Elon Musk buys Twitter and looks to change the landscape of social media
After announcing his intention to buy Twitter, Elon Musk has been on the lookout for an opportunity to take over the company. In fact, the company put in place a defense’ against a hostile takeover. But this didn’t stop Musk from announcing his funding. After meeting with Twitter shareholders privately and delivering video calls to all of them, Musk had begun negotiations with the company.
Elon Musk
SpaceX and Tesla CEO Elon Musk has bought Twitter for 44 billion dollars. He uses the platform to share his ideas, rival critics, and announce business deals to his 83 million followers. The billionaire has been under SEC scrutiny and is now trying to get out of the settlement agreement he signed with the agency. Musk has a long list of plans for the social media platform, including eliminating automated “spam bots” and making its algorithms more transparent.
Regardless of how the deal plays out, it is clear that Twitter will be changed significantly as a result of the deal. The company will face intense competition in the form of Snap, TikTok, and ByteDance.
The acquisition of Twitter may raise antitrust concerns. Those in power tend to intervene when a company acquires a competitor, and sometimes challenges a deal if it benefits the purchaser. However, the Twitter purchase does not appear to pose a threat to the two biggest companies in the social media space. Musk has not tied Tesla or SpaceX to twitter yet.
Since Elon Musk has a massive following on Twitter, the potential for a major overhaul of the service is considerable. In Turkey, there is also pressure on Twitter to remove content that violates the country’s laws. Twitter has been blocked in certain areas of the world. But, lets see if this new acquisition may loosen that isolation.
Elon Musk has finally gotten the opportunity to buy a social media company. He announced the deal on Thursday in a filing with the Securities and Exchange Commission. In it, Musk revealed that he has secured debt financing and equity commitments totaling $25.5 billion, which is more than double the current value of Twitter shares. The deal is expected to close in the first quarter of fiscal year 2022, and Musk said he plans to release first quarter financial results before the market opens.
He will not hold a corresponding conference call.
While it’s a good deal for Musk, there are some negatives. Some conservatives have complained that mainstream tech companies censor their users – including Musk’s own. Twitter says that it doesn’t censor people and does not enforce ideology or views.
The deal could prove problematic for the company’s employees. Because disclosure seemed to be an issue before it closed. Making some of the current employees skeptical. They fear that Musk could undo years of work. While some are excited about the deal, others may balk at a significant change in direction. If Musk’s plans go through, Twitter will likely undergo significant changes to its user experience. It could become a more competitive place but it’s hard to know what that change will entail.
One mention is of Dogecoin being a way to support members. Which would make it the first combined major social media platform to use crypto of this magnitude.
Despite the many negatives, the deal signals the end of a long courtship.
Elon Musk has been a frequent critic of Twitter, including in the context of his censorship of speech. He also has used the social network in ways that were deemed controversial. Many critics worry that his takeover could stifle the voices of others on Twitter. Others believe this is a step in the right direction considering the level of heat the platform has gotten over the last few years.
Elon Musk’s plan to transform the company
One thing is certain, Elon Musk isn’t interested in making Twitter more like Facebook. One of his ideas is to turn the site into a subscription service is not without its risks. The social media site has struggled to keep up with its rivals, with only a small share of the digital advertising market in the US. Although some analysts think that Musk is playing on Twitter’s power users, he’s hardly likely to make changes that are too radical.
Instead, he may be interested in controlling how messages are spread.
Many progressives have called for the breakup of tech giants, and Musk’s plan to buy Twitter may be a game changer. However, with recent studies suggesting half of twitters members aren’t real will this be enough to make it popular again?
Musk has expressed concern about the biased algorithms that power Twitter. To combat this, he’s polled his Twitter followers to see if they would be okay with an open source algorithm. Apparently, 83% of them would support this move. Meaning a public algorithm would allow Twitter users to make their own decisions about what appears on their feed. The CEO of Tesla and SpaceX, Elon Musk, recently spoke out against Twitter’s policies on free speech.
Elon Musk’s role at Twitter
The Tesla CEO is the largest individual shareholder in Twitter and a self-described free speech absolutist. Musk has pledged to not buy more than 14.9% of the company’s shares. Twitter, however, was still in the process of deciding whether to appoint Musk to its board. That was until his buy out of 44 billion dollars today.
Musk has publicly expressed his desire to ban crypto spam bots from the platform. Many of these bots are involved in promoting crypto-based scams and use Musk’s likeness to do so. He has publicly pleaded Twitter to fix this problem now that he has a significant stake in the company. He has also advocated for the introduction of an edit button to help people make changes to their posts.
While there are a lot of reasons to support Musk’s decision to become a board member of the company, there are also some concerns that his decision will damage the company’s reputation as a platform. Many progressive social media users are worried that Musk’s presence could lead to the downfall of the site. However, there aren’t many failures under Elon’s belt and this could prove to be a look into the future of how much better social media can be.
Elon Musk’s financial backing
Tesla CEO Elon Musk had lined up over $46.5 billion in funding for his takeover bid of Twitter. In a filing to the US Securities and Exchange Commission, Elon Musk detailed the financing arrangements for the proposed takeover. The move is expected to boost Twitter’s stock price and put the electric vehicle maker in the position to make big changes to the company.
As of last week, Musk had secured commitments to invest $46.5 billion to finance the takeover. He has already secured $25.5 billion in debt financing and another $21 billion in equity funding. At the time he was undecided on whether to make a tender offer to Twitter’s shareholders or take other actions to advance his takeover. Twitter has confirmed receipt of the proposal. However, it’s too early then to say if Musk would have been successful.
In a TED talk, Elon Musk said that he would privatize Twitter because the company doesn’t allow its users enough freedom of speech. The entrepreneur believes that the company should allow users to express themselves freely, despite the fact that its advertising revenues have not yet reached their potential. But he’s also made Twitter employees frightened that Musk will take the company private.
But, there have been a demand to make Twitter a public utility and a public space. However, now that Elon Musk buys twitter this could be a first step in that direction.
Updates
4/26/2022 Elon suggests current Twitter employees have only 6 months
4/28/2022 Elon receives invite from Texas and Florida to move Twitter HQ
4/29/2022 Google and Apple threaten to remove Twitter from app stores if content isn’t properly moderated
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Disclaimer: This article is meant to be seen as an overview of this subject and not a reflection of viewpoints or opinions as nothing is definitive. So, make sure to do your research and feel free to use this information at your own discretion.
