Elon Musk reached a deal to acquire Twitter Inc. TWTR-N -2.01% decrease for US$44-billion on Monday when the social-media platform agreed to his offer of US$54.20 a share in cash. Twitter will now become a privately held company.
Why does Musk want to buy Twitter?
The Tesla and SpaceX chief executive officer, an avid Twitter user, has previously expressed his criticisms about Twitter’s “failure to adhere to free speech principles,” believing it “fundamentally undermines democracy,” according to a March 26 tweet.
“I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans. Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it,” Mr. Musk said in a tweet Monday.
He also wants to combat trolls on Twitter, and make changes to the Twitter Blue premium subscription service, such as reducing the price and dropping advertising, Reuters reported.
“He wants to protect freedom of speech. … It has been a fundamental part of the American spirit,” said Mariam Humayun, an assistant professor of marketing at the University of Ottawa’s Telfer School of Management with research interests in the intersection of consumer culture, technology, branding and social media. And the deal is reflective of current societal trends.
“Corporations are investing a ton of money into media companies,” said Prof. Humayun.
“There is this movement where corporations know that whoever controls the eyeball is going to have a lot of power.”
Mr. Musk is buying Twitter personally. It’s not clear how he might mesh the social-media platform with his other businesses.
How might Twitter change under Musk’s ownership?
Mr. Musk’s plans for Twitter’s future largely depend on his conception of free speech and whether the 50-year-old entrepreneur plans to use Twitter as his private playground, said Alfred Hermida, who has been writing about and researching Twitter for more than a decade and is the author of the social-media book Tell Everyone: Why We Share and Why It Matters.
Although Twitter is a corporation, it operates like a public utility or a digital town square.
“If we take Musk’s free speech as absolutist, then Twitter will become a free-for-all space, still bound by the legal systems a country operates from, but a place where people are shouting at each other isn’t valuable,” Mr. Hermida said.
Along with changing content-moderation rules and making Twitter more relevant, Mr. Musk also wants to shift the company’s algorithm into an open-source model where users can see how certain posts come up in their timelines.
How has the bid affected Twitter’s stock price?
Twitter shares have been rising since Mr. Musk declared his interest in the company on April 14.
The social-media platform’s shares were below US$40 a share in late March before beginning to rally. On Monday, Twitter shares jumped US$2.77 to US$51.70 on news of the deal.
How might this deal work with Musk’s other business holdings?
“Tesla doesn’t do traditional advertising. Oftentimes the brand is Elon Musk,” Prof. Humayun said. “So having access to a platform where his audience lives and he can preach to the choir just makes economic sense.”
“From a branding perspective, it’s great because Twitter is like an advertisement channel for all his product launches and other businesses. He can sell more Tesla cars and SpaceX tickets,” she added. “He’s good at captivating attention, and once you have people’s attention and eyeballs, you have access to their wallets.”
How are Twitter employees reacting to the potential deal?
Some Twitter employees have expressed worry and frustration about what’s been described as a hostile takeover, according to reports.
“Twitter realizes there’s toxic elements on the platform. So there’s a fear among employees that all the work they’ve done to mitigate that might be undone,” Prof. Humayun said. “Donald Trump had to be pushed off the platform after the Jan. 6 insurrection,” so any move to bring him back “will be tricky for folks saying, ‘We need more limits.’”
However, Mr. Trump told Fox News Monday that he will not return to Twitter even if his account is reinstated as he plans to formally join his own startup, Truth Social, in the coming week.
The Globe and Mail, April 26, 2022