Chain New (ID: ChinaBlockchainNews)
Original author | Fang Qinyu
The drama between the world's richest man, Elon Musk, and Twitter finally came to an end on April 26, Beijing time.
From publicly asking Twitter if it followed free speech to launching the acquisition, Musk went viral, and it took just over a month to force Twitter's board to accede to his $44 billion bid.
The acquisition is expected to close within the year, and after the acquisition is completed, Twitter will complete the privatization and delisting. In this way, Musk's field of involvement has extended from technology and capital to the media. Some people joke that Musk is only one presidential title away.
This matter has also attracted the attention of people in the blockchain industry, because Twitter has always been an important position for blockchain practitioners to make remarks, and Musk's high-profile entry into the blockchain in 2021, at this time, the acquisition of Twitter has led to speculation - whether Musk wants to build a decentralized social media platform?
Interestingly, after the news of Twitter's board of directors agreeing to be acquired, Musk's favorite Dogecoin soared by more than 20%, and some people even combined Twitter's logo with the image of Dogecoin.
(Netizen Mapping)
Spend tens of billions of dollars just to get revenge on your friends?
The 2021 Global Billionaires Indicator List shows that Musk is worth about $274 billion, but in fact he holds about $3 billion in cash and liquid assets.
Previously released Musk acquisition documents show that of the $44 billion in acquisition funds, about $13 billion of the financing came from Morgan Stanley, Barclays and other financial institutions, $12.5 billion was obtained through mortgages from Tesla shares held by Musk, and the remaining $21 billion will come from Musk's "direct or indirect" equity.
Today, how to operate the $21 billion in the eyes of the outside world is still a suspense, which shows that the huge rich man is not so generous at hand, so what is the purpose of throwing tens of billions of dollars?
Musk has more than 80 million Twitter followers and is a heavy user of Twitter. Despite the busy business of building rockets and cars, Musk still did not forget to tweet and interact with netizens, and once did not cover his mouth, such as saying that "Tesla bankruptcy" caused the company's stock price to fall sharply, and also had a war of words with Bill Gates on Twitter.
Twitter founder Jack Dorsey is a close friend of Musk and stepped down as Twitter CEO in November 2021. Jack Dorsey said he voluntarily resigned and wanted "Twitter to be the most transparent company in the world." However, there are media reports that hedge fund Elliott Management won a board seat in 2020 by buying a stake in Twitter, pushing Forsy to step down.
When Elliott Management selected the new CEO, Musk immediately tweeted that "I just want to say that I support Dorsey as CEO of Twitter, others are fine."
The seeds of revenge may have been planted.
In March 2022, Musk tweeted an article about "Do you think Twitter adheres to the free speech principles?" And asked netizens if Twitter is a place for free speech.
Musk's actions, though, come before they get a voice. In mid-March, Musk filed an application to the U.S. Securities and Exchange Commission (SEC) to acquire 9.2% of Twitter's shares in the form of passive investment, which means that Musk will become Twitter's largest shareholder, but the definition of "passive investment" will not affect the company's decision-making.
But with Musk's remarks on Twitter bombarding Twitter management, the prelude to this revenge merger was unveiled.
In early April, Twitter announced that Musk would become a member of Twitter's board. Musk, meanwhile, said he would make significant improvements to Twitter in the coming months.
On April 14, Musk aggressively proposed to acquire 100% of Twitter's shares at a price of $54.2 per share, and in order to stop Musk, the Twitter board launched a "poison pill plan", that is, through a large number of low-priced new shares, to dilute the equity of the largest shareholders, prevent its hostile acquisition, and make Musk lose its position as the largest shareholder.
However, Musk insisted on being the barbarian at the door, and came up with $46.5 billion in financing vouchers, reaching out to several institutional investors on Twitter. It is worth noting that at the time of Musk's takeover offer, Morgan Stanley held 8.4% of Twitter's shares, was Twitter's third largest shareholder, and was also the financial adviser and financing institution for Musk's acquisition of Twitter.
Despite the twists and turns, Musk eventually forced Twitter's board to agree to the acquisition. Now, there are divergent views on what Musk will do when he buys Twitter.
According to Musk himself, it will make Twitter more free-speech and more open. After the acquisition was negotiated, Musk happily published a tweet saying that Twitter is a civic square in the digital age and is crucial for discussions about the future of mankind. He also said that it will help Twitter become better by improving the product with new features, making Twitter's algorithm public, and making transparent the specific logic of content recommendation and blocking.
