What The Heck Is Elon Musk Thinking?

new owner have enraged users and send advertisers fleeing. Muska has always run Tesla and his other companies in an unconventional way, so at first it seemed like maybe he was just doing his thing. But now, after weeks of chaos, it's reasonable to wonder if there actually is any method here or just madness. My colleagues Bradstone, Sarah Fryar, and Kurt Wagner have been reporting on this saga's every twist

and turn. They're here to help us understand what Musk is thinking and if his preoccupation with Twitter threatens the future of his other companies. Sarah, Kurt, Brad thanks so much for being here. Thank you for having us, Thanks for having us. Okay, So in December, the three of you together wrote the story with the greatest headline ever, Elon Musk's Twitter is a Shakespearean psycho drama set in Silicon Valley. And in the few weeks since that story,

things in Musk World have only gotten like weirder. Brad, let me start with you, what exactly is going on? And why did it have to be so strange? It really didn't have to be this strange? And I think this is the takeaway from our story. You know, Ellen is a right now, at least as a bad owner of Twitter. He's almost a bad user of Twitter. His impulses kind of clash with some of the bad sort

of feedback loops of Twitter. He can't resist playing to the crowd, and unfortunately that's kind of antithetical to running a healthy company. And so we see again and again him tweeting things that you know, end up alienating advertisers, alienate users. I think there's a reason why CEOs are a kind of studiously a political crew, and Ellen has just been unable to suppress his own impulses on Twitter,

and it's it's hurt the company. Advertisers are fleeing you just get the visceral sense that it's a more chaotic, more unpleasant place to spend time. That's really saying something because it was always unpleasant and chaotic. That's a really interesting point because before he made his bid to buy the company, he was sort of a Twitter power user and thought, well, hey, if I'm so good on Twitter,

maybe I could run it better. But a lot of the things he said about being a free speech absolutist turned out to be sort of yeah, I get to say whatever I want, but if anyone else is something I don't like, then he has now the power to cut them off. Yeah, that's right. We all saying the power corrupts. I mean, we've sort of seen that with

Ellen on Twitter. The way he ousted the owner of the account that tracked his jet, the way in which some Twitter accounts and an unauthorized way track SpaceX launches seem to have had their accounts frozen, the way in which he's fired the trust and safety staff at Twitter. All of it's fomented the kind of chaos that's heard

the company. If I could jump in, I mean, I think one of the things that stood out in all of our reporting was that this is a guy who, while a huge power user of Twitter and someone who clearly understands the product as from a user standpoint, he really showed up without much of a plan to run Twitter, right. He sort of had this vague idea of what he wanted to do with bots or what he wanted to

do with you know, quote free speech. But other than that, he didn't I think, think through a lot of the logistics and specifics that come with running a company like this, And you know, for someone who is or was the richest man in the world, for someone who had seemingly had these other great successes between Tesla and SpaceX and and all these other projects he's doing, I think that's surprised. I'll speak for myself. I mean that sort of surprised me.

Right at the very least, I thought, Okay, maybe he's got an unconventional plan, but at least he's got a plan. And I think when we were talking with sources for the story, we just sort of realized that he was winging it a lot more than I think any of us would have expected him to do. How did the whole process of Musk purchasing Twitter work out, Because it

seemed incredibly hectic from the outside. Well, if you look at the messages that were exchanged between Musk and Twitter's board and Twitter CEO at the time, parag Agera Wald, it seems like he really decided to buy it on a win because he was upset with the process for joining Twitter's board and some of the precursors to that decision, and he had already decided to be a big shareholder, but it was really around the question of whether he would join the board that he got upset and said

this isn't worth my time. I'm just going to buy your company, expect and offer a SAP and then he had to stick with it. I mean, he made that offer in such a whirlwind time frame that it was so seller friendly, as he described it. So he really just set himself up for this situation that was done in a matter of a fight and turned into a bigger fight and then continues to be a fight. But

I think it's also worth noting. I mean, while it does feel and it did feel like he sort of turned on a dime in terms of joining the board and then suddenly saying no, no no, no, I don't want to do that. I want to buy this company. He clearly came in with having thought about Twitter for a long time, because he had been buying Twitter stock daily for like two months, right, So it's not like he suddenly showed up one morning and said, oh, this would

be a cool idea. He'd clearly been thinking about something with Twitter. But I don't know if he expected the board to actually accept his offer for Twitter. I kind of get the sense that maybe he was throwing it out there, almost trying to apply pressure, just kind of like be a little mischievous, and suddenly they said yes. And at the time, when he's the richest man in the world, it's like, well, you know, okay, maybe I didn't expect it, but like, sure I could do that.

