In the last 24 hours, a lot has occurred. It has been a bit of a reversal, at least for Twitter. Here’s an overview of the most recent news: Tesla CEO Elon Musk joins Twitter’s board.
Bloomberg reported Monday that Musk purchased 73.5 Million shares of Twitter. This gave him 9.2% ownership. Bloomberg cited a 13G file. Musk, the CEO of Twitter and the most prominent investor in the company’s stock was purchased on March 14.
It sent waves through the markets (and tech world), and led to a 27% rise in Twitter stock price. Musk, already the world’s richest man, was also a little more wealthy. The latest Forbes data shows that Musk has a net worth of $302.1 billion.
As the Twitterverse was still adjusting to Musk’s inclusion, another bit of information was released: Musk was joined by the Boring Company founder!
Parag Agarwal, Twitter CEO, and Jack Dorsey (Twitter founder), confirmed the news and welcomed Musk to Twitter’s team as well as on Twitter’s board. This is what they had to say:
Elon is both an avid believer in and a fierce critic of Twitter, which is precisely what @Twitter and the boardroom need to be stronger long-term. Welcome Elon!
— Parag Agrawal (@paraga), April 5, 2022
Elon joining our Twitter board is a great thing! Elon cares deeply for the world around him and Twitter’s place in it.
Parag, Elon and their heartfelt leadership will make them an amazing team. https://t.co/T4rWEJFAes
— Jack (@jack), April 5, 2022
Musk was open to all the niceries, with equal enthusiasm and a little bit of criticism. This is what Musk said.
We look forward to working together with Parag & Twitter Board to improve Twitter over the next few months.
Elon Musk (@elonmusk), April 5, 2022
Musk also asked Twitter followers if they would like an “Edit” button to be added on Twitter. Agarwal retweeted the post with an important cautionary message: “The implications of this poll are important. Vote carefully.
This poll’s results will have important consequences. Vote carefully. https://t.co/UDJIvznALB
— Parag Agrawal (@paraga), April 5, 2022
Relationship between Twitter and Musk
Musk and Twitter have been in a loving-hate relationship for many years. Musk, a frequent Twitter user, is a fan of the social media platform. He has shared updates on his Starlink satellite, funny memes, and promoted Dogecoin (on multiple occasions). Musk stated that Dogecoin’s total transactions flow, which is approximately 2,000 transactions per day, has a higher potential than Bitcoin in a January interview to Time magazine.
Musk also stated:
For those seeking advice, this thread will generally advise that it’s better to have physical items such as a house or stocks in companies that make quality products than having dollars at high inflation.
My Bitcoin, Ethereum and Doge fwiw are mine. I won’t let them go.
Elon Musk (@elonmusk), March 14, 2022
He was not pleased with Twitter’s introduction of NFT-based profiles pictures. This is what he had to say:
Twitter spends engineering resources on this bos, while crypto-scammers throw a spambot party in each thread! ?
Elon Musk (@elonmusk), January 21, 2022
This is not all. The SpaceX founder and self-described “free speech absolutist” has also attacked Twitter for undermining freedom of expression and democracy. On March 25, he ran a survey asking the public if they believed free speech was essential for a functioning democracy. Are you sure that Twitter adheres to the principle of free speech? 70.4% responded “No”.
Musk declared war again on Twitter a day later. Musk declared war on Twitter again, stating that Twitter is the “de facto public square”. This fundamentally undermining democracy. He wrote, “What should we do?” in a tweet. He didn’t even bother with a survey this time. He wrote instead, “Is it necessary to create a new platform?”
The entire episode follows Musk’s battle against the Securities and Exchange Commission. They have fined Musk and Tesla because of Musk’s tweet regarding securing financing to take Tesla private. Musk’s tweets also led to him losing the Chairmanship of Tesla’s Board.
Musk’s tweets, it is obvious, have caused him a lot of trouble in the past. This has made him angry. It is not clear why he is targeting Twitter. The microblogging platform did nothing to restrict his freedom of speech.
He once called the British cave explorer who assisted in saving 12 Thai schoolboys trapped in a cave, a “pedo man”. He deleted and tweeted a meme that compared Justin Trudeau, the Canadian prime minister, to Hitler. His account has been used to share transphobic memes. Twitter did almost nothing to stop his speech.
Musk still seems to believe that Twitter is somehow limiting free speech. It is not clear why Musk decided to invest in Twitter.
What made Elon Musk decide to invest in Twitter?
This could have been for many reasons, but one reason that stands out is the desire of Tesla CEO to take down Twitter. Take into account all the consequences of his tweets on Twitter: several SEC fines, Chairmanship at Tesla’s Board and a lawsuit brought by the British cave explorer. He would not be wrong to suggest that his relationship with Twitter has caused him to feel aggrieved. Now he is determined to correct the record.
He could want to own a majority of the company, so he can have input on how Twitter develops. At the minimum, an escape route (welcome to edit button) is in place. It would be much easier to get a control stake in Twitter than it is in Facebook. Twitter has a market value of $31.5 billion, while Facebook has a market value at $545 billion. Musk’s net worth exceeds Twitter’s value.
Musk also suggested the possibility of creating a new social media platform. We all know the fate of Truth Social App, the former US president’s social media platform. The app isn’t operational and downloads have fallen. Executives are also leaving. The social media market is very crowded and has less chance of success. It is also difficult and expensive to run a company in social media.
The Tesla founder seems to not be keen on Twitter as a way to increase his wealth. He can place his bets on better companies. One possible reason for this is his influence in the company he loves and has caused him plenty of trouble.