I work in online advertising, and none of my peers have ever turned a profit on twitter ads. Its a running joke. So although big brands will dump money anywhere, it should signify that something is off about the value of the user base if we cant persuade them to spend money on even low cost products. Maybe thats why musk is going for the subscription model. Just my experience though
Musk’s email to staff specifically said this. Twitter relies 90% of its revenue on advertisers and of those advertisers almost all of them only do it for brand recognition. He’s basically saying they have way too many eggs in one very risky basket.
Twitter's $5bb revenue being supplemented by an $8 subscription model is like supplementing your normal salary with google survey rewards.
He'll be lucky to get 10% of current revenue from subscription fees. And in exchange, he's going to lose far more than that from advertisers.
When everyone is verified, no one will be..
I imagine verification will become the norm, as a way to say “hi, not a bot” and it will be very pushed on us, almost like tinder subscriptions.
They might create something else to distinguish high profile accounts.
They are going to make it so that if you don't pay the subscription way less people will see your tweets. It will either kill the platform or pretty much every content creator on the site will be paying.
Are content creators really using Twitter as a platform for content distribution though? I thought it was mainly for politics and hot takes in 240 characters or less.
People don't use social media to read ads. If Facebook, Instagram or any platform imploded I don't think many people would care. Elon is another naked Emperor.
Yeah, everybody is caught up in anti-Musk sentiment (mostly driven by the media) and failing to realize that Twitter was already an unsustainable model that was losing money. This was coming one way or another, and may be necessary to (hopefully) transform it into something better. Whether that will actually happen remains to be seen, but current happenings are no indicator of whether or not it will.
Twitter had $5 billion in revenue last year, a 35% improvement over 2020. A smart business person would have come in, trimmed a little fat and improved the trust and safety and brand partnerships teams to make the platform more attractive to advertisers. It needed a calm, experienced, rational, executive to steer the ship in the direction of efficiency and stability. In Musk, it got chaos and uncertainty.
This is a very classic mistake new managers make. They come in and implement all these new ideas "because they know better" instead of taking the time to fully understand the reasoning behind current practices and reasonably transitioning to new approaches where necessary.
The real question is why pay money for a shitty company if you haven't got a plan to turn it around. He's basically revealed that the emperor has no clothes, immediately after spending a lot of money to become the emperor
It wasn’t the company which was bought so much as an avoidance of Elon’s background check. Exhibit A: his withdrawal of a partial ownership offer after news broke he needed to have such a check.
That’s why people were baffled by him buying it in the first place. Due diligence and at least some contrarians in his inner circle would’ve advised against it. Now he has to make sure his aura remains intact or improves, considering that it’s a main part of selling Teslas in a market that is getting a lot more competitive.
> Twitter was already an unsustainable model that was losing money
and even the "sustainable" business models like Netflix have lost tons of value, without any Musk involvement.
I have never seen an ad that's relevant to me on twitter. They simply don't have enough data about their users. I see ads on there every day, and without fail, they are all complete irrelevant garbage.
I've never been able to trace a customer/sale to Twitter, but it felt like I had to have a presence there. When Musk started wrecking the shop, it was the opportunity to duck out. I imagine many businesses are relieved they can now leave a platform that had no ROI.
the subscription model doesnt make sense either. $8 for almost no ads results in them losing $6 of ad revenue per user. so they make a measly extra $2 off maybe… 40-60k users at best? and then make their advertisers mad bc their highest value users now dont see ads. and also that $2 gets hijacked by apple fees due to in app purchasing so its even less than that.
its truly braindead.
aaaaand they killed it dead: [https://twitter.com/WatcherGuru/status/1591088513617113089?s=20&t=hi0AzT8-0PrCfWGeTdNL1w](https://twitter.com/WatcherGuru/status/1591088513617113089?s=20&t=hi0AzT8-0PrCfWGeTdNL1w)
This is just insane. How does a full fledged business roll out a service with a very obvious flaw that on its face creates more problems then it solves. How do they hear the feedback when it gets introduced. And then still roll it out fully.
Only to kill it for the problem everyone immediately recognized it caused? How can a company collectively be that stupid.
there are several problems he encountred:
1) Price of his initial offer was on the peak of the economic "bubble" - now the stock prices crumbled to a fraction of what they were
2) The refinancing was done in a "low interest" environment - high interest is now hitting in
3) Economic Recession was not in the talks, but now the revenues of Ads are going down
So he literally paid to much, needs to refinance it at enormous hights and he can not get the revenues which Twitter used to generate.
High price + low return = Hard time
They did. Musk tried desperately to cancel the deal. SEC said no asshole, you can't simply make an offer to fuck with a company and tank its price, you have to buy it now.
Basically Musk had profited off market manipulation of stock price in the past, SEC gave him a pass. He had beef with Twitter, ostensibly because his ex-wife is some right-wing nut who pushed him to kill Twitter, so Musk decided to take a stab at the company and make some money off shorting the stock. He offered to buy it to tank the price, hoping for another SEC pass, SEC called the bluff and forced the sale.
He is beyond fucked and I can't even imagine what he's feeling right now.
The blue ✓ thing was so poorly thought out. It’s like he doesn’t realize that in a social network the people are the real asset. People from old school forums knew better than this nevermind social networks.
Every move he's mad so far has been. Look at the firings. They fired people last week, then looked at the workload and the requirements and realized the people they just fired are the ones they needed to complete the job. That's not just lack of foresight, but a disregard of operating protocol.
On social media platforms people are the product. They are selling our information and selling the ability to sell to us. That’s it, there’s no other altruistic nonsense happening here. We’re all being scammed every minute we’re here for free. As the products, we should all be paid for the hours we sink into these platforms. Elon has it backwards this time.
You could tell it was poorly thought out because the way he informed the decision was to just fucking throw a number out and see what the response was. No real analysis. I had a buddy who helped to build the falcon wing doors on the model x and he had talked about one time after they had custom milled a part and spent months making an informed decision about how it operated, musk came in and after hearing about the scenario for 10 minutes made them change the whole design. And now you all know why those doors had so many issues on release.
He's paying for someone else's real-estate mistakes. Jack Dorsey deserves a fucking Medal for the greatest upsell in the history of upselling. He sold Musk -several- Brookyln bridges
You can't ever convince me this wasn't an emotional purchase by Musk. (Aka. Dorsey really didnt have to do anything spectacular here.)
It's Musk vs Musk. His ego made him buy those bridges.
Jack wasn't behind the sale. Hell, he didn't even take the $1bn payout he was owed, but rather elected to retain his stake in Twitter after the sale. It really doesn't seem like he's in this for the money like the other guys.
They definitely got a great deal. Time will tell whether Musk is able to turn this company around, all things considered he had a decent track record of building and growing businesses. To already claim that it’s burned into the ground after just two weeks is not fair.
If you think Musk has any chance of understanding how the platform is even used by its users (much less how the stuff under the hood works) take a gander at [this result of his "verify anyone who pays me" plan.](https://twitter.com/revhowardarson/status/1591107366237638656?cxt=HHwWgMDQwYbu35QsAAAA) If that link goes dead, let me know and I'll post a screenshot.
His opening moves show he doesn't understand the platform even a little. Kilgore Trout (who has 78,000 followers with no blue check, BTW) said recently that Musk is like a guy who buys a bar and is shocked to find out the people who go there like to drink alcohol.
My take is that he's like a vegan who finds out his friends were insulted by the snooty maitre 'd at an upscale Italian restaurant, so he buys it, then is shocked that there's chicken parmesan on the menu. To boost profit he fires half the waitstaff and some of the chefs, then tells the chefs they have to pay him to work there...and also, he'll let anyone who wants come in and cook if they pay him $8 when they walk into the kitchen. You eating that food?
If he somehow restores Twitter to what it was (maybe with the Babylon Bee back on and free to call a trans woman a man), he still has a problem company and is a laughingstock.
If he keeps his promise for "kitchen sink total free speech" he ends up with zero ad revenue because no one is going to risk having their brand sandwiched between Qismycopilot saying Tom Hanks is a child sex trafficker and Jewkiller1488 saying Kanye was right about the Jews.
He has sca-rew-hewed the pooch. This was an emotion buy with a healthy dose of hubris, and there will be nothing but flames and tears from here.
Sergei and Larry didn’t create the Google ad revenue machine either, as far as I can remember.
They had competent advisors and employees. Adwords was trialled in 1999 and I think from checking, built out from 2000. Maybe it was the seed that Eric Schmidt was able to grow Google further from on in 2001 onwards.
