Twitter: Why Elon Musk has been so keen on taking control
At first, the story of Twitter and Elon Musk feels a little like a tale of unrequited love.
Our unlikely couple starts out with an imbalance of power.
Elon Musk loves Twitter. He has an enormous audience of 8.38m followers. He tweets prolifically, sometimes controversially, occasionally catastrophically. The SEC banned him from tweeting about Tesla affairs after one tweet wiped $14bn off its share price, and he was sued for defamation following a tweet about a cave diver in which he called him “pedo guy” (the cave diver lost).
But he has never strayed far from his keyboard.
Twitter on the other hand is far less effusive about Elon Musk.
You might think, if someone offered you $44bn for a 16-year-old business that hadn’t really enjoyed the exponential growth of its rivals, they were doing you a favour – and Twitter’s shareholders seem inclined to agree.
He wants to see Twitter fulfil its “extraordinary potential”, he says – and he’s not even that interested in making money out of it. He has plenty of that already, and multi-billionaires can afford to have different priorities.
Twitter responded by going straight on the defensive, deploying a “poison pill” strategy which prevented anybody from owning more than 15% of its shares while Musk circled, though a deal has now been agreed.
Perhaps the board was unnerved by Musk’s declaration that he wanted to see more “free speech” and less moderation. Many Republicans, who have long felt that Twitter’s moderation policies favour the freedom of speech of left-leaning viewpoints, rejoiced.
But regulators around the world are lining up to crack down on social networks and force them to take more responsibility for the content they carry, issuing steep fines for non-compliance on material that incites violence, or is abusive, or classifies as hate speech, among other things. You can hear the alarm bells start to ring.
Let’s not forget the finances. Twitter’s main business model is ad-based – and Musk wants to change that. He’s more interested in subscriptions, he claims, which could prove a hard sell in an environment where all the main social networks are free-to-use. Twitter users may decide they prefer for their data to not be used to monetise them and they’re willing to pay for that – but it’s a gamble.
He also likes crypto-currencies. Could he use the platform to incentivise payments in volatile, unprotected currencies such as Bitcoin?
And then there’s Musk himself. He’s the richest man in the world, a serial entrepreneur whose successes include PayPal and Tesla. He’s charismatic and unfiltered – which can make him a very loose canon indeed. He likes to test boundaries and break rules.
There’s a reason why he declined to join Twitter’s board after buying a 9.2% stake in January – he didn’t want to be bound by the responsibility.
And he has an army of loyal fans who adore him – I once tweeted about the fact that, because of the way his finances are structured (his wealth is largely shares-based rather than cash income, and he doesn’t own property) – he doesn’t pay income tax.
How dare I suggest that he might, he’s brilliant and we should simply be grateful for him, came the replies.
He has not exactly wooed Twitter with flowers and chocolates, this has been an aggressive bid from an aggressive businessman – no negotiation, no compromise.
It’s a private sale, of a private company, and it’s not a merger between two giants so there is unlikely to be much in the way of regulatory obstacles.
Musk’s Twitter would be a very different landscape for the 300 million people who continue to use it, if indeed they do. More feisty, perhaps, and less liberal-leaning. He could reinstate Donald Trump, who currently has a permanent ban – and given that Mr Trump’s own attempt at a social network, Truth Social, appears to be floundering, he would probably be delighted to return.
It’s hard to summarise the collective view of Twitter’s users. In my unscientific observation, for every tweet welcoming Musk, there seems to be another threatening to leave. But then – since when did Twitter users ever agree on anything?