Tesla’s CEO has often expressed his dissatisfaction with the initiatives and practices of microblogging site Twitter.
When Elon Musk has an idea in mind, he doesn’t stop until everyone else knows about it as well. Twitter has just learned this the hard way.
Tesla’s (TSLA) – Get Tesla Inc Report chief executive has had the microblogging site (TWTR) – Get Twitter, Inc. Report in his sights for a long time now. The billionaire is particularly unhappy with the treatment of free speech on the platform and has made this known several times. But late last month his dissatisfaction reached a new level of frustration.
The mogul did not hesitate to express it — on Twitter — by asking his 80 million followers:
“Free speech is essential to a functioning democracy. Do you believe Twitter rigorously adheres to this principle?”
Dissatisfaction With Twitter
The question was accompanied by a poll answered by more than 2 million Twitter users. Just over 70% responded that Twitter did not fully comply with the First Amendment.
Musk also warned: “The consequences of this poll will be important. Please vote carefully.”
The next day, Musk took another step in his vendetta against Twitter. He felt that Twitter had become “the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy.”
And he posed to Twitter users an interesting idea that if implemented would have the potential to change the social-media landscape.
“Is a new platform needed?” Musk asked.
“Would you consider building a new social media platform, @elonmusk?” a Twitter user responded. “One that would consist an open-source algorithm, one where free speech and adhering to free speech is given top priority, one where propaganda is very minimal. I think that kind of a platform is needed.”
“Am giving serious thought to this,” Musk wrote back, without further details.
Musk Becomes Twitter’s Largest Shareholder
Here’s that next step, and it’s a big one: The world’s richest man just disclosed that he took a 9.2% stake in Twitter, according to a Securities and Exchange Commission filing.
Musk became the largest holder of the social network ahead of Vanguard Group, which holds 8.39% in Twitter, according to FactSet data.
So the questions immediately arise: What does Musk intend? And what’s in store for Twitter?
As yet, neither Musk nor Twitter has commented. But key Wall Street observers have weighed in with ideas.
“We would expect this passive stake as just the start of broader conversations with the Twitter board/management that could ultimately lead to an active stake; more aggressive ownership role of Twitter,” Wedbush analyst Dan Ives said on Twitter.
Noteworthy is that the SEC filing indicates that the transaction was carried out on March 14, meaning Musk had already acquired his stake before his March 25 poll on Twitter’s role in free speech.
In addition, Musk, who made this equity investment in his name, uses a particular form. Indeed, the form differs from the one used by activist investors like Carl Icahn. It suggests that Musk is not seeking control of the company or to influence who controls it.
But still and all, it’s hard to think Musk is going to be inactive. Many commentators expect the billionaire to push for big changes at Twitter. Besides Tesla and SpaceX, the tech-savvy Musk has had a hand in success stories like PayPal (PYPL) – Get PayPal Holdings, Inc. Report, which he co-founded.
Twitter is the billionaire’s favorite communications platform. This is where he expresses his opinions, announces news about his companies – Tesla, Neuralink, Boring Co., SpaceX — and settles accounts with his detractors and critics.
He shares his state of mind and interacts with his legion of fans who adore him. There, without the filter of the media, he weaves a direct link with the general public. Musk also solicits financial advice on Twitter.
Pressure on Twitter
Tesla’s tweeter in chief is also an influencer. In other words, he produces content — his tweets — that enable the platform to attract fans of a billionaire whose personality and notoriety go far beyond Silicon Valley and the automotive and space industries.
In addition to free speech, Musk strongly criticized Twitter’s strategic shift toward nonfungible tokens. The company announced in January that it plans to offer NFT holders special profile pictures. Twitter displays NFT profile pictures in a special hexagonal shape as long as a user connects their crypto wallet to their social-media profile.
“This is annoying,” Musk commented on Jan. 21. “Twitter is spending engineering resources on this bs while crypto scammers are throwing a spambot block party in every thread!?”
Twitter is under pressure to introduce new products. The company has promised to grow its revenue and user numbers, but its performance has not changed much.
The company’s market capitalization is $39 billion, making it a bargain for a billionaire like Musk, whose net worth was $273 billion as of April 3, according to the Bloomberg Billionaires Index.
Finally, Musk is not a fan of new Twitter CEO Parag Agrawal, who succeeded Founder Jack Dorsey in November. Musk notably posted on Twitter a meme showing Agrawal in the clothes of the Russian dictator Joseph Stalin and Dorsey as Nikolai Yezhov, the former head of the Soviet secret police.
