Front Burner - Tactics or trolling: Elon Musk's play for Twitter

Episode Date: April 20, 2022

Elon Musk, the world's richest person, is making a play to take over Twitter. It's a platform he dominates already with 82 million followers. The bold but unconventional tactics he's employed are on brand for Musk; part tech billionaire, part internet troll. Today on Front Burner, we're talking to the Washington Post's Will Oremus about Musk's latest endeavour, some of his past controversies and whether it's even possible to hold the world's richest man to account.

In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. This is a CBC Podcast. Hi, I'm Jamie Poisson. We've been hearing all week from people with dreams about what the next era of humanity is going to be. And now, arguably, the biggest visionary of them all, Elon Musk.

And now, arguably, the biggest visionary of them all, Elon Musk. So last week, Elon Musk was at this TED event in Vancouver. That is my driving philosophy, is to expand the scope and scale of consciousness that we may better understand the nature of the universe. And in addition to talking about the answer that is the universe, he also opined about his most recent endeavor, to take over one of the world's biggest social media platforms. Elon Musk making the pitch to buy Twitter in one fell swoop,

posting early in the morning, I made an offer, and sharing a securities filing where he pledges $54.20 per share. Twitter is already a platform that Musk dominates. He has 82 million followers. Twitter has become kind of the de facto town square. So it's just really important that people have both the reality

and the perception that they're able to speak freely within the bounds of the law. And for all of his talk about this de facto town square, he's also known to troll and make some pretty cringy, dumb jokes on there. Like this one from the other week. 69.420% of statistics are false. I can't believe I just said that out loud on a podcast. Today on FrontBurner, we're talking about Elon Musk, the world's richest person by far, the guy who runs the electric car

company Tesla, who owns the rocket company SpaceX. He's obviously had some spectacular successes, but also some really big failures. And his business practices have come under scrutiny in recent years. I'm joined by The Washington Post's Will Orimus. He's been closely following this whole Twitter saga, but he's also written about Musk, the man at leg. Hey, Will, thank you very much for being here. Thanks for having me. So this whole Twitter saga started around two weeks ago now. Elon Musk initially said he's buying up all these shares in the company.

Then he was offered a seat at the board, which he turned down. And then he really upped the ante saying that he wants to buy the company for 43 billion bucks. And I wonder if you could just briefly tell me, what does Elon Musk want with Twitter? Elon Musk is someone who spends a lot of time on Twitter. It's become probably his favorite hobby, just judging from the sheer amount of tweets he sends on a given day. And he's also the kind of person who, when he gets involved in something, his mind immediately starts thinking, okay, this is not optimal. I could do this better. I could run that better. And I think that the simplest explanation for why Elon Musk

wants to buy Twitter is just that it's become really important to him and he feels like he could do a better job than the people who are running it today. He says it's not about the money. He says he sees it as having kind of like a higher purpose. My strong intuitive sense is that having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization. But you've described yourself. I don't care about the economics at all.

Do you believe him when he says that? I believe he believes that. You know, usually when a business person says it's not about the money, you hold on tight to your wallet. I think in Elon Musk's case, that may actually be true. I mean, he's got more money than any human could possibly ever need. His net worth, by the way, is probably about five to six times the value of Twitter, a global public social media platform. He's worth some $270 billion, depending on the estimate. So he doesn't really need an extra billion or two here or there. And

if he did, buying Twitter would be a weird way to try to go about it. I mean, this has never been a particularly profitable company. It's a company whose influence on global culture and politics really outstrips its actual value to shareholders. And so the board of Twitter is not jazzed about this. They say that they've adopted something called a poison pill, which is a way for shareholders to protect the company from Musk. Right now, Elon Musk has about a 9% stake in Twitter. If his shares grow to 15% or more, the poison pill kicks in and the company makes discounted stock available to others to dilute his stake. Twitter says its plan was unanimously adopted by the board, writing, it will reduce the likelihood that any entity, person or group gains control of Twitter.

