Everyone knows that Elon Musk is the world’s richest person; till now, he was known as an investor, entrepreneur, CEO of Tesla and SpaceX, etc.
Now a jewel in his crown is added named “Twitter”. Elon Musk bought Twitter for $44 billion.
Let us first understand in simple terms what it means.
Twitter, a publicly listed social media company, will become a privately owned company. And the basis on which Twitter functions will undergo some very important changes.
Elon Musk has two main objectives
1. To make Twitter a platform for free speech
2. To clean Twitter of all the spam accounts that troll and harass the users
3. But there is one more objective
That we will understand in the latter part.
Now let us understand
Why only Twitter?
Twitter is not the top-earning social media platform, neither does it have the highest number of users.
Twitter made revenue of just $5 Billion in the financial year 2021-2022. It has a daily user base of 217 million. This number might seem large in isolation.
Let us look at the other social media platforms.
YouTube made $28 billion Facebook made $117 in the financial year 2021-2022.
Now we will talk about economics.
Twitter is not really that special. But even then, Twitter is still quite special
The best part about Twitter is that even after 16 years it has not changed. Twitter still has not become a video platform. It was, is, and will be a microblogging platform. It is one of the few spaces out there where written content is the king!
Where every user, big or small is a creator. Everyone right from politicians to financial gurus everyone is active on Twitter. Every government has official Twitter handles. Plus ordinary people can get attention from high-profile people.
Elon musk himself is very active on Twitter; he has more than 80 million followers. And he is one of the most followed celebrities on Twitter.
Now let us dig deeper to understand the reasons for buying Twitter.
Reasons to buyTwitter
On 4th April 2022 Elon musk purchased a 9.2% stake in Twitter and became the largest shareholder in the social media giant. But he did not join the Twitter board.
He said “However, since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company. “
Twitter had a big problem which Elon Musk wanted to solve; “Freedom of speech”. Twitter says with confidence that it wants to promote safe, inclusive, authentic conversations. But many times, we can see a distinct bias on Twitter
Many times, hate filled narratives become popular. Twitter CEO Jack Dorsey: “I fully admit our bias is more left-learning”. For example, Twitter permanently banned Donald Trump. On the other hand, the Taliban’s Twitter handle is still active. Look, it doesn’t matter if you agree with Trump’s views or not.
But banning an active president of the United States is a bold move. It goes against the concept of Free Speech.
Elon Musk calls himself a Free Speech Absolutist. He believes there should be limits on free speech. But only countries can put limits on free speech and that too only if Twitter is operating in their country.
Twitter as a platform does not have authority to squash free speech in any way that they like. And to decide what opinions should be on the platform and which ones should not be on the platform. Elon Musk believes the algorithms that decide what content will work should be made public.
And that is what Elon Musk thinks.
But what is the 3rd objective/hidden reason?
Elon Musk can cause wide fluctuations in crypto prices. He can generate or destroy crores of wealth. Elon Musk announces that Teslas can be purchased with bitcoin with one Tweet.
This causes Bitcoin prices to climb to an all-time high. And then by saying that bitcoin is not good for the planet which causes bitcoin prices to sharply crash for days.
In short, Elon Musk is the world’s biggest financial influencer. Elon Musk is such an influential person that before he makes any financial tweet. He needs Securities & Exchange Commission (SEC) permission.
Because people can take any decisions under his influence which can cause a lot of ups and downs. Elon Musk does not want this power to go out of his hands.
So we don’t know about Freedom of Speech for you and me. But Elon Musk worries about his own Freedom of Speech. There is a saying power corrupts and absolute power corrupts absolutely.
Only time will tell what Elon Musk’s true intentions are. But I think there is hope
After buying Twitter; Elon Musk said “I hope that even my worst criticism remains on Twitter, because that is what free speech means”. And I completely agree
Twitter will become a privately held company. Twitter’s shares that are listed in the stock exchange will be delisted. And all control will be with Elon Musk. This incident might become a good case study for management students.
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