Elon Musk Buys Twitter - What’s The Worst That Could Happen?
Cut through the politics, scandal, and war that’s plastered across our papers at the moment - a war of words and money has taken place.
Elon Musk, Tesla founder and literally the richest man in the world has bought Twitter, one of the biggest platforms for opinion and freedom have speech have struck a deal.
At $54.20 a share, or around $44 billion in total- the move has the potential to completely change the face of the short form content platform.
But is it for better or worse? Well it depends on what side of the spectrum you’re on. Musk is workshipped by many. In fact he’s a prominent troll on Twitter, and he’s been known to allegedly influence the stock market there from time to time.
I know I’m cautious of the change, and as more time passes since the announcement I’m seeing other outlets express the same concern.
Elon Musk and Twitter: What’s the background?
Musk, the Tesla founder and a notorious Twitter troll, acquired 9.2 percent of Twitter earlier this month, making him the company’s largest shareholder. Twitter told employees that Musk would be joining the company’s board, but then reversed course. Days later, Musk made a play to take Twitter private, calling the $54.20-per-share bid his “final offer.” It seemed like a long shot that Twitter would accept the deal, but the billionaire last week said he had secured the financing necessary to make it happen. This piqued Twitter’s interest, to say the least.
The sale comes amid speculation that Musk has been gaming the Securities and Exchange Commission. He was 11 days late in declaring that he’d bought more than five percent of the company earlier this month, a move that allowed him to net over $150 million as he continued to buy stock before disclosing his stake, which prompted the price to rise. “I really don’t know what’s going through his mind. Was he ignorant or knowledgeable that he was violating securities law?” University of Maryland finance professor David Kass told The Washington Post.
A few weeks later, when Musk made his initial offer to take control Twitter, Mark Cuban alleged that he was “fucking with” the SEC before referencing a controversial tweet in which Musk wrote that he was taking Tesla public at $420 a share. The tweet, an apparent weed-smoking joke, led to accusations of market manipulation. Musk has made clear that he is not a fan of the regulatory commission. “I do not respect the SEC,” he told 60 Minutes in 2018. “I do not respect them.”
Following Monday morning’s news that Musk and Twitter were nearing a deal, Twitter’s share price shot up five percent. The company halted trading of its shares later on Monday in anticipation of the sale announcement. Tesla’s stock plummeted in reaction to the news.
Twitter’s’ shareholders will receive $54.20 per share, a nearly 40-percent premium from where the stock’s price sat on April 1. “The Twitter Board conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty, and financing,” Bret Taylor, Twitter’s Independent Board Chair, said on Monday. “The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders.”
Musk and misinformation: the Twitter Takeover
Image taken from Musk’s Twitter profile
Personally, the news takes me back to 2016; false and hyperpartisian content was birthed after Trump (another ridiculously wealthy cis man) took control of the White House. His tweets before, during, and after his four year presidency are historical, but the impact and stats behind the birth of misinformation are not as well known.
Mid-November that same year, Buzzfeed published a report proving that fake news outperformed traditional reporting online in the months before the vote. Again in 2016, Pew Research centre revealed that 88% of American adults said they believed “made up news” has created confusion on “the basic facts of current events”.
My point being, the rich should never be placed in key positions of power. The White House and owner of Twitter may feel worlds apart - but they’re not really. Both hold key places in influencing public opinion. Twitter is a global space for communication, opinion, and political action - it’s been used to revolutionise the women’s rights in the film industry with #MeToo, organise political uprising across the globe, and even ensure refugees find safety in the Ukranian War.
There is no denying Twitter is a place of influence, and for someone known to use the platform to allegedly influence the market and it’s consumers is concerning to say the least.
Trump: The second coming
In a CNBC article, Trump referred to Musk as the “modern day Edison”
20 minutes into writing this article, my phone pings with another news notification; the Biden administration officials are reportedly concerned over the implications of an Elon Musk owned Twitter, fearful that his ownership could exacerbate misfornformation and impact the 2024 presidential race.
Officials are said to be closely watching the deal, concerned Musk will reinstate accounts of Republican officials, including Trump. Whilst Musk has never commented on the potential second coming of Trump , it’s evidently playing on the mind of politicians across the water.
Musk is "a great engineer and businessman but I would not trust him with my daughter let alone the millions of people who rely on Twitter for information," said one Democratic strategist.
Powell, for one, told CNBC in an email that she would consider trying to reinstate her Twitter account should the deal with Musk close.
"I would consider returning," Powell said, "and I'm delighted someone interested in free speech is interested in reclaiming Twitter in the name of truth and freedom."
What do we think?
The news has just broken. We know nothing for certain, but I think there will be a large part of the world watching what Musk’s next moved are.
As I noted earlier in the article, I’m concerned for the rise in misinformation and I’m not alone in that. Musk has been known to use Twitter for financial gain in the past, and with the acquisition of Twitter already muddied by rumours of market manipulation - I am not optimistic.
Some might argue that Twitter has already censored free speech by removing the xenophobic and false narrative that Trump once pumped into the ether. But I would disagree, and call that an argument for another day.
From a marketing point of view, I can also see the potential for Twitter to improve and become a better space for eCommerce.
All in all, let’s stay hopeful.