At dinner last night, I was questioned about Twitter and the recent remarks of Elon Musk. My opinion is somewhat out of variance with the mainstream considerations.
I believe the demise of Twitter was essentially determined long ago. Musk stepped into a scenario that was tenuous at best, and the government control of the platform was always the fulcrum issue. Musk’s prior intent with the platform may be up for debate; however, against his recent remarks, I would argue Musk is presenting the potential collapse of the platform as a martyr scenario.
Musk said recently the platform may collapse without advertisers, but he will not acquiesce to corporate blackmail. Sounds great, but keep in mind that Musk has known about the fulfillment of the DOJ search warrant for user data since January of this year; we only recently discovered it. Put that background reality into the overlay of your opinion, given the year of comments about users shared by Musk, and the known lack of platform privacy.
Musk knew as an outcome of the platform fulfillment of the court order, the release of all user metadata who supported, followed, liked, or shared the tweets of Donald Trump, that the government created the “his kind” list earlier this year. Yet, he never discussed the issue of compromised privacy throughout his commentary; he did exactly the opposite while assuring people the platform would protect users. [Ex. How did the encrypted DM promise work out?]
Now Musk positions himself as the martyr, the victim of leftist targeting…. and his hired CEO Linda Yaccarino is doing the same thing [SEE HERE]. What better way to guide the platform into a controlled collapse than to be a martyred hero as the Twitter platform potentially disappears. Just think about it.
Simultaneously, all prior DOJ/FBI/IC datamining and intelligence gathering operations against conservative or liberty-minded Americans becomes legal when contrast against the fulfilled subpoena. That’s the same DOJ/FBI/IC motive behind the Carter Page FISA application. All prior surveillance legalized ex-post-facto, history rhymes.
VIA CBS – Walmart said Friday that it is scaling back its advertising on X, the social media company formerly known as Twitter, because “we’ve found some other platforms better for reaching our customers.”
Walmart’s decision has been in the works for a while, according to a person familiar with the move. Yet it comes as X faces an advertiser exodus following billionaire owner Elon Musk’s support for an antisemitic post on the platform.
The retailer spends about $2.7 billion on advertising each year, according to MarketingDive. In an email to CBS MoneyWatch, X’s head of operations, Joe Benarroch, said Walmart still has a large presence on X. He added that the company stopped advertising on X in October, “so this is not a recent pausing.”
“Walmart has a wonderful community of more than a million people on X, and with a half a billion people on X, every year the platform experiences 15 billion impressions about the holidays alone with more than 50% of X users doing most or all of their shopping online,” Benarroch said.
Musk struck a defiant pose earlier this week at the New York Times’ Dealbook Summit, where he cursed out advertisers that had distanced themselves from X, telling them to “go f— yourself.” He also complained that companies are trying to “blackmail me with advertising” by cutting off their spending with the platform, and cautioned that the loss of big advertisers could “kill” X. (read more)
Twitter has $12.5 billion in debt from the initial investor purchase of the platform. The debt service costs around $1 billion per year ($100 million/mo). There was never a viable path to profitability and/or platform solvency; the operating costs when combined with the debt service are just too high.
Now, think carefully…. In late September, Twitter CEO Linda Yaccarino made a bold statement. Yaccarino stated that from her review of the current status, Twitter would start to turn a profit in the first quarter of 2024 {link}. However, with $100 million per month in debt service alone, this statement seemed too far of a stretch. At pre-Musk levels of revenue, maybe; but that $1.5 billion debt service is a heavy nut to carry.
Timing – Remember, in early October the Securities and Exchange Commission (SEC) gave special regulatory approval to Bill Ackman’s firm, Pershing Square (hedge fund), for a new investment vessel called SPARC, whose purpose is to invest in private companies in order to take them public. As noted by CNBC, “In a SPARC, investors will know what company the financing vehicle would be used to merge with before they have to pledge their investments.” The financial mechanism avoids some of the issues with typical IPOs.
•It was October 2023, inflection time. •Yaccarino says a strategy is underway for profitability in Q1 2024. •Ackman gets SPARC approval. If you ask me what was going on, I’d say they were positioning a mechanism to get the debt removed and the investors repaid – sell the debt via Ackman.
Once the new advertising boycott began, the Ackman story disappeared completely. The debt holders are naked with a platform that is worth less than the original investment.
Was this just naive stupid thinking? Was the current scenario the result of failed foresight…. or, was this a guided and controlled outcome? If you ask me, I’d say the latter.
Who wins? The surveillance state…
….while everyone proclaims Elon Musk a hero for trying.
Brilliant!
Welcome to the 2024 election season.
