To get to what I think are some potentially very important notes on Tesla, I have to provide quite a lot of background on what is happening at Twitter for anyone who isn’t following the story closely. In fact, most of this article will be about what has been happening on and at Twitter lately. I think there are a few big impacts that could hit Tesla as a result, and then various ramifications from those if they do occur. Skip down to the bottom if you want to avoid the Twitter dumpster fire and only think about the effects on Tesla.
Elon Musk’s Twitter Purchase
The actual series of events that led to Elon Musk deciding to buy a big stake of Twitter and get on its board, which then quickly evolved into buying Twitter and taking it private, is fascinating and you might even say bizarre, but I’ll leave that for the comments under the article if anyone is interested. The very short story, though, is that Elon thinks “free speech” wasn’t given free reign on Twitter previously, and it is his multi-billion-dollar contribution to human society (just not places like China and Saudi Arabia, of course) to bring “free speech” to Twitter. Many believe that free speech was doing fine on Twitter, and it was just hate speech that was heavily moderated, but I think it is correct to assume that a big bulk of Elon’s rationale for buying Twitter was this “free speech” issue. Just note that Twitter is a private-company platform (hence Elon’s ability to buy it) and that it is not even close to the largest social media platform, so it’s hard to genuinely equate it to a hypothetical “global town square.” On the other hand, it has been the chosen platform for government announcements, much political “discussion,” and news reporters.
— Nafnlaus 🇮🇸🇺🇦 (@enn_nafnlaus) November 3, 2022
After Elon negotiated a proposal with Twitter to buy Twitter, he got cold feet. He claims that the reason for that was that Twitter’s estimate for how many accounts were bots/fake spam accounts was far too low, and thus he was misled. Unfortunately for Elon, he had waived due diligence in an initial effort or plan to close the deal quickly and he was in no position to wiggle out of the deal. He went to court with Twitter for a while, but his prospects of winning in court looked quite bad, and in the end, he agreed to buy Twitter more or less as was agreed in the original proposal months ago.
If I’ve got this right, Twitter made about $600 million in revenue last year. Not even looking at other costs, that’s reportedly far less than the expected interest on debt put on Twitter in this deal. “To finance his Twitter deal, he loaded the company with $13 billion in debt, putting it on the hook to pay more than $1 billion annually in interest alone,” the New York Times writes.
If you’re seeing a problem here, you’re not the only one.
What Is Happening On Twitter Now?
Leading up to the Twitter deal, in the course of negotiating the Twitter deal, and since acquiring Twitter, Elon has made a series of quite antagonistic, inflammatory, and conspiracy-laden tweets. (One would think that someone who has so many self-inflicted wounds from tweeting would be a bit more cautious about taking over the platform and while doing so, but alas, that is not what fate had in mind.) This is by no means an exhaustive list, but I’m going to highlight a few that are very relevant at the moment.
His own reminder of his tweet to open 2022 is probably the best place to start, though:
As I was saying … pic.twitter.com/tsGz6fCWuW
— Elon Musk (@elonmusk) May 2, 2022
Indeed, flicking a tiger’s nuts leads to a wild situation. While that was a joke, and then was a joking reminder of the joke in May, it seems that Elon’s game plan lately has been to flick the tiger’s nuts at least once a day. It’s not been going especially well for him or Twitter as a result.
Going back to the idea of “free speech,” as I understand it, what has actually been heavily moderated on Twitter (though, not nearly enough in many people’s eyes) is hate speech and dangerous speech. You may recall that some portion of the Republican Party tried to overthrow the US government and stop the transfer of power after a presidential election for the first time in history on January 6, 2020. You may know that many minorities are hated, targeted for harassment, and brutally harmed and murdered in countless cases. Twitter moderation has presumably been in large part trying to prevent political violence and violence toward minorities. Elon and many others on the right believe that such moderation has gone too far, and he indicated on multiple occasions that once he took over Twitter, he’d lay off a huge portion of Twitter’s content moderation team.
