On with Kara Swisher - Matt Levine on Elon Musk: Chief Twit & “Meme Lord”

Episode Date: October 31, 2022

The Twitter deal is done, and Elon Musk is now, officially, “Chief Twit.” Bloomberg Opinion columnist and “MoneyStuff” writer, Matt Levine, has been analyzing the deal (and the drama) over the past seven months. Now, Matt and Kara consider what the future of the social media platform might look like under Musk. They discuss whether Elon’s seemingly genuine belief in the utility of Twitter, paired with his business and engineering acumen, will be a game changer for the company. And they discuss how his principles will drive big decisions ahead, including potentially reversing the platform's ban of Donald Trump.  Before the interview, Kara and Nayeema talk about the violent attack on Paul Pelosi, husband of Speaker Nancy Pelosi, and the rising tide of violence against politicians. Plus, Kara gives Elon some unsolicited advice on the business, including how to avoid a version of Twitter that would make even Kara quit her favorite social media platform.  Do you want Kara’s (solicited) advice? Call 1-888-KARA-PLZ and leave us a voice mail with your questions!  You can find Kara and Nayeema on Twitter @karaswisher and @nayeema.  Learn more about your ad choices. Visit podcastchoices.com/adchoices

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It shows you how to make words resonate with your audience, helps with brainstorming, and lets you instantly create and revise drafts in just one click. Join the 70,000 teams and 30 million people who use Grammarly to move work forward. Go to grammarly.com slash enterprise to learn more. Grammarly, enterprise-ready AI. Hi, everyone. From New York Magazine and the Vox Media Podcast Network, It's on! bad cold. And I'm Naima Raza. Wow, Carrie, your voice sounds terrible. What did you under? It was doing 100 TV hits about Elon or it's the young kids and the germs? Oh, both. I think both of them. I think it's really when you have small children, you literally, I get everything. And so

I get all the different things. I'm so looking forward to Lice next. Oh, excellent. I had a lot better voice for our interview we did this week. Yes, it was with our guest, Matt Levine, who's the Bloomberg opinion columnist behind Money Stuff, which I think is probably the best and most fun to read newsletter on all things biz. Yeah, he writes for both the experts, the people on Wall Street, and also regular people completely understand what he's writing. Some of the credit default swaps, maybe you're not that interested in. I love credit default swaps. Oh, do you? Well, anyway, you can get that at the

Matt Levine column. Before we get to the interview with Matt Levine, which is about all things Elon, let's talk about our newsmakers. Yep. This week, they're Paul Pelosi and obviously Elon. Yeah, let's start with Paul Pelosi. The husband of House Speaker Nancy Pelosi is still recovering from surgery after a skull fracture and other serious injuries he sustained during a violent attack in a San Francisco home on Friday. The attacker arrived shouting, where's Nancy, which echoed the January 6th mob, of course. The suspect is being charged with attempted homicide, assault, burglary, and other felonies. But this was just horrific news to see. I mean,

Carol, what were your first thoughts when you heard? Oh, a political assassination. They were trying to get her. I mean, she talks about it, you know, now and again, like, and she tends to, just the way you saw her in those videos at the Capitol, she's like, all right, next, because she's kind of a mom kind of personality. Yeah, she's on high alert, but she's also used to being on high alert. Yeah, absolutely. And Speaker Pelosi has been particularly demonized by the GOP. I mean, even before January 6th, her house had been vandalized, a pig's head had been left outside of it. Right.

But this violence is also a broader issue for both parties. You know, we've seen this, the 2020 kidnapping attempt of Gretchen Whitmer, who's a Democrat, but also for Republicans. New York, a burnatorial candidate, Lee Zeldin, who's a congressman, was giving a campaign speech on stage

when a man climbed on the stage with a knife. Yeah. Supreme Court Justice Brett Kavanaugh had a man with a knife and gun arrested near his home. And as you were saying, it's just becoming more and more common. Capitol Police data suggests a surge in violence threats since the 2016 election.

And in the five years since, the number of recorded threats of violence is up to 10,000 in 2021. So what do you think is responsible for that? Some of this language, this language, you know, even after he was attacked, there was the governor of Virginia made an incredibly inappropriate comment, someone who is considered centrist, I guess, about how they're going to send her back to take care of him. And, you know, Carrie Lake, of course, it's something awful. Yeah, when asked, Carrie Lake tied the attack

to elected officials in California. And some extreme elements of the GOP are trying to paint this as a story about crime in San Francisco, and not as a story about violent political polarization writ large, which seems disingenuous here, really. around Hillary Clinton and around everybody in politics is going to attract someone who's going to make a move, just like Pizzagate happened, just like with Steve Scalise. Who's now the second most powerful Republican in the House. He's the whip. Yeah, he got shot at a congressional baseball game. Someone's going to jump off the page. 2017. Yeah, someone's going to jump off this sort of anger pit

that's been created online and do something. And that's, it's just inevitable. for government or being in government is getting less and less attractive. And these attacks are definitely adding to that layer. I mean, it's a huge price. People are paying hundreds of thousands of dollars to protect themselves. I think Warnock paid almost a million dollars since he was elected. Yeah, it's going to get worse. That's all. And that leads us to Elon. It does lead us to Elon, especially because he just replied to a Hillary Clinton tweet about Republican conspiracies leading to violence. And he, in response, shared a conspiracy theory about the attack on Paul, saying there is a tiny possibility there may be more to the story than meets the eye, which is just wild, and we don't need to dignify that.

And we have a whole interview about Elon coming up in a second with Matt Levine, so I don't want to dwell on it, but free speech was part of what motivated Elon to buy Twitter. He's also now saying the platform will have a content moderation panel. But is this kind of misinformation, this kind of violent rhetoric, just going to get worse in a world where Elon runs Twitter? It has been. Everyone's testing the system, right? Everybody who you'd imagine, they've come on and they say, now can I say the N-word? And then they say it. Now can I do this? Now can I do that? Now can I put Hitler memes up?

