Elon Musk, CEO of Tesla Motors and the world’s richest man struck a deal to buy Twitter for $44 billion on Monday.
Musk has promise to reduce censorship on the platform, with a concern from human rights groups that lack of moderation could lead to rise in hate speeches.
Elon Musk has described himself as a ‘free speech absolutist” and has been vocal in his criticism of the platform’s policies on moderating content, arguing that Twitter needs to be a genuine forum for free speech.
In a statement after striking the deal he described free speech as “the bedrock of a functioning democracy”.
What lies ahead for social media’s juggernaut now that Elon Musk has acquired it remains to be seen. Musk can at times be inscrutable, and his politics are elusive, which has made it somewhat difficult to determine exactly he is going to do with twitter.
Here we take a look at one of the biggest deals in recent memory and the questions that arise with it.
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Details of the Deal
The publicly traded firm will now become a private company owned by Musk, who negotiated a purchase price of $54.20 per-share, Twitter said.
The deal is expected to close sometime this year. But before that, shareholders still have to weigh in, as well as regulators in the US and in countries where Twitter does business, before the deal is completed.
The process is off to a good start for Musk, given that Twitter’s board has unanimously approved his offer and is recommending shareholders do the same.
Upon announcing the deal Monday, Twitter noted that the bid, which represents a 38 per cent premium to the company’s closing stock price on April 1, is a substantial cash premium and would be the best path forward for Twitter’s stockholders.
When Twitter’s board adopted an anti-takeover provision known as a poison pill just 10 days ago, the move was widely seen as a telltale sign that the directors were gearing up to rebuff Musk’s opening offer or perhaps seek another suitor willing to pay more.
But the battleground shifted dramatically late last week when Musk disclosed he had lined up USD46.5 billion including USD21 billion of his personal fortune to pay for the purchase. Musk said other investors could contribute to the financing.
The locked-in financing not only underscored the seriousness of Musk’s pursuit, but also appeared to open the door to other large Twitter shareholders interested in hearing more about his plans for the San Francisco company.
The details of those conversations aren’t known, but Musk could point to a more than 20-year history building and running several businesses most notably as the longtime CEO of Tesla. The electric car maker is currently valued at USD1 trillion — roughly 25 times more than Twitter.
Changes For Twitter?
“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,” Musk said in a statement released by Twitter.
This statement clearly suggests a change in strategy and hints at a way forward. One of the changes that could be expected with Musk’s takeover is less moderation of free speech.
Free Speech on Twitter.
Musk has frequently expressed concern that Twitter’s content moderators go too far and intervene too much on the platform.
“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”, Musk has said.
“Twitter has tremendous potential — I look forward to working with the company and the community of users to unlock it.”
In a tweet Monday, before the announcement of his agreement with Twitter, Musk said he hoped even his “worst critics” continued to use the platform “because that is what free speech means.”
Return of Trump?
Donald Trump’s account was terminated permanently last year in the wake of the 6 January riots at the Capitol building in Washington.
Musk has not commented publicly on how he would handle former President Donald Trump’s banned Twitter account. But his free speech comments have stoked speculation that Twitter under his ownership might reinstate Trump.
But even if his Twitter ban is reversed, Mr Trump says he does not plan to return to Twitter, instead opting to use his own platform, Truth Social.
“I am not going on Twitter, I am going to stay on Truth,” Mr Trump told Fox News.
He added that he believed Mr Musk, who he called a “good man”, will “make improvements” to the platform.
Ming-Chi Kuo, a technology analyst at investment management firm TF International Securities, told the BBC that Mr Trump may decide to return to the platform if he runs in the 2024 US presidential election.
“Twitter is still a better choice for him to have a voice, if Twitter is willing to restore his account,” Mr Kuo said.
Algorithm Changes
At a TED conference this month, Musk elaborated on his plans to make the company’s algorithm an open-source model, which would allow users to see the code showing how certain posts came up in their timelines.
He said the open-source method would be better than “having tweets sort of be mysteriously promoted and demoted with no insight into what’s going on.”
Musk has also pointed to the politicization of the platform before and recently tweeted that any social media platform’s policies “are good if the most extreme 10 percent on left and right are equally unhappy.”
Will There Be A Twitter Exodus?
Mr Musk said that he hopes that even his strongest critics will remain on the platform “because that is what free speech means”.
However, some users have threatened to leave Twitter, while others have already quit.
British actress Jameela Jamil, who is best known for her role in TV series The Good Place, said she expects the platform to “become an even more lawless, hateful, xenophobic, bigoted, misogynistic space”.
“I would like this to be my… last tweet,” Ms Jamil told her one million followers.
Meanwhile, Caroline Orr Bueno, a post-doctoral researcher at the University of Maryland, said that for now she will stay on the platform, where she has more than 450,000 followers.
Ms Bueno said “we have no idea what it will look like under Elon Musk’s leadership”.
“What we do know is that if all the decent people leave, it’ll get bad here a whole lot faster,” she added.
Dan Ives, an analyst at investment firm Wedbush Securities, told the BBC that he expects most users to “take a wait-and-see approach”.
“Now it’s about courting new users and stopping defectors from the platform,” Mr Ives said.
Trust In Musk?
Jack Dorsey, who co-founded Twitter and still sits on its board, said he was happy the platform “will continue to serve the public conversation”, even though he does not believe “anyone should own or run Twitter”.
“It wants to be a public good at a protocol level, not a company,” Mr Dorsey said in a tweet on Tuesday.
“Solving for the problem of it being a company however, Elon is the singular solution I trust,” Mr Dorsey added. “I trust his mission to extend the light of consciousness.”