'Neglected' Tesla shareholders right to worry that 'wordcel' Elon Musk is 'distracted by Twitter': columnist

05 January 2023

Elon Musk, the billionaire CEO of Tesla, SpaceX and, most recently, Twitter, has been assuring Tesla shareholders that he isn’t neglecting them — that he hasn’t forgotten about Tesla because of his activities at Twitter. And Musk has promised to step down as Twitter’s CEO if and when he finds a replacement he considers acceptable.

But many Twitter shareholders remain unconvinced. And Washington Post opinion columnist Megan McArdle, in her January 5 column, argues that they are right to feel that way because Musk’s activities at Twitter are, in fact, causing Tesla to suffer.

“Tesla stock has lost about 70 percent of its value, in part because shareholders worry that the company’s visionary leader has been distracted by his new toy,” McArdle observes. “Musk has lost much of his personal value, too, and with it the title of ‘richest man in the world’…. Musk seems at risk of handing his opponents a deliciously ironic victory. In fact, one could say that by neglecting Tesla in favor of the Twitter word factory, he already has effectively confessed that even the world’s most successful shape rotator believes wordceling matters more.”

The Post columnist acknowledges, however, that there are other factors in Tesla stock losing value — including the U.S. Federal Reserve’s interest rate hikes of 2022, which were designed to discourage inflation.

“In fairness, Twitter isn’t Tesla’s only problem,” McArdle writes. “The Federal Reserve has been raising interest rates since March, and that hasn’t been great for the stock market or for automobile makers, who often sell on credit. And it might be double-especially not great for makers of luxury cars such as Teslas, because one way to ease the bite from higher interest rates is to buy cheaper things.”

McArdle continues, “Meanwhile, a company that practically had the electric car market to itself now faces much stiffer competition, and COVID-induced supply-chain problems in China. All this trouble would have happened with or without the Twitter acquisition — but it certainly doesn’t help to have Musk off tweaking moderation policies and arranging oppo dumps on Twitter’s prior management.”

Twitter has been in a state of chaos ever since Musk’s acquisition of the social media platform was finalized. Musk has fired some of Twitter’s top executives as well as much of its content moderation department, and overall morale at the Silicon Valley company has been low.

McArdle poses a question: “Why, after he bought (Twitter), didn’t he just install a new management team and go back to the important work of making cars?” And the Post columnist offers some possible explanations.

“Possibly, he was seduced by the fallacy that having genius in one domain means you are probably good at everything else, too,” McArdle speculates. “You see it in doctors who fancy themselves stock gurus, journalists who confidently offer management advice to chief executives, and Silicon Valley shape rotators who think they could easily out-wordcel anyone if only they weren’t so busy with more important things. But more likely, he fell prey to a different delusion, one in which the shape rotators and the wordcels are united: thinking of Twitter in terms of words and arguments, as a ‘digital public square’ where vital questions are hashed out. It is that, sometimes, but that’s not what it’s designed for. It’s designed to maximize engagement, which is to say, it’s an addiction machine for the highly verbal.”

Since acquiring Twitter, Musk has made a point of looking for ways to annoy liberals — including restoring the accounts of former President Donald Trump, MyPillow CEO Mike Lindell and other far-right MAGA Republicans who were indefinitely suspended from the platform under the former management. Trump, however, hasn’t taken Musk up on his offer to return to Twitter. Trump’s own Truth Social remains his primary social media outlet, and his last Twitter post via @realdonaldtrump was on January 8, 2021 (two days after the Capitol insurrection).

“Musk could theoretically rework Twitter’s architecture to downrank provocation and make it less addictive,” McArdle argues. “But of course, that would make it a less profitable business. More to the point, the reason he bought it is that he, like his critics, is hooked on it the way it is now. Unfortunately for Tesla shareholders, Musk has now put himself in the position of a dealer who can spend all day getting high on his own supply.”

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