If Twitter fails to win back advertisers, the Tesla CEO may have to keep selling stock.
Elon Musk likes to say that fate loves irony. This go-to phrase now seems terribly prophetic.
The Technoking of Tesla has long shunned advertising, arguing that the electric car company is better off spending on products. Besides, who needs a multi-million dollar Super Bowl spot when you can blast your cherry red Tesla Roadster into space to the soundtrack of David Bowie’s “Life on Mars”?
In addition to staging stunts like that maiden voyage of SpaceX’s Falcon Heavy rocket in 2018, Musk is a master at generating viral publicity for himself and Tesla using Twitter. Sure, his posts can often be counterproductive — he jokes about the company’s bankruptcy, falsely claimed he’d gotten financing to take it private, and talked about the stock price — but he also dominates news cycles and interacts with clients regularly. .
After spending $44 billion on the platform he has used to great effect to build Tesla’s brand, Musk now runs a company that relies heavily on the clubby advertising world he never wanted his car business to come close to. . Charging users $8 a month for blue checks isn’t going to make any sense – the math just doesn’t work.
In one of his first appearances as Chief Twit, Musk tried to assure advertisers that Twitter would not become, in his words, a “free-for-all hellscape.” He met and spoke with ad executives, activists and civil rights groups, then undermined his own charm offensive by tweeting a bunk bed conspiracy theory, stripping company staff and threatening a “thermonuclear name and disgrace” campaign against companies that pulled out. out of service.
This week, Musk tweeted and deleted masturbation jokes, encouraging his followers to vote Republican the day before the US election. So much for his emphasis just six months ago on the need for Twitter to be politically neutral.
Times are tough enough for social media ad spend – just ask Meta and Snap. And Musk’s antics backfire beyond Twitter, which he said is losing $4 million a day. By painting such a bleak picture, he fueled speculation that he would have to sell more of his Tesla stock to shut down the social media company.
By late Tuesday, those fears became reality: Musk revealed he had sold nearly $4 billion worth of stock, bringing the total he dumped over the past year to $36 billion.
Whether Musk is done selling (he hasn’t responded to an emailed request for comment) may depend on how Twitter handles debt that has risen to about $13 billion. It faces annual interest payments of nearly $1.2 billion, up less than $100 million prior to Musk’s leveraged buyout.
Before Musk’s unveiling of a new share sale, Tesla’s stock plunged to a 17-month low, down 15% since the deal closed. The automaker’s market fortune is now tied like never before to the ad business that the CEO turned down.