They've done it. This is just what they're doing because this is what they think it is. Actually, you know, it's one thing when you have the Babylon Bee making a tasteless joke, a trans joke, and it's tasteless. It was tasteless, but that's one thing. And there's some reason to argue that it's a comedy site.

They should have left that up. But this stuff is not the same thing. And I don't know what he's going to do to figure out. He can't decide all of them himself. And he's going to be cutting these safety staffs. So it could turn into a really bad situation. Or he's, you know, a lot of the noise coming from

his, I don't know what they are, his hangers-on, is about using AI to mitigate this and bots and this and that. But you can't stop people from being like this guy who attacked Nancy Pelosi. And so if you let them, let this stuff, it just, and also it's not a good business. Joel Roth, who's the, I guess the Twitter head of safety. Great guy.

Yeah, he was saying that it's a small group of, because there have been these reports. I think one report said there have been, you know, five times more racial slurs. LeBron James responded to that saying, you know, I don't know. He basically said, I don't know, Elon, but if Elon is doing this, he should get on top of it. But what he's saying is that it was just a small number of accounts, just 300 accounts who put out those 50,000 tweets. So in that sense, it seems like a more controllable situation, right? Because it's a small number of people. a small number of bots. I would like him to come up with innovation to stop this. It could be bots, it could be whatever, but you can't have the idea that it's okay to talk

like this. And that's from a business point of view. I mean, from a society point of view, it's disastrous. But from a business point of view, if he wants to make money at this thing and make a better product, people have to like being on there or guess what? They'll waltz over to TikTok and say, see you later. Do you think people will? I mean, obviously, Shonda Rhimes has decided she's going to leave. She's not on it that much. Brian Koppelman, I think, executive producer of Billions. So do you think people are going to leave? I don't know. For the first time, I've thought about leaving. And it's only because I got like an inundation of right wing craziness. And I don't want to listen to them.

It's like being at a party and having people come scream at you. I like Twitter. I love Twitter. I'm an active Twitter. I know. I was going to ask you if you were thinking about leaving Twitter. That's funny. I was.

I was like, I don't need this. I don't need this. I got other things to do, including getting more colds and everything else. But I don't need it. Like some of it was like really disheartening. And I don't need it. I hope not to. I like it. I like doing Twitter spaces. I'm an active user. I think it's in when it's wonderful, it's a wonderful product. You know, it's a good marketing product. But I don't know how much it

helps me. I don't know. I have barely tweeted before this year. I mean, barely. Obviously, Elon started his first day with layoffs. You know. So he got control of the company on Thursday night. By Friday, he had fired former CEO Parag Agarwal, chief legal policy officer Vijay Agade, as well as the CFO, the general counsel. And they were all fired for cause. No, he claims they were fired for cause. We'll see. I think there's going to be a lawsuit.

Yeah, that's obviously a way to try to avoid paying severance fees, trying to not get them on vested equity, one would presume. But yeah, it would be hard to justify that because there's hundreds of millions of dollars at stake for these folks. Sure, they're going to sue them. So good luck. Who do you think is the executive that's the biggest loss? Is it Vijaya? No, they would never have gotten along. She's so different. You know, she's done more for protecting people across the world than anybody else. But this Trump thing, even though it was Jack Dorsey's decision, whether Jack Dorsey takes ownership of it, he was the CEO at the time and made the final decision. You should see the stuff online about her.

You know, she was responsible for the decision, although Jack Dorsey. Made it. Endorsed and made the decision. They're not going to go after one of their bros, and so they go after her. He can't run away from this decision himself. made the decision. It was the CEO, but they're not going to go after one of their bros, and so they go after her. He can't run away from this decision himself. I'm sorry. He was the CEO. He let it happen.

Nobody broke his arm to do so, I mean, honestly. But whatever. That's who they're going to blame. But I think she'll take them to court, and she'll have her money. Okay, let's take a quick break. And when we're back, we'll have the interview with Matt Levine. Fox Creative. This is advertiser content from Zelle. When you picture an online scammer, what do you see? For the longest time, we have these images of somebody sitting,

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what he's talking about. And he's very funny. And he's writing about interesting stuff like the anti-ESG group. So just really good, not necessarily reporting on the deal, but analysis of the deal. Yeah, his reporting on this kind of

anti-woke crowd ethos of a certain money set in Silicon Valley has been particularly interesting. And that is also part of the context of Elon's acquisition of Twitter, obviously, from the text that we've seen. 100%. He has been doing so much coverage of this, Cara, that he has ended up having to write about Elon and Twitter on days that he was supposed to have taken off at least 16 times since April. Ah, wow. Too bad. That's the life. That's the life he's chosen. What even? It's a holiday in the news.

No, I don't think there's any holiday in the news anymore. But he's the best, and that's why I wanted to talk to him. All right. Here's the conversation between you and Matt Levine, which thankfully you had a better voice for. All right, Matt, this deal is finally done after you have got so much great content out of this. Elon tweeted, let the good times roll. He also tweeted the bird is freed. That is until he announced he's going to have to moderate for advertisers by creating a moderation council.

I would just like your top line thoughts on this after all these months of writing about it and thinking about it. I mean, you know, from my perspective, the top line thought is probably that the system worked. Like Elon Musk signed a deal to buy Twitter. He changed his mind. And he just sort of thought he could change his mind. And people are like, no, no, no, you signed a deal. It's binding.

And it turned out to be binding. So that's my top line thoughts. I don't yet have thoughts on what the Elon Twitter is going to look like. It'll probably be weird, but I think it'll be less weird than people think. I think it'll be pretty much like Twitter. So let's talk about the deal so far, because on several occasions he tried to back out. You think it would not have closed if not for this chief judge of Delaware's Chancery Court, who wouldn't put up with his delays and enforce the October 28th deadline? Yeah. I mean, I think that the Delaware courts are pretty serious about corporate law.

