Lofty goal signals return to the digital-payments playbook of PayPal’s early days
Behind Elon Musk’s gamble to turn Twitter Inc. into a company worth more than $250 billion is a beloved idea he has hung on to for more than two decades: digital banking.
The billionaire entrepreneur has talked in dribs and drabs about what Twitter 2.0 might ultimately look like under his control. But late last week, he gave employees a taste of how grandiose his plans are, telling them he envisions Twitter being worth more than 10 times its current value of around $20 billion.
Key to his effort, he has said, is putting the social-media company at the center of users’ financial lives. It is a remake that harks back to the early days of his professional career and his first major corporate setback at a startup called X.com, now known as PayPal.
The early success of the digital-payments company gave Mr. Musk the fortune he parlayed into Tesla Inc., the car maker, and SpaceX, the rocket company. But his inglorious end as the startup’s CEO—ousted while on a trip with his first wife—meant he never got to personally bring his full plan to fruition.
Now, the 51-year-old is painting a world where Twitter users can effortlessly send money to each other, earn interest on deposits and much more through an app. That digital ideal closely resembles his original vision for X.com before it merged with another similarly focused firm to eventually become PayPal.
“I think it’s possible to become the biggest financial institution in the world,” Mr. Musk said in March at a Morgan Stanley conference.
There, he talked about his ambitions for diversifying Twitter after revamping its struggling ad business, which has traditionally made up around 90% of its sales. Analysts say it is possible Twitter, as a payment vehicle, could dramatically boost its revenue.
But as with Mr. Musk’s past experiences in automotive and aerospace, his aspirations face huge challenges, including entrenched players and regulatory hurdles.
So far, Twitter has made only nascent moves toward a payments and finance future. In November, the company took one of the first steps toward becoming a payments processor, filing paperwork with the U.S. Treasury. It now has to register for a license in each state where it plans to do business. Twitter hasn’t yet registered in California, according to a government database.
And Mr. Musk hasn’t talked as much about these plans in his public discussions around his $44 billion deal to acquire Twitter in late October. Rather, he has focused on his view that the platform needed to do more to ensure free speech.
Twitter’s revenue fell to $3 billion last year, he has said, from about $5 billion in 2021 amid an advertiser pullback. On top of dramatic cost-cutting and layoffs, Mr. Musk has seen an exodus of workers unhappy with his new approach.
Last week, he tried to signal to remaining workers that they could benefit greatly from their collective success, rolling out an employee stock plan for the private company that valued it at about $20 billion. He also told them that he sees a “clear, but difficult, path” to being worth more than $250 billion at some point.
That number compares with financial giants, such as JPMorgan Chase & Co., which has a market value of about $380 billion, and Bank of America Corp., worth almost $230 billion. PayPal Holdings Inc., which isn’t technically a bank, is valued at around $85 billion.
Mr. Musk didn’t give a timeline and he didn’t respond to a request for comment.
Motivating workers with the potential of a big payday is a familiar playbook Mr. Musk uses at his other companies. In 2015, for example, he drew some collective eye-rolling from Wall Street when he claimed Tesla, then valued at around $25 billion, would in a decade’s time match Apple Inc., then worth about $700 billion.
Tesla surpassed that $700 billion valuation and became the first auto maker to be worth more than $1 trillion in 2021. Since then, its valuation has fallen to around $620 billion.