Companies that advertise on Twitter, however, have seen that as particularly risky to their brands and the wrong path to take. And the more nuanced take on “free speech” is that while speech is free in a democratic society, it also comes with responsibilities and hate speech and very dangerous speech are not permitted. As one saying goes, “your freedom ends where it blocks another person’s basic freedom.” The most famous example is that you are nor permitted to shout “FIRE” in a crowded theater if there isn’t a fire, because it can lead to people rushing out of the theater and hurting if not killing each other in the stampede. (Relevant side note: one of the “don’t tread on me” Oathkeepers who died on January 6 died from the stampede — she was literally tread on to the point that she died.)
In the midst of all this uncertainty and controversy, after Paul Pelosi was attacked last weak, Elon engaged in some … very questionable tweeting. Background: Nancy Pelosi is currently 3rd in line to run the United States, only behind President Joe Biden and Vice President Kamala Harris. Someone believing various right-wing conspiracies broke into her home with the intent to kidnap and torture her, and perhaps assassinate her. Not being home, the person attacked her husband, bludgeoning him in the skull with a hammer. Somehow, Elon was sent a conspiracy story that the attacker was actually Paul Pelosi’s gay lover. The website the story was published on once claimed in 2016 that Hillary Clinton was dead and it was actually her body double who debated Donald Trump. Ironically, Elon’s tweet about the Paul Pelosi conspiracy theory was in response to a tweet by Hillary Clinton. (What are the chances?)
Needless to say, in the midst of concerns about hate speech running wild, conspiracy theories running wild, and a rather unpredictable Elon Musk running the Twitter show in who knows what way, advertisers decided to put their Twitter advertising on pause and see what happens before jumping back in. With a large portion of advertising money drying up, Twitter and Elon are in a bit of a bind, or a crisis perhaps.
Since we are talking Twitter, here are a handful of insightful, clever, and humorous tweets to bring us to this point (aside from the two from Elon referencing the flicking of a tiger’s balls):
Advertisers are not being manipulated by activist groups, they are being compelled by established principles around the types of companies they can do business with. These principles include an assessment of the platforms commitment to brand safety and suitability.
— Lou Paskalis 🇺🇸 (@LouPas) November 4, 2022
Sir, has your strategy of assuring MAGA leaders you are going to turn this platform into a MAGA Hellscape, firing key people in content moderation, and generally acting erratic not worked to assure advertisers this is a safe place to sell their goods & services?
— David Rothschild 🌻 (@DavMicRot) November 4, 2022
Elon be like pic.twitter.com/Z77AYfuC4e
— MD (@mikeydoubled) November 4, 2022
CNN just reported that they spoke with Twitter advertisers, and the reason they’ve pulled their ads is because of Elon Musk’s own behavior since acquiring Twitter, including his tweet sharing a homophobic conspiracy theory about the brutal attack on Mr. Pelosi. https://t.co/5Uwev1nX48
— John Aravosis 🇺🇸🇬🇷🏳️🌈 (@aravosis) November 4, 2022
In hindsight, tweeting that there was “a small chance” Paul Pelosi’s attacker could have been his secret gay lover was not the most advertiser friendly move.
— Whole Mars Catalog (@WholeMarsBlog) November 4, 2022
If only someone, apart from ***basically everyone***, had warned you that your habit of spreading conspiracy theories, divisive political rhetoric, and plans to weaken anti-harassment rules in the name of "free speech", would scare off advertisers.
— Nafnlaus 🇮🇸🇺🇦 (@enn_nafnlaus) November 4, 2022
I’m dying 🤣…Elon hit with a fact check by the app he just dropped $44B on pic.twitter.com/eBgalvTdVa
— Wu-Tang is for the Children (@WUTangKids) November 4, 2022
Maybe you need to apologize publicly for posting that vile conspiracy theory instead of just deleting and not addressing it.