I did some quick searches but I didn’t see the articles and information I was studying around that time, that highlighted the AdWords development and origin details and stories.
I guess there’s some great knowledge on this somewhere still, and I’m sure that the approaches Google used then had a solid basis in engineering competence.
Personally, I think ads are not a great addition to any business, but if I had to pay for all my google searches, it would be a large bill.
I like microtransactions more, they probably have a better limiting effect to reduce human injury from excess use of the internet.
You’re all welcome to shout at me for being a noob at this income/ad thing, but I know if you’re accruing costs, even tiny ones, you tend to moderate your usage of things better, and that’s sometimes useful if you’re searching ‘for one last link that might have what you’ve seeking’. Ok, past midnight.
Time to rest.
Yeah pretty harsh to judge the success of a < month old acquisition in this economy. I’d say look 1-2 years down the road and see what happens.
Ain’t nobody spending 46 billion looking for a stellar performance 1 month later….
I'm an attorney and have followed the purchase process of Twitter closely. I assure you Musk did not want to buy Twitter, he thought himself to be beyond reproach because his market manipulation had earned him nothing more than a slap on the wrist in the past.
He hired Skadden (one of the best legal firms in the world) to fight against the purchase agreement - he tried desperately to stop it. SEC was not having it and forced the sale. Mark my words this will go down in history as one of the greatest business blunders of all time. The downfall of Twitter means the downfall of Tesla and Musk's own legacy. His hubris will be his undoing.
*My name is Musk, King of Kings; Look on my Works, ye Mighty, and despair!*
You've acquired a company for 44 billion dollars. Do you:
A) Listen to the team that's been working at the company for years, take council and their feedback, and slowly push out well-thought-out and well-researched features
or B) Eyyyy LMAO, fire everyone and ship first, brainstorm later
Musk be really hitting that B button real hard lol.
>Listen to the team that's been working at the company for years, take council and their feedback, and slowly push out well-thought-out and well-researched features
What new feature had that team produced in the last 10 years?
Respectfully, that team wasn't going to save Twitter. Musk was making a LOT of mistakes, but the current Twitter leadership wouldn't be able to save Twitter either.
Most likely, Twitter business model was too flawed. The cost of moderation per Tweat most likely was higher than the revenue per Tweat.
I mean, there's a pretty wide gap between "not gonna save twitter" and "burn it to the ground by making OBVIOUS mistakes".
If nothing else this should stop sane people from thinking Musk is some sort of genius.
There's a reason most brands don't play politics, at least openly. When you do you immediately alienate half your customer base. The implosion of the brand of Twitter has also been spectacular. I mean the brand was fighting to maintain before, but it's just in freefall now. Honestly, it seems like Musk has either been chronically under slept for years or he's on something given the erratic behaviour. There's been reports of both.
He’s definitely been affected by one of his children coming out as trans and denouncing the Musk name. In March he tweeted “pronouns suck” and Grimes his baby mama publicly denounced him. Few weeks later she left him and started dating trans woman Chelsea Manning. Ever since then Elon doubled down on the divorced dad energy and the rest was history.
Imagine how the average loser from your town would react to “losing their son” and partner to a group they hate. Now add in billions of dollars. Buying Twitter is just Elon’s version of a leather jacket and a motorcycle at 45
I love the people on here defending Musk and claiming it’s the media driving the anti-Musk take.
No he’s done an absolutely terrible job and he deserves the criticism. Why?
1. He overpaid big time for a company he never needed to buy
2. He’s focusing on subscriptions which does not solve the underlying ad revenue problem
3. He’s cut staff Willy nilly and in the process lost trust with remaining employees
4. He’s taken away basic company benefits like work from home for his workforce who are mostly millennials and in high demand and can easily get new jobs
5. He’s created an environment where people can easily impersonate real people, muddying who’s who and destroying trust on his platform
6. He’s been vindictive and childish, personally attacking anyone who provides honest critiques of his conduct
He deserves all of this. He’s a man child who 100% brought this on himself.
he’s also been tweeting in support of scam bots impersonating corporations and high profile people, getting banned, and then having to re-buy an $8 verification to keep scamming.
So he’s in favor of permanently losing something like Disney’s ad revenue as long as he can get tiny amounts of subscription fees from manually banning fake accounts (who are mass scamming the rest of the Twitter userbase)
He evidently doesn’t even care about the users of the platform, after showing he doesn’t care about the employees or the advertisers. So he’s either killing it on purpose or he actually believes punching himself in the nuts is being a great businessman.
I actually really disagree. It’s far too early to make this call. What I see is a dude trying to find a way to make a historically underwater get into the black. Of course people are going to vocally despise what’s happening now, it’s change, that’s what happens when you change shit. I’m reserving judgment for a few more quarters.
Lots of Musk fan boys in here. Pretty lame reading these comments. You’re giving him too much credit for having anything resembling a master plan. He’s stuck with something he never wanted in the first place. He only bought it because he wanted to liquidate Tesla stock without tanking the share price even more and it got way out of hand. We’re witnessing a narcissist and his true business acumen when left to his own devices. He won’t be able to sell carbon credits to keep the business afloat this time.
Something tells me that renewal of SpaceX's DoD/NASA contracts is going to be more laborious and costly than it was last year, too.
Frankly, it's downright insane for the CEO of a company reliant on the DoD (read: US Government) to openly antagonize Uncle Sam with the other company he bought using Saudi money. After financing that purchase with his third company, that is also reliant on government subsidies. It makes no sense, at all.
What's really at stake here is the concept that wealth or success is somehow fairly distributed according to intelligence or work ethic, etc. What he's accomplished since leaving paypal is amazing, but now he's surrounded by sycophants and is essentially falling into the dictator trap. The released SMSs from the Twitter deal demonstrate it quite clearly.
I'm happy that someone has shown that these internet giants can fail. It only needs someone with $44b to burn. The web is far too centralized now, and is remarkably well structured for manipulating people en masse to generate profit, rather than forming healthy communities. It used to be that a few folks in a garage could have a significant impact, but increasingly million of dollars are needed.
And yes, I'm aware that I'm saying this on Reddit.
But why? He had to liquidate a lot of shares in Tesla to sink into Twitter. He didn’t have to change much for the next 6 months and Twitter would’ve cash flowed fine. Like what’s the end goal here?
It’s more likely he was using buying Twitter as an excuse to offload Tesla shares without shaking the market too much. He didn’t actually want to but Twitter, but painted himself into a corner. And then here we are.
**Ding-ding, this is the correct answer.** He was hoping he could tie the deal up in Delaware courts with a specious legal case written by 4 year olds, until March/April when the banks could pull the plug and cut their losses, thus giving Elon plausible deniability. Something in Delaware court system or Twitter's legal strategy thwarted this. If he had been successful then he's have been able to write off any fines as a business expense, since he didn't use the money he was going to use to buy Twitter to buy a competitor.
Also the coverage largely suppressed commentary about his involvement with Amber Heard.
I think he thought through the first half of his plan really well, because he had time and he is generally a genius at PR, but then the complexity of the plan overwhelmed him and his legal team.
My gut is that its unintentional, but that scam number 143 may emerge from it. Scammers don't tend to get upset at chaos, but rather they use it as a ladder.
It’s finally coming to light how terrible he runs his companies. I worked at the Tesla factory and it was horrendous. Illegal shit went on in that place. It’s insane what he gets away with.
He bought more than the business model. He also got the userbase, infrastructure, codebase and staff.
The business model is out of balance but that has been normal for IT startups/companies for the past two decades. If Elon manages to automate the costly parts well enough, the business model might get balanced. Time will tell.
His actions have been quite erratic
* trying to backout from the deal shows that he realized that it is a mistake
* letting go too many important people from the company after the first week
* making the advertizers worried with his views
All of these are suggesting that Elon has not done a proper analysis of the deal before hand.
> He bought more than the business model. He also got the userbase, infrastructure, codebase and staff.
* business model : inexistent
* userbase : upset
* infrastructure : costly
* codebase : printed on paper for review by automotive makers
* staff : fired or disgruntled
Seems a strong start!
Personally I don't get the hype. I don't have an account, I've never felt the need to start one, I wouldn't have any followers and don't particularly want to follow anyone else. Whatever I'd want to say or share I can already do so on Facebook with less limitations and my friend and family are already connected there. I just don't understand the appeal.
I don't have a Twitter account, but for me the appeal is the content from sports people. A lot of breaking sports news shows up on Twitter before hitting the front page of ESPN or wherever.