Why are they so resistant to this guy wanting to take over the company and I guess, you know, in his words, make it better, optimize it more? Twitter's board has been very tight-lipped about their thinking around this bid. And truthfully, that's what board members are supposed to do. Like they're supposed to deliberate internally, figure things out behind closed doors, and then make a decision. That is not how Elon Musk works. Elon Musk thinks out loud. And in particular, he thinks out loud on Twitter via tweet. So from the moment that he disclosed this ownership stake he had taken in Twitter, he began tweeting to his 80 million plus followers, a bunch of wild ideas, suggestions, polls for how he could, quote unquote, fix Twitter or make it better. That's not the type of behavior that a board tends to feel comfortable with from one of its members.

And that may be part of their reluctance to accept him as one of the fold. Now, Musk had a chance to be one of those board members. When he took his ownership stake, there were talks about bringing him onto the board. We've got some breaking news to bring you right now, which is that Elon Musk is now being appointed to Twitter's board of directors. He's going to serve as what's called a class. And he was all set to join the board when suddenly it fell through. Elon Musk will not be joining Twitter's board of directors as previously announced. The social media giant

says it will remain open to Musk's input. And it fell through on a Saturday morning when he was busy tweeting all kinds of stuff about how Twitter should maybe turn its headquarters into a homeless shelter since the employees weren't going there anyway. I think that was a jab at Twitter's liberal remote work policy. Yeah, yeah, yeah. Do you want an edit button? That was another one, right? Yeah, the edit button. I think they were okay with the edit button. They were like, okay, he's polling users on an edit button. That's fine. We'll roll with it. By the time it got to him suggesting that they remove the letter W from the name Twitter, which I guess was a juvenile anatomy joke, and saying, is Twitter dying and posting stats that show some of the celebrities

who used to use it aren't using it as much. I mean, that was probably a bit beyond the pale for them. But it's actually not clear whether those tweets, which he later deleted, came before or after the decision for him not to join the board. But either way, I think this is not a person that if you're a board member of Twitter, this is not a person you're comfortable working in tandem with. He's not really a team player type. And so now the question is, can he take over the company for himself? The board's initial stance on that is that it wouldn't be in the best interests of the company and its shareholders. You know, he's offering a price that is above its current share price, but it is below the fairly recent peak of Twitter's share. So it's not like he's offering more than Twitter has ever been worth before.

And there are questions about how serious is he really in the long term? And clearly, he's serious now about wanting to own Twitter. How serious would he be in the long term about trying to operate the company in the best interests of the he be in the long term about trying to operate the company in the best interests of the shareholders and in the long term interests of the platform? He's a very mercurial person. And in a way, the fact that he doesn't need the money is a little scary to people who are trying to look out for the shareholders' interests and the interests of the company, because he could just, you know, in a fit of rage, blow it up if he felt like it and still be one of the richest people in the world. So he's not vulnerable in that way that might constrain his behavior.

Speaking of stuff he tweeted, he tweeted, Love Me Tender, which is obviously the name of an Elvis Presley song. Love me tender, love me sweet. But was also a hint to shareholders maybe about what he's thinking right now. Although, frankly, it doesn't seem like much of a hint. But can you sort of explain to me what might come next? What he's referring to there clearly in tweeting love me tender is what's known as a tender offer where he tries to go around the board if the board won't accept his offer to buy Twitter and take it straight to the shareholders of Twitter and pay them a price that they're willing to accept to gain the amount of shares he would need to take control of the

company. The other thing I wanted to ask you before we move on to Elon Musk, the guy, is one particular part of the story which has to do with financial regulations, the SEC, Securities and Exchange Commission, and how Musk notified them and characterized the purchase of his original shares. Can you just tell me what happened there? purchase of his original shares. And can you just tell me what happened there? Musk is known for playing fast and loose with regulations from the Securities and Exchange Commission. And it appears that that's what he did here. So there is a law on the books in the United States that requires someone to disclose to the SEC when they acquire more than 5% of a stake, more than 5% stake in a company. Musk

