Having reinvented the automotive industry with Tesla or the rocket industry with SpaceX is not enough for the new Steve Jobs. By buying Twitter, he also wants to reinvent social media and public debate. Excessive ambition?
He had promised to colonize Mars with SpaceX. And now Elon Musk buys Twitter, a social media broadcasting messages of 280 characters. Has ambition waned? Apparently not. Twitter will be added to the store of companies led by Elon Musk, including Tesla, the king of the electric car, which promises to deliver more than 1.5 million vehicles this year, against 935,000 last year. His SpaceX continues to launch up to one rocket per week under his direction, with satellites or passengers. While waiting to go to the Moon, for NASA. Nothing curbs Elon Musk in his appetite. He is the “cowboy entrepreneur” as the newspaper Les Echos calls him. “A Rockefeller-style self-made man or an inventor boss who has pushed the limits of his time, like Howard Hughes”, estimates the French daily. “Although the comparison most often used in his regard is that of an imaginary hero…Tony Stark, aka Iron Man.” For Twitter, the way is clear. The shareholders are happy to sell the share at an unexpected price, ie 54.2 euros, 38% more than the price on April 1. Elon Musk will pay 44 billion dollars to afford his favorite means of communication. The entrepreneur tweets non-stop (12,000 tweets since 2012) and has 83 million followers, more than Lady Gaga. To carry out the operation, he had to sell 9.6 million shares of Tesla, for approximately 8.5 billion dollars. Elon Musk may be the richest man in the world, with a fortune estimated at 252 billion euros by Bloomberg, it is mainly made up of shares. Mainly in Tesla, of which he owns 16%, or even in SpaceX. To afford Twitter, he therefore built a financing half in cash ($ 21 billion), and the rest in loans, partially guaranteed by Tesla securities. On the markets, this acquisition was not received with great enthusiasm. Tesla shares fell 12% on the day the deal was announced, April 25. No doubt for fear of seeing Elon Musk dissipate with Twitter. Or for fear of backlash from China, for example, on which Tesla depends a lot: the country accounts for 25% of its sales. “If the same CEO who controls Tesla controls Twitter, and someone on Twitter says things that the Chinese government doesn’t like, the Chinese government will be tempted to punish Tesla to influence what Musk will accept (or not) on Twitter”, believes The Motley Fool, an American investment advice site. However, there is no shortage of annoying tweets: the Uyghurs, Hong Kong… Jeff Bezos, founder of Amazon, tickled Elon Musk on the subject. “Won’t the Chinese government have a little influence in the public square”, wondered in a tweet the rival of Elon Musk in the space. This alludes directly to Elon Musk’s statement on his vision of the social network: “Twitter is the digital public square where vital issues for humanity are debated”. In any case, affording Twitter will not be an easy operation. Elon Musk will have to relaunch the company, which is a social network known and practiced by the world of media and politics, but whose success is relative. Its 229 million users are few things compared to the billions of Facebook or Instagram users. And its business model is flawed. Last year, Twitter declared almost $500 million in losses on $5.6 billion in revenue, compared to a profit of $39 billion for Meta (Facebook) and $118 billion in revenue. The company has in fact hardly ever made any money. This does not concern Elon Musk, who trumpeted: “I don’t care about the economics at all”. The entrepreneur has no obligation to reassure shareholders and unpack a detailed business plan. Once acquired, Twitter will no longer be listed on the stock exchange, and will only owe accounts to Elon Musk. No more financial analysts, shareholder activists. This is why, in the press release announcing the takeover agreement, Elon Musk is satisfied with the minimum service to explain his intentions. “I also want to make Twitter better than ever by enhancing the product with new features, making algorithms open source to increase trust, defeat spam bots and authenticate all humans,” promising to “unlock” “the enormous potential of Twitter”. Elon Musk also hinted that he could remove advertising, which represents 90% of the social network’s revenue, to limit pressure from advertisers, and boost paid subscriptions. With options such as editing messages (correction after sending), a subject on which he even launched a poll by tweet (4 million favorable responses). “Elon Musk’s involvement could be a catalyst to welcome more young users, a category where the company is distanced from peers like Snap or TikTok,” writes Bloomberg Intelligence, which is optimistic. But the point that arouses the most comments goes beyond the economic equation. With Elon Musk at the helm, will Twitter (re)become a fake news machine? The entrepreneur repeated that he wanted a discussion platform with minimal constraints, and regularly criticized the moderation systems put in place by Twitter. In particular the exclusions of users too inclined to spread conspiratorial theses, like Donald Trump, banned last year. For libertarian Musk, anything can be said on Twitter, “within the laws of this country,” he said. An idealistic or naive vision? “The United States does not have a law against hate speech,” retorts Andrew Marantz, columnist in The New Yorker. “On the contrary, the Supreme Court regularly recalls that practically all hate speech is protected by the First Amendment (…). So you can shout in a park, for example, that all the synagogues should be burned down.” If Elon Musk is thus criticized by the American liberal press, including the New York Times, his Twitter operation is more welcomed by elected Republicans than by Democrats. In Europe, Commissioner Thierry Breton however warned: “Whatever the new shareholding, Twitter will now have to fully adapt to European rules”. An allusion to the new European legislation, the Digital Service Act, which establishes obligations for the establishment of moderation for social networks. With Twitter, Elon Musk is expected at the turn of the two sides of the Atlantic. But thanks to his multifaceted business, he has the ability to divert attention to other topics. For example, he can create surprise in his space activities. SpaceX is currently developing a fully reusable space vehicle, the Starship, which could carry 100 tons of payload or carry 100 passengers. NASA will use it to return to the Moon, but Elon Musk intends to make other uses of it, for example to accomplish trips. Until Mars… Or for the Starlink project to access the net by satellite, in order to cover the areas of the planet that are still underserved. To provide this service, SpaceX has already sent more than 2,200 satellites into low orbit. Elon Musk wants to see 30,000 in service. This project worries NASA, which fears a traffic jam in space, but also intrigues telecom operators, who could see the emergence of new competing services, or car manufacturers. “I read that Porsche (the VW group) plans to launch its own satellites, because they could be necessary for future autonomous cars”, notes Benoît Deper, CEO of Aerospacelab, a Belgian start-up in the manufacture of mini-satellites. “There is no doubt a fear in the industry that Tesla could enjoy a considerable competitive advantage tomorrow thanks to Starlink satellites.” But for more, check out Elon Musk’s Twitter thread.