Saudi Prince Alwaleed bin Talal, who is estimated to control approximately 4.4% of Twitter’s shares, took to Twitter itself to reject Musks $54 billion USD buyout offer in recent days suggesting that it undervalued the platform.
In response, Musk took to Twitter as well to troll him back, asking how many shares Alwaleed actually possessed, and what Saudi Arabia’s stances on freedom of speech were.
These were obvious jabs over the prince’s estimated net worth which is dwarfed by that of Musk, whose Tesla and SpaceX have exploded in recent years due to investor speculation, as well as over Saudi Arabia’s tumultuous relationship with freedom of speech and human rights, challenged by the assassination of Jamal Khashoggi.
Musk’s net worth is largely based on Tesla’s extremely high valuations based off of the meme appeal of the company, which had an abysmal price to earnings ratio of more than 200 last year, orders of magnitude larger than the average S&P500 P/E ratio of close to 15.
Twitter’s though is even more preposterous, with a negative P/E estimated to be more than 500 this year, suggesting that both company’s valuations are increasingly untethered from reality.
This should raise concerns that prices are increasingly reflective of the preposterous media circus in which the ability to manipulate public attention drives the markets rather than the inverse.
It also raises questions over why a for-profit media platform, used by just a highly polarized and largely extremist fraction of the population, and whose private censorship rights are constitutionally protected by the first amendment, has ironically become synonymous with debates over public freedom of speech.