- Tesla CEO Elon Musk wants to buy Twitter for $44 billion.
- The billion dollar deal is probably the most discussed business in the Internet economy.
- We summarize the most important questions and answers: about Musk’s motivations, funding and consequences for Twitter and the free exchange of opinions.
“Shitposter”, shareholder, potential board member and soon-to-be owner: Elon Musk’s Twitter career over the past few weeks seems odd even in the realm of Silicon Valley. The April 25 announcement of Musk’s desire to buy the company completely ended the first round of business crime that will likely keep the internet world busy for some time to come. Because work is far from certain. We clarify the most important questions.
Is Twitter now owned by Elon Musk?
No, as long as the deal is not finalized, Musk will be disqualified. According to CEO Brett Taylor, Twitter will continue to operate as before for now, Reuters reports. How long the shutdown takes depends on three main factors: Shareholders have to vote on whether to accept the offer negotiated between Twitter management and Musk. To do this, Twitter must provide its shareholders with highly accurate information about the deal – a process that could take months. Second, Twitter will have to wait for regulatory approval, which is also a time-consuming process. Last but not least, Elon Musk should also be able to show the purchase price of $44 billion (€41.7 billion).
How can Elon Musk finance the purchase?
According to the American magazine Forbes, Musk is the richest person in the world with a total fortune of 233 billion euros. So $44 billion shouldn’t be a problem for him. But Musk’s assets are in a variety of investments that he simply cannot liquidate on such a scale. Contractually speaking, it wasn’t Musk as a private individual who had pre-signed an agreement with Twitter, but X Holdings I Inc. , managed by Musk.
To fund this holding, Musk uses classic bank loans and – somewhat riskier – Tesla stock, which he deposits as collateral. This could blow up the deal. Analysts estimated that Tesla stock’s drop below $740 could pose a problem for Musk’s buying on Twitter. At the beginning of April, the stock was worth over $1,000. Since then, it has fallen sharply and reached $815 on Monday (May 9). In light of the many risk factors in the global economy, this scenario cannot be ruled out.
Why does Elon Musk want to buy Twitter?
Musk has not announced a precise plan for how he wants to change Twitter in terms of content and business. The Tesla boss only scatters hints that give an understanding of what he intends to do. Musk summed up his plan at the Metropolitan Opera in New York: “The plan I have (…) is to make Twitter as inclusive as possible, ideally with most Americans around and talking. Its purpose is to support conversations between people and the exchange of their ideas. Creative ideas whether written or Video or podcast. Everyone should enjoy being on Twitter, not just a small group of people. You should find it interesting, informative and entertaining. And I swore publicly that we needed to get rid of bots, trolls and scammers. This is what users are facing right now and we don’t want to be scammed out of their money” .
In the official announcement of the deal, Musk later said, chirp, set similar goals: Twitter is a digital marketplace where topics important to the future of humanity are discussed. In a subsequent series of tweets, Musk accused the company’s previous management prejudice Before. His vision for the company appears to be to open Twitter to a wide range of opinions. Musk has not yet determined what that should look like.
An important question will be whether this opening will also mean allowing users to return to Twitter who have been banned from the platform for spreading lies or attacking other users. Ex-President Donald Trump will be one of the most famous of them, and his Twitter account early 2021 After storming the US Parliament for his call for violence.
Musk initiative clashes in parts of Digital scene in great resistance. Critics fear his plans will introduce a general rule on Twitter, in which the strongest will prevail, while minorities or individuals will be defenseless at the mercy of hate campaigns, Das wrote. Digital Progress Center D64.
Musk will not be completely free, but is bound by legal rules. The EU Commission has already announced that Twitter must also comply with rules against disinformation and hate campaigns under Musk’s supervision in the EU. In the United Kingdom, MPs summoned Musk to brief Parliament on his plans. Even within Twitter, not everyone seems to be happy with the acquisition.
What should Twitter look like as a company in the future?
Musk doesn’t seem to have much faith in the company’s current leadership. According to informed sources, he already has a new CEO up his sleeve. Casey Newton, a tech journalist from the US, citing internal sources, wrote that Musk’s critical and negative mood spread on Twitter after the acquisition was announced. Vijaya Jade, the company’s director and senior advisor, told her team in tears that there was a great deal of uncertainty about where the company was headed. If Musk implements his acquisition plans, he should at least largely rebuild the management team.
Are there alternatives to Twitter?
Technically, there are many alternatives to the service that Twitter offers. But this may not be a substitute for the social network at the moment. An example is Mastodon: The service, which was partly decentralized and written in freely viewable code, provided many of the options that Twitter does as well. But what is missing are the users. Twitter has evolved into a platform with a high level of appeal, especially in certain circles – and has evolved into an advertising medium for politicians, businessmen (like Musk himself) and stars. Here they take a direct position on current events and comment on discussions. These high profile users fuel the influence of the network, attracting other users and making the shift to smaller platforms with less audience less attractive. A service that creates a similar user base is not in sight at the moment.
One of the ideas that emerged in Germany was the idea of a platform under social control, such as public media umbrella. But here too – at least in the coming years – there are no signs of competition on Twitter, due to the lack of legal and technical foundations. Short-lived examples like Clubhouse or Google Plus show how difficult it can be to create new networks or platforms.
In the next few months, there should initially be many rumors and some news about which direction Twitter should move. The whole thing becomes tangible when Twitter itself informs its contributors of Elon Musk’s plans. Once the acquisition is complete, it will then be clear what the new management of Twitter could look like and in what direction they wish to move the platform. As long as he says: Look at Elon’s tweets.