Irony of it all! Elon Musk Ties Tesla’s Fortunes to the Ad Business It has Long Eschewed
If Twitter is unable to win back advertisers, Tesla’s CEO may have to keep selling shares.
Elon Musk is fond of saying that fate loves irony. This go-to phrase now seems awfully prophetic.
The Technoking of Tesla has long eschewed advertising, arguing the electric-car company is better off spending on product. Besides, who needs a multimillion-dollar Super Bowl spot when you can blast your cherry-red Tesla Roadster into space to the soundtrack of David Bowie's “Life on Mars”?
In addition to staging stunts like that 2018 maiden voyage of SpaceX's Falcon Heavy rocket, Musk is a master at generating viral publicity for himself and Tesla using Twitter. Sure, his posts often can be counter-productive — he's joked about the company going bankrupt, falsely claimed to have secured funding to take it private and talked down its stock price — but he also dominates news cycles and regularly engages with customers.
After spending $44 billion on the very platform he's used to great effect to build Tesla's brand, Musk now runs a company highly dependent on the clubby advertising world he never wanted his car company to go near. Charging users $8 a month for blue checkmarks isn't going to meaningfully change this — the math just doesn't work.
In one of his first acts as Chief Twit, Musk tried to assure advertisers that Twitter wouldn't become, in his words, a “free-for-all hellscape.” He met and spoke with ad executives, activists and civil rights groups, then undercut his own charm offensive by tweeting a bunk conspiracy theory, gutting the company's workforce and threatening a “thermonuclear name & shame” campaign against companies that pulled back from the service.
This week, Musk tweeted and then deleted masturbation jokes, and encouraged his followers the day before elections in the US to vote Republican. So much for his emphasis just six months ago on the need for Twitter to be politically neutral.
Times are tough enough for ad spending on social media — just ask Meta and Snap. And Musk's antics are backfiring beyond Twitter, which he's said is losing $4 million a day. By painting such a bleak picture, he stoked speculation he'd need to sell more of his Tesla shares to backstop the social media company.
Late Tuesday, those fears were realized: Musk disclosed having disposed of almost $4 billion worth of stock, bringing the total he's dumped over the last year to $36 billion.
Whether Musk is done selling (he didn't respond to an emailed request for comment) may depend on how Twitter copes with a debt load that's swelled to about $13 billion. It's facing annual interest payments approaching $1.2 billion, up from less than $100 million prior to Musk's leveraged buyout.
Before Musk's disclosure of another share sale, Tesla's stock slumped to a 17-month low, having fallen 15% since the deal closed. The carmaker's market fortunes are now tied like never before to the ad business its CEO snubbed.
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