Musk took a stake in Twitter, is it a "savior" or a barbarian knocking on the door?

Text/Zhou Xiongfei

Elon Musk, who can't stay idle, has his eyes on the social platform Twitter.

Recently, according to a document disclosed by the US Securities and Exchange Commission (SEC), Tesla CEO Elon Musk bought a 9.2% stake in the social media company Twitter, making Musk the largest external shareholder of Twitter.

The document of Musk buying shares in Twitter, screenshot from the SEC official website

After this news was reported by many media, it once became the focus of discussion inside and outside the industry. Many people are not surprised that Musk will become a shareholder of Twitter, because Musk is a serious twitter user.

According to the rough statistics of Wired Travel, Musk has sent more than 17,000 tweets so far, with an average of 5.9 messages per day, and at the same time, he is also willing to reply to various questions raised by netizens. With such high-frequency posts and interactions, Musk has more than 80 million followers on Twitter, making Musk an influential opinion leader.

While Musk needs Twitter, Twitter also needs Musk.

Due to Musk's personal "internet celebrity" effect, his every move is affecting the development of Twitter, for example, when Musk posts relevant tweets on Twitter, many netizens will participate in the discussion of the topic and follow up the forwarding topic, which can undeniably increase the activity of Twitter users.

Such a positive impact is also reflected in the capital market. On the same day that the media reported that Musk had become Twitter's largest shareholder, Twitter's stock price soared nearly 30% at one point. At the same time, due to Musk's influence, Twitter has also become the most purchased US stocks by retail investors this week.

Although Musk and Twitter present a scene of mutual need, some people in the industry are worried that Musk has become the largest shareholder of Twitter in preparation for further control of Twitter, after all, such a case has already occurred.

When it comes to Tesla, many people will think of Musk, but it should be noted that Musk is not the founder of Tesla. At first, Musk was only an investor in Tesla, but after making a series of investments in Tesla, he even squeezed out the founder of Tesla and became the CEO of Tesla.

So, will Musk make Twitter the second "Tesla"? After Musk becomes a Twitter shareholder, what impact will it have on Tesla?

1, Musk is a Twitter fan

"Oh hi lol".

After many domestic and foreign media reported that Musk became the largest shareholder of Twitter, Musk himself only responded in this way on his personal Twitter. While the response was simple, Musk spent billions of dollars on Twitter.

According to Wired Travel, Musk can become the largest shareholder of Twitter this time, which was achieved by spending 2.89 billion US dollars (about 18.39 billion yuan) to acquire 9.2% of Twitter shares.

Notably, before Musk threw money at Twitter, Twitter's five largest shareholders were the Vanguard Group, the Blackrock Fund, Ssga Money Management, Aristotle Capital Management, and Ark Investment Management.

Among them, Pioneer Pilot Investment Company was previously the largest shareholder of Twitter, with a shareholding ratio of 8.39%, while Jack Dorsey, the founder of Twitter, currently holds only 2.25% of the shares. Because of this, Musk's 9.2% shareholding ratio has now exceeded the shareholding of all individuals and institutions in Twitter.

Musk buys shares before Twitter shareholder information, image source CNN Business

Musk's acquisition of Twitter shares may seem quick and sudden, but in fact, Musk has already begun to prepare for it.

According to a number of media reports and confirmations such as The Verge and Bloomberg, Musk has applied to the SEC on March 14 this year to complete the operation of increasing the shares of Twitter, and the shares are passive investment forms. That said, in order to become Twitter's largest shareholder, Musk spent nearly a month preparing.

Behind this, from Musk's love of Twitter.

Through Musk's Twitter account, it can be seen that he registered and opened an account in June 2009, and although there have been many rumors that Musk is using social platforms such as Facebook and Instagram in addition to Twitter to do social marketing, Musk quickly debunked this.

On March 24, 2018, Musk tweeted that "I don't use FB and never have."

In order to make his statement more convincing, Musk also deleted the official accounts of his company Tesla and Space X on Facebook on the same day, saying, "This is not a political statement, and I did not do it because someone asked me to do it." I just don't like Facebook, it creeps me out. I'm sorry. ”

For Twitter, Musk is his real heavy user. In an interview with the American television news magazine 60 Minutes in late 2018, Musk proudly said, "You use your hairstyle to express your personality, and I, with Twitter." ”

According to rough statistics, since Musk opened an account on Twitter in 2009, he has published more than 17,000 tweets on Twitter so far. According to rough statistics on the connection trip, Musk will send an average of 5.9 tweets a day, as few as 2-3 a day, and as many as 7-8.

