Elon Musk $41B offer for Twitter

[dobbo_]

768 said:

You seem level headed.

Nothing about it affects the ability of parents to leave children in their car.

You seem level headed also, I'm on your side! You're praising him for making it easier for parents to leave children alone, unattended. and most importantly comfortable, when they can't get up to touch the screen to turn it back on. Babies, basically. What parent doesn't want their baby to be warm and have a screen to watch when they leave them alone, in a car, whilst they go and do something important? Only a monster would want that.

[off_again]

768 said:

I find this stuff pretty amazing. Wish, say, the NHS worked like this, ever. So many organisations lack this level of open accountability. He does get some things right from time to time.

Yes and no. I get what you are saying and yes, on the surface, this appears to be a reasonable response to a customer ask. This is good.

However, what will result will be Musk making demands of their engineering teams to do this ASAP while dropping what work they are doing at the moment to solve one particular vocal customers ask. This will push back engineering on other issues and problems and most likely cause problems for the actual engineers who have to program this as they have to drop what they have been working on for the last few weeks / months / years and pick up something completely new (which they probably didnt write in the first place).

Of course, I am providing a counter view here, but having worked in technology for years now, I look for companies that have a robust process for this type of thing. I have had to deal with type of personality in the past and its a nightmare. Not suggesting that this isnt important, but it does need to be put into perspective. There are a lot of Tesla owners who bought a car that had 'features' that either dont work or are very poor. From summon to self-park and the elimination of radar sensors (because Musk fell out with the vendor), there are a lot of things that some owners might be rightly pissed about. If I had dropped anything from $50k to $120k on a Tesla to find that a variety of features didnt work and had some random person on the internet ask for something - I would be a little annoyed.

But then again, in the world of attention grabbing attempts, why not - and with a name that includes 'Tesla' in it, you can be sure as hell that Musky will respond. As you can see, I am an utter cynic on these things.

[768]

Nothing wrong with being a cynic, I know the pain of owners derailing engineering teams.

This doesn't sound like a change that would significantly divert engineering teams to me though and I got the impression he spoke to them first. Responding to change should be something they can cope with - dare I say, agile.

Most of these things as ever come down to balance, which is hard to get right. The flip side is that I'm leaving a team tomorrow because no one's calling for work from it at all, which comes with it's own set of issues.

That and having offered to write a fix for an issue where people are being missed by the NHS for cancer screening but no one contactable thinks it has anything to do with them, leaves me leaning firmly on the side of it being a good thing.

[Byker28i]

dobbo_ said:

Yeah that's the kind of accountability I like! A guy that gets a random comment from a parent and then implements a system that lets parents leave an unaccompanied infant in the car. You know, that thing that's almost certainly a crime in this country.

Why can't the NHS respond to comments from NancyBUNCHANUMBERS and change how they operate based on a tweet?

Unfortunately it's not a crime, unless the child is assessed to be at risk - i.e. left in a hot/cold car with no aircon running...
https://www.gov.uk/law-on-leaving-your-child-home-...

[768]

Even if it were a specific crime here, it doesn't mean the scenario can't happen, or that there aren't other jurisdictions, and climates. The merit of the feature is tangential anyway.

[Talksteer]

Gweeds said:

Talksteer said:

1: Come up with someway to seamlessly integrate long form content.
2: Allow content creators to directly post material there, come up with tools to help them create the content.
3: Improve search and come up with more ways for it to be less of a broadcast medium
4: Get rid of the bots and the cesspool stuff

In terms of monetisation, if you have more and better content your revenue from ads would only need to go up about 3-4x what it was before Musk bought them to hit the level where that 250bn valuation makes sense.

I could also see that if Twitter included better (AI) tools to allow companies to use Twitter as a better two way communication tool there might also be some revenue streams available there. Beyond that there is obviously adding new products that just use the Twitter user base to get to scale really quickly.

You actually believe this is likely? Because it all looks a lot like a handwavy nothing burger to me.

I mean yesterday we find out that Musk has a secret list of 35 VIP's that are promoted into timelines. Accounts like Ben Shapiro and catturd2.

