Twitter vs DOGE

Is Twitter worth more than $44B? If so, what does that say about DOGE and the U.S. Government?

Not new or particularly smart of me, but I keep wondering if, in the context of all commentary around Elon Musk’s acquisition of Twitter nearly three years ago, the company is now worth what he paid for it or, possibly, even more? If it is, what does that say about how he is approaching the Department Of Government Efficiency (DOGE)?

Paying $44B for Twitter in cash and debt seemed insane at the time, and pretty much everybody agreed that Elon Musk had gone over the deep end. The company had $4.4B in revenue and lost money! Who would pay 10x sales for a failing company?

Some numbers: In 2022, when Elon bought it, Twitter had $4.4B in revenue. It’s revenue has declined since then: to $2.9B in 2023 and $2.5B in 2024. (These are estimates since X is a private company and doesn’t release results publicly.) But the company continues to operate (without too many outages) with 1,000 full time employees, compared to the 7,500 it had before Elon bought it. Maybe it’s actually making money on half the revenue?

Who knows? Twitter is still a town square and is clearly used as a way to announce news and make political commentary, particularly now that Elon is using it to promote both DOGE and Trump. (I haven’t used Twitter for longer than three years and don’t really understand how or why others use it, but it does appear to be a “thing” today.)

Now Elon is running DOGE and tearing apart the United State Federal Government, using the same basic playbook as when he bought Twitter. Back then, he fired 80% of the employees at Twitter, all by email without empathy. He’s doing the same thing to federal employees and contracts, although we all know that hasn’t reduced the federal workforce by more than 5%. And it’s not likely to reduce government spending, even as much as DOGE claims.

The complaints people have about DOGE and Elon sound pretty much the same as the opinions that were flung around about Twitter in 2022. But we need to ask, “Will it work?” How many times have various other presidents said they would reduce the size of the U.S. Government, and failed? One of those was Donald Trump his first time around. Now we have ended up with a version of Trump who is crazy enough to appoint Elon Musk as the unofficial but very aggressive chainsaw to make the government smaller. And it feels like, it just might work, at least to set a trend toward a more efficient, leaner U.S. government.

We should remember that Elon flirted with bankruptcy in the process of funding both SpaceX and Tesla. So he has managed to establish a playbook of taking unusual risk, pushing the edge of disruption, and still making big changes happen. All of that risk and disruption accumulated to make him the richest guy in the world, even with the reduced valuation of Tesla shares in the past weeks. Maybe it isn’t a good idea to bet against him?

PS: Has anyone else wondered whether the fact that Elon is so distracted by DOGE that it was a factor in the incident where the upper stage of StarShip blew up last week?