Musk tweeted, screenshot from Twitter

At the same time, Musk is also happy to reply to comments from netizens. In May 2020, for example, Musk sent a total of 416 tweets that month, an average of 14.3 per day. Among them, 323 were replies to netizens' messages, accounting for 77.64% of the total number of Tweets in the month.

Judging from the time Musk tweeted, he would "surf" on Twitter at basically any time. According to Twitter data analysis tool TweetStats, Musk will soak in Twitter 24 hours a day, of which 3-6 a.m., 11-12 p.m. and 6-9 p.m. will be the high-frequency time for Musk to tweet.

It is precisely because Musk is so active on Twitter that he has gradually become a KOL (opinion leader) on Twitter.

According to Musk's Twitter data, his account has more than 80 million fans so far, compared with the current US President Joseph Robinette Biden's Twitter has only 20.9 million fans, about 1/4 of Musk's fans.

While becoming a celebrity on Twitter, Twitter is also very important to Musk.

In April last year, Musk said on Twitter that "Tesla does not need public relations" the news detonated the entire industry, and the reason why he had the courage to say such things was mainly because he himself was Tesla's main "public relations leader".

Looking at Musk's Tweets, it can be found that the most mentioned topics are related to Tesla, and the number of mentions has basically reached tens of thousands of times. Based on Musk's strong influence on Twitter, Tesla has become a well-known electric car company.

Image source Tesla official micro

As a result, any comments Musk has made about Tesla on Twitter have also affected the development of the latter. On April 1, 2018, April Fool's Day, Musk tweeted that "Tesla is bankrupt" and "completely, completely bankrupt", and then Tesla stock fell 7% in response.

Two years later, Musk may have forgotten his previous lesson. On May 1, 2020, Musk tweeted that "in my opinion, Tesla's stock price is too high." As soon as the words fell, Tesla's stock price fell by more than 11% that day, and the market value evaporated by $14 billion.

In addition to Tesla, Musk will also frequently mention related topics related to Space X, Underground Fast Tunnel Company Boring and Brain-Computer Interface Company Neuralink on Twitter. That is, through Musk's Twitter "popular science", his technology companies are also known to more people, and The connection travel has elaborated on this process in the article "Musk Is Difficult to Retire".

Now, through Twitter, Musk has not only made himself a household name "Internet celebrity", but also made his company a star enterprise known inside and outside the industry, and it is undeniable that Twitter has become an indispensable platform for Musk to speak.

Because of this, Musk has spared no expense to become the largest shareholder of Twitter. At the same time, perhaps Musk is just as important to the value of Twitter.

2) Twitter needs Musk

Due to the attention of many fans, Musk's every move on Twitter will be infinitely magnified.

Take Musk's response to becoming the largest shareholder of Twitter, although his response is only a few characters, but this tweet has become a hot spot for many fans to forward, like and comment after it was released. To date, there have been more than 60,000 retweets, 60,000 comments and more than 900,000 likes.

Musk's response tweet to buy shares in Twitter, screenshot from Musk's tweet

In these comments, not only did some netizens fancy ridicule Musk's new identity, saying that "Musk is the chief duan player of Twitter"; and even some netizens believed that Twitter should give Musk the title of co-founder, which was not hilarious for a while.

The phenomenon that Musk tweeted and then triggered a carnival of netizens is actually nothing new.

Last November, Musk suddenly posted a tweet on his personal Twitter that read, "Humankind boiled beans burn beans beans cry in a kettle Ben is the same root to fry He Tai urgent." Shortly after such a "seven-step poem" was issued, the bottom of this tweet was crowded with netizens, speculating about Musk's motives for quoting this ancient poem.

Some netizens think that Musk is alluding to the price performance of the two major cryptocurrencies dogecoin and Shiba Inu coin on the day, according to coindesk data, the former 24-hour price fell by 2.65% on the same day, while the price of the latter rose by 6%; some netizens think that Musk is spitting on the game "Humankind" is too difficult.

In addition, there are voices that Musk is responding to the United Nations agency World Food Programme (WFP) through this tweet, because before WFP publicly appealed to Musk to donate $6 billion to contribute to the people affected by famine around the world.