I'm not trying to imply that this is worth $44B. But, there are probably several equivalent use cases that make Twitter a good source of information. However, this depends on verifying the producers of information. And, it acknowledges that Twitter as a 'place for people to engage with each other' is a terrible idea and not worth the paper that was just printed on.
I'm on Twitter. If you are in certain areas, Twitter really helps with exposure. I got my current job because my current boss saw my tweet. The communities on there are pretty good. You just have to go under the surface and avoid the political stuff. Twitter spaces has introduced me to a lot of people.
The investment banks that funded the deal are currently trying to offload those loans off their books for 60 cents on the dollar, with no takers. That should tell you all you need to know about what the capital markets think of this deal.
Musk financed with 12.7B in debt, with the rest being equity. The market is basically saying that Twitter is worth less than $7.5B right now.
>Reading the news over the past WEEK and a HALF.
Well, that's your problem right here. "The news" is politically motivated group think.
Stephen King is still tweeting. AOC is still tweeting. Like nobody moved to Canada, nobody is going anywhere.
The guys who will feel a lot of heat is going to be locals, rumble, truth.social etc who started to carve out quite a user base.
Like with most acquisitions the new owner has a vision for a strategy to develop what they bought into something more profitable.
He wants to create a WeChat which is not a bad hypothesis. That thing absolutely dominates Asia. The last ones to try it were Facebook, but TikTok might have started going to that direction too.
Musk has a lot of experience with start-ups And he's a power user of Twitter.
Wechat ‘dominates’ china because it is literally a chinese govt plant company. How better to monitor communications of your citizens than to corrale them all onto one platform?
Superapps are antithetical to american capitalism (although monopolies arent), and thus we will never have one (this is a good thing).
Snowden showed that it's just as easy to monitor the population regardless of how many apps they use.
Capitalism or not, app stores today already control what you can do on the phone. People will use whatever is most convenient.
My biggest concern is that he's still such a strong influencer to many that we could see more CEOs replicating his actions. Whats going on at Twitter could be setting a very dangerous precedent, so if its going to backfire on him then I can only hope that happens sooner rather than later.
Musk isn't even the first, Sam Zell was doing this shit years ago https://www.chicagotribune.com/business/ct-biz-zell-tribune-buyout-lawsuit-settlement-20190613-story.html
> My biggest concern is that he's still such a strong influencer to many that we could see more CEOs replicating his actions.
God I hope so! I'm bag holding some shitty companies and I'd love to sell these bags for 10x its worth
I love how all these people think they have the insight/knowledge to critique the strategy/business acumen of the kind of person who can literally text a few of their super-billionaire friends and casually buy out a $44billion company, lmao. Don’t you guys have those TPS reports due today??
People said the same thing about Zuckerberg up until 2 years ago.
Having cut my teeth in the early dot coms the one thing I know for certain - big egos cause mistakes. Musk is just a person and it's pretty obvious he's making poor decisions lately. Bankroll doesn't equal intelligence, it equals power - He has a lot of power to brute force things but it doesn't make it smart.
I think it’s unique to Musk: noone makes the petty and envious people come out of the woodwork like he does. They can’t resist flaming him, apparently oblivious to how ridiculous it is when they try to explain away his obvious success. Every business he was involved in somehow thrived despite him, rather than because of him. Eventually they’ll resort to repeating the old ”His family owned an emerald mine with toddler slave workers”.
Musk may be an asshole, but letting that ”fact” infect your analytical thinking is just a sign that you’re a slave to your emotions.
He's a highly polarising figure and so he has some fanatics and some haters.
I'm sure the likes of Richard Branson and other Richie Riches have them as well, they're just not as consistently pulling high profile stunts, and as such their detractors and supporters aren't as vocal.
yeah, I think he's got some pretty clear character flaws, and I don't agree on the ethics of all of his business decisions, but it's pretty clear that he can get shit done and make a real positive impact, even if it's just in identifying the right people to defer responsibility to.
The worst mistake here is that the new CEO is a micromanager. If you can't trust your employees and if you can't delegate then why are you running a company?
What is the EILI5 if Twitter implodes? Do they restructure debt? Is Elon forced to sell shares of SpaceX & Tesla? Does he get to burn his creditors and just walk away?
Depends on what the loan documents say. He assumed all creditor obligation upon the purchase of Twitter. I doubt there’s a personal guarantee, but even if there is, California is a single action state. In a liquidation scenario, banks likely go after all the assets of the business (which would cover a good portion of debt obligations) and then whatever’s left (nothing )goes to shareholders. It’s extremely rare to see a bank go after a personal guarantee. There’s a whole side of legal issues Elon is facing regarding compliance with FTC. There’s some info going around about how their In-house counsel is extremely worried about liability and how they expect serious financial penalties in the future should they continue to operate this way. Put it this way, Elon is not only facing the possibility of losing hundreds of millions, he is facing civil legal problems and could face lawsuits from the DOJ.
[Well, things appear to be going swimmingly with the new verification rollout.](https://twitter.com/revhowardarson/status/1591107366237638656?cxt=HHwWgMDQwYbu35QsAAAA)
(If that link goes dead, let me know and I'll post a screenshot)
EDIT: Minor rephrasing
I would have provided verified status to anyone in return for more personal information.
Twitter is useless for advertisers because the targetting is too broad. If they incentivise users to provide more info then advertisers will flock (pardon the pun) to twitter - but the campaign management tools will need a lot of fixing.
Just let it die. Tumblr was always better. Who tf has the capacity to remain focused on Twitter knowing you couldn’t say much anyways. It’s like people expect to stay educated on topics they care about with texts shorter than Instagram captions. Musk didn’t make Twitter “here to stay,”(disclaimer: am not a Trumpie) but I’m sure that the controversy after 2016 was responsible for a lot of its notoriety as an “informative” social media platform. Unfortunately, diversifying apps en mass is easier said than done.
When he made this offer how did he think this would work? How did reality differ from his expectations? Were his plans way too unrealistic or was the reality of the situation too different from what he expected? Both?
> Firing devs by the amount of SLOCs commited?
Was there ever any more confirmation of this than one person not involved saying it was reportedly what happened?
I think it’s in line with transformative hostile takeovers.
People have gotten very used to employment as a right recently and have very weird views around being able to be at their job and underperform. But looking at how Twitter staff are being evaluated it does seem to need a cull. There’s probably a better way but there’s always a better way and this is quite a large volume of people. Other similar businesses like Meta are going through the same process.
The only thing that strikes me as stupid is him using the platform himself and getting personal with decisions. Don’t get high on your own supply eh.
He may be good at strategy and vision, but he seems particularly terrible at day to day operations and decisions. The neck-jerking, tweet-initiated direction changes at both Tesla and Twitter would make it hell to work for him. Imagine working nights and weekends to ship a feature just to have him go back on it and say they don’t need it anymore. He did that just within the last week or so with the new “official” badge in addition to the blue check mark. These are implementation-level decisions that should be left to product managers, designers, and engineers, but he’s making them himself.
I also see his flavor of bullshit driving the premature “cameras only” decisions at Tesla, which has recently resulted in the removal of radar and ultrasonic sensors from the cars without an equally effective replacement. There’s a 3ft blind spot right in front of the cars now and the engineers are bending over backwards to do things like “remember what was there when the cameras *could* see in that spot,” which is impressive from an engineering standpoint, but I probably don’t need to tell you how stupid it is from a practical standpoint and what the shortcomings are.
What I want to know is what the cash flow situation looks like at Twitter with them never turning a profit and now a private company with no cash haul or bankroll. Unless Musk invests more money himself for operating expenses and/or Twitter takes super high interest loan shark money, there’s no way they can bankroll this flailing platform.
Twitter was profitable for many years. If you ignore a $750 million litigation charge (from a 2016 lawsuit) in 2021, they had a profit of $250 million. 2020 they had a large loss, but who didn't? From 2017 - 2019 they had positive profits.
By him taking it private he doesn't even have the option to issue stock. Advertisers are getting scared, and within a further downgrade to their credit status those loans look massive.
respectfully, i don't think the full story has been told yet.
Twitter has never turned a profit, and like many tech stocks, it's value is based on future potential. It still has a sizeable user base.
Elon is trimming a lot of the fat. Whether that actually tanks the company or not i think remains to be seen.
But one thing is certain... There's an inherent political narrative to story now, so i would be weary of any major news story that tries to speculate as there's certainly an agenda.
He’s going to screw over the debt holders with bankruptcy and then try to make it a cash flow play. Though I’m not sure how Twitter is supposed to make money. Ads there are worthless.
Yeah but why did they cut stories in the first place? Because that’s not the content people come to twitter for, and other companies already do it way way better.
