point is 00:09:54 about PayPal, end quote. Then, if you really can't get enough of the Elon Musk Twitter story, Bloomberg outlines sort of what I was discussing yesterday in terms of, is funding secured? Quote, the purchase isn't straightforward, but Musk has several financing paths. One option is to sell his Tesla shares outright. Another is borrowing against them to stage a leveraged buyout, possibly with outside partners. Musk, 50, currently has about $3 billion in cash or other somewhat liquid assets after spending $2.6 billion buying a 9.1 stake in Twitter in recent months, according to Bloomberg calculations. For Musk to raise the additional $36 billion in cash needed to buy the rest of Twitter

Starting point is 00:10:35 would require selling about 36.5 million Tesla shares or more than a fifth of his stake. Such an exit could risk a slide in the company's share price, not to mention potentially raise questions about the commitment, financial or otherwise, of its chief executive officer. His other option is to borrow against his positions in Tesla and Space Exploration Company SpaceX. This becomes a hostile takeover offer which is going to cost a serious amount of cash, said Neil Kampling, head of TMT Research at Mirabot Equity Research, he will have to sell a decent piece of Tesla stock to fund it or a massive loan against it,

Starting point is 00:11:09 end quote. On the bonus episode we're going to have this weekend, we go deep on employees in tech playing the startup game, playing the go-to-a-big-tech company game, the great game of stock options, if you will. But did you know about Bling, the anonymous professional social network that a lot of high-paid folks in tech use to trade inside dirt on how companies actually operate and treat their employees. From every quote, the specific corner of the tech industry active on blind is flush with money and people trying to optimize for more, whether it's collecting information to

Starting point is 00:11:46 negotiate the best offer or job hopping their way to higher total compensation or TC. The refrain, TC or GTFO, is persistent on blind. It signifies that career conversations should center around weighing six-figure salaries and that discussions about work without mention of money aren't worth having. Blind isn't representative of the entire technology industry, big tech or otherwise, but for many on the app, big tech is a game and big money is the score. The idea that the best is elsewhere is intrinsic to the community, with tech workers bouncing from meta to Microsoft or vice versa to maximize their earnings in a compensation climate that often rewards leaving instead of staying. The app captures a culture obsessed with optionality. And yet, despite the sky-high salaries, lucrative stock options and

Starting point is 00:12:31 generous perks that are a feature of big tech, negativity towards work is pervasive across the app. Much of the conversation is similar in spirit to what you might find on R-slash anti-work on Reddit or any other space where one speaks candidly about work. People are burnt out, facing a crisis of meaning and hoping to find salvation up the ladder at a higher salary band or at a shinier brand, end quote. Then, Vice has a piece about something that I need to learn more about. Stablecoins are apparently in a war for dominance right now, and it's getting ugly. There are many stable coins today, and they're gaining favorable attention from regulators and politicians.

Starting point is 00:13:11 The competition has led to a knives-out war between upstart projects against legacy stablecoins like DAI, the stable coin issued by Maker Dow that pioneered the defy borrowing and lending market in 2017. By my hand, die will die, Du Kwan, founder and CEO of Terraform Labs declared on March 23rd. Terraform Labs is the firm behind the Terra blockchain and its native stablecoin, UST, not to be confused with USDT or Tether, a separate stable coin. As part of the plan to kill off die, Kwan wants to make UST the new king of the stable coins. It's a plausible scenario since he and his allies hold a significant amount of tokens, with which to pay off users in Curve, a D. D-Fi protocol that largely determines the fate of stable coins due to its prominence in the ecosystem. In a move reminiscent of hostile takeovers in the corporate world, they plan to aggressively

Starting point is 00:14:02 wage a battle in what crypto people call the curve wars, end quote. And I'm not going to quote from it, but Forbes has a cover story profile of Friend of the Show and Web 3 Booster Supreme Chris Dixon of A16Z. They named him the investor of the year in their Midas list this year. And finally, this is not really tech, though you could say there's a social media influencer angle here. The Atlantic takes a look at the lives of Europe's many, many ex-royals, the descendants of dethroned monarchs. Quote, Europe has 12 remaining monarchies, including three principalities and a grand duchy. But the continent is also lousy with dethroned or exiled royals, many of whom have returned to their ancestral homelands. King Michael of Romania was kicked out by communists, but his daughter,

Starting point is 00:14:53 Margareta, custodian of the Romanian crown, is back there and has co-founded a charitable foundation. Constantine II, a former king of Greece, flew his family to safety in Italy after a coup in 1967. He now lives a quiet life in a Greek resort town. Crown Prince Alexander of Serbia was born in a suite at Clerages in London after his father fled Yugoslavia during the Second World War. He now lives in the Royal Palace in Belgrade. Simeon Saxe-Coburg Gotha a former king of Bulgaria spent 50 years in exile. He served as the country's prime minister soon after he was allowed home in 1996. The further royals get from power, the otter the whole business seems. There are three main claimants to the French throne. One of them, Jean-Christophne

Starting point is 00:15:39 Napoleon Bonaparte, who works in private equity, has a LinkedIn profile. Another, Jean-Diorland. Count of Paris is six generations away from the last king of France, Louis-Philippe, but feels the need to keep the monarchist's presence alive on the internet. Quote, in the last 30 years, the politics of our country has completely altered our social bonds through its hedonistic individualism, he explains on his website. It therefore seemed important to me to accompany my commitments with appropriate communication, end quote. For the record, this is also why I tweet, end quote.

Starting point is 00:16:22 All right, we've got a big bonus episode for you tomorrow. It's a great one. If you wanted practical advice on how to play the great game of stock options, We've got a deep discussion for you with Gerge Oros of Pragmatic Engineer, the number one paid tech newsletter on Substack, by the way. If you want to become an employee in tech, do you go with a small but hot startup? Do you go with a big established tech player? We get into the pros and cons of each.

Starting point is 00:16:52 We offer behind the scenes practical stories of working at fast, say, or working at Uber, working at Google. We get into how engineering cultures operate in big tech company. And then, after about an hour, sorry, we couldn't resist. Chris and I kick around the whole Elon and Twitter thing. But also, very important programming note. There will be no show on Monday. It is Easter Monday, I guess, in a lot of places.

Starting point is 00:17:18 It is here in the U.S. too, but it's not an official holiday. And yet, somehow when I plotted out the schedule at the beginning of the year, I marked Monday as a day off. And so, I'm going to stick with that since the kids happen to be on spring break. next week and thus out of school. So I'm going to do a specific dedicated Papa day. I will be going on this week in tech with Leo Laporte on Sunday night. And since they release that show on Monday, if you really, really miss me on Monday, you could listen to me there. Otherwise, talk to you on Tuesday.

Tech Brew Ride Home - Fri. 04/15 – Twitter To (Poison) Pill Elon?

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