apparently passed that 5% mark with Twitter on March 14th before anybody knew that he was buying up shares of the company. He did not immediately disclose it to the SEC and instead continued buying up shares. Now that allowed him to keep buying shares at the same stock price that they were before his bid was known. By the time he did disclose it 11 days later, the stock price shot up. But at that point, he had already acquired 9.2% of the company. So he was able to acquire a larger stake without disclosing it and save himself a bunch of money because if it had been known earlier that he was buying up a big share in the company, the stock would have gone up earlier and he would have had to pay that higher price.

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So when we look at what has been happening around this Twitter saga, it kind of feels like super classic Elon Musk to me, right? Like we're talking about breaking corporate norms, possibly skirting regulations, trolling on the internet, generating a bunch of headlines, making money or saving money along the way. And I wonder if now we can rewind a bit

and talk about his backstory here. Tell me a little bit about uh where elon musk uh started elon musk grew up in a wealthy family in south africa i read the encyclopedia i read every age um let's see probably age nine or ten okay Okay. You were starting reading? Well, not that I actually wanted to read the encyclopedia, but I ran out of things to read, so in desperation I read the encyclopedia. He came to Canada and the United States for college,

and he started getting interested in high tech and the Internet. This was in sort of the early days of the dot-com boom. There weren't very many people on the Internet, and certainly nobody was making any money at all. Most people thought the internet was going to be a fad. Not this South African entrepreneur. Musk sold his first computer program at the age of 12, and he hasn't stopped selling since.

Wow. He co-founded a company called Zip2 that eventually sold to PayPal, the payments company. A year ago, Musk sold his software company, Zip2, which enabled newspapers to publish online for $400 million cash. Receiving cash is cash. I mean, those are just a large number of Ben Franklin's. He joined the leadership at PayPal and helped to run it for a while. And I wasn't around at the time to cover it, but it was apparently pretty tumultuous. But he left with a pile of money.

He was quite wealthy, and then he was looking for even bigger and better projects to take on. And the first one he took on was like classic Elon Musk. I mean, you know, a lot of people, when they make money from a tech investment, they will go on to fund other tech projects or maybe, you know, start sort of a small vanity project, you know, a niche thing that appeals to their interests. Musk decided to found a private space exploration company, which became SpaceX, with the goal of eventually reaching Mars and perhaps someday colonizing Mars for Earth. How much time before there's regular travel back and forth to Mars? Roughly.

Like a real civilization on Mars. Well, I think it's going to take a while to build a real civilization. So that improbable venture went through a lot of close calls with bankruptcy and with regulators and all that sort of thing. But it has actually taken off. I mean, it's sending rockets to space now. Six, five, four, three, two, one, zero. Ignition. Stop. Go Falcon. Go Dragon. Got speed. Axiom one. The thing about the future is just, if we're out there exploring stars, it's so much more exciting

and inspiring than one where we are forever confined to Earth. You know, he hasn't colonized Mars yet, but that is a going concern that he still owns. Next, he got involved at the very early stages of an electric car startup. Now, this is back 15 years ago, 20 years ago at a time when electric cars were thought to be a dead letter. I mean, you know, General Motors had tried it. A few people had tried it. Now, this is not a new idea. They've had electric cars for a long time. Why aren't there more of them about? Well, about 50 years ago, these cars were much better than any petrol car at the time. And then as they progressed to the development of the petrol car,

these became dormant for about 50 years. Nothing's been done. They couldn't make it affordable. They couldn't make it affordable. They couldn't make the economics work. The cars were slow and clunky. They got a bad reputation. Nobody was interested in electric cars. He started it up and said,

we're going to do this a totally different way. He quickly took over control of the company from the people who had originally founded it. And he had them develop a super-fast electric sports car to show we can actually turn the image of electric cars on its head. We can make them something desirable. We can make them a dream car. So he built the Tesla Roadster.

