It must be slightly intoxicating to be able to move markets. Imagine if your latest purchase of a stock or token sent the value of that security soaring simply because it became known that you made the trade.
Such is the case with Elon Musk and Twitter. As TechCrunch reported this morning, the well-known technology entrepreneur “has taken a 9.2% share of the company, working out to around $2.9 billion based on Friday’s share price.” In response to Musk’s disclosure that he had purchased so much of the U.S. social network, shares of Twitter are up 24.6% as I write to you this morning.
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For Twitter, the Musk purchase is providing it with billions of dollars in new market cap, meaning that the social company is at once harder to take over and more able to execute M&A given that it has more value to throw around. Hell, the share-price bump, should it persist, is effectively a raise for Twitter’s staff, perhaps limiting human churn amid a tight labor market.
But folks rarely drop a few billion dollars for fun — Musk likely has a set of goals in mind for his nearly 10% stake in Twitter. But at least he didn’t decide to build his own vanity social network.
Taking Twitter on
Apart from TikTok, the field of new social networks feels somewhat thin. And those that have clawed their way to market share have generally done so by taking a new tack on digital human interaction over a rehash of what worked before. TikTok made it by focusing on short-form videos and music, just as Twitter blew up with micro-posts. Instagram had a good idea with feeds of images. You get the idea.
Rare is the copycat success, at least in recent years, especially among startups looking to ape a winning model. A good example of that fact is the regular attempts to replace Twitter. Remember Mastodon? Probably not. More recently, have you used Gettr, Truth Social, or Parler or Gab? Probably not. And yet there are a host of companies trying to replicate Twitter’s magic.
Musk had mused in March about a new social network after posting some unlearned criticisms of how Twitter is managing its own service. But instead of buying something smaller, or building something new, Musk bought Twitter stock. What now?