There are also claims that Musk will pave the way for his own election for the president of the United States, because the lesson is Trump, and Musk has not yet expressed his position on whether to restore trump accounts after the completion of the acquisition, and Trump has preemptively said that he will not return to Twitter. However, Musk was born in South Africa, which theoretically does not meet the rule that "presidential candidates must be born in the mainland", but the U.S. presidential election nominee has had a number of non-born candidates in the United States.
It has also been suggested that Musk may have been designed to "capture" the next generation of young people, just as Microsoft once hoped to acquire Tiktok, where the main users on Twitter are relatively young.
Will Twitter be "decentralized"?
However, whatever Musk's intentions, there is a risk of turmoil in Twitter's management in the future. Because Musk has continued to tweet over the past few weeks to express his dissatisfaction with Twitter's board and the company's operations.
Jack Dorsey said publicly after the acquisition talks, "As a company, Twitter has always been my heart disease and my biggest regret, because it gradually belongs to Wall Street and advertising models." Now, Musk has taken Twitter back from Wall Street, the first step in Twitter's move in the right direction. In principle, I don't think Twitter should be owned or operated by anyone, and Twitter should be a public good at the protocol level, not a company. However, to solve this problem, Musk is the only solution I trust, and I believe in his mission to expand the light of consciousness. Musk will create a platform for maximum trust and broad inclusion, and that goal is right, and that's why I chose him..."
Jack Dorsey had a discussion with Musk on Twitter about Web 3.0 in late 2021. Simply put, Web 3.0 is the next generation of the Internet, and decentralization is an important feature of it. Jack Dorsey and Musk believe that there are no real Web 3.0 products, most of the Web 3.0 products are controlled by some centralized investment companies, and Musk agreed with a netizen in this discussion, that is, "the best way to predict the future is to start building."
Based on Musk's past statements, it is speculated that after taking over Twitter, the billionaire may create Twitter, and these measures include but are not limited to:
Twitter content moderation. Twitter should be more cautious when deciding whether to take down a tweet or permanently ban a user. Temporary blocking is a better option. When Twitter makes changes to amplify or reduce the impact of a tweet, users should be made aware of what's going on. But freedom of speech is not borderless, and all of Twitter's actions should be in accordance with the laws of the countries in which it provides its services.
The algorithm is open source to avoid some sort of behind-the-scenes operation. This is to have a public platform that gains maximum trust and broad inclusion; eliminate bot fake accounts and reduce scams; and introduce "Tweet Editing" features. Musk found through the voting of Twitter users that 70% of users want to have an edit button function, and the change itself should be widely publicized; content with longer characters should be allowed to be published, which is too little for 140 characters; and advocate a paid model to reduce dependence on advertising revenue. Twitter's fourth-quarter 2021 earnings report showed that announced revenue was 90 percent of the company's total revenue; layoffs and closures of Twitter's San Francisco headquarters.
What the above initiatives may have to do with Web 3.0 is algorithmic open source and reduced reliance on advertising revenue models.
In fact, before Jack Dorsey left Twitter, Twitter had a lot of roots with Web 3.0 and had some open-ended attempts.
In June 2021, Twitter changed its official profile to "dropping NFTs all day" and tweeted "140 free NFTs for 140 people, good friends." In September of the same year, Twitter announced that it would add Bitcoin as a tip payment method, add NFT verification, and an automated content monitoring program. The program includes a space fund for the monetization of Twitter creator content. The plan is alleged to be related to Twitter's decentralized social media division after Jack Dorsey announced bluesky being led by veteran blockchain developer Graber.
Graber previously worked on blockchain privacy project Zcash, while Bluesky was Twitter's decentralized social media working group.
Interestingly, after news of Twitter's privatization was revealed, Bluesky clarified his relationship with Twitter, saying that he was an independent social media company, a public welfare limited company, "which is owned by the team itself, and Twitter does not have any controlling interest." At this point, the decentralized social media project led by Jack Dorsey and Twitter parted ways.
Predictably, the more decentralized and avant-garde Bluesky and the social media giant Twitter that will be transformed may be secretly pitted in the future — if Musk is telling the truth, he didn't buy Twitter to make money, but to do something that was "extremely important to the future of human civilization."
For Wall Street, though, Twitter could struggle to meet the goals Jack Dorsey set before he left, such as a 50 percent increase in revenue from 2021 to $7.5 billion from 2021 to $2023, while Twitter still has a net loss of $221 million in 2021. So while Twitter's stock price rose more than 5 percent after the acquisition was finalized, it quickly turned down as U.S. stocks fell en masse.
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