lol, so much for risk management. https://t.co/CfAOAJvKvX
— 🎃GHOULLIKEHELLMACHINE🎃 (@golikehellmachi) November 1, 2022
Even though I’ve yet to actually sign up, Twitter’s been good to me… and, by extension, to you guys. For one thing, if not for Twitter as a kind of RSS feed, I’d never have been able to do the Daily Covid Updates, at least not in such a comprehensive and far-ranging form. If the new ‘owner’ manages to make it unusable, I’ll have to find another source… but meanwhile, it’s a public common: a place where all the separate interest groups intersect, more or less willingly. And we don’t have enough of those, right now!
Anyway, my tuppence worth on Musk and Twitter. He’s in for a rocky ride, and the question for me is whether his ego is going to make him destroy Twitter. Right now, what’s pretty clear is that he doesn’t understand what makes Twitter work. 1/10
— Prof Paul Bernal (@PaulbernalUK) November 1, 2022
There are three things he doesn’t seem to grasp. Firstly, he seems to think he’s bought a tech company (‘not enough coders, too many managers’) when what he’s really bought is a community of users. 2/10
What makes Twitter work, what makes it potentially valuable, isn’t the tech (which isn’t that special) but the community that uses it – that, in particular, it’s become the medium of choice of journalists and politicians. 3/10
That’s the value, right there. Every journalist worth their salt uses Twitter – and most use it a lot. Ditto pretty much every politician. They’re the user base he should care about, not the right-wing-nut-job community. But he doesn’t even understand *them* 4/10
Right-wing-nut-jobs don’t just want a place where they can rant, abuse and say whatever words they want. If they did, they’d be quite content with Gab, Parler, Truth Social, some bits of 4Chan, Reddit etc. See, they’ve got plenty of spaces. 5/10
No, what they want is a place where they can rant *at the libs*, at the MSM, at the people they hate. If those people aren’t there (and they aren’t on Gab, Parler, Truth Social etc), the ranting isn’t nearly as fun. So if Musk manages to drive the libs away, that’s ruined. 6/10
If the libs are driven off, the right-wing will be jubilant for a while, but then bored. And then Twitter dies. So Musk has to keep the libs on board. Oh, and the advertisers too, because they’ll run like hell if Twitter’s just a hate-speech hell-site. 7/10
And that means moderation. It means keeping the Nazis off the site. It means keeping control of abuse and hate speech. It means cutting down the misinformation. All things Musk doesn’t want to do. If he turns Twitter into a hell-site, he kills it. 8/10
So what can he do? It’s not easy. There’s no simple solution, no magic wand. Free speech is bloody difficult. I’d suggest he read Habermas, but of course he won’t. So it’ll be messy, and I suspect he’ll just get bored eventually, but who knows? 9/10
That’s the thing. Handing over Twitter to a massive-ego, massive-wealth, unpredictable billionaire is kind of a metaphor for the whole way we’ve dealt with the internet. It’s a mess. We just have to do what we can. 10/10
Now that block bot has had time to do its thing, here's a dispassionate look at the Twitter deal.
The purchase price was north of $44b. That amount was raised w/a combination of $12.5b in financing, $21b in equity, & the remainder from a loan secured against his Tesla stock.
— Fr. Robert Ballecer, SJ (@padresj) October 29, 2022
Best non-specialist readable FINANCE explanation I’ve seen:
First, the loan is secured on stock that is down from $361 at the time of the original deal to $228 yesterday, a 37% drop.
Why is that drop important?
As the loan is secured AGAINST Tesla stock, he had to commit MORE stock than he originally negotiated.
Further, he’s likely using the same loan agreements that he’s been using to fund a cash-poor, stock-rich lifestyle (not unusual among the wealthy) – meaning that the bank can FORCE him to sell stock or cover the difference w/more stock/cash if the price drops.
This creates a precarious financial balance:
If Twitter doesn’t earn, that will negatively affect Tesla stock prices, which could force a cover w/more Tesla stock or cash which would put further downward pressure on Tesla stock.
You know that scene from the HBO miniseries "Chernobyl" where Valery explains to the court how a "positive void coefficient" created a self-reinforcing buildup of heat that ended w/the #4 reactor blowing itself apart?
Musk has that as ~1/4 of his Twitter financing. pic.twitter.com/h6T4gohRFl
— Fr. Robert Ballecer, SJ (@padresj) October 29, 2022
Third, Musk isn't going to take on Twitter's debt as personal debt. That means it goes on Twitter's books, which already weren't looking too good.