So do you think it's more or less likely that advertisers will return and 'only' increase ad revenue by a factor of at least 4 (I'll answer that for you - they've already gone, and they won't be back because their spend has gone elsewhere without the bin-fire that goes along with it on Twitter).

An awful lot of 'find some ways' in your answer. Along with pretending things like Youtube, TikTok et al don't exist.

I didn't realise I was on the Twitter payroll and thus responsible for putting forward a fully costed business plan! I knocked out a few ideas with a few minutes of thought, I would have thought that Musk’s team might have put some more effort into it.

The point is that Twitter is something of an under performer among the other social media companies in terms of revenue per monthly user, it has a decent sized userbase though there is still space for that to grow. The product can be quite addictive and thus should be quite capable of getting a good number of eyeballs on it.

The number of people it takes to develop improvements or even fundamental refreshes is relatively small compared to the amount of people the company employs (see size of social media companies before they bloat). The new boss has plenty of contacts (see PayPal mafia) and profile to build very rapidly a strong engineering team, this presumes that the issues can be solved by engineering, but by and large making a better product does help.

Advertisers will return to Twitter if the metrics start showing that its working and other advertisers are marketing products uncontested. I was just running those numbers to show that an outsized valuation could be generated with not outrageous changes in revenue.

As an approximation Twitter costs about $4bn to run, with about half that being wages. If Musk halves the wage bill and saves about $1bn a year plus adds 20% to advertising revenue then that would imply a short term potential profit of around $2bn and a share value of around $50-60bn. Social media are infinitely scalable and relatively cheap to operate so large chances in user base and income are possible in relatively short periods of time.

The key point I would make is that we are still relatively early in the process of a complete turn around of a medium size but highly valued company. We don’t have access to what they are intending to do other than that they are experimenting with subscriptions, again if they manage to convert only 5% of monthly active users into subscribers then that would generate ~$400 million in pure profit. I don’t think that they have a good enough product to justify $7 a month but again its relatively early doors.

[Al Gorithum]

Talksteer said:

Advertisers will return to Twitter if the metrics start showing that its working and other advertisers are marketing products uncontested. I was just running those numbers to show that an outsized valuation could be generated with not outrageous changes in revenue.

Perhaps the Ratner affect shouldn't be under-estimated?

[KaraK]

Talksteer said:

As an approximation Twitter costs about $4bn to run, with about half that being wages. If Musk halves the wage bill and saves about $1bn a year plus adds 20% to advertising revenue then that would imply a short term potential profit of around $2bn and a share value of around $50-60bn. Social media are infinitely scalable and relatively cheap to operate so large chances in user base and income are possible in relatively short periods of time.

$4bn doesn't seem a million miles off, they were running at ~$221m loss in 2021 with revenues of ~$5bn. That was somewhat skewed by a $765m litgation settlement that they paid out. So you could make a decent-ish guestimate at ~$4.5bn to run twitter "as was" Pre-Musk.

Kicking half the workforce to the kerb will have saved a big chunk certainly, difficult to say exactly but if we go with your $1bn savings that gets wiped out immediately by the ~$1-1.2bn being paid out to service the debt Musk saddled the company with in the process of buying it. So yeah, if they could get advertising revenues to 20% higher than pre-Musk levels they'd be pulling in about $1bn a year profit (not $2bn). Of course it remains to be seen whether they can even get the ad revenues back to where they were - I've seen quotes of between 35-40% reduction in that since Musk bought it. Which means there's quite some ground to make back before you can even think about it being profitable.

Elon's grandstanding about how twitter was about to bankrupt when the swooped in to save the day is pretty much hogwash, yeah they were probably going to take a bit of a hit with the general economic turndown and additional revenue streams to make up for likely shortfall in the ad revenue was a sensible strategy, particularly if you threw in some efficiency savings too. But they were far from screwed - they had over $6bn pretty much on hand at the end of 2021.

So they might not have been in the same strata as companies like Meta, MS or Alphabet but they were pretty healthy - the repeated kickings they've taken to the groin in the last six months and the consequently shakier position they find themselves in now are basically all Elon's doing.

Maybe it's all 4d chess and I just can't see it, or Elon just doesn't know what he's doing with running a social media company, or maybe he's just going along with his ex-wife's pleas and has burned $20bn of his own wealth to destroy twitter.

