Tesla CEO Elon Musk now says he wants to buy Twitter Straight away, taking it private to reinstate its commitment to “free speech”. But his proposal, which seemed to have failed with investors on Thursday, raises as many questions as it answers.
Among them: Is he serious? Can he get the money together? Will the sale please shareholders? And what will the social platform look like if it is successful?
Why is Musk interested in Twitter?
Basically because the service, they say, isn’t living up to its potential as a “platform for free speech.” Musk insisted he has no interest in making money from Twitter and said on Thursday that his inspiration came from the realization that “having a public platform that is more and more credible and broadly inclusive is the key to civilization.” very important for the future.”
Twitter, like other social media platforms, suspends accounts for violating content standards, which include violence, hate speech or harmful misinformation. its suspension Donald Trump Outrage among supporters of former president
Musk describes himself as a “free speech autocrat” – but he has blocked Twitter users who question or disagree with him. Regulators have also accused his car company Tesla of retaliating against black employees who talk about discrimination.
Has Musk said where he would get the funds to buy Twitter?
No. And their regulatory filing says the proposal is subject to “completion of anticipated financing.”
During an onstage interview Thursday at the TED 2022 conference, Musk said vaguely that he had “enough assets” to complete the deal, adding: “I can do it if it’s possible.”
Can he buy Twitter directly from his personal wealth?
According to Forbes, Musk is the richest person in the world with a net worth of $265 billion. But most of his money is tied up in Tesla stock — according to FactSet, he owns about 17% of the company, which is valued at more than $1 trillion — and SpaceX, his privately held space company. It’s not clear how much cash Musk has.
“I think it’s going to be somewhat painful and I’m not sure I’ll actually be able to achieve it,” Musk said in his interview on Thursday.
Musk could sell Tesla stock to raise money — which could hurt Tesla’s share price — or borrow against his stock holdings. But Forbes notes that he has already used more than half of his Tesla stake as loan collateral.
Will Twitter’s shareholders be happy with their offer?
The stock traded below its offer price of $54.20 per share on Thursday, leaving investors skeptical that the deal would go through. The shares have traded above $70 over the past 12 months and peaked at $80.75 in February 2021.
The executive turnover has happened since the departure of co-founder Jack Dorsey in November, with a new CEO Parag Agarwal leaving Twitter, whose initial actions included internal restructuring.
That hasn’t changed much in Twitter, which, despite its outsized influence due to high-profile celebrity and politician posters, as well as a dedicated base of journalists, has fewer users than social media rivals like Facebook and Facebook. TIC Toc, Musk himself is a huge user, with over 81 million followers.
Dorsey, who is still a major shareholder, has not indicated what he thinks of Musk’s offering.
Twitter just said it would look into the offer. A spokesman declined to answer whether the board would defend against a hostile takeover known as a “poison pill.”
How could Musk be remaking Twitter?
It’s hard to know with Musk, and even trying to play this fantasy game is taking the guy too seriously. Having said that Twitter is not living up to its potential to be a “platform for free speech,” it seems likely that it will undermine content moderation. But he has also called on the company to crack down on spam accounts, which means more restraint.
He proposed dropping the ads from the service – ads are how Twitter makes money – and turn its San Francisco headquarters into a homeless shelter. It also allows a button to edit tweets.
What concerns does Musk raise as the owner of Twitter?
Social-media companies struggle to stop misinformation and hate speech. Musk, whose tweets may lead online bullies to flock to his critics online, isn’t keen on content moderation.
“Regulators around the world will win over the potential free speech implications should Musk’s takeover bid succeed,” said GlobalData analyst Rachel Foster-Jones. “Musk is clearly serious about promoting free speech for the benefit of democracy, but the line between free speech and hate speech or misinformation is becoming increasingly blurry, and Twitter’s efforts to replace these are easily Issues can spiral out of control.”
In his conversation with Anderson, Musk said that Twitter “is bound by the laws of the country in which it operates, so obviously there are some limits on freedom of speech in the US and of course Twitter has to abide by those rules.” Will happen.” But he said it is “dangerous enough” to “mystify and demote tweets” and have a “black-box algorithm”.
what happens next?
Third Bridge technology, media and telecoms analyst Scott Kessler said Twitter may hire bankers and consultants to help review the deal. And other buyers may come forward. “It seems that if strategic and/or financial buyers are interested in Twitter, they should probably engage right now.”