Attribution to Debbie Rowe – Own Work
This Twitter thing isn’t panning out the way Elon Musk probably imagined it would. He is facing issues on a number of fronts.
Musk, after months of controversy, including facing a lawsuit, bought Twitter for $44 billion. Elon does not have $44 billion. So he needed investors. It turns out that the largest investor, in Twitter, after Musk, is Saudi Prince Alaweed bin Talal. The Saudi Prince, CEO of Kingdom Holding Company, committed equity of $1.89 billion, making him, as mentioned, the sdecond largest investor in Twitter. This has faced major backlast given the Saudi’s suppression of free speech and their known human rights abuses. Not a good looik for Musk who, after his purchase of Twitter exclaimed “The Bird is free”.
Twitter revenues is 90% advertising based. Musk has stated that he wants to reduce dependency, on advertising revenue. He might get his wish, rhough not the way he planned it. The very first weekend that Musk took over Twitter, racist and pro White Nationalist hate tweets exploded on the site. Musk, prior to the weekend stated that would not allow Twitter to become a hellscape. Well, only a few days in, that it is exactly what it is turning into. Some advertisers are starting to put their advertisements, on Twitter, on hold, while others are contemplating pulling out of Twitter completely. The main reason is that they don’t want to be associated with the hate tweets starting to circulate. Imagine what happens of Trump gets his Twitter account back.
Right now, Twitter has a feature called Twitter Blue. It is a subscription service, costing $5/month and offers subscribers premium services, such as undoing tweets. Musk, in his desire to depend less on advertising revenue, planned to install a blue check mark service. The blue check mark would signify that Twitter has confirmed that the person’s user name is actually who the person is. Musk was planning to charge $20/month for this service. Author Steven King has seven million followers on Twitter. Now, using King as an example, and assuming that he is already paying $5/month for his Twitter Blue subscrition, Musk would gain $15/month or $180/year with King.
King’s response to Musk’s proposal was as follows,
“[Expletive] that, they should pay me. If that gets instituted, I’m gone like Enron,”
Ok, so King leaves. Musk loses $180. Well, no. Musk would also lose King’s seven million followers. They would migrate, with King, to whatever new social media site King goes to. Smaller Twitter audience, lower advertising revenues.
With all this going on, Bloomberg reports that the Twitter deal has reduced Musk’s net worth by $8 billion. For the year, his net worth has gone down by $66 billion, mainly because of his falling Tesla share value. Musk said trhat he purchased Twitter not to make money but for humanity. Let’s see how that goes.