This is the first production model. This is the first customer car. This is the Tesla Roadster. You know, the all-electric, zero-emission Roadster. If it looks a little dirty, it's because I've been driving it. It's got 500 miles on it and very exciting. And then from there, his goal was to gradually turn that into a mass-market car company that would make electric vehicles happen.

And in fact, he and Tesla have largely done that. I mean, they have missed a lot of promises along the way. They've missed a lot of deadlines. They've had a lot of controversies along the way. But Tesla has, in fact, sparked this electric vehicle revolution. And now all the major automakers in the world are trying to compete with Tesla and keep up with Tesla on the electric vehicle front. I mean, you know, we could go on all day. I mean, he started Neuralink, a company that's going to implant, looking to implant computers in people's brains to fuse man and machine in a way that's never been done before.

That one, not going so well so far. I mean, that one really hasn't gotten off the ground very much. But he's always restless. He always wants to do the biggest thing possible. He's, you know, he does like nothing but moonshots, right? And so his latest moonshot, I guess, is going to be to try to fix this notoriously troubled but highly influential social media platform, Twitter. I know like Robert Downey Jr., when he was getting ready to play Iron Man, he went to Tesla, he, like, based his character on Elon Musk.

Mr. Musk, how are you? Congratulations on the promotion. Thank you very much. Thank you. Those Merlin engines are fantastic. Oh, thank you. Good idea for an electric jet. You do?

Yeah. Then we'll make it work. You mentioned controversy, failures along the way. And I wonder if we could spend some time talking about some of these failures, some of the big ones. Yeah. So the list of Elon Musk's failures is even longer than the list of his successes. Although to be fair, that's probably true of a lot of entrepreneurs. He said that in, he said in 2017 that he was going to build a tunnel to facilitate high-speed travel between New York and DC. So you could get from New York to DC in 29 minutes. He had promised a Tesla semi truck in 2017. He promised it would be there by 2019. It has still not happened.

One of the most outrageous ones was when 12 youth soccer players were trapped in a cave in Thailand in 2018. Musk very publicly came out and said, well, I'll save them. I'll build a submarine that'll get them out. This mini sub will get there in 17 hours. And in fact, they were rescued by conventional means with cave divers who do that kind of work normally. And the main thing that Musk came away with there was a libel suit for having called the cave diver a pedophile. Unsworth was there, called the sub a PR stunt, saying Musk could, quote, stick his submarine where it hurts. Well, Musk then went to Twitter saying he never saw Unsworth on scene in Thailand and then tweeted this. Sorry, pedo guy,

you really did ask for it. Followed by another tweet, tweet, bet you a signed dollar it's true. Now, Musk later deleted the. Musk was able to get that suit dismissed, but, you know, not exactly the result that he had that he had promised. I mean,, but, you know, not exactly the result that he had promised. I mean, the list, you know, again, the list goes on. Yeah, I don't want to blow your mind, but I'm not always right. Yeah, yeah, and I remember, you know, talking about Tesla and self-driving cars, right? You know, in 2014 and 2016 and 2019, you know he said that that he was certain that full self-driving cars will be ready that year and that it would probably be safe to fall asleep at the

wheel by the end of 2020 tesla car next year will probably be 90 percent capable of autopilot like so 90 percent of your miles could be on auto. All Tesla vehicles actually in the factory have the hardware necessary for level five autonomy. I think we will be feature complete full self-driving this year. And I wonder, what do you make of all of these grand promises that don't necessarily or haven't come to fruition? promises that don't necessarily or haven't come to fruition. Is this like a Silicon Valley,

like fake it till you make it kind of thing? Is there something else going on? Yeah, I mean, the self-driving cars are one that had a direct impact on consumers. My colleague at the Washington Post, Jeffrey Fowler, wrote a column where he led with the fact that in 2019, he leased a Tesla and paid several thousand extra dollars on the promise from Musk that it would soon have what he called full self-driving capabilities. Jeffrey got to the end of his lease and had to return the car and the full self-driving still wasn't ready. So he's a guy who promises the impossible and he does it again and again. And then in many cases, I mean, he kind of does his damnedest or pushes his employees to do their damnedest to make it happen. And in a few cases, I mean, they get close, you know, they promise he promises that he'll build a thirty five thousand dollar mass market electric car.

