Tesla CEO Elon Musk became the largest holder of Twitter stock after he owned a 9.2% stock in the company last week. Not only does Musk has the largest stake, worth nearly $3 billion in Twitter but has been inducted into the Board of Directors.
Interestingly, with 73,486,938 shares of Twitter as per SEC filing last week, Musk has even more shares than Twitter CEO Parag Agrawal. That means the maverick technopreneur Elon Musk has more say in the company and some of his tweets in the past week do indicate that.
Demand for Edit Button
A day before Twitter inducted Musk into the Board of Directors, he tweeted a poll question to his 81.2 million followers – “Do you want an edit button?” To which 73.6% of his follower replied Yes and 26.4% said No.
On April 7, Musk tweeted “Twitter’s next board meeting is gonna be lit” with a picture of him holding a cigar with smoke.
Or the latest one on April 10, where Musk again tweeted a poll question to his followers – “Convert Twitter SF HQ to homeless shelter since no one shows up anyway.”
In a way, Musk is an outspoken critic of Twitter as a social media platform and its policies to such an extent that last month he tweeted. “Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy.”
He followed that with another tweet, “Free speech is essential to a functioning democracy.” And even posted a poll question to his followers – “Do you believe Twitter rigorously adheres to this principle?
An asset or liability for Twitter?
So for Twitter and its directors, the question remains have they made the right decision to induct Elon Musk on the board. And how prepared are they to deal with any negative impact and implications that Musk will have on Twitter and its overall business globally?
For instance, after Musk took 9.2% ownership in Twitter, the stock surged 27% on NASDAQ, however, the rest of the week the stock fell by 3.55%. It’s a short term indication of how the market has reacted to Musk’s entry into Twitter’s board.
From April 2021 to April 2022, the Twitter stock price has fallen from $70.86 per share to $46.23 – a decline of almost 35% in a year.
Yes, there’s no doubt that Musk is one of the smartest businessmen in the technology space with a strong influential persona with over 81 million Twitter followers alone. He brings new ideas and changes to Twitter as well as can help the microblogging platform increase revenues and profits. That’s an asset for Twitter.
Liability, legal trouble and more
Having said that, the other side of Musk is a maverick and successful entrepreneur. But at the same time, he’s an independent thinker, blatantly vocal and an advocate of ”Freedom of Speech.”
And these traits and habits of Musk are more likely to test and throw new challenges at Twitter, both from inside and outside. These all may land the social media platform and its management in some legal troubles, impacting its stock valuation, growth prospects, overall business and most importantly its 60 million followers.
Twitter’s policies and its alternatives
In recent years, people have condemned and objected to Twitter’s top management and its policies not just in the US but around the globe. People have questioned the platform’s role in politics and remain under scrutiny for its not so democratic approach.
More than often the platform has been called biased for its one-sided stand against certain individuals, groups and nations. In some countries, the social media platform is at loggerhead with the governments, battling inquiries and legal cases. And that has created a space for alternative social media platforms around the world.
Indian microblogging and social media app
For instance, Twitter’s policies and political stand towards India led to the birth of an Indian microblogging and social media app Koo launched in May 2021 by Bangalore based tech startup Bombinate Technologies.
Koo is an alternative to Twitter mainly built for Indians, allowing them to post messages and communicate in Indian languages and has over over 15 million users.
New social media platform
Former US President and businessman Donald Trump after being blocked by Twitter and Facebook for more than a year launched founded a new social media platform Truth Social launched in February 2022.
These incidents are evident to the growing need for alternative social media platforms that are non-bias and their policies are open, and adhere to democratic principles. And Musk’s views are very aligning with these beliefs and values.
Under regulators’ scanner
The Tesla and SpaceX billionaire last month tweeted that he’s giving serious thought to starting a new social media platform. He criticised Twitter for failing to adhere to free speech principles that fundamentally undermine democracy.
Certainly, going ahead Twitter’s Board of Directors are likely to be more concerned about what Elon tweets including the company. And why Twitter directors need to be more worried is because Elon remains under the scrutiny of the U.S. SEC (Securities and Exchange Commission) and its regulators for his tweets over Tesla stocks.
And that’s why the question remains – will Elon Musk be an asset or liability for Twitter and its management in the near or long term future?