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The $44 Billion Lesson: Is Elon Musk Ditching Twitter's "Stop Loss"?

2022-12-21T10:11:35.490Z


Tesla founder Elon Musk, who has held several online referendums to make decisions in the past two months since acquiring Twitter, will launch an online referendum on his future as Twitter CEO (CEO) on December 19.


Elon Musk, the founder of Tesla, who has held several online referendums to make decisions in the past two months since acquiring Twitter, launched an online vote on December 19 on whether he will remain as Twitter’s chief executive officer (CEO). More than 17.5 million users participated, supporting Musk's resignation as CEO by a 57.5% to 42.5% ratio.

After the voting results came out, Musk once questioned that the result of the majority of voters supporting his resignation was the result of "robots" making votes, but in the end he "accepted the results" on the evening of the 20th, claiming that he had "found someone who is stupid enough to take over". would "resign as CEO immediately."


Since he was "forced" to acquire Twitter at a high price of US$44 billion on October 27, Musk has been in the news every day for two consecutive months, from massive layoffs to restoring the account of former President Trump (Donald Trump). Successfully grabbed the attention of the world.

Two months of chaos besieged on all sides

However, Musk, who has recently turned to the right and even called on people to vote for the Republican Party before the mid-term elections on November 8, has become Twitter's box office poison in the hearts of left-wing people. More than 32 million global monthly users will be lost, and revenue growth will be difficult to see.

At the same time, Musk's speech management policy, which was changed from day to day, also made Twitter users at a loss and alienated.

Musk, who once claimed to be a "free speech absolutist", stated at the beginning of the acquisition of Twitter that he would set up a speech control committee to deal with related matters, similar to Facebook's approach, but he quickly backtracked and voted directly through Twitter "Amnesty" for most of the people whose accounts are blocked -- which does make Musk look like the absolute guardian of free speech.

But on the other hand, on December 14, Musk blocked the account (@elonjet) that tracked his private jet with public information. On the 15th, he also blocked the accounts of several journalists for the same reason. Promote other social media on Twitter.

Free speech absolutism seems to cease to exist.

In the end, under the siege of the United Nations, the European Union and public opinion leaders, Musk restored the accounts of these reporters and canceled the policy of prohibiting the promotion of other social media in less than 24 hours.

Is Twitter controlled by Musk still a public square for free speech?

People don't know.

In addition, after mass layoffs of employees, Twitter's internal turmoil continued. On November 23, it silently canceled the clause prohibiting false information about the new crown epidemic. On December 12, it was even reported that it was responsible for online safety, harassment, Expert groups on various important harmful content issues, including child pornography, have been disbanded.

Since Musk acquired Twitter, several studies have shown that hate speech on Twitter has increased significantly. For example, the non-profit organization "Center for Countering Digital Hate" (Center for Countering Digital Hate, tentative translation) found that blacks, homosexuals, and transgender people Both the number of hate tweets and the number of responses to them have increased by as much as threefold.

Under such circumstances, at the end of November, Thierry Breton, Commissioner for Internal Markets of the European Commission, publicly warned Twitter that it must comply with the Digital Services Act that has just come into effect, stop "arbitrary" speech control, and aggressively Crack down on disinformation and agree to extensive independent audits by next year, among other things, or risk being banned in the EU or face fines of up to 6% of global turnover.

In addition to political pressure, the advertising business, which accounts for 90% of Twitter's revenue, is even more bleak.

According to a report by The New York Times earlier this month, the number of Twitter advertisers fell from 3,980 in May to 2,315 in October, a drop of more than 40%.

The "Wall Street Journal" also reported that by November of this year, desktop visits to Twitter's advertising management platform had plummeted by 85% year-on-year.

Regarding this tragic situation, Musk can also be regarded as outspoken. As early as the beginning of November, he claimed that Twitter was losing $4 million a day.

Twitter was originally a poorly managed business, with a loss of more than 200 million U.S. dollars last year. After Musk’s leveraged buyout, the annual benefit expense alone was as high as 1 billion U.S. dollars.

Now that Musk has smashed Twitter's "advertising job", I am afraid that the actual value of the company has been further damaged, and Musk's 44 billion investment may eventually be lost.

(Press: Actually not necessarily!)

The essential difference between Twitter and Tesla

With the image of "Iron Man" (Iron Man), Musk is really a superhero figure with the amazing success of his companies such as Tesla and SpaceX.

However, in fact, Musk also has many businesses that have failed or are on the verge of failure, such as Boring, which focuses on digging tunnels to improve ground traffic congestion, or SolarCity, a large solar energy company that was acquired by his relatives. wait.

