“I wouldn’t recommend running two companies. It decreases your freedom quite a lot.” —Elon Musk
That quaint gem from 2015 resurfaced as Musk, now the world’s wealthiest man, closes in on ownership of Twitter, his fifth major company. (Ironically, the comment came in response to a question referencing Jack Dorsey splitting his time as CEO of Twitter and Square.)
Musk already serves as CEO of electric-auto maker Tesla ($1 trillion market cap) and the aerospace outfit SpaceX (recently valued at more than $100 billion). He’s also the de facto leader of the underground tunnel startup the Boring Company ($5.7 billion valuation) and the neurotechnology company Neuralink (roughly $500 million to $1 billion valuation).
Now, Musk plans to spend $44 billion to add Twitter to his mix, though it’s unlikely he’ll serve as CEO in a traditional capacity.
The extensive portfolio is prompting fair questions about whether Musk is stretching himself too thin—particularly given the immense content moderation, monetization, and product development challenges facing Twitter. Tesla’s share price is down 10% since news of Musk’s impending purchase broke on Monday—perhaps owing in part to wariness about the CEO’s divided attention.
“I fear this is going to be a distraction,” an anonymous fund manager with a significant position in Tesla told Reuters for an article published Tuesday. “He’s juggling supply chains and factory delays and the expansion of the energy storage business, and this doesn’t fit at all.”
For an executive who claims to spend 80 to 100 hours weekly working at his current companies, adding the headache-inducing complexities of Twitter to his plate seems untenable. Already, Musk owns a mixed record of managing his disparate interests.
On the positive side, Tesla and SpaceX have flourished despite Musk’s busy schedule. Musk told the Wall Street Journal last December that his time is split “about even between SpaceX and Tesla,” depending on “what is kind of the crisis of the moment.”
While both companies are clouded by allegations of hostile work environments, their business bona fides are unimpeachable. In both cases, Musk has devoted extensive energy to engineering and product development, while a small but loyal team of executives handles day-to-day management.
The flip side: Musk’s leadership at Neuralink has come under fire, with former employees describing him as insufficiently devoted to the enterprise. A January investigation by Fortune’s Jeremy Kahn and Jonathan Vanian explored these tensions.
“Despite being de facto CEO, Musk, primarily occupied with Tesla and SpaceX, spent little time at Neuralink’s offices—initially dropping by once a week, and then later visiting the offices only about twice a quarter, often for no more than a few hours, according to former employees,” Kahn and Vanian reported.
They continued: “When Musk wasn’t there, senior managers struggled to get the billionaire’s attention even though his sign-off was required on major decisions, one former employee recalls. The former employee believes that this remains a problem. Adding to the dysfunction, Musk encouraged junior employees to email issues and complaints to him directly, bypassing normal management channels, the employee says.”
For now, Musk appears intensely devoted to reshaping Twitter in his preferred image, perhaps at the expense of his other endeavors.
The Twitter fanatic framed the purchase as an altruistic act, designed to preserve the sanctity of free speech and revitalize the stagnant company. In a sign of his genuine interest, Musk claimed earlier this month that “I don’t care about the economics at all”—though we’ll see about that once his estimated debt service payments of roughly $1 billion annually come due.
But unless Musk takes a significant step back from Tesla and SpaceX, the stretched schedule will test his ability to empower others carrying out his vision for Twitter. Musk will need a simpatico executive team that aligns with his libertarian bent and navigates his erratic style.
For a notoriously ambitious and demanding leader, one known for micromanaging some projects and not-at-all-managing others, finding the right balance at Twitter will be no easy task.
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A quick turnaround. Top Twitter officials told employees Monday that they expect Elon Musk’s $44 billion acquisition of the company to close within six months, Bloomberg reported. Twitter CEO Parag Agrawal notified staffers that he will remain in charge until the deal is finalized, at which point Musk will make decisions about the company’s direction. Platformer reported that employee sentiment toward Musk’s ownership skewed “largely concerned and negative,” though some workers are excited about the Tesla CEO untethering the company from shareholders.
