Flavor of the Summer: Musky Twitter
Twitter is one of the most unheralded social media platforms despite its unique functioning style and adoption by world leaders, governments, celebrities and easy accessibility to the who’s who by the general public. On the other hand, Elon Musk is the maverick who set out to do the unthinkable and has gone on to send manned mission to International Space Station by SpaceX and made Electric cars a generic car in countries like Norway which would have been a privilege to own a decade ago. The union of Elon Musk and Twitter, at first sight, is quite unthinkable. You have a maverick who’s keen on changing the world by his actions and Twitter is a platform where you can trigger an action by words.
Well, the unthinkable happened.
On 14th April 2022, Elon Musk went on to Buy Twitter for $44Bn in an all-cash deal. This was one of the quickest developments that happened in the business world as Elon Musk had acquired 9% stake in Twitter only 10 days back. All this may come as a surprise to the public, but this was an event bound to happen someday considering the octane nature of Elon Musk and the opinions that he holds of the world. He is the same man who went up against NASA to manufacture Space X and then ended up becoming the go to carrier for humans to space with NASA. If that was not enough, Elon Musk has been an extremely active user of twitter with tweets coming off in a rumble. Twitter was definitely a platform that kept the most creative, shrewd business minded person hooked and allowed him to express his thoughts or joke around. Amidst all the memes and reactions around Musk’s acquisition of Twitter, let’s understand the real deal behind this takeover and implications for the same.
1. Ability to influence markets: Elon Musk’s Tesla has achieved zenith in the automobile industry, but the cost economics of a high-end electric car cannot allow Elon Musk to become the richest person on Earth. His Tweets allow people to anticipate market changes translating into surges in Tesla Stock Prices. His tweet in 2021 pondering whether he should sell 10% of his stake in Tesla got the Tesla stock prices dropping by 7.3%. Multiple such instances indicate that Elon Musk’s tweets had the power to influence the market standing for Tesla. With The Boring company and SpaceX slated for an IPO in the near future, the amount of money that Elon Musk can make simply by controlling Twitter is unthinkable. His absence in Twitter could have deprived him of the power to influence stock markets without insider trading, but his shrewd business mind ensured that didn’t happen.
2. Non-Negotiable Position for Twitter Management: The moment 9% of Twitter’s stake was acquired by Elon Musk, it was a signal of the things to come which was completely ignored by Parag Agrawal led Twitter management. That event sparked a 27% surge in Twitter’s value. Twitter has been a loss-making entity expect for 2018 and 2019 and a decline of Elon Musk’s offer would have pushed its share price into deep trenches as the expected reaction of Elon Musk would have been to sell off the 9% stake as well leading to adverse reactions in the market. The safe and the logical bet was to allow the takeover. This will enable Twitter to generate more cash flows and also in turn introduce the set of creative changes that it has been pushing back to do owing to multiple viewpoints in the board. Elon Musk’s entry as the sole owner allows Twitter to unlock the potential it always had of being the most engaging social media platform.
3. Ability to express views freely for himself and the world: Twitter is largely unfiltered, but there are instances when it has not shied away from blocking accounts that express views which are extremely disturbing to wide public. Even the former US president Donald Trump’s account stands blocked as of today. Elon Musk loves speaking his mind and is a strong advocate of free speech. Taking control of Twitter will allow him to make it a holistic and free speech platform with no regulations expect for the usual S.E.C regulations. This also allows him to get views from everyone in the world about his endeavors as Elon Musk relies heavily on opinions from customers(complete mankind) to make the world a better place. It also allows him to be his maverick self by creating controversies like “Coca Cola containing Cocaine” 😊.
So, what’s next in this Musky Twitter world?
Although the deal has not completely pushed through and is work in progress, but the deal is almost final. The all-cash deal has resulted in Elon Musk selling $4bn of his shares in Tesla resulting in Tesla’s value falling by $126bn. That’s the power that Elon Musk’s actions have on the stock exchange. Twitter is sure to become a free space with multiple polarized thoughts coming through with Elon Musk advocating for free speech. It has its pros and cons, but Twitter will be the same for general public and not the same for the celebrated people. S.E.C will try to bring in barriers to free speech, but Elon Musk is not someone who will go down without a strong fight. There will be elements of Musk in twitter interface with high level of sophistication as we can see in Tesla cars, SpaceX shuttles or even the Astronaut’s spacesuits. It is exciting to look forward to changes in Twitter and the market itself. However, this summer flavor of musky Twitter has also given a cue to people like Jeff Bezos and Gautam Adani to facilitate takeovers of the company. This could potentially end up into a world controlled by the supremely rich and we would never want that.
So, let us enjoy the Musky Twitter flavor and hope that it doesn’t end up rotting other systems in the world. Till it lasts, 3 cheers to Elon Musk and the world of twitter!
