UPDATE: Twitter appointed Musk to its Board of Directors, noting that he cannot own more than 14.9% of the company, according to a filing with the Securities and Exchange Commission (SEC). Musk will serve in this position until 2024. “I’m excited to share that we’re appointing @elonmusk to our board! Through conversations with Elon in recent weeks, it became clear to us that he would bring great value to our Board,” CEO Parag Agrawal said in a tweet. “Looking forward to working with Parag & Twitter board to make significant improvements to Twitter in coming months!” Musk replied.
“The Company will appoint Mr. Musk to the Company’s Board of Directors (the “Board”) to serve as a Class II director with a term expiring at the Company’s 2024 Annual Meeting of Stockholders,” the filing says. “For so long as Mr. Musk is serving on the Board and for 90 days thereafter, Mr. Musk will not, either alone or as a member of a group, become the beneficial owner of more than 14.9% of the Company’s common stock outstanding at such time, including for these purposes economic exposure through derivative securities, swaps, or hedging transactions.”
Billionaire Elon Musk goes by many names: Tesla Motors CEO, Dogefather, Trollmaster, and Technoking. After acquiring a 9.2% stake in Twitter on March 14, according to a 13G filing, Musk now holds the new title of the social media juggernaut’s largest shareholder. The decision should not be surprising since he recently tweeted hints and has been vocal about the website’s free speech policies. Will Musk’s presence at the tech company shake up its censorship endeavors, or is this a troll move to irk the firm’s left-leaning developers and managers? Either way, investors were bullish, sending the stock price up as much as 25% when the news broke.
With a passive stake of 73.5 million shares, the Elon Musk Revocable Trust will now be a minority shareholder in Twitter, topping the likes of Vanguard (70.375 million), Morgan Stanley (70.157 million), and Blackrock (51.858 million). Market analysts agree that this sizable stake might not result in an overhaul of the company, but a meaningful investment in the publicly traded business from someone as prominent and controversial as Musk does force the corporation to be more accountable. Plus, considering the notable rally that sent the stock to nearly $50, traders view the move as a positive development.
‘Seize the Memes of Production’
In a recent poll he conducted on his Twitter account, Musk – who has described himself as a “free speech absolutist” – asked: “Free speech is essential to a functioning democracy. Do you believe Twitter rigorously adheres to this principle?” More than 70% of respondents said “no.” Musk added that “the consequences of this poll will be important.”
Speculation mounted that social media’s meme extraordinaire would launch his own Twitter alternative. This might not have been a feasible solution considering that the plethora of substitutes has failed to pose any real challenge to the blue bird.
Don’t Build It, Buy It
Conservatives and libertarians have encouraged Musk to construct his own social media platform or acquire Twitter. But while he mentioned that he thought about coming up with a rival company, recent attempts have not proved successful. Parler generated impressive momentum early last year, but the buzz quickly fizzled. Truth Social has struggled since its launch, resulting in Josh Adams and Billy Boozer – the chiefs of technology and product development – resigning from their positions. In addition, Truth Social has failed to live up to the hype, with issues from users unable to access the website because they are on a waiting list to the troubling mobile app release. Gettr has also endured a myriad of internal matters that has led to lackluster growth.
If you build it, will they come? Why bother creating a new platform when the public is already utilizing another? In other words, Musk refused to invest all the capital, manpower, and resources that go into establishing another Facebook, Twitter, or Snapchat. Instead, he took his immense wealth and invested the $3 billion to buy a seat at the table and influence the change he wishes to see at the fourth-largest social media app in the US.
Now market experts will debate whether this will lead to adjustments at the company, or if it is showboating on Musk’s part. One analyst thinks this could prompt management and the board to discuss Musk taking on a more active stake and “more aggressive” position in the company. Daniel Ives, a managing director and equity research analyst at Wedbush Securities, told CNBC that ownership potential could come into question in the future:
“Musk could try to take a more aggressive stance here. This eventually could lead to some sort of buyout. It’s no surprise that he wanted to do something on social media, and this is really him not just talking to the talk, but walking the walk.
“This is just a starter … Musk is not gonna do this just to take a passive stake. He’s gonna ultimately try to either really change Twitter in terms of a more active stake or eventually, could lead to a buyout.”
(Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images)
At the time of this writing, Musk has made only one post regarding Twitter, asking users if they would like an “edit button,” perhaps verifying the idea that he intends to take an active role.
Twitter’s Hypocrisy
Censorship has been a common complaint about the website. Even more troubling is the inconsistency when it comes to whom or what Twitter censors. For example, Russian President Vladimir Putin’s account remains active, but former President Donald Trump is still banned from participating on the social network. And then there has been the issue of gatekeeping. Twitter stirred the pot when it blocked links to the New York Post‘s article on the contents of Hunter Biden’s laptop.
Can Musk reverse these trends? Unless there is a sharp drop in people who actively utilize the platform, the incentive might not be large enough. Although user growth has slowed since 2015, tech analysts forecast that user count is projected to climb about 8% this year. At the same time, the most significant motivation may be appeasing Musk and ensuring he does not purchase more shares in the company. Perhaps the Musk Magic and the prospect of reinstating Trump’s account could make Twitter a more fruitful destination to meme, mock, and murmur.
