After the world's richest man, Elon Musk, successfully acquired Twitter, the next step was to recover shares, privatize and dissolve the board of directors to achieve the goal of saying nothing. If he doesn't, boards may be constrained in decision-making, dictatorships are the trend in tech, and the distribution of power that balances each other is being abandoned. This trend is very destructive, one step from heaven to one to one hell.
Over the past decade, through the construction of equity and voting power, big tech founders like Mark Zuckerberg and Alphabet's Sergey Brin and Larry Page have cast themselves as dictators of modern business.
Zuckerberg owns a majority of Meta's voting rights stake, while billionaires Brin and Page control 51 percent of Alphabet's special class voting stakes, giving them ultimate control over Google and YouTube. This two-class share structure is uncommon in business, but it is common in the tech world and is thought to give the company's founders the freedom to execute on their long-term vision. While Musk owns only 20 percent of Tesla, his board of directors is made up of friends and brothers. For years, the board largely obeyed his orders.
All of this runs counter to modern corporate management philosophies, which believe that strict accountability is right. David Joffey, a professor at Harvard Business School, says that without these restrictions, technology leaders are free to make wayward decisions. Sometimes, these decisions can be good for the company. For example, when Mark Zuckerberg bought Instagram for $1 billion in 2012, the company had no revenue at the time, and he didn't apply to the board for permission. Seven years later, Instagram contributed $20 billion in annual sales to Facebook.
But from another perspective. Multiple studies have shown that the rise of Instagram under Zuckerberg's management is linked to rising rates of depression, anxiety and suicide among teens, especially teenage girls. The site makes a lot of money, but it also causes psychological harm to children and adults, and Facebook's own research has confirmed this.
In the long run, shareholders will also be affected by unfettered control. Zuckerberg led Facebook into obsessing over chasing an abstract business goal— the metacosm. While the move could eventually bear fruit, for now, the move has cost the company $10 billion. Meta's stock has fallen 40% since the beginning of the year. Why didn't he keep Facebook moving at a high speed and steady? Because no one, including the management team very much the board of directors did not urge him to restrict him from doing so.
From the surface we can see, Musk's acquisition of Twitter is difficult to link to simple business practices. He said: "I don't care about money, I just want to achieve an understanding of free speech". Now Tesla's shareholders are paying the price. Since Musk borrowed more than $25 billion from Tesla as collateral, the automaker's stock has depreciated by nearly a quarter in the past three weeks.
Maybe when you're a billionaire, you're no longer interested in making money. When you're in an industry where visionaries are idolized, it's easy to be tempted to chase your dreams and ideologies.
These billionaires, who control social media around the world, actually need stricter checks and balances. This is certainly doable. As many institutional investors have called for, dual-tier listings may eventually be phased out, but it will take time. Regulators, meanwhile, have been tough, but they're also easy to ignore for people like Musk. He has repeatedly scoffed at the SEC that the power of money is so powerful that it can even help him bypass laws that could undermine his free speech program.
For better or worse, the simplest and most effective remedy now is to check and balance it with other billionaires. The biggest impact on Facebook's unbridled data collection practices to date has come from Apple, which allows customers to block Zuckerberg's company from tracking them. Zhang Yiming of ByteDance also threatened to use TikTok to lure Facebook and Twitter users away.
We shouldn't continue to evolve, and we can't live in a world where social media is controlled by billionaires and can't do anything about what they want.