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High flying Elon Musk aims for the sun – with media along for the ride: part 2 [1]

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Date: 2023-04-23  

A modern Icarus: Elon Musk rockets to the sun, astride his Tweety-bird

This is part 2 of a two-parter. You can read part 1 here on Kos. Or you can read the entire thing on my substack (which is free). Or you can read just this because I think it stands on its own in explaining Musk & the journalists who just can’t kick their Twitter habit. But first let’s talk about the money (ie Tesla) that allowed Musk to fully exercise his unbridled ego.

Where we left off:

Elon Musk gets tens of thousands of re-tweets for every gem he writes. This one from pre-takeover Elon was re-tweeted 94,700 times: “Chocolate milk is insanely good. Just had some.” Soon after that Tweet, ElonMusk agreed to buy Twitter for $44 billion.

Okay, here we go with part 2:

Elon Musk the genius is not very good at math

What kind of republic organizes its entire news-gathering capacity around a single app dedicated to chaos, lies, and disinformation – along with the occasional newsworthy info about the latest tornado strike or mass shooting? Not a republic aiming for survival, I assure you.

Musk is a nasty troll who got away with his genius shtick for years. The man who solved the climate crisis with electric cars that drive themselves, and houses wrapped in Tesla solar roofs. The man who fixed gridlock with tunnels that get you from Los Angeles to New York in 45 minutes. The man who will rocket our civilization to Mars, landing one million people on the red planet by 2050.

None of these things are even remotely plausible but Musk gets away with saying them because he is a nasty troll when challenged.

Remember when Bill Gates was shorting Tesla stock and Musk bullied him with a picture Tweet implying Gates looked like a pregnant man? It said: “in case u need to lose a boner fast”.

Then there was cave diver Vernon Unsworth, the British hero who rescued a bunch of Thai kids trapped in an underwater cave. Musk tried to horn in on the rescue attempt with a bunch of unworkable ideas, including a custom-built sub. After Unsworth rejected the sub saying it was too long to handle the cave’s narrow passages, Musk smeared him as “pedo guy”. Unsworth sued. Elon won – as usual – because he had better lawyers who managed to sell the jury his “just kidding” line of defense.

Classy guy, Musk.

But even Elon Musk must eventually come down to earth, and the Twitter bird may be his undoing. His antics at the company have exposed him to a different kind of journalism than what he is used to, i.e. the pandering fluffery that passes for American business reporting.

For the record, Musk did not invent PayPal – he was forced out of the company before it became PayPal. Musk did not create Tesla – after investing, he forced out the real founders in a hostile takeover, one eventually settled with a deal allowing Musk to call himself co-founder of Tesla. Musk does deserve credit for starting SpaceX and knowing how to hire the right people. But a cloud of Musk hangs over his space venture as well. Business Insider reports that SpaceX employees are relieved that Elon is preoccupied with Twitter since keeps him from mucking around with their work. Wonder what it’s like at SpaceX after his wonder rocket blew up four minutes after leaving the launch pad?

Despite a long record of flawed ideas and broken promises, the word genius has trailed Musk for two decades. Google “musk genius” and you get over 11 million hits.

The biggest argument against the genius of Elon Musk, however, is his $44 billion purchase of Twitter. I did the math. Something Elon didn’t bother with – or is very bad at. In 2021, Twitter had revenue of $5.08 billion, a 37% increase year over year. But adjusted operating income was just $273 milion because Twitter was expensive to run. I say adjusted because that 2021 profit was actually a loss – a negative $221 million thanks to litigation costs that disappeared when Twitter “adjusted” their profit. In the last decade the company had made money only twice – during 2018 and 2019. Twitter was no cash cow and the Musk purchase was insanely over-priced. As a thought experiment, let’s say Twitter continued to rake in that $273 million year after year. Elon Musk would need 161 years to recoup his investment. But it’s even worse than that. The debt service alone on the Musk-Twitter deal is $1.5 billion a year thanks to $13 billion Musk owes his banks.

