X Has Been A Crypto Scam-Filled Failure For Elon Musk — Now What?
- Today, Elon Musk’s X has become a crypto scam-filled failure. The bots he once fought against have become integral part of the X platform.
When Elon Musk was forced to purchase Twitter in 2022 for $44 billion, he claimed that there were a couple of specific reasons for the move: First, he would destroy the bot-nets that had become a norm on the platform, and second, he would bring free speech back and transform Twitter into the internet’s ‘town square.’
Unfortunately, both of those promises have failed to materialize. Indeed, one of them — the idea that Musk would get rid of the bots — can be viewed in real-time, an epidemic of bots replying with ‘░P░U░S░S░Y░I░N░B░I░O░,’ crypto scams, offers of drugs, and unrelenting verified imposter accounts.
None of these accounts are me … FYI pic.twitter.com/6AIkFw57x1
— Liz Ann Sonders (@LizAnnSonders) April 16, 2024
The current string of bots relies on mixing and matching different character encoding standards to avoid detection — a strategy that has, for now at least, worked shockingly well.
A software engineer said that spam detection across all social media and video games “is a cat-and-mouse game that will never end,” implying that Musk will never defeat the armies of bots he’s promised to exterminate.
See Also: Elon Musk’s Tesla Adds Dogecoin Payments On Its Website, Is X Next?
Of course, the idea of ‘impossible’ has never stopped Musk. The richest man in the world is known for plowing huge swaths of his wealth into projects that won’t necessarily succeed, like Tesla and SpaceX.
But can throwing money at the problems plaguing X (formerly Twitter) really solve them and allow Musk to create a new, vibrant, digital town square? Not only that, will he actually have the money to spend on the likely unprofitable venture?
Musk Is Fighting For His Life (If His Life Is $56 Billion)
It’s worth remembering how Musk was able to complete the purchase of Twitter in 2022. Not only did he borrow $1 billion from SpaceX to complete the acquisition, he also financed the majority of the buyout through loans with Morgan Stanley, Bank of America, and Barclay’s.
His equity partners include Jack Dorsey, Larry Ellison, and Saudi Prince Alwaleed bin Talal.
This means that before taking into account employees, infrastructure costs, and paying out creators on X, Musk has to shell out over a billion dollars in interest payments to his loan providers every year.
Including all the other expenses, it’s hard to believe that X — which saw its revenue fall 54% to $1.9 billion last year — can be profitable now or any time soon.
However, Musk has been a little distracted by his numerous other ventures and mounting legal issues, most importantly a massive payday of $56 billion that’s been denied to him due to a ruling by Judge Kathaleen McCormick of the Delaware Chancery.
Judge McCormick characterized Tesla’s board of directors as “supine servants of an overweening master,” with the board almost immediately authorizing a re-vote on the payment plan to shareholders and Musk suggesting that Tesla would quickly re-incorporate in Texas.
But Musk’s problems don’t end with the Delaware Chancery.
The much anticipated CyberTruck, of which only about 4,000 have been delivered, was recalled after a customer had the pedal cover on the accelerator slip and wedge itself in such a way that the gas pedal would remain down even after someone lifted their foot off of it.
Last month, sport and culture website Defector aptly ran the headline “Cybertruck Deliveries Halted Due To Car Being A Big Piece Of Shit That Doesn’t Work.”
Most recently, Musk laid off 10% of the company, including the entire Tesla charging team — despite Tesla becoming the go-to charger of choice for EVs throughout the US.
Tesla was added to the S&P 500 index in December 2020. Since then, the company’s share price is down almost 20% while the S&P is up almost 40%. This means that Tesla is one of the poorest performers in the S&P 500.
Will Elon Ever Sell X?
It’s unclear what Musk plans to do if he doesn’t receive his $56 billion pay package — though he’s claimed that without the money, staying on at Tesla as CEO is out of the question.
The richest man in the world apparently has 411 million shares of Tesla, with about half of those pledged as collateral for loans he’s taken out.
So, if Musk does decide to divest himself fully from Tesla in the event that he isn’t given his pay package, it means that he’ll likely have to (and want to) begin to sell his shares.
Even if he slowly sells his shares to not put a lot of sell pressure on the stock, there’s little chance he’d be able to retain as much value as his supposed net worth — and it’s likely that if Musk steps down as CEO shares will continue to tumble.
Musk’s other ventures provide some ability for him to continue to earn money, but there’s no doubt that Tesla is his cash cow.
All of this to say that, even if he isn’t valued at $200 billion after selling his Tesla shares, there’s little likelihood that he’d need to get rid of X in a fire sale.
With tons of cash available, Musk could easily live the rest of his life with X bleeding money every year.
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