Twitter, Musk & Free Speech

Nowadays, it seems that the real people who hold all the power in our world are billionaires. That is why Jeff Bezos, the founder of Amazon, brought the New York Times. And recently, Twitter was also brought in by Elon Musk.

If you don’t know Elon Musk, he’s currently the wealthiest person on Earth, and he is the founder of Tesla, SpaceX, etc. A few days ago, he brought another influential company, Twitter, a social networking service, for $44 billion.

It might seem that it was planned pretty well, with Musk swooping in and buying Twitter, all the shareholders getting paid, and everyone walking off happy. But that wasn’t quite the case. About a week ago, the Twitter board was still hesitant, trying to block Musk’s purchase by adopting the “poison pill” measure. It sounds more sinister than it is, and it doesn’t involve any poisoning. It preserves the right for other Twitter shareholders to buy more company shares at a slightly lesser price, effectively weakening Musk’s hold. However, Musk just offered more, from the initial bid of more than $40 billion to $44 billion. And then, when that wasn’t enough, he changed to cash, which is quite a good deal, considering that for every share you hold of this company, you get almost $55 in dollar bills.

So what made Elon Musk bid so much for this social networking service? And what determines the shares of a company in the first place? When thinking of shares, think of them as a piece of cake. The entire company is the cake. One share of this company is one slice of this cake, assuming the slices are equal in size. Let’s say Mike gets two of the initial ten. Then Mike has two shares of the cake. If it were a company, Mike would own two company shares. We also need to consider the price per share since it isn’t free. That is determined by how much people (the investors and future shareholders) are willing to pay. Let’s say that Company A is doing good. Then naturally, more investors would want to invest in this business to pay off in the future. It means that you buy shares now at a lower price, and then you could sell them at higher prices, with the medium your profit. But Company B is not doing well. Investors would likely invest in other more profitable businesses, so fewer people are willing to pay for a higher price (since the probability that Company B would crash even more is higher than the company doing better). In that case, each of the shares would be worth less. But not all people care that much about profit, for example, our Elon Musk. Because the Twitter stock, frankly, suffering losses in recent years.

Back to the second question, why did Elon Musk pay that much for Twitter? He wanted to reform the platform, and he advocated that it should be a “platform for free speech.” The billionaire argues that the world needs an “inclusive” digital town square that abides by free-speech principles and that Twitter today is too restrictive. Musk has suggested that his Twitter would treat content more permissively.

There is also another issue over Musk’s new ownership of Twitter: Will Former U.S. President Donald Trump return to Twitter? He got banned after officials pointed out he incited violence and caused insurrection at the Capitol on January 6th, 2021. That big protest of pro-Trump supporters tried to stop the election from being certified. Meanwhile, the former president got banned from Twitter (and other social networking platforms) to prevent him from tweeting “lies” about the 2020 election. However, with Elon Musk now in charge of Twitter and has plans to reform the censorship on the platform, Musk could allow Trump back. But the former president has said he wouldn’t return even if his ban gets reversed. In the months following his ban, Trump started his platform, Truth Social, trying to out-compete Twitter, though Truth social is still relatively small compared to the daily users on Twitter.

Even though Trump has said he wouldn’t return to Twitter, things aren’t that solid sure (maybe he will change his mind). Anyway, Trump or not, Elon Musk buying up Twitter is still a crucial moment in the modern online world. And what might happen next is, like it or not, in the hands of influential billionaires shaping our world. That’s the end of this production from the New News Newsminute. Thank you for reading, and tune in next week for more upcoming international updates and analysis.