Friday, April 29, 2022

Elon Musk Purchases Twitter for $44 Billion


On Monday, Twitter revealed that it had sold itself to Elon Musk, the billionaire founder of Space X and CEO of Tesla. Musk, who is currently the richest man in the world, purchased Twitter for $44 billion, or $54.20 per share.

This purchase follows a quick turn of events between Musk and Twitter over the past few weeks. Musk was revealed to hold a 9.2% stake in the company as of April 4th, briefly making him the largest shareholder of Twitter. After this information went public, Musk was offered a position on Twitter’s Board of Directors, but he later declined. A day after Musk offered to buy the company for $43 billion on April 15th, Twitter’s Board of Directors voted unanimously to adopt a “poison pill” plan that, in the case of any single party acquiring at least 15% worth of stake in the company, would offer other shareholders additional shares at a discounted price. The intention of the plan was to dilute the stake of said single party and prevent a hostile takeover of the company.


However, Twitter’s tune changed rapidly last week when Musk revealed he had $46.5 billion lined up in financing. After a meeting on Sunday, the board agreed to sell the company to Musk, prompting a storm of speculation over what the future held for the social media platform.


Despite its relatively small size compared to other social media platforms like Facebook (Facebook’s user base exceeds one billion, while Twitter’s hovers around 500 million), Twitter has grown increasingly influential over the past few years. Following former president Donald Trump’s abundant use of the platform throughout both the 2016 election and his presidency, it has rapidly gained a notorious reputation, but also a vital role in political discourse. The large number of other politicians, public figures, and journalists that frequent Twitter also undoubtedly helps its relevancy. 


In addition to its general associations with Trump, Twitter has been embroiled in several controversies, most notably being accused of playing a major role in the Capital Riot on January 6th, 2021. Trump’s Twitter account was removed for inciting violence following the riot, but Twitter’s controversies exceed Trump. Due to its disproportionate influence in politics, it has been accused of harboring conspiracists, misinformation, hate speech, and other harmful forms of online communication. As a result, Twitter had begun to crack down on misinformation this past year, especially throughout the pandemic. But in turn, it has been accused of stifling free speech. 


Musk has been one of the loudest critics of Twitter’s moderation, going so far as to call himself a “free speech absolutist.” Despite being 50 years old, Musk has been an active user on the platform — he has over 83 million followers, as well as a tendency to post memes, “go after” other public figures, and make controversial political statements. His political beliefs, while hard to pin down precisely, err libertarian and have recently trended towards the right. Last September, he called California’s stay-at-home orders “fascist,” and in May 2020, violated COVID-19 restrictions to reopen Tesla’s car factory. He has also amassed support amongst reactionary corners of the Internet, especially after using lingo such as “red-pilled.” 


As a result, many fear what Musk’s ownership of the company means for the future of Twitter. In particular, many fear that Trump’s Twitter account may be reinstated, although the former president has claimed that he wouldn’t return to Twitter even if Musk reversed his ban. (Trump has been developing his own social media platform, Truth Social, as a “free speech” alternative to Twitter.) In his Monday tweets, Musk stated that he hopes “even my worst critics remain on Twitter, because this is what free speech means,” and that “free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated.” He also said that he opposes permanent bans and prefers temporary suspensions for social media platforms.


Aside from his free speech “absolutism,” Musk has proposed making Twitter’s algorithms open source for transparency, eliminating spam bots, and adding an edit button. Regardless of what exactly the future holds for Twitter, Musk at the very least seems eager to work on it, and change is almost certain. He concluded one of his Monday statements with “Twitter has tremendous potential — I look forward to working with the company and the community of users to unlock it.”


Questions:
  1. Do you support Musk acquiring ownership of Twitter? Why or why not?
  2. What are the potential political ramifications of Musk controlling Twitter? How much influence do social media platforms like Twitter hold over political discourse, and is that a problem?
  3. In 2013, Jeff Bezos, Amazon founder and second richest man in the world, purchased the Washington Post. What are your thoughts on this trend of billionaires buying media companies?


Sources:

https://www.cnn.com/2022/04/25/tech/elon-musk-twitter-sale-agreement/index.html

https://www.reuters.com/technology/exclusive-twitter-set-accept-musks-best-final-offer-sources-2022-04-25/

https://www.cnbc.com/2022/04/25/twitter-shares-jump-5percent-on-reports-that-its-ready-to-accept-elon-musks-bid.html

https://www.cnbc.com/2022/04/15/twitter-board-adopts-poison-pill-after-musks-43-billion-offer-to-buy-company.html

https://www.independent.co.uk/news/world/americas/us-politics/elon-musk-political-party-views-republican-b2067871.html

https://www.newsweek.com/elon-musk-donald-trump-supporter-twitter-1697979

https://www.cnbc.com/2022/04/25/donald-trump-says-he-wont-return-to-twitter-if-elon-musk-reverses-ban.html

https://twitter.com/elonmusk/status/1518677066325053441


6 comments:

Darshan Gupta said...

