After months of negotiations, Twitter Inc., the American communications company based in San Francisco, California, was recently purchased by Elon Musk, the CEO of SpaceX and Tesla. It was sold for $44 billion, at a price of $54.20 a share. The billionaire financed the takeover with his own money, along with other investors and a $13bn debt. The agreement was signed on 27 October officially making Musk the owner. At this same moment Twitter’s stock was suspended from trading on the New York Stock Exchange, the company is set to be delisted on November 8, 2022.
This past Thursday Elon Musk has taken control of the company officially, four of Twitter’s top executives have been fired, including Parag Agrawal, the chief executive; Ned Segal, the chief financial officer; Vijaya Gadde, the top legal and policy executive; and Sean Edgett, the general counsel. This Monday, the company’s filings have revealed that Elon Musk has appointed himself CEO and has fired the rest of the board of directors made up of nine non executive directors. The billionaire changed his twitter profile to “Chief Twit” to announce his new position.
Even more, Musk’s plans as new owner of Twitter include extensive layoffs, rumoured to be around 75% of the workforce, in an effort to pay down the debt burden that has grown substantially since the start of his acquisition. These claims, however, have been denied by Elon Musk himself, instead confirming a first round of layoffs that will cut out 25% of Twitter’s staff, a move which has already disrupted the workforce and created tension among employees.
Musk’s acquisition of Twitter expects changes in content too. The entrepreneur signals plans to overhaul how Twitter has moderated the spread of information across its platform (the social media platform has been long accused of favouring left-leaning, liberal messages, which it has denied). He aims to maximise ‘free speech’ in the app.“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,”. Musk has strongly disapproved permanent bans for those who repeatedly violate the rules, bringing up the possibility of reemergence of previously banned, controversial users like former US president Donald Trump who may be readmitted in the platform after Twitter’s change of ownership. His new approach to information has created distress among many researchers and brands who claim Twitter’s rules have been essential to countering online hate speech and disinformation and creating a ‘healthy’ platform. Musk has responded to the criticisms by assuring Twitter will not become “free-for-all-hellscape where anything can be said with no consequences.” Moreover, he has assured Twitter will create a new content moderation council with diverse viewpoints which will decide on content decisions and review reinstatements. Musk also intends to improve the platform by getting rid of spam and bot accounts which he believes impairs the site.
Another change in Twitter’s structure includes making the company private. As soon as the agreement was signed, the company was no longer traded in the stock exchange. But what are the consequences of this? Musk will no longer have to answer to shareholders meaning he will be able to make changes to the service freely, imposing his vision and singular strategy. Being a private company will also avoid public scrutiny as it will no longer be required to make quarterly disclosures about the health of its business.
Reportedly, the innovative entrepreneur has also plans to make the social media company into an “X, the everything app”, an app similar to WeChat in China which incorporates different services including: social media, messaging, finance, food orders and other features.
To conclude, Elon Musk’s acquisition of one of the largest social media apps in the world has come with a variety of plans aside. Freedom of speech seems to be the entrepreneur’s main focus, however, the level of power he has as an individual CEO and the level of deregulation he intends to impose may suffer drawbacks from regulatory agencies, especially in Europe. The innovation of the content of the platform might have irreversible effects on the social and political ecosystem, which is why these changes must be well analysed before brought to practise.