Tesla CEO Elon Musk now owns a 9% stake in Twitter and adirectors, raising questions about how the billionaire business mogul could reshape the social media platform. As Twitter’s largest shareholder, he has the ear of top managers.
“Through conversations with Elon over the past few weeks, it became clear to us that he would bring great value to our board,” Twitter CEO Parag Agrawal said Tuesday morning.
The “friendly move” will “likely lead to a host of strategic initiatives” in the short and long term, Wedbush analyst Daniel Ives said in an April 5 report.
Immediate impact: Twitter shares have jumped more than 30% since Musk revealed he took a stake in the social media business.
Does Musk have a history with Twitter?
Indeed, he does. Musk’s 80.5 million Twitter followers make him one of the most popular figures on the platform, rivaling pop stars like Ariana Grande and Lady Gaga. But his prolific tweets sometimes get him into trouble when, for example, he uses them to promote his business ventures, rally Tesla loyalists, question pandemic measures and provoke fights with those he’s not with. OK.
In a famous example, Musk apologized to a British caver who alleged Tesla’s CEO called him a pedophile by calling him a “pedo” in an angry tweet – then deleted. The explorer filed a libel suit, though a Los Angeles jury.
He was also locked in awith the United States Securities and Exchange Commission regarding his activity on Twitter. Musk and Tesla in 2018 agreed to pay $40 million in civil fines and for Musk to have his tweets cleared by a corporate lawyer after he tweeted that he had the money to take Tesla private at $420 a share – which didn’t happen but caused Tesla’s stock price to jump. His lawyer argued that the SEC violated Musk’s free speech rights.
What does Musk plan to do on Twitter?
Musk has described himself as a “free speech absolutist” and made it clear that he doesn’t believe Twitter upholds free speech principles – a view shared by Donald Trump supporters and several public figures right-wing politicians who had their accounts suspended for violating Twitter’s content rules.
But what really drives Musk’s involvement on Twitter is unclear. His concerns about the service include arguing to make Twitter’s algorithm visible to the public, expanding the availability of “verified” Twitter accounts, and blasting a profile picture initiative involving non-fungible tokens. or NFT.
Musk also called “crypto spam bots,” which search tweets for cryptocurrency-related keywords and then pose as customer support to empty users’ crypto wallets, the “most annoying problem on earth.” Twitter”.
“We don’t know what his goals are,” said Jennifer Grygiel, a Syracuse University communications professor and social media expert. “Maybe Elon Musk secretly wants to blow up (Twitter)…maybe he wants to destroy it.”
In one TweeterMusk said he looks forward to making “meaningful improvements to Twitter in the months ahead!”
What can Musk actually do as a board member?
Musk’s role as a board member and largest shareholder of Twitter certainly gives him an outsized voice in the company’s future. He was publicly praised this week by the CEO and other board members, a sign that Twitter management is likely to take his ideas seriously.
But he is still just one member of a 12-person council that Twitter says has “an important advisory and feedback role” but no responsibility for day-to-day operations and decisions. This means Musk will not have the power to add an “edit button” or restore Donald Trump’s suspended account.
“Our policy decisions are not determined by the board or shareholders, and we have no intention of overriding policy decisions,” Twitter spokesperson Adrian Zamora said.
Nonetheless, Musk should push Twitter on free speech issues. Twitter is among several social media platforms that attempt to strike a balance between freedom of expression and censorship of content deemed hateful, harmful or false.
“[W]We believe a key driver of this investment is Mr. Musk’s desire to redesign the platform and make it more open source with fewer checks in between,” Truist Securities analysts said in a note. research.
What do shareholders think?
Several Wall Street analysts said they were encouraged by Musk’s new role at Twitter. “He’s a guy who pushes for change, who I think refuses to have failure on his resume. A perfect guy you need on the board for them,” said CFRA analyst Angelo Zino. Research. It’s true, Zino said, although “what exactly his ideas are, who the hell knows.”
Other investors are not so sure. Meredith Benton, founder of investment advisory firm Whistle Stop Capital, has been pushing Twitter and Tesla shareholders to support tougher workplace harassment and discrimination policies. She describes Musk’s new role as a concerning development for Twitter investors, especially giventhat Tesla discriminated against black employees at its San Francisco Bay Area factory.
“Twitter’s biggest challenge right now is successfully navigating through the societal implications of using its platform,” Benton said. “Elon Musk with his air of reckless bravado poses a risk of undermining the thoughtful and strategic handling of these matters.”
How is Twitter doing as a business?
There has been a turnover in management since the co-founderin November left Twitter with Agrawal at the helm, as his first actions involved reorganizing divisions. Wall Street analysts had approved the choice of Agrawal as the new leader, but there have been no major changes to the platform yet. The company has long lagged its rivals on social media and has far fewer users.
Simply linking Musk’s high-profile name to Twitter could inspire people to spend more time on the platform and earn more money, Zino said, calling Musk “the most important person” on Twitter. .
Musk is a busy guy
You wouldn’t know it from his prolific positions, but he holds several important roles, including CEO and “Technoking” of electric car company Tesla and CEO of rocket company SpaceX. He is also the founder of The Boring Company, an underground tunneling business; and Neuralink, which wants
Critics have raised concerns about medical research being conducted at the University of California, Davis on live monkeys involving Neuralink, which Musk co-founded, CBS San Francisco reported.
Opponents of the research say primates are subjected to abusive experiments that sometimes end in death. In February, a lawsuit by a group of doctors was filed against the university demanding the release of documents about the research, and a complaint was filed with federal authorities.
Still, Wedbush analyst Ives said he believes “balancing his key roles at SpaceX and Tesla should NOT be a major issue or concern for investors at this pivotal time.” Ives added, “Now is the time to break out the popcorn and watch the developments over the next few months with Musk on the board.”