I know this is obvious, but . . .
Everybody seems to have forgotten what Elon Musk's real problem with Twitter is. The wellspring of everything that's happened since last year was a single moment of stupidity in which he agreed to massively overpay for it. And it's not like he doesn't know this. He tried desperately to get out of the deal, and took over the company only after a court forced him to.
At that point he was stuck with a massively unprofitable business, so he laid off half the staff and then embarked on a series of hare-brained schemes to raise revenue. Some of these schemes have been dumber than others, and none of them have even remotely worked, but that's because nothing will work. I'm unable to conceive of any plan that would raise enough money to make Twitter a break-even proposition, let alone profitable. And the only alternative is to pump endless billions of personal dollars into it, not exactly an appealing proposition.
So, sure, Musk is destroying Twitter. But who wouldn't? I don't think there's a human being on earth who could fix Twitter. At best they could be a little less flaky about sending it down the drain, but that's probably all.
I imagine AI could eventually be able to run Twitter almost cost-free, delivering perfectly moderated content free of spam, porn, fake news and other offensive material. But by then, nobody will be interested in reading stuff written by other humans.
Right. Just like how eventually Tesla is going to eliminate the need for humans to drive cars. Except that it’s unclear whether all this automation that saves Elon’s businesses is going to happen before eventually Elon’s death arrives.
Maybe there was no way to make it profitable after the debt load he created, but jesus, i don't think anyone could have destroyed it faster. Every decision has been not just disastrous, but obviously idiotic.
Yes, maybe nothing would "work" in the sense of making Twitter a profitable acquisition, but some efforts fail worse than others. He had enough money to cover the loss and he could have kept it going and had the prestige of owning such an influential company, but instead he's turning a major loss into a catastrophic loss. It's as if, having made a foolish decision to start with, he thinks that by continuing to do stupid things he will prove he was right all along.
This is so silly and fallacious.
Even if we accept the premise that managing Twitter to turn things around and make modest profits was never possible, there were more options than "do nothing and lose money" and "sink more money into the thing and inevitably lose even more money." Musk could have kept his mouth shut, quit doing Adderall for a few hours, and tried to hold things basically steady while he looked around for a buyer to take Twitter off his hands. He probably would have had to take the L and lose a few billion on the deal, but he would have recouped much of his original investment. Instead he went for "point the nose down and fly the plane into the ground as fast as possible", immediately killing his main revenue source and with it, any chance of cutting his losses.
This. All Elon had to do was keep running the company as it always had been run until he found another fool/buyer willing to take it off his hands in a few years, perhaps at a small loss. (Although this is America, and we seem to have no shortage of idiots with billions of dollars to burn at this point in our history, so who knows? He might’ve been able to trick them into overpaying for it, just like he himself did.)
But no. Instead he took control and immediately crashed whatever value it did actually have into the ground, in the process rendering it unsellable to pretty much anyone on the planet. What a genius.
yes, except i think he would have lost far more than a few billion dollars. musk himself, inexplicably, publicly stated the company was worth half what he paid recently. and i think that understates the true loss in value.
Remind me, how much was the break-up fee going to be?
I suspect it was high, but less than $44B.
Based on a likely settlement, it would have been around $10B..
Thing was, the break-up was obviously the sane option for Musk, but the Twitter board had to agree to let him do that, and of course they instead insisted on robbing him blind.
Well, robbing him blind in the sense of holding onto money he gave them voluntarily.
"robbing him blind"
That's funny.
By Elmo making an unsolicited, binding offer that was, even at the time, above market value. The board had a legal and fiduciary obligation to press Elmo to close the deal he made or they would have been sued to high heaven.
Which tells you that something is seriously broken in our system if there's such a strong incentive to hand something of value over to someone who will obviously destroy it out of incompetence.
That depends on how you define "value". If you mean the value to society of having a reasonably functional public square then, yes, this deal was a tragedy. But if you mean stockholder value, then this deal was golden. The stockholders got more than they could have expected in any other realistic scenario.
as i recall it was only a billion dollar penalty to break the deal pre-purchase.
I am reminded of Steve Jobs when he learned he had pancreatic cancer. His own “reality distortion field” cut in and instead of calling in the best experts and taking his best shot, he wasted 9 months pursuing silly alternative cures that claimed to be magically capable of fixing the problem. Elon is facing having losing billions rather than his life, but for a man of his ego having to live with the reputation of being a loser is probably worse than death.
While fiddle music emanates from Twitter headquarters? https://www.theguardian.com/technology/2023/jul/06/meta-launches-twitter-rival-threads-in-100-countries
So, what you're saying is, one of the richest persons on Earth was lying.
The real problem with Twitter is...
Musk bought it and lied about his goal of buying it.
Musk may not have been lying; he might genuinely be trying to make Twitter into "a platform that is maximally trusted and broadly inclusive" but simply has no idea how to do so.
