ELON CONTINUES TO SCREW THE POOCH

Returning to our originally scheduled programming, here’s as fine a mess as one can find.

Over the past 40 years, many people have come to believe that a person who is Good at Business - who becomes rich - has done so because of their massive intellect, managerial savvy, and good judgement.

During that time, there have been many examples that disprove such belief, but none so obvious as Donald Trump and Elon Muck. What unites the two is their seething resentment of a world that rewarded them money and influence, but still refuses to grant the respect they think is their due.

Trump has proven that resentment is perhaps the most powerful political force in the modern world. Muck is doing his bit too.

Over the past 12 years, Muck tweeted whatever came to mind, mostly without major negative consequences, even when he tweeted things like informing the world he had the financing to take Tesla private, which had a major effect on Tesla’s stock price and should have gotten him in trouble with the SEC

Now, ten days after overspending by at least $40 billion to purchase Twitter in a financial climate where the $44 billion offer was mostly his “fuck you” money, and then forced to purchase it in a financial climate that puts his entire house of cards at risk, he is finding that his every word matters. And pretty much every word he has spouted in those ten days has made his situation worse by factors of billions of dollars.

Muck is on the hook for $13 billion that is secured by his Tesla stock. If he is forced to come up with the money, selling that much stock will lead to a fire sale that could see him lose upwards of $100 billion of the $200 billion in “assets” that constitute his claim to be the world’s richest man.

Twitter is rapidly becoming a theater of the absurd, worthy of an Ionesco drama, as William D. Cohan put it. Here’s Elon’s dilemma, and it’s a financial doozy: his $13 billion has an interest rate capped at an annual rate of 7.5 percent. So Twitter has to pay nearly $1 billion in interest to its banks each year. That’s basically the same EBITDA Twitter had in 2021. However that’s probably no longer an attainable level of EBITDA in 2022, based on Elon’s Friday tweet alone.

It’s hard to see how Elon can go from losing $1.5 billion a year, if true, to generating the cash flow he needs to keep his creditors off his back, even after firing half the company, and especially if users and advertisers continue to leave. It’s highly unlikely a guy like Larry Ellison will pony up more money to flush after the first billion.

And the possibility of that happening is becoming more and more likely - literally from one tweet to the next.

Tweeting an offensive conspiratorial fantasy to Hillary Clinton about the assault on Paul Pelosi had immediate consequences. Advertisers fled because of that tweet and have continued to do so with each following brainfart. The Pelosi tweet may be the most expensive in history, since so far it has cost Twitter billions in advertising revenue as companies like General Mills, Audi, Pfizer, General Motors and other big institutional advertisiters pulled their marketing because they do not want their brands even remotely associated with anything scandalous.

Muck’s Saturday threat to “name and shame” advertisers for doing what advertisers are expected to do merely demonstrates further his complete incompetence as a manager.

At this point, it might be useful to point out that Elon Muck DID NOT do the following:

He DID NOT invent Paypal. He DID NOT start Tesla. He DID NOT start Space-X.

He is the scion of an Afrikaner family that made their millions in the “blood emerald” and “blood ruby” business in Rhodesia, a company that is still known for its involvement in purchasing “blood” gemstones, also known as “conflict gems,” whose legitimate provenance cannot be proved. They consort with warlords and their profit comes from the deaths of exploited Africans in Africa’s civil wars and general instability of the past 40 years.

He came here with several million dollars and proceeded to hire fellow students at Stanford who actually knew what they were doing to create Paypal, which he did in alliance with now-certified pro-Nazi anti-democrat Peter Thiel.

He then took the money made from that and bought his way into both Tesla and Space-X much the way he bought himself into Twitter, though both of those companies actually made things. Tesla has yet to actually be profitable making his tinny toys, since it depends for the majority of its income on government subsidies for electric car sales. He bought his way in, got rid of the actual people who started the company, and named himself “founder.”

Tesla, in fact, is now falling in sales because the real car companies are eating his lunch, creating EVs that actually work, that don’t need to hide a non-disparagement agreement among all the papers a buyer signs. Companies that act like car companies, not Silly Con Vally tech companies.

Owners are upset when all cars have the same glitch, and over extended periods of time the company doesn’t fix them. The shine is off these tinny toys. Nondisparagement agreements or not, word is getting around.

Musk is not an inventor. He is not “chief engineer” at Space-X.

He is the man behind the curtain Dorothy was told to pay no attention to.

Muck is so bad at what he does that when he had a conference call with ad executives last week to quell their concerns over his tweets and the 500% increase in appearance of the “n-word” on Twitter since he took control, that many of the people on the call literally paused the ads and shifted the accounts elsewhere DURING THE CALL because of the uncertainty his statements were adding to. When he fired half the company over the past weekend, he managed to unwittingly fire Twitter’s chief customer officer, the one responsible for maintaining crucial brand and agency relationships.

The advertisers don’t need Twitter. Compared to the other social media behemoths like TikTok, Facebook, Instagram, and YouTube, Twitter barely registers.

When it became known last Thursday that he was going to fire half the employees, he did via an email and didn’t even sign his name to it, an act of cowardice one can list high on “character tells” about him. Many found out about their termination when their work accounts stopped functioning. The cuts hit or totally destroyed major parts of the trust-and-safety, policy, machine-learning, social-good, accessibility, communications, ethical-AI, data-science, and research teams. Those remaining were told to work 80-hour weeks to build products for Musk lest they too be terminated and to come up with ideas to “tantalize” Muck. Today, Bloomberg reported that some of the employees had skills necessary to build products Musk actually wants to launch and were terminated by mistake, and the company is trying to lure them back.

It’s actually amazing there are any employees left.

And Muck continues digging the hole deeper. This morning, to the dismay of lost all the brand advertisers left - all of whom strive to be apolitical - Muck endorsed the Republican slate of candidates for tomorrow’s midterm elections to his 114-million-followers. The blowout of advertisers after the Pelosi tweet is nothing compared to what is going on as you read this.

Every decision he has made: getting rid of content management, firing half the employees, failing to engage brain before hitting “send” on each tweet, has cost him billions of dollars. Every decision he’s made has lost him money.

Muck is holding a master class in how not to run an effective organization. He is surrounded with a group of yes-men advisers, many of whom also lack specific expertise.

Even if he does manage to salvage things, what we are seeing is the opposite of a business mastermind at work. Muck is not leading Twitter with careful vision; he’s bumbling his way through a job he’s unqualified for.

The history of capitalism is that you can be very successful and also be a very terrible human being.

In this sense, Musk is an excellent teacher. The great irony is that his achievements with Space-X and even Tsla might have obliterated the perception that he’s a spoiled, rich doofus. Buying Twitter and telling people to vote Republican has pretty much obliterated that possibility.

That one tweet will likely cost him many Tesla sales, since it’s mostly the vehicle of choice of rich lefties.

The Silly Con Valley Bros need to be reined in. What they are creating is not “progress.” Hero-worshiping the mega-rich is the road to ruin, as we can see around us every day.

The lesson we have learned with Muck and Twitter is an old one: it’s better to be thought a fool than to open one’s mouth and prove it beyond all doubt.

Yesterday began the second workweek of Musk’s tenure. He celebrated it in the traditional way, by tweeting an image of a Nazi soldier in a meme about birds.

pic.twitter.com/gCxUkZ4kZC

What fresh hell will tomorrow bring? Bet on more chaos.

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