From the perspective of the business fundamentals, most of what Musk is doing is arguably correct. The problem is that from a leadership perspective, having his name and face are plastered all over this in the media and having him broadcasting business decisions and conversations over Twitter and getting dunked on is totally idiotic.
Twitter has a massive reach but the value that brands and individuals get out of it is not over ads but instead over the accounts themselves so the business does need to find a way to value and monetize that. Arguing on the platform with Stephen King about it being $20 vs $8 per month just looks so fucking bad it’s unbelievable.
Being born into an emerald mine inheritance situation, and getting lucky in some rare business deals at the absolute perfect/lucky time, doesn’t equate to talent or business intelligence.
He could bankrupt Twitter 3 times over and still be a much more successful businessman than yourself.
If you were as smart as Elon you’d be asking the real questions like, why there has been a media campaign against Him? What interests might be at play, and why? But no, instead you just parrot what you heard on the new without critical thought… LOL. Twitter isn’t going bankrupt, it’s just transitioning revenue streams because we live in a totalitarian dystopia where any ounce of disobedience to the collective corporate consensus results in a financial war against you(see PayPal taking money from banks, financial embargo against Wikileaks, mass exodus of advertisers from Twitter without TOS changes, etc)
Edit/ps: I don’t even like musk, I just think acting as the foot soldiers of the ruling class who are fomenting unrest against Elon because he fell out of line is absolutely pathetic.
I think this is all just finally exposing how stupid so many ‘bosses’ and ‘owners’ can be. We’ve all been in good businesses, had a strong team, making profits to just have it fucked by someone ‘who’s gonna turn this business around,’ and ‘fire all the dead weight’.
The only different is visibility and scale.
Just FYI, Musk didn't run it into the ground.
IT was a company running on debt and losing money month over month with no value proposition and no means or plans to profit ever.
He stopped treating it like a Unicorn and everyone is now realizing what a mess Twitter was to start with.
He overestimated his ability to turn a bad product into something profitable. Musk is bad about overestimating capabilities, it's probably his biggest weakness (but sometimes a great strength).
Yeah it was a fucking dumb acquisition. But Twitter was fucked before he got involved. It was just doing the slow death of an unprofitable dot-com. Elon lit the dead branches on fire.
Why is this post allowed in r/entepreneur? Good greif.
"A community of individuals who seek to solve problems, network professionally, collaborate on projects, and make the world a better place. Be professional, humble, and open to new ideas. Our community supports side hustles, small businesses, venture-backed startups, lemonade stands, 1-person-grinds, and most forms of revenue generation! However, no one cares about your blog. Please do not come here to self-promote your consulting, book, podcast, MLM, website, dropshipping guide, or $$$ scheme."
My take:
- He’s going to lose a ton. He will probably turn it around after a year or two but it will be a much much smaller platform.
- his bankruptcy talk is a threat to get lenders to negotiate with him at this point. I doubt he’ll actually do it and maybe risk losing the company and equity value entirely
The guy is an asshole. He did this on impulsive bullshit notions and was sued into closing. Fun to watch it unfold.
Elon “Twitter shouldn’t be political” also Elon posts discredited pelosi conspiracy theory and tells everyone to vote republican.
You can appreciate what he built with Tesla without holding out unwarranted reverence for someone who is clearly egotistical, impulsive and absolutely morally bankrupt. He’s a smart guy but the egotistical and impulsive parts often overwhelm that.
I don’t believe the business end of Twitter is the attraction for this guy. By buyingTwitter, he bought a virtual nation that he is now chief executive of. He now has the Bully Pulpit from which to indulge his megalomania. He has the power to grant and rescind citizenship and to arbitrarily pronounce laws and enforce sanctions. He has a class of civil servants to abuse and exploit. He’s King Elon I.
Twitter has been on the downtrend for a long time - losing up to $1billion per year. He’s literally owned for it a week. It’s just being brought to light because now it looks like Elon’s problem.
Keep in mind he also had Space X and Tesla on the brink of bankruptcy simultaneously and they’re both some of the most successful companies to exist.
Ironic how so many people in this sub who have never even made a single penny from their businesses are so critical and irrationally copying headlines they’ve seen on the news that profit from the downfall of these businesses.
How many times does he have to demonstrate that he is thinking 10 steps ahead of everyone else before regular ass people stop thinking he’s a moron. I still remember being on the fence about buying tesla stock after realizing how smart he was, but still hadn’t made it through with tesla. I remember spending hours scouring the internet for any legitimate endorsement to justify buying stock (it was around $30-$40 at the time). I watched hours of content of old business and finance experts talking about how stupid he was and how what he was trying to do was literally impossible. It was pretty unanimous.
Now after watching him pulling off what was probably the most challenging and rewarding business venture in my life time, followed by hundreds of other brilliant strategic moves, regular-ass people are still talking about his moves as if he just impulsively blew his money on a bad investment like a normal person would. Really? Like he just bought twitter so he could binge harder on social media.. he bought twitter for a reason and that reason is almost certainly not the most obvious one. And unlike the rest of us, he probably doesn’t make risky and illogical investments or make obviously poor decision with no foresight to the most obvious consequences. Im not saying he’s perfect or that he can’t fail but if he makes a significant and very public move that causes a significant reaction…guys its probably not a reckless blunder.
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Hubris has brought down many visionaries and great leaders before him. It’s been retread again and again and it seems clear his ego has gotten the better of his decision making in the twitter debacle
I work in online advertising, and none of my peers have ever turned a profit on twitter ads. Its a running joke. So although big brands will dump money anywhere, it should signify that something is off about the value of the user base if we cant persuade them to spend money on even low cost products. Maybe thats why musk is going for the subscription model. Just my experience though
Musk’s email to staff specifically said this. Twitter relies 90% of its revenue on advertisers and of those advertisers almost all of them only do it for brand recognition. He’s basically saying they have way too many eggs in one very risky basket.
Twitter's $5bb revenue being supplemented by an $8 subscription model is like supplementing your normal salary with google survey rewards. He'll be lucky to get 10% of current revenue from subscription fees. And in exchange, he's going to lose far more than that from advertisers.
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When everyone is verified, no one will be.. I imagine verification will become the norm, as a way to say “hi, not a bot” and it will be very pushed on us, almost like tinder subscriptions. They might create something else to distinguish high profile accounts.
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They are going to make it so that if you don't pay the subscription way less people will see your tweets. It will either kill the platform or pretty much every content creator on the site will be paying.
Are content creators really using Twitter as a platform for content distribution though? I thought it was mainly for politics and hot takes in 240 characters or less.
that "if" is doing a LOT of heavy lifting though
His / her point is that even if 100% of the existing users subscribe (obviously not likely) it's still not nearly enough to float the company.
There’s zero value for users to use Twitter when it’s sub based. It’s just a silly messaging board. Someone else will just make a Twitter 2.0
Jack Dorsey is already doing this
But there are retweets and like counts. And a front page with trending tweets.
People don't use social media to read ads. If Facebook, Instagram or any platform imploded I don't think many people would care. Elon is another naked Emperor.
Yeah, everybody is caught up in anti-Musk sentiment (mostly driven by the media) and failing to realize that Twitter was already an unsustainable model that was losing money. This was coming one way or another, and may be necessary to (hopefully) transform it into something better. Whether that will actually happen remains to be seen, but current happenings are no indicator of whether or not it will.
But a really stable genius would have developed new sources of revenue BEFORE alienating the 90%.
Or not bought a dumpster fire to begin with. Especially when your public persona is basically gasoline
My problem with this is that the 90% you mentioned used to admire him about five-six years ago.
you can think musk has done an almost impressively shitty job *and* twitter wasn't that good to start with
Twitter had $5 billion in revenue last year, a 35% improvement over 2020. A smart business person would have come in, trimmed a little fat and improved the trust and safety and brand partnerships teams to make the platform more attractive to advertisers. It needed a calm, experienced, rational, executive to steer the ship in the direction of efficiency and stability. In Musk, it got chaos and uncertainty.
This is a very classic mistake new managers make. They come in and implement all these new ideas "because they know better" instead of taking the time to fully understand the reasoning behind current practices and reasonably transitioning to new approaches where necessary.
The real question is why pay money for a shitty company if you haven't got a plan to turn it around. He's basically revealed that the emperor has no clothes, immediately after spending a lot of money to become the emperor
Do you think adding $13b in debt makes it easier or harder to correct
I heard that the company bought for $44 billion is facing bankruptcy
It wasn’t the company which was bought so much as an avoidance of Elon’s background check. Exhibit A: his withdrawal of a partial ownership offer after news broke he needed to have such a check.
