29th April 2022
Elon Musk’s bid to buy Twitter for $44bn in an all-cash deal has been accepted by the Twitter board and barring any regulatory intervention will go through by the end of the year.
The world’s richest man stunned industry watchers with his bid to take Twitter private. The deal includes a promised $21bn of equity investment, a $12.5bn loan backed by part of Musk’s stake in Tesla (from five different banks) and then the remaining $13bn in loans against the company itself (from seven further banks).
Since the bid was accepted Musk has reportedly sold $4bn worth of Tesla shares to help finance the deal – with Musk himself saying that he will not be selling any more shares in Tesla as part of his plans for Twitter.
Musk has openly criticised Twitter’s leadership over its moderation policies, favouring a much looser approach to moderation – although he has given no specifics on what this would mean beyond calling himself a ‘free speech absolutist’.
Taking Twitter private will give Musk the ability to make changes as he sees fit to the platform, and that is what is both exciting and worrying the platform’s users and brands in equal measure.
Many high-profile accounts have reported huge drops in followers since the news broke and the hashtag #RIPTwitter began trending. Barack Obama saw a 300,000 user drop, Katy Perry 200,000. Twitter is looking into these shifts and is suggesting they were organic in nature – i.e. not bots – meaning that many people may have followed through on their promise to leave the platform following news of Musk’s takeover. Elsewhere, high profile accounts to the right of the political spectrum are reporting an increase in followers.
In a statement Musk said he wants to: "Make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans”.
For advertisers the concern is what impact the change in ownership will have on the platform, both in terms of its overall popularity as well as its how it operates.
Elon Musk is a living Tony Stark. A tech billionaire that exudes personality and who breaks the rules and does it his way. His personal celebrity could well act as a lightning rod to attract more people to the platform than may leave it. Given his position on free speech he will undoubtedly make changes to the moderation and banning procedures, but those are not likely to be the only changes – subscription services and payments could also well be part of the billionaire’s plans, with Musk already having enabled Tesla customers to pay using Dogecoin.
Change is coming, that is for sure. What the change will be, we will not know until Musk decides to tell us. For brands, it means a new cautiousness and a period of test and learn with the platform as it transforms, including a new risk assessment of brand suitability if and when the content and tone of the platform changes over time. Whether Twitter becomes a Dogecoin, Tesla and SpaceX PR platform, and more popular version of its current form driven by Musk’s celebrity or a less brand safe environment with an absolutist view of freedom of speech, the one thing you can guarantee is that it won’t be boring…Musk doesn’t do boring.