In Glow Of Twitter Dumpster Fire, 3 Risks For Tesla

1 year ago Zachary Shahan 0 Comments
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To get to what I think are some potentially very important notes on Tesla, I have to provide quite a lot of background on what is happening at Twitter for anyone who isn’t following the story closely. In fact, most of this article will be about what has been happening on and at Twitter lately. I think there are a few big impacts that could hit Tesla as a result, and then various ramifications from those if they do occur. Skip down to the bottom if you want to avoid the Twitter dumpster fire and only think about the effects on Tesla.

Elon Musk’s Twitter Purchase

The actual series of events that led to Elon Musk deciding to buy a big stake of Twitter and get on its board, which then quickly evolved into buying Twitter and taking it private, is fascinating and you might even say bizarre, but I’ll leave that for the comments under the article if anyone is interested. The very short story, though, is that Elon thinks “free speech” wasn’t given free reign on Twitter previously, and it is his multi-billion-dollar contribution to human society (just not places like China and Saudi Arabia, of course) to bring “free speech” to Twitter. Many believe that free speech was doing fine on Twitter, and it was just hate speech that was heavily moderated, but I think it is correct to assume that a big bulk of Elon’s rationale for buying Twitter was this “free speech” issue. Just note that Twitter is a private-company platform (hence Elon’s ability to buy it) and that it is not even close to the largest social media platform, so it’s hard to genuinely equate it to a hypothetical “global town square.” On the other hand, it has been the chosen platform for government announcements, much political “discussion,” and news reporters.

After Elon negotiated a proposal with Twitter to buy Twitter, he got cold feet. He claims that the reason for that was that Twitter’s estimate for how many accounts were bots/fake spam accounts was far too low, and thus he was misled. Unfortunately for Elon, he had waived due diligence in an initial effort or plan to close the deal quickly and he was in no position to wiggle out of the deal. He went to court with Twitter for a while, but his prospects of winning in court looked quite bad, and in the end, he agreed to buy Twitter more or less as was agreed in the original proposal months ago.

If I’ve got this right, Twitter made about $600 million in revenue last year. Not even looking at other costs, that’s reportedly far less than the expected interest on debt put on Twitter in this deal. “To finance his Twitter deal, he loaded the company with $13 billion in debt, putting it on the hook to pay more than $1 billion annually in interest alone,” the New York Times writes.

If you’re seeing a problem here, you’re not the only one.

What Is Happening On Twitter Now?

Leading up to the Twitter deal, in the course of negotiating the Twitter deal, and since acquiring Twitter, Elon has made a series of quite antagonistic, inflammatory, and conspiracy-laden tweets. (One would think that someone who has so many self-inflicted wounds from tweeting would be a bit more cautious about taking over the platform and while doing so, but alas, that is not what fate had in mind.) This is by no means an exhaustive list, but I’m going to highlight a few that are very relevant at the moment.

His own reminder of his tweet to open 2022 is probably the best place to start, though:

Indeed, flicking a tiger’s nuts leads to a wild situation. While that was a joke, and then was a joking reminder of the joke in May, it seems that Elon’s game plan lately has been to flick the tiger’s nuts at least once a day. It’s not been going especially well for him or Twitter as a result.

Going back to the idea of “free speech,” as I understand it, what has actually been heavily moderated on Twitter (though, not nearly enough in many people’s eyes) is hate speech and dangerous speech. You may recall that some portion of the Republican Party tried to overthrow the US government and stop the transfer of power after a presidential election for the first time in history on January 6, 2020. You may know that many minorities are hated, targeted for harassment, and brutally harmed and murdered in countless cases. Twitter moderation has presumably been in large part trying to prevent political violence and violence toward minorities. Elon and many others on the right believe that such moderation has gone too far, and he indicated on multiple occasions that once he took over Twitter, he’d lay off a huge portion of Twitter’s content moderation team.

Companies that advertise on Twitter, however, have seen that as particularly risky to their brands and the wrong path to take. And the more nuanced take on “free speech” is that while speech is free in a democratic society, it also comes with responsibilities and hate speech and very dangerous speech are not permitted. As one saying goes, “your freedom ends where it blocks another person’s basic freedom.” The most famous example is that you are nor permitted to shout “FIRE” in a crowded theater if there isn’t a fire, because it can lead to people rushing out of the theater and hurting if not killing each other in the stampede. (Relevant side note: one of the “don’t tread on me” Oathkeepers who died on January 6 died from the stampede — she was literally tread on to the point that she died.)

In the midst of all this uncertainty and controversy, after Paul Pelosi was attacked last weak, Elon engaged in some … very questionable tweeting. Background: Nancy Pelosi is currently 3rd in line to run the United States, only behind President Joe Biden and Vice President Kamala Harris. Someone believing various right-wing conspiracies broke into her home with the intent to kidnap and torture her, and perhaps assassinate her. Not being home, the person attacked her husband, bludgeoning him in the skull with a hammer. Somehow, Elon was sent a conspiracy story that the attacker was actually Paul Pelosi’s gay lover. The website the story was published on once claimed in 2016 that Hillary Clinton was dead and it was actually her body double who debated Donald Trump. Ironically, Elon’s tweet about the Paul Pelosi conspiracy theory was in response to a tweet by Hillary Clinton. (What are the chances?)

Needless to say, in the midst of concerns about hate speech running wild, conspiracy theories running wild, and a rather unpredictable Elon Musk running the Twitter show in who knows what way, advertisers decided to put their Twitter advertising on pause and see what happens before jumping back in. With a large portion of advertising money drying up, Twitter and Elon are in a bit of a bind, or a crisis perhaps.