I think that the Delaware courts kind of conceive themselves as like the representatives of Delaware's incredibly strong interest in having companies incorporated there and having their merger agreements be predictable. So people get out of merger agreements, but like, you know, you have to find the part of the document that says you can get out of the merger agreement. And Elon Musk didn't even really try. Like he was not putting in a real good effort to sort of make a legal case. And his lawyers, you know, tried to clean up after him, but it didn't really work. Did you at any point think he could get out of it? I know you said, well, it could happen, I guess. You know, I worried. I worried. I mean, I think that there are not a ton of precedents either way for this particular thing, for like

one guy signing an agreement by a company. I thought the agreement was pretty clear. I thought he didn't have any real legal outs, but he was going to throw everything he had against it. And I didn't think the odds were zero, but it turns out that it was enforceable, and he ended up settling for 100% of the purchase price he agreed to, which is a pretty comprehensive loss. All right, I want to talk about that in a second. But one of the things that he did right away, he's made a number of moves, including this alleged content moderation board. He has not asked me to be on it yet, though I have a viewpoint. Maybe he'll ask me. He didn't ask you?

I haven't heard yet, but I'm crossing my finger. Okay, waiting by the phone. So he's dubbed himself Chief Twit, which is fine, whatever. He can call himself whatever he wants. He's going to pay that much money. And he fired four executives. Parag Agrawal, the CEO, Vijay Gade,

the head of legal policy, trust, and safety, who was part of the decision to boot Trump off Twitter, but also a big legal hero in efforts to protect users of the platform from governments, as well as CFO Neil Siegel, General Counsel Sean Edgert. Do you look at this or think this is a problematic thing or is that typical in these kind of corporate takeovers? I think that he's going to lay people off

and that's always been his plan. I think in terms of firing the four top executives that he clashed with, that's totally not a surprise. He wants to run Twitter his way and not the way they're running it, and that's why he's buying it. And I don't think any of them are surprised. I think he will be firing a lot of rank-and-file employees at some point, but I don't know how he could choose yet who they are. Yeah, but they really carried the water for shareholders. These executives managed to get him, along with the board, to stick to the price. Someone wrote, Powering had secured the bag for his shareholders and got fired. They should build a statue to him

in Shareholder Value Hall of Fame. Do you agree? Oh, yeah. I mean, first of all, like, it's not a pleasant, you know, fight to get Elon to actually close the deal, right? I mean, I've been critical of Twitter's board and management for sort of finding themselves in this position. Like, Elon has a vision for Twitter. It's not totally clear what it is, but he thinks it's valuable, and he thinks it's important, and he's just like a Twitter user. Like, he really likes Twitter. He does. And you never get that sense from Twitter's board or management. No. You never get the sense that they're deeply committed to the product, that they really believe in its social importance in the way that Elon says he does.

Arguably, the share price was languishing because the company was a little bit out of ideas. And that's why Elon Musk ended up buying it, right? It kind of reminds me of the people, I think it was Terry Semel who bought the Alibaba stake for Yahoo, which Yahoo kept running off the rails, but it didn't matter because they had that massive stake that made them very valuable. And in this case, they had Elon to pay for it. And you're quite correct in that they ran out of ideas. This has been a terrible company for most of its history. Twitter has in terms of economics. You know, its importance as a product and as like a sort of, you know, as Elon would say, like town square for democracy

is so much greater than its economic importance. Every politician wants to be on Twitter all the time. Why isn't it making more money? And, you know, the latest iteration of that is Elon Musk is going to try to make it make more money. Maybe. Well, the economics of this deal always have seemed out of sync to me. Also, Elon is throwing out $54.20. What is the value of Twitter? Yeah, I don't have a strong view on that. When he announced that price, that was like a normal to generous price. The stock price. Right. If you looked at sort of where Twitter was trading and the market, but that was before, you know, a big downturn in the market generally. It's not a great time in the market for social media stocks. And Elon Musk kind of

bought this social media stock at the peak. Right. He bought it at the peak and now he owns it when there's a lot of headwinds. Meta just reported problematic earnings. And it's quite good at making money over the years. The same thing with Alphabet, same thing with all the companies in the tech sector. But Twitter has not been. How does that, does it really matter if it's a private company and it's his? You know, it doesn't matter to shareholders, right? I mean, the shareholders have been cashed out. It matters a little bit in the sense that Twitter has a really big debt burden now. Like it's borrowing about $12 or $13 billion to pay for this purchase.

And so it's going to have something like one to one and a half billion dollars a year of interest expense, which would be difficult in better times for it to cover that interest expense. So if it continues to perform poorly financially, there's some chance of Musk's banks foreclosing on Twitter, which I wouldn't want to do if I were them. But like, you know, it's like a theoretical possibility. And, you know, Musk has co-investors and he will eventually probably want to take this company public again. I mean, that's normally what happens with LBOs. So you'd expect him to want to sell it again and to want to spruce up the economics in order to do that. And he has to show that. An LBO is a leverage buyout for people to know. For your piece, you wrote this, I love this line, but Musk in this story has some magic power. He can create tens of billions of dollars

of market value by waving a magic wand in a way that no ordinary mortal can replicate or even understand. I guess I almost believe that. Tell me the part you believe and you don't believe. I don't know. I mean, if you look at like the history of Tesla, I think most people kind of think of Tesla as a pretty good business now in terms of like, it makes cars and sells them for a lot of money and does volume and builds factories and stuff. But for a long time, like the stock price was way ahead of the business, right? And it would not make money year after year. And you know, the typical reason that people give for that is that there's an army of Elon Musk fans who will, you who will buy the stock and push up the price of the stock.

