Twitter originally accepted Elon Musk's $44billion bid to buy the social media giant, with the Tesla and SpaceX boss pledging to boost free speech on the platform.
Mr Musk, the world's wealthiest person and a prolific Twitter user, has a controversial past with the app. More than 300 million people, including many world leaders use the service.
Source: https://help.twitter.com
The business tycoon, who is worth $267 billion, has more than 84 million followers on Twitter and tweets several times a day. He insists his takeover is not motivated by economic reasons, but rather out of a desire to safeguard Twitter as a venue for free speech. The billionaire self-identifies as a 'free speech absolutist' and believes Twitter has failed to live up to its free speech principles.
Free speech is essential to a functioning democracy. Do you believe Twitter rigorously adheres to this principle?' Musk asked via a Twitter poll. Musk's view that Twitter excessively censors some of its users is popular on the political right. 'Woke warriors' and Left-wing organisations have lashed out at the deal because “hate” may now flourish.
In recent weeks, Musk has proposed relaxing Twitter content restrictions, while ridding the platform of fake 'spambot' accounts and shifting away from advertising as its primary revenue model. Musk believes he can increase revenue through subscriptions.
Asked during a recent TED interview if there are any limits to his notion of 'free speech,' Musk said Twitter would abide by national laws that restrict speech around the world. Beyond that, he said, he'd be 'very reluctant' to delete posts or permanently ban users who violate the company's rules. He is said to instead favour temporary 'timeouts' for users who break the new rules.
Like most of Silicon Valley, employees of Twitter generally lean to the left, making them immediately more likely to be sceptical of Musk than those on the right.
Then there is the issue of job security and the new working environment under Musk. While Twitter has guaranteed staff their jobs for the next six months and said 'no layoffs are planned', once the Tesla boss takes over any HR decisions will be up to him.
Twitter currently has an option for staff to work from home, and internal messaging boards are now alight with fears Musk will now axe the policy. The entrepreneur has a contradictory approach to WFH, lashing out at stay-at-home orders during the early days of the pandemic and reopening his factories in the face of official opposition, but later saying staff did not have to come in if they felt uncomfortable about doing so. Musk is well known as a micromanager who has regularly slept on the floor of his factories, so he may become frustrated if he feels staff are not showing similar dedication.
Twitter investors have for years been concerned with the company's slowing revenue growth. Its last quarterly results showed revenue had grown slower than expected, despite increasing by 22% to $1.6bn in the last three months of 2021. However, daily active users rose by 25 million in the year to 217 million, and the company aims to hit 315m by the end of next year. Despite some headwinds, Musk's huge $264.6bn fortune looks perfectly capable of financing Twitter long into the future.
To purchase Twitter, Musk is said to have raised $25.5bn in debt, including a margin loan of $12.5bn against his shares in Tesla, from a group of banks led by Wall Street bank Morgan Stanley. He has also vowed to provide $21bn in equity financing for the takeover, which leaves him on the hook for more than 70% of the purchase price unless he finds other backers.
There is nothing fundamentally wrong on the proposed acquisition. However, it is a question of where “free speech” ends and responsibility begins. Is this a right-wing takeover of social media? Also, as in all acquisition, there will be no GDP increase unless there are areas to improve revenue. And it is perhaps the financial returns from this venture has made Musk to press the “pause” button for now.
Reference:
Why has Elon Musk bought Twitter? Who are the winners and losers? Why are staff unhappy? And how will the social media giant change after $44 billion deal? Rory Tingle MailOnline, 26 April 2022
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