If Elon Musk thought it would win wide backing for his $ 43 billion hostile takeover bid that he became Twitter’s savior, then he should get a rude awakening.
The world’s richest man made some sweeping demands for this week’s unsolicited approach. Shareholders, he promised, would “love” the rich premium he offered. He wanted to bring freedom of speech back to one of the most important social media. And he wanted to overtake the management of a company that had gone astray.
With characteristic hype, he even put forward his bid as a benefit to humanity. “The risk of civilization diminishes the more we can increase confidence in Twitter as a public platform,” he said in an interview at a TED conference a few hours after his approach was revealed.
At all points, the requirements have largely fallen for deaf ears. Even before Twitter’s board of directors revealed its opposition early on Friday by adopting a poison pill takeover defense, shareholders had given their own vote of no confidence. Twitter shares fell nearly 2 percent on the news of the bid, as a sign of Wall Street’s low confidence that it will succeed.
“I would be pretty surprised if the Twitter board was willing to give in for $ 54 given where the stock was just six months ago,” said Rich Greenfield, a partner at consulting firm LightShed, expressing a widespread attitude before the news of the poison pill. Musk’s emergence as Twitter’s biggest shareholder (a position he lost to Vanguard this week) sent the shares up 38 percent earlier this month in hopes he would be a catalyst for change. But his offer is still 26 percent below the 12-month high.
If Musk’s proposal was intended as an observation shot, it left many investors unsure how serious he was of following up – especially given his misguided claim once before of having “secured funding” to take Tesla privately.
Musk nurtured skepticism and smiled as he took the TED scene shortly after his bid, then reopened the “finance-secured” controversy by insisting he had had the money all along. He only settled a complaint from regulators, he claimed, because they had backed him into a corner where Tesla was facing bankruptcy.
Going public with a hostile approach to Twitter before he had funding in place or discussing it in depth with the board was a “highly unusual” move that had not made it easier for people to judge his true intentions, Ann said. Lipton, Associate Professor of Business Law and Entrepreneurship at Tulane University. Twitter’s executives were left in a position where they tried to assess not only whether the price he offered was reasonable, but also whether he was willing to pay it at all. Without the funding, “it’s very hard to believe he is,” she added.
Musk’s attempt to wrap his bid in the banner of free speech, meanwhile, also drew a skeptical reaction from many experts who have worked to keep the major social media platforms free of hate speech and misinformation. He said he wanted to end the secretive system through which Twitter favored some tweets over others, making it less likely that users would be banned. “Timeouts are better than permanent bans,” he said.
The statement drew half-hearted applause from the Republican right wing, where the permanent ban on Donald Trump has become a symbol of Silicon Valley bias. But some questioned how far Musk would be able to go in challenging the broader practice of content moderation.
“Reinstating Trump would be the ultimate litmus test,” said Jason Miller, a former senior Trump adviser. Without it, “it’s all just window-splitting,” he said – though he added that Twitter’s culture and the left-wing views of its employees would make it difficult to change the ethos completely.
Among many experts, Musk’s claim that Twitter suppressed free speech was dismissed as a naive claim that did not take into account years of efforts to weed out hateful remarks and misinformation.
Twitter is struggling with a deeper problem caused by its advertising business model, which “rewards extreme speech,” said Roger McNamee, a Silicon Valley investor who has campaigned against Facebook. It has forced it to try to combat a wave of hatred and misinformation, which in turn has drawn criticism over alleged censorship, he and others have said.
In another move that he claimed would improve free speech, Musk said he would publish the algorithm that determines what users see on Twitter. “Having a black box algorithm, promoting some things and not other things” could be “quite dangerous”, he claimed.
However, most digital services keep their ranking algorithms secret, and revealing Twitter can allow people to “play the algorithm and manipulate the content,” says Greg Sterling, co-founder of Near Media and expert in search and social media. media. It could cause particular problems given Twitter’s role in political debate and its use by some governments to release official information, he added.
The promise of a stronger commitment to free speech on Twitter could also hurt the company’s business by making its site less attractive to brand advertisers, according to some advertising experts and financial analysts.
It is not “necessarily good for civilization whose inaccuracy is allowed to spread under the guise of freedom of speech,” said Arun Kumar, head of data and technology at the IPG advertising group. Advertisers “do not want to be associated with fake news or hate speech,” he added.
Musk himself said this week that he did not invest in Twitter for financial reasons, suggesting he might not be affected by such concerns. A week ago, he also claimed in a tweet, which he later deleted, that its reliance on an advertising business model had exposed Twitter to “the power of companies to dictate politics”.
But experts warn that reliance on other business models, such as subscriptions to its revenue, could reduce the reach of the service. “There would be a lot less conversation if it was a paid platform,” Greenfield said.
McNamee expressed a widespread stance, saying all doubts about Musk’s bid showed it could be more of a chase for attention than a concerted effort to take control of Twitter. Yet Musk has never followed the conventional course, and his enormous personal wealth and stated goal of taking control of the company has made it difficult even for most critics to dismiss his approach outright.
With Twitter digging in towards his opening shot, Wall Street may soon see if Musk really has the desire – and patience – for a long-running battle.