Why is Elon Musk Wrecking Twitter?
The answer lies in the greatest finance film of all time
It is difficult to imagine how Elon Musk will ever make a dime from his acquisition of Twitter. It’s only a few months into his investment in the platform, but he’s already beating the bushes for help paying the $13 billion in debt he incurred buying Twitter.
For reasons known only to him, Musk paid $44 billion in an acquisition that analysts describe as “one of the most overpaid tech acquisitions in history.” Musk followed up his curious purchase with one management misstep after another: re-platforming white supremacists and provocateurs like Kanye West, losing half of the company’s top 100 advertisers, chasing away millions of users, and firing essential staff.
After charging for the account verifications and then for access to the company’s API, Musk appears to have settled on a monetization strategy of charging for formerly free services and, if yesterday’s dumpster fire is any indication, limiting daily tweets.
While Musk was busy running Twitter into the proverbial ditch, the stock of Tesla, the electric car company Musk also runs, fell off a cliff. Due in equal parts to his neglect of the EV manufacturer and the Twitter shitshow, last year, the company lost $700 billion, or 65%, of its value. The combination of managing Twitter and ignoring his duties at Tesla caused Musk to lose more of his personal wealth — a reported $200 billion — than anyone in recorded history.
To NASA’s relief, Musk appears to have been too busy destroying value at Twitter and Tesla to focus much attention on SpaceX, which he also runs. Notwithstanding his previous successes, Musk’s foray into the social media business has gone so poorly he risks relegation to the list of worst CEOs of all time.
What makes the whole shitshow so remarkable is that no one seems to know precisely why Musk bought Twitter in the first place.
The movie Wall Street warned us there’d be guys like Musk
Twitter’s descent into even more of a hellscape than it already was reminds me of a scene from the greatest finance movie of all time.
Long-time readers of this newsletter won’t be surprised to learn that Wall Street, Oliver Stone’s archetypal portrayal of eighties excess, is one of my favorite movies. I’d been a mortgage-backed securities salesman for about five years when it premiered, and I saw the movie the day it opened in theaters.
Wall Street’s release coincided with the rise to prominence of corporate raiders like Carl Icahn and junk bond king Michael Milken. A year before the film’s release, Ivan Boesky (the inspiration for the film’s main character) was sentenced to three-and-a-half years in prison and $100 million in fines for insider trading. The Black Monday crash rocked the stock market two months before the film’s release.
The “greed is good” scene is probably the most memorable point in the film. In a speech during the annual shareholder of Teldar Paper, a fictional company, corporate raider Gordon Gekko, played by Michael Douglas, extols the virtues of insatiable capitalism.
It’s fair to say that Stone’s portrayal of decadence and greed is a waypoint in our gradual acceptance, if not glorification, of extreme wealth. The glorification of avarice in Wall Street was a kind of permission slip that made it okay to discard ethics as a requirement in our business dealings and to accept dishonesty as a reasonable trade-off for wealth accumulation.
The film’s impact on the finance industry was enormous. Even without the benefit of social media, the buzz around Stone’s film spread like wildfire. The film’s influence was undeniable a thousand miles away from the real Wall Street in Little Rock.
Suddenly, no one would be caught dead without a snappy set of braces at the investment bank I worked for. Bankers traded their Oxford shirts for monogrammed french-cuffs. The Italian guy sitting next to me on the trading floor began sporting Gekko’s slicked-back hairstyle.
Unlike Gekko, who ended up in prison, I made it through my finance career with most of my reputation intact. But I was more than willing to play the part at the time. I bought my first Mercedes-Benz — and my first Rolex — before my thirtieth birthday. Lord knows I had more bull-and-bear braces than I knew what to do with. I didn’t have Gekko money, but looking at me, you’d never know it.
In recent years, Douglas, who won an Academy Award for his portrayal of Gekko, a character who was the film’s villain, expressed shock at the number of people who pursued careers in finance or economics because of the character.
Although the film wasn’t our reason for being in finance, the film certainly influenced Little Rock’s investment community. A lot of us saw ourselves as would-be Gordon Gekkos.
Watching how Musk operates reminded me of a different, less notable scene in Wall Street that I still think about more than three decades after seeing the film.
Bud Fox, played by a young Charlie Sheen, persuades Gekko, a client he idolizes, to acquire Bluestar Airlines, a company where Fox’s father has worked for decades. He later discovers that, rather than improving the company’s operations, Gekko’s intention is to break Bluestar apart, sell its assets, and raid its cash-rich pension fund.
An enraged Fox asks Gekko, “Why do you need to wreck this company?” Gekko angrily replies to Fox with one of the film’s most memorable lines:
“Because it’s wreckable.”
Like Bud Fox, Twitter’s right-leaning employees believed his promises to improve the platform. When he promised to end the platform’s perceived censorship (he banned journalists who criticized him), address child exploitation on the site (it’s worse), and champion free speech (unless you live in China), they believed him.
But, reminiscent of the leopards eating faces meme, their trust in Musk appears misguided:
Twitter might have had a reputation as a left-leaning workforce, but there had always been a faction that disapproved of its progressive ideals. On Slack, some of these workers had formed a channel called #i-dissent, where they asked questions like why deadnaming a trans colleague was considered "bad." When Musk announced he was buying the company, one of the more active i-dissenters was thrilled. "Elon's my new boss and I'm stoked!" he wrote on LinkedIn. "I decided to send him a slack message. I figured you miss 100% of the shots you don't make 😅🚀🌕”
This employee was cut during the first round of layoffs. Soon, all the prominent members of the #i-dissent Slack channel would be gone. The channel itself was archived, while bigger social channels like #social-watercooler were abandoned.
However this slow-motion train wreck ends, Musk’s acquisition and subsequent mismanagement of the social media platform may go down as the worst tech debacle since the AOL-Time Warner merger, which until now was considered the worst technology acquisition of all time.
The notion that one individual can lead an electric car company, and build rockets, while simultaneously turning around a global social media platform says as much about how we view extreme wealth as it does about his hubris.
As for the why of it all, it’s hard to know whether we’re witnessing managerial incompetence, a hamhanded plot to normalize far-right radicalism, or something even more sinister.
Whatever his reasons, Musk is wrecking Twitter because it’s wreckable — and because he can.
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https://www.businessinsider.com/elon-musk-teases-twitter-everything-app-ambitions-with-x-tweet-2023-4
1. His buddy and former business partner (Paypal) is Peter Thiel
2. He is against unionization
3. He is against regulation
4. He is against taxation on the investment class
5. He is a white man who originally came from South Africa
6. Like our former corrupt President, Musk is selfish, narcissistic and impulsive.