Since we are talking Twitter, here are a handful of insightful, clever, and humorous tweets to bring us to this point (aside from the two from Elon referencing the flicking of a tiger’s balls):

https://twitter.com/themaxburns/status/1588682988291661824

That’s enough on this portion of the story for now. On to the next portion of the dumpster fire.

$8/month, please!

I an apparent effort to make Twitter financially fit, Elon Musk pitched the idea of a $20/month fee for a verified blue checkmark on Twitter. In response to protest from the famous author and Tesla Model S owner Stephen King, Elon dropped the price to $8. Nonetheless, many have highlighted the absurdity of going from “this is all about free speech” to “your tweets will get more attention/be prioritized over others if you pay $8/month” (not direct quotes). Additionally, many have criticized, scoffed at, and tried to explain the problems with charging $8/month for verified blue checkmarks. Here are some tweets:

https://twitter.com/waltmossberg/status/1588169357968146433

https://twitter.com/jhkayejr/status/1588545918668001280

You get the point — there are a lot of reasons why $8/month for a blue checkmark verification on Twitter is not a great idea.

Risks for Tesla

With that looooooooong bit of background out of the way (and that’s not even half of it), let’s get to how this could be affecting Tesla.

Elon Musk is the face of Tesla. More than perhaps any other CEO, the two are tied in a knot in the public eye. For a long time, that was a great benefit to Tesla, because Elon would give Q&A sessions in which he focused on noble and widely loved ideas like protecting humanity, having fun, exploring the cutting edge of tech and space, solving climate change, and being a good human. This whole Twitter saga, as well as a few controversies before it, have made Elon more and more of a controversial figure. To put it bluntly, he’s seen in a much worse light nowadays than he was for years. Here are three good summary tweets on this matter, one from the famous music producer Moby:

In general, many just want to see Elon focusing on positive stuff again, and contributing to optimistic solutions, not misguided grievance politics. As long as he’s doing the latter, it is quite likely he is damaging Tesla’s brand and future sales.

So, the first issue for Tesla with all of this, is that it could genuinely hurt Tesla’s brand and demand for Tesla vehicles, solar panels, and energy storage units.

Also, increasingly latching onto crazy conspiracy theories and faulty logic, people are questioning more and more whether he is logical and trustworthy as the head of Tesla. That’s not to say that he hasn’t done a superb — historic — job leading Tesla to the tremendous heights it has risen to, but these kinds of errors, logical fallacies, bad business ideas (see: $8/mo Twitter), and susceptibility to debunked and obviously false conspiracy theories are creating serious cracks in Elon’s reputation and even superfans’ faith in his leadership at Tesla. In particular, those concerned about the Tesla stock price have been speaking out more than I’ve ever seen. Some examples:

So, aside from Tesla taking a hit in actual sales (potentially), there’s a risk for shareholders that the company’s stock will take a hit.

There’s stockholder risk beyond this perception factor, too. Elon had to sell Tesla stock to buy Twitter, but he also reportedly took out a lot of debt based on his Tesla stock in order to finance the deal, and if Tesla’s stock price drops a lot, he could face an issue with the banks and have to sell more stock. Furthermore, if Twitter can’t get its own finances in order, it’s possible that Elon will have to sell even more stock down the line to help out the company. All of this results in quite a lot more Tesla stockholder risk than existed a few months ago. Investors don’t like risk. The result could play out in quite an unpleasant way for shareholders in the coming months/years. (Disclosure: I own shares of TSLA.)

Last but perhaps not least, all of the time and attention Elon is putting into Twitter is time and attention that he can’t put into Tesla. This was a concern from the beginning among people who think his time solving problems at Tesla is critical to the company’s continued innovation and success. It’s also odd, confusing, or at least hypocritical that Elon said multiple times that he couldn’t work on new tech that could go under Tesla’s umbrella because his brain was full, he was too busy, and other things along those lines. Here’s a reminder of a couple of big ones:

https://twitter.com/Doggie_wumpus/status/1587155123070853121

At least a few times, Elon has said that he’d love to work on electric aircraft or improved HVAC for homes, but he is just too busy. But not too busy for a growing Twitter dumpster fire? (Note: Elon and Tesla cofounder and longtime CTO JB Straubel initially met over lunch to discuss their joint interest in developing electric aircraft. That lunch led to the Tesla we know today.)

Love To All

To close, after all of that trauma, let’s remember that tools like Twitter can be used for good. If only we all used Twitter more like Michael Caine does:

Side note: it sure is nice knowing that is genuinely Michael Caine, thanks to the blue verification checkmark.

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Zachary Shahan

Zach is tryin' to help society help itself one word at a time. He spends most of his time here on CleanTechnica as its director, chief editor, and CEO. Zach is recognized globally as an electric vehicle, solar energy, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, Canada, and Curaçao. Zach has long-term investments in Tesla [TSLA], NIO [NIO], Xpeng [XPEV], Ford [F], ChargePoint [CHPT], Amazon [AMZN], Piedmont Lithium [PLL], Lithium Americas [LAC], Albemarle Corporation [ALB], Nouveau Monde Graphite [NMGRF], Talon Metals [TLOFF], Arclight Clean Transition Corp [ACTC], and Starbucks [SBUX]. But he does not offer (explicitly or implicitly) investment advice of any sort.

Zachary Shahan has 7383 posts and counting. See all posts by Zachary Shahan