Is X (yes, Twitter) worth the $44 billion that Elon Musk paid when he took it private?
In the past, I had argued that he blew money which he has in unlimited form. But today, I am updating that Musk bought X at a discounted value. Possibly, using the double play strategy which I explained in a Harvard Business Review piece, and which simply means that where you capture value in business may not necessarily be what people see as the core nucleus of your business (yes, the one oasis).
Musk has played a double play strategy where X delivered a platform which assisted his candidate to win the US presidency. But that X must not be the product (or company) through which Musk must capture value. Since the election, Musk has possibly added at least $70 billion to his virtual bank digits, and that might not have been possible without his voyage into X.
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So, he paid $44b and there is a value return of $70b already, so, how can you say that he overpaid in X since without X, the platform which enabled his political ascension might not have been possible? If X is a tool which was bought for a mission, X delivered. As we speak, it has generated more than $44b.
As Guardian UK and other media empires exit X, the platform can mutate as a place to reshape outlooks for future elections. If that is the case, X can even earn more money because it is the world’s #1 political square with the capacity to deliver huge results in the future.
Of course, X does not need to make tons of money for Musk, but it simply needs to make making money in other areas possible. The risk for X, though, is what happens in four years since there would not be Trump on any ballot. Why worry – that is a political eternity for anyone to worry about right now.
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X has over-delivered for what was paid for its acquisition. The same way the US Postal service doesn’t make profits but powers multi-billion dollars digital commerce economy. Value comes in different ways, and not always a like-for-like returns, the returns can be adjacent or tangential. But you have to know how to read these things, with open mind anyway. Of course we live in a world where people who never run a million dollar entity are lecturing the world’s richest man and finest innovator by miles, what value for money is. The arrogance is amazing.
Again, which platform would have delivered Trump’s messages to the wider audience if Musk never acquired Twitter? All the hysteria and mouth breathing in the last two weeks are because the bad guys were beaten in their own game, and as they realized that they have lost relevance, they became terrified. It is always the evil ones that will first accuse you of planning evil, even when you have no such intention; it’s usually the case.
Musk won, Trump won, X won; the people who thought they see clearer than the real visionaries all lost, and their severe pain is just getting started. Will they ever learn? No way.