Elon Musk’s freshly-acquired Twitter has been on the boil, with users witnessing a meltdown of sorts. Fears abound that the world’s wealthiest billionaire’s pledge to give free speech a free rein could turn the popular microblogging platform into a free-for-all and allow hate speech and conspiracy theories to flourish.
Musk’s $44 billion purchase of the California-based social media company, founded in 2006, has polarised the world like never before. Significantly, the ferment is not limited to outside users or rights groups that are concerned that Musk’s Twitter grab could give too much power to an individual. The turmoil within the organisation, too, is so intense, and emotions are running so high that the company has reportedly barred its developers from making changes to the platform amid concerns of an internal sabotage.
People Matters unpacks the hectic developments surrounding Twitter in recent weeks, and what they mean for various stakeholders.
How did it all begin?
Elon Musk, the CEO of the world’s largest electric carmaker Tesla, on April 4 announced in a regulatory filing that he had acquired an over 9% stake in Twitter, making him the company’s largest shareholder. A day after, Twitter offered Musk a seat on the board, with its India-born CEO Parag Agrawal making the announcement on the platform, and Musk seemingly accepting the offer. Musk joining the board could have staved off a takeover bid from him, as he could not own, individually or in group, more than 14.9% stake so long as he remained on the board. He turned down the board seat, setting off speculation that he would attempt a full takeover of the platform.
… Which is exactly what he did!
Musk, 50, who also heads rocket company SpaceX, brain-chip startup Neuralink, and tunneling enterprise the Boring Company, went for the jugular, making a hostile takeover bid on April 14. “I am offering to buy 100% of Twitter” for $54.20 per share in what he described as his “best and final offer”. A nervy Twitter board adopted the so-called “poison pill”, a limited-duration shareholder rights plan that allowed other shareholders to buy additional shares at a steep discount if any person or group acquired at least 15% stake in the company without the board’s approval. As it turned out, the manoeuvre did not work, and Twitter agreed to sell itself to Musk, bringing an end to a dramatic and swift courtship.
What happens now?
Once the regulatory and shareholder approvals are obtained for the deal, Musk will take the publicly-traded Twitter private, meaning he will purchase the publicly-held shares and delist from the stock exchanges. A self-proclaimed free speech absolutist, Musk, who is one of Twitter’s most influential users with nearly 86 million followers, has been a bitter critic of the platform’s content regulation policy and has pledged to make speech “as free as reasonably possible” for the 217 million (and growing) daily active Twitter users. He has also pledged to cleanse it of fake accounts, spam bots (automated accounts run by software), introduce an ‘Edit Button’, as well as a feature to allow for longform tweets, which are currently limited to 280 characters. He has also vowed to authenticate all humans, but there are little details of what that would entail. Would it be the end of anonymity and pseudonymity, features that furthered free speech, without provoking political persecution?
Why has Musk’s move evoked so much outrage?
Social media platforms wield considerable influence and have the ability to shape discourses and narratives. Critics believe that if left unchecked or unmoderated, they potentially run the risk of being captured by demagogues who can use them as megaphones to propagate their vile, violent views. It’s feared that Musk’s hands-off approach could legitimise and normalise hate mongering, violence, conspiracy theories and misinformation on Twitter. Also, for all his free-speech advocacy, Musk has shown little tolerance to criticism, blocking users who questioned his views. Worse, when US senator Bernie Sanders tweeted, “We must demand that the extremely wealthy pay their fair share,” Musk responded, “I keep forgetting you’re still alive.” That apart, there are concerns around data privacy as Twitter goes private, freeing itself up from accountability to shareholders, and owned by a maverick businessman.
Will Musk’s free speech absolutism hurt Twitter financially?
It possibly will. Advertising is Twitter’s main source of income. In 2021, it raked in more than $4.5 billion in ad revenue, accounting for about 90% of its total revenue. Analysts fear that the removal of content moderation to make Twitter a haven of free speech, as Musk has envisioned, could spawn misinformation and hate speech, potentially prompting big companies with a reputation to save to distance themselves from the platform. Musk has in the past hinted at a subscription model, but then that could run counter to Musk’s free-speech evangelism. Pay your way to free speech?
Finally, what happens to CEO Parag Agrawal and other Twitter employees?
To date, Agrawal remains Twitter’s CEO, but whether he will remain in his role is doubtful. Ties between him and Musk are anything but warm, and given how the Tesla CEO, who is worth more than $270 billion, has been critical of the Twitter management, Agrawal’s days at the helm are numbered. Reports suggest that if Agrawal is sacked within 12 months of a change in control of the company, he would get about $42 million. Agrawal, who took Twitter’s reins from co-founder Jack Dorsey in November 2021, has expressed uncertainty about the company’s future once the deal closes and it transitions to Musk’s ownership. Agrawal told his employees that there were no plans for layoffs ‘at this time’.