What Elon Musk Really Wants From Buying Twitter?
Some billionaires buy newspapers, magazines, and sports teams.
Elon Musk is trying to buy a social network that he admits much of the world will hate.
Watch the video above to learn more about the proposed deal
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“Everyone will still blame me for everything,” Musk said during an on-stage interview at the TED conference on Thursday.
“If I take over Twitter and something goes wrong, it’s 100 percent my fault. I think there will be quite a few mistakes.”
So why does the world’s richest man — who already runs multiple businesses with ambitious goals like taking people to Mars — want to buy Twitter, a social media platform that, for all its benefits, is monitored for content issues like hate speech and misinformation, as well as fighting to revive user growth?
Elon Musk announced a 9.2 pc stake in Twitter last week, making him the company’s largest shareholder. Credit: AP
Musk has repeatedly stressed in recent days that his goal is to strengthen free speech on the platform and work to “unlock” Twitter’s “extraordinary potential”.
Others have suggested he may be more interested in raising awareness of whether the deal goes through.
Twitter’s leadership, shareholders, and employees must now ponder this question in the wake of Musk’s fantastic offer on Thursday to acquire all of the stock in Twitter he does not own at a valuation of $41.4 billion.
The offer capped off a whirlwind 10-day period in which Musk revealed he’d become the company’s largest shareholder, accepted a board position to dump it, and the entire time tweeted about how Twitter could die and should consider eliminating the “w” from his name, among other suggestions.
Even by Twitter’s standards — a company that has had to deal with employee turnover, public interest from potential buyers, and no lack of outside oversight — Musk’s push is a lot.
Within Twitter, longtime employees are used to dealing with big changes, said Jenna Golden, who led the company’s political sales force in Washington from 2012 to 2017.
She believes many are holding their heads down and trusting their leaders to help weather the storm.
But Musk’s vibrations can make it difficult to stay focused.
Twitter CEO Parag Agrawal seemed to allude to that difficulty in a Sunday memo, write will be distractions ahead.”
However, after a general meeting Agrawal held with staff on Thursday afternoon, some employees took to Twitter to express frustration at the lack of answers about what Musk’s offer might mean to them and suggest they should keep working on the disruption.
The company now appears to be bracing itself for what could become a protracted takeover drama.
According to reports from the New York Times and others about Thursday’s meeting, Twitter’s board of directors is weighing its options.
One such option could be to implement a defensive tactic known as a “poison pill,” which would give other shareholders the right to buy stock cheaply, effectively diluting Musk’s ownership stake and potentially putting him at the negotiating table. Forced.
Still, there seem to be genuine doubts about whether Musk, a successful but sometimes erratic entrepreneur who found himself in hot water with regulators in 2018 after falsely implying that he’d gotten funding to take Tesla private, is serious about moving forward With the deal.
Despite being the richest man in the world, there are questions about how he would get the money to fund the nearly $42 billion deal.
Musk himself admitted on Thursday that closing a deal would be a challenge.
“I’m not sure I’ll be able to acquire it,” he said.
Twitter’s stock fluctuated slightly on Thursday but remained mostly flat, closing around $45, well below Musk’s bid price of $54.20.
Twitter shares rose in the US after Elon Musk offered to buy the social media group. Credit: AP
The lack of enthusiasm – unusual after a takeover bid – suggests investor skepticism about the deal.
Twitter declined to comment on this story, and Musk did not respond to requests for comment.
Musk’s announced plans for Twitter
To hear Musk tell it, the purpose of his Twitter offering is nothing short of protecting civilization as we know it.
“This is no way to make money,” Musk said at the TED conference.
“My strong intuition is that having a public platform that is maximally trusted and broadly inclusive is extremely important for the future of civilization.”
One of Musk’s plans for the platform is to make its algorithm open source and more transparent to users when a tweet is highlighted or downgraded in their feed.
He also said on Thursday that he would like to have a more lenient content moderation policy.
“I think we want to be very reluctant to take things down and just be very careful about permanent bans; timeouts are better,” Musk said.
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It’s not clear, however, that his plans differ greatly from Twitter’s existing strategy.
While Twitter’s algorithm isn’t currently open source — a term describing code accessible to anyone — leaders at Twitter have expressed support for moving in that direction. The company often makes it clear when targeting certain tweets or types of content.
Twitter has also made the mistake of labeling, rather than completely removing, much of the content often considered problematic, including some types of misinformation.
And it offers several short suspensions to users who break the rules before being removed.
In some cases, Musk’s desire for freer expression on the platform contradicts his other goals and past actions.
During his interview on Thursday, shortly after saying he would like to keep as many legal rulings as possible and would be hesitant to remove users from the platform, Musk said another of his top priorities would be to “end the spam and scam bots, and the bot armies that are [on] Twitter”, accounts that may be a nuisance, but are nevertheless legal.
Musk also previously attempted to delete a Twitter account designed to track the movements of his private jet by offering to pay the freshman managing the account (the account owner declined).
‘A desperate attempt for Musk to attract attention
Other followers of the Tesla and SpaceX CEOs have suggested that Musk’s takeover bid has more to do with polishing his reputation and preserving his vote on his preferred platform.
Musk has long used Twitter to build his brand, communicate with his more than 80 million followers, and troll those he considers his opponents.
In that context, his offering would fit with a long history of high-net-worth individuals buying media properties to bolster their image.
“Elon Musk’s offer to buy Twitter is a desperate attempt by Musk to attract attention,” David Trainer, CEO of research firm New Constructs, said in an investment note Thursday.
“He’s only offering to buy Twitter because Twitter is where Musk is most popular.”
Some Twitter users pointed out that even Musk’s bid price, $54.20 a share, contained the number “420”, which Musk uses to joke about cannabis.
What Elon Musk is doing now
Musk said in his Thursday letter to Twitter that if the board of directors rejects his offer, he would “have to reconsider my position as a shareholder,” a move that could send Twitter’s shares plummeting.
He later hinted on his Twitter feed that he could make life more difficult for the Twitter board if they resisted his offer, offering not-so-vague suggestions for lawsuits and mobilizing other shareholders.
“If the current Twitter board takes actions that conflict with the interests of shareholders, they would be violating their fiduciary duty,” Musk said Thursday evening.
“The liability they would take in doing so would be enormous.”
Musk has previously asked on Twitter whether a new social media platform is needed. If his bid on Twitter fails, he would “try to raise the capital needed to create a similar social media platform to compete with Twitter,” Morningstar Senior Equity Analyst Ali Mogharabi said in an investor note on Thursday.
But Mogharabi added that it could be a “hard task” to “attract millions of daily active users, as Twitter had done by the end of 2021”.
Suppose Donald Trump’s new social media platform Truth Social, which has struggled to get off the ground, is any guide. In that case, internet users aren’t necessarily clamoring for a new platform that claims to be an alternative to free speech for Big Tech- businesses.
If the deal goes through, Musk could change everything from Twitter’s platform policies to workplace culture, said Golden, the former employee, who described the billionaire as “incredibly unpredictable” and “a loose gun.”
She added that the prospect of even more turbulence than usual “makes people worry and fear that things will change: ‘What will this look like? Will this affect our internal experience? How is this viewed in the outside world?”
Twitter’s culture is known for being inclusive and friendly, she said.
“With someone like Musk running the show, that questions much of that.”