Elon Musk’s universe of power: CEO of the largest electric car company, the most controversial social media owner, the father of the first satellite Internet system

According to the New York Times (NYT), billionaire Elon Musk’s $44 billion acquisition of Twitter has brought the game of technology giants to a new level.

In the past, technology tycoons when they wanted to buy something would have to rely on the support of their company as a prop. Founder Jeff Bezos has to rely on Amazon to buy Whole Foods and Mark Zuckerberg has to rely on Facebook to buy Instagram, WhatsApp, Oculus… The ultimate purpose of these purchases is still to serve the development of the company. company.

But Elon Musk’s Twitter deal is completely different because this is the story between the Tesla founder personally and the social network of 240 million users. Billionaire Elon Musk does not rely on any company to buy Twitter and is not for the benefit of any business but himself.

“Elon Musk likes it, he buys it” – This joke is so popular that many people have asked the Tesla founder to buy countless problems in the world to fix it (Make It Right).

In fact, if you look back at Elon Musk’s career path, you can partly understand his personality.

 

Elon Musk

19 years old: selling PCs in the dormitory of the University

24 years old: started building Zip2 (later sold to Compaq)

28 years old: started building X (later to become PayPal)

30 years old: started building SpaceX

32 years old: started building Tesla

44 years old: started building OpenAI

45 years old: start building Neuralink

45 years old: started building Boring Co

51 years old: buy Twitter

 

Returning to the Twitter deal, the NYT said that even if it had to join forces with other investors to buy Twitter, Elon Musk would still be in control of this social network.

“The bird (Twitter’s icon) is free”, is what Elon Musk announced after the $ 44 billion deal, but the freedom under whose permission this Tesla founder did not mention. .

On the media side, everyone was surprised and controversial at Elon Musk’s decision when he had to pledge Tesla shares to buy a business segment that was almost unrelated to all the fields that this billionaire. have done before.

Not only facing financial challenges, Elon Musk also has to take on an additional $ 13 billion in debt from Twitter, a company that has not been profitable for 8/10 years of operation. This deal is made in the context of the global economy facing the risk of recession, just as Elon Musk has publicly worried. Online advertising, which accounts for 90% of Twitter’s revenue, has declined as cost-saving firms prepare for the recession.

In 2021, Twitter’s interest payable is up to $ 50 million and with the debts piled up when Elon Musk bought this social network, the company will have to incur debt interest of up to $ 1 billion per year. But the financial report shows that Twitter only manages about $ 630 million in cash flow to pay off debt in 2021. This means that this social network is making less money than the annual interest payment.

So why does Elon Musk, the world’s second-richest billionaire with a globally famous electric car company and countless other founding companies, still want to acquire Twitter, a deal that is not very profitable in theory? ?

Unprecedented

Looking at the empire of Silicon Valley giants today, everyone sees a general expansion. Most of Elon Musk’s fortune is in electric car company Tesla stock, but the billionaire and Amazon founder Jeff Bezos are still battling in the expensive space race.

Meanwhile, founder Mark Zuckerberg of Meta (Facebook) changed direction to the virtual universe. Billionaire Peter Thiel of Paypal is involved in lobbying with billions of dollars in donations to politics.

“This is a new era when we have to deal with billionaires instead of their companies as we did in the 20th century,” admitted University of California professor Richard Walker.

Sharing the same opinion, expert Michael S. Malone, who specializes in the history of the technology industry, said that in the past, most of the giants, after building empires, would retire, set up a charity fund or invest to raise money. produce. But things were different.

“It’s never been like this before where billionaires, instead of retiring, are building a series of new empires,” Malone said.

In fact, the rich have a long tradition of squeezing into the media sector. Billionaire Bezos bought the Washington Post for $250 million. Slaesforce’s Marc Benioff acquired Time magazine while eBay’s Piere Omidyar developed his own media agency.

However, according to the NYT, unlike the previous media engagements of technology billionaires, Elon Musks really wants to make a change and create another legend in his empire projects. after the Paypal, Tesla, SpaceX…

New trend?

Statistics from data firm Dealogic show that Elon Musk’s Twitter deal is only 10th in value in the ranking of the largest technology industry purchases since 1995.

However, as mentioned above, this is the first deal in history when a giant in the technology industry acquires a famous social network just for the sake of hobby, not for the benefit of any business.

“I don’t care about economic interests,” Elon Musk eloquently declared in April 2022 when talking about the Twitter deal.

So these claims were dented a bit when the stock price fell, leading many experts to estimate Twitter’s value to be less than $44 billion, or even less than $30 billion. This made Elon Musk want to withdraw from the deal and then fall into a scandalous lawsuit and ultimately still have to accept the price of $ 44 billion.

Immediately after becoming the new boss, Elon Musk continuously made drastic reform decisions that many people predicted would cut costs to ensure Twitter did not become too big a financial burden for this billionaire.

The story became even more ridiculous when in early October 2022 when the deal was not completed, Elon Musk launched his perfume line with the message: “Buy my perfume so I can buy Twitter”.

With the price of 100 USD / bottle, but 30,000 products were sold out, causing Professor Walker of the University of California to admit that the world is entering a new era of domination of technology tycoons.

“ There is no obstacle to these new empires as the tycoons continuously build their ecosystems. From unions to the media are gradually acquired. All sources of information are gradually being controlled by a group of rich people, and yet they still talk about freedom “, Professor Walker worried.

In the same opinion, analyst Richard Greenfield of LightShed Partners said that now no one can change Facebook but Mark Zuckerberg or Snap but Even Spiegel.

“ No one owned Twitter before. Now one boss decides everything ,” warned Mr. Greenfield.

Also according to this analyst, if the deal to expand the empire into the social network segment of Elon Musk, who has no experience in this industry, becomes successful, this will be a premise for a series of public billionaires. catching technology, creating an unprecedented trend.

” If this deal turns out to be a success, you will see a lot of billionaires follow suit, ” predicts Greenfield.

*Source: NYT