Sunday, December 4, 2022

Elon Musk, what is behind the purchase of Twitter?

Who is Elon Musk?

Elon Musk was born on June 28, 1971, in Pretoria, South Africa.

1995: at only 24 years old, he sells his first company “Zip2” for 306 million dollars.

2002: at the age of 31, he sells his second company, “PayPal” for 500 million dollars.

2003: he founds SpaceX, an aerospace manufacturing and space transportation services company, whose objective is to reduce the costs of space travel and facilitate the colonization of Mars.

2004: founds Tesla, which not only designs and manufactures electric cars, but also develops components for the propulsion of electric vehicles, solar roofs, photovoltaic solar installations, domestic batteries and is developing the first humanoid robot, called Optimus, which will start production in 2023.

2015: founds OpenAI, a specialist in AI, artificial intelligence, which seeks the rapprochement and benefit of AI with humanity.

2016: founds Neuralink, a nano biotechnology company whose objective is to integrate the human brain with artificial intelligence.

2016: creates The Boring Company an excavation company to build tunnels that solve the problem of traffic in urban areas, saving time and money on gasoline.

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2019: starts Starlink, as a subsidiary of SpaceX, to create a network of satellites that provide broadband internet service. Until October 2022 it has launched 2,600 satellites, of which 2,320 are operational.

Elon Musk, the great salesman

Each of the companies listed are worth billions of dollars and Elon Musk is the majority shareholder, making him the richest man in the world.

But the question that is being asked on Wall Street is, is Elon Musk the one who gives value to companies or do the companies give value to Elon Musk?

For example, Tesla’s value stems from extreme optimism about Tesla’s future ability to become the dominant player in car manufacturing, as more electric cars are manufactured, but is that optimism real or part of the aggregate? “Elon Musk”?

The fact is that all the companies mentioned have a market value derived from expectations about how much money they will earn in the future, as opposed to how much money they have earned in the past, proving that these expectations are favored by having a charismatic CEO or leader.

Elon Musk and Twitter

On Wall Street they know that Elon Musk paid 20% more than the real value for Twitter, but they assume that there is a reinforcement of value to “who” made the acquisition.

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There is no doubt that Elon Musk is an extremely intelligent person, understanding that Twitter will give him direct access to the general public, where he can support the rest of his companies. Remember that Donald Trump’s tweets (when he had his Twitter account) created billions of dollars in market movements. Something similar happened when Jeff  Bezos (Amazon) bought The Washington Post, just to have influence on the political decisions in Washington.

If anyone expects Elon Musk’s business on Twitter to be based on ads, they are totally wrong, Twitter is not as ad friendly as other social networks, but there is no doubt that it has a greater impact on the world, because that is, or was, where the great political debates take place.

Cesar Leo Marcus was born in Buenos Aires, Argentina.
Doctor (PhD) in International Logistics and Foreign Trade, and Master (MBA) in Economic Sociology, he was professor of both chairs at the Universities of Madrid (Spain) and Cordoba (Argentina).
A journalist, he publishes in newspapers in California, Miami, and New York. He is a writer, he published twelve books, and a literary editor, director of Windmills Editions. He currently resides in California.

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