Operating at a loss for most of its history, Twitter has JUST started to eek out profits, but now that's not enough. pic.twitter.com/phaSnMxtaf
— Fr. Robert Ballecer, SJ (@padresj) October 29, 2022
Conservatively, financing that debt will cost about $1b a year.
Last year, Twitter lost $221m. The year before, $1.1b. Covering that debt doesn’t look likely in the short term.
Musk said he plans to double revenue within three years, but that says nothing about PROFIT.
Fourth, ad sales account for about 92% of Twitter’s revenue.
Those ad sales only went up once Twitter started aggressively going after troll and bot accounts.
No brand wants its ads posted in a stream of people writing the worst-possible thing they can think of to write.
This is why, even though Musk courted the “burn it down & post everything” crowd, his statements to the advertisers – that it WASN’T going to be a free-for-all-hellscape – are quite the opposite.
Musk can’t forever finance the debt w/o any hope of seeing a return on investment.
Doing so would endanger not only Twitter, but Tesla & all its connected companies. (See #1)
Musk knows that Twitter needs to EARN.
To earn, it needs ADVERTISERS.
To have advertisers, Twitter CAN’T be another Parler, Gab, Gettr or Truth.
Now we have a better picture of the buyout:
– Musk bought a business w/dubious profit prospects
– promising changes that could destroy the revenue it already has
– to court an audience who will turn on him if he DOESN’T
– W/a positive void coefficient of financial hardship
To be fair, Musk can pull it off.
I’m a financial dilettante who hasn’t seen the inner workings of Twitter.
Maybe he sees a quick way to turn around the company & stave off financial Armageddon.
Maybe he has a pivot will greatly widen revenue streams w/o driving up costs.
Maybe he’s playing a long game & is willing to live with a financial Sword of Damocles to see through something he thinks is important.
But to an outsider, it looks like a rich man bullied himself into making a bad deal.
Still, he is right in saying that Twitter has a big part to play in discourse around the world.
Sure, we can all move elsewhere, but first I think we watch what he does.
I can honestly say, good luck Mr. Musk
For those who did not grow up among Jesuits, yes, the unspoken words at the end are ‘… and may God (Who knows the hearts of all) have mercy on your soul.’
(Full thread of sources at the link.)
twitter users can do math and see the boulder rolling downhill and picking up speed, but most of us don’t have a professional interest in sucking up to the owner https://t.co/e6KSFcCJWt
— 🎃GHOULLIKEHELLMACHINE🎃 (@golikehellmachi) October 31, 2022
it reminds me of when bloomberg put up a paywall and people tweeted "i like reading matt levine but not enough to pay," which made me really mad. think how much more of it he's getting.
— Matt Levine (@matt_levine) November 3, 2022
men will literally buy a microblogging website for 44 billion dollars and then process their remorse about it on said platform instead of going to therapy https://t.co/nvgRXTrK9S
— world famous art thief (@CalmSporting) November 2, 2022
Aziz, light!
There’s no better breakdown of the immensity of Elon’s folly than this one, Hey Elon: Let Me Help You Speed Run The Content Moderation Learning Curve.
Craig
He seems like KGB when his Oreo tell gets noticed.
HumboldtBlue
Why you always gotta remind a motherfucker?
Enhanced Voting Techniques
And Tesla is more or less profitable company; so Musk will ended up selling a bunch of his Tesla stock to these banks for cheep. That part of the deal makes sense.
And going by the obnoxious tweets Musk has been doing over his subscription fee, it turns out Musk sucks at even sales.
NotMax
That’s like the eighth time in the past several days have seen eek in place of eke someplace on B-J.
“What a revoltin’ development.”
– Chester A. Riley
.
Knally
@Aziz, light!: that was brilliant and also educational!
Splitting Image
@Aziz, light!:
Thanks for posting this. By the end I was feeling a lot of sympathy for Mr. Masnick, who is clearly speaking from experience.
I was also getting a warm, happy feeling imagining Mr. Musk embarking on the same journey.
opiejeanne
@NotMax: It’s really annoying
Also, this week I heard a news person say “wrecking havoc”. It’s “wreaking”, which I shouted at the tv. I’m insufferable, I know.
opiejeanne
His purchase of Twitter is the most expensive self-own in history, and I’m almost out of popcorn.
prostratedragon
Do Jesuits pray loudly? For I am sure that’s exactly what I heard.