In the end, Musk did not publicly say why he wanted to send such content, leaving netizens to speculate. As everyone knows, in the next month, Musk asked netizens for advice.

On the 9th of that month, Musk said on his personal Twitter, "I am considering resigning and becoming a "full-time" Internet celebrity, what do you think? After the release of this interactive tweet, it became a topic carnival in which netizens around the world participated.

Some netizens think that Musk is already an Internet celebrity, there is no need to ask such a question; some netizens said that Musk has so many technology companies, it will certainly not resign, Musk said this is just a joke; and even Mr Beast, who has 84 million subscribers on Youtube, threw an olive branch to Musk and expressed his willingness to teach Musk how to get more traffic.

Musk's tweeting can not only drive netizens to participate in interaction and increase the activity on Twitter, but also have the ability to affect the stock price of Twitter itself.

Just after Musk issued the tweet confirming that he was Twitter's largest shareholder, according to Tiger Securities data, Twitter's stock price rose by 27.12% on the day, and the stock price reached $49.97 per share at the close. The gain also became Twitter's biggest one-day gain since its listing.

Twitter's stock price trend in the past month, screenshot from the Tiger Securities APP

Such a sharp rise in stock prices can be described as "long drought and ganlin" for Twitter, after all, Twitter's recent situation is not good.

In early February, Twitter released its fourth quarter and full year last year. According to the data, Twitter achieved revenue of $1.567 billion in the fourth quarter of 2021, an increase of 22% year-on-year from the same period in 2020, while net profit recorded $182 million, down 18% year-on-year.

Similar to the fourth quarter results, Twitter's performance for the whole of last year was also not optimistic. For the full year 2021, Twitter achieved total revenue of $5.08 billion, up 37% year-over-year. The net loss, although it narrowed by 80.5% compared to 2020, was still in the loss of $221 million.

From the data of revenue and net profit, it can be seen that Twitter has fallen into the dilemma of "increasing revenue without increasing profits" last year. Because of this, at the close of the day of earnings release, Twitter's stock price fell 1.98% to $37.08 per share, and in the following days, Twitter's stock price has also been in decline.

For a social platform like Twitter, the biggest source of profit is to earn income through user interaction with advertising, but this "cash cow" is slowly running.

On Twitter's earnings call, its CFO, Ned Siegel, admitted that "Twitter's total ad engagements in the fourth quarter of last year fell 12% year-on-year due to the difficulty of getting users to click on ads." Behind this, there are also Bloomberg analysts who believe that it is mainly due to the slowdown in the growth of the number of daily active users on Twitter.

On the one hand, Musk's own traffic attributes, on the other hand, Twitter's user activity declined, in the industry's view, Twitter needs a KOL like Musk to save its own decline, after all, Musk has proved that he has such an ability.

At the end of January last year, after Musk added the label of "Bitcoin" to his Twitter profile, the price of Bitcoin rose by more than $6,000 in one hour, and at one point it exceeded $38,000 / coin.

Not only did he advocate for itself, Musk also had Tesla buy $1.5 billion worth of bitcoin. With this investment, investment bank Wedbush estimates that Tesla earned about $1 billion a month from Bitcoin.

In addition to Bitcoin, Musk also used his ability to bring fire to the Clubhouse software.

Last February, Musk tweeted "I'm at Clubhouse tonight at 10 o'clock Los Angeles time." " tweet. Within an hour, a room in the Clubhouse called "Elon Musk on Good Time" had flooded with 5,000 people, and the room was instantly full.

Facts have proved that the explosion of Clubhouse has spread from overseas to China, and for a time it has the invitation code of Clubhouse, which has become a boom for many young people in China to catch up.

And when Musk bought 9.2% of Twitter, according to Vana Research data on U.S. retail trading traffic, millions of retail investors competed to buy Twitter's stock, so much so that Twitter's stock became the most U.S. stock bought by retail investors this week.

In this way, Although Musk and Twitter belong to different fields, they have now reached the point of mutual need and support. It is for this reason that after Musk joined Twitter, how the relationship between the two will change has become the focus of attention inside and outside the industry.

3. After "stealing" Tesla, will Musk "steal" Twitter?

When the news of Musk becoming Twitter's largest shareholder was announced, many people in the industry threw up this question. It is not surprising that there will be such speculation, after all, there is such a precedent in Musk.

