MarketWatch: Elon Musk just might have a plan for X, but the rest of us may end up footing the bill

Elon Musk, agent of chaos, is at it again.

During his disruptive nine-month reign as Twitter owner, Musk has systematically stripped the microblogging service of its name and upended most of its major features.

A week ago, he went even further: Twitter’s name — its very tweets — were renamed and rebranded like a box of cereal. X is now officially the land of X’s, with conference rooms at the company’s San Francisco headquarters sporting names like “eXposure,” “eXult” and “s3Xy.” Beleaguered fans of the nearby Oakland A’s can relate: The baseball team’s owner, John Fisher, has pulled off a similar decimation of his property’s value in a bid to move the team to Las Vegas.

Read more: Will a tweet really now be called an X, and will that fly with users?

But is it merely reckless behavior, or is it calculated capitalism? Maybe the mercurial Musk has actually been forthright and transparent in his dismantling of Twitter since he bought it for $44 billion last year. There likely is a method to Musk’s madness if you consider his track record at Tesla Inc.
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and SpaceX, investors and entrepreneurs in Silicon Valley said in a series of interviews.

Just as many, however, declined to comment on Musk, admitting they had no idea what he’s thinking.

Theories include Musk selling Twitter and turning X into a secure public forum for free speech funded by government subsidies and taxpayer money, or into a payment and cryptocurrency site of some sort, or even into a video-first destination.

Musk has proved masterful at maximizing government subsidies and contracts, taxpayer money and other goodies for Tesla and SpaceX. After acquiring SolarCity Corp. and consolidating its operations with Tesla, for example, the billionaire was able to secure free factories, obtain vouchers for consumers to purchase solar panels and electric cars, and line up NASA to underwrite costs for SpaceX, one venture capitalist claimed.

SpaceX received $2.8 billion in government contracts last year, according to The Information, and has raked in $15.3 billion since 2003. In fiscal 2022, NASA awarded the company about $2 billion in contracts out of an approved annual budget of $24 billion, according to Statista. Meanwhile, New York state spent nearly $1 billion over the past decade on Musk’s vision for the largest solar-panel factory in the Western Hemisphere. But Tesla’s facility in Buffalo has brought in hardly any business and a state comptroller’s audit found just 54 cents of economic benefit for every subsidy dollar spent on the factory, according to a Wall Street Journal report.  

Burn it down

A longtime valley entrepreneur is convinced Musk will combine payments with what becomes of X.com and envisions customers sending each other tokens. Another sees it being transformed into a video site that lures in consumers with the provocative X brand name.

A far more sinister take is that the site will be flooded with right-wing content and will have little moderation as part of a naked attempt to spread misinformation and raise funds for Donald Trump in the 2024 presidential election.

In other words, expect more of the unexpected in the months to come for X. Plans may change quickly, but one thing is constant: Musk will continue to reshape X in his preferred image with little regard for Twitter’s past.

From the beginning of his ownership of Twitter, Musk has been single-minded in just one thing: Burn down the house and create something entirely new out of the ashes. This could be the logical reason behind his seemingly rash moves to charge users for blue check marks, to limit the number of viewable tweets and direct messages for nonpaying members, and to allow the return of far-right extremists to the platform.

But in imposing those changes and dropping the Twitter name, Elon Musk will have single-handedly wiped out more than 15 years’ worth of value in a brand that had secured its place in America’s cultural lexicon, say brand experts.

This is an extremely risky move, they say, because with X, Musk is essentially starting over. Meanwhile its competition — namely, Meta Platforms Inc.’s
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Threads — is gaining ground while advertising on X shrivels. On Tuesday, X reportedly cut ad prices to woo brands back.

“By killing Twitter, Musk has cancelled a cultural icon,” Zachary Estes, a marketing professor at Bayes Business School in London, said in an email.

Read more: ‘Musk is wiping the slate clean and starting over.’ Why Twitter’s rebranding as ‘X’ could actually work.

The Threads threat

As X.com moves away from the Twitter legacy, Meta Chief Executive Mark Zuckerberg claims Threads is adding tens of millions of users a day, although user engagement and content are down after an initial surge when Threads was introduced earlier this month. Many Threads users, desperate to cut ties with Twitter, have complained it is difficult to import their social media followers to the new platform.

But Zuckerberg has proven to be persistent and will likely figure out a way to make Threads a success.

Ironically, Meta owns rights to the “X” trademark for “online social networking services … social networking services in the fields of entertainment, gaming and application development,” according to the U.S. Patent and Trademark Office.

Whether this leads to a lawsuit or legal warning between longtime antagonists Zuckerberg and Musk is anyone’s guess. Meta declined to comment to MarketWatch.

Musk, meanwhile, will no doubt continue to delight in confounding what remains of Twitter’s faithful members and what is left of the once-loved digital platform.

“We really need Twitter in some form,” bemoans Informatica Inc.
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CEO Amit Walia. “It is important that social-media platforms exist.”

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