Column: Elon Musk investor Gerber says he is 'kind of done with X': Ross Kerber

Bluesky Digital Assets

20/11/2024 13:00

(The opinions expressed here are those of the author, a
columnist for Reuters. This column is part of the weekly Reuters
Sustainable Finance newsletter, which you can sign up for here)
    By Ross Kerber
       Nov 20 (Reuters) - Donald Trump's U.S. presidential
election victory seems set to have a wide impact on the
businesses of Elon Musk, including his social media platform
X.com. 

Some Wall Street banks hope the billionaire's close ties with
the president-elect will boost X's prospects and help them
offload $13 billion of debt that backed Musk's 2022 purchase of
what was then Twitter. 
        
  
    Other investors are disillusioned, including Ross Gerber of
Gerber Kawasaki Wealth & Investment Management of Santa Monica,
California, a backer of Musk's ventures who agreed to be
interviewed for this column and told me "I'm kind of done with
X".

    Gerber's take looks relevant at a time when several news
organizations have 
    quit the platform
    . X seems to be losing users concerned with harmful content,
malicious bots, and Musk's support of Trump, said Filippo
Menczer, an Indiana University computer science professor. "Many
do not want to support a platform that has become so strongly
aligned with one political party," Menczer said via e-mail.
    
An analysis by web designer Digital Silk of data from SimilarWeb
found daily visits to the rival social media platform Bluesky
rose to 5.7 million on Nov. 16, more than double their level
Nov. 1. Daily visits to X were 149.5 million on Nov. 16, up
slightly from 147.9 million on Nov. 1.    
In theory this should worry investors in X like Fidelity, which
has cut its valuation by 79%. 
    
Fidelity declined to comment. But Gerber took my call to
describe his souring on X and why he posts far less on the
platform.
    
The following transcript of our conversation is edited for
length and clarity. And yes despite our name similarities, we
are two different people. 
    
Q: Are you still an owner of X? 
A: Yes. I'm kind of done with X. Over the last three or four
months I've pretty much realized that most of the people I care
about have left and most the information I was getting from
Twitter (X) in the past with regard to stocks and breaking
information, that was extremely valuable to me, it's gone.
    
Q: On X you have 367,000 followers, that's a lot of followers.
A: Yeah it's probably one of the most in our industry.
    
Q: How does that give you an edge?
A: It was really like this community of investors and analysts, 
#fintwit is what it used to be called. If I tweeted something
like 'Netflix is gonna have a massive night,' then I'd have five
other like analyst people commenting on it. 'Ross, but what
about this?' " You'd have this debate. Now I get nothing.
    
Q: Do you think it's that they have all left? Or do you think
the algorithms have somehow stopped surfacing your questions?
A: They've left. The algorithm certainly is part of it because
the algorithm is now rigged to give you the most offensive
things you could possibly want. All I get is anti-semitism now
and I get Trump.

Q: Are you going to stop Tweeting? (I should have said
"posting")
A: I do a few Tweets a week. I think I broke my record last week
I was on and this was during the election. I was only on Twitter
for 15 minutes total, you know. And I used to be on Twitter an
hour a day.
    
Q: How did your investment in X come about? 
A: I feel horrible that I was one of Elon's greatest enablers
over the last decade. When he bought Twitter, we owned some
Twitter. And also just being Elon supporters, we figured we
would reach out and see if we could invest in X because at the
time I wanted to have some influence on this process.
    
Q: Can you say how much you invested?
A: No, but it was less than a million dollars. On my books it's
zero, it's worthless. (When I asked Gerber about his valuation
in a followup email, said he does not know about X's exact
financials).
    
Q: Do you think that Elon Musk made a difference in the
election?
A: Yes. Elon won the election for Trump. I don't think Trump
would have won the election without Elon. 
   
Q: There are plenty of other investors in X. What would you want
them to do at this point? You think of it (X) as this
misinformation machine, what should owners do?
A: The people who invest with Elon understand they have no say,
right or ability to change anything that's going to happen. 
    
Q; If you are concerned about X's impact on public discourse
right now...
A: I'm not. I'm not concerned at all. Nobody's on it. See this
is what I'm saying, it's lost its power.

Q: Wait a minute, you just told me X's support won the election
for Trump.
A: That's right because when this started years ago, it had this
huge audience, and he's whittled this down.

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X lags on social platforms    https://reut.rs/3ZcpIGs
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 (Reporting by Ross Kerber; Editing by David Gregorio)
 ((ross.kerber@thomsonreuters.com; (617) 412 0093;))