Howard Hua ‘25

What is This Twitter/Elon Musk Battle?

On April 4th, 2022, Elon Musk, CEO of electric vehicles company Tesla (TSLA) and private space exploration and technologies company SpaceX, tweeted that that he had recently become the largest shareholder of Twitter (TWTR). Holding 9.2% of all shares, his massive buy-in caused share prices to skyrocket 15% in one day. On the same day, Musk tweeted multiple ideas on how he thought Twitter could be improved, including the addition of an edit button (something which had been an idea at Twitter previously).

Later, Twitter offered Musk to join as a board member of the company. Although this action would restrict Musk to owning at most 14.9% of total shares, being a board member meant Musk could influence key decisions about the daily operations and delivery of products from Twitter. Musk initially agreed to this offer, but later pulled out.

Now, Twitter has recently announced a so-called “poison pill” defensive move against a potential $43 billion cash buyout from Musk. Twitter revised it’s stockholder’s rights plan to disincentivize one person from holding too many shares of a company by allowing other shareholders to buy extra stock if one person decides to pursue a buyout.  

Twitter's Struggles & The Problem with Free-Speech Social Media

Recently, Twitter has been struggling with free speech and content moderation, sometimes causing voices to go unheard. In a prime example, the personal Twitter account of former president Donald Trump was banned from the platform due to repeated violations of misinformation and incitement of danger and harm. Although Musk agrees that misinformation can be harmful, he finds that Twitter should be a more inclusive environment for all. Therefore, he hopes to loosen content moderation.

Musk’s Primary Changes to Twitter and their Potential Impacts

Musk has stated that in addition to a softening of content moderation standards and the addition of an “edit” button, Twitter should also turn to a paid/subscription-based model to better suit the average user who wants open news and fresh perspectives from all individuals. And, the “edit” button could become a subscriber-only feature, enticing more customers to pay. Finally, the cost of a subscription could remove ads from the platform entirely.

Through all of these changes, however, Musk is clear with one primary objective: to bring Twitter closer to his fans. Musk is already a prolific Twitter user with almost 83 million followers, and with millions more driving his electric vehicles, there is great hype among his fanbase. Therefore, Musk wants to make Twitter part of a broader experience. If Musk controlled Twitter, than Musk can get more supporters and become a more powerful figure.

Sources:

https://www.wsj.com/articles/what-elon-musk-would-do-with-twitter-11650200403

https://www.theverge.com/23026874/elon-musk-twitter-buyout-news-updates

https://www.nytimes.com/2022/04/15/business/twitter-poison-pill-elon-musk.html