And then he builds a mass market electric car that was like 40 some thousand dollars. And it was a couple of years late. It still was a huge hit. It still has transformed the auto industry. It wasn't what he claimed it would be. Then there are other circumstances where he makes those outlandish promises and then sort of seemingly loses interest or tries to send them down the memory hole and never speak of them again. He seems like a guy who only gets motivated when he's promising the whole world and on a tight deadline. And he doesn't seem to think a lot about the repercussions for everybody else who is counting on him to actually deliver those things. He seems to think that the ends justify the means.

And as long as he ends up having built some cool stuff or done some interesting stuff, it doesn't really matter if he broke hundreds of promises along the way and left a lot of people hanging. Have there been any consequences for him? Elon Musk has faced very few consequences for somebody who has broken as many promises as he has and acted as far outside of the norm as he has on many occasions. I mean, this is partly because he is fabulously wealthy and he's given a lot of leeway by investors to do things that they would not allow other executives to do. executives to do. I think because he's had some of these smash hit successes like Tesla and SpaceX, he gets the benefit of the doubt to a degree that almost nobody else on earth gets. He has millions of rabid fans who will excuse anything he does. There's like a little cottage industry of people whose job is to go around saying why, you know, whatever Elon Musk seemed to do wrong

is actually right. And if you don't understand it, then you're just, you know, whatever Elon Musk seemed to do wrong is actually right. And if you don't understand it, then you're just, you know, you're the sheep or the idiot who doesn't get that he's operating on a higher plane. He has faced, you know, some procedural headaches. He tweeted at one point that he had the funding to take Tesla private. Of course, that sends the stock markets going bonkers in response. You're not allowed to do that under SEC rules, especially if it's not true. It turned out he didn't have the funding secured. And so he faced a lawsuit and had to settle with the SEC. It required him to appoint some outside leadership to Tesla's board. It required him to have what was jokingly

called a Twitter sitter. You know, he has to have somebody oversee his tweets about the company. You know, he's been accused, his company has been accused of labor violations. You don't see the people who are being cut by machinery or who are losing the use of their arms through repetitive motion problems or who are being exposed to toxic fumes and having,umes and having long-term medical problems because of that. That's reveal reporter Will Evans there. This morning, a former Tesla contract worker speaking out after a San Francisco federal court decided the electric car maker must pay him $137 million over claims he suffered racist abuse at the company. So he's constantly facing lawsuits. I went to a trial last year in Delaware where he was facing a lawsuit from Tesla shareholders who argued that he misled the company about the

financials of SolarCity, which was a solar energy company that was run by his cousin. He acquired SolarCity for Tesla, and Tesla shareholders alleged that he wasn't forthcoming about the state of SolarCity when he made that deal. That verdict we're still waiting for. So, you know, he's like a Wild West character, you know, he's on the run, constantly on the run from the law, but they never seem to catch up to him. Though it strikes me that the stakes are quite high. Like this is a guy that owns a car company, a space rocket company. These are areas where one really wants and expects, I would imagine, accountability. For example, I know that there have been real questions raised about the safety of his vehicles, right?