[pquinn]

Al Gorithum said:

Talksteer said:

Advertisers will return to Twitter if the metrics start showing that its working and other advertisers are marketing products uncontested. I was just running those numbers to show that an outsized valuation could be generated with not outrageous changes in revenue.

Perhaps the Ratner affect shouldn't be under-estimated?

Sacking most/all of the people the advertisers dealt with at Twitter probably wouldn't help them come back either.

There's loads of social media outlets and if one of them is hard work to manage then it's not exactly an incentive.

Edited by pquinn on Thursday 30th March 13:39

[off_again]

768 said:

That and having offered to write a fix for an issue where people are being missed by the NHS for cancer screening but no one contactable thinks it has anything to do with them, leaves me leaning firmly on the side of it being a good thing.

Yikes - that sounds like personal experience there - I am sorry.

Unfortunately I have personal experience with NHS cancer care. While the people were great, the process was terrible. But lets not go down that rabbit hole.

[ZedLeg]

768 said:

I find this stuff pretty amazing. Wish, say, the NHS worked like this, ever. So many organisations lack this level of open accountability. He does get some things right from time to time.

This isn't accountability, it's grandstanding.

How does the ceo of three multi billion dollar companies have the time to be talking to randoms on Twitter.

[dimots]

ZedLeg said:

This isn't accountability, it's grandstanding.

How does the ceo of three multi billion dollar companies have the time to be talking to randoms on Twitter.

Wait, how long does it take to write a tweet?

[Leithen]

dimots said:

ZedLeg said:

This isn't accountability, it's grandstanding.

How does the ceo of three multi billion dollar companies have the time to be talking to randoms on Twitter.

Wait, how long does it take to write a tweet?

He’s spent billions buying the platform and you think he shouldn’t use it….?

[dimots]

I notice Jeff Bezos had time to watch The Last of Us AND to tweet about it! How do they do it? Superhuman.

https://twitter.com/JeffBezos/status/1620466730572...

[Al Gorithum]

ZedLeg said:

768 said:

I find this stuff pretty amazing. Wish, say, the NHS worked like this, ever. So many organisations lack this level of open accountability. He does get some things right from time to time.

This isn't accountability, it's grandstanding.

How does the ceo of three multi billion dollar companies have the time to be talking to randoms on Twitter.

Yes probably.

Also, I wonder whether he would have responded if OP was called Tesla Hater instead of Tesla Diva?

[andy_s]

Al Gorithum said:

ZedLeg said:

768 said:

I find this stuff pretty amazing. Wish, say, the NHS worked like this, ever. So many organisations lack this level of open accountability. He does get some things right from time to time.

This isn't accountability, it's grandstanding.

How does the ceo of three multi billion dollar companies have the time to be talking to randoms on Twitter.

Yes probably.

Also, I wonder whether he would have responded if OP was called Tesla Hater instead of Tesla Diva?

Brilliant, a post to remember when asked about neurosis.

[Al Gorithum]

andy_s said:

Brilliant, a post to remember when asked about neurosis.

Or about Narcistic behaviours.

[ZedLeg]

Leithen said:

dimots said:

ZedLeg said:

This isn't accountability, it's grandstanding.

How does the ceo of three multi billion dollar companies have the time to be talking to randoms on Twitter.

Wait, how long does it take to write a tweet?

He’s spent billions buying the platform and you think he shouldn’t use it….?

I suppose it shows how humble he is that he wastes time on twitter like the rest of us

[James6112]

ZedLeg said:

Leithen said:

dimots said:

ZedLeg said:

This isn't accountability, it's grandstanding.

How does the ceo of three multi billion dollar companies have the time to be talking to randoms on Twitter.

Wait, how long does it take to write a tweet?

He’s spent billions buying the platform and you think he shouldn’t use it….?

I suppose it shows how humble he is that he wastes time on twitter like the rest of us

Us?
Never tried it myself

[nebpor]

dimots said:

I notice Jeff Bezos had time to watch The Last of Us AND to tweet about it! How do they do it? Superhuman.

https://twitter.com/JeffBezos/status/1620466730572...

Well for a start he’s not a CEO anymore