Tesla CEO Elon Musk is about to seal the deal to buy Twitter for $44 billion. Jae C. Hong/AP hide caption
Jae C. Hong/AP
Tesla CEO Elon Musk is about to seal the deal to buy Twitter for $44 billion.
Jae C. Hong/AP
Elon Musk lugged a sink into Twitter headquarters on Wednesday.
"Entering Twitter HQ – let that sink in!" he captioned the video, which he posted on Twitter.
He also renamed himself "Chief Twit" on the social network.
Musk has been founding companies since the dawn of the internet age. He's grown Tesla, SpaceX and PayPal into the blue chips that they are today.
But the financially struggling social media company, which he is expected to buy by Friday, needs something more to become a success story, said Andy Wu, who teaches business strategy at Harvard Business School.
"Musk has no experience in managing organizational change and there's definitely an embedded culture at Twitter that he'll have to change in order to achieve some of his goals," Wu said.
The challenge has only grown since Musk first offered to buy Twitter in the spring for $54.20 a share, or about $44 billion. Tech stocks have struggled along with the broader market. It didn't help that Musk openly criticized the company, tried to walk away from the deal, and only changed his mind after a high-profile and expensive legal battle neared trial. At one point, Twitter's stock lost a quarter of its value.
"Myself and other investors are obviously overpaying for Twitter right now," Musk said on a call with Tesla investors last week.
He acknowledged on Thursday that there was a lot of speculation about why he was buying Twitter after all his wavering.
"It is important to the future of civilization to have a common digital town square, where a wide range of believes can be debated in a healthy manner, without resorting to violence," he wrote in an open letter to Twitter advertisers.
"That is why I bought Twitter. I didn't do it because it would be easy. I didn't do it to make more money," he added, acknowledging that failure was a "very real possibility."
He has floated big plans for Twitter: he wants to slim it down while getting rid of fake accounts, loosen its rules on what users can say on the platform, and build it into an "everything app."
Experts say succeeding at even one of these goals would be hard enough.
Entering Twitter HQ – let that sink in! pic.twitter.com/D68z4K2wq7— Elon Musk (@elonmusk) October 26, 2022
Musk revolutionized the electric-car industry and privatized space
Throughout his career, Musk has chased bold, sci-fi-like visions. He fast-forwarded the electric car industry and sent rockets into space.
"People thought SpaceX was a crazy idea. He was going to launch satellites. Who does that? The government does that. And he proved all of his skeptics wrong. He launches satellites for much less money than the government," said Erik Gordon, professor of strategy and entrepreneurship at the University of Michigan's Ross School of Business. "He's gone through this before and landed like a cat."
Tesla was on the edge of insolvency more than once, due to manufacturing and logistics problems that piled delays on top of delays. Musk sunk millions of his own money into the company as it burned through cash and struggled to make deliveries.
In 2018, he famously slept on the floor of the Tesla factory to troubleshoot the assembly line and oversee the paint shop.
Musk is a genius at persuading the financial markets to back his risky investments, said Tim Higgins, who wrote Power Play: Tesla, Elon Musk, and the Bet of the Century.
"Probably the biggest contribution he had to Tesla was his ability to sell his vision of the future to customers, but more importantly to investors, to raise the billions and billions of dollars that were needed to keep Tesla afloat until it could become a viable company," he said.
That power has gotten Musk into trouble. In the middle of Tesla's struggles, Musk tweeted that he planned to take Tesla private at $420 a share. The stock price soared, leading the Securities and Exchange Commission to investigate whether Musk had misled investors.
In the end, Musk gave up his role as chair of Tesla's board and paid a $20 million fine to settle. (Tesla paid another $20 million.) He also agreed to let a Tesla lawyer review his tweets. The company remains publicly traded.
Am considering taking Tesla private at $420. Funding secured.— Elon Musk (@elonmusk) August 7, 2018
Musk's fundraising magic worked with SpaceX too, even when its rockets repeatedly blew up.
