[V.Narayan]

Originally Posted by V.Narayan

Musk's dramatic over-exaggerated style has nothing to do with corporate economics or efficiency and everything to do with posturing and an over inflated sense of himself.
One challenge success creates is the seed in our minds that we are unconquerable and with that sets in the decline. The graveyards are full of indispensable men. I believe Musk has bitten off more than he can chew and will not see his $44bn come back. He may not care either.

Case study question in the MBA class of 2023.

Joe Smith bought a business that had two customers {advertisers & those who tweet or follow the tweets} and one type of production asset {the engineer/skilled employee on the job}. Within days of acquiring the business Joe junked half the production assets and threw them away for scrap even paying the scrapman to carry them away {exit salary}. Joe Smith then made certain announcements that damaged the value of the sensitive intangible product and a large part of the big customers cancelled their orders. How would you evaluate Joe Smith as a CEO.

When a CEO or leader of any kind starts believing his own news clippings or as the Americans say drinking his own kool aid then termites are deep inside. Musk may not care but his $44bn but it aint coming back.

[neeraj0272]

Originally Posted by mayukh42

That is how all social networks are designed; not the only way they could have been. This business model is just herd mentality among the different founders. Not many took the risk of trying something new instead of free, and still attract users. One reason is that is how internet in general was perceived at birth. Yes they achieved success, but whether it will remain that way is for the future to say.
hardware.

I agree with all of your points but there must have been many entrepreneurs who would have tried paid model. But the thing is that to be commercially successful in a competitive environment and especially for social networks you need to have a critical mass. So it was a race to capture market share and hence at that time free model was adopted by everyone and indeed this free model triumphed. And I think everyone benefitted with this free model.
Most striking example of this is Android I think and what an enabler Android has turned out to be.

Originally Posted by mayukh42

If it is free, then you are the product.

We are "profiled" on Twitter; our tweets are analyzed and "trends" created, and this is sold to advertisers without paying us a share.

One has to be realistic and there is no escaping this. Every news paper carry ads. Do you think we can afford news papers without ads? Or TV channels without ads? All sports carry ads.
Even the so called champion of paid model i.e Apple would not have succeeded to this mega level without freebie model.

Originally Posted by mayukh42

Apple is an ecosystem; the price of MacOS or iOS is included in the price of their hardware.

Exactly. And that was my point in an earlier post.

[Jeroen]

Originally Posted by neeraj0272

Even the so called champion of paid model i.e Apple would not have succeeded to this mega level without freebie model.
.

Actually, Apple never ever gave away their phones for free or even a discounted price. It was the carriers/telecom providers that did so. Mainly on long term subscription based type of contracts.

I know for a fact that Apple was never too happy with that business model. In the early days of the iPhone the initial costlier of say the iPhone 4 would be somewhere in the region of USD 350-450,—. When your products is perceived as not to cost anything i.e. free of charge, it is difficult to profile yourself as an exclusive or special brand.

In reality, most people who took these deals ended up paying for the iPhone through higher subscription fees. From early on the EU took action and also regulated to what extend phone subsidies could be allowed by the carriers and providers.

Apple still managed to keep a brand hype. And the carriers and providers paid Apple a very hefty price for the mobile devices they were giving away for free.

Jeroen

Jeroen

[neeraj0272]

Originally Posted by Jeroen

Actually, Apple never ever gave away their phones for free or even a discounted price. It was the carriers/telecom providers that did so. Mainly on long term subscription based type of contracts.

I know for a fact that Apple was never too happy with that business model.

Apple still managed to keep a brand hype. And the carriers and providers paid Apple a very hefty price for the mobile devices they were giving away for free.

Yes. Businesses follow different pricing models to pursue profits. Free model is just one of them. Another is managing a brand image to maintain it's pricing power just like you mentioned about Apple. We as a consumer might debate what is ethically better but a company use these business models just as tools. Google is now charging subscription for ad free Youtube and Apple might abondon paid model for Free model in the future if it finds it more profitable.

