Elon Musk’s $2.9bn stake in Twitter comes with few upsides
The hearts of Tesla shareholders must sink every time Elon Musk takes on another pet project. At least this one is with his own money, which wasn’t the case when the carmaker spent $1.5bn on bitcoins last year, but a 9.2% stake in Twitter has potential to become a serious distraction from the day job.
The near $3bn (£2.3bn) purchase has been structured as a passive investment, yet one doubts Musk intends to buy and hold for eternity. That’s not his style. Possible plot lines include a request for a seat on the board or even a full takeover bid in time, speculated analysts, not unreasonably. He can afford the latter.
Musk has said nothing about his intentions but it was impossible to miss the big tease beforehand. He flirted with the idea of launching his own social media platform and conducted an unscientific Twitter poll asking whether the platform “rigorously adheres” to principles of free speech. He sounds like a man on some sort of mission, not just one who is sore about past run-ins with US financial regulators over his tweeting activity.
The independent directors of Tesla are never likely to curb Musk’s extracurricular activities, particularly this one: the boss’s high public profile has saved the company a fortune in advertising dollars over the years. Equally, however, it’s hard to see any upside for the company if Musk gets sucked into toxic battles over social media’s role in the US political landscape. Leading the electric vehicle revolution is hard enough without unnecessary detours.
There were two directions Ted Baker could have taken after the exit of founder Ray Kelvin in 2019. One would have involved drift and more profits warnings – we’ve seen that script in the fashion industry a few times after founders
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