Vox Populi

Much as I’d like to, I can’t ignore the elephant in the room on Monday.

Elon Musk was voted out as head of Twitter.

If this were a normal, public company, that might mean the board decided he had to go. But this isn’t a normal, public company. It’s a privately-run basket case which, for the last two months, has functioned as Musk’s personal fiefdom.

On Sunday evening, Musk polled an audience he spent months insisting was overrun by bots and fake accounts on the fate of his stint as CEO. The results weren’t favorable. Or maybe they were. It depends on what you believe about Musk’s desire to run the company on a daily basis in perpetuity.

Twitter voted by an overwhelming margin for Musk to step down (screenshot below). When he posted the poll, he said he’d abide by the results — “vox populi,” as he likes to declare, whenever he justifies decisions by citing poll results.

Musk has run Twitter for just 53 days.

Attempting to discern his motivations is, as usual, an exercise in futility. At times, Musk seems genuinely oblivious to things that should be obvious. For example, it didn’t seem to occur to him that offering blue, verified checkmarks to anyone with a few dollars and a debit card, could lead to chaos given that users have been conditioned to assume that any account with a blue checkmark is, at the least, an official account. At one point, a “verified” Eli Lilly handle announced that “insulin is free now,” sending the company’s shares lower. The account was fake.

There are myriad such examples of what looks, to the outside observer, like ineptitude. So, it’s possible Musk was unaware of well-known psychological dynamics associated with polls. There’s precedent to support such an assertion. Musk has demonstrated on several occasions that he either doesn’t understand the power of leading questions or else doesn’t know how to write them in such a way as to reliably elicit the desired response.

If he didn’t want to step down as head of Twitter, the wording of the poll suggests Musk is also oblivious to well-known psychological dynamics associated with reviews, comments and, prior to the internet era, letters to the editor. Angry people are far more likely to leave a review, post a comment or write letters than people who are satisfied with a product or agree with an article. It’s the same phenomenon that Republicans worried about following the Supreme Court’s decision to overturn Roe. If you infuriate millions of people, then give them the opportunity to weigh in, they’ll take it — particularly if weighing in has the potential to make a difference. In simple terms: The odds were skewed against Musk in his poll, assuming i) he didn’t want to step down and ii) all else was equal, where that means bots didn’t influence the outcome.

Crucially, Elon’s multitudinous fans were going to vote no in droves, but it’s very likely that participation in this particular poll was meaningfully higher among people who don’t care for Musk compared to that cohort’s participation in other polls he’s conducted on the platform. If he didn’t want to step down, he appears not to have realized the potential for higher participation (high voter turnout, if you will) from the anti-Musk crowd.

But what if Musk did want to step down? There are reasons to believe he might. For example, Tesla just had one of its worst weeks in a long time, falling 16% in just five sessions.

The shares are down 63% from the highs (figure above), a slide that erased some $785 billion in market cap. Musk’s net worth dropped in tandem. As of last week, he was no longer the world’s richest person.

At the same time, he sold more Tesla shares. Some speculated he might consider using the proceeds to buy back some of Twitter’s debt incurred during the buyout.

The latest sale found Musk unloading some $3.6 billion of Tesla stock, which Bloomberg noted could cover the riskiest portion of the $13 billion in high-interest debt he saddled the platform with (figure below). Due in part to deteriorating market conditions (so, factors beyond Musk’s control) banks were widely believed to face losses on the debt if it were sold into an unfavorable environment.

One portion of that debt has a fixed coupon of 11.75%. It’s a $3 billion bond. “There are various reasons why Musk might find buying the debt appealing,” the linked Bloomberg article said. “It would save Twitter about $350 million in annual interest payments [and] Musk would likely be able to buy the bonds at a steep discount, further lowering the company’s debt burden.”

That sounds good, but I’m not sure all Tesla shareholders see it that way. If Bloomberg’s supposition is even a little bit true, it means the dark comedy that is Musk’s Twitter takeover is impacting Tesla’s shares in at least two ways: Some argue that Musk’s antics on Twitter pose a reputational risk to Tesla, and any shares Musk sells to fund anything to do with Twitter are an albatross at time when Tesla’s stock is already under pressure.

That could become self-fulfilling to the extent any additional Tesla share sales in the service of bolstering Twitter put more downward pressure on the stock, thus reducing the value of Musk’s stake should he need to post it as collateral. On December 8, Bloomberg reported that “Musk’s bankers are considering replacing some of the high-interest debt he layered on Twitter with new margin loans backed by Tesla stock that he’d be personally responsible for re-paying.” Musk is also said to be courting new investors at the same price he paid which, by his own account, was too much.

Musk’s behavior during his tenure at the top of Twitter was erratic, to put it politely. What began earlier this year as a series of flirtatious tweets with America’s far-right, quickly metamorphosed into daily, caustic propagandizing in the faux libertarian style that by now is a cliché. Musk recently advocated for prosecuting Anthony Fauci, for example, and promoted what he called “The Twitter Files,” a series of leaked internal communications documenting the company’s moderation decisions including those related to Donald Trump and other right-wing provocateurs. What Musk variously billed as revelations were made public by, among other people, Bari Weiss and Matt Taibbi, both provocateurs in their own right. Despite the best efforts of Musk’s conduits, the “files” were treated by most as exactly what they were — another cynical attempt to sow distrust and societal discord among a slice of the electorate that’s been manipulated again and again since 2016 by would-be populists and opportunists of various sorts.

Last week, Musk claimed Jack Sweeney, a college student running an account which tracked his private jet, was conveying “assassination coordinates.” He cited an incident involving his family in a decision to ban the account and said he was taking legal action against Sweeney and unnamed “organizations.” He subsequently banned several journalists on the same general excuse, before reinstating them.

I’d be totally remiss not to note that some incendiary right-wing talking points, including calls to prosecute Fauci, have been blamed for inciting violence against public officials and FBI agents. Musk has amplified some of those talking points, even as he insists that inciting violence is off limits.

On October 30, Musk identified himself only as “Chief Twit.” “No idea who CEO is,” he remarked, in the same tweet. The results of Musk’s poll suggest we’re right back to having “no idea” who’s officially in charge of Twitter.

It wasn’t immediately clear whether Musk would relinquish the “Chief Twit” role — perhaps to one of the provocateurs to whom he’s endeared himself recently.