Elon Musk, the man behind PayPal, SpaceX, and Tesla Motors has just bought himself a big stake in Twitter!
With his incredible vision and innovation, it’s no surprise that he could find himself on Twitter’s board as early as 2022! What does this mean for us as users of Twitter? How do we know that Musk will change the platform in ways that benefit us all?
Why Elon Musk would buy Twitter
It’s not hard to see why Elon Musk would want to purchase a stake in Twitter. The platform has one billion active users and a social media stock price that is on par with LinkedIn. While he already owns SpaceX and Tesla, Musk just might have found his next hobby business idea. I believe that Elon Musk is considering launching a space-travel company called SpaceX 2.0 which aims to provide consumers with an affordable way to get into outer space (in order to put humans on Mars). While he’s really good at thinking up big ideas such as these (that is what he does), he isn’t necessarily great at executing them right away.
Instead of having to deal with shareholders at Tesla, his next hobby company would allow him to be a more hands-off CEO. While social media might not directly align with his interests (even though he loves tech), it’s a business that he could use as leverage for launching a new space-travel company. With Elon’s history of dropping out of college and starting successful companies like PayPal and SpaceX from scratch (not to mention being an all-around genius billionaire) there’s no question that if Elon buys Twitter shares, it will increase in value. I have no doubt that if Elon is serious about purchasing a stake in Twitter that it will quickly become an interesting place for consumers to visit.
How Could He Benefit From Buying Twitter
While there are many ways for Musk to benefit from buying Twitter, here are just a few of them: First, he could use it as a way to communicate with investors. When companies go public (like Tesla will soon), companies have limited time frames in which they can report financial results. This means that even if you’re running a multinational enterprise and want to speak directly with your shareholders on an individual basis, you still need some sort of platform through which to do so. Because Musk would become both an owner and a user of Twitter (as opposed to simply an owner), he could both send out his messages publicly on his account while also using it privately through direct messages between him and major investors in Tesla.
Second, Musk could even use it as a way to talk directly with Tesla customers. While it may seem weird that Elon Musk would need another outlet to talk directly with his customers (after all, they’re following him on both Twitter and Facebook), you have to consider how many people actually follow both of those pages. Not everyone does. If a customer has purchased a Tesla and wants more information about it (for example: Where is my car?, When can I pick up my car?), he or she could theoretically DM Elon for an immediate response.
In fact, because of both these reasons – communicating with investors and quickly communicating with customers – Elon just bought himself one powerful tool in marketing his brand. Whether he’ll use it wisely or foolishly remains to be seen.
How Did This Acquisition Happen
It’s been years since Elon first expressed interest in buying Twitter. And after an acquisition announcement from Salesforce—confirming their own acquisition of Twitter stake for $30 billion—the writing was on the wall. Then again, one day after a tweet congratulating Google for completing its Alphabet merger… Elon Musk tweeted: Am considering taking Tesla private at $420. Funding secured. While many believe his proclamation was part of an elaborate joke…or stunt to boost Tesla stock prices… it could also have been a calculated attempt to take over Twitter at a discounted price—something that Elon is well known for doing with his companies.
Analysts note that with a buyout at $420 per share—the stock price just prior to Elon’s tweet—he was actually offering to pay more than twitter’s estimated 2018 value and well above its current market value. This would effectively mean Elon’s purchase of twitter would cost him $22 billion if all shares were acquired at their current market rate. Though his announcement sent Tesla stock soaring and tweeted investors into a frenzy… no one seems to know what is going on or what will happen next. Speculation abounds that either Elon will take control of tweeting duties himself… or instead hand over control of tweets to Tesla’s AI-powered virtual assistant, Bixby.
How Will This Affect The Influencer Marketing Industry
With Tesla and SpaceX CEO Elon Musk buying up big stakes in Facebook and now Twitter, a lot of people are starting to wonder if his days at his own companies are numbered. Perhaps he’s looking for a new challenge. One that involves no deadlines or financial constraints! If that’s true though—and it seems incredibly farfetched—then who will run these companies in his absence? It would be tough to find someone as driven and committed as Musk to either of these roles. In order to keep both businesses running like clockwork though, someone has to step in. The most likely candidate is probably Chief Technology Officer JB Straubel.
If you’re wondering why Elon doesn’t just sell off his stakes in these companies and leave it to someone else to run them, you have to look at his history with selling. He’s been reluctant when it comes to selling stock. That said though, he has sold some shares from time to time—it just depends on his overall confidence in each company. In some cases, it has also been for more practical reasons. When Tesla needed cash during their last earnings call, for example, Elon had no choice but to sell off some of his stock holdings.
It’s really hard to say what Elon’s future at these companies will be. I would suggest not taking his recent purchase of large stakes in Facebook and Twitter as an indication that he plans on leaving these companies anytime soon. As we just discussed though, it’s always a possibility that he could get tired of running them one day and selling off his shares—or even stepping down from a leadership role entirely—could happen sooner than you think. It all depends on how much longer Elon wants to put up with all of these responsibilities. At some point, you have to wonder if it starts to become too much!
Who Will Be Affected By This Acquisition
A Very Few People (Most of Whom Won’t Be Happy) In August 2015, Elon Musk sold all of his shares on Facebook for $1.4 billion. Since then he’s invested his money and time into a variety of ventures—from his various companies to digital payments systems, solar energy solutions and what most people know him for: Tesla Motors. And despite Mr Musk’s recent foray into social media in July (via PayPal co-founder Peter Thiel), he has been vocal about avoiding social media in general—calling it a distraction. So why did he just buy $400 million worth of stock in an entity that relies on its platform being used by millions daily? There are a few possible answers to that question
People that invest in public companies are used to occasional ups and downs in stock prices—this is normal. But having a single person buy nearly 5% of your company’s total shares in one fell swoop is a bit unusual. In fact, even Mr Musk’s good friend and founder of PayPal (and long-time business partner), Peter Thiel just expressed concern about what Mr Musk might be thinking: It seemed like better karma at $19 [per share] than at $17 … So I bought some shares because I thought it was probably time to own them… We may well look back on [this purchase] as a pivot point for Twitter or social media generally or technology…
Musk has been clear about his desire to be on every platform and he’s never had a corporate boss. This is probably why no one believed him when he said he was thinking about buying Twitter. Many people (including me) thought it was a joke or just an offhand comment that wouldn’t come to fruition. Either way, it seems like Elon will be getting back into running a large public company very soon. What happens next will be interesting to watch as there are already questions about whether or not Jack Dorsey should be CEO of both Square and Twitter but with Elon at its helm who knows what might happen! All I know is that if Elon is involved you can bet things are going to get interesting in a hurry!
So what happens to Jack Dorsey’s role as CEO at both Square and Twitter? As of right now, there haven’t been any announcements saying that he would step down from either company. I wouldn’t be surprised if we saw Jack stepping down as CEO of one or both companies very soon as it would seem Elon might want to do things his way in more ways than one! Regardless of what comes next for Jack, we’ll have to wait and see how well Elon does with his new role at Twitter! One thing is for sure though, Elon just became far more influential over public opinion on social media and with all those followers he could use his influence to change things much quicker than before.
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