Why was not Apple happy with the subscription model? I think their overpriced phones sold in the US mainly due to this subscription model. That is why Apple has a major market share in the smartphone market in the US.

Btw my comment was more keeping in mind the software side rather than the hardware.
Apple allows free apps on its app store. I am sure ios users must be using these free apps. So there you are. Apple is a also beneficiary of ad supported free apps. Surely Apple can follow a policy of non ad supported apps. But then will they be able to sell that much devices?

[Turbanator]

Originally Posted by V.Narayan

Musk may not care but his $44bn but it aint coming back.

He encashed his Tesla shares and funded Twitter; meanwhile, Zuckerberg has lost $76.6 billion since the start of 2022 by doing Nothing

Who knows the worth of those Tesla shares in this market today? If this is correct, then VW is down from 180s to 135s now.

https://in.investing.com/equities/vo...ate=1640995200

Whatever goes up has to come down; the only way to keep our business growing is by creating more businesses from time to time; some will succeed, and some will fail. It's nature, so we should keep on trying. In hindsight, a lot could have been done differently.

A majority of the people commenting on Musk's failure in this are men with set thought processes. Musk goes by his gut feelings and is ok to fail when you are not afraid.

[kiku007]

Am I the only one waiting for this saga to be made into a Netflix series one day? It has great potential. There’s an eccentric/erratic Billionaire, social media, $44B, drama, suspense, heartbreak, impending disaster or a revolution etc.

I’m especially interested in what Musk’s trusted Wealth Manager Jared Birchall was/is doing to stop this runaway train. Here’s how he regained control over Musk’s charity endeavours,

https://www.wsj.com/articles/elon-mu...ov-11657308426

Off-topic:
The Spotify limited series on Netflix is pretty good. You’d understand why people love or hate anyone challenging the status-quo.

https://youtu.be/VtvfbGRDJbY

[binand]

Originally Posted by Turbanator

A majority of the people commenting on Musk's failure in this are men with set thought processes.

This is one thing I can agree with (seeing that I am one of this set). Though I have not made any direct "OMG he's going to fail" comments I have highlighted my skepticism in the success of the acquisition.

In the last 24 hours I see he has introduced the paid blue tick, moved the previous blue tick to an "Official" label, dropped the latter idea, and has converged on a single tick for both paid and verified users (with the difference only seen when you go to the account's profile and do a mouseover on the tick itself). While I believe this makes it tough to determine who's verified and who's paid while browsing a timeline, trend or feed it is still a sign of something happening at Twitter HQ.

Oh and he's done the first steps in making Twitter a payment app too: https://www.nytimes.com/2022/11/09/t...-business.html

[volkman10]

Elon Musk's net worth falls below $200bn; Investors dump Tesla shares as he becomes ‘more focused on Twitter'


Link

[neeraj0272]

As things stand currently, this system of co-existence of legacy blue ticks and paid blue ticks is counterproductive to the goal of removing Lords and peasants system.
Because Legacy blue ticks have now become all the more valuable for generating esteem for its holders.
Elon Musk should think it through. Twitter needs some kind of merit based verification but it should be very restrictive for example grant free blue ticks only to official Governments and other organisations PR handles etc. or a minimum threshold count of followers but this threshold should be different for every field like 10 million for cricket which is followed by billions but 100 thousand for a sport which doesn't have that much followers and so on.
And there should be a clear visual indicator to differentiate between free and paid check marks.

[binand]

Originally Posted by volkman10

Elon Musk's net worth falls below $200bn; Investors dump Tesla shares as he becomes ‘more focused on Twitter'

There's also a lawsuit going to trial on 15/11 (in front of the same judge who handled the Twitter-Elon case) about his pay package of $56B at Tesla:

https://www.reuters.com/legal/musk-f...al-2022-11-07/

[banana_patekar]

Originally Posted by V.Narayan

Case study question in the MBA class of 2023.

