Elon Musk's backers cheer him on, even if they aren't sure what he's doing to Twitter
Elon Musk's acquisition of Twitter has not exactly taken off like a rocket.
After trying desperately to get out of the $44 billion purchase, he faced a court battle for reneging. So he went through with it, while complaining that he was "obviously overpaying." Mass layoffs and mass resignations have left Twitter a shadow of its former self. And Musk's decision to put blue checkmarks — Twitter's confirmation of a user's identity — up for purchase has scared away advertisers, who provide nearly all of the company's revenue.
Now, despite committing to have a thoughtful process for content moderation decisions, he has let former president Donald Trump back on the site based on a Twitter poll.
For Musk's biggest backers, this turmoil feels familiar — and they're hanging on for the ride.
"I think none of this has gone to plan. Zero percent of it," says Ross Gerber, the president and CEO of Gerber Kawasaki Wealth and Investment Management. Tesla is his company's largest investment, and he put a smaller amount of money toward Musk's purchase of Twitter. "That's how Elon works. That's just the way he is."
Gerber thought it was a bad idea for Musk to buy Twitter. He thinks Musk has made major mistakes in his first few weeks of ownership.
So why did he invest, and why does he still think his investment will pay off?
Because it's Elon Musk.
"I'm never betting against this guy," he says.
Staffing chaos and feature failures
After mass layoffs convulsed Twitter earlier this month, Musk demanded that the remaining workers report to Twitter's offices instead of working remotely. He insisted they sign a pledge to build an "extremely hardcore" company or quit. Many chose severance, with some offering dire warnings about the company's fate on their way out.
Musk's goal "was to pare down the company to the people who really saw the vision and the goal," Gerber says. "And it turns out it's going to be pared down a lot more than I think he thought."
But Gerber says he thinks the company can recover.
On Twitter, many Musk superfans are mocking the Twitter staff who left as being insufficiently committed to the company, while others have volunteered to come to Twitter for the chance to work with their hero.
George Hotz, who previously founded an autonomous driving startup, tweeted at Musk that he'd work essentially for free, if Twitter covered his living expenses. On Saturday he announced that he had become a Twitter intern.
Billionaire venture capitalist Marc Andreessen sees the appeal.
"If I were a coder in my 20s again, I know exactly where I would go work right now," he said on Twitter. "What an incredible moment."
Andreessen's firm, Andreessen Horowitz, invested $400 million in Musk's purchase of Twitter. Earlier this month, Andreessen tweeted about a much smaller investment that was, in its own way, another vote of confidence.
November 10, 2022
"$8," he tweeted, with a photo of his receipt after he signed up for Twitter Blue. That's the monthly subscription service Musk revamped to include the blue verification checkmarks, and which Musk called the future of the platform.
Musk hit pause on new Twitter Blue subscriptions two days later, after it led to rampant impersonations of politicians, advertisers and even Musk himself.
Musk's history of gleefully defying the skeptics
Musk was seen by many investors and auto experts as delusional or fraudulent when he promised that Tesla, an upstart company with no manufacturing experience, would take over the auto industry. And he still inspires raised eyebrows, rolled eyes and roars of outrage with many of his claims — whether it's a timeline for reaching Mars, overpromises about "Full Self-Driving" features, or the idea that a humanoid robot is actually the future of Tesla.
But when it came to the battery-powered vehicle itself, Musk's vision proved to be correct, with transformational impact. Tesla is now selling more than a million vehicles per year. The rest of the market is following suit.
And Musk is the world's richest man.
He pulled off a similar trick at SpaceX, a private company that launches satellites. It took on a seemingly impossible task, and almost went bankrupt, before finding success.
"He's gone through this before and landed like a cat," Erik Gordon, professor of strategy and entrepreneurship at the University of Michigan's Ross School of Business, told NPR.
And what about the deafening chorus of industry experts who say that Musk is risking the security of Twitter's users, and the credibility of the platform as a whole, by entering a field he doesn't really understand, slashing the workforce and impulsively changing features? To his backers, that's just FUD — "fear, uncertainty and doubt" — spread by people who don't want Musk to disrupt their industry.
Changpeng "CZ" Zhao is the CEO of Binance, which invested half a billion dollars into Musk's purchase of Twitter.
The more successful you are, the more people FUD about you. FUD makes you stronger, not weaker. https://t.co/izQ9S8S8de— CZ 🔶 Binance (@cz_binance) November 18, 2022
"The more successful you are, the more people FUD about you," he tweeted this week, in reference to Musk and Twitter. "FUD makes you stronger, not weaker."
And sure, Musk is erratic, impulsive and often juvenile. But that didn't stop the meteoric rise of Tesla.
Still, not every Musk fan is totally sanguine.
Dan Ives of Wedbush, an analyst and longtime Tesla bull, says the "circus" at Twitter is bad news for the car company. Yes, investors give Musk a lot of leniency, but Twitter is taking his attention away from Tesla and forcing him to sell a lot of Tesla stock.
"Selling Tesla stock to buy Twitter, I think the perception is it's selling diamonds to buy a $2 slice of pizza in New York," Ives says.
Stock in Tesla has dropped by 50% this year, thanks in part to the drama at Twitter.
For Ives, that's a warning sign. For the most hard-core Musk believers, it's an opportunity.
With stock so cheap it's the best time in years to buy more Tesla stock, they argue.
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