I think what complicated things, of course, was everything that happened shortly after with the economy, and suddenly this like kind of fun side project thing that he was thinking about became much more expensive for him than he anticipated. And as we known in our story, Twitter was profitable the first quarter of two and after Musk's purchase, he's

been talking about bankruptcy. He's been saying that Twitter is losing on an order of four million a day, is unsustainable and part of the reason for that is Twitter has now assumed the debt from that forty four billion transaction to purchase the company, and the first bill for that debt is coming due at the end of this month.

So it's a really precarious situation now that the company is in, which explains why Musk hads do layouts in the order of magnitude that he did, and why he's been making other unusual decisions like not paying the rent. I think that, you know, someone described it to me this way. They were like, Elon Musk is treating Twitter like it's an engineering problem. But Twitter is a human problem, right.

Twitter is culture, Twitter is speech, it is politics. It is all of these things that require nuance and human understanding about relationships and things that are just different challenges, I should say, than you know, building a rocket or building a car. And I think there's some speculation or criticism from people who have worked at Twitter for a long time that they feel that he's just approaching this problem in the wrong way. He's approaching it as an engineer.

He's not approaching it in sort of like the soft skills needed for Twitter. And I think it's sort of an interesting critique because I don't disagree with it. I do think like a lot of Twitter's problems as much as they struggle with product, and sure they do have engineering needs, of course, but I do think a lot of the biggest stuff they deal with is not related to the technology itself. It's related to kind of human behavior, and that is what shatters all the hope. Sarah, Kurt

and Bread please stick around. We'll keep talking after the break. Right. You said that Alamos is kind of a bad CEO of Twitter right now. He indulges his whims, He makes theoretic decisions. Twitter was never the best run company. Um was it fixable by anyone? Like, let's say more, you know, sort of straight lace CEO came in to right the ship there, Um, what are the big challenges that the company would have faced? What needs to be fixed to

make it viable in the future? Print of all West, let me turn it around and say, you know, in two thousand twelve, we wrote a cover story in Business Week calling Twitter the company that Couldn't kill itself, And the fundamental point was that as poorly run as this thing is, there is something that's so fundamentally addictive about it and useful about it to a certain small, you know, demographically narrow subsection of professionals that it really can't go away. Okay,

so that's the kind of basis point. It's still, you know, ridiculously alluring for people who just can't seem to turn way, even though they know it's destructive to their personal lives. But on the other hand, there's something about it that just doesn't appeal that broadly. And every attempt the company has made over the years under Dick Costolo, under Jack Dorsey to bring video onto the network, to expand the lengths of tweets, you know, it seems to have failed.

Maybe fundamentally. It's just not that large of a business. And what happened over the years, and this was well before Elon musk Is I think expenses grew much faster and larger than the company could really support with its current revenue base. This was an airplane that was losing altitude even before Ellen took over. Can you put that in perspective when you compare Twitter's user base to the size of other really big social media platforms, where does

it rain? I don't know, because they stopped reporting all these metrics once Ellen took over, but I want to say it's a little over two hundred and thirty million daily users. Compare that to Facebook has close to three billion users across all of its services, but you know, more than two billion on Instagram and WhatsApp and Facebook alone, And so by that measure, it's what ten issue of

a lot of these other services. And I think that's always actually surprised people because one of the things that Twitter's best at is getting tweets out in front of people, right Like, you see tweets on the news, you see tweets, people talk about tweets on the radio. Donald Trump was basically a president by tweet, right like he was dictating

