Billionaire Elon Musk’s interest in buying Twitter raises questions about the Tesla founder’s motivations and what he might change on the platform, should he acquire it.
On Thursday (15), he made a proposal to buy Twitter for US$ 41 billion (about R$ 197 billion), saying that if the offer is not accepted, he will “reconsider” his position as a shareholder. On the same day, the company said it would discuss the proposal.
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Here’s why Musk is interested in the social network and what might change if he buys the company.
1. Why is Musk interested in Twitter?
Because, according to him, the service is not fulfilling its potential as a “free speech platform”. Musk insists he is not interested in making money from Twitter and on Thursday said his motivation stemmed from the realization that “having a public platform that is as credible as possible and widely inclusive is critically important to the future of Twitter.” civilization”.
Twitter, like other social media platforms, suspends accounts for violating content standards, including violence, hate speech or harmful misinformation. Donald Trump’s suspension has angered the former president’s supporters.
Musk has called himself a “free speech absolutist” while also blocking Twitter users who question him or disagree with his views. Regulators also accused his company, Tesla, of retaliating against black workers who spoke out about discrimination.
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2. What can Musk change on Twitter?
It is difficult to have a concrete answer. However, in saying that Twitter is not fulfilling its potential to be a “free speech platform”, Musk seems to suggest that he would reduce content moderation on the platform.
On the other hand, the billionaire has already asked the platform to crack down on spam accounts, which implies more moderation.
In addition, he proposed removing ads from the service – which are how Twitter makes money – and turning its San Francisco headquarters into a homeless shelter. He also seems to approve a button to edit tweets.
3. What concerns does Musk’s proposal raise?
Social media companies are implementing actions to curb misinformation and hate speech. And Musk, who is known for sharing memes and controversial posts – doesn’t seem interested in content moderation.
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“Regulators around the world will be shaken by the potential free speech implications if Musk’s takeover bid is successful,” said Rachel Foster-Jones, analyst at GlobalData.
“Musk is clearly serious about promoting free speech for the benefit of democracy, but the line between free speech and hate speech or disinformation is becoming increasingly blurred, and attempts to change Twitter can easily lead to these issues out of control”.
In his conversation with Anderson, Musk said that Twitter is “bound by the laws of the country it operates in, so obviously there are some limitations on free speech in the US, and of course Twitter would have to abide by those rules.”
On the other hand, the billionaire said it was “quite dangerous” to have “mysteriously promoted and demoted tweets” and to have a “black box algorithm”.
4. What could happen in the case of purchase?
Twitter may hire bankers and consultants to help it review the deal, said Scott Kessler, a technology, media and telecommunications analyst at Third Bridge.
And other buyers may come along. “It seems that if potential strategic and/or financial buyers are interested in Twitter, they should probably get involved now.”
Musk said where will he get the funds to buy Twitter from?
Not. And its regulatory filing says the offer is subject to “completion of an early financing.”
During an interview Thursday onstage at the TED 2022 conference, Musk vaguely noted that he has “enough assets” to complete the deal, adding, “I can do it if possible.”
5. Can Musk acquire Twitter with just his personal fortune?
Musk is the richest man in the world, according to Forbes, with a fortune of nearly $265 billion. But much of his money is tied up in Tesla shares — he owns about 17% of the company, valued at more than $1 trillion, according to FactSet — and SpaceX, his private space company. It’s unclear how much money Musk has.
“I think it’s going to be a little painful and I’m not sure I’ll actually be able to acquire it,” Musk said in his interview on Thursday.
Musk could sell Tesla stock to raise money — which could hurt Tesla’s stock price — or borrow against its stock. But Forbes notes that he has already used more than half of his Tesla stake as loan collateral.
6. What do shareholders think about Musk’s offer?
The stock traded below its offer price of $54.20 a share on Thursday, indicating investors doubt the deal will be completed. The stock has traded above $70 for the past 12 months and peaked at $80.75 in February 2021.
There has been executive turnover since the departure of co-founder Jack Dorsey in November left Twitter with a new CEO, Parag Agrawal, whose initial actions involved internal reorganizations.
There have been no major changes to Twitter, which, despite its massive influence due to high-profile celebrities and posters of politicians, as well as a dedicated base of journalists, has fewer users than social media rivals like Facebook and TikTok. Musk himself is a big user with over 81 million followers.
Dorsey, still a major shareholder, declined to say what he thought of Musk’s offer.
Twitter said only that it would review the offer. A spokesperson declined to respond to whether the board will put in place a defense against a hostile takeover known as the “poison pill.”