Musk & Twitter, Good or Bad Move?

Here are several reasons why it was a good move for Elon Musk to become majority owner of Twitter, as of today. He purchased 9.2% of TWTR stock, making him the majority shareholder of the aging platform.

Twitter is a very well established brand, which still holds a huge market share in social media viewership. This cannot be easily matched with any fresh startup.

The technology, systems, processes, employees, and infrastructure are already in place. The app's reliability has been very stable forever. It can handle the load of millions of users making things trend, or to express their latest false outrage.

Most of mainstream media utilizes Twitter as a daily source to find what is trending, what's failing, and drama to report on. Why not be at the top of that information stack, if you can be? This info source will become even better if Elon removes the cloud of censorship that Twitter has been plagued with, in recent years.

Twitter has seen as high as $77/share a little over a year ago, and was slowly declining into the $30/share range over recent months. Buying at a discount, and he knows how to turn it around.

For those suggesting Musk should have just started his own social media platform, they don't realize that buying a profitable company has a 98% success rate, whereas startups only have a 50% success rate. The odds are heavily in favor of acquisitions over startups.

Twitter is a publicly traded company, which means the investment and capital raise avenues are already in place, and anyone can become an investor. No need for traditional startup VC's, Angel Investors, or Private Equity groups to fund growth stages.

Finally, Elon is also a fan and an avid user of Twitter. He fully understands the culture and impact from a user's perspective. These types of buyers usually become catalysts for great change, because they see the pros and cons from a user perspective. Current executives and leadership often fail to connect or relate as a user, and often make poor decisions that cost membership and participation numbers.

I look forward to seeing some positive changes at Twitter.

Tony Whatley, Founder of 365driven.com