EXPLAINER: What is Musk really doing as he guns for Twitter?

Elon Musk, a Mercurial Billionaire, now wants to purchase Twitter. He plans to take it private in order to restore the company’s commitment to free speech. His offer, however, was rejected by investors on Thursday.

They all ask: Is he serious? Can he raise the money? Will a sale make shareholders satisfied? And how would the social network look if he succeeds in his endeavor?

WHY IS MUSK INTERRESTED IN TWITTER?

Musk claims this is because the service isn’t living up its potential as a platform for free speech. Musk insists that he isn’t interested in making money from Twitter and Thursday saidHe was motivated by the realization that “having access to a public platform that is highly trusted and inclusive is crucial for the future civilization.”

Twitter, just like other social media platforms also suspends accounts who violate its content standards. These include hate speech and violence. Its suspension regarding Donald Trump angered his followers.

Musk described himself as a “free speech absolutist”, but he has blocked Twitter users who disagree with him. Tesla has been accused by regulators of retaliating against Black workers for speaking out about discrimination.

HAS MUSK MENTIONED WHERE HE WILL GET THE FUNDS FOR BUYING TWITTER

No. His regulatory filing states that the offer is subject “completion and anticipated financing.”

Musk stated vaguely during a Thursday interview on stage at the TED 2022 conference that he has the “sufficient assets to complete the deal.” He also added, “I can do this if it is possible.”

CAN HE BUY TWITTER OUTRIGHT OUT OF HIS PERSONAL HEALTH?

Forbes claims that Musk is the world’s most wealthy man, having amassed a $265 billion fortune. However, Musk’s wealth is mainly tied to Tesla stock, where he holds about 17%, according FactSet. SpaceX is his privately-held space company. It is not clear how much money Musk has.

Musk: “I believe this will be painful, and I’m not sure I will be able to obtain it.” saidIn his interview on Thursday.

Musk could either sell Tesla stock to raise funds — which could affect Tesla’s share prices — or borrow against his stockholdings. Forbes points out that Musk has used more than half his Tesla stake as collateral for loans.

WOULD TWITTER SHAREHOLDERS BE PLEASED WITH HIS OFFER

The stock traded at $54.20 per share on Thursday, which is lower than the offer price. This suggests that investors are unsure that the deal will proceed. In the last 12 months, shares traded at more than $70 and reached an all-time high of $80.75 in February 2021.

Since Jack Dorsey, the cofounder of Twitter, left in November, there has been executive turnover. Parag Agrawal was appointed as Twitter’s new CEO. His initial actions involved internal reorganizations. Twitter hasn’t seen any significant changes, despite its enormous influence from high-profile celebrities and politicians, and a dedicated base of journalists. However, it is smaller than other social media competitors like Facebook and TikTok. Musk is a big user, with more that 81 million fans.

Dorsey remains a major shareholder but has not said what he thinks about Musk’s offer.

Twitter saidIt will only look into the offer. A spokesperson refused to answer whether the board would put in place a defense against hostile takeovers known as “poison pills”.

HOW MIGHT MUSK REMAKE TEXT?

Musk is difficult to judge, and trying to make this hypothetical work might be too serious. He seems to be saying that Twitter isn’t living up to its potential as a platform for free speech and that he will reduce content moderation. He also demanded that Twitter crack down on spam accounts. This implies greater moderation.

He suggested that Twitter drop ads — these are how Twitter makes money — as well as making the San Francisco headquarters into a shelter for homeless people. He seems to also approve of the button to edit tweets.

WHAT CONCERNS DOES MUSK AS A TWITTER OWNER RAISE OWNER?

Social media companies have difficulty containing misinformation and hate speech. Musk’s tweets could lead to online bullies to swarm him online. However, he doesn’t seem to be keen on content moderation.

“Regulators all over the world will be grumbling at the possible free speech implications if Musk’s takeover bid is successful.” saidGlobalData analyst Rachel Foster-Jones. “Musk clearly cares about free speech for democracy’s benefit, but the line between hate speech or misinformation and free speech is getting increasingly blurred. Attempts to change Twitter could lead to these issues spiraling out-of-control.”

Musk spoke with Anderson about his conversation. saidTwitter is “bound to the laws of the country in which it operates, so clearly there are some restrictions on free speech in America and Twitter would need to follow those rules.” But he saidIt was “quite hazardous” to have “tweets mysteriously promoted or demoted” and a “black-box” algorithm.

WHAT WILL HAPPEN NEXT?

Twitter may employ bankers and advisors to review the deal. saidScott Kessler, Third Bridge technology analyst and media and telecom analyst There could be other buyers. It seems like Twitter is a good platform for potential strategic and/or financial buyers who are looking to get involved.