Twitter in Elon’s Hands Is No Idle Distraction

Now, Mr. Musk’s ability to repay the tens of billions of dollars he secured to buy Twitter will hinge on his turning what has historically been a mediocre business into a good one.

Change won’t be easy. Consider the state Twitter had to have been in for its board to ultimately accept Mr. Musk’s offer, so quickly after he rebuffed their invitation to play on the same team by joining the board. Activist-driven attempts to change the trajectory of the company last year, including plans to double its revenue and the pace of its product innovation by 2023, had no lasting impact on its share price. Twitter’s share price fell 50% from mid-February of last year to mid-February of this year, even despite the company’s appointment of a fresh face as chief executive.

Of course, it is unclear if thinking any bigger would have helped.

Meta Platforms

has proved an especially cautionary tale for what major transformation at a social-media platform can do to a company’s near-term value in the public markets. While its “metaverse” ambitions may eventually pan out, Meta has seen more than $400 billion in market value evaporate so far this year.

By buying Twitter outright, Mr. Musk avoids having to think about fickle shareholders. But he has his own wealth to consider. The fact that he will need to answer to creditors means he has to be careful about trampling over a cash-generating advertising business, no matter how he feels about it. Yet the capitulation of Twitter’s board to Mr. Musk shows advertising alone probably isn’t the answer.

The key question around Twitter has always been the apparent disconnect between its valuation in public markets and its perceived influence on the public consciousness. In the markets, Twitter currently has an enterprise value of 6.4 times forward revenue to Meta’s 3.4 times. That might sound generous, but consider that next year, Wall Street is only expecting Twitter to generate $6.7 billion in advertising revenue to Meta’s nearly $149 billion.

Yet whether in building hype for Mr. Musk’s visions of electric cars and private space flight, or propelling the presidential campaign of a certain New York property developer, or driving the national social and political movements of recent years, Twitter’s role is undeniable.

The question now is whether Mr. Musk can succeed better in bridging that gap than the men who came before him. Whatever his plans, we have to assume they are a lot bigger than a paid-for edit button. Boosting monetization through subscriptions won’t be enough if it comes at the price of undermining Twitter’s central role in the discourse, thus harming its ultimate value proposition as the public square of the 21st century.

After two attempts to lead the company, co-founder

Jack Dorsey

resigned late last year, noting being founder-led is a “single point of failure” and “severely limiting” for a company. Lest anyone think Mr. Dorsey blames only himself, however, he also tweeted earlier this month that the board has “consistently been the dysfunction of the company.”

Now Mr. Musk needs to cure that dysfunction under perhaps the most intense public spotlight yet, while also running two other huge and innovative companies. All this for a man whose limitless ambition hasn’t always translated into follow-through.

It won’t be enough just to promise a new concept anymore. If Mr. Musk hopes to drive his latest cybertruck off into the sunset, its windows and much else better be bulletproof.

Write to Laura Forman at laura.forman@wsj.com and Aaron Back at aaron.back@wsj.com