Very insightful and filled with true facts. One financial time bomb you didn't mention is the annual billion dollar debt payments Musk's acquisition saddled Twitter with. A billion is several times more than Twitter's best year of net revenue. The bankers who funded it did so in order to stay in Musk's bullying good graces when he was the richest man in the world. They have not been able to syndicate those loans and they present a balance sheet problem for them. They have to try to collect something--if the loans are totally non-performing I don't see how they can avoid declaring Twitter in default (because auditors have a much narrower view of what constitutes a good business decision than guys who aspire to accompany Elon on his private jet). Default has cascading consequences for a company that wants to operate in the real world with things like servers and electricity and payroll and such. Coupled with those other time bombs Elon will be walking away from a totally insolvent company by the end of the year in any case.
Excellent analysis, Dave. I woke up one day and realized that in bankruptcy, the debt holders will end up taking over Twitter for a price of $13 billion, which -- at least before Musk ruined everything -- would have been a fair price for the company. Made the lenders seem less insane.
I am watching two things with my product manager hat on. The roiling of crypto currency and the demise of Twitter. Both are just so much to watch and such sources of bad, unethical, and stupid behavior that it is just an amazing show.
I left Twitter (mostly: I keep one account that is connected to my Substack) when the game of suspending journalists over the @ElonJet kerfuffle, so posts like this and the many twitter observers articles are filling the need for that dopamine hit, and oh, what a show it is becoming.
Great stuff Dave!
(also: typo, it is 'fined' not 'find' in your section about fines)
Does the site turn off when bankruptcy happens? Does Elon get in legal trouble for burning an (admittedly unprofitable) company straight into the ground? Do the people who sold him a company knowing he almost surely was going to destroy it but get their own paydays get in trouble?
After two decades where user numbers alone were enough to garner continued investment despite no defined revenue stream it’s amazing to watch Musk accidentally blowing the lid off the whole ponzi scheme.
I've lost all faith that the legal process will ever resolve anything with this situation or the 'other' situation ("The Former Guy"). The law today has too many paths of appeal; too many ways out; has become too crooked (Hello Supreme Court!) that holding it up as the bogeyman that will right everything in the world is becoming just that - a bogeyman.
People are still tweeting, both companies and influences and common people. Where are they going to go? No good competition right now... And Mastodon isn't it. This is an active ecosystem.
Musk cares more about the influence and power than the money. He's able to tell 100 million people to vote Republican. He's able to shift public option and spread propaganda. Only the world's richest person has the luxury of doing this, he's not going to let it go.
Also, Advertising is down across the entire industry, this will pick up in a year. Twitter Blue is increasing in subscribers but very slowly... 400k. Who knows if that will increase rapidly once the legacy blue is removed. I don't think it's likely though.
Imo, Twitter will lose money but Musk knows he's got something powerful that he's ok losing money on it (as he himself has said). Regulation (mainly from EU) might be the biggest issue but that's 50-50. Unless there's a good competitor and people leave (maybe if they remove legacy blue), this is Musk's Right-wing Twitter
It seems #ElonMusk has caused a massive collision between internet politics & political psychology. Thank you for answering one of the main questions I was wondering. How long will Twitter survive under Musk's destruction? The psychology and profile predicted it would blow up in his face, but didn't expect him blowing it from so many different vectors and at such an accelerated pace, thus confirming his perceived detachment from reality & worst human instincts. https://samray.substack.com/p/the-groo
The amazing thing is that this is a realistic story. If you would have made a movie scenario two years ago that describes what is happening now, hit would have been classified as a Tarantino-esque alternate reality like those in Inglorious Basterds and Once Upon a Time in Hollywood, without the believability.
Aside from the use of a derogatory word in the sentence "Elon’s management philosophy is a... mix of lying and cyberbullying employees.", I really think this is spot on.
