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Elon Musk did it to Us Again!!
By now you'd have to be living under a rock to not know that Elon Musk announced he was going to buy Twitter for 44 billion dollars.
Yes, you heard it correctly. That's billion, with a capital “B.” 44 of them to be exact.
Elon Musk and Twitter.
If you don't remember the story, it went something like this:
- On April 14, Elon Musk said he would buy Twitter himself for 44 billion dollars.
- That price equaled $54.20 in cash for each share of Twitter common stock, a 38% premium to the site's stock price on April 1 (which had recently fallen 17% after Twitter's new CEO was announced).
- Then the word kinda sorta slipped out that Elon Musk wasn't actually putting up the whole $44 billion himself. Instead, Musk had arranged $46.5 billion in financing from Morgan Stanley and other banks.
- Next, Elon Musk teased that he might allow Donald Trump back on the platform (you might remember that Trump's Twitter account was closed on 01/08/22)
- A few days later, Musk confirmed that he would indeed allow Trump back onto Twitter.
- But then Musk announced that he might not buy the site after all because it was possible that more than 5% of Twitter users were actually bots. Really? He wasn't aware of the number before he pledged the $44 billion? Looks like I spend more time inspecting a vintage car I'm thinking of buying than Musk does to spend almost the entire GNP of Austria on a web portal.
- Twitter stock fell 20% on his announcement, recovering somewhat when Musk tweeted that he “remained committed to the deal.” According to a Reuters article on May 13, Twitter's “shares were down 9.6% to $40.71 in trading on Friday, a steep discount to the $54.20 per share acquisition price.”
Musk and Twitter for people with short attention spans.
- Elon Musk was buying Twitter with $44 billion of his own money.
- Elon Musk was borrowing $46.5 billion to buy Twitter.
- Elon Musk was going to reinstate Trump's Twitter account.
- Elon Musk was not buying Twitter.
Regardless of the long-term business ramifications of this deal and regardless of whether or not Musk actually winds up buying Twitter, he's already gotten what he wanted.
Elon Musk hijacked the news cycle for a full week. And now you and I believe that Musk has $44 billion in cash.
Not only that, but when the Twitter acquisition story was dying down and people stopped talking about it, preferring to obsess over really important issues such as Russia invading Ukraine and the leaking of The Supreme Court's draft of their Roe v. Wade decision, Musk got himself back in the headlines and got everyone talking simply by threatening to bring back Donald Trump.
Why did Elon Musk do this?
Just like the influencers who get paid to play video games on Twitch or apply makeup on Instagram, Musk used social media and traditional media to enhance his brand image. By doing this, he's no different than the Kardashians, anyone who's ever appeared on The Bachelor or the entire cast of every “Housewives of…” show ever produced – using base, salacious or prurient outbursts to get attention.
Elon Musk masterfully used every attention-grabbing device he could for the sole purpose of getting you and I to contribute our time and attention to his business at virtually no cost. Because as the old advertising adage goes, “if you're not paying for the product, you are the product.
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People say that time and money are resources, and you can argue whether that's true or not. What is true is that money is a renewable resource while time is the ultimate non-renewable resource – you can always figure out how to get more money, you can never, ever, ever get more time.
Elon Musk's brand got all the advantages of our time, attention, and opinion of his reputation and he paid us nothing for it.
You will never ever get back the time you spent looking at stories and posts about Elon Musk or Twitter.
The people who rushed in to buy Twitter stock thinking they'd profit by Elon Musk's purchase will never get back the money they lost. Elon Musk did it to us again.
You are wrong on this the same way that you were 100% wrong on your assessment that Donald Trump was running for president to improve his image. Even the top 0.01% make mistakes. I’m sure that there is a part of what is happening that Musk did 100% on purpose: the zig-zagging of the Twitter stock shows the board (and any reticent shareholder) that he has the power to bend Twitter to his will. But the effect on his image has been negative over a huge spectrum.
But to address the original question: no, you are wrong on this. Twitter (or any such platform) not only provides a huge cash flow (100% of the advertising is pre-paid or paid 30 days) but will serve to bolster his car, boring and space companies.
While what you stated may very well be true, you also left out perhaps the most important ramification of Elon Musk’s proposal to buy Twitter; that being he wants to ensure our first amendment right of freedom of speech. Perhaps he never truly intended for the sale to occur but it certainly called out the suppression of free speech which you totally left out of your article. By doing so, you are also contributing to the fall of this great nation.
That’s a reasonable opinion, Linda (that Musk did this to ensure our first amendment rights, not that I’ve contributed to the fall of this great nation).
Musk’s history has demonstrated to me that he puts dollars ahead of his concern for our constitutional rights.
I did not waste any time reading about Musk who in reality is one of the most dangerous opponents of real democracy. It’s also an example of how one miss uses the power of money. I don’t always agree with Jeff Bezos but his purchase of the Washington Post then allowing it to be run by newspaper professionals is how one spends money.
The issues surrounding Roe reminds me of the late George Carlin who said 30 years ago that (I’m paraphrasing) why the concern about the fetus, we should be concerned after the child is born.
Thanks for your invite Bruce.
Reading your posts are, as you say, time I’ll never recover. However, I don’t want to recover that time. I love your analyses (is that the plural?) and opinions – and how you express them — always a worthy purchase for my time spent. You rock, Bruce. ox
Sobering and cogent analysis. It’s disturbing to see the media hoodwinked again. If you were a news boss, how would you supervise your reporting staff to avoid playing so abjectly into Musk’s hands?
Thank you Ed. I don’t know what traditional media needs to do to protect itself from serving as a mouthpiece for someone whose utterances are seen as news regardless of whether they’re self-serving or not. Clearly the speed at which new media operates has eliminated a lot of the reflection that analog newsrooms counted on for accuracy.
We did it to us… again!
Perfectly and cleverly stated, David!
We must all learn to drive by these “roadside accidents” without slowing down to look. I’ve trained myself to ask, “Is this really worth reading” before clicking on ANYTHING; the difference between a newsworthy headline and click-bait isn’t all that difficult to discern if we can override our impulses. My intel on Elon Musk, Twitter, and Trump is headline-deep … and it’s still more than I really care to know.
It’s a good thing I spent almost zero of my time listening or caring what he does….!
There’s an interesting issue that Musk clearly hasn’t considered. As he drifts right with his pronouncements regarding “ free speech”, labor rights and taxes and demonstrates the pitfalls of being a person with Asperger’s syndrome and a microphone there may well be fallout. His wealth which makes the SEC’s rules meaningless is based on the valuation of Tesla. Until now Tesla had no competition and therefore there was at least some rationale to support a valuation more than nearly all the other automakers (combined) Do the people who love his MAGA like comments represent prime buyers of EVs? Will he hurt his brand’s valuation? Will he begin a downward spiral of the company’s valuation which will be faster than it should be? Every year there are exponentially more all electric vehicles hitting the market
Good to have you weigh in Myer. I’m also curious to see what Musk tipping his hand and taking sides will do to Tesla sales. People associate their purchases with their values and it will be interesting to see if his actions are connected to supporting First Amendment rights or supporting the former president. Only time will tell…
Remember day trading? My whole office was doing it and not working I kept working and making money. They criticized me everyday. But I was right.
No one made money off the stock market on day trading.