Very encouraging that the new owner thinks it was bad form to silence a guy who had just incited a riot by conspiracy theorists at the Capitol and seemed capable of inciting a lot more amidst his mania to overturn the 2020 election.

Trump can rest easy now knowing that his mic won’t be cut the next time he tries a coup, I guess.

This report from the WSJ makes me consider a question to which only Elon Musk himself knows the answer. Namely, to what extent is buying a Twitter a business decision for him? Does he feel pure altruism in wanting to improve an influential communications platform by, among other things, trying to ensure that it treats all of its users fairly? Or are there bottom-line considerations?

I ask because it seems to me that having Donald Trump back on the platform would be good for business in various ways. Yeah, fine, “free speech” and all that. But there’s money to be made too.

People who have spoken to him and his team recently say Mr. Musk remains dismayed that former President Donald Trump is still barred from the platform…

The move riled Mr. Musk, who had previously described himself as “half Democrat half Republican” and endorsed Andrew Yang for the Democratic nomination in 2020.

Mr. Birchall—Mr. Musk’s de facto No. 2—in a text message to an associate described his boss’s view as: “He vehemently disagrees with censoring. Especially for a sitting president. Insane.” Mr. Trump has said he has no plans to tweet again.

There’s evidence that Musk’s motives really are altruistic. Reportedly he spoke to the head of the Babylon Bee in March to confirm that the site had been suspended for goofing on a transgender Biden official as its “Man of the Year” and speculated that he might have to buy Twitter as a result. He and Jack Dorsey also allegedly share a belief that Twitter should be privately held rather than publicly owned so that it can focus on being a “public good” rather than maximizing shareholder profits.

But restoring Trump’s account and getting him to post again would be a potential moneymaker in several ways. It would be a singular advertisement that the culture at Twitter really has changed dramatically, which may convince many more conservatives to sign up for the site. It would be buzzy to the general public too, piquing interest in Twitter due to curiosity about what Trump would say once he’s back on. It could undercut Trump’s own platform, Truth Social, by depriving TS of its chief attraction. And if Trump ends up back in the White House in 2025, Musk’s show of goodwill might earn him some federal regulatory goodwill in return for his various businesses. Trump would have no moral qualms about using state power to benefit a celebrity like Musk who did him a personal favor by restoring his Twitter account, particularly given how much criticism Musk would take from anti-Trumpers for doing so.

Leave Trump aside, though, and return to the question of whether acquiring Twitter is a money-maker or a money-loser for Musk. Does the company have any big-picture financial value to him? Some argue that it does. Musk is a master of the “attention economy” who’s used his gigantic audience to promote Tesla in ways that have made the company many times more valuable than it would be from a traditional “revenue minus expenditures” perspective. “Being the world’s most recognisable businessman – the constant focus of attention – gives him a unique personal ability to move markets,” wrote one analyst this week, noting that Tesla’s total net income after a decade of selling electric vehicles is -$350 million. Bloomberg columnist Matt Levine made a similar point:

Tesla is a company, a relatively small car company, that makes good high-end electric cars, right? And the stock-market value of Tesla, which makes Elon Musk the richest person in the world, comes from a lot of extreme optimism about Tesla’s future ability to make more cars and become the dominant player in car-making as cars become more electric. Also, he’s just, like, a sort of futurist visionary—he’s building tunnels that he seems to think will be the future of transportation. He’s sending rockets into space. And so the value of these companies in the market is largely derived from expectations around how much money they’ll make in the future, as opposed to how much money they’ve made in the past. And those expectations are probably helped by having a charismatic, noisy founder who makes a lot of jokes online and is sort of a science-fiction character himself, and portrays himself as a science-fiction character, and who appeals to people who like that by making jokes…

He might say, “Look, I get so much value out of this direct access to the public.” Owning that direct access to the public—owning that thing that creates so much value for Elon Musk and Tesla—it has to be valuable somehow, whether it’s by increasing the value that it creates for Tesla, or whether it’s by finding a way to monetize the value that it creates for sports stars and celebrities and Donald Trump and lots of other people.

For Musk, Twitter is a hype machine. And by owning it, Musk could conceivably figure out ways to amplify his ability to create hype and draw public attention to his projects even further.

But … enough to justify a $44 billion price tag? When he’s already buddies with Twitter bigwigs like Dorsey, leaving him at little risk of ever being banned and losing his platform? That’s hard to grok.

And it gets harder once you begin to consider the effect this episode is having on Tesla’s value. I sure hope Musk sees financial potential in Twitter because if this is an altruistic endeavor it’s become an extremely expensive one:

Why did Tesla tank when Musk went public with his designs on Twitter? Read Jonathan Last for a likely explanation. Musk is financing his Twitter takeover with margin loans, using Tesla shares as collateral. But the catch with those loans is that if the shares fall below a certain price, the banks can seize them and immediately sell them to pay down the loan. As you might imagine, those sales will drive the price down further — which may cross another margin-loan threshold, triggering further sales by lenders. And suddenly there’s a downward spiral, or at least enough of a possibility of a downward spiral that other Tesla investors may get spooked and try to offload their shares before the price drops again.

And of course, those panic sales drive the price even lower.

Not a big deal for the richest man in the world, who won’t starve if his shares tank. But a very big deal for lesser Tesla investors.

Reportedly Musk has a lot of his shares in Tesla leveraged, which means there may be an ongoing wave of lenders putting those shares up for sale as the price falls further. Last wonders why the hell the board of Tesla didn’t try to stop the Twitter deal, knowing what impact a cascade of margin loans taken out by Musk might have on the company’s value. For our limited purpose here, though, it’s enough to say that the 20 percent downturn in Tesla’s price is a major complicating factor in weighing whether buying Twitter was a good business decision for Musk. For the moment, it looks like a bad one.