Watching Elon Musk run amok at Twitter is compelling performance art, by turns entertaining and thought-provoking, but more so sad and deeply disturbing.
The emperor-CEO has cast himself as the hero in a morality play, with all the virtues and vices of capitalism laid bare. Genius and greed. Ambition and arrogance. The power of unbridled wealth to pursue grand ideas and bulldoze anyone or anything that stands in the way.
Musk agreed to buy Twitter in April for $44 billion, after complaining publicly — mostly on Twitter — that its role as a platform for free speech was being threatened by woke orthodoxy, mismanagement, and too many unproductive workers. But as Twitter’s stock price tumbled along with other social media and tech stocks, he got cold feet. He tried to back out of the deal but was trapped in a legally binding commitment.
In the month since the acquisition closed, the world’s richest man has subjected Twitter to corporate chemotherapy: bringing the company to the brink of death in hopes of saving it. More than half of the pre-takeover workforce of 7,500 has been fired, including nearly every top executive; hundreds of others have resigned.
While many new owners clean house, I can’t recall anyone attempting anything like this so quickly, so publicly, and, seemingly, so haphazardly.
After overpaying for Twitter and loading it up with $13 billion of debt, Musk, 51, has few options for the money-losing company in the short term. Boosting revenue — by charging for the blue “verification check,” adding premium features, bringing in more advertisers — will take much longer, if it happens at all.
“He did the deal with no apparent economic rationale,” said Roger Lowenstein, a Cambridge author whose books include deep dives into Warren Buffett, the Federal Reserve, and Abraham Lincoln’s financing of the Civil War. “This is a deal done to make a point.”
The point is that the haters said he wasn’t serious about owning Twitter, that he was a dilettante super-tweeter who would quickly get bored. Musk wants to prove them wrong by rescuing free speech from a woke mob and remaking Twitter in his image. So far he has made the platform more of a free-for-all, ending Twitter’s COVID misinformation policy and reinstating a motley crew of users who were kicked off the site for hate speech, spreading disinformation, and breaking other rules. Musk has also veered deeper into right-wing politics, personally sharing a discredited conspiracy theory about the attack on Paul Pelosi and tweeting a meme with Pepe the Frog, a cartoon character that has been largely coopted by the far-right.
“I think he sees it as a political purpose — his version of ESG,” Lowenstein said, referring to the investing movement that focuses on the environmental, social, and governance records of companies.
To be fair, Twitter needs an overhaul. It was mostly failing at cleaning up the cesspool of ugly behavior, even with the high-profile banishment of Donald Trump and others. It had too many employees. Innovating was lagging.
And to be fair, Musk gets things done, as evidenced by the stratospheric success he’s had with PayPal, SpaceX, and Tesla. There are plenty of serious people who say that if anyone can fix Twitter, it’s him.
“The negativity out there is somewhat laughable,” said Steven Kaplan, a professor who studies private equity at the University of Chicago Booth School of Business. “One of the reasons he’s so successful is that he moves like a hurricane. He’s fast, persistent, and willing to experiment.”
In his willingness to cold-bloodedly cut large numbers of workers, you might think Musk is a reincarnation of the 1980s corporate raiders like the Bass brothers, Carl Icahn, and Ronald Perelman. But those guys were focused on breaking up bloated companies and walking away with the spoils, not rebuilding them for the long run.
No, Musk is more like a lone wolf KKR or Blackstone, private equity firms that buy companies with the aim of making them more valuable. While job cuts are often in their playbook, these firms work hard on strategic and operational improvements so they can eventually sell at a profit.
Yet private equity firms pride themselves on having a detailed turnaround plan in place when they take over.
Musk, in contrast, seems to be improvising, and at times acting in haste. Some workers were fired, only to be asked back a few days later. Trump, and many other banished users, were reinstated — and advertisers pulled back because they don’t want their brands adjacent to toxic tweets. One of those advertisers is Apple, which Musk said has mostly stopped advertising on the site.
“Do they hate free speech in America?” he tweeted as part of a mini-rant against the iPhone maker this week.
“It feels like he’s really shooting from the hip,” said Caleb Silver, editor-in-chief of financial website Investopedia. “It’s slash and burn with no vision of what’s going to grow back — at least not one that’s obvious.”
It’s unnerving to see a company so widely known and influential get dismantled amid doubts it can be put back together again. Imagine, for example, if Musk had bought Biogen, the Cambridge biotech pioneer whose market value is about $44 billion, emptied its C-suite and research labs, and started calling the shots on which drugs to develop.
Unlike Biogen, Twitter isn’t making life-saving drugs. But for all its terrible flaws, the company provides a valuable service to many constituencies, from Black Twitter to scientists to activists in repressive foreign countries.
Twitter will not disappear overnight, as some never-Muskers predict. But the ending of his morality tale has yet to be written.
Twitter could fly high once again. Or, as Musk has warned, the company could land in bankruptcy court.
But don’t worry about the capo di tutti capitalists. He’ll be fine regardless.