The Falcon, the Dragon, the Super Heavy rockets all exploded spectacularly on the launchpad or while attempting to land. SpaceX has since successfully flown astronauts to the International Space Station in the partially re-useable Falcon rocket.
In his tweets, Musk put a spin on the spectacular explosions as a new approach to the staid military-industrial spacecraft industry, applying the software industry's iterative process to rocketry.
"All he had to do was tweet something like, 'Oh, everything is actually wonderful. I couldn't be happier about all of these disasters. It's going to be great.' And he raised lots of money," Higgins said. "He's a money-raising genius."
Musk's ability to raise money on command was also on display during his legal fight with Twitter. The lawsuit made public a cache of his personal text messages, in which Silicon Valley heavyweights jockeyed to invest in Twitter.
Some consider Musk a visionary; others see a troll
Tesla is fighting a racial discrimination and harassment lawsuit that a California agency filed on behalf of 4,000 Black Tesla employees.
Several women have filed lawsuits alleging Tesla fostered a culture of sexual harassment at its Fremont plant and other facilities.
Also, during the first months of the pandemic, the Fremont, Calif. Tesla factory continued operating despite orders from local public health officials to shut down to prevent the spread of Covid.
"There's a sense in which Musk is like teletransported from another era of business and is just unconcerned about things, you know, like it's 1952," Gordon said. "He has huge zones of non-concern. Most companies 30 years ago didn't care about sexual harassment or racial discrimination."
On Twitter, Musk readily trolls those who disagree with him or appear to be rivals.
His ego has been on display to his 110 million followers throughout the Twitter legal saga. After Twitter CEO Parag Agrawal tweeted a detailed explanation of the company's efforts to combat spam, Musk responded with a poop emoji.
💩— Elon Musk (@elonmusk) May 16, 2022
Musk has pledged to loosen Twitter's rules on what people can post to the platform. He's said Twitter was wrong to ban former President Donald Trump after the Jan. 6 attack on the U.S. Capitol. Many Twitter users have openly worried that the network will soon become more racist, sexist, and toxic.
Musk tried to allay some of those fears in his letter to advertisers Thursday.
"Twitter obviously cannot become a free-for-all hellscape, where anything can be said with no consequences!" he said.
Twitter is a different sort of challenge for Musk
While many people are nervous about what sort of social network Twitter will become under Musk, it has never been a healthy company.
During Tesla's earnings call last week, Musk said Twitter "sort of languished for a long time but has incredible potential."
Why Twitter is an easy target for outsiders like Elon Musk intent on change
While Twitter is often used by politicians and journalists, it has fewer U.S. users than Facebook, TikTok or YouTube. It has struggled to attract ad dollars, and to create services that users will pay for. Internal company documents obtained by Reuters say now even "heavy tweeters" are using the platform less.
Musk plans to address Twitter staff on Friday. He's said he wants to trim their ranks dramatically. Time has reported that Twitter employees are circulating a petition, asking Musk to preserve the current headcount and staff benefits.
Layoffs would "hurt Twitter's ability to serve the public conversation," the petition reads.
Yet Higgins, the biographer, expects many employees will choose not to work for Musk.
"He can be infuriating and inspiring in almost the same breath. It just depends on the Elon Musk you get that day," Higgins said. "I have no doubt that if and when he gets into Twitter, he's going to anger a lot of people there and a lot of people will probably leave."
In addition, it's going to be hard to create a social network that is truly "warm and welcoming to all," as Musk says he wants, and not the "free-for-all hellscape" he says he'll avoid.
That may be "a very dangerous experiment," according to Harvard's Wu.
Social networks like Parler, Gab and TruthSocial, which take a more hands-off approach to content moderation, have a tiny fraction of the users that mainstream platforms have. People have used them to spread hate speech, threaten violence and share harmful misinformation that is banned elsewhere.