Seize the Memes of Production
Ramp Report #8 - Elon's Battle For Free Speech
Memes of Production
I love Twitter.
It's hands down the best social media app that has ever existed for a multitude of reasons. One just needs to understand how to yield its power. Don't just take my word for it. Hear what golf legend Greg Norman has to say on the matter:
I’ve been using the product for about 12 years now and have slowly and steadily become a power user. Am I addicted to it? Absolutely. But it has also changed my life in profound ways. This blog (newsletter), my daily outlet, and many of my friendships would simply not exist without Twitter—and for that I am forever thankful. Nonetheless, there is so much room for improvement. And I'm not talking about your stupid edit button.
Can we all just agree the edit button is for people who suck at tweeting?
— Ramp Capital (@RampCapitalLLC)
Apr 5, 2022
This has become more apparent to all of us in the past 2 weeks—which has been a whirlwind for the media, shareholders, and Twitter employees and executives alike.
Two weeks ago on Monday, Elon Musk announced he had amassed a 9.2% position in Twitter (~73.49 million shares), making him the largest Twitter shareholder. For reference, founder and ex-CEO Jack Dorsey only has a 2.25% position in the company. Here are the stakes of the other board members:
@ChrisJBakke Wow, with Jack departing, the Twitter board collectively owns almost no shares! Objectively, their economic interests are simply not aligned with shareholders.
— Elon Musk (@elonmusk)
Apr 16, 2022
Without looking up stakes from board members in other large public social media companies, this seems astonishing low across the board. If you're on the board of one of the most powerful companies in the world that has also been one of the lamest investments, maybe you truly do only care about the power and not the money. Even our boy Jack seemed to release a little frustration against the dysfunctional board with this recent tweet:
Since Elon announced his stake in Twitter on April 4th, the stock has risen 14.68%—halving the 30% jump after the first 2 days of the announcement. Ben Thompson captured the ludicrousness and juxtaposition of the event with a chef's kiss of a tweet—making Twitter seem like a simple plaything to Elon.
Elon Musk has already made ~$750 million on his Twitter trade, which is approximately double Twitter’s net income for the last 3 years.
— Ben Thompson (@benthompson)
Apr 4, 2022
The saga continued after the news broke that Elon decided not to join the board, which fueled speculation that he was going to attempt a takeover of the company. On Thursday, as predicted, Elon made an offer to purchase Twitter for $54.20/share (because memes) or $43 billion. Twitter promptly adopted the poison pill strategy to fend him off.
Many have flocked to Twitter (pun intended) claiming that this poison pill strategy is a blatant violation of fiduciary duty and the board will be sued.
If the board of directors at @Twitter reject the offer made by @elonmusk, then wouldn’t the board be acting in direct opposition to the financial interests of their shareholders?
— Nick Short (@PoliticalShort)
Apr 14, 2022
I'd gladly take a buyout at $54.20 just to be done with this massive hole that's been in my portfolio since the IPO.
Fun with numbers: If you had put $10,000 into Twitter on the IPO (November 2013), you would currently have $10,040 from Friday's closing price. You would have also been down 69% in only 2.5 years. Good job team.
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Good vs Evil
The question I keep mulling over in my head is if Elon does succeed in purchasing Twitter would this be a net good or bad thing? Depends on who you ask.
Many on the political right see it as a good thing because they believe they and their most outspoken leaders (including Trump) have been silenced since the 2016 election. Many high profile accounts have either been shadowbanned or outright banned from the public discourse. They claim that Twitter's rules with regards to banning are nebulous, inconsistent, and left-leaning.
Many on the political left see it as a bad thing because they believe giving this kind of power to the richest person in the world is akin to your favorite dystopian sci-fi thriller. Never mind the fact that the richest people in the world already control the media—Rupert Murdoch, Jeff Bezos, Michael Bloomberg, et. al.
Elon's tweets come from his stream of consciousness (as they should) and his style is very reminiscent of the way Trump tweeted (off the cuff and brash). I think it scares the legacy media companies when they see a visionary who is widely admired by the youths but goes against the status quo. Because it's their job to control what people think, right?
“MSNBC’s Mika Brzezinski says Elon Musk Twitter takeover could set 'very dangerous precedent'”
Mika, “It is our job to control what exactly people think.”👇 @elonmusk
— Fibci (@Fibci2)
Apr 15, 2022
In a Ted Talk interview a few days ago, Elon sat down and discussed some of his feelings towards the app. When asked why he put in an offer to buy the company, his reply was relatively straightforward:
I encourage you to watch the full interview below to at least get a sense of where his head is at on the matter. Maybe he's just winging it. I don't know.
One thing that is true though, there is no company in the world that’s more important to the global discourse or even the practical application of politics than Twitter. And the ultra wealthy love having their finger on the pulse of this discourse. It is the ultimate source of power in this highly digitized, politicized, and connected world.
Whether or not you believe Elon's intentions or think he’s lying or has ulterior motives, his responses are interesting nonetheless. What was the trigger that made him set his sights on fixing this issue of free speech? His decision doesn't seem politically motivated as he's previously described himself as "half Democrat, half Republican" and "somewhere in the middle, socially liberal and fiscally conservative". I think he’s just a visionary who sees an inefficient organization and wants to fix it.
If acquiring Twitter is truly about free speech then why not go down the Trump route and just build your own social media company? Well, three main reasons stand out:
- He's the richest person on the planet so he can afford it (at least he says he can, but most of his net worth is tied up in Tesla shares)
- Buying Twitter is way more efficient than starting from scratch (See #1)
Stickiness is a measure of how memorable something is or how much it sticks to your mind. But it can also be defined quantitatively by taking the daily active users (DAUs) and dividing it by the monthly active users (MAUs). The closer the number is to 1, the stickier the app is. The last MAU report given by Twitter in Q1 2019 showed 330 million MAUs. Even if you take their current monetizeable DAUs globally, you still get a stickiness of 187/330 = 56%.
Generally apps with over 20% are considered good, and apps that reach 50%+ are excellent. Twitter falls in the excellent category and so does Facebook.
Even if you have the resources to acquire new users, you still need users who find value in the app and produce content regularly. Otherwise it's dead on arrival, like Truth Social. I signed up for Truth Social whenever it officially launched a few months ago and I'm still 518,062 in line waiting to be admitted in. Luckily, I was able to nab the @elonmusk handle. My plan is to sell it to him for $6.9420 million.
Think about why you come to Twitter every day. For me, it's a curated news and entertainment source and a place to make deals happen. There are so many intelligent people on the app providing value. Not only is the stickiness already ingrained by the power users, but it's also keeping them from switching platforms. Hence why it would be nearly impossible for Elon to create his own copycat Twitter from scratch. It's just not that easy, no matter how much the web3 bros want you to believe it is.
In summary, we still don't know how this Twitter vs. Elon vs. free speech saga will play out. It's all speculation from both sides of the aisle. My hope is that regardless of the outcome, it will be a wake-up call to Parag and Twitter's board. We want more innovation, creator tools, and transparency. We want a product we can fully trust and be free to openly express our ideas, no matter how controversial, without the fear of being de-platformed.
It seems like Jack had given up so much of what he fought for over the years since stepping down as CEO. And now with a potential new visionary at the helm, they could cut the fat and turn the ship around, or at least correct the course. Or maybe they will be like everyone else who has came before them and realized that free speech is one of the hardest problems of our time to solve in the age of fake news, misinformation, disinformation, online bullying and harassment.
i know the last day on earth gonna be so fun on twitter
— navi ✰ (@prettyboynavi)
Apr 16, 2022
That's all for this week. Thanks for subscribing and sharing.