You're a huge figure in the public eye, and like it or not, when you do stuff like that, it matters.
Stop trying to shift the blame elsewhere. Own it.
— BrooklynDad_Defiant!☮️ (@mmpadellan) November 4, 2022
Listen to something other than the voices in your head.
People are bailing out – users across the political spectrum are reporting shrinking follower counts – marketing groups that don't listen to anything but $ are gone. And you posted a conspiracy theory.
— Keith Olbermann (@KeithOlbermann) November 4, 2022
Within days of owning this site you posted homophobic fake news as the husband of the US Speaker of the House recovered from a assault. What exactly should we be thinking about the Musk regime?
— Mr. Newberger (@jeremynewberger) November 4, 2022
The “oppressed” conservatives freely tweet dangerous hate speech while lamenting about dangerous hate speech being censored. Always the victim, never the villain.
— 𝐂𝐡𝐢𝐝𝐢 (@ChidiNwatu) November 4, 2022
A thermonuclear name & shame is exactly what will happen if this continues.
— Elon Musk (@elonmusk) November 4, 2022
"Sir, the advertisers are nervous about your unpredictability."
"Have we tried turning a digital lynch mob against them?"
— Max Burns (@themaxburns) November 5, 2022
That’s enough on this portion of the story for now. On to the next portion of the dumpster fire.
I an apparent effort to make Twitter financially fit, Elon Musk pitched the idea of a $20/month fee for a verified blue checkmark on Twitter. In response to protest from the famous author and Tesla Model S owner Stephen King, Elon dropped the price to $8. Nonetheless, many have highlighted the absurdity of going from “this is all about free speech” to “your tweets will get more attention/be prioritized over others if you pay $8/month” (not direct quotes). Additionally, many have criticized, scoffed at, and tried to explain the problems with charging $8/month for verified blue checkmarks. Here are some tweets:
Just to make this as clear as possible.
What verification means now: We've confirmed this person or company is who they say they are.
What verification will mean in the future: I have $8.
Elon could still back out of this, but that's the fundamental change that he's proposing.
— Ben Collins (@oneunderscore__) November 4, 2022
The Twitter checkmark isn’t a status symbol. It’s much more useful than that. It allows you to quickly check whether someone is the real deal and not an impersonator. This improves Twitter overall, and impedes bad actors. So it should be free and universal, not a paid perk.
— Walt Mossberg (@waltmossberg) November 3, 2022
A free blue check that is earned has value.
A blue check that any scammer can buy has no value, at any price.
Elon hasn't figured out the difference between price and value.
— 2001st mule ♨︎ (@Jeb2028) November 3, 2022
I just can't get over the pivot from "free speech/town square" to "$8 per month." Pretty breathtaking.
— Joseph (@jhkayejr) November 4, 2022
— Marja 💙 🌎☯️☮ (@marjaane) November 3, 2022
Verification is a public service, it is a good deed performed by companies who contribute very little good to the world in my opinion. We should be making easier clearer paths to verification for everyone, not making it harder. It is their responsibility, not a business model.
— Rob Kazinsky (@RobertKazinsky) November 2, 2022
— Jacob Windrix (@JacobWindrix) November 4, 2022
"If you're poor, your voice isn't worth as much" – @elonmusk
— 𝔇𝔞𝔫𝔞 🌞 (@daelmor) November 1, 2022
So essentially lords who can pay get better services and peasants without means to fork over dough to the world’s richest man are screwed as usual. Got it. Pretend it’s some class warfare thing, but I never asked for the blue check and it’s meaningless to me overall. https://t.co/5YXRH2TmyX
— Kara Swisher (@karaswisher) November 1, 2022
FR$₈/ₘₒₙₜₕEE SPEACH FOR ALL – Elon
— 𝔇𝔞𝔫𝔞 🌞 (@daelmor) November 1, 2022
Elon Musk: let's have free speech
Also Elon Musk: Speech is $8/month
— Genevieve Roch-Decter, CFA (@GRDecter) November 1, 2022
YOU DON'T PAY TO SPEAK ON A PUBLIC SQUARE@elonmusk
— 𝔇𝔞𝔫𝔞 🌞 (@daelmor) November 1, 2022
— Nafnlaus 🇮🇸🇺🇦 (@enn_nafnlaus) November 1, 2022
Lmao at a billionaire earnestly trying to sell people on the idea that “free speech” is actually a $8/mo subscription plan
— Alexandria Ocasio-Cortez (@AOC) November 2, 2022
I provide free content on this platform that 850,000 + people want to read. Now @elonmusk wants to charge me for providing free content to nearly a million people on his platform. Interesting market principles at play here. Shouldn't he (or my readers) be paying me? Thoughts?