by tweet. You see the Twitter stuff, but maybe you don't have an account, And so I think that has created this feeling that Twitter is significantly larger than it really is from a user standpoint, because it's cultural impact is so much larger than its user basis. There's this feeling that Twitter is a very public and scary place

to a lot of people. Not a lot of people like the idea of saying something publicly to a bunch of strangers that they don't know, especially when the reputation is, Oh, if you say something that people don't like, you're gonna get harassed, You're gonna get dragged, you're gonna get dunked on. There's this fear I think of Twitter that doesn't come with some of these other networks because they're not quite

as public as Twitter is. And I think Twitter has suffered as a result of that, and there's no you know, they try to do little things like their version of stories that didn't work out, to try and make it lower pressure to share and all that, but ultimately Twitter is a public square and there's a lot of people that are afraid to be public. I would just say there's something in the architecture of Twitter that makes it very appealing to a small group of people and totally

untenable to the larger population. And since Must took over that small group of people have been talking about, well, if Twitter is gonna die, or if Musk is gonna turn it into an even more toxic place, We're gonna

go someplace else. But it seems like the reason a lot of people are on Twitter is because everyone's on Twitter, and there is no other place that people can go on mass, especially after spending years and years many people building these huge followings, they worry that they won't come with them. Well, there's not really a viable alternative waiting in the wings. We've seen people promote their Massodon accounts. Masodon is impossible for a normal person to use. You

have to use like several different plugins. Understand that there are different Massodon servers that you can join, and there are some other initiatives like post. But look, network effects are what keep platforms healthy. If the network is there, there's no real reason for you to join another platform now.

Something that our sources and social media have been talking about for the last few years, as these networks get saturated, as they grow bigger, and as people start to leave them, is the idea that network effects can also work in the opposite direction, that if there is an exodus that begins from a place, that it can accelerate and that a network can lose what makes it good very quickly

as it becomes, you know, a fad. Maybe the behavior of using a place like Twitter to get caught up on the daily events in the world turns into something completely different over the next few years. You Know, what I've found really interesting is um because I agree with Sarah. There isn't an obvious something waiting in the wings, and yet there sort of is, which is Facebook, And not a single person is talking about migrating to Facebook, right,

But like, why not? You know, everyone has an account. I'd probably guarantee that we're already there. We know how to use it. There's a feed, there's news, there's like all the things that Twitter does on Facebook, and yet I haven't met a single person who's like, right, Twitter is getting too tough, I'm headed back over to Facebook. It's just funny to me. But isn't that just because like the moment is passing now, Facebook was where your

grandma goes. Yeah, that's kind of my point though, right, is like, this feels like an opportunity for Facebook, or should have been. But the fact that nobody actually wants to go back over there, I think is quite telling because that just sort of signals that, like, even though Facebook offers almost all of these things that Twitter does and we're all familiar with it, no one seems to actually see that as a viable replacement. I just find

that interesting. As someone who covers the social media space, I would have thought this would have been a bigger opportunity for them. So is Twitter fixable under Musk? I'll go first, I'm gonna say yes. I mean it's been two months, right, Like it's been a pretty disastrous two months, but it's only been two months, and so I'm not fully ready to say this thing is, you know, going to zero or anything like that. Now. One of the things that I'm personally concerned about is that, you know,

the biggest reason I use Twitter is for news. Right, It's where I get all of my information. It's lightning fast. Um, if there's something happening around me and I'm curious what's going on, I'm usually going to Twitter before I go to anywhere else. But Ellen doesn't seem nearly as concerned about like the legitimacy of that news and the accuracy of that news. Right. He's trying to actively get rid of Twitter's policies around fact checking and things like that.

And so if I can't go there and feel like, Okay, I'm accurately in in the view of what's happening around me, then you know, maybe I have less incentive to tune in. I imagine I'm not alone in that being like the main draw I'm sure, there's a lot of people who feel the same, and so I do wonder how much the misinformation stuff is going to play into Twitter's viability long term. But that's, you know, use case of one. That's my experience. I'm curious what Sarah brad think. Well.