And if you believe some form of that, then can he add value to Twitter? Maybe. Now, separately, can he add cash flows to Twitter? And the reason people buy Tesla is not just that they like his jokes online. They also think he is some sort of business genius. And so if he can do some business genius to Twitter, then perhaps that leads to a, you know, 80 or 100 billion dollar valuation instead of the, you know, 40 billion he bought it at or the 10 billion it might be worth otherwise. Right. Do you think he's a business genius, Matt? I think he's obviously very smart and talented and has, you know, gotten a lot of things right. And I think he's obviously very smart and talented and has gotten a lot of things right.

And he runs all these very disparate, very aggressively complicated companies tackling difficult problems and making impressive progress on them. You can't look at SpaceX and be like, this guy's a dope. Right, no, 100%. He's really good at doing stuff. Great at products, great at products. You know, and Twitter is a challenged product that he thinks is important, can put his mind to, and perhaps make it better.

I don't know how. And when you look at like the stuff he said publicly about how he wants to do it, you're like, I don't know, that doesn't sound like it's going to triple the value of the company. But, you know, he's created a lot of shareholder value before, so might he do it again? Maybe. Does this make it a meme stock at some point? That's what you're suggesting, that they'll buy it no matter what and put up the value. Right. I mean, it's not a

meme stock in the sense that it's not a public company. Right. But if it did. You could imagine like Elon Musk buying Twitter today or yesterday and, you know, waiting like two weeks to get public again. And you've basically just taken it away from Twitter shareholders. And now you sell it back to like Elon Musk fans. And maybe you can sell it at a higher price. Obviously, he's not going to do that. Two weeks. No, that's an exaggerated joke.

Yeah, why not? Like, I think it's going to be, you know, three, four or five years, like a sort of more normal time frame where he can actually do stuff. And when he goes back to the public market, he can say, look at all that I've done to change Twitter and make it better. But to some extent, like having it go from a company that is a regular public social media company to being an Elon Musk company, that possibly adds value there. And that's like people who are Elon Musk fans would want to buy the stock. Yeah.

I want the T-shirt. I want the T-shirt and a share of stock in Elon Musk because he's done it before. Correct. That's the premise behind it is that he's done it before. He can do it again. Yeah. But also that he is a meme lord and he has fans who might buy, you know, like he became a meme lord for Dogecoin, the cryptocurrency.

And like that doesn't do anything. And nobody's expecting him to like make Dogecoin, you know, have cash flows. But like people bought Dogecoin because Elon Musk liked Dogecoin. By the way, it's up again. It's up again. Sure. There you have it. So how does Elon fix the business?

Let's talk about that. Who will be left at the company? Obviously, he's fired those executives. The employee compensation program will vest on Tuesday. So he has a lot of incentive to fire people. Well, now, I guess. Yeah. He fired senior executives who he clearly didn't like and who

he's been fighting with for months. That's not surprising. But I think he said that he wants to slim down the employee ranks pretty drastically. And I don't think he's alone in thinking that Twitter's overstaffed and has not done a lot of product innovation with all that staff. So it is not at all impossible that he can slim down the staff and continue to have a functioning Twitter and possibly even add some stuff that he wants to add. So when you're doing that, when people are coming in to try to redo, I called it the Mount Everest of turnarounds, you have to fire people and you've got to cut costs. That seems to be sort of one of the moves in the quiver. But you really do have to come up with ideas. You have to keep the audience,

keep advertisers, and then come up with new fresh things to sell to them. It seems like most of the innovation and interest is somewhere else, like on TikTok is what's eating everybody's lunch, not just Twitter, but Facebook and other places. I agree with that. But, you know, it's sometimes hard for me to see because I'm, you, and the center of gravity in the journalistic world is Twitter. Twitter, right. And it's clearly, you know, it is not where the teens are making the memes, you know? No. But it's where Elon Musk hangs out, right? It's where Donald Trump wishes he could hang out, right?

So I think that there continues to be this idea that it's culturally central. And the question is, can he revive that and monetize that? And the stuff that he's said about that is like, well, we'll charge people for subscriptions. Okay. Like, does that, does that sort of destroy its cultural value? Because like the value of Twitter is like, everyone can go there and make memes and sort of, uh, uh, exchange ideas and make memes and sort of exchange ideas. I don't know.

Exchange ideas. I like that. Well, whatever. Exchange abuse. Abuse on each other. But it's still never been the majority social media company. It's never been the biggest. It's important resonance with media people, politicians.

Do you imagine what could happen where they would leave from your perspective? Or that it becomes, because sometimes parties just stop being parties, right? Or clubs stop being clubs or whatever. We've seen that happen dozens of times for in the Internet space for sure. Yeah. The sort of immediate worries with Elon Musk takeover are, you know, if you sort of buy Twitter with the goal of free speech and then you just sort of like fire the entire content moderation team and then it's all just you know abuse and racism and misinformation then probably a lot of people are like i don't want this anymore i'm gonna go do something more pleasant with my life and you lose people um and i think musk's ideas for that are kind of like you'll be able to like choose your filter

so that you can have like the high racism twitter or the low racism twitter somewhere in between and like maybe that'll work but like it might be kind of hard to implement. But the other problem is just if you like, if you're firing everyone, or if you're like, sort of like demoralizing everyone, then like you lose not only the like, you know, people blocking Donald Trump, but also the people blocking like spam bots and crypto scammers. And then, you know, like part of why he wanted to buy Twitter is that his Twitter experience was like being constantly barraged by spam bots. And he wants to fix that, but he's also wants to fire everyone. So it's like, you know, he may end up making that

problem worse. And then just more generally, you know, like people like there's been very little product innovation at Twitter. And like, when you talk about like TikTok, like the thing they're doing is more appealing to more people and particularly to younger people. And so like, does Twitter risk becoming like the place where old journalists go to chat with each other? And how valuable is that? No, not at all. So let's talk about subscriptions. Very hard to do. Very, they tried Twitter Blue, which was a shitty product. I tried it. Didn't give me anything more. I find value in Prime. I find value in Netflix. I find value in Disney Plus. If you have any children, you have to watch Frozen 112 times a week.