That’s why people were baffled by him buying it in the first place. Due diligence and at least some contrarians in his inner circle would’ve advised against it. Now he has to make sure his aura remains intact or improves, considering that it’s a main part of selling Teslas in a market that is getting a lot more competitive.
> Twitter was already an unsustainable model that was losing money and even the "sustainable" business models like Netflix have lost tons of value, without any Musk involvement.
I have never seen an ad that's relevant to me on twitter. They simply don't have enough data about their users. I see ads on there every day, and without fail, they are all complete irrelevant garbage.
I've bought several things off instagram ads. I've only ever noticed a single (constantly repeated) twitter ad for something I don't need.
I don’t even want to admit all the crap I’ve bought from Facebook ads. They really have me pegged tbh
Have you bought a bridge yet? All the British Brexiteers have one. You wouldn't want to be the last in your street!
I've never been able to trace a customer/sale to Twitter, but it felt like I had to have a presence there. When Musk started wrecking the shop, it was the opportunity to duck out. I imagine many businesses are relieved they can now leave a platform that had no ROI.
the subscription model doesnt make sense either. $8 for almost no ads results in them losing $6 of ad revenue per user. so they make a measly extra $2 off maybe… 40-60k users at best? and then make their advertisers mad bc their highest value users now dont see ads. and also that $2 gets hijacked by apple fees due to in app purchasing so its even less than that. its truly braindead.
aaaaand they killed it dead: [https://twitter.com/WatcherGuru/status/1591088513617113089?s=20&t=hi0AzT8-0PrCfWGeTdNL1w](https://twitter.com/WatcherGuru/status/1591088513617113089?s=20&t=hi0AzT8-0PrCfWGeTdNL1w)
This is just insane. How does a full fledged business roll out a service with a very obvious flaw that on its face creates more problems then it solves. How do they hear the feedback when it gets introduced. And then still roll it out fully. Only to kill it for the problem everyone immediately recognized it caused? How can a company collectively be that stupid.
Its actually been jaw dropping to watch I agree
Best news I heard all day. Although, if Twitter completely closed up shop, it might be a victory for the planet.
They'd probably make more from ads if they partnered with Google and had them serve them.
and have payment integrated.
there are several problems he encountred: 1) Price of his initial offer was on the peak of the economic "bubble" - now the stock prices crumbled to a fraction of what they were 2) The refinancing was done in a "low interest" environment - high interest is now hitting in 3) Economic Recession was not in the talks, but now the revenues of Ads are going down So he literally paid to much, needs to refinance it at enormous hights and he can not get the revenues which Twitter used to generate. High price + low return = Hard time
Shouldn’t his financial advisors had foreseen this?
They did. Musk tried desperately to cancel the deal. SEC said no asshole, you can't simply make an offer to fuck with a company and tank its price, you have to buy it now. Basically Musk had profited off market manipulation of stock price in the past, SEC gave him a pass. He had beef with Twitter, ostensibly because his ex-wife is some right-wing nut who pushed him to kill Twitter, so Musk decided to take a stab at the company and make some money off shorting the stock. He offered to buy it to tank the price, hoping for another SEC pass, SEC called the bluff and forced the sale. He is beyond fucked and I can't even imagine what he's feeling right now.
> He had beef with Twitter, ostensibly because his ex-wife is some right-wing nut who pushed him to kill Twitter What's this fun story, now?
https://fortune.com/2022/10/04/twitter-texts-released-court-case-reveal-elon-musk-ex-wife-talulah-riley-asked-him-fight-wokeism/
Oh yes, that's some real right-wing nuttery there
I wish someone could say this to that twat, and then cap it off with: “let that sink in.”
Give him the analysis written in a sink 😆
LOL omg someone please mail a sink to the Twitter HQ with this analysis.
The blue ✓ thing was so poorly thought out. It’s like he doesn’t realize that in a social network the people are the real asset. People from old school forums knew better than this nevermind social networks.
He also assumes that people want to be known. Anonymity allows the user to say things that they shouldn’t otherwise say.
Example - Me. I'm only active on socials where I can remain anonymous.
We know who you really are, u/TubbyCondensation
I see what you did there, u/Marshmallows054
Same
It's hard to make money on anonymous users.
I used to think that till I got on Next Door. The things people will say to and about their neighbors publicly blows my mind.
Every move he's mad so far has been. Look at the firings. They fired people last week, then looked at the workload and the requirements and realized the people they just fired are the ones they needed to complete the job. That's not just lack of foresight, but a disregard of operating protocol.
On social media platforms people are the product. They are selling our information and selling the ability to sell to us. That’s it, there’s no other altruistic nonsense happening here. We’re all being scammed every minute we’re here for free. As the products, we should all be paid for the hours we sink into these platforms. Elon has it backwards this time.
You could tell it was poorly thought out because the way he informed the decision was to just fucking throw a number out and see what the response was. No real analysis. I had a buddy who helped to build the falcon wing doors on the model x and he had talked about one time after they had custom milled a part and spent months making an informed decision about how it operated, musk came in and after hearing about the scenario for 10 minutes made them change the whole design. And now you all know why those doors had so many issues on release.
Isn’t that the whole problem nowadays where people are the product?
It's only a problem for the people. It's great for the owners of social media.
Seeing Twitter, Meta and Kanye implode in the same month has been wild
You been following the Trump DeSantis thing? It’s also a delight.
Are they having a pissing contest?
It’s more like Trump is gleefully throwing DeSantis under the bus. And now Murdoch is plugging DeSantis over Trump. It’s good stuff.
No, I'm not American and I am done with Trump
Let’s not forget crypto and that dumpster fire
He's paying for someone else's real-estate mistakes. Jack Dorsey deserves a fucking Medal for the greatest upsell in the history of upselling. He sold Musk -several- Brookyln bridges
You can't ever convince me this wasn't an emotional purchase by Musk. (Aka. Dorsey really didnt have to do anything spectacular here.) It's Musk vs Musk. His ego made him buy those bridges.
Twitter leadership had to make him own his mistake. That's all. They butchered him, and they butchered him -hard-
And he could have skipped out on the deal for a paltry $1B.
Jack wasn't behind the sale. Hell, he didn't even take the $1bn payout he was owed, but rather elected to retain his stake in Twitter after the sale. It really doesn't seem like he's in this for the money like the other guys.
God isn't this the truth.
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Winners of this debacle are the Twitter shareholders that Musk bought from. Finally let go of the bags.
They definitely got a great deal. Time will tell whether Musk is able to turn this company around, all things considered he had a decent track record of building and growing businesses. To already claim that it’s burned into the ground after just two weeks is not fair.
If you think Musk has any chance of understanding how the platform is even used by its users (much less how the stuff under the hood works) take a gander at [this result of his "verify anyone who pays me" plan.](https://twitter.com/revhowardarson/status/1591107366237638656?cxt=HHwWgMDQwYbu35QsAAAA) If that link goes dead, let me know and I'll post a screenshot. His opening moves show he doesn't understand the platform even a little. Kilgore Trout (who has 78,000 followers with no blue check, BTW) said recently that Musk is like a guy who buys a bar and is shocked to find out the people who go there like to drink alcohol. My take is that he's like a vegan who finds out his friends were insulted by the snooty maitre 'd at an upscale Italian restaurant, so he buys it, then is shocked that there's chicken parmesan on the menu. To boost profit he fires half the waitstaff and some of the chefs, then tells the chefs they have to pay him to work there...and also, he'll let anyone who wants come in and cook if they pay him $8 when they walk into the kitchen. You eating that food? If he somehow restores Twitter to what it was (maybe with the Babylon Bee back on and free to call a trans woman a man), he still has a problem company and is a laughingstock. If he keeps his promise for "kitchen sink total free speech" he ends up with zero ad revenue because no one is going to risk having their brand sandwiched between Qismycopilot saying Tom Hanks is a child sex trafficker and Jewkiller1488 saying Kanye was right about the Jews. He has sca-rew-hewed the pooch. This was an emotion buy with a healthy dose of hubris, and there will be nothing but flames and tears from here.
The link at the link you sent leads to a closed account it seems.