I have to say that you only need a big news event to remind yourself how valuable Twitter can be. And recently when Buffalo Bill safety to mar Hamlin had that grievous injury, or Kevin McCarthy and the repeated votes to be how speaker, you know, I find myself turning to Twitter to find out what's going on. As much as I have been kind of repelled and repulsed by the quality of the dialogue recently on Twitter, it's still is kind of unreplaceable in terms of real time news.

And I think that probably is the asset he has bought. And if he has to burn it down and take it through bankruptcy to build it up again, I agree with you, Kurt. I think that there's still a lot of potential there will be right back. Bradwell Musk has been spending seemingly every waking moment of his days at Twitter or tweeting about Twitter or causing news about himself on Twitter. His other big company, Tesla, has really kind

of been going through the ringer. Is this a real distraction or is that just the kind of media narrative that Musk is spending all this time on Twitter and therefore Tesla suffering. Okay, I think it's a media narrative and curtain Sarah might disagree with me on this, but you know, Tesla last year was a meme stock. It was a momentum play. It was insanely overvalued. People were piling in and there was a belief that the company had a little bit of a monopoly on electric vehicles.

And not only did the market crater, but of Tesla's businesses in China and everyone who is you know, heavily in China is suffering right now. It's been closing at Shanghai plant. You know, the COVID zero policies killed it, and the stock has created in Elon has lost two billion dollars. I just don't know how different that would be if the Twitter distraction didn't exist. I think Tesla

was due for a fall either way. Now I think you're wrong, because I listened to Elon Musk speaking recently on a Twitter spaces with Tesla investors, and they were bringing up Twitter over and over because they thought that that was the problem. One of the investors said, listen, my grandchildren don't think it's cool anymore that I own

a Tesla. That's a problem. My son doesn't like it that you're making fun of people who use different pronouns, like this is taking the shine off of our Tesla vehicles. So I do think that that's a big issue. It's a media a narrative, yes, but it's also Tesla is about coolness, and it's about Ellen. It's about saving the world doing something that is innovative and new. There are other evs that are really exciting and very cool coming

out right now. And the factor of you know, if I drive a Tesla, that means I'm an interesting, innovative person with good taste. That's shake here. Maybe he'll win some customers among conservatives. I'm going to agree with Sarah. I think this is all about optics, right, Like, would the literal output from Tesla factory be different if Ellen

was there? Maybe you're right, Brad, I don't know if that's actually the case, but I do think that optically, this idea that he is distracted, that he's not paying attention to Tesla as much as investors want him to. I think Sarah brings up a great point, like there's a whole group of probably left leaning people in the US who probably thought maybe they were indifferent about Tesla, maybe even thought Tesla was kind of cool because it

was environmentally friendly. That suddenly they've seen, you know, Elon's personality sort of exposed if you will, on Twitter, and they're saying, why would I ever buy a Tesla? Why would I support this person? Right? Like, we see that. I see that in my Twitter feed all the time.

And so I think that we're very early in this, but I don't think it's sustainable for him to try and continue to do Twitter in the way that he's doing it as well as these other companies, because investors, anytime something goes wrong, investors have a very built in, easy to point to excuse for why it's going wrong. Whether it's fair or not, I don't know, but I do think that that is like a real problem for him.

Because of the optics. There is a perception that Musk has had to kind of plunder Tesla in order to meet some of the debt obligations for taking on Twitter. Is that a problem for Tesla? Could they get themselves into trouble just because of the money required to keep Twitter going and where must is having to get it? Looking back on the year, if I'm Elon Musk, I'm really glad that I sold Tesla near the peak. Well,

he's been selling all year. He sold close to forty billion dollars worth of Tesla stock in the last like fifteen months or something like that. You know, the more he sort of divests his steak in Tesla, the more you feel like he has less interest or less at stake personally for its success in the future. Now, I don't necessarily think that, you know, just because he's cashing out to pay for Twitter means that he doesn't care

about Tesla anymore. But again, if you're a Testlas shareholder, that has to be something that you're thinking about when you see him constantly selling, you know, billions of dollars of Tesla stock. He's also constantly promising We'm not going to sell anymore, and then he doesn't. That's a good point, because he does that a lot. He says something and does another so trying to predict what Elon Musk is going to do as a fool's game. So I'm going