His actions to save money at the expense of stability and reliability says otherwise.
When someone says “it’s not about the money”, you can be sure it’s about the money.
Musk has always been all about the flim-flam. He promises big-- full self-driving, super-speed vacuum tunnels-- and once in a while delivers valuable things-- mass-market electric cars, cheap(er) launches, starlink-- via companies with capable managers who keep him from meddling too much in how they do things. But he's a chiseler too, constantly cutting corners and wanting to do things on the cheap-- the TX launch pad, woefully under-sensored vehicles for what he wants them to do. The twitter corner-cutting is an extreme version of the standard MO, and unlike real car makers, he's never experienced the salutary discipline of liability lawsuits
He's Harold Hill with money, underneath it all. Before Marian.
I think Kevin's basic premise is wrong...Twitter was a loser money-wise generally but it was Covid that cut it's head off...Twitter made a profit of $1.2 Billion Dollars in 2018 and $1.4 Billion in 2019...Twitter was well on the way of at least being able to survive...and maybe prosper but two impossibilities intervened...Covid and Mr Musk. Kevin should rethink what he is saying in these regards. Traveller
Exactly. Twitter was a remarkably profit engine, easily bringing 1- 2 bill plus a year with good prospects. Before the purge, the sale staff there was as good as anywhere.
If Twitter had finally achieved profitability in 2018-2019, why exactly would Covid have rendered it unprofitable again? Twitter doesn’t seem to depend on employees interacting face to face at all with anyone (other employees or customers) so there was no reason the company couldn’t have become more profitable by just cancelling all their office space leases worldwide and moving to 100% work from home. The pandemic should’ve made Twitter even more profitable, not less, similar to how Netflix soared from 2020-22: all your customers stuck at home surfing the internet should have been a boon to a purely online entity like Twitter.
The main effect of COVID, I think, was that the economic downturn in 2020 was so nasty that advertisers, and especially brand advertisers, most likely slashed their ad budgets as part of their general belt-tightening to weather the recession. (I don't know exactly how this affected Twitter - I'd think that at least some ad revenues would have rebounded in 2021 and 2022, but perhaps Twitter's reliance on big brand advertisers left them vulnerable if marketing departments shifted more and more of their advertising dollars off of primarily brand-advertising sites like Twitter and onto search engines, etc.)
Musk paid for Twitter a little more than the GDP or Libya.
I make $100h while I’m courageous to the most distant corners of the planet. Last week I worked on my PC in Rome, Monti Carlo at the long final in Paris. This week I’m back inside the USA. All I do fundamental errands from this one cool area see it. For more information,
Click on the link below… https://GetDreamJobs1.blogspot.com
Inertia.
Had Musk simply done nothing other than chase new features and functionality, birdsite would have been fine. That's not what he did. He chased extreme cost-cutting, churlishly going after people who disagreed with him, and platforming hate.
Now, maybe some folks will see Blue subscriptions and longform on a shortform platform as features. I do not. I block anyone posting longform on the shortform platform and anyone who paid for Blue. Paid Blue is a bag of dicks -- feel free to prove me wrong.
But more than that, I moved 99% of my activities to the Fediverse. Almost no trolls; they're in the Fediverse but they're on servers that are blocked by mine and most of the mainline servers. You can't avoid trolls on birdsite except to go private -- all or nothing.
There is a remarkable level of knowledge and breadth of interests in the Fediverse. All you need to do is learn to follow hashtags.
But FTR, Threads is where a lot of birdsite holdouts are apparently headed.
Some amusing things about this.
Musk's company is now probably a lot closer to being worthless.
Later this year, Threads will be incorporating ActivityPub as its underlying protocol to enable connections to others in the Fediverse.
The majority opinion (comprising mostly of techies) in the Fediverse is to block (defederate) Threads. It's not necessary, IMO. Individuals can block servers/instances on their own. (HowTo: Click on the three dots in any given post and at the bottom you have the option to block the server/instance.)
For all intents and purposes, when Threads incorporates ActivityPub, the Fediverse will have won the social media war.
Your choice after Threads joins the Fediverse will be:
- Join an account in the Fediverse that does not collect data and isn't monetized
- Join Threads.
When NPR posed the question, "Can Threads recreate Twitter's role as the public square?", they're not understanding that the public square is the Fediverse and Threads will be the UI front end with ActivityPub being the back end.
Musk had a face saving way out of his own goal: He could have taken seriously his official motive for buying Twitter and run it essentially as it had been run by the old management claiming to be motivated by love for humanity. He could afford to take the losses for years. He could have used it as a reputation creating (rather than destroying) exercise. I think quite a few people would be grateful to him who now laugh at him. And the losses could probably kept bearable (for him) with conscientious management. And who knows how much a creative tax attorney could squeeze out of a forty billion loss combined with a deficit creation machine like Twitter.
