The billionaire has become the largest shareholder of the microblogging website
Twitter (TWTR) – Get Twitter, Inc. Report is in an uncomfortable situation at the wrong time.
The microblogging site is in a race against time to increase its monetizable users and increase its revenue.
The platform, which is under pressure from activist fund Elliott Management, has promised to reach 315 million average monetizable daily active usage — its measurement for advertisers – and $7.5 billion or more revenue by the end of 2023.
Revenue in 2021 was $5.08 billion.
In fourth-quarter 2021 mDAU grew 13% to 217 million. MDAU refers to users who come to Twitter every day and use the platform and applications, where they may be exposed to advertising.
Less than two years before the deadline, the social network is facing an even bigger problem. The most worrying is that Twitter can do nothing since the firm does not hold all the cars.
The big issue in question is Elon Musk.
The billionaire is one of the most influential voices on the microblogging website.
But above all, he recently became the largest shareholder, with a 9.2% stake in Twitter, according to regulatory documents he filed on April 4 and April 5 with the Securities and Exchange Commission.
What Are Musk’s Intentions?
Twitter and Musk then reached an agreement under which the tech tycoon agreed not to hold more than 14.9% of the firm before 2024.
In exchange, he obtained a seat on the board of directors on April 9.
But the billionaire ended the deal at the eleventh hour and now we find ourselves back at square one.
What will the richest man in the world do next? What are his intentions vis-a-vis Twitter?
Elon Musk, whose preferred communication channel is Twitter, has remained silent for the time being. However, he has made small gestures and sent a new document to the SEC. These actions suggest that the next few weeks are likely to be eventful for Twitter.
Musk has since deleted a series of provocative tweets he wrote on Twitter over the weekend of April 10. But these posts were mainly criticisms against the platform.
In one of the tweets, he pointed out that Twitter should lower the price of Blue, Twitter’s premium service, and remove advertising for subscribers to this service.
In another tweet, he organized a poll to turn the headquarters of Twitter in San Francisco into a homeless shelter because, according to him, Twitter employees no longer come to the office.
Nearly two million people voted.
He also deleted a poll in which he asked Twitter users whether to remove the letter W from Twitter.
On the other hand, the entrepreneur kept a post in which he wondered if Twitter was not dying.
This post was accompanied by remarks noting that the people who were among the top 10 accounts with the most followers on Twitter were not very active there.
He cited stars Justin Bieber and Taylor Swift as examples. These remarks suggested that Musk thinks Twitter doesn’t have enough great tools or products for influencers.
‘Distractions Ahead’
One of the most striking gestures is that Musk ‘liked’ a tweet from a user claiming that Elon Musk rejected the Twitter deal because he was told to be nice and not speak out.
“Let me break this down for you: Elon became largest shareholder for Free Speech” the user wrote. “Elon was told to play nice and not speak freely.”
“We believe the Twitter Board and Musk could not come to an agreement around Musk’s communications with the public,” said Dan Ives, analyst with Wedbush Securities.
“This now goes from a Cinderella story with Musk joining the Twitter Board and keeping his stake under 14.9% to likely a ‘Game of Thrones’ battle in the months ahead.”
Ives said that it’s likely that Musk takes “a more hostile stance towards Twitter and further builds his active stake in the company.”
In a new filing to the SEC, the mogul explains that he does not currently intend to increase his participation in Twitter or sell his shares.
But “the reporting person reserves the right to change his plans at any time, as he deems appropriate,” Musk warned.
The CEO of electric vehicle maker Tesla (TSLA) – Get Tesla Inc Report also warns that he will be able to discuss Twitter’s products and services with management and the board of directors.
“From time to time, the reporting person may engage in discussions with the board and/or members of the issuer’s management team concerning, including, without limitation, potential business combinations and strategic alternatives, the business, operations, capital structure, governance, management, strategy of the Issuer and other matters concerning the Issuer,” he said.
It is undoubtedly this last cryptic message that most startled the leaders of Twitter.
Musk is known to attack and criticize his rivals and critics on social media and is not shy about engaging in tussles, such as the one currently pitting him against the SEC over a 2018 tweet in which he said he wanted to take Tesla private.
“There will be distractions ahead, but our goals and priorities remain unchanged,” said Parag Agrawal, Twitter CEO.