There appear to be three necessary conditions behind Musk's two successful businesses.

One is that its business belongs to untapped industries, such as electric vehicles, private aerospace and so on.

The second is that these businesses have the potential to attract government funding.

The third is that Musk can propose unprecedented grand visions for these businesses, such as enabling humans to live on Mars.

The problem is that Twitter doesn't have all these three conditions.

Although Twitter has a great influence in the media industry, politics, and academia, the social media industry based on advertising business is already full of giants, and TikTok, a new competitor that focuses on short videos, is no longer an industry to be developed. .

In the future, local governments will only have the possibility of tightening regulations on social media companies, without any subsidies.

What's more serious is that Musk himself can't come up with a groundbreaking grand idea for Twitter.

Of course, he positioned the acquisition of Twitter as the first step in developing an all-in-one WeChat-like app.

However, this goal is purely "plagiarism", and European and American people who have become increasingly suspicious of technology giants in recent years are unlikely to be willing to hand over their information in various fields to the same company.

Therefore, Musk, who has no amazing ambitions, after taking over Twitter, almost the only visible business change is the launch of the blue tick subscription plan.

At the beginning of its launch, it was forced to suspend due to the number of people pretending to be others.

This $8 monthly fee plan is obviously not a new way to reverse Twitter's business.

After Musk entered Twitter, many users were looking for alternatives to Twitter.

(Reuters)

Musk, who has been mired in Twitter, recently reported that he is privately selling shares to others at the price of $54.2 per share when he bought Twitter in order to raise funds.

He is still stubborn now, and he seems to have a certain degree of awareness that he can't handle Twitter.

The cost of this lesson is, for the time being, $44 billion.

For Musk, who is still the second richest man in the world, Twitter's losses may be temporarily affordable. However, the Twitter turmoil in the past two months has begun to affect Tesla, where Musk's net worth, wealth, and achievements are tied.

The fire of Twitter and Tesla?

In order to cope with Twitter's acquisition, Musk has sold nearly $40 billion worth of Tesla shares this year.

At the same time, Tesla's stock price plummeted by 60%, making Musk lose his status as the world's richest man.

Over the past year, Musk's net worth has nearly halved, or $123 billion, according to Bloomberg data.

At the same time, Musk's acquisition of Twitter, its operation, and the various controversies he caused have also greatly damaged Tesla's corporate image.

For the first time since the same survey began in 2016, more U.S. respondents had more negative impressions of Tesla than positive ones, according to YouGov's November poll.

Morning Consult's survey also showed that the proportion of respondents who have a positive impression of Tesla fell from 43% in January this year to 38% in November.

The technology news website CNET also quoted reports from Tesla customers and sellers, saying that many customers have abandoned Tesla electric vehicles because of Musk's performance on Twitter.

Misfortunes never come singly. Although Tesla first popularized the use of electric vehicles and opened up new markets, with the emergence of competitors, Tesla is no longer the only choice.

According to S&P Global, Tesla's share of the U.S. electric vehicle market has fallen to 65 percent from 79 percent two years ago, and is expected to fall below 20 percent by 2025.

Analysts at Oppenheimer have reportedly told clients that Musk's management of Twitter has severely damaged Tesla's market sentiment.

Ross Gerber, founder of wealth management company Gerber Kawasaki, also pointed out that Tesla's stock price is reflecting the value of "no CEO".

Musk has run numerous companies.

(Reuters)

When the spillover effect of Twitter’s chaotic management and operating difficulties spread to Tesla, Musk seemed to have reached the moment when he had to choose between the “wet head” Twitter and Tesla, which was rich.

Otherwise, a negative impact from the Twitter acquisition may become a vicious circle that is difficult to deal with.

Musk’s “Twitter CEO Resignation Referendum” provided him with a slightly more decent step down from this difficult choice.

Buying Twitter at a high price and letting go of it two months later will make Musk look bad anyway.

However, the trade-off between face and silver paper should be clear and unmistakable.

The end of Twitter is coming?

Elon Musk may have a hidden plan of "death and rebirth" Elon Musk: If a replacement is found, he will resign as Twitter CEOTwitter has more than 10 million users support him. After his resignation, Elon Musk intends to restrict voting qualifications. Who can succeed Elon Musk at the helm of Twitter?

Snoop Dogg invited netizens to guess that the dark horse is Elon Musk and Twitter "lose-lose"?

The $44 Billion Farce of Buying or Not Buying is Unfinished The Four Corners of Biden’s Climate Policy, Elon Musk, Taxes on the Rich, and Democratic Partisanship

Source: hk1

All news articles on 2022-12-21

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