Elon Musk and Twitter: Free Speech Is Not Free
Especially when it costs over $40 billion
Free speech is not free when a billionaire offers to pay over $40 billion for it in all cash. Despite the millions of tweets praising Elon Musk as a champion and defender of free speech, people must realize that no billionaire spends that amount of money, or any amount of money really, out of purely philanthropic motivations.
Sure, Elon Musk loves Twitter. He values its utility as “the de facto public town square.” He thinks he can make some improvements.
He also thinks he can make some money.
To understand why, we must review and understand what motivates Musk. But first, let’s review how we got here.
Five Days on Twitter’s Board
He was on the board, and then he wasn’t. Elon Musk had purchased 9.2% of Twitter, making him its largest shareholder with a ~$3 billion stake. This was disclosed in a regulatory filing to the SEC on April 4th.
How did Twitter respond? By keeping its friends close and Elon Musk closer.
On April 5th, Twitter Chief Executive Officer Parag Agrawal tweeted that Musk was joining the Twitter Board of Directors. The lovefest only lasted five days, following a series of tweets from Musk that polled his followers on how to improve Twitter, including the possibility of converting Twitter’s (largely empty) San Francisco Headquarters into a homeless shelter.
Most of those tweets have since been deleted. Regardless, Agrawal thereafter announced on April 10th:
He must have known this was only the beginning of Twitter’s saga with Elon. As stated at the end of his note, “There will be distractions ahead, but our goals and priorities remain unchanged.”
The New York Post had reported that Musk had made Twitter employees anxious and uneasy. One employee thought Musk was “just getting started.”
They were right. As of April 13th, Musk had submitted an offer to purchase all outstanding Twitter shares for cash at a 38% premium (or $54.20 per share) over the April 1st closing price.
What is behind Musk’s fascinating Twitter obsession? Why does he want to control the fate and future of the company? Let’s review his motives.
Free Speech
This is what Elon Musk wrote to Twitter’s Chairman of the Board, Bret Taylor, in an exhibit to his offer to buy the company (which was filed with the SEC):
“I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy.
However, since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company.
As a result, I am offering to buy 100% of Twitter for $54.20 per share in cash, a 54% premium over the day before I began investing in Twitter and a 38% premium over the day before my investment was publicly announced. My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder.
Twitter has extraordinary potential. I will unlock it.”
So it took about two weeks, from his initial investment to his offer to buy the company outright, for Musk to realize that Twitter cannot be a “platform for free speech around the globe.”
Quick realization!
Which makes me wonder — is his motive here truly altruistic and rooted in social good? Does he really want to spend some $40 billion to defend free speech and nothing more?
Based on his history of Twitter trolling, we need to look deeper. Has he turned to trolling Twitter following a dispute over his board seat? What might he gain from acquiring Twitter? We must ask ourselves this last question, especially considering Twitter’s historic struggle to monetize itself.
Open Source Twitter and Its Potential
Remember this?
As background, this article does a good job explaining the recent efforts at Twitter to explore decentralization and open source. Basically, under a decentralized Twitter model, users could interact across various social media platforms. They would no longer be confined to Twitter’s walled garden. Accordingly, each user could create their own unique Twitter experience.
This approach would realize a version of Web 3.0, which advocates for an open source internet where platforms no longer intermediate the internet experience. Musk and former Twitter CEO, Jack Dorsey have publicly discussed the possibility of Web 3.0 for a while. Although Musk has called it more of a “marketing buzzword” than reality, given his recent efforts to buy all of Twitter, he may be trying to change that.
Not only would an open source Twitter empower users to set their own content moderation rules, it would also open new revenue streams for the company.
As The New York Times reported in March 2022, Twitter has been exploring ways to decentralize and incorporate cryptocurrency. The project is called Bluesky and dates back to Dorsey’s last few years as CEO.
“The Bluesky project would eventually allow for the creation of new curation algorithms, which would show tweets at the top of users’ timelines that differed from what Twitter’s own algorithm showed. It would give users more choice about the kinds of content they saw, Mr. Dorsey said, and could allow Twitter to interoperate with other social media services.”
If Musk were to morph Twitter into an open source model, he could unleash the already active cryptocurrency and NFT communities on the social media site, while potentially profiting immensely in the process. An open source Twitter would allow users to interact in a multitude of new ways, while giving Musk the opportunity to take a piece of those interactions.
Already a strong proponent of Dogecoin, Musk could make his investment there continue to grow by incorporating the cryptocurrency into an open source Twitter.
Call me cynical or skeptical, but I don’t believe that any billionaires invest in anything — whether Twitter or Dogecoin — simply for altruism or fun. That is not how they amassed their billions in the first place. People like Musk have unique monetary drives and motives.
Taking the helm of an open source Twitter would situate Musk at the center of the next internet revolution. He would soar past Zuckerberg’s flailing attempts to build a metaverse and set the rules of the game for the new internet. The power and profit potential here should not be ignored or underestimated.
Control and Fun For Elon
Apart from the potentials of an open source Twitter, Musk also wants control. He is a passionate Twitter user who obviously enjoys and has fun on the platform. He wants to be able to tweet about removing the “w” in Twitter without repercussions from shareholders or a Board of Directors.
Which is why he wants to take Twitter private through his acquisition. It is also why Musk as a member of Twitter’s Board of Directors was never a realistic possibility. He could no longer be Elon. He would have had to consider his fiduciary obligation to shareholders. Too many restrictions. Too much red tape. No fun.
One could equate Musk’s efforts to buy Twitter with Jeff Bezos purchasing the Washington Post. Even if Musk is not involved in the day-to-day similar to Bezos and his newspaper, he still maintains a degree of control and oversight, and enjoys freedoms he wouldn’t have otherwise. And while the Washington Post maintains its “independence” from Bezos, journalistic ethics would not be a barrier for Musk, allowing him to control a massive unchecked soap box for Tesla, SpaceX, and anything else that interests Elon.
Except with one big distinction. Although the Post has been profitable for Bezos, it is not even close to the future profit potential of Twitter, especially if it helps transform the internet and usher in a version of the Web 3.0 era.
The Future For Elon Musk and Twitter
It’s unclear as of this writing whether Elon Musk will actually gain control of Twitter. One thing that should be crystal clear, however, is that he is not purely motivated by free speech. Free speech is not free when it costs over $40 billion to buy. We would be naive to think otherwise.
Another clear certainty, based on Musk’s track record, is that he would transform Twitter. Whether it would be for the best remains to be seen. But if he actually acquires it, he will inevitably pour all of his patented Elon Musk intensity into the mission of trying to make Twitter better.
Musk has been transformative in every industry he has ever entered. From payments and electric cars, to solar panels and rockets, the man is not afraid to disrupt an industry and push it to the limits.
This great strength of his is also one of his biggest weaknesses because he has no limits. His personal behavior, including his tweets, are unchecked and often unhinged. For that reason, there’s no way he could keep Twitter public should he acquire it. There would be a parade of securities fraud lawsuits.
The future for Elon Musk and Twitter may be uncertain, even if he acquires it, but we should not lose sight of the fact he’s not doing this for charity.
He’s doing this for Elon.