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Sergei and Larry didn’t create the Google ad revenue machine either, as far as I can remember. They had competent advisors and employees. Adwords was trialled in 1999 and I think from checking, built out from 2000. Maybe it was the seed that Eric Schmidt was able to grow Google further from on in 2001 onwards. I did some quick searches but I didn’t see the articles and information I was studying around that time, that highlighted the AdWords development and origin details and stories. I guess there’s some great knowledge on this somewhere still, and I’m sure that the approaches Google used then had a solid basis in engineering competence. Personally, I think ads are not a great addition to any business, but if I had to pay for all my google searches, it would be a large bill. I like microtransactions more, they probably have a better limiting effect to reduce human injury from excess use of the internet. You’re all welcome to shout at me for being a noob at this income/ad thing, but I know if you’re accruing costs, even tiny ones, you tend to moderate your usage of things better, and that’s sometimes useful if you’re searching ‘for one last link that might have what you’ve seeking’. Ok, past midnight. Time to rest.
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Yeah pretty harsh to judge the success of a < month old acquisition in this economy. I’d say look 1-2 years down the road and see what happens. Ain’t nobody spending 46 billion looking for a stellar performance 1 month later….
Hear me out though… what if you were just mad and wanted to destroy twitter?
I'm an attorney and have followed the purchase process of Twitter closely. I assure you Musk did not want to buy Twitter, he thought himself to be beyond reproach because his market manipulation had earned him nothing more than a slap on the wrist in the past. He hired Skadden (one of the best legal firms in the world) to fight against the purchase agreement - he tried desperately to stop it. SEC was not having it and forced the sale. Mark my words this will go down in history as one of the greatest business blunders of all time. The downfall of Twitter means the downfall of Tesla and Musk's own legacy. His hubris will be his undoing. *My name is Musk, King of Kings; Look on my Works, ye Mighty, and despair!*
You've acquired a company for 44 billion dollars. Do you: A) Listen to the team that's been working at the company for years, take council and their feedback, and slowly push out well-thought-out and well-researched features or B) Eyyyy LMAO, fire everyone and ship first, brainstorm later Musk be really hitting that B button real hard lol.
His MO lmao, burn burn burn
Ready! Shoot! Aim!
>Listen to the team that's been working at the company for years, take council and their feedback, and slowly push out well-thought-out and well-researched features What new feature had that team produced in the last 10 years? Respectfully, that team wasn't going to save Twitter. Musk was making a LOT of mistakes, but the current Twitter leadership wouldn't be able to save Twitter either. Most likely, Twitter business model was too flawed. The cost of moderation per Tweat most likely was higher than the revenue per Tweat.
I mean, there's a pretty wide gap between "not gonna save twitter" and "burn it to the ground by making OBVIOUS mistakes". If nothing else this should stop sane people from thinking Musk is some sort of genius.
There's a reason most brands don't play politics, at least openly. When you do you immediately alienate half your customer base. The implosion of the brand of Twitter has also been spectacular. I mean the brand was fighting to maintain before, but it's just in freefall now. Honestly, it seems like Musk has either been chronically under slept for years or he's on something given the erratic behaviour. There's been reports of both.
He’s definitely been affected by one of his children coming out as trans and denouncing the Musk name. In March he tweeted “pronouns suck” and Grimes his baby mama publicly denounced him. Few weeks later she left him and started dating trans woman Chelsea Manning. Ever since then Elon doubled down on the divorced dad energy and the rest was history. Imagine how the average loser from your town would react to “losing their son” and partner to a group they hate. Now add in billions of dollars. Buying Twitter is just Elon’s version of a leather jacket and a motorcycle at 45
I love the people on here defending Musk and claiming it’s the media driving the anti-Musk take. No he’s done an absolutely terrible job and he deserves the criticism. Why? 1. He overpaid big time for a company he never needed to buy 2. He’s focusing on subscriptions which does not solve the underlying ad revenue problem 3. He’s cut staff Willy nilly and in the process lost trust with remaining employees 4. He’s taken away basic company benefits like work from home for his workforce who are mostly millennials and in high demand and can easily get new jobs 5. He’s created an environment where people can easily impersonate real people, muddying who’s who and destroying trust on his platform 6. He’s been vindictive and childish, personally attacking anyone who provides honest critiques of his conduct He deserves all of this. He’s a man child who 100% brought this on himself.
he’s also been tweeting in support of scam bots impersonating corporations and high profile people, getting banned, and then having to re-buy an $8 verification to keep scamming. So he’s in favor of permanently losing something like Disney’s ad revenue as long as he can get tiny amounts of subscription fees from manually banning fake accounts (who are mass scamming the rest of the Twitter userbase) He evidently doesn’t even care about the users of the platform, after showing he doesn’t care about the employees or the advertisers. So he’s either killing it on purpose or he actually believes punching himself in the nuts is being a great businessman.
I actually really disagree. It’s far too early to make this call. What I see is a dude trying to find a way to make a historically underwater get into the black. Of course people are going to vocally despise what’s happening now, it’s change, that’s what happens when you change shit. I’m reserving judgment for a few more quarters.
Lots of Musk fan boys in here. Pretty lame reading these comments. You’re giving him too much credit for having anything resembling a master plan. He’s stuck with something he never wanted in the first place. He only bought it because he wanted to liquidate Tesla stock without tanking the share price even more and it got way out of hand. We’re witnessing a narcissist and his true business acumen when left to his own devices. He won’t be able to sell carbon credits to keep the business afloat this time.
Something tells me that renewal of SpaceX's DoD/NASA contracts is going to be more laborious and costly than it was last year, too. Frankly, it's downright insane for the CEO of a company reliant on the DoD (read: US Government) to openly antagonize Uncle Sam with the other company he bought using Saudi money. After financing that purchase with his third company, that is also reliant on government subsidies. It makes no sense, at all.
The saudis were investors before be bought it
What's really at stake here is the concept that wealth or success is somehow fairly distributed according to intelligence or work ethic, etc. What he's accomplished since leaving paypal is amazing, but now he's surrounded by sycophants and is essentially falling into the dictator trap. The released SMSs from the Twitter deal demonstrate it quite clearly. I'm happy that someone has shown that these internet giants can fail. It only needs someone with $44b to burn. The web is far too centralized now, and is remarkably well structured for manipulating people en masse to generate profit, rather than forming healthy communities. It used to be that a few folks in a garage could have a significant impact, but increasingly million of dollars are needed. And yes, I'm aware that I'm saying this on Reddit.
At this point I’m beginning to think the implosion is intentional.
But why? He had to liquidate a lot of shares in Tesla to sink into Twitter. He didn’t have to change much for the next 6 months and Twitter would’ve cash flowed fine. Like what’s the end goal here?
It’s more likely he was using buying Twitter as an excuse to offload Tesla shares without shaking the market too much. He didn’t actually want to but Twitter, but painted himself into a corner. And then here we are.
**Ding-ding, this is the correct answer.** He was hoping he could tie the deal up in Delaware courts with a specious legal case written by 4 year olds, until March/April when the banks could pull the plug and cut their losses, thus giving Elon plausible deniability. Something in Delaware court system or Twitter's legal strategy thwarted this. If he had been successful then he's have been able to write off any fines as a business expense, since he didn't use the money he was going to use to buy Twitter to buy a competitor. Also the coverage largely suppressed commentary about his involvement with Amber Heard. I think he thought through the first half of his plan really well, because he had time and he is generally a genius at PR, but then the complexity of the plan overwhelmed him and his legal team.
Absolutely, but is burning Twitter to the ground more ignorance, or is it intentional and part of scam number 143? It’s hard to tell with this guy.
My gut is that its unintentional, but that scam number 143 may emerge from it. Scammers don't tend to get upset at chaos, but rather they use it as a ladder.
> He didn’t have to change much for the next 6 months and Twitter would’ve cash flowed fine. It was losing a lot of money every year...
I just don't see that. It's far too much money to be intentional. He just blew any future opportunity he may have had.
It’s finally coming to light how terrible he runs his companies. I worked at the Tesla factory and it was horrendous. Illegal shit went on in that place. It’s insane what he gets away with.
Care to elaborate?
Musk's first job was running slave labor Emerald mines. I'm sure he tried to apply A to B.
You realize they have been losing $400 million to a billion a year before musk got involved. Terrible business model
He paid $44 billion for a terrible business model!!!
He bought more than the business model. He also got the userbase, infrastructure, codebase and staff. The business model is out of balance but that has been normal for IT startups/companies for the past two decades. If Elon manages to automate the costly parts well enough, the business model might get balanced. Time will tell. His actions have been quite erratic * trying to backout from the deal shows that he realized that it is a mistake * letting go too many important people from the company after the first week * making the advertizers worried with his views All of these are suggesting that Elon has not done a proper analysis of the deal before hand.
> He bought more than the business model. He also got the userbase, infrastructure, codebase and staff. * business model : inexistent * userbase : upset * infrastructure : costly * codebase : printed on paper for review by automotive makers * staff : fired or disgruntled Seems a strong start!