Deputinize Eurasia from the Kuriles to St Petersburg
I loved that Jesuit thread when I first saw it, and it’s resonating even more today.
Musk is nothing more than an edgelord who’s run to the end of the luck of the circumstances of his birth to an apartheid emerald mine slaver fortune who managed to leverage that fortune into some corporate plundering while continuing to harbor the deep racial animus and hubris that seems inherent in far too many white South Africans (particularly those of Dutch heritage).
opiejeanne
@Deputinize Eurasia from the Kuriles to St Petersburg: I think he’s not of Dutch ancestry, but rather British.
Splitting Image
Deep thought: If Musk has to service the Twitter debt with Tesla stock, I wonder how long it would take for Musk to lose control of the company. Eventually his creditors might be able to force him out of Tesla entirely.
That might even be good for Musk, since it would give him more time to work on Twitter.
mrmoshpotato
@opiejeanne:
Hooray! No more havoc; it got wrecked.
Ruckus
@Splitting Image:
elon work? Surly you jest…..
I think what elon wants is to be worshiped.
And he’s going about getting that worship in the worst way.
By being himself.
NobodySpecial
I keep trying to figure out what special sauce Twitter brings to the social media table that Instagram et. al. don’t, and I’m drawing a big blank.
opiejeanne
@NobodySpecial: Well, me for one.
MomSense
@HumboldtBlue:
Damn, I’m guessing that my growing up with Franciscans doesn’t cut it.
Frank Wilhoit
Understanding is for losers.
Baud
I can’t wait to see which company buys Twitter for $68 million.
VOR
Article summarizes the issues “Welcome to Hell, Elon”
Link
It seems like he is throwing out half-assed idea after half-assed idea. Normal companies research a big change in pricing policy. They focus group, they survey, they trial. Elon threw out $20 and then switched to $8 a day later.
Bruce K in ATH-GR
The more I see of Musk’s attempts to remake Twitter in his own image, the more I see a living example of the Dunning-Kruger effect in action. He didn’t create Tesla or SpaceX, after all; he was an angel investor who made his way to the front of the parade already in progress in both cases, on the back of other people’s brilliance. And now, like others before him, he’s bought into his own propaganda about himself, and thinks that he is the indispensable man to turn Twitter into a 21st-century technological behemoth.
He’s behaving like a Gamergate edgelord with near-unlimited wealth backing him, and he doesn’t seem to understand that not everyone thinks the same way he does.
This is the same guy who decided to replace the steering wheels on Teslas with steering yokes because it was cool, notwithstanding that the global auto industry has been aware of yokes for over a century and has many good reasons for not adopting them.
satby
People here like to bash Twitter, but it has been good to all of us (including non-users) in helping bypass the inane media takes on political narratives. It’s a great disseminator of information rapidly, which has been useful for pushing back on disinformation, which tbf is also being disseminated there but gets immediately flagged and often swarmed with debate if not removed. It has a lot of faults, but has a lot of great content too. So I’m hoping Elmo gets bored quickly and puts a competent CEO in charge.
Ken
I’m seeing a connection between that and Jessica Lessin’s tweet quoted above, “If a customer doesn’t want that, they aren’t a true fan.” The obnoxious tactics might work if twitter’s customers were fans, because they’d get a little shiver at Musk being so Musk-y and fork over the $20 a month. But twitter’s customers aren’t fans, any more than I’m a fan of my electric utility or my supermarket.
(Also, twitter’s customers are the advertisers, not the users, but we’ve gone into that before.)
prostratedragon
For the regretful: “Sur: Regresso al Amor [South: Return to Love]”
schrodingers_cat
This analysis assumes that Musk’s goals in the Twitter transaction are financial. If that were indeed the case he would step down as the CEO. Because he is seriously damaging the brand.
But if his goal is to destroy Twitter from within he is succeeding.
Matt McIrvin
@NobodySpecial: Twitter wasn’t even in the top 10 social networks before this point–if it has a special sauce, it’s that people in the political media post there and pay attention to it.
The kids are on TikTok.
OverTwistWillie
Should have paid the billion and got out of the deal.
Ego + sunk cost fallacy. 🤷🏽♂️
dm
I wonder what sort of space station his $44 billion and the engineering talent of his employees could have put together? Well, $31 billion, since I doubt he’d have managed to con $12 billion of of the banks.