— Michael McFaul (@McFaul) November 3, 2022
Charging a monthly fee for a "blue checkmark" is the classic product development fail of not actually solving a real problem for customers/users.
— Eric Berlin (@ericberlin) November 1, 2022
One guy’s business plan for a $44 billion over-leveraged purchase is apparently to run around and individually ask people for $8.
Remember that next time you question yourself or your qualifications.
— Alexandria Ocasio-Cortez (@AOC) November 3, 2022
You get the point — there are a lot of reasons why $8/month for a blue checkmark verification on Twitter is not a great idea.
Risks for Tesla
With that looooooooong bit of background out of the way (and that’s not even half of it), let’s get to how this could be affecting Tesla.
Elon Musk is the face of Tesla. More than perhaps any other CEO, the two are tied in a knot in the public eye. For a long time, that was a great benefit to Tesla, because Elon would give Q&A sessions in which he focused on noble and widely loved ideas like protecting humanity, having fun, exploring the cutting edge of tech and space, solving climate change, and being a good human. This whole Twitter saga, as well as a few controversies before it, have made Elon more and more of a controversial figure. To put it bluntly, he’s seen in a much worse light nowadays than he was for years. Here are three good summary tweets on this matter, one from the famous music producer Moby:
In 2013, @elonmusk came and spoke to us at the first Tesla conference in California. He made us all have hope for the future again. He was a true inspiration and a joy to see and hear from. Not sure what happened to change him. I hope he will see that Tesla lovers miss him.
— (((Mother Earth))) (@G8trz4ever) October 29, 2022
Dear @elonmusk as a former friend may I suggest that dealing with climate change and protecting democracy might be a better use of time and money than giving racists and antisemites a social media platform
— moby XⓋX (@thelittleidiot) October 28, 2022
In general, many just want to see Elon focusing on positive stuff again, and contributing to optimistic solutions, not misguided grievance politics. As long as he’s doing the latter, it is quite likely he is damaging Tesla’s brand and future sales.
So, the first issue for Tesla with all of this, is that it could genuinely hurt Tesla’s brand and demand for Tesla vehicles, solar panels, and energy storage units.
Also, increasingly latching onto crazy conspiracy theories and faulty logic, people are questioning more and more whether he is logical and trustworthy as the head of Tesla. That’s not to say that he hasn’t done a superb — historic — job leading Tesla to the tremendous heights it has risen to, but these kinds of errors, logical fallacies, bad business ideas (see: $8/mo Twitter), and susceptibility to debunked and obviously false conspiracy theories are creating serious cracks in Elon’s reputation and even superfans’ faith in his leadership at Tesla. In particular, those concerned about the Tesla stock price have been speaking out more than I’ve ever seen. Some examples:
I don’t care whether he’s left or right, and I don’t need to agree with his opinions, but when he tweets unsubstantiated conspiracy theories from low quality dubious sources, it looks like the beginning of a hairline crack in his logic and to reason what’s ground truth vs BS.
— Scott Wainner (@scottwww) October 30, 2022
That’s exactly the problem I’ve been seeing. He’s a freaking genius but everyone can have blind spots and be influenced in a negative way by people around them.
