What’s he going to do about Trump?
Publishing date:
Apr 26, 2022 • 18 hours ago • 5 minute read • 66 Comments
Tesla Inc CEO Elon Musk, left, is buying Twitter Inc. Will Donald Trump, right, come back to the social media platform? Photo by Reuters/ Bloomberg Elon Musk sealed the deal Monday to buy Twitter Inc for US$44 billion cash.
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The transaction was approved by the company’s board but is still subject to a shareholder vote.
Since the deal, which Musk will pay for with US$25.5 billion of debt and a US$21 billion equity commitment, speculation on what it means for investors, the 16-year-old social media platform and seemingly democracy itself have been running rampant.
Here are a few things you might care about:
Free speech? “Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,” Musk said in the news release announcing his purchase.
A self-proclaimed free speech absolutist, Musk says one of the reasons he bought Twitter was because he disagreed with the social media platform’s content moderation practices.
Musk has not given details on how he plans to “improve and fix” Twitter but opening it up to no-holds-barred expression could run him into trouble not only with the public and regulators, but also with advertisers.
“We expect advertisers will be less willing to spend on Twitter if Elon Musk removes content moderation in order to promote free speech,” MoffettNathanson analyst Michael Nathanson told Bloomberg.
Advertisers on Twitter could flee to platforms like Alphabet’s Youtube, TikTok or other channels if that happens, he said.
Twitter will also still have to contend with Europe’s strict content rules, Internal Market Commissioner Thierry Breton reminded Musk Tuesday.
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Article content Be it cars or social media, any company operating in Europe needs to comply with our rules – regardless of their shareholding.
Mr Musk knows this well.
He is familiar with European rules on automotive, and will quickly adapt to the Digital Services Act.#DSA
— Thierry Breton (@ThierryBreton) April 26, 2022 Breton told Bloomberg that Twitter will need more moderators and better methods to help protect users. The EU recently approved the Digital Services Act giving European governments new power to take down illegal content, and demand platforms do more to tackle harmful content.
What’s he going to do about Trump? When it comes to dominating the media ecosystem through Twitter, few were as good at it as Donald Trump, writes The Washington Post. It reports that the three major cable networks — MSNBC, Fox News and CNN — showed 1,954 of Trump’s tweets making up 32 hours of airtime between Jan. 1, 2020, and Jan. 19, 2021.
Trump was banned from the platform after his tweets in the lead-up and aftermath of the Jan. 6, 2021 attack on the U.S. Capitol, and one of the big questions about Musk’s buyout is whether he will allow the former president back.
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Article content The masthead of U.S. President Donald Trump’s @realDonaldTrump Twitter account before he was banned from the platform. Photo by @realDonaldTrump/Handout via REUTERS Musk said at a TED conference this month he would want to be “very cautious” with permanent bans, preferring timeouts.
Piers Morgan has urged Elon Musk to “uncancel” Trump, but the former president said in a Fox News interview on Monday that he will not return to Twitter.
Who knows?
Ethan Porter, an assistant professor of media and public affairs at George Washington University, told the Washington Post that if Trump does come back, his influence may have waned.
“Trump had a relationship with Twitter where he was really good at using the platform to get attention in his presidential campaign and then through the end of his presidency,” Porter said. “If people’s views toward Trump have permanently shifted, then it’s easy to foresee a post-Musk Twitter where Trump still has access to get to the site but is just simply less impactful.”
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Article content Canadian banks among the lenders Musk is borrowing US$25.5-billion from a dozen banks to help pay for Twitter and RBC and CIBC are among them, reports the Globe and Mail.
The Canadian banks are putting a combined US$1.15-billion into the lowest-risk loan, with Morgan Stanley the lead bank, promising US$2-billion.
The deal will be one of the largest leveraged buyouts in corporate history.
If you are a Tesla investor Musk’s move to buy Twitter has raised concerns among investors that the CEO, who once admitted to sleeping on the Tesla factory floor during the launch of the Model 3, might get distracted by this new venture.
Though a trillion-dollar company, Tesla still has many characteristics of a start-up, including a shallow management bench.
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Article content The electric car maker is also racing to boost output at new plants in Texas and Berlin in the midst of roaring inflation and supply chain snarls. Then there’s its biggest factory in Shanghai, hobbled by the COVID-19 shutdown. In January Musk said Tesla would not introduce the Cybertruck this year because it already had too much on its plate.
“I fear this is going to be a distraction,” one fund manager, with a significant position in Tesla, told Reuters. “He’s juggling supply chains and factory delays and the expansion of the energy storage business and this doesn’t fit at all.”
Shares of Tesla have dropped by 10 per cent over the past two days as Musk plans to use stock in the company as collateral for a loan financing the takeover.
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Article content Reuters could not reach Tesla for comment, but one insider at the company who asked not to be identified said investor concerns were “overdone” and Musk was still heavily engaged at the automaker.
Elon Musk clinches deal to buy Twitter for $44 billion Elon Musk launches $41.39 billion hostile takeover of Twitter Elon Musk takes 9% stake in Twitter to become top shareholder If you’re a Twitter user At least one Twitter user has jumped ship since the buyout was announced.
Henrik Fisker, a electric-vehicle designer who once worked with Tesla, told his 86,000 followers in a tweet Monday that they should look for him on Instagram for future updates. Shortly after that, the account returned an error message saying it no longer exists, Bloomberg reports.
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Article content Fisker was contracted by Tesla in 2007 to help with the early design of the Model S, but left shortly after to develop the Karma hybrid sports car. This prompted a lawsuit from Tesla claiming he stole confidential information, which Fisker ultimately won in arbitration.
Alternative social media platforms have been trending on Twitter since yesterday as some users search for a new outlet.
Wonder if these top 10 Twitter users will stick around?
Barack Obama (132 million followers; 16,463 tweets) Justin Bieber (114 million followers; 31,399 tweets) Katy Perry (109 million followers; 11,628 tweets) Rihanna (106 million followers; 10,627 tweets) Cristiano Ronaldo (99 million followers; 3,781 tweets) Taylor Swift (90 million followers; 716 tweets) Lady Gaga (85 million followers; 9,745 tweets) Elon Musk (84 million followers; 17,539 tweets) Prime Minister Narendra Modi (78 million followers; 32,603 tweets) “The Ellen Show” (78 million followers; 23,822 tweets) — The Washington Post and socialblade.com
Before closing the deal to buy the platform Musk talked about tweaking the service, including an edit button and defeating “spam bots” that send unwanted tweets.
Stay tuned.
Additional reporting by Bloomberg and Reuters
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