Talk to me about what would be valuable here. What could they, could they charge big? I mean, for me, Twitter is a marketing opportunity for the most part and a bit of an addiction around news. Yeah. I mean, if you have like a hundred Twitter followers, Twitter is a way to consume some information that you probably wouldn't pay a dollar a month for. But if you have a million Twitter followers, Twitter is part of your business, right? Like you're in, you're in some sort of business of promoting yourself and you need Twitter. And if you charge those people, you know, 10 bucks a month, like that would be a easily, you know, written off expense.

That's the thing that people have suggested over the years. One thing he wants to do is just build more product, like just make more stuff that you can do to make a Twitter experience better. And like, presumably you could charge for some of that. Like, you know, you could charge people to have the low racism Twitter you know you could charge people to have the low racism twitter or you could charge them to have the high race on twitter i don't know i don't know which one is more valuable to more people but like probably the high races yeah right um so you can build more filters and more ways to customize your twitter experience and then like you can pay a little bit for a more pleasant twitter experience

and like twitter is very valuable because there are a lot of casual users who can see the memes that you tweet and in some low-touch way be fans of yours. And those people shouldn't pay for Twitter because they're very casual users. But there are a lot of very deeply addicted... Leaving aside that he bought the company, if Twitter had charged Elon Musk $1,000 a month last year to use Twitter, he would have paid it, right? He's rich and he loves Twitter. So something is there. But doesn't that take away from this town square idea of Elon's talking about if everyone gets to have their filtered Twitter or not? Does that take away if everyone's not in the same cesspool swimming around together? I mean, a little bit, but like, honestly, Twitter is never like it's a, you know, you choose your own feed, right? And like

Twitter's product, people have like been fighting against that for years where they are constantly trying to show you tweets that, that from people you don't follow because they want to, you know, increase virality and search more ads. Right. They're trying to be more like Facebook. But, um, the idea that everyone on Twitter should see the same thing has not really ever been a goal of the product. Uh, and when Musk says it's the town square, like he doesn't exactly mean that. Every tweet that he writes is published in a newspaper. It's published in the Wall Street Journal and on Bloomberg. For him, it's a broadcast platform,

which is not the same as the town square, but not a lot of people have a filter that avoids him. Yeah, no, he's doing it to get around reporters or whoever he wants to and just get his personality out there. Also, by the way, he interacts with people. People reply to him and he wants to and just get his personality out there. Also, by the way, like he interacts with people, like people reply to him and he replies to them. Like he does use it as a two way communication tool, which is maybe somewhat unusual for a, you know, celebrity with millions of followers. So will advertisers who make up the core of revenue stick around from your perspective?

Is this a critical business for them? He tweeted addressing advertisers about making Twitter warm and welcoming, which I don't think of Twitter when I think warm and welcoming, but maybe that's me. Look, I've never fully understood Twitter advertising. The ads I get are not great, you know, and right, like even given like as of last week, Twitter's trust and safety procedures, if you're serving ads on Twitter, you're kind of still next to some sketchy content. Yes, you really are. At least you're worried about that. There's very good ads on Instagram. There's very good ads on TikTok.

Everyone else seems to have decent ads, or at least useful ads. Yeah, I mean, Twitter historically is just worse at that. But they're also like, you use Twitter differently, right? You're not there to follow your friends and share your baby pictures so they can serve you ads for Disney Plus. Yeah. I've never gotten a Disney Plus ads. Yes, I've never got. I have a lot of children.

I've never gotten any children's ads. And I put up some ideas that I might have children. I'm not sure I have either. But no, like Twitter is like not about your life, right? It's about screaming about politics or making weird jokes. Yeah, they never separate the ick from the attractive. So is content moderation the answer? He's saying he's a free speech absolutist, but he's already punted a little by saying he'll form a content moderation council with widely diverse viewpoints, no changes to policy until he convenes.

That's his way of pushing the Trump decision down the road, presumably, I would think. I don't know. That seems like that to me. I don't think he's really a free speech absolutist. Oh, neither do I. Neither do I, Matt. I think that he, you know, like, he wants somewhat more Republican content on Twitter. But I don't think that he wants all possible content on Twitter.

I think there's going to be a lot of content moderation and I think he's going to, you know, it's like pretty easy for him to declare victory and be like, ah, Trump is back on Twitter. Free speech is free. You know, I think that like, as of last week in his mind, he was like the guy making the content decisions, right? Like, but as of now, he's like, wait a minute, like I can't spend my whole time deciding if some account with 200 followers should get back on Twitter after they tweet something racist. And I think he's realizing that and he wants to have, like any other company would, have some sort of process for doing this so that he can say, it's the process, it's not me, I don't have to make every decision personally.

Because that would be a nightmare. Except he's putting himself. Because he's like this insane micromanager. He might get into that for a week or two, but I think eventually he wants some sort of process that he can punt to. What will rise to his attention of decision-making, do you think? Trump, obviously. High-profile Kanye West, things like that, is that where he should stick to?

People will think it, because they think he's running everything. They think he's Willyie wonka i guess yeah i mean i think that my sense is that the content moderation stuff is like gets a lot of attention but what will probably take up more of his time is producty stuff stuff like you know figuring out how to do ads better, figuring out other ways to monetize, figuring out block lists, just making the experience better. In terms of moderation decisions, I think the place where he's going to get

where a lot of his focus is going to be is stuff where the pressures on him come directly from powerful government officials. I think he will get calls from powerful Republicans saying we need to unban these Republicans who did bad stuff. I also think the concern that a lot of people have has nothing to do with American politics. The concern that a lot of people have is that he's going to get calls from Chinese Communist Party officials saying, you, as the CEO of Tesla,

have tons of important economic ties to China, have tons of important economic ties to China. And we don't want Twitter to carry any pro-Tibet content or like anything about like, you know, Uyghur genocide. What happens in that case? Because he does, he is exposed there in his economic interests. He's already been tweeting about Taiwan. Yeah, nobody knows, man. Like he's like called for China to invade Taiwan, you know?