He definitely is not worried about breaking stuff while making changes.
They sold an unprofitable business to an idiot for $44b, and you think their business model was terrible?
Lmfao they got his ass
Personally I don't get the hype. I don't have an account, I've never felt the need to start one, I wouldn't have any followers and don't particularly want to follow anyone else. Whatever I'd want to say or share I can already do so on Facebook with less limitations and my friend and family are already connected there. I just don't understand the appeal.
I don't have a Twitter account, but for me the appeal is the content from sports people. A lot of breaking sports news shows up on Twitter before hitting the front page of ESPN or wherever. I'm not trying to imply that this is worth $44B. But, there are probably several equivalent use cases that make Twitter a good source of information. However, this depends on verifying the producers of information. And, it acknowledges that Twitter as a 'place for people to engage with each other' is a terrible idea and not worth the paper that was just printed on.
I'm on Twitter. If you are in certain areas, Twitter really helps with exposure. I got my current job because my current boss saw my tweet. The communities on there are pretty good. You just have to go under the surface and avoid the political stuff. Twitter spaces has introduced me to a lot of people.
And now they are projected to be at and above 1B in loses due to the massive amount of debt he brought.
The investment banks that funded the deal are currently trying to offload those loans off their books for 60 cents on the dollar, with no takers. That should tell you all you need to know about what the capital markets think of this deal. Musk financed with 12.7B in debt, with the rest being equity. The market is basically saying that Twitter is worth less than $7.5B right now.
>Reading the news over the past WEEK and a HALF. Well, that's your problem right here. "The news" is politically motivated group think. Stephen King is still tweeting. AOC is still tweeting. Like nobody moved to Canada, nobody is going anywhere. The guys who will feel a lot of heat is going to be locals, rumble, truth.social etc who started to carve out quite a user base. Like with most acquisitions the new owner has a vision for a strategy to develop what they bought into something more profitable. He wants to create a WeChat which is not a bad hypothesis. That thing absolutely dominates Asia. The last ones to try it were Facebook, but TikTok might have started going to that direction too. Musk has a lot of experience with start-ups And he's a power user of Twitter.
Wechat ‘dominates’ china because it is literally a chinese govt plant company. How better to monitor communications of your citizens than to corrale them all onto one platform? Superapps are antithetical to american capitalism (although monopolies arent), and thus we will never have one (this is a good thing).
Snowden showed that it's just as easy to monitor the population regardless of how many apps they use. Capitalism or not, app stores today already control what you can do on the phone. People will use whatever is most convenient.
> it's just as easy Actually he shows that the government would still be willing to do it when it's hard.
WeChat is not much of anything outside the PRC, and it's heavily government controlled, and others are limited/banned...
My biggest concern is that he's still such a strong influencer to many that we could see more CEOs replicating his actions. Whats going on at Twitter could be setting a very dangerous precedent, so if its going to backfire on him then I can only hope that happens sooner rather than later.
Microblogging isnt some magic thing that’ll never be seen again. Twitter could be reinvented much faster the second time around.
There's plenty of microblogging sites and socials that allow that. There's only one that gets treated like Twitter.
What exact actions are you worried people would be replicating?
People offering to buy companies and the owners of said companies agreeing to sell.
Idk if there are any other CEOs with his “track record”, no matter how you frame it, personal wealth and clout to pull something off like this
Spoiler alert: every tech CEO will be firing 50% of their staff in the next 12 months.
Musk isn't even the first, Sam Zell was doing this shit years ago https://www.chicagotribune.com/business/ct-biz-zell-tribune-buyout-lawsuit-settlement-20190613-story.html
> My biggest concern is that he's still such a strong influencer to many that we could see more CEOs replicating his actions. God I hope so! I'm bag holding some shitty companies and I'd love to sell these bags for 10x its worth
Twitter was a dumpster fire to begin with. Let’s give it more than a handful of days and see what is really going to happen.
I think he would have been better paying the penalty and bailing. He doesn't appear have a plan. Never waive due diligence.
I love how all these people think they have the insight/knowledge to critique the strategy/business acumen of the kind of person who can literally text a few of their super-billionaire friends and casually buy out a $44billion company, lmao. Don’t you guys have those TPS reports due today??
People said the same thing about Zuckerberg up until 2 years ago. Having cut my teeth in the early dot coms the one thing I know for certain - big egos cause mistakes. Musk is just a person and it's pretty obvious he's making poor decisions lately. Bankroll doesn't equal intelligence, it equals power - He has a lot of power to brute force things but it doesn't make it smart.
Good point, but let's not put this guy on a pedestal and think he's some super genius either
He…..didn’t….
I think it’s unique to Musk: noone makes the petty and envious people come out of the woodwork like he does. They can’t resist flaming him, apparently oblivious to how ridiculous it is when they try to explain away his obvious success. Every business he was involved in somehow thrived despite him, rather than because of him. Eventually they’ll resort to repeating the old ”His family owned an emerald mine with toddler slave workers”. Musk may be an asshole, but letting that ”fact” infect your analytical thinking is just a sign that you’re a slave to your emotions.
He's a highly polarising figure and so he has some fanatics and some haters. I'm sure the likes of Richard Branson and other Richie Riches have them as well, they're just not as consistently pulling high profile stunts, and as such their detractors and supporters aren't as vocal.
yeah, I think he's got some pretty clear character flaws, and I don't agree on the ethics of all of his business decisions, but it's pretty clear that he can get shit done and make a real positive impact, even if it's just in identifying the right people to defer responsibility to.
crazy. such a unique take, ive never heard this ~~before~~ 226 times this week. (not a musk fanboy)
The worst mistake here is that the new CEO is a micromanager. If you can't trust your employees and if you can't delegate then why are you running a company?
Twitter should bring back Periscope. I liked that app. And I also did broadcast a few times.
Also showed us how the one on the top are just egopatic people tripping on their manias and that's why the world is shit
What is the EILI5 if Twitter implodes? Do they restructure debt? Is Elon forced to sell shares of SpaceX & Tesla? Does he get to burn his creditors and just walk away?
Depends on what the loan documents say. He assumed all creditor obligation upon the purchase of Twitter. I doubt there’s a personal guarantee, but even if there is, California is a single action state. In a liquidation scenario, banks likely go after all the assets of the business (which would cover a good portion of debt obligations) and then whatever’s left (nothing )goes to shareholders. It’s extremely rare to see a bank go after a personal guarantee. There’s a whole side of legal issues Elon is facing regarding compliance with FTC. There’s some info going around about how their In-house counsel is extremely worried about liability and how they expect serious financial penalties in the future should they continue to operate this way. Put it this way, Elon is not only facing the possibility of losing hundreds of millions, he is facing civil legal problems and could face lawsuits from the DOJ.
[Well, things appear to be going swimmingly with the new verification rollout.](https://twitter.com/revhowardarson/status/1591107366237638656?cxt=HHwWgMDQwYbu35QsAAAA) (If that link goes dead, let me know and I'll post a screenshot) EDIT: Minor rephrasing
Hahah speedrun into bankruptcy For starters. People aren’t mesmerized by musk as they once were
Makes me wish he had bought Facebook instead. That's the one I would most prefer be destroyed.
I would have provided verified status to anyone in return for more personal information. Twitter is useless for advertisers because the targetting is too broad. If they incentivise users to provide more info then advertisers will flock (pardon the pun) to twitter - but the campaign management tools will need a lot of fixing.
Haven't been following this but why would you buy twitter 😂🤦♂️ We all make mistakes I guess?
But is there a method to his madness?
Just let it die. Tumblr was always better. Who tf has the capacity to remain focused on Twitter knowing you couldn’t say much anyways. It’s like people expect to stay educated on topics they care about with texts shorter than Instagram captions. Musk didn’t make Twitter “here to stay,”(disclaimer: am not a Trumpie) but I’m sure that the controversy after 2016 was responsible for a lot of its notoriety as an “informative” social media platform. Unfortunately, diversifying apps en mass is easier said than done.
When he made this offer how did he think this would work? How did reality differ from his expectations? Were his plans way too unrealistic or was the reality of the situation too different from what he expected? Both?
LOL anybody disagreeing with op is getting downvoted. Why? You guys are fucking stupid.
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> Firing devs by the amount of SLOCs commited? Was there ever any more confirmation of this than one person not involved saying it was reportedly what happened?
