Solomon: Is Elon Musk Sabotaging Twitter?
In this week’s episode of the Elon Musk Twitter drama, the audience wonders whether he is intentionally trying to sabotage the company.
Just looking at the contours of the math, assume that Musk’s annual debt payment is close to the $1 billion it has been widely reported to be. If he can drive the company into bankruptcy, that’s one way to lower his payment.
Indeed, the biggest and arguably least reported Musk news from the past week is that the banks that loaned Musk the money to buy Twitter are selling the debt. Bloomberg reported that these banks are trying to offload Twitter debt for as little as 60 cents on the dollar.
So if the institutional money behind Musk’s acquisition of Twitter is really nervous enough to be offloading Twitter debt, bankruptcy is at least something Musk can see on the horizon. And that horizon seems to be filled with more obstacles of his own creation each week — so many that a close and careful observer really has to stop and ask whether he is engineering Twitter’s fall.
One of the lowlights of the week was Musk shooting himself in the foot by alienating a major advertiser, Eli Lilly.
At a time when Musk privately knows and is publicly communicating the need for Twitter to generate significantly more advertising revenue, a fake Twitter account announced that Eli Lilly is now offering free insulin. The end result of this tweet from what seemed to users to be a verified Eli Lilly account cost the company an estimated $15 billion from its market cap.
Attorney Michael Epstein commented, “The trust between advertisers and the platforms on which they advertise is always a tenuous thing. It is always the responsibility of the platform to ensure that no preventable harm is done to the advertiser’s brand. Clearly, this wasn’t the case with Twitter and Eli Lilly. Once the trust is broken in these relationships, it is usually irreparable.”
What might also be irreparable is the harm to Musk’s other companies. There is always the very real risk that as Twitter’s fortunes head south, Tesla will follow. There is more than a little nervousness in the market that between Musk dumping $4 billion in Tesla stock to help fuel Twitter and his seemingly irrational behavior, Musk’s attention isn’t where Tesla shareholders want and need it to be.
Over the next few weeks, the pressure on Musk to better tend to his other business ventures is only going to intensify.
From where I sit as an analyst of these kinds of things, I wonder about the cumulative effect of all of this on Musk with each passing week. No matter how much he lauds the Silicon Valley ethic of “all work, almost no sleep,” this catches up with a person. The first way it affects most people is by impairing their decision-making, which is where I believe Musk is right now.
Combine this with an environment where no one seems comfortable telling Musk no, and we have a recipe for both Twitter and Tesla disasters.
The views expressed in this opinion article are those of their author and are not necessarily either shared or endorsed by the owners of this website. If you are interested in contributing an Op-Ed to The Western Journal, you can learn about our submission guidelines and process here.
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