You Can Ignore The Elon Musk And Twitter Drama

Tesla CEO Elon Musk (AP Photo/Matt Rourke, file)

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Financial media are obsessed by the continuing Elon Musk versus Twitter sagaTWTR
.

Latest developmentTwitter sued Musk after Musk announced that he would not be able to fulfill the $44 billion deal to purchase the company.

It’s fun and exciting to see the back and forth, especially if you like deciphering tweets of billionaires and cryptic text. It can be quite profitable if you’re a corporate lawyer.

But unless you’re a Twitter shareholder, board member or employee, let’s face it: this is just a distraction.

Why would Elon Musk even want Twitter?

Statista ranks Twitter as the 15th most used social network. Twitter’s 436 million active users are less than Pinterest’s and a fraction of Facebook’s 2.91 billion (data as of January 2022).

These are the most beloved social networks in the world

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Twitter’s latest quarterly report showed $1.2 billion in revenue, compared to Meta Platform’s revenue of $27.91 billion.

Twitter failed to adequately monetize its users or grow them. The attention to Musk’s tweets over the past few months helped drive new users. Aside from that, the growth rate has been stagnant.

With the broader market slumping this year, Twitter’s market capitalization has dropped to $27.46 billion since news of his $54.20 offer was first reported. Musk opposed Twitter trading between $30 and $40 per share.

TeslaTSLA
Shareholders have also been taken on a wild ride. When news broke in April that Musk would finance the purchase of Twitter using Tesla shares as collateral for a margin loan, Tesla’s stock dropped 12%.

Do Not Attend The Sideshow

Elon Musk has the ability to attract every moth to his glowing flame, like a candle. This story attracts attention and clicks. Every pundit on CNBC is asked for their opinion on it, even if they’re an analyst covering the consumer staples sector.

As an investor, it’s essential to focus on news that matters most to your portfolio—the Fed, earnings, inflation.

Today’s 9.1% CPI print affects you more than the Musk/Twitter drama. Despite its best efforts this year, the Fed hasn’t tamed spiraling inflation. Increased interest rates slow down the economy, and reduce corporate earnings. That’s the only story that matters.

As for me, I don’t need drama and excitement surrounding my stocks. My only desire is for steady growth in dividends and earnings. Doing investment correctly should not seem boring

This fiasco teaches us that it is important to invest in companies with excellent management. A well-managed business should have a share price that is protected from the fluctuations of one person.

The upcoming courtroom drama of Musk vs. Twitter will make for good television but won’t make you a profit.

You can change the channel at any time.