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Tesla (TSLA) founder and chief executive Elon Musk has been very busy ever since his $44bn Twitter takeover deal closed on 27 October 2022.
In the few days since, Musk has already tweeted about cost cutting plans, a subscription model for existing users of Twitter, and potentially turning Twitter into an online “town house” via an app known simply as X.
However, tweeting on these topics is a loteasier than actually achieving them. And with these decisions already potentially having a negative impact on profits, it raises the question of whether Musk is aiming to take Twitterpublic again.
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Project X and Twitter Blue
Musk first purchased the x.com domain name back in 1999 and used it for a financial service start-up, which was eventually combined with another company now known as PayPal (PYPL). After the Twitter deal was approved, Musk tweeted his plan to revive the x.com site again.
Buying Twitter is an accelerant to creating X, the everything app
— Elon Musk (@elonmusk) October 4, 2022
Since then he has also teased followers aboutbringing back Vine, which was owned by Twitter before it was shut down. This may also serve his ambition to create the everything app.
As of now, one of the big changes Muskplans to make on Twitter is around introducing a subscription tier, in which the users who currently have a blue tick will need to pay $8 to maintain it. Originally pricing it at $20, even the $8 subscription suggestionhas not been received well.
$20 a month to keep my blue check? f*ck that, they should pay me. If that gets instituted, I’m gone like Enron.
— Stephen King (@StephenKing) October 31, 2022
Large exodus happening on this platform. Not sure if I stay or not. Leaning toward staying, but if today is a sign of things to come, not sure what the point is. Freedom of speech is great. Hate speech intended to incite harm, (with no consequences) ain’t what I signed up for.
— Josh Gad (@joshgad) October 29, 2022
The irony that Musk purchased this platform to make it more about free speech then immediately monetized it so that it’s literally NOT free for anyone. https://t.co/IBNqTuu2lE
— Listening in the Dark ✨Amber Tamblyn (@ambertamblyn) October 31, 2022
Brands pull ads from Twitter
Meanwhile,Musk’s ambition to protect free speech on Twitter has also seen some pushback.
While the idea mayseemnoble on the surface, some users and advertisers have suggested thatwithout some kind of policing it may prove to be difficult toavoid making it a toxic 'hellscape'.
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If this does occur, brands which currently use Twitter as an advertising tool may not remain confident in Twitter’s ability to provide them a guaranteed positive outreach.
Indeed, this may already be having negative consequences for Twitter.The Financial Times reported this week that L’Oréal (OR) has pulled ads from Twitter due to concerns over the environment on the social media site now thatMusk has taken over.
Advertisers globally said that many businesses are concerned about inappropriate content spreading on the site, and are now quietly distancing themselves.
Prior to the takeover, brand ads were the highest source of income for Twitter. In the second quarter 2022, Twitter earned just shy of $1.2 bn in revenue, and of that $1bnwas earned through ads.
Will Twitter go public again?
Wall Street Journal reported that prior to the deal closing, Musk had told investors that he may make Twitter a public company again in just a few years after the takeover.
Like other statements made by Musk during this Twitter saga, it is hard to know if he said this in earnest or whether it was to keep investors momentarily happy.
But If ad revenues dry up and Musk’s subscription model fails to generate income, Musk may have no other option but to re-float the company.
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Related topics
#Tesla stock #Twitter
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