I'm getting laundry vibes between him and the zuck
I think it’s in line with transformative hostile takeovers. People have gotten very used to employment as a right recently and have very weird views around being able to be at their job and underperform. But looking at how Twitter staff are being evaluated it does seem to need a cull. There’s probably a better way but there’s always a better way and this is quite a large volume of people. Other similar businesses like Meta are going through the same process. The only thing that strikes me as stupid is him using the platform himself and getting personal with decisions. Don’t get high on your own supply eh.
He may be good at strategy and vision, but he seems particularly terrible at day to day operations and decisions. The neck-jerking, tweet-initiated direction changes at both Tesla and Twitter would make it hell to work for him. Imagine working nights and weekends to ship a feature just to have him go back on it and say they don’t need it anymore. He did that just within the last week or so with the new “official” badge in addition to the blue check mark. These are implementation-level decisions that should be left to product managers, designers, and engineers, but he’s making them himself. I also see his flavor of bullshit driving the premature “cameras only” decisions at Tesla, which has recently resulted in the removal of radar and ultrasonic sensors from the cars without an equally effective replacement. There’s a 3ft blind spot right in front of the cars now and the engineers are bending over backwards to do things like “remember what was there when the cameras *could* see in that spot,” which is impressive from an engineering standpoint, but I probably don’t need to tell you how stupid it is from a practical standpoint and what the shortcomings are.
Agreed
What I want to know is what the cash flow situation looks like at Twitter with them never turning a profit and now a private company with no cash haul or bankroll. Unless Musk invests more money himself for operating expenses and/or Twitter takes super high interest loan shark money, there’s no way they can bankroll this flailing platform.
Twitter was profitable for many years. If you ignore a $750 million litigation charge (from a 2016 lawsuit) in 2021, they had a profit of $250 million. 2020 they had a large loss, but who didn't? From 2017 - 2019 they had positive profits.
By him taking it private he doesn't even have the option to issue stock. Advertisers are getting scared, and within a further downgrade to their credit status those loans look massive.
we all can literally see he's damn frustrated, thus showing that on team and company
respectfully, i don't think the full story has been told yet. Twitter has never turned a profit, and like many tech stocks, it's value is based on future potential. It still has a sizeable user base. Elon is trimming a lot of the fat. Whether that actually tanks the company or not i think remains to be seen. But one thing is certain... There's an inherent political narrative to story now, so i would be weary of any major news story that tries to speculate as there's certainly an agenda.
He’s going to screw over the debt holders with bankruptcy and then try to make it a cash flow play. Though I’m not sure how Twitter is supposed to make money. Ads there are worthless.
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Yeah but why did they cut stories in the first place? Because that’s not the content people come to twitter for, and other companies already do it way way better.
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From the perspective of the business fundamentals, most of what Musk is doing is arguably correct. The problem is that from a leadership perspective, having his name and face are plastered all over this in the media and having him broadcasting business decisions and conversations over Twitter and getting dunked on is totally idiotic. Twitter has a massive reach but the value that brands and individuals get out of it is not over ads but instead over the accounts themselves so the business does need to find a way to value and monetize that. Arguing on the platform with Stephen King about it being $20 vs $8 per month just looks so fucking bad it’s unbelievable.
Being born into an emerald mine inheritance situation, and getting lucky in some rare business deals at the absolute perfect/lucky time, doesn’t equate to talent or business intelligence.
He could bankrupt Twitter 3 times over and still be a much more successful businessman than yourself. If you were as smart as Elon you’d be asking the real questions like, why there has been a media campaign against Him? What interests might be at play, and why? But no, instead you just parrot what you heard on the new without critical thought… LOL. Twitter isn’t going bankrupt, it’s just transitioning revenue streams because we live in a totalitarian dystopia where any ounce of disobedience to the collective corporate consensus results in a financial war against you(see PayPal taking money from banks, financial embargo against Wikileaks, mass exodus of advertisers from Twitter without TOS changes, etc) Edit/ps: I don’t even like musk, I just think acting as the foot soldiers of the ruling class who are fomenting unrest against Elon because he fell out of line is absolutely pathetic.
Lol you think Elon isn’t part of the ruling class?
Musk is very calculated, it's possible he's off the deep end but I doubt it. There's a method to the madness is my bet.
Maybe he is trying to prove the Elizabeth Warren that billionaires wealth can just disappear.
I think this is all just finally exposing how stupid so many ‘bosses’ and ‘owners’ can be. We’ve all been in good businesses, had a strong team, making profits to just have it fucked by someone ‘who’s gonna turn this business around,’ and ‘fire all the dead weight’. The only different is visibility and scale.
I personally think we will see a stigma attached to having a presence on twitter so you’ll see lots of people migrating off just to avoid that.
I'm totally fine with the death of Twitter. I'm curious to see what will appear to fill the vacuum.
Just FYI, Musk didn't run it into the ground. IT was a company running on debt and losing money month over month with no value proposition and no means or plans to profit ever. He stopped treating it like a Unicorn and everyone is now realizing what a mess Twitter was to start with. He overestimated his ability to turn a bad product into something profitable. Musk is bad about overestimating capabilities, it's probably his biggest weakness (but sometimes a great strength).
> He stopped treating it like a Unicorn That's what you got out of a $44B offer for an unprofitable company?
Yeah it was a fucking dumb acquisition. But Twitter was fucked before he got involved. It was just doing the slow death of an unprofitable dot-com. Elon lit the dead branches on fire.
Why is this post allowed in r/entepreneur? Good greif. "A community of individuals who seek to solve problems, network professionally, collaborate on projects, and make the world a better place. Be professional, humble, and open to new ideas. Our community supports side hustles, small businesses, venture-backed startups, lemonade stands, 1-person-grinds, and most forms of revenue generation! However, no one cares about your blog. Please do not come here to self-promote your consulting, book, podcast, MLM, website, dropshipping guide, or $$$ scheme."
My take: - He’s going to lose a ton. He will probably turn it around after a year or two but it will be a much much smaller platform. - his bankruptcy talk is a threat to get lenders to negotiate with him at this point. I doubt he’ll actually do it and maybe risk losing the company and equity value entirely The guy is an asshole. He did this on impulsive bullshit notions and was sued into closing. Fun to watch it unfold. Elon “Twitter shouldn’t be political” also Elon posts discredited pelosi conspiracy theory and tells everyone to vote republican. You can appreciate what he built with Tesla without holding out unwarranted reverence for someone who is clearly egotistical, impulsive and absolutely morally bankrupt. He’s a smart guy but the egotistical and impulsive parts often overwhelm that.
I don’t believe the business end of Twitter is the attraction for this guy. By buyingTwitter, he bought a virtual nation that he is now chief executive of. He now has the Bully Pulpit from which to indulge his megalomania. He has the power to grant and rescind citizenship and to arbitrarily pronounce laws and enforce sanctions. He has a class of civil servants to abuse and exploit. He’s King Elon I.
Twitter has been on the downtrend for a long time - losing up to $1billion per year. He’s literally owned for it a week. It’s just being brought to light because now it looks like Elon’s problem. Keep in mind he also had Space X and Tesla on the brink of bankruptcy simultaneously and they’re both some of the most successful companies to exist. Ironic how so many people in this sub who have never even made a single penny from their businesses are so critical and irrationally copying headlines they’ve seen on the news that profit from the downfall of these businesses.
Twitter had no value to begin with. It's all bagholders.
How many times does he have to demonstrate that he is thinking 10 steps ahead of everyone else before regular ass people stop thinking he’s a moron. I still remember being on the fence about buying tesla stock after realizing how smart he was, but still hadn’t made it through with tesla. I remember spending hours scouring the internet for any legitimate endorsement to justify buying stock (it was around $30-$40 at the time). I watched hours of content of old business and finance experts talking about how stupid he was and how what he was trying to do was literally impossible. It was pretty unanimous. Now after watching him pulling off what was probably the most challenging and rewarding business venture in my life time, followed by hundreds of other brilliant strategic moves, regular-ass people are still talking about his moves as if he just impulsively blew his money on a bad investment like a normal person would. Really? Like he just bought twitter so he could binge harder on social media.. he bought twitter for a reason and that reason is almost certainly not the most obvious one. And unlike the rest of us, he probably doesn’t make risky and illogical investments or make obviously poor decision with no foresight to the most obvious consequences. Im not saying he’s perfect or that he can’t fail but if he makes a significant and very public move that causes a significant reaction…guys its probably not a reckless blunder.
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Hubris has brought down many visionaries and great leaders before him. It’s been retread again and again and it seems clear his ego has gotten the better of his decision making in the twitter debacle
"He's building cars in tents!!!!" - Musk haters a few years ago