Musk thought he could cost-cut his way to profitability; hence the employee blood-bath after his take-over, cutting staff by 80%. The loss of content moderation, public relations and advertising personnel, however, came with its own cost: an increase in Nazis and trolls and advertisers heading for the exits. What followed was a massive drop in ad revenue. According to Bloomberg, Twitter’s top ten advertisers cut their spend by 89%.

Musk claims it’s all worth it andthe future is rosy:

I feel like we’re headed to a good place. We’re roughly break-even, [and] I think we’re trending toward being cash-flow positive very soon, literally in a matter of months.

Wishful thinking or reality? Who knows. Since Twitter went private under Musk, its financials are a black-box. Musk himself says that Twitter is now worth only $20 billion – meaning he lost more than half his investment in less than a year. According to his own math.

In December The Washington Post identified some $7 billion in Twitter equity investors, including Saudi Arabia & Qatar investors. It’s worth noting that equity partners get access to Twitter user data. Do they get to read everyone’s direct messages? No one knows because as I mentioned, Musk Twitter is a blackbox.

Not to worry, Musk the genius still dreams. He has folded Twitter into a new Musk company called X.com. He envisions X as an “everything app” that does social media, messaging, banking and god knows what else. Business Insider reported on X based on a text that Musk sent to his brother (one revealed during the brief Musk-Twitter court case):

"I have an idea for a blockchain social media system that does both payments and short text messages/links like Twitter. . . You have to pay a tiny amount to register your message on the chain, which will cut out the vast majority ofspam and bots." Musk said the site would have a "massive real-time database" that would keep permanent copies of messages and followers, and a "Twitter-like app on your phone" that can access the database in the cloud.

Visa can handle thousands of transactions per second. Blockchain such as Bitcoin can do seven transactions per second. As I said, Elon is bad at math.

Tesla investors suck at math too

Musk can waste time and money playing in his Twitter sandbox because he’s the world’s richest man – or used to be – thanks to Tesla, a vastly overvalued car company. How overvalued? As I write, Tesla is worth about $517 billion and dropping fast. Two days ago Tesla’s market cap was at $580 billion, an insane valuation, more than Toyota, GM, Ford, Volkswagon, Mercedes, Honda and Stellanis combined. All these companies have a combined value of $563.5 billion. And yet they sold 36.3 million vehicles in 2021 versus Tesla’s 936,000.

The Tesla valuation didn’t make sense in 2021 when Tesla owned the electric car market with more than 80% of EV sales. It makes even less sense now with everyone introducing new electrics and Tesla market share expected to drop below 50% in coming months.

And yet Tesla wealth keeps Musk – and Twitter – afloat. For how long?

A lot of investors fretted that Musk’s Twitter obsession would have Tesla ramifications: they were right. After Twitter accepted the Musk deal; Tesla plunged by 12% -- a $100 billion loss in one day. When Musk symbolized his takeover by carrying that ridiculous kitchen sink into Twitter headquarters, Tesla value crumbled further, losing over $100 a share before stabilizing and clawing back most of the loss.

Tesla Model 3. The front end looks distinctly odd. Maybe even ugly. Certainly nothing that = Tesla, the most valuable car company in the world.

Big picture: Tesla finished 2021 with a net worth of $1.09 trillion. Now it’s worth half that and quickly falling back to earth. Same fate as his Starship rocket.

Want to bet on its value come December? Tesla isn’t an investment. It’s an ego-trip in a gambling hall. Yet Tesla provides the cash for Musk to service his Twitter’s $13 billion debt. It’s the reason Musk gets to play mad king in the world’s “public town square”. Don’t believe me? Do the math.

Public Square my ass

Musk says Twitter is not about the money. He’s just looking out for the little guy.

Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy. What should be done? Elon Musk Tweet, March 26th 2022

Let’s parse it.

