Practical Techie: Billionaire Musk goes after Twitter
US citizens cherish nothing more than the constitutional doctrine of free speech, yet it is a divisive issue in terms of political ideology. And just this month of April 2021, the CEO of Tesla and SpaceX Elon Musk fired up the debate in the worlds of business and technology when he acquired a roughly 9% stake in Twitter and harped on the theme of how the social media platform fared in terms of free speech.
Basically, the billionaire considers Twitter must be more “inclusive,” whatever that means in his entrepreneurial and worldly-digital-citizen mind. In a letter to the Twitter board, Musk stated he believes that the company should be private to go through the changes that need to be made. Soon after the bid, Twitter CEO Parag Agrawal officially announced that Musk joined the social media giant’s board of directors. All this action sent Twitter shares surging by 10% in pre-market trading.
BACKSTAGE — A month before the purchase announcement, Musk criticized Twitter for “failing to adhere to free speech principles” and asked whether a “new platform” was needed. Subsequently, Musk posted a Twitter poll asking his followers if they think Twitter “rigorously adheres” to the idea that “free speech is essential to a functioning democracy.” The poll received more than 2 million votes; more than 70% voted “no.” Some who commented on the survey suggested Musk launch a social media platform of his own or buy a stake in Twitter. A large group of Twitter employees announced they would resign if Musk tampered with its content ethics. This prompted top Twitter executive Lulu Cheng Meservey to post a warning message: “If you’re a Twitter employee who’s considering resigning because you’re worried about Elon Musk pushing for less regulated speech… please do not come work here.” Huh? It left many scratching their heads, although Cheng Meservey declared she was merely “poking” around.
BOARDROOM — With more than 73 million shares valued at around $2.89 billion, Musk is now the single largest outside investor in Twitter, even if he does not have operational control. He would need at least 50% of all shares to have a controlling stake in the company. As it currently stands, Musk would be unable to change Twitter policies or control which users are or are not banned from the platform without support from other investors. Musk’s initial bid values the social media company at $43 billion. In the public letter, Musk highlighted that he believed Twitter’s full potential is yet to be realized as a platform for free speech. In one of the first news media reactions to the deal, Fox News stated through host Trish Regan that Musk, an African-American, could constitute a major shift in the US social media landscape.
FIDUCIARY — After much back and forth, Musk decided not to join Twitter’s board, as previously announced by Agrawal. Musk would rather become a fiduciary of the company, a common role in business. A fiduciary is a kind of umbrella term to describe an individual who is bound by a legal and ethical responsibility to act in a client’s interest. Many cases fall under fiduciaries, such as the relationship between brokers and investors, court-appointed guardians and their legal wards, attorneys, and clients. Or as board members and shareholders, as in the case of Musk and Twitter.
INTENTIONS — Despite all the above, the late March poll seemed to have set a path of action for Musk.
“Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy,” he stated in a later tweet that month. “What should be done?” he is quoted by Bloomberg.
Despite such musings, analysts in the high-tech sphere predict that Musk is unlikely to do anything with his current stake at Twitter. Given that his shares are classified as passive, the businessman is, on paper, not seeking to exert control over the platform’s day-to-day operations.
Others, such as business analyst Daniel Ives, with Wedbush Securities, allege that, on the contrary, Musk will attempt “aggressive” actions once he consolidates more shareholder power with Twitter. This includes a buyout of the pervasive social media platform to enact changes to Twitter’s “free speech” policies.
OUTCOME — In the days leading up to the acquisition announcement, Musk kept active in suggesting changes to Twitter. He asked users if they wanted an edit button and proposed anyone who pays for Twitter Blue — the social media’s subscription version — should be able to do so in Dogecoin and get a blue tick and see their dashboards free of ads. He also suggested turning Twitter’s headquarters in San Francisco into a homeless shelter. Meanwhile, conservative pundits — namely Donald Trump followers — have already called on Musk to reinstate the former president’s account. In 2020, Twitter executives banned Trump for “inciting violence” in the wake of the January 6 Capitol riot.
What will finally happen remains to be seen in the forthcoming months.