Analysts, reporters, investors and netizens in general spent most of Thursday asking (and answering) questions about Elon Musk’s cartoonish cash bid for Twitter. As usual, almost no one asked (let alone answered) any of the questions that matter.
Musk’s crusade to commandeer the company is first and foremost an example of his penchant for juvenile exploits — Dogecoin-esque buffoonery taken to its illogical extreme. It’s also a testament to a childlike, Trumpian obsession with the company, cultivated over years spent tilting at various windmills in 140 characters. It may not even be a serious offer. “My conclusion [is that] Musk is f–king with the SEC,” Mark Cuban said. “His filing… allows him to say he wants to take a company private for $54.20 versus his ‘Am considering taking Tesla private at $420. Funding secured,'” he added. “Price goes up. His shares get sold [for a] profit.”
Assuming it is serious, there’s ostensibly a free speech element. Musk, like too many geniuses, has a libertarian streak that whispers to him about taxes, censorship and pandemic containment protocols. “I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy,” Musk declared, in an offbeat SEC filing destined for some kind of infamy. It didn’t seem to occur to Musk that seizing a company and taking it private doesn’t exactly scream “democracy.”
The notion that Twitter stifles free speech is a favorite right-wing talking point that often refutes itself. In many cases, the loudest voices decrying purported liberal censorship on the platform unironically lodge their complaints via tweet. Musk is no exception.
One of the pillars of conservative politics is the notion that governments shouldn’t interfere in private enterprise or otherwise instruct corporations on how to run their businesses. Twitter, like other tech giants, has decided it’s in the company’s best interests to exercise a modicum of control over speech that, for example, incites violence or perpetuates misinformation about vaccines.
If that’s censorship and censorship is bad for business, the market will take care of the problem in due course. There’s no need for Republicans (let alone a sitting US president) to take it upon themselves to demand social media abandon moderation policies, just as there’s no need for Democrats to demand the same platforms remove objectionable content. If a company is seen as unduly heavy-handed, user growth and engagement will slow, as will ad revenue and eventually the stock price will reflect the company’s worsening prospects. Or, on the other side, the rampant proliferation of misinformation will scare away advertisers and undermine trust in the platform. That too will eventually be reflected in the share price.
Everyone, including and especially Republicans and would-be libertarians, has seemingly given up on the “invisible hand” when it comes to big tech companies, though. Politicians and private citizens alike all appear to believe they should have a say in how these companies are managed, above and beyond the “vote” they can exercise by simply refusing to engage with the platforms or selling a given company’s shares.
Musk, by virtue of being personally worth multiple Twitters, is in a class by himself. He’s a private citizen, but he can exercise government-like control over entire companies simply by buying them outright — in cash.
On Thursday, gallons of digital ink was devoted to answering questions about how Musk would fund a $43 billion purchase. I’ll save you the trouble: He can sell Tesla shares or borrow against them. The first option has theoretical limitations (selling a huge chunk of Tesla could push the shares lower and may irritate other investors), while the latter has more concrete limits (he can only borrow 25% of the value of any pledged shares). He could likely raise around $10 billion more by borrowing against the entirety of his unpledged SpaceX stake.
But those aren’t the only options. Musk is the world’s richest person. His capacity to raise money is limitless. He could, for example, team up with another billionaire and make a better offer, all “best and final” language aside. That assumes he can convince someone else to join him on what, at the end of the day, is just another example of Musk batting the world around like a cat playing with a dying mouse.
And that gets us to the real, existential questions that no one ever wants to ask. This isn’t about Twitter, just like the Dogecoin charade and Tesla’s Bitcoin purchase weren’t about crypto. This is about recognizing the first manifestations of humans becoming gods in the 21st century.
I’m fond of harkening back to an article from August 2020 called, appropriately, “Gods”. In it, I wrote that “when one combines the exponential nature of wealth creation in a capitalist system with modern market structure, the read-through is that a few fortunes will become so large, so fast, that the people associated with them will become gods,” beholden to no one — not regulators, not presidents, not nations.
I was primarily referring to Musk who, at the time, was worth $110 billion, $90 billion less than Jeff Bezos. Six months later, Musk made it clear he could single-handedly influence the price of cryptocurrencies, including Bitcoin. Around that time, he began to accumulate wealth at an astounding pace. In the six weeks to February 15, 2021, he made more than $25 billion on paper, leapfrogging Bezos to become the world’s richest person. Then, on Monday, October 25, 2021, Musk’s net worth grew by more than $36 billion in a single day when Hertz, just four months removed from bankruptcy, ordered 100,000 Teslas.
Tesla has been the poster child of the “weaponized gamma” dynamic, whereby Musk’s legions of day-trading followers leverage the power of collective action to create a self-fulfilling prophecy in the company’s shares. Musk has the capacity to unwittingly turbocharge that explosive dynamic by tweeting into an unfolding squeeze.
When Musk polled his Twitter audience in November about whether he should sell Tesla shares (ostensibly to pacify critics who argue unrealized gains are a means of tax avoidance for the rich), the stock was coming off another mind-bending rally triggered initially by the Hertz order, but magnified by what one analyst described as “raging at the options casino.” In theory, Musk’s fans could orchestrate another such squeeze, pushing Tesla higher, thereby inflating the amount he could borrow against pledged shares.
Alternatively, he could leverage his social media sway to push Twitter around or harness the platform against the company’s board by using it for a straw poll aimed at gauging popular support for his bid in the event it’s rejected. In his filing, Musk indicated he may sell the stake he already owns if Twitter doesn’t accept his offer. “This is not a threat,” he mused. Bloomberg suggested Musk “may be able to turn Twitter into a meme stock,” which would be ironic considering the platform is “where most [meme stocks] are made.”
All of this for what? An edit button? That’s a joke, but it’s probably a more accurate explanation than Musk’s contention that he’s just trying to create “an inclusive arena for free speech,” as he put it, during a TED event in Vancouver on Thursday afternoon. It’s not, he insisted, about making money.
On that latter point, I’d agree. And that’s really the problem. At the end of the day, the concept of “unlocking value” is usually about making operational changes aimed at extracting money from a target. Rarely does benevolence play a role, but at least there’s an identifiable motive: The profit motive. Musk, by contrast, is doing this because he can. It’s a game for him. Something to do. Like driving up the price of a meme coin. Or aggravating Bernie Sanders on Twitter. Even if you, like Cuban, think he’s just trying to turn a quick profit, that’s still a game. And only Musk can play it at that level.
There were any number of jokes one could make on Thursday. As I tweeted shortly after Musk’s filing was made public, the premise was comically oxymoronic. “I’ll free Twitter from the tyrannical influence of liberal censorship by bringing it under the control of one man — me,” Musk seemed to be saying.
But what he was really telegraphing (perhaps without realizing it), is that his whims are becoming synonymous with everyone else’s reality, commensurate with the size of his fortune.
The faster the wealth creation machine spins, the more true that will become, until everything we do is in some way, shape or form, a manifestation or projection of one person’s impulses, inclinations and fantasies.