"If the deal fails, I reconsider my position as a majority shareholder (selling shares)."
Wen | Zheng Yijiu
Last month, Elon Musk publicly stated on Twitter that he wanted to build a new social media platform, and everyone thought he was going to start from scratch, but musk was obviously more anxious than everyone else, so he chose to directly participate in Twitter and planned to buy it all, the world's most important social media and news distribution platform.
Earlier this month, Musk announced that he had bought a 9.2 percent stake in Twitter for $2.9 billion and had become the largest shareholder at one point. Of course, these increases have quietly begun since March, until the public stock holding news on April 4, which surprised Twitter's board of directors and the outside world.
After rejecting the invitation to join Twitter's board of directors, Musk finally released the ultimate move on April 14, Beijing time, planning to fully acquire Twitter at $54 per share and take the company private.
Musk Twitter screenshot
The latest development is that Twitter is considering a poison pill plan to avoid hostile takeovers.
After the great success of electric vehicles and commercial aerospace and the rise to become the world's richest man, can Musk still bring his magic to the twilight social media industry? Perhaps more than commercial success, people would prefer to see the series continue to be updated.
01
No one knows how to use Twitter better than Musk
After Trump's Twitter account was banned for impacting Congress, Musk is arguably the most influential figure on the platform.
He has long been active on Twitter, sharing information about his business, including Tesla, SpaceX and tunneling company The Boring, and for Musk, who has always disdained setting up a public relations department in the company, his personal Twitter account has almost taken on most of the public relations and publicity, and his speeches often have a huge impact on the stock market.
In 2018, Musk said in a tweet that he was considering taking Tesla private at $420 per share and had managed to raise funds. The news propelled Tesla's stock price up sharply and sparked an investigation by the SEC, which found that Musk had never discussed the specifics of such a privatization deal.
Musk and Tesla settled the SEC lawsuit in 2018, agreeing to pay $20 million each, while Musk stepped down as chairman. He also agreed to communicate with Tesla's lawyers and obtain their permission before issuing tweets deemed important to Tesla shareholders. Last month, Musk asked a federal judge to cancel a settlement with regulators over the events of 2018.
Musk left the court after reaching a settlement with the SEC
Musk complained on Twitter that some companies had taken action to remove content from their platforms.
At one point, he slammed Amazon for restricting the sale of a self-published e-book that questioned whether the coronavirus was as deadly as public health experts at the time said. Amazon later resurfaced the book, saying it had been incorrectly blocked.
Musk then pointed to the software that large platform vendors use to show content to users. These algorithms typically encourage users to spend more time on the platform and thus view more ads.
As for using Twitter to publicly attack the SEC and the U.S. legislature, it has fallen under Musk's routine.
On March 25, Musk posted a vote on his account: Please vote, do you think Twitter abides by the principle of "freedom of speech"? More than 2 million voters participated, and 70 percent said Twitter was unqualified at this point.
After the vote, Musk asked a question that almost everyone knew the answer to: What should we do if Twitter did so badly?
Musk, arguably the boss of a commercial company, uses Twitter in the same way as former U.S. President Donald Trump, who knows the platform and what their fans want to see, and they're happy to use that interaction to achieve their business or political goals.
Musk is an outlier from the many Silicon Valley tech executives who have always been close to the left and progressive culture, and he has made no secret of his appreciation for conservative values, especially on the issue of free speech.
As a result, some conservatives have recently expressed on Twitter that they hope that Musk's stake in Twitter will overturn the block decision against Trump.
Trump's Twitter account was banned
In recent years, Twitter and Meta-owned Facebook and Instagram have been criticized for how they handle content on their platforms. Some accuse the companies of censoring speech, while others say they are not doing enough to review content on their platforms that could lead to harm.
From Musk's open letter to Twitter's takeover offer, he also directly put forward his vision for transforming Twitter, as well as a fairly tough stance.
