With many M&A deals, deteriorating markets can turn a flawed acquisition into a disaster. That possibility must haunt Elon Musk
In Mr Bruner’s diagnosis, the first hints of hell come from hubris. The self-styled “” has every reason for self-belief. Tesla is the world’s most valuable carmaker. SpaceX is literally rocket science in action. Yet for executives like him it’s a fine line from that to overconfidence. Sony’s Morita Akio crossed it. So did’s Fred Goodwin.
The corollary of hubris is sloppy financing, another attribute of top-of-the-market megaflops. This is particularly true at the tail end of bull markets, such as the one recently vanished in a puff of smoke. Not only was Mr Musk so unconcerned about overpayment that he based his $54.20-a-share offer for Twitter on an overused cannabis joke. Big banks jostled to back one of the world’s largest-ever buy-outs, even though by then cracks had started to appear in leveraged-loan markets.
If it works, it would provide yet further testimony to Mr Musk’s ineffable genius. But it also has a hellish side. It could pit the world’s most powerful businessman against tech regulators. It could stir up trouble geopolitically . And it could enrage China, thwarting Tesla’s prospects there. Another deal for the history books, no doubt.
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