Elon Musk spent 3 billion dollars becoming the largest stakeholder in Twitter, surpassing Jack Dorsey at 2.3%.

The stock rose 27% day one, meaning Musk in a single day made 810 million dollars in return off of his investment. He was also just granted a board seat on Twitter.

Why did he do all this though?

His official reason

Elon Musk said he bought Twitter stock believing the company is innovative and could be a valuable investment.

Which the numbers don’t suggest his opinion is okay.

Twitter’s market cap average was 17.8 billion in 2017.
Before buying 9%, the company was worth 31 billion.

An increase of 74%.

That sounds amazing, but most of that growth happened from 2017 to 2018, when the average grew to 24 billion. Since that point, in the last four years, Twitter has only gained 35% in value.

Which comparing that, Facebook from 2018 to 2021 averaged an 81% return and while being down this year is still up.

Snapchat in 2018 was worth 7.3 billion, but in 2021, the market cap hit 75 billion, giving the company over a 1,000% return in four years.

35% sounds great, but compared to most of the tech world, it hasn’t stacked up the last four years.

And that’s mainly due to lack of major growth.

Twitter had 5 billion in revenue in 2021, which was up 67% since 2017, but again, smaller over Snapchat and Facebook.

They also don’t have 30%+ margins like Facebook, where Twitter lost a billion dollars in 2020 and 100 million in 2021.

User rates are also flat, being at 330 million now, compared to 217 million in 2017, which again is lower over other social networks.

Writing this, I don’t want to say Twitter is a bad investment, but nothing for Elon Musk to jump over.

That brings us to the second reason, freedom of speech.

Elon Musk is claiming large tech companies are too censored and worried it’s damaging the freedom of speech.

A legitimate concern, but Twitter doesn’t really have as huge of a problem there.

Marjorie Taylor Greene just tweeted calling Mitt Romney, Lisa Murkowski and Susan Collins pro pedophile.
Twitter is the most accepting social network for nudity by far, as well as mentions of drug use.
Many altright groups still exist on Twitter, despite regularly promoting fake news or just defamation.

I’ve never really seen anyone noticeable taken off Twitter, unless it was Alex Jones or Donald Trump, who I think deserved it.

This makes me think Elon Musk isn’t so much caring about freedom of speech as his speech with this move.

And that’s reason three, marketing.

Elon Musk has 80.5 million followers on Twitter.

Elon Musk once tweeted Tesla would accept Dogecoin and the price of Dogecoin surged 40% in a few hours, which was worth well over 3 billion dollars.

Tesla also doesn’t have a formal marketing budget, never buys commercials and relies nearly 100% on viral marketing, word of mouth and Elon’s twitter to promote the company.

This makes my belief that Elon Musk bought Twitter to help ensure it holds as a vehicle for marketing Tesla, SpaceX and any other idea he has, without ever having to worry about the risk of being banned or having posts taken down.

He purchased a 9% stake, where the stock will likely continue to casually go up, showing he’ll never actually lose money.

In the process, he can brand himself to a lot of people online as the mastermind behind Twitter and have his core businesses promoted there, without ever having risk.

That’s why Elon Musk did this.