Like everyone else, I was interested in the fact Elon Musk acquired 9.2% of Twitter or a nearly $3 billion stake.
First of all, I started my career thanks to Twitter. It’s how I networked, met really smart people, landed a great job, and basically catapulted me to where I am today at TradingView running their global community.
So naturally, I have a special place for the blue bird, and I am always following their story. Some of you who know me well might also remember that I was once “Twitter’s most loyal bag holder.” That’s for another post, but if you know how much Twitter’s stock has languished since its IPO, you get the idea already.
The thing is, despite any of Twitter’s current price action, Elon Musk buying 9.2% of Twitter just makes a lot of sense considering what the network has also done for him. More importantly, the network will gladly carry his shiny new investment higher. And that’s the key here: when he buys, the news gets out, and the news cycle alone puts him in the money. He tweets, therefore he pumps.
Musk is already up $700+ million on his investment. It works like this: buy Twitter, it goes viral on Twitter, the news pumps Twitter’s stock price, and suddenly his very purchase of Twitter is spiking higher thanks to Twitter. What a cycle!
Musk has moved markets quite a bit with his tweets over the years including Dogecoin and the now infamous “Tesla buyout at $420” tweet. Some might say his tweets have largely created his image, including having a slingshot effect on his Tesla brand. Musk does not use Facebook or LinkedIn or Telegram or Instagram or any other network. Every thing you know about Musk is through Twitter. He’s buying the company that helped shape his path. By the way, I am very big fan of Tesla and how it’s changing our energy habits. So in a way, this post is also a praise for how Musk has wielded Twitter perfectly over the years for his brand and now his portfolio – it’s a master class.
So anyways, my thoughts are pretty simple:
• He only uses Twitter, no other network is considered. I actually think it’s great investment strategy – buy the things you use!
• This is not a huge sum of money for him considering his current net worth is over $100 billion. It’s not even 2% of his net worth. It sounds like a YOLO, but this is spare change for him.
• Twitter has been instrumental to his brand and company’s. Now he owns a really big stake in it. Also, considering he’s a builder, he will probably try to influence the company and its direction. This is also for another post – see image below:
• When you buy the companies you love, every time you use them, you’re effectively “paying yourself just by using it” and Musk now gets to do that with Twitter with each tweet. Sounds like fun.
Those are my thoughts. Curious to hear your thoughts if you have any.
Some Other Notes
How Twitter reacted after the news:
If you’re still reading, I also think this is a reminder about how much is going on in the market in terms of opportunities since the recent sell off. I know the indices aren’t down much over the last 12 months, BUT, the average stock is getting slammed. Look around and you will see 100+ stocks down 50% or more in 12 months time. I want to write a post about all of these companies. There are soooooo many.
May the dip be with you.