Musk says Twitter has the X factor after all
One thing Elon Musk guarantees is unpredictability. A few weeks after spurning Twitter when it was all dressed up and ready to tango, the Tesla billionaire is back with a rose between his teeth and $44 billion in his pocket. He must now have rolled his Model S up and down Twitter's drive so often that his tire tracks are a permanent imprint next to the skittering autumn leaves, an indelible reminder of Musk's takeover affair with the social media company this year – regardless of what happens next.
This time it's apparently about X, a rather sinister-sounding plan to create an all-singing, all-dancing app that would presumably produce a new generation of smartphone zombies – call it Smombie 2.0 – all under the control of Musk but in the interests of free speech. This super-app probably means you can dispense with all those banking, entertainment, messaging, travel and whatever apps provided by a confusing array of companies and conveniently enslave yourself to the X man. You might even get a free voucher for Starlink or discounted seats on your 2030 flight to Mars.
Buying Twitter is an accelerant to creating X, the everything app— Elon Musk (@elonmusk) October 4, 2022
"Buying Twitter is an accelerant to creating X, the everything app," tweeted Musk on October 4, confident that dull-witted authorities would fail to spot his plan for world dominion. "Twitter probably accelerates X by 3 to 5 years, but I could be wrong," he subsequently added – especially if he stomps off again and decides to concentrate on generating space debris and colonizing Mars.
Twitter's contribution to the latest chapter in this story was, of course, more prosaic. In a sedate filing with the US Securities and Exchange Commission, it published the entirety of the letter penned by Musk's lawyers on October 3 (which can be read here). "On behalf of X Holdings I, Inc., X Holdings II, Inc.," it starts, naming the entities that will combine Musk's various assets into one giant, super-app-building company. Even before Musk's first spaceship sets off, this is starting to sound like a James Cameron movie featuring an all-powerful organization named The Company and aliens that gestate inside people's intestinal tracts.
The staid details of that letter are that the "Musk Parties" plan to "proceed to closing of the transaction contemplated by the April 25, 2022 Merger Agreement, on the terms and subject to the conditions set forth therein" and so on. Twitter's investor relations team published its own tweet stating that: "We received the letter from the Musk parties which they have filed with the SEC. The intention of the Company is to close the transaction at $54.20 per share."
This is 27% more than a Twitter share was worth at close of business on October 3, although Musk's I'm-back routine had pushed the price up to $52 yesterday. Musk claimed to have gone off Twitter after seeing it was infested with bots. (He reportedly thinks up to a fifth of accounts are spam. Twitter says only 8% are. The real figure is probably somewhere in the middle.) Far likelier is that he was struck by an extreme case of buyer's remorse as Twitter's share price went south. At one point in July, it was worth less than $33 per share.
Its recent financial performance looks dismal, too. For the quarter ending in June, it reported a 1% year-on-year dip in sales, to about $1.18 billion, and a $270 million loss, compared with a small profit of $65.6 million a year earlier. Based on daily active user numbers for that quarter, it was about one tenth the size of Facebook. Oldsters prefer Zuckerberg. Youngsters prefer TikTok or apps unknown to anyone over the age of 30. A $44 billion sale to Musk looks like the best bet for investors.
Increasingly, Twitter seems like the online equivalent of McDonald's – something people consume despite knowing they will feel slightly worse about themselves afterwards. And nobody with the mental faculty to use basic tools believed Musk would make a decent guardian of free speech, his original purported reason for buying Twitter. Others, including many of the Twitter faithful, simply didn't share Musk's apparent enthusiasm for unfettered, no-holds-barred commentary.
The X rationale is rubbish, of course. Musk doesn't need an ageing, text-based social media service to build tomorrow's super-app. And if he genuinely thinks he does, he has lost his visionary qualities. He comes knocking at Twitter's door once again because he knows he would probably have lost in court at considerable expense, after reneging on his original offer. It doesn't mean there won't be further twists, and he might even seek another exit route.
Other signs of the billionaire's eccentricity came this week in a Twitter poll he ran, asking his roughly 108 million followers for their reactions to different ideas about ending war in Ukraine. They included the suggestion that people in areas recently annexed by Russia should vote on their future, a move the Kremlin endorses. To paraphrase a movie line, Musk could just be one of the dumbest smart people on the planet.
- Twitter shareholders drag Musk kicking and screaming to the altar
- Twitter turns the legal guns on Musk
- Musk reneges on $44B Twitter bid with 'bots' baloney
- Whither Twitter sale, after Elon Musk pauses offer
- Free speech is in trouble if it depends on Twitter
— Iain Morris, International Editor, Light Reading