The Deed is Done: Musk Owns Twitter
“Brother, can you spare a dime? (Or a few billion?)”
As you have no doubt heard by now, Elon Musk closed his purchase of Twitter on Thursday night, October 27, 2022. Now he owns the thing.
All my predictions about how he might try to get out of the deal proved wrong. (Nothing new there.)
Now we’re looking at a whole new world where this mercurial, immature, petulant, allegedly brilliant businessman owns the company privately.
Some points to remember:
1.) He can do whatever he wants. It’s a “private” company. I am sure there are people of a certain political stripe who will celebrate the fact that FINALLY free speech will reign supreme on the digital town square that is Twitter.
Thing is, even when Twitter was “publicly” owned by shareholders, it was still a “private” business. Somehow, certain people (millions of them) had the grossly mistaken impression that the First Amendment applies to everything.
In fact, the First Amendment only applies to the government – Federal, state, local – not restraining your speech. A person has no more rights to scream racist obscenities on Twitter as they do in your local pizza joint. If the owner of the restaurant doesn’t want someone in their establishment swearing at customers, she can kick them out. So can Twitter. It really is that simple.
All that said, Elon Musk can now allow - or not - whoever he wants on Twitter. It’s all his. His restaurant, his pizza, his choice of speech. It’s still really that simple.
2.) He overpaid. By a lot. He paid for a brand-new Gulfstream G800 private jet and got a 1983 Chevy Citation with 328,294 miles on it and a wire coat hanger for its AM radio antenna. By all reasonable measures, if Musk didn’t sign the worst contract in the history of business to buy Twitter for $44 billion, Twitter might be worth, maybe, $15 billion if he somehow got out of the deal and Twitter stock was still trading today. Stated another way: Musk and his merry band of hangers-on and sycophants in Silicon Valley were about $30 billion in the hole the minute Musk took possession of the building keys on Thursday night.
And that is a massively deep hole to climb out of. Twitter was never a particularly good business to begin with. It underperformed the Nasdaq, the S&P, the overall market and Timmy’s Corner Lemonade Stand since going public. Musk may or may not be the smartest businessman in the world, but starting out billions underwater is no way to run a railroad. (Unless you want to run the railroad off a cliff like in “Back to the Future 3.” In that case, Elon had also better invent a flux capacitor. And fast.)
3.) Musk made a lot of enemies during his tortured, circuitous route to ownership. Name a Twitter stakeholder - employees, management, investors, creditors, advertisers, users, the media, politicians, celebrities, my dog, your dog – and Musk managed to insult, lie to, harangue, fuck with and screw over each and every one of them. And in the end, for what? To be a less credible owner of a deeply wounded organization of which he was the principal wounder.
Bottom line: Would you want to work for or invest in or invest with this guy? Me neither. (Remember: he lost $30 billion in the 30 seconds it took to finally close this deal.)
4.) Big brands may defect. There may be a few big advertisers (every other major car company in the world, Boeing) that compete with Musk’s other businesses who are probably not thrilled with the prospect of sharing part of their advertising strategy with Musk, let alone hand over actual money to him. Why would General Motors or Ford (to name two), who are staking the entire future of their companies on going fully electric, willingly discuss their advertising plans with the guy who runs the biggest EV manufacturer in the world? It’s analogous to McDonald’s taking out Big Mac ads on Burger King’s web site. (Not really, but you get the point…)
Maybe Musk really does have some grand “superapp” idea up his sleeve that will fundamentally change Twitter in a way us mere mortals cannot imagine, but unless and until he builds, launches and convinces the world to use said superapp, advertising is the only way this company makes any money right now.
So, good luck Mr. Musk. You overpaid for a highly influential pig in a poke. It remains to be seen whether or not that pig will ever amount to anything more than it is now: a demoralized, friendless, overvalued sow.