to ask each of you to do that. Um, when you look ahead, what do you actually see as the future of Twitter? What Twitter looked like a year from now or three years from now. Again, we're totally speculating here, right, but I don't think the bankruptcy thing is really that far out of the question. I mean, he's basically warned like Twitter could be bankrupt, and he said this multiple times, not only two employees, but publicly as well. And I think that there's two reasons that I don't think this

is that crazy. The first is that the vast, vast majority of the revenue Twitter makes is from advertising right close to and everything we've seen and heard over the last couple of months since he took over, is it Advertisers are uncomfortable spending money on Twitter. They don't know what they're gonna get. It's not considered a safe environment.

And I don't think Ellen has really done anything with his own behavior or with Twitter's rules or policies to make them feel better, right, So there's no reason for me to think that advertisers are suddenly going to come back. Okay, so there's revenue that's you know, we'll say, um cut in half. I don't think it's even that dramatic of an elsis. Then you add in what Sarah mentioned earlier

about the debt. They're going to have these big, big debt payments do every quarter At some cases, they're gonna have multiple debt payments, do you know, in the same quarter, because they have different interest payments that are coming at three months and six month intervals. And so you know, if you say, okay, revenue is cut in half, and suddenly you're now spending hundreds of millions of dollars a quarter just to service this debt that you took out,

it could be strategic. I'm not a bankruptcy expert. I'm certainly you know, I'm a little over my skis here, but I could see it being a strategic play for Elon Musk to take Twitter bankrupt, to try and get them out from a lot of this debt, and to basically say we're going to start this thing over a little bit. Well, I'll add that the idea that he would bring in another CEO is kind of fanciful, Like even if he doesn't. In name, he's still the owner,

he's still the chief twit. I doubt he would empower somebody else to make decisions he doesn't agree with. I think he's going to contain it, to exert an iron grip on this thing, as Kurt says, as he takes it through bankruptcy, and then maybe as he picks up the pieces, who knows, maybe stages and I p O takes the financial loss down the line. But it's hard to see at this point how he comes out of

this with anything resembling a win. And I don't think that Twitter will continue, and this is obviously speculation, but I don't see it continue to have its same place in the cultural conversation that it had leading up to this. I think that as Musk takes over the conversation and a lot of the people who are prominent on Twitter

decide to give up on posting there. Um. I think people will certainly follow it for the presidential elections and other big events that happen, and they'll go there when there's a natural disaster and when something major occurs. One thing that we could see how upen as we could see Twitter pivot to be more of a entertainment platform

than a real time information platform. We could see it become more like a TikTok or an Instagram, where it's algorithmically showing you content that it thinks are going to be interested in, and there's less pressure to be part

of a live conversation. I would add, maybe the most the greatest example of what Sarah just said, which is Twitter sort of losing that cultural hole that it had, is the fact that President Donald Trump has been you know, able to come tweet again for almost six weeks, and he has not, right, Like, this is someone who I mean, he couldn't go multiple hours without tweeting when he was president.

He's now waited six weeks to say anything, and he has eighty eight million Twitter followers, right, and so he for whatever reason, he's running for president again, right Like, It's not as if he's just like I've retired, I'm kicking it a back and I'm golf and I have note. It's like, no, he has need. He has need to

get his message out to me. That is sort of a symbol of you know where Twitter's places right now in our broader culture and economy, because you know, it's hard to imagine he would have sat on the sidelines a few years ago had he been brought back. Kurt Wagner, Sarah Fryer, Brad Stone, thanks for coming on the show. Thank you, Wes, Thank you for having us. Yeah, thank you. You can read more of Brad, Sarah's, and Kurt's reporting

on elon Musk at Bloomberg dot com. Thanks for listening to us here at The Big Take, the daily podcast from Bloomberg and I Heart Radio. For more shows from my Heart Radio, visit the i Heart Radio app, Apple Podcasts, or wherever you listen. Read today's story and subscribe to our daily newsletter at Bloomberg dot com, slash Big Take, and we'd love to hear from you. Email us with questions or comments to Dig Take at Bloomberg dot net. The supervising producer of The Big Take is Vicky Bergelina.

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