Tesla boss Elon Musk may be studying the blockbuster AOL-Time Warner merger of 20 years ago, the biggest, most sensational deal of the era. That’s because he may be considering a similar stunt himself – using Tesla Inc.’s crazily overvalued shares as a takeover currency.
But first, a reminder of those heady days, when the dot-com boom was still intact and America Online – better known as AOL, led by Steve Case – went shopping.
By then AOL was a tech juggernaut, a pioneer of e-mail, web portals, instant messaging and browsing. Mr. Case added CompuServe and Netscape to the mix, and investors fell in love with the whole techy mess.
AOL shares soared well beyond their realistic worth, and Mr. Case knew that rival technology would soon turn AOL’s old dial-up service into a dinosaur.
What he needed was a big, stable business that threw off a lot of cash. He also needed to deal with a CEO who would fall into his confidence trap and – voilà – in came Jerry Levin, boss of Time Warner, the venerable studio, media and publishing empire.