The Musk Takeover
Adit Kashyap
April 29th, 2022
Patrick Pleul/picture alliance via Getty Images
USD 44 billion later, Twitter is Musk’s. 100% of it.
Like Elon Musk or not, this is big stuff. Twitter is one of the biggest social media platforms in the world and to have total control of it is very big news. So, what led to this moment and what are its possible ramifications?
Twitter before Elon Musk
Founders Jack Dorsey, Biz Stone, and Evan Williams with former CEO Richard Costello. Co-founder Noah Glass is not in the picture.
Twitter is a social media behemoth. Alongside giants like Facebook, Instagram, Snapchat, YouTube, and TikTok, it dominates the internet. It started out as a little website with an SMS-like concept in mind where one could send share small bloglike updates with friends. After a presentation at South by Southwest music and technology conference in Austin, Texas, the interest in Twitter kept growing and growing. Businesses started using the platform to make announcements regarding new products, services, promotions, etc., while politicians began utilizing the app to increase their reach and popularity among the electorate. A great example of this occurred during the run-up to the 2008 US Presidential election, when former President Barack Obama was able to create a much more significant social media following in comparison to his rival, John McCain, thereby greatly aiding his bid for the presidency. This would henceforth set the precedent for politicians to maintain an active and large social media base to further their message as the world kept walking down the path of digitization.
Twitter also became an important source of information and an alternative to traditional media and an important tool for journalists. Journalists could report on matters without the need for a crew, documenting a particular incident. Instead, they could do an impromptu reporting of the incident via their phones. It also became a popular tool amongst protesters and other political activists to spread their message. The 2009 Iranian presidential election allowed Twitter to establish itself as a center for the dissemination of information. After the victory of President Mahmoud Ahmadinejad, supporters of the opposition’s candidate, Mir Hossein Mousavi, took to the streets. This provoked the government to instate a crackdown on said protestors. Twitter thus became a tool for these protestors to let their fellow compatriots and the world know of what was happening when traditional media could not. This is just one of the many examples that show that Twitter is the modern-day digital town hall, blooming with ideas and information. It should, at least in precedent, that such a function of Twitter, and social media, be treated as inviolable. Yet, this wasn’t to be.
During his second stint as the CEO of Twitter, Jack Dorsey was heavily criticized for limiting access to “objectionable content”. This criticism grew to outrage, especially amongst members of the right-wing of American politics, when former President Donald J. Trump was banned from the platform for violating Twitter’s policies against the glorification of violence. Whatever your opinion on Donald Trump may be, it is undeniable that the precedent set from his banning is extremely dangerous. It has shown the gaps and cracks in the power structure and the degree of accountability within these private-sector companies. If the then-sitting President of the United States of America can get unilaterally banned from Twitter, and all other social media platforms, with no real effort to reverse such a decision, what stops you from being next? You may think you’re too small to be cared about but any sort of deviation that the social media overlords may not like from your part will result in your being de-platformed. Horrible and terrifying precedent. No company should have this amount of power to decide that one can speak only under their terms.
Don’t get me wrong, I love the private sector. It is a bastion of efficiency and innovation. But, without the right legislation, it will go berserk. It will do as it pleases, with whatever goal in mind, without any sort of accountability. It may go after people and groups you don’t like today. Seeing such a sight, you may even be pleased, joyous, and jubilant. But that does not mean that you’ll never be blacklisted too. It was this reality that set the stage for the Musk takeover.
Enter Musk
Elon Musk at the opening of Tesla's gigafactory in Germany.
Elon Musk is a South African-born American entrepreneur, chief engineer, and angel investor. As of April 2022, he is the wealthiest man on Earth with a net worth of USD 252 billion. He is one of the biggest users on Twitter, amassing a following of more than 80 million. He has always been an active user of Twitter, using it to promote SpaceX, Tesla, Dogecoin, and several other things. He was jokingly suggested to buy Twitter by a user, to which he replied, “How much is it?” Musk also told Seth Dillon, the CEO of Babylon Bee, that he “might need to buy Twitter” after the conservative satire news website was suspended for violating Twitter policies with regard to “hateful conduct”.
On April 4th, Musk acquired 9.1% of Twitter’s stock which made him the single largest shareholder of the company. As such, he was invited to join the board of directors. Although accepting the offer initially, he rejected it later as it prohibited him from owning more than 14.9% of the company's stock.
And then, on April 14th, he made an unprecedented offer of USD 43 billion to purchase the entire company, thereby making it private. After much deliberation and plans, Twitter’s board accepted the buyout offer on April 25th for a whopping USD 44 billion. This transaction is not instant due to its sheer size. This means that Twitter hasn’t become 100% Elon Musk’s but will instead transition into being so somewhere in 2022.
Aftermath
The Musk takeover of Twitter has been received with mixed reactions. Some love it while others hate it.