Soprano2
@Aziz, light!: That’s great, I’m going to send that link to a co-worker I was talking to about Musk acquiring Twitter the other day. He thinks Musk is a genius and can’t understand why I have such reservations. Most people don’t understand the difficulties with running a social media platform like Twitter; they think it’s as easy as “free speech, open it up, what could go wrong?”.
schrodingers_cat
@satby: That’s what I am hoping too. Most of the avid Twitter bashers on this blog are second hand users of Twitter. As in they consume Twitter via Balloon Juice FPs.
So I just tune them out. Balloon Juice now has become more of a place to hang out and raise funds and chill. While Twitter is what BJ was like 10 years ago with lots back and forth and intelligent conversation (it is possible, you can choose what you see) and breaking news. For me it functions like an RSS feed with commentary and camaraderie.
I block and mute mercilessly. (Chief Twit and Orange Error are banned and so are the words)
schrodingers_cat
@NobodySpecial: The people who are on Twitter is what makes Twitter different. Politicians, journalists, writers, celebrities etc interact with their audience on Twitter.
WaPo’s editorial cartoonist has liked some of my tweets. At times some famous person responds to your tweet etc. Molly Young Fast, CIA retd dude, John Sipher have responded to my tweets. Plus there are many Juicers on there as well.
The Twitter acct of the maker of the fineliner pens I use once complimented my artwork. That was pretty cool
And for me the biggest draw is Indian Twitter, specifically Marathi Twitter. I can exchange ideas and discuss politics in Marathi and Hindi with people living in India.
Percysowner
I’ve been through this kind of thing before. Way back when LiveJournal was the big thing. Then it got bought by Russians, and people got antsy, but not much. Then it started to crack down on certain people, and people got more antsy and started making accounts on competing but lesser known sites. Then it started to really censor and everyone found a new place to post. Now LJ is pretty dead. Once the tipping point is reached and people leave, it’s hard to get them back. The old owners of Twitter are counting their money and sighing in relief.
sdhays
@Splitting Image: Now it all makes sense! The banks agreed to finance the absurd Twitter buyout in order to get Musk out of Tesla before he totally destroys it.
(No, I don’t think the bankers are that clever, but it seems it might work out.)
Another Scott
Cheers,
Scott.
satby
Why I’m there more than here now.
Miss Bianca
@NotMax: “eek” vs. “eke” is a pet peeve of mine as well.
Altho’, when we’re talking about EE-LON MUSK, an “eek!” may be the most appropriate word choice no matter what the context.
Geminid
@Miss Bianca: I once heard someone say that they used their computer mouse to get their “eek mail.”
BenCisco 🇺🇸🎖️🖥️♦️
@schrodingers_cat: True. I’ve interacted with/been recognized by a few people I would have never come across in meatspace (ChuckD, Ellen Barkin, Lisa Guerrero, etc.)
jonas
As the old saying goes, if you owe the bank $1000, you have a problem. If you owe the bank $1 billion, the bank has a problem. This is essentially how Trump runs his businesses — live on credit using your real estate portfolio as collateral, but always make sure its so much that the banks can’t simply make you liquidate everything to pay it back (particularly in Trump’s case, where everyone knew he had wildly overvalued everything, but this is true of Tesla as well). They’ll always want to “renegotiate” instead of actually booking the losses. Wash, rinse, repeat.
RaflW
@NobodySpecial: There was a thread on there the other day that succinctly said the ‘value’ of twitter has been that us lowly people can quote-mock, ratio and othewise ridicule the powerful, rich &/or famous.
I’m not on Insta, and have done exactly one TicTok for my niece’s covid-cancelled bday a year ago, so I’m pretty unfamiliar, but I think those platforms lack the yelling-upwards ‘fun’ a lot of tweeps seek.
azlib
@jonas:
Remember bank loans are money created out of thin air, but a loan increases a bank’s assets. Writing off a loan means writing off an asset which is not something a bank wants to do.
Matt McIrvin
@schrodingers_cat: For me the thing that made Twitter bad was that I followed people I already knew and respected outside of Twitter and they turned out spend a lot of their time RTing intensely annoying politics stuff (generally ultra-Bernie/so-leftist-they’re-rightist people). And there’s that dilemma of, do I just stop following this person I consider sort of a friend? Not great.