When a CEO or leader of any kind starts believing his own news clippings or as the Americans say drinking his own kool aid then termites are deep inside. Musk may not care but his $44bn but it aint coming back.

The money is not entirely his. Apparently his stake in the takeover is in mid 20 Billion, but the news is that lot of other tech billionaires/investors pitched in. Larry has paid 1B or more. And some of them who have invested don't really like free speech (read mid east)

I am pretty sure there will be a "loan restructuring" where Elon will get most of his money back. Of course, if Twitter manages to be profitable.

[vamsi.kona]

I think it's a bit too early to declare if Elon would fail or succeed by looking at how many have left Twitter in the initial days of takeover. From what I read and heard

He wants, at least for now, only verified accounts to pay, not everyone. Twitter will remain free for general users.

Rather than a generic algorithm that decides what feeds we see, he wants a system where users can select what they want to see, akin to music playlists or RSS feeds etc.

As is being suggested by many media houses, he doesn't want a no holds barred free speech platform. He doesn't want to ban someone as long as they don't cross law. So he wants moderation based on law rather than a human moderator/moderators deciding arbitrarily.

And his most ambitious idea with Twitter is to make it an all in one kind of app like WeChat of china, where you can order food, hail taxi, make bookings, transfer money etc.

Now is he a bit of hothead sometimes, absolutely. He is a windup merchant. And he had tiffs with MSM like NYT and BBC from long back, especially with regards their reviews of Tesla, which he felt was completely biased and false. NYT had to retract one of their reviews later. And personally I don't think he is more of conservative. He is more of a free spirit who doesn't like too much authority I think. So he is winding up few on the left who believe they are better to decide what is right or wrong. And obviously he most likely will have more confrontations with right as well.

Tesla and SpaceX were on the brink of going down many times but he persisted, sometimes betting his all and came out of it stronger. Will he be able to do the same with Twitter??. Can't be sure it can go either ways especially since it is just an app. Orkut was very popular before it vanished. Yahoo mail was very popular before gmail kicked it out. So Twitter can be a huge success or vanish. Just that I think it's too early to write it off as a failed investment yet.

[binand]

Originally Posted by banana_patekar

The money is not entirely his. Apparently his stake in the takeover is in mid 20 Billion, but the news is that lot of other tech billionaires/investors pitched in.

Al Jazeera had written about this.

* Original Musk investment (the 9.6% he picked up in Q1): $4B
* Subsequent Musk investment as part of leveraged buyout: $27B
* Other investors who contributed: $5B
* Bank loans that made it to Twitter's balance sheet: $13B

Musk's own cash investment (money he raised by selling Tesla stock) is $31B. He has made a series of additional stock sales over the last few days which add up to $4B; no idea as of now why that money is needed.

Originally Posted by banana_patekar

I am pretty sure there will be a "loan restructuring" where Elon will get most of his money back. Of course, if Twitter manages to be profitable.

How can loan restructuring that gives money back to Elon happen? Sounds far-fetched. Loan restructuring is basically banks converting outstanding loans to stock, so if anything he'll have to spend more money to continue holding 100% of Twitter. The main thing to watch out for is whether the Twitter loans become NPAs for the lending banks or not.

[alpha1]

Musk knows that he has to control public communications if he wants to be indispensable to nations/kingdoms/politicians - that is the crowd he will pander to.

Others have already beat him to the traditional media, however due to explosion of 3G and smartphones - there is no better media that "social media". Facebook is already booked. Whatsapp usurped. Twitter is what could be acquired.

Musk will want to run for President of US in the coming decades, perhaps he is also banking on a unified republic of world in distant future.
Actually, he kind of reminds me of a certain ex POTUS ... hmmm *scratching my head* who would that be?

[binand]

Originally Posted by alpha1

Musk will want to run for President of US in the coming decades

As far as I know Musk fails the eligibility criteria to be POTUS. Neither of his parents is a US citizen and he was not born in the USA.