Elon Musk was speechless.
Musk’s intense focus on his social media company purchase has devolved into the culture wars. Meanwhile, Tesla is tanking.
“Amazing, wow,” Musk said after hesitations and pauses. “You’re a jackass. … What a moron.”
The incident highlights the new reality facing Musk, who also runs Tesla and SpaceX: a crisis of confidence in his once-unquestioned brilliance.
That crisis accelerated as Tesla stock prices plunged nearly 20 percent this week to $123 per share on Friday, largely due to concerns about Musk. Also this week, roughly 58 percent of 17 million Twitter accounts that responded to an unscientific poll from Musk said he should step down as Twitter CEO, after helping create, then reverse new policies that proved controversial last weekend.
“Historically he’s been a pendulum between genius and reckless,” said Gene Munster, managing partner at Loup Ventures. “He’s on reckless right now. He’s way over recklessness.”
He added, “It leaves people to view him … as slightly less of a genius.”
Musk has built his reputation on having a Midas touch with the companies he runs — something many investors and experts thought he would bring to Twitter when he purchased it for $44 billion in October, paying nearly twice as much as it was worth by some analyst estimates. He is known for sleeping on the factory floor at Tesla, demanding long hours and quick turnarounds from his workers. He is seen as an engineering genius, propelling promises of cars that can drive themselves and rockets that can take humans to Mars.
But that image is unraveling. Some Twitter employees who worked with Musk are doubtful his management style will allow him to turn the company around. And some investors in Tesla, by far the biggest source of his wealth, have begun to see him as a liability. Musk’s distraction has prompted questions about leadership of SpaceX as well, though it is much less reliant on his active involvement. Meanwhile, Neuralink and Boring Co., two companies he founded, continue to lag on promises.
Musk’s net worth — largely fueled by his stake in Tesla, which has fallen by more than half this year — has plunged this year from roughly $270 billion to below $140 billion on Friday, according to the Bloomberg Billionaires Index. That fall has relieved him of the title of the world’s richest man and called into question his ability to keep up with his billions of dollars in loans.
Musk is repeatedly described as a man obsessed with Twitter in all the wrong ways, who is failing both at protecting his new investment and his previous ones, according to interviews with a half-dozen former Twitter employees and people close to him, who spoke on the condition of anonymity for fear of retribution or because they were not authorized to speak publicly about company matters.
Musk this week said Twitter is in a financial hole and facing a cash crunch — even as it slashed more than half of the workforce and closed offices.
“We have an emergency fire drill on our hands,” Musk said on Twitter Spaces. “Aspirationally, I’m not naturally capricious.”
Musk has always been unpredictable and freewheeling with his public persona, but with Twitter, his actions have directly affected the business, turning off some of the company’s users and pushing away advertisers, said Jo-Ellen Pozner, a management professor at Santa Clara University’s Leavey School of Business.
“It really feels destabilizing for the whole Twitter community,” she said, adding that the reputation of a CEO does affect businesses and their stock prices — and could even prompt consumers to choose another vehicle.
Musk and Twitter — which has disbanded most of its public relations team — did not respond to requests for comment.
Holed up in a 10th-floor conference room
Musk, who is South African and migrated to North America as a teenager, first forged his image as a tech wizard by founding the company that became PayPal. He funneled much of his around $165 million in gains from the sale of PayPal into two ventures: Tesla and SpaceX. SpaceX went on to become the most successful private spaceflight company in history, pioneering reusable rockets and launching astronauts to the International Space Station.
Tesla, meanwhile, brought electric vehicles to the mainstream with sleek, fast and competitively priced sedans and SUVs that shattered the frumpy image of eco-conscious cars. His closest allies have held out faith even as he has missed major deadlines for selling new vehicle models and rolling out self-driving technology.
Musk has been focused almost solely on Twitter since he bought it, planning to reinvent the company as an engineering-driven operation. He immediately ousted Twitter’s previous executives and embarked on a campaign of harsh layoffs that cut the company in half. Many of Musk’s supporters, who had followed his rise at Tesla, gave him the benefit of the doubt that he had a plan to transform Twitter.
But he immediately spooked advertisers by engaging in a baseless accusation and dialed back Twitter’s content moderation, prompting calls from civil rights groups for advertisers to suspend their marketing on the site. And he had to pull back his first major product launch — Twitter Blue Verified — after a day when a swarm of impersonators wreaked havoc.
Musk appears to be struggling to grasp Twitter’s business, the people close to him say, and he demands a stance from his employees that stifles discussion of problems. “He doesn’t see from the zoom-out view at all,” one of the people close to Musk and his team said, describing him as “uncovering and solving and programming all night.”
He has been holed up in a 10th-floor conference area with a staging room for visitors — where they often remain for more than an hour before being called in. They are instructed not to speak until Musk does. And when they do finally meet with him, he’s sometimes watching YouTube videos.
Many staffers have quickly learned they can’t rely on the erratic and unpredictable Musk, even as he makes assurances about the various facets of the company they have raised as concerns.
The driving team behind Project Eraser — which carries out functions such as deleting the user data of those who ask, part of compliance with federal requirements — has been gutted. Musk has brought in a new roster of leaders, many who are loyalists.
When one executive met with Musk and voiced concerns about the Federal Trade Commission’s consent decree, Musk assured that person there was nothing to worry about. He said Tesla had plenty of experience on privacy matters, and pointed to his deep knowledge and awareness of the constraints Twitter was under.
Minutes after the meeting concluded, a subordinate of Musk emailed: Would the executive be willing to send over a copy of the consent decree they had just discussed?
