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Opinion Why Elon Musk is buying up Twitter

Elon Musk at the E3 gaming convention in Los Angeles on June 13, 2019. (REUTERS/Mike Blake)

Adam Lashinsky is the former executive editor of Fortune magazine and author of “Inside Apple: How America’s Most Admired — and Secretive — Company Really Works.”

The world is once again asking a question that seems to amuse Elon Musk at least as much as it captivates his followers: What does Elon want?

The latest object of Musk’s desire is Twitter. He disclosed in a securities filing Monday that in mid-March he had taken a 9.2 percent stake in the short-burst social media company. Twitter’s previously depressed stock price promptly shot up by almost 30 percent. This follows on Musk’s own comments last week — on Twitter, naturally — that he was considering starting a new social media company, one whose algorithm would be generated by its users rather than by the company that owns the platform.

To reach the answer to the now-$41-billion question — that would be Twitter’s new valuation — let’s examine Musk’s habits. For all his accomplishments, Musk has no history of investing in mature companies. He’s the ultimate entrepreneur, having started, and this is a partial list, payments titan PayPal; rocket-maker SpaceX; brain-machine-interface start-up Neuralink; and the Boring Company, which aims to dig transport tunnels in big cities.

Despite a claim on Tesla’s corporate website, Musk did not start Tesla. But he did invest early on, and Musk became Tesla’s driving force. Today the electric carmaker is a main source of his $270 billion fortune. So, it’s certainly possible that Musk intends to buy all of Twitter. Musk has a long history of doing exactly what he says he’ll do. Taking him at his word that he wants to own a social media firm, it’s more than reasonable that Musk looked at Donald Trump’s embarrassing debut of the woke-resistant platform Truth Social and concluded he’d rather commit a sliver of his net worth to taking over Twitter than starting a rival from scratch.

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Musk, after all, is a Twitter power user. He commands an audience of more than 80 million followers, and he tweets to them incessantly on topics ranging from (in recent days) his love of Berlin, understanding the universe, covid-19 and his various companies. His tweet Monday following the disclosure of his Twitter stake was the cryptic “Oh hi lol.” It was liked more than 350,000 times and generated more than 35,000 comments.

It isn’t altogether clear why Musk would need to own the cow when he drinks so freely of the milk. He might simply feel he can do a better job at running Twitter. For all of the company’s success, it perennially is thought of in Silicon Valley as a product also-ran. Its valuation trails those of Alphabet (Google), Meta (Facebook) and even Snap (Snapchat). He also wouldn’t be the first tech titan to make a run at Twitter. Salesforce’s Marc Benioff tried in 2016 to buy Twitter for $20 billion but was discouraged by his colleagues, directors and investors. By the way: Musk’s Twitter stake is in his name, not Tesla’s.

And while Musk has been lauded for his real-world, physical product innovations, he’s not immune from the allure of media mogul-dom. He sits on the board of Endeavor Group Holdings, the talent agency and entertainment company run by Ari Emanuel, alongside mega-private-equity investor Egon Durban, whose Silver Lake invested $1 billion in Twitter two years ago, though Musk has announced he plans to exit the board in June.

Twitter also provides a potential launchpad for bitcoin, another of Musk’s obsessions. He takes bold stands in favor of the cryptocurrency from time to time, and Tesla both holds bitcoin on its balance sheet and at one point accepted bitcoin as a payment method. Given Twitter’s reach and the way it uses software to connect far-flung users, Musk could see it as the ultimate vehicle to realize a long-held dream of promoting a nongovernmental, global currency.

It’s equally possible Musk isn’t serious about taking over Twitter and that instead he is probing, goofing, needling and otherwise entertaining himself, his fans and his antagonists. He unhappily agreed with the Securities and Exchange Commission in 2018 to vet his tweets with Tesla lawyers after the regulator objected to his Twitter musings that he’d take Tesla private. (Shareholders can thank the SEC for thwarting Musk. He mulled buying out the company at $420 per share. Today, Tesla’s stock trades for more than $1,100 per share.) Would owning all of Twitter give Musk more or less leverage with the SEC? Might his friendly relationship with the powers that be in China, where Tesla operates a factory, help Twitter enter that market, where it is now banned? Has Musk thought about such things?

That the sky is not the limit for Musk’s aspirations is the stuff of cliche. But his ambition truly is boundless. In a recent interview with the CEO of German media conglomerate Axel Springer, Musk said he’d be happy if humanity could build a self-sustaining city on Mars. “I think we really just got this little candle of consciousness, like a small light in the void,” he said. “And we do not want this small candle in the darkness to be put out.”

Next to that, buying Twitter seems downright trivial.