Problem is, Musk is nothing more than a rich POS white guy who knows he is superior to every living being on the planet. Can't make that sh*t pie into anything other than what it is.
Musk had a face saving way out of his own goal: He could have taken seriously his official motive for buying Twitter and run it essentially as it had been run by the old management and claim to be motivated by love for humanity. He could afford to take the losses for years. That way Twitter could have been a reputation creating (rather than destroying) exercise. I think quite a few people would be justifiably grateful to him who now laugh at him. And the losses could probably kept bearable (for him) with conscientious management. And who knows how much a creative tax attorney could squeeze out of a forty billion loss combined with a deficit creation machine like Twitter.
This is a wrong take.
After he overpaid for it, musk had to do a combination of increased revenues and cost cutting to keep the platform going. Revenue was $4bil, so something like a 10% gain in revenue combined with slashing the workforce by 10% (assuming labor is the main cost) gets you there: you get the extra billion needed to service the new debt musk saddled the company with to buy it.
What musk has done is scare the advertisers away, and lost $2 billion in ad revenue + that $1 billion of debt service. So now the shortfall is $3 billion, and that one is harder to make up for.
But again, with costs cut 75%, you save roughly 3bils. If you reduce your server costs and other costs by the same, then you may even turn a profit.
Of course, the idea of reducing traffic/views to reduce your AWS and Google cloud bills is risky as you may reduce your ad revenue even more.
1. Cut costs deeply and repeatedly
2. ???
3. Profit!
Somehow #2 seems to assume customers will continue to always buy what you’re selling, even if you cut costs so much you can’t deliver any product or service at all. But maybe Elon has a secret army of underpants gnomes to make #2 all work out.
as far as I can tell (I cancelled my account after he reinstated hate mongers), the platform was still running after the layoffs. Elon even rolled out new products, like his $8 blue checks, so #2 could have been: do nothing.
Just cut the costs while keeping the platform running. Don't retweet right wing conspiracies, don't reinstate dangerous accounts (you can maybe make the case that you reinstate trump without much backlash, even though he's dangerous, but he's also the GOP nominee-to-be for a presidential election), don't throttle views, don't do these silly Twitter-was-corrupt-Files, don't fire then slander as a pedophile your head of online safety
but there was a path
Then there's the reports of Twitter's own goal, a self directed DDOS:
https://waxy.org/2023/07/twitter-bug-causes-self-ddos-possibly-causing-elon-musks-emergency-blocks-and-rate-limits-its-amateur-hour/
Some people can have an incredible run of good luck in their lives, until they don't.
From what I've read about Musk's successful companies (Tesla, SpaceX), the companies devote a large percentage of their management staff to "Managing Elon".
Shakespeare wrote two kinds of plays; comedies and tragedies. The tragedies were never "Oh, a giant meteor came from the sky and killed lots of people."
No. Shakespeare's tragedies were all about how a man's own flaws brought him down.
"The fault, dear Brutus, is not in our stars, but in ourselves..."
Perhaps thinking that Musk could make Twitter wildly profitable was like thinking that a chimpanzee could fix your airplane's engine. You'd have to ignore a lot of prior evidence to believe that.
What Americans are really thinking about at Dictionary.com,
https://i.redd.it/b5i2hncbn6ab1.jpg
Elmo will find that his least expensive option would have been to pay the $1B breakup fee last year, and walk away. Likely his inflated ego made that impossible. Twitter needs to come up with about $1.2B a year in interest payments, and that does not include the eventual principal payments on the $13B of debt.
This is a dumb take.
Just because you overpay for an asset doesn't mean that you have to do a terrible job operating it.
These are two seperate errors. Unless Musk is paying Kevin to put a positive spin on his disastrous management, this article is comically bad.
Agreed (I didn't read Kevin's full comments: "Musk is destroying Twitter. But who wouldn't?")
A whole lot of people are not flaming assholes, who would not have put the company, employee's, venders/suppliers, and their customers through all the bullshit he has delivered. Paying double what it was worth is going kill it, but only a dickhead like Elon would provide such misery to his employees and then kill much of its remaining value.
FYI, at current SOFR rates, interest is going to be closer to $1.5B this year, giving the likelihood that the $500M revolving credit line has already been fully drawn down.
Is it possible that Twitter is for Elon a consumption good, not an investment? Like when a really rich guy wrecks his Ferrari?
This is a really dumb take.
Twitter was not broken before the purchase. It was profitable. Not wildly so, but it was a functional business. It had issues, sure. But finances were stable.
Then Space Karen bought it. And it was big and complex - all internet-scale services are. Despite his pretenses, he's a finance guy, not an engineer. He didn't understand it. And because he's the kind of person he is, he beat on it and broke it until it was small enough that he could understand it. Kind of.
