“Elon Musk’s Twitter Takeover: A Visionary Transformation”
Why did Musk get involved with Twitter?
Elon Musk’s Twitter Takeover got involved with Twitter by acquiring the social media platform with the aim of implementing significant changes. Musk has expressed a vision of turning Twitter into a “super app” in Western markets, integrating various functionalities such as speech, communication, and financial transactions. His involvement aligns with broader goals and strategic ambitions.
Musk asserts that his involvement is driven by a desire to “help humanity” enhance free speech. He emphasizes the crucial role of free speech in a functioning democracy, highlighting Twitter as the digital town square where vital matters for humanity’s future are debated.
While Musk’s intentions may have a noble aspect, as the world’s wealthiest individual, he also saw an opportunity. In April, he discreetly acquired a 9.2 percent stake in the company, making him the largest shareholder. Musk’s primary wealth comes from owning a 14 percent share in Tesla and a significant stake in the private space and satellite company SpaceX, making him the wealthiest person globally, surpassing Jeff Bezos of Amazon.
Following his stake acquisition, Musk engaged in discussions with Twitter’s executives, including Agrawal, to explore potential changes to the company. However, these talks faced obstacles, particularly regarding content moderation policies that Musk deemed too restrictive and concerns about the prevalence of spam and fake accounts.
Expressing frustration and fueled by the success of Tesla’s share price, Musk made a hostile bid to acquire the entirety of Twitter for $43 billion, offering a 38 percent premium at $54.20 per share. Musk secured $13 billion in debt financing, using Twitter as collateral, committed to selling Tesla shares, and garnered substantial financial support from affluent friends and associates willing to take equity stakes in the envisioned private Twitter.
In April, Agrawal and the Twitter board accepted Musk’s offer, cementing the deal with the signing of a binding merger agreement.
[Also Read: Why Did Elon Musk Buy Twitter, and What Does It Mean]
Why did Musk use Twitter?
Following a global market downturn triggered by surging inflation leading central banks to raise interest rates, significant declines hit large tech stocks, especially those in industries akin to Twitter, such as the photo and messaging company Snapchat.
Realizing that he would be substantially overpaying for the company due to these market conditions, Musk attempted to back out of the deal, asserting that the agreement had become worthless. In an unexpected move in June, Twitter took an unusual step by suing Musk, seeking to compel him to proceed with the acquisition at the initially agreed-upon price of $44 billion.
This initiated a perplexing legal battle between Musk and Twitter, with the social media platform suing Musk to enforce a deal he no longer wished to pursue.
Musk’s legal team attempted to argue that he had been misled by the company’s executives, particularly in regard to the prevalence of bots on the website. However, legal experts observed that Musk had signed the agreement without conducting due diligence, putting him at a disadvantage in any subsequent trial, especially in a Delaware court.
Facing a deposition by Twitter’s lawyers, Musk eventually relented. He agreed to proceed with the purchase and made a memorable entrance into Twitter’s San Francisco headquarters, humorously carrying a sink. Musk later quipped, “Let that sink in,” alluding to a popular meme on the Twitter platform.
What changes has Musk already made?
Musk has swiftly implemented several changes at Twitter, with a primary focus on significant workforce reductions. Shortly after entering the company premises accompanied by his associates, Musk initiated a series of layoffs, raising concerns that as much as half of Twitter’s global workforce of 7,500 employees could be impacted.
In a bold move, he ousted the existing company board and terminated the employment of CEO Agrawal and other top executives. This action was designed to nullify pending compensation for the dismissed leaders. Substantial cuts were also made in teams responsible for content moderation, legal affairs, and communications.
Observers noted that the job cuts seemed to be concentrated in areas that had been points of contention for the new owner, suggesting a potentially retaliatory aspect to the layoffs.
While many of Musk’s planned changes to the Twitter platform are still in progress, one notable adjustment involves the introduction of a subscription model. Musk envisions charging $8 per month for users to obtain verification, symbolized by the coveted “blue tick.” This feature is expected to be rolled out in the coming months. Musk argues that the verification modifications will play a crucial role in combating the issue of bots and fake accounts that have been a source of pollution on Twitter.
Additionally, Musk has expressed the idea that granting everyone the opportunity to acquire a “blue tick” would empower users and enhance their visibility on the platform. However, critics are apprehensive, fearing that this strategy may lead to a division within the website between those who can afford verification and those who cannot.
[Also Read: 8 Best Alternative Twitter Applications]
Could Elon Musk Transform Twitter into a ‘Super App’?
In essence, Elon Musk’s ultimate goal might be to transform Twitter into what’s commonly referred to as a “super app.” This term denotes an application capable of performing a multitude of tasks typically handled by several different apps.
Super apps have gained popularity in certain parts of Asia, especially in regions where government regulations are stringent and access to a variety of apps is limited or restricted. In China, for instance, where the Google Play Store is banned, WeChat, boasting over 1.2 billion users, has integrated third-party services directly into its app, allowing users to post messages, text friends, make purchases, and send money—all without the need for additional downloads.
Elon Musk has indicated that the acquisition of Twitter aligns with his “grander vision” of creating a super app for Western markets.
“It’s a pretty grand vision, and, of course, that could be started from scratch, but I think Twitter would accelerate that by three to five years,” he stated in August.
Musk, who already owns the naming rights for X.com, his payments company that merged with another to become PayPal, may take the initial step of verifying user identities to transform Twitter into “X,” the envisioned super app. However, winning over existing users and dissuading them from seeking alternatives will be a challenge for the polarizing new owner.
Musk’s ambitious plans to integrate speech, communication, and financial transactions into a single app may encounter resistance from politicians and antitrust regulators in the U.S., where concerns about reigning in dominant tech giants are growing.
Regardless, faced with advertisers leaving the platform and looming bank loan repayments, Musk’s initial efforts will likely prioritize sustaining the platform.
Conclusion
Elon Musk’s acquisition of Twitter suggests a strategic move towards realizing his vision of transforming the platform into a Western market “super app.” With plans to integrate diverse functionalities, including speech, communication, and financial transactions, Musk aims to accelerate this ambitious goal. However, navigating potential regulatory challenges and retaining user trust pose significant hurdles.
