$4bn Twitter flutter adds to the Elon Musk mysteries

Elon Musk has been putting in 100-hour weeks for decades. Picture: Jim Watson / AFP

What will he do with it? That was the big question after Elon Musk let it be known on April 4 that he had amassed a stake of 9.2 per cent in Twitter, making him the social-media firm’s largest shareholder.

Will the world’s richest man buy more shares or even take Twitter private? Will the boss of Tesla take a hands-on role in Twitter’s management? Will the libertarian troll push to bring back Donald Trump, kicked off the platform after inciting an assault on the Capitol in January 2021? Speculation mounted after Twitter said a day later that Musk would join its board.

As is his wont, Musk will reveal his plans in his own time and probably in his own tweets to the 80 million people who follow him on the platform (not many fewer than followed Trump before he got the boot).

In posts published before he announced the investment, he complained that Twitter “serves as the de facto public town square” but fails “to adhere to free-speech principles”. He urged the company to open up the algorithm that decides which tweets users see. In light of his well-documented sympathies for cryptocurrencies and their underlying technology, the blockchain, he could try to turn Twitter into a decentralised service controlled by users.

It is hard to see how that would make the company more profitable. Investors rejoiced anyway. Some may be believers in the “Elon markets hypothesis”, which holds that stocks should be valued based not on fundamentals but on their proximity to Musk.

Others may hope that he can really shake things up. Twitter has been a much bigger cultural success than a commercial one. Before Musk’s move sent its share price up by a third, the firm’s market value had been languishing around $US30bn ($40.2bn), not much higher than where it was when it went public in 2013. By comparison, its social media rival Meta (nee Facebook), briefly became a $US1 trillion company and its market capitalisation is up more than five-fold in the same period despite a recent tumble (it is currently worth $US631bn).

Whatever Musk’s designs for Twitter, one near-certainty is that they will require money, time and attention. That raises another question: is the self-styled Technoking overextending himself? Financially, he isn’t. The investment in Twitter, which cost less than $US3bn, is chump change for Musk – about 1 per cent of his net worth.

A bigger concern, especially to investors in his other firms, is his workload. Twitter comes on top of several big corporate commitments. Besides running Tesla, a $US1.1 trillion electric-car giant with nearly 100,000 employees, he heads ­SpaceX, a privately held rocket firm valued at $US100bn. He also helped found two drilling start-ups, one making big holes to build tunnels (The Boring Company), the other making tiny ones to implant electrodes in the brain (Neuralink).

Adding a Twitter board seat to his resume may overtax even a functioning workaholic and astute delegator like Musk. Now 50 and the father of eight, he has been putting in 100-hour weeks for decades, as he recently revealed in an interview.

Where Musk may be most overextended is in his trolling — not so much of his numerous critics (though he does plenty of that in his spare time) but of regulators. America’s Securities and Exchange Commission was already after him for allegedly violating a court agreement to have his tweets lawyered before publishing, reached after he tweeted in 2018 that he had “funding secured” to take Tesla private, which he ended up not doing.

The Twitter investment may get him into further trouble. He made it public days after the deadline for such disclosures. And his filing suggested that he would be a passive investor, which seems at odds with his joining the board.

The Economist