Is Twitter like a public town square?

No. A public town square is public. Twitter is a privately owned company. Same as the local shopping mall. The local shopping mall imposes regulations on the speech of its customers because bad behavior is bad for business. Pre-Musk Twitter was starting to do the same thing. After Donald Trump was booted from Twitter, along with his many bots and trolls, business improved. The number of Twitter users increased by 21%.

Even an actual public town square puts limits on speech. Villages and cities alike have laws against disturbing the peace. Political marches require permits, which are denied if police fear a disruption of public order. But Elon Musk chafed under the modest content moderation he found at Twitter. So he bought it.

It’s just really important that people have both the reality and the perception that they are able to speak freely within the bounds of the law. Elon Musk TED Talk, April 14, 2022

The bounds of US free speech law include many things not allowed on pre-Musk Twitter. Nazis telling us what they’ll do to Jews if they get another chance (spoiler: same as before). Qanon crazies pushing anti-vax lies. Pornography of all stripes. ISIS propaganda. Pedofiles arguing for man-boy love. And last but not least, Steve Bannon & Donald Trump undermining democracy as they falsely claim election fraud. These are all legal under the U.S. Constitution but were quite rightly limited under the Twitter moderation policies that Musk ditched.

Without content moderation, social media devolves to the lowest common denominator, a churning cesspool of cynicism, lies, hatred and puke. Facebook tested the further boundaries of social media bestiality around the globe by not hiring enough local-language content moderators in many of the counties where it operates; the result has been a world-wide tsunami of unbridled racism, including hate-crime murder, as countless numbers of minority/ethnic groups have been attacked by whoever held the upper hand in that particular place. In Myanmar it became genocide. Social media is a mixed blessing at best, a nightmare at worst.

In his April 2022 TED Talk Elon Musk was high on the ego fumes:

My strong intuitive sense is that having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization …

Such a genius. The ugly truth of social media is this:

If you are not paying for it, you're not the customer; you're the product being sold. Post by blue-beetle, August 26, 2010

The press is the product – Twitter sells the access

Let’s start with Donald Trump. Take away Twitter and you can imagine an America without Trump at its center. The country would still have its many problems, bad actors and a dysfunctional authoritarian-adjacent Republican Party. But it wouldn’t have a human lie-manufacturing hurricane battering key institutions.

People acknowledge Twitter’s importance to Trump’s rise, but most fail to understand how he used it to construct a story about himself and America, one that placed him in the middle as America’s appointed saviour. A 2021 academic study by Brian Monahan and R.J. Maratea explains it. The Art of the Spiel: Analyzing Donald Trump’s Tweets As Gonzo Storytelling. Cleveland.com unpacked their findings in an interview with Monahan that explains how Trump’s Tweets built six separate frames that came together to create the plot for the story, a story much more powerful than any individual Tweet. A story that gave Trump power:

Our analysis of thousands of Trump’s tweets indicates that much of Trump’s communications are in service of a story he is crafting that is primarily about himself, and it is littered with grievances (many of which share broad themes with the grievances of his supporters), self-praise, and an unrelenting litany of constructed threats and dangers,” Monahan and Maratea wrote in the study. “With this, we suggest that the prominence of his adherents’ ‘deep stories’ in his self-serving mediated storytelling serves as fodder for the larger spiel that he is unfurling, one that depicts a world needlessly imperiled by all sorts of nefarious others whose ill intent, incompetence, and intractable weaknesses can no longer go unchallenged. In this constructed world, Trump is self-appointed as a savior figure, the only one with the temerity to call attention to all that is wrong as well as the fortitude, intellect, and skill to put things right. In Trump’s storytelling approach, he is not telling his story, but that of his supporters. This despite having little in common with them as a wealthy New York real estate developer and television personality.