And here we are. Some douchey rich guy let his ego drive him to likely the dumbest huge takeover in history, and the end result is Musk has a blog where Nazis tell him how smart he is.
👍👍👍👍👍😄😄😄
Lots of speculation here regarding what motivates Musk with his Twitter mismanagement. To me, the best take is Catherynne M. Valente's:
"There isn’t enough money printed to change who they are. Elon Musk is (or was) the richest man on Earth. He’s losing money like a teenage nosebleed every time he goes further to the right. This is just the shape of his soul, it’s not a feint for profit. It’s not just about making enough money to keep the servers going and buy everyone in the office a house, it’s not even about making shareholders rich, it’s fundamentally about the yawning, salivating need to control and hurt. To express power not by what you can give, but by what you can take away. And deeper still, this strange compulsion of conservatism to force other humans to be just like you. To clone their particular set of neuroses and fears and revulsions and nostalgias and convictions and traumas so that they never have to experience anything but themselves, copied and pasted unto the end of time. A kind of viral solipsism that cannot bear the presence of anything other than its own undifferentiated self, propagating not by convincing or seduction or debate, but by the eradication of any other option."
This is good, thanks for posting. And see also jm195 upthread.
IIRC, twitter is the first company Elmo has owned and run on his own, without adult supervision and full-time Elmo-strokers. And even though he way overpaid for it, it's a rounding error for the kind of wealth he's supposed to possess-- plus he shifted a good bit of that over to other investors who also can swallow a few billion if they have to.
So, it's his toy-- make that *HIS TOY*-- and he can give in to those 3-year-old's impulses and break it however he wants. He has the magnifying glass, and twitter is his ant.
It's never been about the company's finances, not since he got locked into the contract and refused to pay a bill to get out of it. He just wants to wreck something all by his own self.
Bullshit, he was never stuck with it. He could have,
* Sold it at a massive loss.
* Given it away.
* Shut it down.
All of which would have been a better choice than trying to run it.
But his ego couldn't bring himself to fold a hand that he invested so much in, so he tilted, and has done nothing but toss money away.
I have no comment on whether Twitter was salvageable. When Google went public I argued that it had no chance, anyone could build a search a engine, so I'm a poor judge of potential.
By doing absolutely nothing Twitter would have been just fine. Revenue went from .3B in 2012 to 4.4B in 2022. They were also profitable in 2018 and 2019. That is not a company in distress. Not worth 44B but also not about to shutter the doors.
Musk drove it into the ground by understanding absolutely nothing about internet advertising, but also for having open disdain for the entire concept of advertising. He also never ran a company in a competitive space.
This all leads to a larger discussion about the general media blind spot about the buying power of the left vs. the right. The right is competitive in politics because of gerrymandering and the fact that we are Republic that gives as much power to ND as we give to CA. The right also has an outsized voice on social media most likely because of troll farms run by people like Wagner and bored retired people.
The left dominates commerce because you can't gerrymander it and if you spend as much on marketing to Iowa as you do in NY you will be fired. Business isn't woke they just know where the dollars are. So when Musk invited the far right back on Twitter the business community stopped advertising, and it was only a matter of time before the left people fled along with all their money, which Zuck is now harvesting.
Musk and Musk alone is responsible for the fall of Twitter.
You know, Kevin, there was a theory right when he bought it that he wanted to drive it down to zero value so he could get out from under the financing he took on. The loans would just have to be write-offs. That might still be a best guess.
But if you ask me, what he's been up to at twitter has taken anything connected with it out of the realm of "business decisions" altogether. It's a trip out of rationality into the murky underworlds of id.
Musk is destroying twitter at the behest of the evil dictators in the world who just want to control the media. 😂
“We know governmental entities with vested interests in eliminating avenues of effective dissent and the dissemination of truth (Saudi Arabia, China, others) provided funding for Musk to complete his purchase when he couldn’t otherwise pull it off. We see him, barely months at the helm, take off any remaining mask of progressivism or moral purpose and speed-run a descent into radicalization while working day and night, not even to make money, but to change anything that might smack of mercy or kindness or acceptance of others. To welcome monsters and ban journalists.”
"So, sure, Musk is destroying Twitter. But who wouldn't? I don't think there's a human being on earth who could fix Twitter. At best they could be a little less flaky about sending it down the drain, but that's probably all."
I don't know. Had someone bought it for the realistic valuation of $15-20 billion, it's possible that they could have found a way to make it profitable. I don't think it's likely, but I'm not sure it's totally impossible. But he paid $44 billion, which means you have to make Twitter profitable PLUS earn back the extra $25-30 billion he overpaid for it, and that seems like just too much pressure to make it realistically possible.
Twitter was moving to profitability when Musk bought it, in fact there were two recent years when it DID make money. So your opinion is flat wrong.