Since acquiring social media platform Twitter for $44 billion, Elon Musk has been busy at work, making changes like job cuts and focusing on monetization efforts. Here’s what one Ark Invest portfolio manager thinks of the job Musk has done so far with Twitter.
What Happened: Musk acquired Twitter for $44 billion in 2022 and became the chief executive officer of the social media company, giving him the CEO title of three companies.
Many fans of Musk and his companies Tesla and SpaceX have cheered him on and believe in the long-term story Twitter envisions. Others have pointed out the current flaws and challenges of Twitter.
“We didn’t think that this would be an overnight success when he went and acquired Twitter,” Ark Invest portfolio manager Nick Grous told Benzinga. “We knew it would be a bumpy ride.”
Grous said Ark Invest, who invested in the Twitter acquisition, maintains a long-term outlook on the success of the social media company.
One of Musk's visions is to make Twitter into a super app, which is something that hasn’t been popular in the United States, according to Grous.
“Best use case is WeChat in China and how prolific its been to that population and to China in whole.”
Grous said Musk can build a solution to this with Twitter, which is part of the reason why Ark Invest is bullish on the future of Twitter.
“We’ve always maintained our long-term outlook based on what Elon Musk has sought out to do.”
Grous said Musk came into a company that didn’t have those goals, so he needed to change the structure before he could set out to build the super app. The Ark Invest portfolio manager said Musk is not losing sight of his original goal for the company.
Related Link: Here's What Ark Funds Thinks Of Elon Musk's Twitter Purchase
What’s Next: One of the recent growth areas in social media has been short-form content, helping companies like TikTok and Alphabet Inc GOOGGOOGL owned YouTube appeal to a younger demographic.
“It’s a really competitive market, extremely competitive,” Grous said.
When asked about what Twitter needs to do to grow through video content in its monetization efforts, Grous offered up some advice.
“The playbook has been written on how to engage with consumers when it comes to short-form video.”
Social media platforms have changed the way artificial intelligence is used for distribution, led by the efforts of TikTok. Prior to this, users were shown videos based on the interests of their friends and the people they follow, which may not be the same.
“This is going to change how people interact on social media, because of the way AI was integrated into the distribution of content.”
Grous said Twitter should build its model on that, which can make video more scalable and keep people engaged longer. The Ark portfolio manager notes that time spent on short-form content platforms, like TikTok, rivals that of long-form content from streaming platforms like Netflix Inc NFLX in some cases.
“Don’t need to reinvent the wheel, Twitter needs to do what TikTok did.”
Grous cited Meta Platforms META showing success from its Reels for Facebook and Instagram as more signs of how to grow short-form content.
For Twitter, the struggle will be going from mostly text to video.
“How do you naturally incorporate it with a platform that’s been historically text-based content? You don’t want this becoming a whole new platform.”
If done right, Grous said Twitter has a “real opportunity to be disruptive in the social media space.”
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