Elon Musk’s purchase of Twitter for the vastly-inflated price of $44 billion is probably the singularly largest and most rapid destruction of corporate value in the history of American business thus far. While there have been plenty of terrible deals in American history – AOL/TimeWarner stands out as an example, it took years for those business deals to turn sour. Musk has managed to destroy Twitter in a matter of weeks.
While Musk had been known as the visionary genius behind Tesla’s electric cars and SpaceX’s incredible rockets and spacecraft, he has managed to torch not only a social networking site, but his own mystique. Instead of a tech visionary, Musk looks like a terminally uncool and out-of-touch shitposter with a boundless ego and an equally boundless sense of self-importance. Because Musk heavily leveraged his Tesla shares, it is quite possible that he could lose control of that company. Given that NASA and the Department of Defense are some of SpaceX’s largest and most important customers, the backlash to Musk’s radicalism could (and probably should) cause him to be ousted from that company as well. And the next time SpaceX needs a capital raise how many investors will see the garbage fire that is Twitter and think that giving Musk more money is a sound investment? Musk’s infantile antics have real-world implications for both him and his companies.
I said that if Musk reinstated The Former Guy, I would leave the site. He did, and I did. What is even more pathetic is that Musk is practically begging TFG to return to Twitter. While TFG would certainly get a bigger audience at Twitter than at his private internet pigsty Truth Social, TFG seems uninterested in returning. Knowing how TFG loves making others squirm, Musk’s pathetic entreaties must tickle the Mango Mussolini of Mar-A-Lago. But given the choice of playing on Musk’s playground or the one he owns completely, TFG appears content to stay put.
Not only has Musk invited TFG back to the site, but he is actively restoring the accounts of every shitposter, racist, and fool he can find. Project Veritas, the painfully unfunny Babylon Bee, the idiot’s intellectual Jordan Peterson, etc. Musk is rapidly turning Twitter into a virtual Mos Eisley Cantina – a digital den of scum and villainy.
Musk’s idiotic business deal means that Twitter needs to bring in roughly twice the revenue it has ever had just to service the site’s massive debt obligations. The math behind Twitter’s debt obligations simply does not work. In order for Musk to keep the lights on at Twitter he needs to find a source of revenue.
Unfortunately for Musk, he has pissed off advertisers to the point that major firms have already begun pausing or even cancelling campaigns. Major brands do not want their ads next to a racist rant from “JewHatr1488.” Instead, Musk has been pushing for the $8 “Twitter Blue” subscription model, that includes some additional features and a “verified” checkmark. However, Musk failed to understand that the purpose of verification was not to make a user seem cool, but to ensure that everyone else knew that user was legitimate. This misunderstanding led to a clusterfuck of epic proportions as people used Twitter to impersonate major brands. If Musk had already been on thin ice with advertisers before, the botched Twitter Blue rollout made things infinitely worse.
Even if Musk is content to let Twitter go without its main source of revenue, the idea that people are going to pay $8 a month for a septic tank of a website seems hopelessly naive. The only value of a social media site is its people. And as normal people leave Twitter in droves, whether decamping to Mastodon, Instagram, or any of the up-and-coming sites like Hive or Post, the value of Twitter drops even more. Most people are not going to wade through a sea of filth just to hear what their friends are doing. And even fewer still are going to pay $8/month for the privilege of doing so. The chances that Musk is going to make enough money to even come close to servicing Twitter’s debt obligations with Twitter Blue subscriptions is naive at best, and catastrophically idiotic at worse.
This does not even touch on the way in which Musk’s has mismanaged Twitter’s employees. Musk’s management strategy is basically “the lashings will continue until morale improves.” The employees that Musk has not fired either as a headcount reduction strategy or in fits of pique have largely left. At this point the skeleton crew that is left tends to be people who have few other options, like H1-B visa holders that cannot leave without the risk of deportation.
The fact is that Elon Musk is someone so desperate for any kind of attention that he will burn billions of dollars in cash to do so. The purchase of Twitter was not a savvy business move—it was a toddler’s tantrum. Musk’s crowing about Twitter’s spiking usage shows how he fundamentally misunderstands his position. Gawking at a dumpster fire brings eyeballs, but it does not bring revenue. Insulting users is not going to make people want to stay on the site, and once a critical mass leaves, the rest will follow. It is quite possible that critical mass has already left. From my experience, most of the people I follow have already decamped to Mastodon. Despite Mastodon’s issues, it is far less toxic.
In the end, Twitter is likely to collapse. There are plenty of ways in which Twitter could die in very short order. The mass firings of engineers could cause the site to slowly break down to the point that people just do not bother. Elon’s blatant violation of Twitter’s FTC consent orders could cause ruinous fines or even personal liability. Google and Apple could see a Twitter that’s become a haven for porn, piracy, racism, and trolling and decide to boot the Twitter app from their respective app stores. Twitter could simply run out of money and have to file for bankruptcy. There are a million ways that Twitter could die at this point and very few scenarios in which the site survives.
Business and law textbooks will no doubt have lengthy chapters on Musk’s Twitter acquisition and its fallout. None of them will be flattering to Musk.