Like he's- Special administrative zone, Matt. I mean, come on. Right. Like he's expressed views that like called for China to invade Taiwan, you know, like he's special administrative zone, Matt. I mean, right. Like he's expressed views that are, that are like, you know, quite positive about China and everything else aside, like if you're the CEO of a company that has a lot of business in China, you want to avoid offending China and your personal statements. And that's understandable. But, uh, now he is responsible for the statements of, you know, hundreds of millions of people

on Twitter and could China lean on him? I don't know. And here again, it will be useful for him to say, no, it's a company. We've outsourced it to the trust and safety team. You know, we've, we're committed to free speech. And like, I don't think he's going to like, you know, ban discussion of Tibet tomorrow or whatever. Like, I think he has a genuine desire not to do that. Right.

I just, I don't know what the pressures will be down the line. Yeah. There won't be many. And he already seems willing to wade in there, which is interesting. And no matter what he does with China, he's going to be suspect because of his economic interests. So what's the best case and worst case for the business here? Oh, I mean, the worst case is everyone quits and the service becomes unusable and Twitter dies in like three months. Like, I don't think the odds of that are super high, but like the worst case here is, you know, zero. And like when I say zero, like it gets worse because it's like, yeah, there's debt that you have to pay. And then like, does a bank foreclose on it?

Does like Morgan Stanley end up owning Twitter? And like, they don't want that. So there's all sorts of worst cases. What's the best case? He does product innovation that makes it fun to use and that people want. And he does enough economic innovation that, you know, he's like selling more ads and or charging people for using Twitter in a way that is relatively frictionless so that like power users are paying as much as they're willing to pay and ordinary users are getting it for free

and are like, oh, this is fun. And then like the next step of that is he does that in like three years. And then he goes back to public markets and he's like, buy my Twitter. And it's worth a trillion dollars because it's the combination of like the business is good. And like it's the Elon Musk, you know, fanboy meme stock effect. Your business is ready for launch. But what's the most important thing to do before those doors open? Is it getting more social media followers? Or is it actually legitimizing and protecting the business you've been busy building?

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In, knowing what to do, when to do it, and who to hire. Start caring for your home with confidence. Download Thumbtack today. Even though this is Elon's deal, there's a lot of people involved, investors, 19 investors aside from Musk. I want to go through a lightning round of some of those different parties to this deal and ask what influence they have at this point. Morgan Stanley, which led the group of banks in providing $13 billion in loans for the deal. Role? Influence? I think they have his ear. His banker at Morgan Stanley, Michael Grimes, is a sort of well-known banker and has clearly been like his kind

of trusted advisor on this. And I think that like, we'll be giving Elon some financial advice about like what the market wants and, uh, and that matters, you know, in terms of being the creditor, I think that Twitter is just going to pay the interest for a while. Like, I don't like, even if things go poorly. And I think that Morgan Stanley in their role as creditor, just want no part of the day-to-day running of this business. No, we don't want Morgan Stanley running Twitter either. And they're not going to sell the debt off to other people who will be a little less kind to Elon, correct?

That's what's been said so far. But that doesn't mean they won't. It means that this is not a good time to sell the debt. So if the market changes, their minds might change um i don't know i thought about that because a lot of people have talked about like oh this debt will end up in the hands of like apollo and these really aggressive you know distressed debt investors who will like put the screws to elon i can't imagine wanting that right so i don't know i think the debt will be pretty quiet i also think that like i don't think Twitter is going to default

on the debt in six months. I think they have a lot of cash and I think they'll find a way to kind of make the payments. You don't think some activist investor is dreaming and getting in a fight with Elon? Someone just went up against Facebook when they have no influence at Facebook

because Mark Zuckerberg controls everything. What are they going to do? Make them feel bad? But like, I don't know. Like look at like Mark Zuckerberg's personality. It's true. Oh, I think there's an activist. I don't know if there's no lack of malignant narcissists on Wall Street. So we'll see. Prince Al Wahid bin Talal and the Kingdom Holding Company had a combined $1.89 billion in Twitter shares, which they didn't sell into this thing,

making him the second largest shareholder after Musk. He's been initially critical of the deal. He was kind of testy, in fact. Roll now, influence? I think none of his equity investors have any influence at all. I think a couple of them are like Elon's friends and VCs, and they might have some influence. But I mean, I think contractually they have no say over the company. And I think they are not in this because they want to run Twitter.

They want to hang. They're in it because they trust Elon. In Alouette's case, the interesting thing there is that he was critical of the deal because he thought Elon was underpaying for the shares. Now, I don't know if he still thinks that. But his rolling over his stock is a way to implement that view. If you think Twitter is worth $100 billion, you don't want to sell it at a $40 billion valuation, so you keep your stock. That's his bet here. And you don't care. You're so rich, you don't care. Well, I mean, if you think it's worth that much, he's going to keep his stock. Why not roll the dice? That makes sense. That actually

makes sense. What about VC, Sequoia Capital, $800 million, Mark Andreessen, $400 million, telling Elon initially he'd invest $250? Oh, yeah. I mean, again, I think as equity investors, they have just no power whatsoever. I think this is Elon's company. I think as like fellow rich VCs, like they can get him on the phone. You know, they can like text him. Okay. Binance, which committed $500 million. Their CEO went asked this week if he'd stick to the deal, responded with a not so rousing,

I think so. Yeah, they're in. And like other exchanges, they're like, we're going to put Twitter on the blockchain, right? So like Binance has definitely made some noises about how they will help Twitter go out, like integrate with the blockchain. I have no idea what that means.

