Don’t knock Musk’s Twitter takeover – the business genius might surprise us yet

When Elon Musk was a child, his adenoids were taken out. Doctors suspected he was deaf because he spent so much time day-dreaming and staring into space.

Yet the operation made no difference to the young Musk’s behaviour. He continued to spend hours alone gazing into the distance and not responding to his name being called out. According to his biographer, Ashlee Vance, his mother concluded that Musk was not suffering from hearing loss at all but instead was living and thinking “in another world.”

As most people know, mothers usually know best. What his mother didn’t reckon on was that the grown-up Musk would continue dreaming; not just in one other world, but many different ones to become one of the most intriguing – and richest – characters on planet earth.

After studying physics and economics at university, he set up a software company, Zip2, with his brother. Aged 28, he sold out to Compaq for $307m. 

He went on to co-found an online bank, X.com, which later merged with Confinity to form PayPal, where he made a few more millions of dollars. 

Musk looked to the skies for his next adventure, setting up SpaceX with the long-term ambition of whisking humans off to Mars to colonise the red planet and conserve the species, because of his deep-rooted fears that Artificial Intelligence will one-day go rogue and turn on its masters. 

He’s yet to make it to Mars – although he reckons that a crewed mission will be ready to fly by 2029. But SpaceX has now launched five crews for NASA and two private trips in the last two years. Indeed, the latest SpaceX trip taking four astronauts on a Falcon 9 rocket to the International Space Station for a six-month mission 250 miles above earth took off on Wednesday. Earlier in the week, another SpaceX rocket returned from the first private trip after completing a 17-day flight chartered by three businessmen to and from the space station for a cool $55 million each.

And then there is Tesla, which Musk joined in 2004, taking over as chief product designer and chairman. He is now chief executive and “Technoking”, as he calls himself.

After an often hairy and very bumpy ride in which Musk nearly took Tesla private after being ambushed by short-sellers and was sued by the SEC, he now runs what is one of the most desirable and innovative electric car brands in the world. 

What’s more, against all the naysayers and doubters, Tesla cars are selling like hot cakes. They make money and the company is now worth $931 billion, making it the most valuable car-maker in the world. In January, Musk announced Tesla had enjoyed a “breakthrough year” and posted record fourth-quarter and full-year earnings. And it was some breakthrough: Tesla sold nearly a million cars – nearly double the 2020 figures – and despite chip shortages because of supply chain issues – made $5.5bn last year compared with $721m in net income in 2020. 

What’s more, Musk – often criticised for over-forecasting the number of Tesla cars and vehicles he could churn off the assembly line – beat his own prediction. He has also recently adapted the chemistry of his batteries for the standard-range EVs to a version with a lithium-iron-phosphate (LFP) cathode rather than nickel cobalt aluminium oxide (NCA) cells to make them cheaper and more appropriate for Chinese customers, by far his biggest export market. 

He has also found the time to found the Boring Company, which hopes to revolutionise transport through tunnelling and hyper-links, and Neuralink, which aims to connect humans’ brains with computers.

So the idea that Musk is such a megalomaniac that he is willing to fritter away $44bn on buying Twitter – his latest venture completed in a sensational 12 days – and turn it into some sort of far-right rag where everybody can unleash hate speech is so off target as to be slightly deranged. 

While Musk is undoubtedly a maverick, with a touch of the anarchist about his business dealings, his reputation rests on having created brilliantly made products, ones that customers rely on utterly for safety and trust, such as cars and space rockets. 

Why would he throw away such a reputation to mess-up Twitter? And even if he did make a hash of it, would that matter? He’s risking his own money – and the banks are willing to risk their own money – to take ownership and do what he wants to improve it.

After all, it’s not a public service like the BBC World Service: there is no holy writ that Twitter should stay as it is with the license to mute or block the views that its guardians of taste don’t like.

Yet that is what many on the left of the Twittersphere are suggesting, that Musk is the anti-Christ, an extremist who wants to break all the hard-won regulations and self-censorship rules introduced to curtail the lunatics screaming from the rooftops. Social media safety experts claim that the industry’s recent crackdowns on fake news or misinformation is vital for democracy, and that if there are no rules – as Musk is suggesting – then it’s the Wild West on steroids in the ether. 

Yet this is nonsense as there are neither proper nor consistent rules now. As others have pointed out, Twitter has many double standards: ISIS terrorists use the platform, as does the Ayatollah of Iran, yet former President Trump has been banned. 

Which is why the response by some of those who should know better has been so disappointing, if not downright silly.

Rather than welcome Musk’s takeover of Twitter – which he describes as being driven by a desire for greater transparency and openness of speech, the Brussels bureaucrats were out in force warning Musk about heavy fines and other punishments should he infringe the EU’s new digital rules.

Yet if people bothered to listen to what Musk actually says, they could hear for themselves that he wants a greater range of opinions – not fewer. As he explained in a TED talk with Chris Anderson on 14 April – just as he was about to bid for Twitter – he said that Twitter should be more open to greater diversity: “If someone you don’t like says something you don’t like, then that’s my definition of free speech.” It’s worth watching. If Musk is true to his word, it’s not a bad start to how Twitter should guide what is and what is not published. But even Musk hasn’t answered the eternal question about whether there are limits to what we should hear or read. Or indeed, who guards the guardians. 

Of equal interest is what changes Musk will make to the mechanics of the social media platform, and can he make it profitable? 

While he says making money from Twitter is not a priority, the world’s richest man didn’t get so rich by not having a natural business instinct and is bound to want to turn a Twitter profit. 

Working out how is the $64,000 question. Advertising is tailing off – as Facebook’s latest figures show – as we emerge from two years of on-off lockdowns while economic growth is slowing down around the world, and unlikely to pick up again soon. There is chatter about launching a subscription model although, as Netflix recently revealed, the appetite for consumers to pay for even more content may be on the wane as the cost of living bites deeper.

More worrying for Musk is the cost of the takeover to his personal wealth and more pertinently, to the value of his 17 per cent stake in Tesla and his co-investors. To secure finance for the bid, Musk used a portion of his shares in Tesla as collateral for his audacity, a move which some analysts say could have a detrimental impact on the car maker. It’s a rough estimate but the collateral on the $12.5bn will cost Musk about $1bn a year in interest to service.

So far, Tesla’s shares – which fell sharply after the Twitter bid was agreed – have bounced back to close to where they were trading pre-bid. This suggests that Tesla’s investors are not too worried about Musk’s latest extravaganza, and believe that he will be able to deliver in the same way he has done for them. They are betting that he delivers what he says, and give him the benefit of the doubt. In his own words, he “wants to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans.”

“Twitter has tremendous potential,” Musk says. “I look forward to working with the company and the community of users to unlock it.” So should we.