Musk’s review of Twitter has come under heavy criticism – Copyright AFP/File Robyn Beck
The flying feathers and constant Twitter gossip are developing a very familiar pattern. Elon Musk is the bad guy by default; and the absence of other numbers with dollar signs mean nothing. While I can disagree with his methods, the media coverage is skewing too many things and he’s not doing a very good job.
The famous figure of $400 for meals, for example. musk said it was costing $400 per meal. Employees said they were paying $20-$25 per meal. These are not even the same numbers. Cost to serve and cost to buy are totally different things.
Have you ever seen an empty restaurant? Do you know that it is the operating costs that increase the losses? If you’re paying for facilities and staff, you’re paying $X per day, and sales have to be more than that to make a profit. Musk is talking about the operating cost structure, No the price of meals.
Meanwhile, going back to the slash-and-burn scenario, looking at costs and reducing them isn’t exactly new. That’s what happens when you take over a business. The extreme measures currently in play may be drastic, but given previous management’s numbers, who knows?
I for one have a hard time wondering where all that income went. The market accepted figure of around $4 billion per year is approximate. …So where did those few lazy billions go? It wasn’t mac and cheese in the cafeteria, that’s for sure.
None of the issues of The Before Times, to abuse an overused phrase, seem particularly appealing. Q2 2022 shows revenue of $1.17 billion. Where is it? Is it an unreasonable question? A hot dog stand would have answers.
Let’s do a word association test:
Twitter’s revenue story is a pretty neurotic thing. Fast forward from 2013 to 2019 to the pandemic. Then the numbers moved in various spasms. At no point did Twitter’s revenue exactly hit the headlines until Musk’s offer. It was good.
Financial market coverage is highly selective for a number of reasons, not all of them good reasons. Twitter revenue received an occasional mild disapproval from Wall Street pundits, and that was about it. Internal costs weren’t exactly in the headlines. With Black Rock and others as major investors, Twitter was also not considered a particularly risky stock.
Then of course the world ended. From comatose market acceptance of “whatever” to the exact opposite. Now the media are taking sides.
This is regardless of the fact that The Before Times doesn’t look too impressive to the naked eye just for revenue management. Where did that money go? Where are the consolidated accounts to check expenses and other Accounting 101 news? Not in publicly available information.
Perhaps the previous management can be vindicated with this information. Maybe Musk is right, too aggressive about it. Most likely, the numbers send mixed messages both ways.
It’s the old story, once again. Polarize, simplify and call it news. That’s not good enough anymore. Facts please.
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