To me, it's a little hard for me to make a case for Musk not to buy Twitter, considering the pace of innovation today. We live in Silicon Valley, home of startups. If Twitter becomes obsolete to many of its users because of the direction it takes after Musk buys it, there probably will be a developer who builds a competing platform to account for this market share. These users won't evaporate. Their communities will diffuse into Facebook, Instagram, Whatsapp, etc etc. I am very much on the boat of, "if Musk wants to buy it, and Twitter's okay with it, let him buy it". There is one problem though, many of Twitter's best engineers are going to leave. Software engineering salaries are divided into base salary, equity, and bonuses. If the company is taken private, and base salary/bonuses aren't dramatically improved, then those engineers are going to migrate to companies where they will be paid what they're worth. If Musk doesn't consider this, there will be real problems with the longevity of the platform. That's probably going to be the biggest consequence of taking the company private.

Amitai Smyla said...

I am not entirely sure what to make of Musk buying Twitter given his position on free speech and his self proclaimed "free-speech absolutist" mindset/belief. Clearly free speech is an important right which was sealed in the U.S. Constitution through the 1st amendment, however there are many people who abuse this freedom I believe when spreading lies/misinformation which radicalize media platform users (the insurrection being the prime example to source). If Musk creates a platform or moves it in the direction of being void of regulation/monitoring, I am concerned that the issue of misinformation will be exacerbated and prove extremely detrimental to the American people (and specifically American politics given that a lot of the concerning discourse revolves around political issues, campaigns, endorsements, policies, etc). As for the trend of billionare's purchasing media companies, I personally don't like the thought of individuals being able to shape media platforms that impact hundreds of millions or billions of people based on their beliefs alone, such as Musk deregulating Twitter based on his approach and perspective on free speech. These companies I believe would benefit from distributed ownership and oversight, where there can be a range of perspectives and influences driving the platforms' development and future.

Bryan Kwan said...
This comment has been removed by the author.
Bryan Kwan said...

I don’t really mind Musk owning Twitter unless he does something bad. One thing I’m certainly worried about is the social media regulation aspects and how exactly Musk intends to regulate his own platform. As seen with Mark Zuckerberg, these billionaires are often hard to negotiate with and unwilling to really regulate their respective sites to the extent to which it is needed to avoid conflicts such as the January 6th coup. Single party ownership is also something that can be bad as they are like a dictator over the site, with no one really to challenge them. His tendency to also go to the right will definitely lead to some controversy.

Twitter definitely holds some influence over political discourse as many people use it to vent their opinions and gain traction like Trump. It’s easily accessible and most politicians use it to voice their messages. In this way, Musk’s control over Twitter could have some pretty big political ramifications especially if he abuses his power and does something out of line. For example, he could censor people that don’t line up with his views (I seriously doubt he will do this though) or he could emphasize content that he supports (like rightist views).

Billionaires buying media companies kinda just accentuates elitism and the idea of government being shaped by the elite. This is because media companies often act as gatekeepers for political information and news to the public which can result in different political views that adhere to these rich billionaires (who are often to the right in favor of less government control on the economy). They can affect voting and other things just by shaping what people see.

Pascal Nguyen said...

Well I dont have a twitter so am not too affected by it I think though that Elon being a buisnesman can do whatever he wants and if he wants to buy twitter by all means he can. Plus I think it would be interesting to see this technocrat try his hand on social media. Makes sense considering the cult following he has for him to control the platform is just a way to solidify his control over how his apearence is in front of the camera. I think overall there will be political controversy if there isn't already (I havent bothered to see how others think but am sure someone somewhere is throwing a fit over it.) I think the trend of the billonares like musk and bezos buying up these media companies is just the consequences of not redistibuting wealth. So I think well it is probably dangerous that the rich control the information we get I hope most people will have their doubts when twitter or the post says how great musk is or bezos.

Pascal Nguyen said...

Well I dont have a twitter so am not too affected by it I think though that Elon being a buisnesman can do whatever he wants and if he wants to buy twitter by all means he can. Plus I think it would be interesting to see this technocrat try his hand on social media. Makes sense considering the cult following he has for him to control the platform is just a way to solidify his control over how his apearence is in front of the camera. I think overall there will be political controversy if there isn't already (I havent bothered to see how others think but am sure someone somewhere is throwing a fit over it.) I think the trend of the billonares like musk and bezos buying up these media companies is just the consequences of not redistibuting wealth. So I think well it is probably dangerous that the rich control the information we get I hope most people will have their doubts when twitter or the post says how great musk is or bezos.