Yeah, I mean, it matters a lot whether your self-driving promises turn out to be backed by a safe product that people can rely on. And we've seen again and again Tesla's autopilot or self-driving technology make decisions that led to crashes, even fatal crashes. Tonight, Tesla confirming this car

was in autopilot mode when it crashed in Northern California, killing the driver. Walter Wong was behind the wheel. And the, you know, legally, because of the way the regulations are, Tesla hasn't been held liable for those to any significant degree. There's the human driver is supposed to be in charge. Of course, Elon, you know, he kind of wants to have it both ways. It seems to me he markets this technology as something where it's autopilot, right? It'll work on its own. You don't have to be in charge. And so then Tesla drivers film videos of themselves sitting in the back seat while the autopilot drives. I mean, all these YouTube videos showing

off its capabilities. But then when it crashes and somebody dies, oh, it was, well, you know, we do say in the fine print that you're supposed to have a human driver and they're supposed to be paying attention. So it's actually the driver's fault. I guess, you know, the question that pops into my head there, and I know this is a thread that you kind of alluded to already in the conversation. But is it even really possible to hold a man as rich as Elon Musk accountable? Like $20 million fine by the SEC is like a drop in the bucket for this guy. No, I don't think he can be held accountable by conventional means. And the question is, can he be held accountable by any means? I mean, if he were to go even further and do something that was clearly criminal, you know, presumably

he would face criminal charges in a criminal trial. So I don't think he's entirely above the law, but it does kind of raise that question when again and again, he flouts the rules and the norms and feels like, you know, society only rewards him for it. I wonder if we can end by going back to that lawsuit that you talked about earlier, the one that dealt with Tesla's decision to buy that solar firm called SolarCity in 2016. And it turns out this plan internally at Tesla was being called Project Icarus after the Greek myth about the guy who flew too close to the sun.

And asked about this on the stand while that lawsuit was playing out, Musk was kind of cheeky, smiling. As he said, it should have been called Project Daedalus. And I wonder if you could leave us today with what you made of that response and what you think resonates with that old metaphor and mosque today. So in the Greek myth, Daedalus was the brilliant inventor and he crafted wings for him and his son Icarus so that they could fly out of a prison. Daedalus warned Icarus not to fly too close to the sun. He said, your wings will melt and you'll die. Icarus gets up there, he's flying, he's heady with the power of flight, he's intoxicated, and he flies too close to the sun and scorches his wings and crashes and burns. Daedalus, the inventor, survived, although not without a certain amount of guilt and being haunted for his role in Icarus's death. So it was interesting that on the stand in Delaware in the shareholder lawsuit, it was brought up that this project to buy SolarCity had been called Project Icarus. That could mean that Musk's own deputy, his chief financial officer, saw this as Musk flying too close to the sun. I mean, Musk trying to go too far in buying a company that was literally about harnessing

the power of the sun, by the way. But Musk said, no, no, no, you've got it all wrong. I'm not Icarus. I'm Daedalus. He's the brilliant inventor. He's the one who survives. He's not the one who crashes and burns. And so I just thought that was sort of a poignant illustration. I mean, when you're flying too close to the sun, there's two ways it could go. You could end up crashing and burning, or you could somehow survive and others may crash and burn, but you somehow escape unscathed. And Musk clearly has a lot of confidence that he's going to be the one who escapes unscathed. Be that as it may, I think he's overlooking the fact that a lot of the people who have tried to travel along with Musk on this journey have, in fact, crashed and burned, that they've

suffered a lot of the consequences that he himself has not yet suffered. And it's sort of the perennial question about him is part of why he's such an object of fascination is, you know, will this be the time that he finally goes too far? Is this the thing that will finally bring it all crashing down on his head? And it hasn't happened yet. Then again, you know, it doesn't mean it won't. Well, this was a super interesting conversation.

Thank you so much for coming by. Thank you. Thanks for having me. doesn't mean it won't. Well, this was a super interesting conversation. Thank you so much for coming by. Thank you. Thanks for having me. All right, that is all for today. I'm Jamie Poisson. Thanks so much for listening. Talk to you tomorrow.