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Twitter is on the verge of big changes with the likely takeover by tech billionaire Elon Musk. The richest person in the world wants to relax the content rules on the platform and rethink the business model. In just days, the Tesla boss broke through the company’s resistance to his buyout attack with financing commitments of more than $46.5 billion. Twitter’s board of directors approved the deal. Now, enough Musk shareholders have yet to sell their shares.
Musk already has a good 9 percent, and that’s enough to get him past the 50 percent mark. Because unlike Google or Facebook’s Meta Platforms group, Twitter’s founders and top managers don’t have shares with more voting rights that can secure their control over the company. Twitter and Musk gave themselves until the end of the year to finalize the sale.
What does the boss of an electric car manufacturer, a space company and a brain implant developer want from Twitter? How will the service, which has become something of a nervous system of the news industry, change as Musk’s private property? Who can make sure that Musk is not using Twitter for commercial interests? Without the transparency of stock market reports, will it be possible to know how Twitter makes its money and if the business is doing well? These are all questions for which there are no reliable answers.
When the deal was announced Monday, Musk promised, among other things, to “defeat spam bots and authenticate everyone.” The software algorithm used to select tweets that are potentially interesting to users should be made public.
Above all, Musk wrote the widest possible freedom of expression on the flags. That’s only possible if the short-messaging service exits the stock market, he said. Musk described his idea of free speech as follows: “If someone you don’t like can say something you don’t like.” All opinions must be allowed within the law. Twitter with free speech is important for democracy and minimizes risks to civilization, he said.
However, it is now the case for two groups in particular who complained particularly loudly about the so-called “censorship” on Twitter: people whose posts were targeted due to incorrect or misleading information about the corona virus and supporters of the former President Donald Trump, who did not readily claim that the 2020 election was stolen from him. Applause poured from the camps for Musk’s vision.
Others sounded the alarm. Democratic US Senator Elizabeth Warren wrote on Twitter: “This deal is dangerous to our democracy. Billionaires like Elon Musk play by different rules than everyone else.” The civil rights organization ACLU (American Civil Liberties Union) was also concerned: although Musk is a member and one of the most important supporters, it is “very dangerous to put so much power in the hands of one person.” Musk used the criticism to demonstrate his approach: “I hope even my worst critics stay on Twitter because that’s what free speech means.”
Former Facebook security chief Alex Stamos also warned against an “anything goes” setting. You add no value to a platform by filling it 99.9 percent with porn and ads for fake-brand sunglasses and erectile dysfunction drugs, he wrote on Twitter.
The human rights organization NAACP (National Association for the Advancement of Colored People) tried to convey to Musk its view of limits on expression: “Freedom of expression is wonderful, hate speech is unacceptable.” There is also no place on Twitter for false information. NAACP Chairman Derrick Johnson specifically appealed to Musk not to allow Trump back on the platform. “Life is in danger, and so is our American democracy.” President Joe Biden’s White House is also concerned that Trump could reappear on Musk’s Twitter ahead of this fall’s midterm elections and the 2024 presidential election, CNBC television reported.
Trump was kicked off Twitter after expressing sympathy for his supporters who stormed the Capitol in Washington on January 6, 2021. Management has so far emphasized that there is no way for him to return to the platform. Musk might see it another way: He believes temporary “waiting times” are better than permanent exclusions, the Tesla boss at large said recently. Musk himself downplayed the dangers of the corona virus at the start of the pandemic, calling the restrictions in California “fascist.”
Trump told Fox News he wouldn’t go back to Twitter even if he could. Instead, the former president is building his own Twitter alternative called Truth Social, which has led a grim existence until now.
Musk has always said that the Twitter deal is not about money. But he puts a lot of his money into it. While Musk won’t be accountable to anyone as the owner of Twitter, he still has to pay off the debt he needs to complete the deal.
The 50-year-old has made loan commitments of more than $25.5 billion and also wants to bring in an equity of around $21 billion of his own. Musk is by far the richest person in the world with an estimated net worth of around $257 billion. However, his wealth consists almost exclusively of shares in Tesla and his space company SpaceX. He has to secure loans with shares.
In doing so, you will own a platform that has never been able to turn its importance to politics and media into as lucrative a business as, say, Facebook. Twitter made $5 billion in sales last year and posted a final loss of $221.4 million. One of Musk’s ideas for Twitter is that a subscription model would ensure independence from large corporations better than the current advertising business. But it is doubtful that enough users are willing to pay money to use Twitter.
Another question is how Musk’s business interests might clash with those of Twitter. China is an important market for Tesla, and not exactly known as a bastion of free speech. Amazon founder Jeff Bezos, the world’s second-richest man, owner of the “Washington Post” and Musk’s space rival, accordingly raised the question of whether China had just gained more influence on Twitter. He doesn’t believe in that himself, Bezos restricted. But Tesla’s situation in China is getting more difficult.
Wall Street Journal: Musk stabs hornet nest
The “Wall Street Journal” comments on the probable acquisition of Twitter by billionaire Elon Musk:
“What a gamble for Musk, who says he can unlock value on Twitter that the current leadership can’t (unlock). (…) If Musk can find a more satisfying balance in content moderation, he may be right about the value.” hidden from Twitter. .(…) Moving back a few notches on the moderation dial could encourage broader engagement, but be prepared for progressives to clamor.
One start could be to break up what appears to be a monoculture at Twitter’s headquarters in San Francisco. Perhaps Musk will move the company to Texas like he did with Tesla. How many Twitter programmers have been to a rodeo? Musk may also have functional changes in mind, such as longer tweets. (…) Does Musk realize that he is stabbing a wasp nest? Will his vision work? who knows. But it will be fascinating to see how Musk seeks to disrupt Silicon Valley’s creeping conformity culture.”
Commissioner Breton unfazed by Musk’s Twitter takeover
The announced takeover of Twitter by tech billionaire Elon Musk is not a cause for concern for EU Internal Market Commissioner Thierry Breton. “Every company in the European Union has to comply with rules, it’s as simple as that,” the Frenchman told the German Press Agency on Tuesday. He made explicit reference to the Digital Services Act (DSA), which has just been passed and which provides for stricter supervision of online platforms. Those who do not comply with these regulations face penalties of up to six percent of global annual sales. Breton said he didn’t see any problem with the app even if Twitter was solely in the hands of Musk.
Once the DSA is applied, online platforms will have to comply with certain rules: the bigger the platform, the more obligations. For example, platforms with more than 45 million users would have to hire many more content moderators, in all EU languages. They must also act immediately if there is illegal content on their site. “Platforms have an obligation to tell us how many users they have and we have ways to control that,” Breton said.
It is the responsibility of politics to regulate the digital space. “The information space does not belong to any private company.” Musk knows Europe very well because he is a major player in the auto industry with Tesla.
He also said he wasn’t worried about Musk leaving former US President Donald Trump on Twitter. Rather, he believes it is problematic if a single person can decide to exclude users. Such decisions would have to be made by a larger body in the future.
Deutsche Bank raises Twitter target to $54.20 – ‘Hold’
Deutsche Bank Research raised its price target for Twitter from $35 to $54.20 in line with Elon Musk’s takeover bid. In a study published Tuesday, analyst Benjamin Black placed the rating at “Hold.” The expert is pretty sure that the Tesla boss’s approach will succeed. Musk is very creative and also takes unusual paths. Consequently, Black is curious about the billionaire’s exact plans.
Twitter shares closed in New York on Monday at $51.88 (+5.62 percent). It was even higher in premarket trading on Tuesday, but then fell 3.02 percent at times to $50.14 in regular trading.
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