(CN) — Elon Musk, CEO of Tesla and SpaceX, has offered to buy Twitter for about $43 billion, claiming the social media platform has failed to adhere to free speech principles and should be taken private.
The development marks the latest in the unfolding drama that began when Musk, one of the more outspoken Twitter users, announced he took a 9.2% stake in the company about a week ago.
“I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy,” Musk said in a filing with the SEC. “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 shares spiked in early morning trading but have since retreated to around $45.90. Musk offered to buy the company at $54.20 per share and the fact that investors haven’t piled in shows Wall Street retains skepticism the deal will go through.
Multiple reports indicate Twitter executives have an all-hands-on deck meeting to decide the way forward after Musk’s offer.
Still, some Wall Street analysts are bullish on Musk eventually owning Twitter.
“We believe this soap opera will end with Musk owning Twitter after this aggressive hostile takeover of the company,” Wedbush analyst Dan Ives tweeted Thursday morning. “It would be hard for any other bidders/consortium to emerge at this price level.”
Musk has been accumulating shares since January and is currently the largest shareholder. He took that title from Vanguard, which owns about 70 million Twitter shares as part of its mutual funds and ETF portfolios as of April 14.
This week, shareholders filed a lawsuit against Musk saying his delay in announcing his purchases caused the stock to remain artificially low so he could continue to buy at a discount.
After Musk disclosed his stake, Twitter CEO Parag Agrawal offered Musk a seat on the board of directors, which the Tesla CEO initially embraced.
Agrawal said Musk could have input in making the platform better and Musk appeared eager to participate. But discussions broke down and Musk appears to see outright ownership as a better vehicle for enacting the reforms he believes the influential social media platform requires.
Commentators were divided after the announcement Thursday, as some people believe Twitter stands in need of powerful content moderation to stem the tide of misinformation, while others believe the platform needs to conform to free speech principles and misinformation is a tool used by partisans to steer the national conversation toward their preferred talking points.
Twitter has struggled to find a sweet spot in content moderation for years. Former CEO Jack Dorsey said in May 2018 that the platform needed to get rid of trolls and try to foster a more civil and productive discourse on the influential medium.
“We have witnessed abuse, harassment, troll armies, manipulation through bots and human coordination, misinformation campaigns, and increasingly divisive echo chambers,” Dorsey tweeted at the time. “We aren’t proud of how people have taken advantage of our service, or our inability to address it fast enough.”
But many conservatives believe those content moderation policies have gone too far and become overly censorious, and Twitter has become partisan in deciding what constitutes acceptable discourse.
A recent high-profile case involved a story about Hunter Biden’s laptop, which contained information about the degree to which he was using his father’s name to secure high-paying sinecures with energy companies in Ukraine, Russia and China.
Twitter suspended the New York Post over its publication of the story about Hunter Biden’s foreign business dealings, the central thrust and details of which have since been confirmed by other news outlets like The New York Times and the Washington Post.
Conservatives are also upset about the indefinite ban of former President Donald Trump after Twitter deemed Trump was using the platform to undermine democracy. In the weeks after Trump lost the general election in 2020, he took to Twitter as his primary outlet to perpetrate a slew of false claims about voter fraud that culminated in the attack at the U.S. Capitol on Jan. 6, 2021.
Facebook and YouTube also suspended Trump in the immediate aftermath of the attack on the U.S. Capitol by Trump supporters who were convinced the election had been stolen.
Liberals, generally speaking, supported the ban at the time and tend to argue for more content moderation, blaming lax policies on social media for misinformation regarding the 2020 presidential election and the Covid-19 pandemic.
Dorsey and other social media CEOs appeared before Congress last year and were asked what specifically they were doing to combat misinformation on their platform.
“For far too long, big tech has failed to acknowledge the role they’ve played in fomenting and elevating blatantly false information to its online audiences. Industry self-regulation has failed,” House Energy and Commerce Committee Chairman Frank Pallone, D-N.J said in May 2021. “We must begin the work of changing incentives driving social media companies to allow and even promote misinformation and disinformation.”
But free speech supporters argue that “misinformation” is a label often used to silence good-faith dissent from the dominant narratives and that the answer to bad speech is more good speech.
Wall Street has long been bearish on Twitter, with several analysts noting the platform acts as a de facto public square but has been unable to monetize its influential position or innovate beyond its current iteration.
Musk told the SEC that he can fix that.
“Twitter has extraordinary potential,” he said in the filing. “I will unlock it.”
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