Instead of focusing on plans to make the site a competitor to YouTube with video and rolling out other new features that will earn revenue, he instead got sucked into the culture wars, the people said.
That took the form of the Twitter Files, an examination by some journalists of many of the company’s actions before Musk’s arrival, such as the blocking of a New York Post story that dug into the contents of Hunter Biden’s laptop and the ban on former president Donald Trump.
Musk chose Bari Weiss, a former New York Times columnist, as one of the writers invited inside the company to go through documents.
“Please give Bari full access to everything at Twitter,” Musk wrote to a subordinate in a Signal message viewed by The Washington Post. “No limits at all.”
That was concerning to many inside Twitter — particularly those familiar with the 2011 FTC settlement after hacks of high-profile accounts, including that of then-President Barack Obama. Staffers responsible for her onboarding pushed back and refused to grant Weiss the full access Musk had requested, saying it would violate the settlement.
One former employee described that step as “super unprecedented” and “highly inappropriate,” saying Twitter would never have granted that level of access to an outside party who might suddenly be able to read direct messages, for example.
The pushback, however, was not taken as seriously at senior levels.
Days later, Musk announced deputy general counsel Jim Baker had been “exited” from the company, as the CEO cited what he called his “possible role in suppression of information important to the public dialogue.” Former employees said it would have been normal for an attorney to review documents for release.
That same day, Alan Rosa, Twitter’s chief information security officer in charge of access matters, was fired from the company as well. Employees that week found Weiss’s name searchable in Slack, the company’s internal messaging service. But her access was overseen by a chaperone, new Twitter Trust and Safety chief Ella Irwin.
Irwin’s name appeared in a watermark on the Twitter Files. When Twitter suspended more than half a dozen journalists last week over alleged violations of its rules on doxing — the sharing of private information — the suspensions were labeled in internal systems “direction of Ella.”
Musk also used internal systems to dig up an old message from his previous Trust and Safety head and took aim at Twitter executives, unleashing a swarm of criticism on employees — sometimes while they were still working for Twitter.
“These guys did amazing damage,” one former employee said of Musk’s circle at Twitter, which included employees of his other companies and friends who lacked expertise on Twitter. “They are basically bullying their way to getting ‘super god’ access to these things. All they’re doing is they’re witch hunting for Elon, so they can find people talking [about him] so they can fire them.”
Musk is running the newly private company largely on his instincts — mirroring the workflows of his other major technology company: Tesla. The electric car company, the world’s most valuable automaker, has eschewed market research in its dominance of the electric vehicle space, seeding the automotive industry with a raw and authentic expressions of Musk’s id. Tesla’s stainless steel Cybertruck pickup, which shocked automotive analysts with its angular sci-fi looks, has served as a key example of that ethos.
At Tesla, employees often find out about deadlines and major product changes through tweeted edicts. But they have also grown used to the CEO’s shoot-from-the-hip attitude, his reliance on his gut instincts rather than the research and development arms typical of multibillion-dollar corporations.
But Tesla’s stock price has plummeted — which Musk frequently attributes to economic trends.
“As bank savings account interest rates, which are guaranteed, start to approach stock market returns, which are *not* guaranteed, people will increasingly move their money out of stocks into cash, thus causing stocks to drop,” he said in a tweet Tuesday.
But analysts have pointed to problems more specific to Tesla and concern with Musk’s time at Twitter, suggesting in essence that the sheen has worn off a company whose value was not rooted in its fundamentals.
“I felt for a while he was given a pass,” said Karl Brauer, executive analyst at the website iSeeCars. “‘Oh, it’s Elon. He’s Midas: If he’s touching it, it’s going to be successful.’ Now a certain number of people have stopped giving him a pass on things that probably should have been looked at a little more critically or acknowledged as potential downside.”
The crisis in confidence in his leadership accelerated when Musk began making changes to Twitter to address his personal problems and concerns.
Last week, he reneged on a previous commitment to keep an account on Twitter that published the location of his private jet, which he held up as an example of his free speech principles. After abruptly suspending @ElonJet, he suspended journalists who tweeted about it, drawing ire from both sides of the political spectrum.
He launched a poll, which on Friday again directed Musk to allow them back on the site.
“The people have spoken,” he tweeted.
Musk jetted around the globe to Qatar for the World Cup final on Sunday, where he was spotted alongside former Trump adviser Jared Kusher and Qatari leaders.
That day, Twitter posted a new policy: It was banning the promotion of outside social media sites on its platform, including Facebook, Instagram and Trump-backed Truth Social. Users would no longer be able to promote outside links to those sites and others including Mastodon, Tribel, Post and Nostr. Twitter said cross-posting of content would be allowed, but it would no longer permit “free promotion.”
The criticism was swift, and even loyalists expressed concern. Musk apologized.
“Going forward, there will be a vote for major policy changes,” he tweeted. “My apologies. Won’t happen again.”
Then Musk launched a new poll. “Should I step down as head of Twitter?” he wrote in a tweet. “I will abide by the results of this poll.”
By Monday morning, the result was clear that Musk should step down. He went silent on the platform for much of the day — one of his longer stretches as a prolific tweeter to his more than 120 million followers. He responded to a few tweets later in the day calling the results into question.
On Tuesday, he said he would resign — with caveats.
“I will resign as CEO as soon as I find someone foolish enough to take the job!” he wrote in a tweet. “After that, I will just run the software & servers teams.”
Gerrit De Vynck and Cat Zakrzewski contributed to this report.