Boiled down, Trump’s story was simple, so simple, so classic that it fit on a hat. MAGA. Make America Great Again. Many of his biggest fans took it further, interpreting it as “make my life great again”. That’s the snake oil Trump sold – using Twitter – to almost half the country. That other great Twitter salesman, Elon Musk, did something remarkably similar, selling his narrative of Elon Musk the uber-genius, and mankind as the beneficiary of his greatness. He would save the planet with electric cars and trips to Mars.

Journalism is the Twitter secret sauce that helped Trump and Musk sell their story. Most of the country pays little attention to Twitter itself, they aren’t even on it. According to Pew Research (2022) only 23% of Americans use Twitter – as opposed to the 81% using Youtube. But how often do you read a story about what’s happening on Youtube?

Twitter generates stories because Twitter is populated with journalists and news organizations, and they spread the most sensational things found on Twitter. Musk and Trump both qualified. In 2015 at the start of Trump’s political rise, 24.6% of verified users on Twitter were journalists. They made up the largest single profession on the site, more than sports people or entertainers & actors. Twitter founder Jack Dorsey even credited journalists with Twitter’s rise.

So many around the world have helped make Twitter what it is, but there's one group I'd like to thank today: journalists. — jack (@jack) March 21, 2015

Journalism gives Twitter its reach. A Pew study says 69% of journalists use Twitter as their go-to social media website for reporting. Editor & Publisher spells out the problem:

In a 2021 study of more than 23,000 articles, two media experts — Logan Molyneux, an assistant professor in journalism at Temple University’s Klein College of Media and Communication, and Shannon McGregor, an assistant professor at the Hussman School of Journalism and Media — concluded that comments on Twitter are routinely taken at face value by journalists and placed into stories with no further context. “This sends repeated messages to audiences that information on Twitter is legitimate and authoritative, granting Twitter power,” Molyneux and McGregor wrote in NiemanLab.

Journalists routinely embed Tweets into stories – instead of reporting the old-fashioned way, by talking to people or attending public meetings. Considerable academic research confirms that Twitter drives news – not the other way around. Such as this study: The Impact of 280 Characters: An Analysis of Trump’s Tweets and Television News Through the Lens of Agenda Building showing how Trump used Twitter to set the nation’s agenda:

Trump, as the 45th U.S. president, impacted the media agenda and the public agenda, especially through Twitter (Perez-Curiel & Naharro, 2019). A Pew Research Center study showed that 16% of 2017 news stories about Trump or his administration included one of his tweets (Mitchell et al., 2017). From an agenda building perspective, by choosing to cover his tweets instead of other news, media placed Trump and his 280-character Twitter addresses at the center of the public agenda (Conway et al., 2015).

Another thing Trump and Musk have in common is how they use a Tweet to turn their army of fan-boys into trolls. Journalist Edward Niedermeyer writing in Slate described his own experience after revealing that Tesla used non-disclosure agreements with customers to keep them from complaining about Tesla’s crummy repair record. He was quickly mobbed by the Musk troll-swarm:

Here was the turducken of Tesla’s information control strategy: NDAs for customers, smears against critical reporters, a vicious pack of online enforcers, and a total disregard for facts holding it all together. It didn’t matter how much evidence I had and how little Musk had, there was always a large and growing “community” willing to assert that I had to be wrong, biased, and outright evil to contradict their hero. As the years wore on, this pattern repeated itself again and again: Factual reporting drew attacks rather than refutation, Musk’s unofficial social media enforcers evolved from a mob to an ecosystem of influencers and media outlets, and the stock always kept climbing. Clear evidence of Musk’s overpromising, and stories that would have earned any other automaker a congressional hearing, all became lost in the shadow of his ever-growing legend. Countless stories never even saw the light of day for lack of corroboration, including some of the most eye-opening anecdotes I heard in more than 100 interviews with former employees, as Musk’s reputation for aggression cowed many potential sources into silence.