Very insightful and filled with true facts. One financial time bomb you didn't mention is the annual billion dollar debt payments Musk's acquisition saddled Twitter with. A billion is several times more than Twitter's best year of net revenue. The bankers who funded it did so in order to stay in Musk's bullying good graces when he was the richest man in the world. They have not been able to syndicate those loans and they present a balance sheet problem for them. They have to try to collect something--if the loans are totally non-performing I don't see how they can avoid declaring Twitter in default (because auditors have a much narrower view of what constitutes a good business decision than guys who aspire to accompany Elon on his private jet). Default has cascading consequences for a company that wants to operate in the real world with things like servers and electricity and payroll and such. Coupled with those other time bombs Elon will be walking away from a totally insolvent company by the end of the year in any case.
Excellent analysis, Dave. I woke up one day and realized that in bankruptcy, the debt holders will end up taking over Twitter for a price of $13 billion, which -- at least before Musk ruined everything -- would have been a fair price for the company. Made the lenders seem less insane.
I've been off Twitter for 4 months now and the reflex to check in has finally dissipated. But this still makes me sad.
I am watching two things with my product manager hat on. The roiling of crypto currency and the demise of Twitter. Both are just so much to watch and such sources of bad, unethical, and stupid behavior that it is just an amazing show.
I left Twitter (mostly: I keep one account that is connected to my Substack) when the game of suspending journalists over the @ElonJet kerfuffle, so posts like this and the many twitter observers articles are filling the need for that dopamine hit, and oh, what a show it is becoming.
Great stuff Dave!
(also: typo, it is 'fined' not 'find' in your section about fines)
Might be a dumb question but...then what?
Does the site turn off when bankruptcy happens? Does Elon get in legal trouble for burning an (admittedly unprofitable) company straight into the ground? Do the people who sold him a company knowing he almost surely was going to destroy it but get their own paydays get in trouble?
After two decades where user numbers alone were enough to garner continued investment despite no defined revenue stream it’s amazing to watch Musk accidentally blowing the lid off the whole ponzi scheme.
I've lost all faith that the legal process will ever resolve anything with this situation or the 'other' situation ("The Former Guy"). The law today has too many paths of appeal; too many ways out; has become too crooked (Hello Supreme Court!) that holding it up as the bogeyman that will right everything in the world is becoming just that - a bogeyman.
What about the loans to purchase twitter? Like 10-12billion?
Great read but 7 months in, he's still there. He does have deep pockets, mind.
Good points but misses a few key marks.
Isn't the bankruptcy point irrelevant?
People are still tweeting, both companies and influences and common people. Where are they going to go? No good competition right now... And Mastodon isn't it. This is an active ecosystem.
Musk cares more about the influence and power than the money. He's able to tell 100 million people to vote Republican. He's able to shift public option and spread propaganda. Only the world's richest person has the luxury of doing this, he's not going to let it go.
Also, Advertising is down across the entire industry, this will pick up in a year. Twitter Blue is increasing in subscribers but very slowly... 400k. Who knows if that will increase rapidly once the legacy blue is removed. I don't think it's likely though.
Imo, Twitter will lose money but Musk knows he's got something powerful that he's ok losing money on it (as he himself has said). Regulation (mainly from EU) might be the biggest issue but that's 50-50. Unless there's a good competitor and people leave (maybe if they remove legacy blue), this is Musk's Right-wing Twitter
It seems #ElonMusk has caused a massive collision between internet politics & political psychology. Thank you for answering one of the main questions I was wondering. How long will Twitter survive under Musk's destruction? The psychology and profile predicted it would blow up in his face, but didn't expect him blowing it from so many different vectors and at such an accelerated pace, thus confirming his perceived detachment from reality & worst human instincts. https://samray.substack.com/p/the-groo
The amazing thing is that this is a realistic story. If you would have made a movie scenario two years ago that describes what is happening now, hit would have been classified as a Tarantino-esque alternate reality like those in Inglorious Basterds and Once Upon a Time in Hollywood, without the believability.
Aside from the use of a derogatory word in the sentence "Elon’s management philosophy is a... mix of lying and cyberbullying employees.", I really think this is spot on.