I don't think it means much. I don't either. I don't think it means anything. And the other thing is like, we haven't talked about it really, but there's the super app idea where like Twitter becomes like the payments channel for America the way like, you know way WeChat kind of is in China.

And I don't put a high probability on that. Neither do I. But if you put any probability on that and you're a crypto exchange, that's a good business to attach yourself to. Sure. All right, two more. Jack Dorsey, he set the deal in motion. Do you see him having a big influence? No.

It's interesting that in Elon's filings, he was continuing to have conversations with Jack about investing. And we don't really actually know who the co-investors are, but it didn't seem like Jack was actually rolling his stock over. I don't know. But like, my impression is that Jack is kind of checked out from Twitter and does not have a lot to tell Elon about how to run it. All right. Last one. CFIUS, the Committee on Foreign Investment in the U.S. Is there any danger of anything here? There's been some reporting that like people in the Biden administration don't like that Elon Musk has sort of been acting like a Russian agent on Twitter. When he's not being a Chinese agent, but go ahead. Yeah. And like, he's like been more,

like he's like occasionally tossed off Chinese propaganda, but like he's been pretty committed to Russian propaganda and only for like the last like two weeks. It's not like a longstanding fondness for like aggressive Russian foreign policy. It's like two weeks ago, he was like, yeah, Russia should really keep Crimea. I call him Madam Secretary in case you're interested. Yeah. I mean, like, I think that the odds of CFIUS blocking Elon Musk, who is a U.S. citizen, from owning Twitter are like zero. I think there's some chance that some of his foreign investors, which include like Binance and Alwaleed and some others, would be kicked out of the deal because CFIUS technically has the ability to kick out minority foreign investors.

But like, why? Like, what's the risk to foreign policy of like these minority investors owning Twitter? So I don't think it's much. Yeah. All right. Let's move to ESG because some of the people are on Elon that were agonized by Twitter were part of his anti-woke crowd. Joe Lonsdale, Larry Ellison, Joe Rogan, you've been studying this anti-woke, anti-ESG

sales pitch as a new trend for those seeking easy cash. I'm going to read something from your piece, which I'm loving these anti-ESG pieces. Right now, if you go around saying, I am doing a financial business, but I will make a point of not considering environmental, social, governance factors, or even

I will consider ESG factors, but only to do the opposite of what those woke ESG funds do, people will fling money at you. Tell me about this. I think that this comes out of Republican electoral politics where Republicans say a way that we can appeal to voters is by saying that big evil financial firms like BlackRock are stealing your retirement savings to promote their big city woke values, right? There's some like kernel of truth to that where like, you know, these big investors are run out of big coastal cities and like many of their managers tend to be more socially liberal than like the average you know republican voter and so

they have views on climate change that are not necessarily like the political majority in america and so these esg funds take that like implement that view and try to buy stocks that will do well in response to climate change. And if you are a Republican, you know, candidate, you can make hay out of that because you're, you know, you're saying like traditional Republican things about like, you know, distrusting climate change, but you're also attacking big business, which like has a sort of natural populist appeal. But is it a good investment theory? Like, do they have any possibility of success? Contrarian thinking can be rewarding, but it also is... I don't think that this is primarily a financial... It's vanity investing, then. I think this is a theory of Republican

politics, but like the way you implement it is you take money away from BlackRock. You're like, our state pension will never invest in BlackRock. We'll take it away. And then there springs up a business to support that. But it's not primarily a like thought out financial, and I'm being unfair. And there are people who take it more seriously and are like, we think ESG is wrong. Like the financial analysis is incorrect and we will do a different financial analysis. But there are also a lot of people who are like, these Republican state treasurers are handing out all this money they took from BlackRock. I want to get some of that money, right? So I think there is a sort of obvious opportunistic form of anti-ESG investing

where you say, I'm not woke. Give me the money. So is it the end of ESG? No. I mean, it's weird because the US is very weird in this, in there being a very strong coordinated backlash to ESG. But the rest of the world, no, not at all. And so these really big global asset managers have a difficult time where it's very important for them to prove their ESG bona fides to certainly European investors and also to a lot of American pension funds or whatever. But also they have to be able to go to the Texas pension fund and be like, no, no, no, we don't do ESG at all. Right, right, so that we can invest in gas and oil.

So last thing, ESG is one trend, but you have written a 40,000-word cover story for Bloomberg Businessweek about crypto. Can you talk about your take on crypto? And you're pretty much in the middle, like, I don't know. It could be good, it could be bad. What makes it a good time to talk about it now since we're in obvious crypto winter? Yeah, I mean, like, we're in a crypto winter in the sense that crypto, like, lost a ton of, you know, $2 trillion of market value in the last, like, you know, during this year. But it's also, like, there's a trillion left, right? Like,

it's still a big, you know, asset class is maybe too nice a word, but it's still a big you know asset class is maybe too too nice a word but it's it's still a big thing right it still attracts a lot of investment and uh and people are still doing a lot of stuff and like building a lot of products in crypto i mean you know i as you say i'm in i'm kind of in the middle like i'm skeptical of a lot of the claims that have been made for crypto's like current usefulness or for like a future where we're all constantly exchanging coins for everything we do um but i also think that like crypto has built a pretty cool financial system and has had a lot of like interesting technical ideas uh and so like i'm sort of enthusiastic for like seeing what crypto is doing i also think that it's just an interesting thing to think about

because it's a real lens on what happens in finance what you know like what social status means all these questions that you know are sort of like big questions of of life sure are like crypto like makes them really clear and weird you know yes and they also testing old theories i think that's one of the points you were making that was so valuable to me is that they're not necessary there's nothing new under the sun and yet they're rethinking the things that are under and making the same mistakes in many ways. Yeah. Even just making the same mistakes that traditional finance makes is instructive because you get to like, you get to see it in like a lab setting, you know, you get to see, like I said that like

the crypto winter among other things just recreated the 2008 financial crisis. Like just some of the dumb stuff that, that happened in 2008 where everyone's like, well, we can never let that happen again. Crypto found a way to do it again, which is, you know, instructive.