As for Twitter shares, it experienced a 5% increase in its value when it was reported it was only a matter of time for the Musk takeover to take effect. Jack Dorsey, founder, and former CEO of Twitter says that he trusts Musk to be the owner of Twitter and thinks that “taking Twitter back from Wall Street” is the right thing to do.
Politicians like Ted Cruz, Jim Jordan, Yvette Herrell, and other Republican politicians received this takeover positively while their Democratic counterparts like Pramilla Jayapal, Marie Newman, Jesus Garcia, etc., have voiced their concerns. With Musk styling himself as a free speech absolutist, several users are worried that de-platformed accounts will be reinstated and will spread “hateful” and “bigoted” agendas. Donald J. Trump, who was arguably the platform’s most famous and prolific user, announced that he won’t be coming back to Twitter even if his account was unbanned. As the takeover is so recent, the aftermath is still going on and new things will reveal themselves soon.
Possible ramifications
Illustration by Alex Castro / The Verge | Photo by Joshua Lott / Getty Images
Like it or not, Elon Musk is going to play a very important role in our lives. As the soon-to-be sole owner of a multi-billion-dollar social media company, he has the direct power to influence the way we communicate. Before the takeover, he was very loud about the lack of free speech within the platform, with several individuals who express opinions that stray from the ones shared by the Twitter aristocracy being subject to shadow-banning, deletion of tweets, temporary suspensions, and outright bans from the app. Musk has vowed to put that to an end, as since his takeover, he has voiced his desire to turn Twitter into a politically neutral platform, with no bias toward any ideology.
This desire of his, however, may be applicable to the USA but not everywhere else. The EU, for example, has laws like the DSA or the Digital Services Act which was legislated to regulate the sort of speech made on social media platforms, ensuring its legality. Content that is perceived to be illegal under EU law will be having to be swiftly removed from the platform with offending platforms being made to provide 6% of their annual turnover as a financial penalty if they happen to not comply with the rules and remove such content. Other countries too, where freedom of speech isn’t given as much importance as it is in the USA, will wield their legal weaponry against Twitter to ensure that the free speech absolutism of Musk doesn’t come into conflict with their own laws. It is probable that Twitter in such countries will be restricted to some degree or the other to comply with their laws and regulations. This is already seen in places like Germany where since 2017, the country has been taking down “hate speech” on online platforms. However, Musk could also simply not comply with these rules and regulations. Repeat offenders of the DSA will risk being banned from the EU altogether. Instead of trying to preserve the EU market and others like it, perhaps Musk may instead take the road of preserving free speech in the USA and other countries with more relaxed laws surrounding free speech. Musk has, however, stated that free speech on Twitter will respect the provisions of the laws regarding free speech. Musk could decide to comply with every nation’s laws with respect to free speech but since he is based in the USA and keeping up with the laws of all countries and their national subdivisions is a nigh-on impossible task, Elon will probably decide to stick to American laws and disregard the business side of things. In his bid for Twitter, Musk himself said that this isn’t a potentially new source of income for him but instead a means to build a public platform that is trusted by all and is broadly inclusive, something that he sees as being essential to the future of civilization. Still, all this is mere speculation as the purchase was so recent. Things remain to be seen.
It should also be noted that the Musk takeover of Twitter has been financed not by Musk himself by mostly through loans. He must of course pay his creditors back and for this, it is imperative that Twitter makes a profit. This is easier said than done as Twitter has been notorious for being rather unprofitable, turning out a profit only in 2018 and 2019. This could hamper his plans for the expansion of his vision of free speech if it comes into conflict with his obligations to his creditors.
Now, this is a possible ramification that is based on an opinion held by me, rather than anything that has materialized with regards to the Musk takeover. As much as I respect and look up to Elon Musk, one cannot escape the grand power that he has amassed for himself. Twitter is a massive platform, a social media giant that has contributed greatly to the centralization of the internet. With him having total control over Twitter, he can shape the course of the internet. I do think that he is going to set Twitter straight and put it on a path of respecting the freedom of speech but there is nothing that guarantees that he will keep doing that. There could come a time when Elon amasses enough power for himself that the cost of not keeping his promise of making Twitter a haven for free speech no longer outweighs the benefits. Governments must, therefore, legislate laws that protect their citizens’ right to the freedom of speech from the subjective interpretation of companies who may be infected with a bias, something that we clearly saw in Twitter and social media companies in general for the past few years.
Conclusion
In conclusion, I think the Musk takeover is a good thing for Twitter and the internet as a whole. It has broken the monopoly the left had on internet companies, allowing for the introduction of intellectual diversity which will only enrich our lives and advance our civilization forward. His stances on several topics regarding speech and the dissemination of information align with my own. His vision of Twitter looks to be one where information isn’t arbitrarily and subjectively labeled as misinformation and people and organizations don’t need to fit any ideological bill, based on which their presence and reach on Twitter was decided. If done right, it may as well be the 21st century’s digital equivalent to the coffeehouses of the Enlightenment.