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6 April 2022

Elon Musk is now Twitter’s biggest shareholder. Here’s why that is worrying

Why would the world’s wealthiest person want to make an enormous investment in an app that is widely considered on its way out?

By Sarah Manavis

When Twitter finally banned Donald Trump in the wake of last January’s Capitol building riot, a space opened up to become the app’s new main character, its arch villain. Waiting in the wings was Elon Musk, the Tesla founder and CEO who is currently the richest person in the world, and who had long used Twitter to stoke controversy and engage with his fans. Since Trump’s departure, Musk has made near-weekly headlines for his tweets – which have ranged from claims he would give away $6bn if his followers could explain how it would solve world hunger, to challenging Vladimir Putin to a fight.

Musk’s account has always been a detestable combination of misleading information, business tweets and what he would likely describe as jokes. He often weighs in on political culture, typically on topics that would appeal to his right-leaning male fanbase. On 25 March, he posted a series of tweets in this vein. “Free speech is essential to a functioning democracy,” he wrote, followed by a poll asking his followers to vote yes or no to the prompt: “Do you believe Twitter rigorously adheres to this principle?” He replied to his tweet saying: “The consequences of this poll will be important. Please vote carefully.” The next day he quoted the result (a clear win for “no”) and wrote: “Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy. What should be done?”

The answer came on 4 April, when it was announced that Musk had purchased a $2.9bn stake in Twitter – a nearly 10 per cent share, making him the platform’s biggest shareholder (for context: Twitter’s founder and ex-CEO Jack Dorsey only owns a 2.25 per cent stake). Today, it was announced that he has also joined Twitter’s board. While Musk is known for such deliberately shocking business moves, this still came as a surprise. Even if we take his free speech concerns at face value, why would the world’s wealthiest person want to make such an enormous investment in an app that is widely considered to be insular, small, ineffectual and, more than any other social platform, on its way out?

Musk tweets have impacted the price of Tesla shares as well as those of various cryptocurrencies he invests in (though not always in a positive direction). The most infamous example came in 2018, when Musk tweeted that he was considering taking Tesla private at $420 a share (the joke being that the number has long been associated with marijuana). The tweet made Tesla’s stock jump 11 per cent: Musk was later fined $20m by the Securities and Exchange Commission for security fraud and was forced to step down as Tesla chair (though he remained the CEO, a role he still occupies today). As Twitter appears to be cracking down on disinformation on its site, it can only work in Musk’s favour to be a powerful voice at the platform’s top tables. 

But alongside this history of Twitter having benefited his businesses, Musk also has a consistent track record of taking criticism very badly. In 2018, after a slew of bad press for Tesla that revealed a number of disastrous internal issues, including a covered-up car crash, the company claimed investigative reporters and union workers at Tesla were part of an “extremist” conspiracy organised to attack the company. Musk then suggested that he might create a website to rate journalists, even saying he’d call it “Pravda”, in an apparent attempt to stoke a backlash against those reports. While Musk and his supporters claim to be proponents of free speech, instances such as these suggest they are in many ways seeking to suppress it. Musk’s position at the platform may give him a new opportunity to pressure and discredit his critics.

As is so often the case with Elon Musk, this may prove to be some kind of joke – albeit, typically, a not very funny one – the point of which will be clear to very few. He may eventually sell his shares after the joke runs dry, or simply do nothing with them. But, already, he appears to be having sway. Late on Monday night he tweeted asking users, with another yes or no option, if they wanted an edit button on Twitter, something the platform has been insistent it will never introduce (the company even tweeted “we are working on an edit button” as an April Fools’ Day joke last week). But on Tuesday, Twitter announced that it was, indeed, testing an edit button. The new CEO, Parag Agrawal, quote-tweeted Musk’s new poll, deliberately echoing what Musk had written on 25 March: “The consequences of this poll will be important. Please vote carefully.” While this may have been in jest, Agrawal also said in Musk’s board seat announcement that Musk would “bring great value” to Twitter’s board.

We may continue to see Twitter take more responsibility for its users’ posts: perhaps it will moderate and remove more content rather than less. But as is also often the case with Musk, the jokes, the memes and the eagerness to please his die-hard fans could mask something else – an interest not in free speech, but in what kind of speech is aired on one of the world’s biggest platforms.

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