April 2022 was quite literally the month of the (digital) century. Twitter's lucky day. When the one and only Elon Musk acquired a 9.2% stake in the company, making him the biggest shareholder and a seat on the board! Twitter's Senior Engineering Director, Luke Simon, couldn't contain his excitement. He exclaimed, "Elon Musk is a brilliant engineer and scientist and has a Midas touch when it comes to growing companies, Twitter watch out!
Let’s go back a bit…
Twitter was in a bit of a rut under the "zen-like" leadership of Jack Dorsey, a co-founder who was also busy running his own business. Dorsey, who was known for his long meditations, fasting and walking to work, was more of an absentee landlord, leaving Twitter's strategy and daily operations to a handful of trusted deputies. It seemed like Twitter was being run by a ghost, leaving the company's potential wasted.
In its glory days, around 2012, Twitter was hailed as "the free-speech wing of the free-speech party." It was credited for amplifying movements like Occupy Wall Street and the Arab Spring, sparking utopian visions of how social networks could promote democracy and human rights worldwide. But that was before Facebook and YouTube came along and stole the spotlight. It was time for a change and that change came in the form of Elon Musk.
Twitter skyrocketed to fame and became a powerhouse in the tech world, captivating the hearts and minds of political junkies, sports enthusiasts, and news buffs alike.
It's not just a platform, it's an addiction.
With Twitter, even the most insignificant person can become the main character of their own story. Who needs profits when you've got influence? #TwitterTakesOver
Becoming the centre of the conversation, because, why not?
Donald Trump was the master of Twitter manipulation, using his @realDonaldTrump feed to spread hate and vitriol that helped him become president in 2016. But, as it turns out, all that hate and negativity didn't make Twitter worth as much money as people thought. Even Disney CEO Bob Iger couldn't handle the "nastiness" and pulled out of a deal to acquire the platform.
But, Twitter wasn't going to let itself be used for evil again. After Trump's election, the platform cleaned up its act and dedicated itself to "healthy conversations." It banned Trump after the January 6 insurrection, showing that it had finally realized the toll of unfettered speech.
Photo: BRITTA PEDERSEN/POOL/AFP via Getty Images
But, this new and improved Twitter seemed to entice Elon Musk so much that he became convinced that he had to buy it. In his mind, by 2022 the company had been corrupted and controlled by governments and the liberal media elite. Who better to restore Twitter to its former glory than its wealthiest poster?
Musk, much like Trump, knows how to make Twitter his own personal playground. He tweets like a boss, breaking every rule of corporate America and making him a fan favourite, and a bitter pill for his haters to swallow. He's the second-most-followed active account on the site, and you know what? He's proud of it. "At least 50% of my tweets were made on a porcelain throne," he tweeted one evening in late 2021. "It gives me solace."
All roads lead to Twitter
Musk sauntered in with an offer so large, it could make even the most frugal Twitter employee's head spin. But for Simon, senior engineering director at Twitter, it was a dream come true. As the owner of a portrait of himself dressed as a 19th-century French general, Simon had been itching to shake things up and build a culture that's "impact-focused, egalitarian, and empirical". And with $44 billion on the table, it looks like he finally had the chance to put his data-driven justifications front and centre #TwitterTakeover
Other employees were not as thrilled with Musk's interest in Twitter, pointing out the darker aspects of his career - the disregard for labour relations, the lawsuits for sexual harassment and racial discrimination at his companies. They found his interest in Twitter ominous. On Slack, a product manager responded to Simon's enthusiasm with scepticism: "I take your point, Simon, but as a childhood Greek mythology nerd, I feel it's important to point out that the story behind the idea of the Midas touch is not a positive one. It's a cautionary tale about what is lost when you only focus on wealth."
The product manager's comment was spot on. According to more than two dozen current and former Twitter staff, since buying the company in October 2022, Musk has shown a remarkable lack of interest in the people and processes that make his new toy tick. He has purged thousands of employees, implemented ill-advised policies, and angered even some of his most loyal supporters. Those who remain at the company are either trapped by their need for health care and visas or cold-eyed mercenaries hoping to ascend through the power vacuum. #MuskTwitterFail
Time to pay up…
According to Markets Insider, “Elon Musk has to make the first interest payment on the $13 billion debt he took on to buy Twitter – and the company's dire financial situation means it faces risks including bankruptcy.”
In October, Musk decided to add Twitter to his collection of companies, buying it for a whopping $44 billion. He financed the deal by borrowing a cool $13 billion from banks like Morgan Stanley and Bank of America. But now the bill is coming due, and the debt is held by Twitter, not Musk personally. The company is on the hook for around $1.5 billion a year in interest payments.
If Twitter can't make those payments, it could file for bankruptcy and start a debt restructuring process. But, as an alternative, Musk could sell more of his Tesla shares, which he's already sold $40 billion worth of to finance the deal or use Twitter's limited cash reserves to pay off the debt. #TwitterDebtWoes
Photo: Musk, 2023
Twitter was in the red in 2021, losing a whopping $221 million. Since buying the company, Musk has been on a mission to cut costs and boost revenue, laying off around half of the employees and launching a new subscription service called Twitter Blue.
But despite his efforts, Musk has been sounding the alarm about Twitter's finances and even floated the idea of filing for bankruptcy to restructure its debt.
"We have an emergency fire drill on our hands," Musk told a Twitter Spaces forum in December. "This company is like you're in a plane that is headed towards the ground at high speed with the engines on fire and the controls don't work."
"That's the reason for my actions that may seem sometimes spurious," he added.
What do we think?
Naturally, we have an opinion on this. On the one hand, it’s refreshing to see the tech mogul facing some real-world problems, like paying off debt. On the other hand, however - no one really wants to see Twitter fail, right? If anything is going to make 2023 interesting, it’s going to be Elon.
Elon Musk may have dropped the ball in his management of Twitter, but the biggest mistake he made? Thinking it was just another tech company to add to his portfolio. Whether he genuinely wanted to improve the platform or just wanted to ruffle some feathers with his buyout offer, is still up for debate. But, regardless of his intentions, his focus was on the one thing that most people have trouble wrapping their heads around: Code.
From the outside, it appears that Elon Musk's card-shuffling social network is in for a wild ride. Will it survive on advertising revenue alone or will it go bankrupt and disappear into the digital abyss? Only time will tell. But one thing's for sure, Twitter's uncertain future has us questioning what the social media world will look like in the wake of its tumultuous 2022.
It's the ultimate game of "will it or won't it" and we're all just along for the ride.