15 or so years ago I was falling into the conspiracy trap too due to mistrust of media. So glad I didn’t go too deep.
— Cybertruck + Aptera 💚 (@TeslaTruckClub) October 30, 2022
None of this means I don't love Elon, Tesla, SpaceX and the rest. That hasn't changed. Just really feeling let down lately.
Oh, and fuck the fuck your feelings folks. I invested more on feelings and my love of the above than any spreadsheets or financial data.
— Techgnostik (@Techgnostik) October 31, 2022
That's the problem. The trend is towards more and more mistakes. And he rarely comes back and addresses them, apologizes, or explains. He just deletes and tries to move on. But the damage doesn't move on.
— Techgnostik (@Techgnostik) October 30, 2022
Investors should at least consider that Elon’s twitter ownership might be a drag on the mission of Tesla and SpaceX.
Too soon to tell and Elon tends to beat the odds. What do you think?
(No plans to sell…regardless)
— 🐶 Earl of FrunkPuppy 🐶 (@28delayslater) October 31, 2022
The worst part of @elonmusk tweeting dumb conspiracy BS is that he’s been the target of dumb conspiracy BS for years from TSLAQ (and others), so you’d think he would not even consider sharing dumb conspiracy BS.
— Cybertruck + Aptera 💚 (@TeslaTruckClub) October 31, 2022
Our fellow Musk and Tesla supporters are not doing Elon a favor by just coming up with reasons. Thing is I believe they are doing for stock price, and the excusing is doing the apposite.
— KeithWontEverVoteForInsurrectionistParty (@KeithInKeyWest) October 31, 2022
Given that the richest man in the world had the worst possible timing in buying Twitter, waived due diligence, then spent months trying to back out of it with a transparent excuse, and failed and paid full price, I think he could use all the advice about Twitter he can get. :Þ
— Nafnlaus 🇮🇸🇺🇦 (@enn_nafnlaus) November 2, 2022
So, aside from Tesla taking a hit in actual sales (potentially), there’s a risk for shareholders that the company’s stock will take a hit.
There’s stockholder risk beyond this perception factor, too. Elon had to sell Tesla stock to buy Twitter, but he also reportedly took out a lot of debt based on his Tesla stock in order to finance the deal, and if Tesla’s stock price drops a lot, he could face an issue with the banks and have to sell more stock. Furthermore, if Twitter can’t get its own finances in order, it’s possible that Elon will have to sell even more stock down the line to help out the company. All of this results in quite a lot more Tesla stockholder risk than existed a few months ago. Investors don’t like risk. The result could play out in quite an unpleasant way for shareholders in the coming months/years. (Disclosure: I own shares of TSLA.)
Last but perhaps not least, all of the time and attention Elon is putting into Twitter is time and attention that he can’t put into Tesla. This was a concern from the beginning among people who think his time solving problems at Tesla is critical to the company’s continued innovation and success. It’s also odd, confusing, or at least hypocritical that Elon said multiple times that he couldn’t work on new tech that could go under Tesla’s umbrella because his brain was full, he was too busy, and other things along those lines. Here’s a reminder of a couple of big ones:
Elon: I can’t do home HVACs and e-planes because my brain is full.
— Doggiewumpus (@Doggie_wumpus) October 31, 2022
At least a few times, Elon has said that he’d love to work on electric aircraft or improved HVAC for homes, but he is just too busy. But not too busy for a growing Twitter dumpster fire? (Note: Elon and Tesla cofounder and longtime CTO JB Straubel initially met over lunch to discuss their joint interest in developing electric aircraft. That lunch led to the Tesla we know today.)
Love To All
To close, after all of that trauma, let’s remember that tools like Twitter can be used for good. If only we all used Twitter more like Michael Caine does:
Love to all
— Michael Caine (@themichaelcaine) November 3, 2022
Side note: it sure is nice knowing that is genuinely Michael Caine, thanks to the blue verification checkmark.
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