Musk has now stripped verification from journalists, news organizations and public figures,, switching to a paid “verification” system. Meaning anyone can pay eight bucks a month and pretend to be someone else on Twitter. Fake account immediately popped up pretending to be Hillary Clinton, J.K. Rowling and even Pope Francis. Governments around the world are impacted as spoofers and malicious actors alike spread chaos. Here’s just one report, from the Guardian:

Fake accounts claiming to represent the Chicago mayor Lori Lightfoot, Chicago’s Department of Transportation and the Illinois Department of Transportation all began sharing messages early Friday falsely claiming that the city’s Lake Shore Drive – a major thoroughfare – would close to private traffic starting next month.

Official accounts for New York State have been affected as well. Spend some time on Google and you quickly see Twitter Blue with its real-looking fake accounts is a world-wide concern.

Yet the journalists stay. NBC reported on the debacle while relying entirely on Tweets. Tweets that may or may not be who they say they are. Not a single live interview or follow-up with the Tweeter. No confirmed information, which is the whole point of relying on established media outfits for news. They might as well be telling us what people are saying on Parlor, Gab, 4-chan or Trump’s own Truth Social. Or Mastodon or Notes or Facebook for that matter.

Why are journalists so addicted to Twitter? Jonathan Last, writing for The Bullwark succinctly explains the why:

Twitter killed the blog and lowered the barrier to entry for new writers from “Must have a laptop, the ability to navigate WordPress, and the capacity to write paragraphs” to “Do you have an iPhone and the ability to string 20 words together? With or without punctuation?” If you were able to build a big enough audience on Twitter, then media institutions fell all over themselves trying to hire you—because they believed that you would then bring your audience to them. Established writers flocked to Twitter because, as Walter Bagehot observed, once financial leverage exists for anyone, everyone must use it just to stay at par. If you were a writer for the Washington Post, or Wired, or the Saginaw Express, you had to build your own audience not to advance, but to avoid being replaced. For journalists, audience wasn’t just status—it was professional capital. In fact, it was the most valuable professional capital.

Professional capital or not, Twitter should never have become the go-to news source for American media. It cheapens reporting, allows political actors to set agendas and leads to superficial analysis based on the latest Twitter hot-take. Journalists should know better.

Bottom line, Twitter is a business. And we, the users, were its product. That includes the journalists and media organizations populating Twitter. They thought they were acting in their own business interests, when in fact they weren’t. They were working for Twitter. We all suffered. If it wasn’t for the constant reporting of his Twitter sensationalism, Trump could never have built the story that crafted his political narrative. Musk could never have convinced his army of rubes that he was genius material.

Even after the Musk Starship rocket blew up minutes after leaving the launch pad, an army of journalists began repeating the SpaceX official Twitter line – the launch was a huge success. Maybe it was. Maybe it wasn’t. I’d still like to see real reporting about it, as opposed to the endless Twitter stenography that now passes for American journalism. The Washington Post ran this after the Starship explosion: Why SpaceX’s Starship explosion is a low-key success. The story was based on just one real-life interview, that with a curator at the Smithsonian Air & Space museum. Not someone with any real insight into the actual SpaceX launch. The rest of the article was based on four Tweets touting the success of the failed launch. Two were from SpaceX and Musk. Another from the NASA administrator who financed the launch. And one came from a French astronaut making the cryptic statement: “Never mistake trial for failure.”

Twitter is the crack cocaine of American journalism. What’s the rehab?

Cancel the damn account, that’s the rehab.

Twitter in the rear-viewmirror is a beautiful thing.

The Twitter “public square” was never a public square, and it wasn’t good for America or the world. It sure as hell was bad for journalism. The sooner Musk burns it to the ground the better. I’m not opposed to social media. I use Facebook some. I have a Mastodon account that I’m still wrapping my head around. And I’m on substack Notes. But I use them sparingly, for specific things; I’m no longer looking for a replacement.

Twitter in the rear-view mirror is a beautiful thing.

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