"Ever since I started investing, I've realized that Twitter can neither thrive nor serve this social need (freedom of speech) in its current form. Twitter needed to transform into a private company. I'll tell you straight to you about my takeover decision. It's a premium offer that shareholders will love. If the deal fails, I reconsider my position as a majority shareholder (selling shares). ”
02
Influence is not proportional to profitability, and Twitter needs to undergo transformation
While Twitter tends not to be among them when it comes to tech giants, there's a huge disconnect between its value as a commercial company and Twitter's impact on the world.
The former means that Twitter is relatively cheap in both stock price and market value, and before Musk's acquisition effect fermented, Twitter's market value was slightly higher than $30 billion, even worse than Baidu.
As analyst Ben Thompson teased, Musk reported his Twitter holdings at a floating profit of about $750 million, which is almost double Twitter's net income in the past three years.
And Twitter's influence is why Musk cares about such a company that does not produce much economic benefits.
In his TED talk, Musk talked about his original intention to acquire Twitter
This disconnect is not new – media companies often fall into this contradiction, but it illustrates in many ways the role of Twitter in today's information ecosystem: news now often starts with Twitter and is then amplified by media outlets, as is the case with the recent Russo-Ukrainian war.
In the last quarter of last year, Twitter's $1.6 billion in revenue accounted for 4.7 percent of Facebook's $33.7 billion revenue, but Twitter's overall impact on the world was as great as, or even much bigger than, its peers.
Facebook has all but given up media as a social media gatekeeper, but that gap has been filled by Twitter, both in terms of the production of news and, equally crucial, in shaping elite opinion and narrative.
But Twitter, even more important than Facebook, especially for new ecosystems of all kinds: Which WhatsApp group or Telegram group isn't full of twitter links that need to be discussed or scolded? It's as if these private groups are bastions on the border; Twitter is a wilderness for today's internet users to forage for content, and of course, many times where the two sides of the information battlefield fight.
Twitter has one of the most powerful moats on the internet: the ability to truly influence the distribution of information as a media platform.
Image source: Network
Of course, Facebook has users, Instagram has KOLs, and TikTok has a new generation of influencers, but these new things are more fragile and easier to replace in the face of Twitter's control over traditional information sharing.
A similar situation applies to Weibo, no matter how developed the Internet celebrity economy is, a public opinion field that does not make money at all is always irreplaceable.
Don't underestimate the reality that access to anyone and all information, for better or worse, is a value that only Twitter can provide on the Internet today.
This is also why both The Pearl, which Trump personally endorsed before, or the True Social social platform he built himself, almost all of them quickly disappeared, because attracting some people alone is not enough to create a real information sharing platform. Apparently, even confident musk is aware of this, and it is now a waste of effort to start from scratch.
Musk has enough resources and is more persistent, and for now no one cares more about Twitter than he does.
If he wants to change Twitter, he needs to try to convince current shareholders that he can really make the platform better, especially according to his theory: "Given that Twitter is a de facto public municipal square, non-compliance with the principle of free speech fundamentally undermines democracy", or rely on his influence to raise the stock price to make investors profitable.
Image source: Network
Obviously, no other investor in the world can increase the value of a company by just by declaring itself a majority shareholder. For existing shareholders, that means they're now dependent on Musk's investment and involvement in Twitter or they'll lose all of those gains; it also means they're very motivated to support whatever Musk might want to do, even if Twitter's management is showing a tougher stance for now.
Just today, in an interview at TED in Vancouver, Musk said that a platform that is trusted and widely inclusive at its most is crucial to the future of civilization, and that he doesn't really care about economic issues at all.
During the Q&A, he also shouted directly to the board: "I definitely want to keep other existing investors, but (if investors don't buy it) I theoretically have the money to buy out all of their shares." ”
Asked what he would do if the takeover offer was eventually rejected by Twitter, Musk said there was no way to answer the question at this time. But he made it clear that he still had Plan B.
The only thing that is certain now is that Musk, who has always played cards according to common sense but has amazing mobility, will definitely play this good play to the end.
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