Elon Musk, the Richest Man on Earth, Buys Twitter
After several weeks of back-and-forth, Elon Musk, CEO of Tesla, SpaceX, and Neuralink, added a fourth company to his collection: Twitter. The widely-known billionaire has been an avid user of the social media platform, raking in over 85 million followers. Now, the platform is completely in his hands. In his proposed (and accepted) offer, Musk would pay $44 billion, roughly $52.40 per share, to take complete ownership of the company. This plan takes the company, which used to be owned and run by a board of shareholders, and turns it into a completely privatized company. At this point, let’s take a step back and see what led to Musk buying the controversial social media platform and what he will do once the transaction is complete.
As mentioned earlier, Musk is an avid user of Twitter: he posts about several things, ranging from news about his other 3 companies to random thoughts to eccentric economic decisions, such as using a poll to determine whether or not to sell 10% of his Tesla stock, which totals over $16 billion. Being so active on the website, he has found many issues which he wanted to have addressed; however, not being part of the board, he didn’t have any power except to make suggestions. This began to change when Musk bought 9% of Twitter’s stock shares, which was the largest portion of Twitter-owned by a single entity. Normally, this would mean that he would join Twitter’s board of shareholders, but he declined the opportunity, prompting speculation that he was moving towards some bigger plan.
Twitter’s board, not wanting to let the company go private, knew that he would make a move soon, so they adopted the “poison pill” strategy: Musk already owned a large portion of Twitter, so the board planned to sell new stocks at a lower discount, bringing in new money and diluting whatever control Musk originally had. This strategy has the added effect of making the company more expensive to buy should Musk make the offer. Despite this, the multi-billionaire went through with his plan, giving the board an initial offer of $40 billion for the company, and eventually $44 billion, which they eventually took.
The next steps are to finalize the deal and have regulators make sure that no economic regulations are being broken. The process should take about half a year on the high end, but in the meantime, Musk has already begun talking about how he wants to change the platform. His most notable goals are to loosen up restrictions on posts, rid the app of bot armies, and add a (limited) edit feature for tweets. While the last two suggestions are quite popular with regular Twitter users, loosening restrictions on what can and can not be posted has raised quite a controversy. Twitter is known for starting all sorts of conflicts and social movements, but sometimes, what people post goes too far. An example is former President Donald Trump, who was banned from the platform because of his instigating tweets and a possible connection to the January 6th Capitol riots. The users are divided over whether to allow divisive content and hate speech just because it doesn’t break the law. For Musk, however, the solution is clear: untighten the limits. He has often been quoted saying that “free speech is the bedrock of a functioning democracy” and that he believes “Twitter is the digital town square where matters vital to the future of humanity are debated.” While that may seem grandiose, it is the vision of one of the most powerful men in the world, and once the transfer is complete, he will have nearly full reign on letting that vision become reality.