By Ed Hammond / Bloomberg Opinion
Even by Elon Musk’s own accounting methods, taking Twitter private has been a disaster. Worth somewhere between half and one-third of the $44 billion he paid for it only seven months ago, the social media platform has become a case study of value destruction. There is an easy fix: Musk should take Twitter public now.
The idea defies traditional logic, of course. In the ordinary world, a primary reason for taking a company private is to improve its operations and profitability before returning it to shareholders. Musk’s world is not ordinary. He has fired more than 80 percent of Twitter’s workforce, and it shows. Advertisers have fled in droves. He just hired a new CEO.
Even putting aside the torching of several billion dollars, the glitchy vibe and a mission that could at best be summarized as fluid don’t make a compelling initial public offering narrative. Nor are prospective investors likely to be juiced about Musk Twitter’s singular operational achievement: becoming a service whose primary use case is providing a platform for complaints about itself. But none of that matters because Musk himself defies traditional logic, and there’s no reason to wait.
What do people see in Musk? Vision, genius, irreducible self-belief? Shallow contempt? Rolling contradictions? All of the above? I am neither a fan nor a fanboy. I don’t have a Tesla. I tweet little and don’t want to go to Mars. I can’t code. I still don’t fully understand the 420 thing. I also think he’s the most influential person alive.
One manifestation of this is his ability to focus economic conviction around ideas that flout traditional investment analysis. Tesla is a stock market outlier in every conceivable sense. It trades at multiples unimaginable for other carmakers and did so for years before making money. Even with its recent declines, it has a market capitalization 14 times greater than that of General Motors and 13 times that of Ford. And it has believers, die-hard investors who are convinced that Musk, despite — and sometimes because of — so many missteps, will deliver.
Whether Musk is launching electric cars, reusing rockets or just casually pumping crypto, his power to rapidly accumulate goodwill among the masses is unmatched. So why not do it with Twitter, the very organ through which much of that financial loyalty is husbanded?
Sure, big institutional money and much of the financial media would question the rationale. But so what? They have been doing that for years about Tesla, and look where that got them. In fact, it would probably help. Musk long ago mastered the populist gift for provoking “establishment” skepticism to push an image of victimhood.
Finance doesn’t get more establishment than Fidelity, which last week marked down the value of its stake in Twitter by two-thirds. Musk could use the investment giant in his pitch: “These fools think my Twitter is only worth cents on the dollar. They only think about value as an expression of money; we are going to galactify humanity. Let’s crush them!”
Going public — which Musk himself floated as an idea within as little as three years of taking Twitter private — would also give him the thing he craves constantly: a referendum on his superiority. It must be irksome for someone of such undimmed self-love to have his project devalued by dumb, mainstream-money institutions. The people would have his back; I think they would. And even if they didn’t right away, he could convince a lot of them. He’s good at that. Twitter would become the ultimate meme stock, a vehicle of perpetual contrarianism. (As an added bonus, big banks would love the prospect of getting the $13 billion in loans they gave Musk off their balance sheets.)
As for the glare of shareholder scrutiny, Musk would handle it in the same way he has handled it at Tesla, with a mixture of bluster, weariness and complete unpredictability.
He could still do the things he likes doing with Twitter. He could still help politicians sort of launch their campaigns for high office, he could take away check marks and ban pesky journalists. He could still be Musk in all his sprawling personalities. He wouldn’t even have to bother with detailed plans about restoring cash flow and making money. No one expects that from him.
And imagine the buzz; it would be the IPO to end all IPOs.
Musk’s Twitter has been a dumpster fire, from pursuit to remorseful purchase to chaotic dominion. But it is, above all else, his conflagration, a scorched projection of brand Musk. A few years ago, a friend sent me a video of his Tesla, its outline just recognizable inside the inferno pouring from it. Apparently, it was something that was happening quite often. The company’s stock would suffer, I was sure. It tripled. I didn’t get it and I still don’t. But Musk isn’t there to be understood, he’s there to expand the possible. Taking Twitter public would tick that box.
Ed Hammond is a Bloomberg News reporter who covers mergers and acquisitions.