A lot has happened in the past 24 hours. In a way, it has turned upside down, at least as far as Twitter is concerned. For those who haven’t been able to catch up with the latest news, here’s a quick summary of what happened: Tesla CEO Elon Musk is joining Twitter’s board.
Bloomberg, citing a 13G filing, on Monday reported that Musk had purchased 73.5 million shares of Twitter, which gave him a 9.2% stake in the social media platform. The stock purchase happened on March 14 and the investment made the maverick CEO, Twitter’s largest investor.
The news sent ripples through the market (and the tech world) and it led to a 27% increase in Twitter’s stock value. It also made Musk, who is already the richest man on the planet, a tad bit wealthier. According to the latest Forbes data, Musk’s net worth stands at $302.1 billion.
While the world was still getting in terms with Musk being a part of the Twitter-verse came another piece of news: The Boring Company founder was joining Twitter’s board!
The news was confirmed by Twitter CEO Parag Agarwal and Twitter founder Jack Dorsey, who welcomed Musk in Twitter’s team and on Twitter’s board. Here’s what they said:
He’s both a passionate believer and intense critic of the service which is exactly what we need on @Twitter, and in the boardroom, to make us stronger in the long-term. Welcome Elon!
— Parag Agrawal (@paraga) April 5, 2022
I’m really happy Elon is joining the Twitter board! He cares deeply about our world and Twitter’s role in it.
Parag and Elon both lead with their hearts, and they will be an incredible team. https://t.co/T4rWEJFAes
— jack⚡️ (@jack) April 5, 2022
Musk accepted the pleasantries with equal enthusiasm mixed with a hint of criticism. Here’s what he said:
Looking forward to working with Parag & Twitter board to make significant improvements to Twitter in coming months!
— Elon Musk (@elonmusk) April 5, 2022
In between, Musk asked his followers on Twitter if they wanted an ‘Edit’ button on the platform. This post was later retweeted by Agarwal with a cautionary message which says – “The consequences of this poll will be important. Please vote carefully.”
The consequences of this poll will be important. Please vote carefully. https://t.co/UDJIvznALB
— Parag Agrawal (@paraga) April 5, 2022
Now, Musk and Twitter have had a love-hate relationship for a long time. Musk is an avid Twitter user who, in the past, has used the platform for sharing everything from updates about his Starlink satellite and funny memes to promoting Dogecoin (on several occasions). For instance, Musk said, “The total transaction flow that you do with Dogecoin is transactions per day has much higher potential than Bitcoin,” in an interview with Time magazine back in January this year.
More recently, Musk said:
As a general principle, for those looking for advice from this thread, it is generally better to own physical things like a home or stock in companies you think make good products, than dollars when inflation is high.
I still own & won’t sell my Bitcoin, Ethereum or Doge fwiw.
— Elon Musk (@elonmusk) March 14, 2022
Contrary to that, he was quick to criticise Twitter when the company introduced NFT-based profile pictures on its platform. Here’s what he said:
Twitter is spending engineering resources on this bs while crypto scammers are throwing a spambot block party in every thread!?
— Elon Musk (@elonmusk) January 21, 2022
Not just this, the SpaceX founder, who is also a self-claimed “free-speech absolutist”, has also criticised Twitter for undermining free speech and democracy. His most recent attack on Twitter began on March 25, when he conducted a poll asking people – “Free speech is essential to a functioning democracy. Do you believe Twitter rigorously adheres to this principle?.” 70.4% of people responded with a ‘No’.
A day later, Musk declared a war on Twitter once again. “Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy. What should be done?,” he wrote in a tweet. But this time, he didn’t bother to conduct a poll. Instead he wrote, “Is a new platform needed?.”
This entire episode follows Musk’s ongoing battle with the Securities and Exchange Commission (SEC), which has fined Musk and Tesla for his tweet about securing funding to take Tesla private. His tweets have also costed him Chairmanship at Tesla’s board.
Needless to say that Musk’s Tweets have landed him in ample trouble in the past, which in turn has left him aggrieved. What isn’t clear is why is he targeting Twitter? If anything, the micro-blogging platform has done nothing, absolutely nothing, to curtail his free speech.
For instance, he once called a British cave explorer, who helped in rescuing 12 school boys stuck in a cave in Thailand, as a ‘pedo guy’. He also tweeted and deleted a meme comparing He once tweeted, then deleted, a meme comparing Canadian Prime Minister Justin Trudeau to Hitler. He has also shared transphobic memes from his account. Yet, Twitter has done almost nothing to curtail his speech.
Even so, Musk seems to find Twitter hindering free speech somehow. What remains unclear is why Musk invested in Twitter?
Why did Elon Musk invest in Twitter?
There are many reasons why this might have happened and one of the reasons that pops out from the book is that the Tesla CEO wants to bring Twitter to heel. Consider everything that posts on Twitter have costed him – several fines by the SEC, chairmanship at Tesla’s board and a lawsuit by the British cave explorer (which is won). It wouldn’t be too far-fetched to say that his relation with the platform has left him aggrieved and now he wants to set the record straight.
Alternatively, he could also want a controlling stake in the company so that he has a say in what Twitter builds or in other words the platform gets him trouble less frequently. Or at the very least, there is an escape mechanism in place (welcome, edit button). Getting a controlling stake in Twitter would definitely be easier than getting a place in Facebook’s board. For reference, Twitter’s market value stands at $31.5 billion whereas Facebook’s market value stands at $545 billion. Musk’s net worth is also more than Twitter’s market value.
Another alternative that Musk floated around was building a separate social media platform. But we all know what happened to former US President Donald Trump’s social media platform, Truth Social app: the app isn’t fully operational, downloads are falling and executives are leaving the company. Simply put, social media space is a bit crowded right now and there are fewer chances of succeeding. Also running a social media company is hard and it costs a lot of money.
To sum it up, the Tesla founder doesn’t seem to be interested in Twitter to up his own wealth. There are better companies he can bet on for it. What does seem to be a probable reason is having a say in the company that he is a devout user of and that has gotten him in ample trouble in the past.