Twitter gets Musky - Furries contemplate exodus from social media site
On October 28th, 2022 a deal that had been in discussions for half of the year finally completed. Elon Musk, the CEO of SpaceX and Tesla, closed on his purchase of Twitter and took it from a publicly traded company to a private venture. The final price tag of $54.20 a share gives out a total of around $44 billion dollars. He had put in this offer back in April of this year.
After taking over, the new owner is moving quickly to shake up staffing and push for proposals such as making the verification check mark be a paid McGuffin at an $8 recurring monthly payment rather than a measure of someone being of social import and prevent people from scamming others by pretending to be that person, as the tool was originally designed to do.
In an interview with the Baron Fund, Musk indicated that the monthly subscription would prioritize ‘access’ to paying feeds over non-paying users on the platform. It has yet to be seen how this subscription process would have safeguards in place for those with money and means to use a bunch of verified accounts to promote their products or political causes inorganically.
These proposed changes have caused concerns for those in the fandom that believe that moderation will be biased toward those with capital or those who hold social influence with Elon, taking a public square and making it into a gated community. Those who believe so have begun to look for alternatives.
A deal for a blue bird that was a bit technically foul
The purchase itself has drawn some concerns in its impact on Elon's liquidity to maintain his companies as well. Below is a chart of the last 5 years of Twitter’s public trading taken from Yahoo Finance:
- The blue line is the moment to moment market value
- The purple line is the moving average of the market value over the last 50 days of trading
- The dotted lines is the time when it was revealed Musk was buying stake into the company and announced that he would be buying it for $54.20 a share
At the time Musk put in the offer, Twitter was just above the 50 day moving average price of around $52 dollars a share. Not too drastic a difference from the offer put in. Unfortunately for Elon, the markets themselves have not fared well this year, with Twitter being no exception.
At the closing time when Elon paid his $54.20 a share, that trailing average moved down from $52 a share to $41.54 a share. Meaning that he could have subtracted $10 per share on the price and had his 420 meme cake too with an offer of $44.20, or about $36 billion rather than $44 billion. As it stands, according to this moving average, Elon Musk overpaid for the 50 day average market value by 23.35% at closing.
This is why the previous corporate leadership of Twitter pushed Elon to follow through with this offer. It’s their job to look after the shareholders. And giving them a moving average boon of 23.35% in a year where most of the market has been down by 15% or more is quite an expert maneuver in getting your shareholders free value. Well… free for everyone but Elon Musk, and perhaps any users who relied on the platform should the worst come to pass.
One could point out that the “fair market value” of Twitter was $49.89 (the blue line) a share at the time of closing. However, it was known that Musk had to close at the end of October or he would have to suffer adverse litigation. So as the time got closer, savvy public
traders traitors were buying up stock of Twitter just to make a basically guaranteed profit margin when Musk would be forced to buy the shares from them at $54.20 a pop. Therefore the rolling average gives a truer value as a company's average value than using the fair market value, which is more volatile and can have moments of oddity based on unusual circumstances. Say, a billionaire overpaying for the company. So much for your precious perfect market hypothesis!
It can be noted that this purchase could have had a more emotional basis for the buyer, Elon, and he was willing to pay a premium due to his fear of the changes he sees in the platform. Musk is known for his prolific posting on the website, sometimes to his own detriment (see above for an example). If he starts to believe that Twitter would start to curtail his ability to tweet without what he deems as hindrances, then he simply bought it to protect his ability to Tweet by his own rules and not the community’s.
In that way, the irony is that the fear many furries feel about losing “their community” due to a changing Twitter landscape could very well be the same fears that pushed Musk to trickle down his wealth to a bunch of savvy 2022 Twitter traders who bought stake to flip it to the billionaire under duress. Those who bought in just before September made out the best gaining about 71% returns in only a 2 month period.
The Social Media is dead. Long live the Social Media
As furries look to move out, there have been jokes and speculation on how long Twitter can last under their new leadership. One even bringing back the 'can it outlast a cabbage' meme used for Liz Truss, a short lived prime minister that served the UK after Boris Johnson resigned. The cabbage won that particular race.
They point to fumbles the new CEO has made coming into the position. Many who worked on the platform were already let go as Musk looks to make a return on his overinvestment, even terminating people that apparently they didn't mean to. The CEO also has tweeted cries of activist conspiracy as advertisers start to leave the platform. Some such advertisers are rival auto companies that probably don't want to give the CEO of Tesla their money.
In spite of this, it's important to remember that Musk has faced doubts from the masses before and came out on the other side. He was a part in PayPal's origins before he was well known, he was involved in pushing forth proof that electric vehicles could rival the internal combustion engine, and also has lead a company that looks to make space exploration more sustainable with reusable rockets. Of course, it's important to also give credits to those he paid to actually work on these things as well. Executives are just managers after all and no man rules alone.
In response to these platitudes though, I will note that these are ventures that he was on the ground floor on. Building a house from the ground up is different than renovation and maintenance on one you buy, especially when you purchased the property for well over market value to start with. This is especially true when noting that 2 of the 3 successes of Musk noted above had a vested governmental interest: curtailing America’s dependency on fossil fuels and making our space program more sustainable. For obvious reasons, these kind of ventures are things the US government were more than happy to subsidize. Musk's desires for Twitter is far less likely to have any governmental backing. If it does get government backing then the userbase is going to be a bit wary of that and why they would. Or as the youth amongus would say, "that's a bit sus, bro".
And also, it is important to note that Twitter itself was able to take off in spite of nay-sayers as well, without Musk at the helm. Why would anyone want to share their thoughts with the world only 140 characters at a time? This is what many long winded people on LiveJournal would say, myself included. Little could have I predicted that the platform I saw no value in would become the one to replace LiveJournal as the fandom’s go to for blogging and content sharing.
At some point in 2009 I had created a Twitter account, noting that people I knew on LiveJournal were going there. However, it was not until 2013 that I decided to hang up my hat on LiveJournal entirely. The reasons noted was that people were no longer sharing their thoughts there. They were mostly bot-posting what their tweets were for the week.
So anyone looking for a spectacular and hasty collapse of Twitter may be disappointed. It will probably outlast the cabbage. Social media sites die slowly before they pass on. If you’re a Musk hater, then that is actually good news for you, a slow death is much worse than a quick one for a person who leveraged their way in with leverage (a “fancier” term for debt). The longer they try to right the sinking ship, the more damage they’ll take on paying back the debt as the business they run continues to not return anything on the investment.
It took 4 years for me to start using Twitter with it being my main go to social media hub. Likewise, the next Twitter could be around the corner, but there will be a time of cross-pollination before the old guard falters.
Of Eggs and Baskets
It can be intimidating when times of change present themselves, but know that the only thing that does not change is change. Social media platforms start with the user base, and die with the user base. But users will always find places where they are most comfortable and happy to share the content they work hard with others. Social media sites are bridges, not shops. And you can put a toll on it, but then you risk people using another bridge.
Can Musk maintain the bridge that Twitter sold him? Time will tell, but furries would do well to prepare for the worst by diversifying their social media platforms. For should one fail, there will always be another. Feel free to share your preferred platforms in the comment section below.