When it comes to Tesla, many people habitually think that Musk founded it, but the truth is that Tesla's founders were Martin Eberhard and Marc Tarpenning, who founded Tesla on July 1, 2003.

Although Tesla was founded, it was in the predicament of no money to develop at that time, so the two founders had to take Tesla's development plan to find investors in Silicon Valley. Since the duo's philosophy at that time was to build a pure electric sports car called the Roadster, most investors were not optimistic about it, and Musk, who was still an investor at that time, appeared in front of them.

The original version of the Roadster, the source tesla official micro

At that time, Musk had just made $160 million by selling his PayPal, and he was thinking of continuing to start a business. After some exchanges and communications, Musk was very interested in Tesla's electric car plan, so the two sides hit it off, Tesla received $7 million from Musk, and Musk became Tesla's largest shareholder.

With the injection of funds, Tesla immediately began the development of the first electric sports car Roadster, in May 2006, Roadster's first engineering prototype EP1 was born, but the EP1 is still far from mass production. At this time, Musk found that the cost of roadster's bicycle production had risen from the previously announced $100,000 to $200,000.

In Musk's view at the time, with the doubling of production costs, the car will not make money even if it is mass-produced, and even the more it is sold, the more it loses, until it affects its own income. Musk could not accept this potential loss and targeted Tesla founder Albert, believing that this person was not qualified for the position of Tesla CEO.

After a game of interests and legal mediation, the two reached a settlement, but at the cost of Eberhard's resignation as Tesla CEO, which Musk took. Because of this, at that time, many media published reports titled "Musk stole Tesla", which triggered discussions in the industry.

Although there were many doubts about Musk at that time, it turned out that under Musk's leadership, Tesla not only became a well-known electric vehicle company in the world, but also its products were welcomed by consumers around the world.

More than a decade later, if you look at Musk's current largest shareholder in Twitter, you may feel a little familiar. With a series of moves made by Musk, this familiar meaning is also deepening.

Fast forward to the 25th of last month, Musk posted a vote on Twitter that read, "Do you think Twitter abides by the principles of Free Speech?" He also cautioned that "this vote is very important." Please vote for you carefully. ”

Musk's vote on Twitter's free speech related vote, screenshot from Musk Twitter

It turned out that more than 2 million netizens participated in the vote, and 70.4% of people believe that Twitter did not follow this principle.

Musk, a libertarian who believes in an "open market of opinions," has a long history of complaints about Twitter's lack of free speech, and this year he sent a series of tweets questioning Twitter's standards of free speech, asking Twitter to publish its own algorithms.

These accusations were ultimately not responded to by Twitter, so Musk made such a vote, and after the vote, in the face of netizens' distrust of Twitter, Musk said: "What should we do?" For Musk's question, some netizens said, "Let Musk buy Twitter and transform it." ”

A week later Musk made the move, and although he did not buy Twitter, he became the largest shareholder. Based on the above Musk's experience and behavior, there is speculation that "Musk will control Twitter like Tesla".

For now, Twitter is trying to stop itself from becoming the next Tesla.

According to the Wall Street Journal, after Musk bought 9.2% of Twitter's stock, Executives such as Twitter CEO Parag Agravar frequently called Musk and decided to give Musk a board seat. According to the agreement with Twitter, Musk's shareholding ratio during the term of the board of directors must not exceed 14.9% of Twitter.

Dan Ives, an analyst at Unity Securities, commented that "Twitter's invitation to Musk's board of directors is actually avoiding Musk from buying more of Twitter's shares, because if he doesn't, Musk has the ability to buy more twitter stock and gain more control over Twitter." ”

In response to the invitation, Musk tweeted that he looked forward to working with Twitter's CEO and other board members, but he also said that "a major overhaul of Twitter will be made in the coming months."

Musk's response to being invited to join Twitter's board is screenshotted from Twitter

Because Musk said such a response, in the industry's view, although Musk is willing to take the olive branch handed by The Twitter board, he may not give up his ambition to transform and control Twitter.

Now, to judge whether Musk will make Twitter the next Tesla, it depends on Musk's subsequent actions on Twitter. But what is certain is that with Musk becoming the largest shareholder, Twitter's traffic dilemma may be solved to some extent, and Musk can also better promote Tesla and Space X on Twitter.

In this way, this transaction is a win-win situation for Musk and Twitter.