Musk Tells Investor Conference He Plans To Make Twitter “Extremely Valuable”

On the day Elon Musk took over Twitter and fired half its staff, he took a break to visit one of his staunchest backers, fund manager Ron Baron, to say he has a plan to make Twitter an extremely valuable national institution.

Musk proved to be the highlight of the 29th annual Baron Investment Conference, which is saying a lot, considering pop star Bruno Mars provided the event’s entertainment. The conference for wealth managers and investors in the Baron Funds was held at Lincoln Center in New York last Friday.

Musk is the chief executive officer of electric automaker Tesla (TSLA) and SpaceX, a manufacturer of reusable spaceships, which also owns Starlink, a producer of low-orbit Internet satellites. And as of Oct. 27, with the completion of a $44 billion buyout, he’s the owner of Twitter.

He told the conference that in 2000 when he was running X.com, which later became PayPal
PYPL
(PYPL), he devised a strategy to create “the most valuable national institution in the world.” He didn’t elaborate, but said the plan would make Twitter into a “way better system,” and “ultimately extremely valuable.”

The goal, he said, was to bring 80% of Americans to Twitter and turn the platform into a digital town square where people feel comfortable to voice their opinions and exchange ideas.

Conference host Baron, the founder and CEO of Baron Capital, which manages the Baron Funds family, led the interview. His Baron Funds are big investors in Tesla. Since 2014, when the Baron family and Baron Capital first invested in Tesla, they have bought 17.5 million shares at a cost of $322 million and an average share price of $18.39. The total market value of the portfolio is now $3.76 billion.

Baron asked Musk how he planned to prevent people spouting anti-Semitic and racist comments on the platform.

“I want to be clear, the content moderation policies have not changed and it’s not okay to engage in hateful conduct on Twitter,” Musk replied. “We’ve actually had targeted attacks where people were able to temporarily put hate speech on Twitter. But, those were taken down immediately.”

Musk said his new controversial verification system would solve this problem. The verification system shows that high-profile accounts really belong to the people whose name is on the account. A previously free perk, Musk said he wants to get as many people verified as possible at a price of $7.99 a month. However, many people are not happy with charge, even though the fee will allow users to edit tweets, and post long-form videos and audio podcasts. He said this would also allow Twitter to start sharing revenue with content creators.

“That will be transformative,” he said.

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The verification system is not just a way to raise revenue, but a way to cut down on the spam and bots that try to manipulate public opinion and are prevalent on the platform. Musk said the cost to create a bot is very cheap, less than a penny. But if people have to pay $8 for 100,000 fake accounts, that will become prohibitively expensive at $800,000 a month.

He explained that Twitter was having “serious revenue challenges before the acquisition talks started.” He added that every technology company dependent on advertising was having a difficult time, but that Twitter was more vulnerable than most because it’s more discretionary for large brands. In addition, activist groups have caused a significant advertising drop as they pressure major advertisers to stop buying ads on Twitter. This despite Musk’s attempts to make it clear that moderation rules have not changed.

Musk said his workload has increased from 70 hours a week to 120.

“But, I think once Twitter is set on the right path, it will be much easier to manage than SpaceX or Tesla.”

However, that doesn’t look like it will happen soon. On the day of the conference, Musk tweeted that layoffs were not a choice as “the company is losing over $4M/day. Everyone exited was offered 3 months of severance, which is 50% more than legally required.”

On Thursday, the New York Times
NYT
reported that Musk said the company did not have enough money to survive and “mentioned bankruptcy”.

Baron asked Musk, with all his money and success, why does he continue working?

Tesla’s CEO replied that what he’s working on is important and that Tesla significantly accelerated the advent of sustainable energy. “Before Tesla, no one was making electric cars, and now almost every automaker in the world is building electric cars. That’s a big deal but there’s still a long way to go.”

“I think SpaceX is important for humanity’s existence to be insured over the long term. I think we must become a multi-planet species and a space-bearing civilization,” he said.

He concluded by saying, “It’s important we take actions to ensure that the light of consciousness continues. We should really understand that consciousness is but a small candle in a vast darkness, and can easily go out.”