Are the imbeciles and hucksters gone? Oh no. But I think like, I think the, the, the, you know, density of,

of hucksters is lower because like a lot of them, you know, some of them were like literally on the lam and then others are, you know, pretty chastened by being in bankruptcy. and i think just in general like you're less likely to fool people now into like doing like the dumbest possible thing because when everything was going up like you might as well do the thing that's going up the most and now people are you know it's like it's not obviously easy money anymore so so you've crypto elon anti-ESG. What is the biggest finance story

you're looking at next? Gosh, the next big story. I don't know. I'm interested in like, you know, I come from banking and a bunch of the big banks are sort of doing big moves. You know, Credit Suisse is breaking itself apart. Like Goldman Sachs is kind of rethinking its retail move. So there's a lot of stuff that's happening in banks, but mostly I've had no thoughts beyond Elon and Twitter and I'm going to, you know, like remove my brain from my head for the weekend. Well, you're very funny. People don't realize that you've made finance funny. You've made finance funny.

And also witty. Elon has done it too. Yes, he's done it. He's given you good material. But, you know, not every writer takes that material and uses it properly. And it's a pleasure talking to you. Thank you for having me. He was a great interview.

He really is. He's really interesting. He's got a great voice for podcasting, I think. I think he sounds very sultry. Sultry business news. Wow, Cara, that's your type? I just think he's very smart. He's smart and has a good voice for radio. He also has a sense of humor. Yes, he's very dry, but very funny. Very dry.

I thought the most interesting point for me or the frame that he put around it is how having a CEO who actually cares about Twitter, who isn't checked out of Twitter, who would pay a thousand bucks a month for Twitter, probably Elon would pay like 10,000 bucks for Twitter. I mean, chump change for him. That that would make him a different kind of leader who's invested. Yes. It actually is the most earnest picture I've heard painted of Elon in some way. Yeah, he was good. I thought the most important thing and something I've talked about is taking this thing public. If he cleans it up just a little bit, it could become a meme stock. There's a way out of this for Elon if he relies on his fans. And he does just a pretty good job cleaning up the balance sheet. Although he said not a meme stock, a meme lord with a

potentially good stock that he could drive up via. It's a meme stock. It's not a good business. And I don't know how he can triple revenue, but good luck. What about when it's the X app, when it's everything, when you're using it to order your food and your lice medicine for your hair? I'm going to give all my personal information to Elon Musk and his friends, yes. Mm-hmm. Sure. No. He's starting to insulate himself from these big decisions.

Do you think that he's going to be able to insulate? You know him. Is he going to be able to keep himself from big decisions? I don't know. I don't know. I just don't trust this group of people with my data. I'm not on Facebook. It's no insult.

I just don't think they have as much respect for my data as other people. So I'll go with people with respect. If there starts to be data problems, I'll see you later. But if Trump comes back, you're not going to leave because of that. He was there before. I think it's stupid and divisive.

And he broke their rules. But it's his ball. He can do whatever he wants. And you think that he's going to be proactive making that decision, or you think he's really going to be delegating it to some content moderation board? No, he's not. He's going to make it himself. All right. Well, we'll see what happens as we stay tuned for, I'm sure, hourly updates of Elon Musk owning Twitter, a new world, a new world, and hopefully for the recovery of Paul Pelosi as well. Indeed. All right, Cara, time for unsolicited advice. Who would you like to give it to today?

Do you want to give some to the new Twitter leadership? You know, interestingly, Elon asked me for some ideas, and since then we've had a little bit of a kerfuffle, but I would say a couple of things, that he has to really lean into the idea of an enjoyable product experience. People are making all kinds of calculations of why they're there. And if they're not enjoying it like they do on TikTok, for example, I think people won't use it. And if the product is full

of racists and anti-Semites and anti-gay people, I don't want to be there and I won't be there. And the most important thing is how do you attract new users, right? How do you get new people? I was talking to my son, Louis, and he liked Elon. His opinion of him has changed, really, through this whole debacle, I think. And I think one of the most important things is how are you going to get them to come on this super app or whatever the heck you do or make payments? Young people, how to get young people onto this new Twitter. Yeah, I asked them both, nothing, mom. There's nothing that would make us get on there. Nothing. And I said, not a truck of weed. And they laughed. I was making a joke, but no, nothing. There was nothing they could think of. Trust me. And they think it's, they think all this stuff is a time suck. Well,

yeah. And the question is, is Twitter relevant? I mean, it's used by a bunch of older people who are influential in media. Not everybody has Twitter, but... Let me just say that's exactly what they said to me. They're like, it's a bunch of old ladies like yourself yelling at old men like yourself. And I was like, thank you. You are both like an old man and an old lady. That's a good way to end the episode. They have no interest, Elon. So figure out something they'd have interest in, but it's not going to work anyway. So we'll see. All right. Read us out, Cara. they'd have interest in, but it's not going to work anyway.

So we'll see. All right. Read us out, Cara. Today's show was produced by Naima Raza, Blake Nischik, Christian Castro-Rossell, and Raffaella Seward. This episode was engineered

by Fernando Arruda. Our theme music is by Trackademics. If you're already following the show, you get a treat. If not, here's the trick. Go wherever you listen to podcasts, search for On with Cara Swisher and hit follow. Thanks for listening to On with Kara Swisher, and hit follow.

Thanks for listening to On with Kara Swisher from New York Magazine, the Vox Media Podcast Network, and us. We'll be back on Thursday with more.