Most people are familiar with the Tesla CEO, Elon Musk, but even more, people have had Elon Musk on their radar with Musk’s recent acquisition of the major social media platform, Twitter. With the drama surrounding the deal and even more in the aftermath of the purchase, the eyes of the world are watching Elon Musk following the takeover.
There have been many rumors, some confirmed, and others denied, that signal that this new era of Elon Musk is expected to be different from what we have seen from him as the CEO of Tesla. While Musk has always had somewhat of a flair for the dramatics even as the CEO of Tesla, his new role has put him right into the thick of things online.
In this article, we will explore the details of Elon Musk’s Twitter acquisition, what this means for Twitter, and what this means for Tesla.
The Elon Musk-Twitter Deal
Elon Musk’s acquisition of Twitter was somehow both foreseen and shocking. When Musk began buying Twitter stock in large quantities, the writing seemed to be on the wall that Elon Musk wanted to be more involved in the social media company’s inner workings. From January 2022 to April 2022, Elon Musk purchased enough of Twitter’s stock to become the company’s largest shareholder. At this time, his ownership was just under 10% of the company.
This amount of ownership was enough for Twitter to share an invitation to Musk to join their board of directors as a show of respect in April 2022. Their offer was accepted, and then promptly declined, with an offer to buy the company outright coming from Musk which sent the company into apparent turmoil until they agreed to accept the offer of a $44 billion dollar buyout.
The dramatics started early. In July, Elon Musk announced that he planned to pull out of the deal to purchase Twitter. His reason cited was the numerous spam accounts that existed on the site. However, with a hefty lawsuit and trial looming, Elon Musk eventually moved forward with his purchase of Twitter on October 27th for a total of $44 billion dollars as agreed upon earlier in the year. As a result, Twitter, a publicly-traded company, went private.
What is Next For Twitter Under Elon Musk
Since the acquisition, Elon Musk and Twitter have taken up quite a bit of space in the news. With many layoffs and proposed changes for the company, there has been a sense of fear of the unknown for potential investors and users of the platform as well.
Elon Musk’s Goals for Twitter
Prior to the purchase of the major social media platform, Musk claimed that his goals for Twitter were to get rid of the overwhelming amount of bot and spam accounts and to reduce the number of limitations on speech on the platform. Previously, Twitter terms and conditions kept a tight leash on Twitter users in order to keep the platform friendly to advertisers and reduce hate speech.
Freedom of Speech on the Platform
Because of these goals, many people fear that Elon Musk’s ownership of Twitter will lead to an increase in hate speech on the platform, making Twitter no longer a “safe place” to post online. Notably, he has called for the unbanning of several high-profile Twitter accounts, including Kathy Griffin and former President Donald Trump.
There also seems to be a move toward reconfiguring the current policies on hate speech and what is or isn’t allowed on the platform. Notably, Elon Musk tweeted “Comedy is now legal on Twitter” following the purchase of the platform. This tweet seemed to be in reference to the number of people who had received bans on Twitter for making posts that were allegedly jokes which violated the prior set of terms and conditions for the platform.
In the future, people are split on whether or not these decisions will be positive or negative for the platform. There seems to be quite a bit of contention in the opinion columns on whether or not more or less moderation of Twitter posts is better or worse for the platform.
Certainly, the previous leadership of Twitter believed that heavier moderation was better for making money, though there seems to have been budgetary problems according to Elon Musk upon his takeover.
Layoffs, Resignations, and Overall Reduction of Staff
Much of the panic surrounding the takeover has come from the major layoffs and resignations that have come following the acquisition of Twitter. Top executives were the first to be eliminated from Twitter's payroll, including the CEO of Twitter and top employees of the company.
These decisions were made within the first week of Musk’s takeover and resulted in a temporary closure of Twitter’s in-person offices. Of note, these decisions may just be the most publicly critiqued decisions of Elon Musk since his purchase of Twitter. However, Musk explained that while some of the layoffs were due to changes in expectations for the platform, others were strictly due to cost-cutting and budget necessities.
Since the initial layoffs, Musk has since axed several employees that have criticized Twitter and Musk’s decision. Many departures have come from Twitter employees choosing to leave as well. After receiving messages of ultimatums from Musk, a noticeable amount of employees submitted resignations which forced Twitter offices to close due to staffing issues.
What Elon Musk’s Acquisition of Twitter Means for Tesla
Immediately following the announcement of the completion of the deal for the Tesla CEO to become the owner of Twitter, Tesla stocks took a downturn. Initially, analysts found this to be surprising as surely the acquisition of a major company would only serve to further Elon Musk’s wealth. The purchase would make Musk the owner of another major company that is based in the United States.
However, there were significant fears in the market that Elon Musk would have to offload his shares of Tesla stock in order to be able to afford to pay for the deal. The thought was that in order to further secure funding, he would need to reduce his level of ownership in his own successful company. These fears appeared to be outweighed by the reality of the purchase and Elon Musk did not have to sell a considerable amount of Tesla shares in order to afford the deal.
Elon Musk is thought to have taken out over $12 billion dollars in loans in order to fully finance his purchase of the company, rather than selling stock in Tesla. This doesn’t exactly clear Tesla from Elon Musk’s financial chopping block, though. Twitter is not a profitable company at the moment, and it hasn’t been since 2019. With the loans and the possibility that Twitter could continue to bleed funds under Elon Musk, Tesla stockholders worrying about Elon Musk selling Tesla stock aren’t out of the woods just yet.
To conclude, Elon Musk’s acquisition of Twitter was a risky move, both for himself personally, for Twitter, and potentially for his company, Tesla. While there are plenty of reasons to be excited about the acquisition as a supporter of Elon Musk, there are equally many reasons to view the acquisition with some caution and hesitation. Regardless, for Twitter, there seem to be many changes ahead for the social media company.