A Truth bomb? Shares of the blank-check company planning to merge with Donald Trump’s media company fell 13% on Monday in response to Elon Musk’s planned acquisition of Twitter, CNBC reported. The selloff of Digital World Acquisition Corp. signaled that some investors fear Republicans will gravitate toward Twitter over Trump’s social media platform, Truth Social, as Musk promises to reduce speech restrictions on the site. Trump told Fox News on Monday that he won’t return to Twitter if allowed—the company banned him after the Jan. 6 Capitol attack—but the former president still isn’t an active user of Truth Social following its late-February launch.
Snapping up the scraps. Several Wall Street analysts are predicting that Twitter’s digital media rivals could see improved advertising revenues if Elon Musk follows through with promises to reduce the platform’s reliance on ads, CNBC reported. In multiple notes to investors, the analysts forecasted that several media companies—including Facebook and Instagram parent Meta, YouTube parent Alphabet, TikTok, Snap, and Pinterest—would gobble up some of Twitter’s ad revenue, which totaled $4.5 billion in 2021. In a since-deleted tweet, Musk suggested earlier this month that Twitter shouldn’t have ads, arguing the “power of corporations to dictate policy is greatly enhanced if Twitter depends on advertising money to survive.”
A crypto retirement plan? Fidelity Investments will soon allow companies to offer Bitcoin as an investment option in their employees’ 401(k) accounts, the Wall Street Journal reported Tuesday. Fidelity will become the first major retirement-plan provider to offer Bitcoin within a 401(k), a signal of the growing interest in cryptocurrencies as a mainstream investment. Customers will only be allowed to invest up to 20% of their retirement account in Bitcoin, though that threshold could change in the coming years as regulators and legislators consider additional cryptocurrency rules.
FOOD FOR THOUGHT
The EU’s Elon message. One last Twitter note on this Twitter-heavy day. Elon Musk’s free-speech fanaticism might fly in the U.S., but don’t sleep on the European resistance. As the Financial Times reported, the European Union’s ambitious effort to increase Big Tech oversight, which includes new requirements for content moderation, is on a collision course with the self-described “free speech absolutist.” Most immediately, Twitter likely will need to comply with the Digital Services Act, which European leaders finished negotiating last weekend ahead of formal passage in the coming months. The legislation forces large social media companies to quickly remove illegal and harmful content, though a precise framework for enforcement remains to be seen.
From the article:
Thierry Breton, the EU’s commissioner for the internal market, told the Financial Times that Elon Musk must follow rules on moderating illegal and harmful content online after Twitter accepted the billionaire’s $44 billion takeover offer.
Breton said: “We welcome everyone. We are open but on our conditions. At least we know what to tell him: ‘Elon, there are rules. You are welcome but these are our rules. It’s not your rules which will apply here.’”
IN CASE YOU MISSED IT
These futuristic 3D-printed homes are a rare example of affordable housing in this historically pricey market, by Bernhard Warner
Twitter cofounder Jack Dorsey says Musk is the only person fit to take the platform private, by Eamon Barrett
Jeff Bezos asks whether Elon Musk buying Twitter gives China extra leverage over democracy’s ‘town square’, by Eamon Barrett
Musk’s Twitter purchase leaves global media increasingly in the pockets of a few billionaires, by Nicholas Gordon
CEO of Tesla competitor Fisker abandons Twitter hours after Musk offer is accepted, by Chris Morris
Big Twitter accounts on the left are losing followers and those on the right are gaining since the Musk buyout was sealed, by Sophie Mellor
Anonymous hacks into Russian energy companies, exposing over 1 million emails, by Carmela Chirinos
As Moonbirds’ NFT sales surged, some investors made thousands of dollars. Others went into debt to buy at the peak and lost, by Taylor Locke
BEFORE YOU GO
It’s that time of year. The spring earnings quarter got off to an ugly start last week for tech, with Netflix’s stock plummeting on disappointing subscriber trends. The next three days, though, will tell a broader story about the sector’s health. Several industry heavyweights are scheduled to release quarterly earnings reports this week, delivering some insight into macroeconomic and company-specific headwinds. Alphabet and Microsoft will look to build Tuesday on a strong finish to 2021. Skittish Meta investors will learn Wednesday whether Facebook usage continues to slow (Spotify, PayPal, and Qualcomm also report). Apple and Amazon will show Thursday how well they weathered major supply-chain challenges. And to bring this newsletter full circle, Twitter also will hold its investor call Thursday morning. Wonder if they’ll have anything interesting to talk about.
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