Posted: May 5, 2022
The story about Elon Musk buying Twitter has been a little hard to follow with a new twist or turn almost every day. But…for now…the deal seems to be finalized. Here’s a quick recap of what’s happened so far: First, Musk bought approximately 10% of Twitter’s shares and wanted to join Twitter’s board of directors. Then, he withdrew his name from consideration and disappeared for a few days. When he reemerged, he made things simple by just offering to buy all of Twitter’s shares outright for $44 billion. At first, Twitter’s board rejected the offer and invoked a “poison pill” to prevent a hostile takeover from Elon. But, just a few days later, Elon secured financing for the deal and the board agreed to sell. Let’s take a look at what might happen now that Elon Musk owns Twitter. Musk Joins A Unique Club Elon Musk’s Twitter purchase has been a highly-publicized and very polarizing event. Fans of Elon are hoping that he will turn the platform into a digital town square that’s the pinnacle of free speech. Non-Elon fans, however, are lamenting the fact that a billionaire was able to easily scoop up one of the world’s largest social media companies like he was buying a used car. On that note, let’s remember that Musk isn’t the only billionaire that owns a media company. After purchasing Twitter, Musk will join a unique club of billionaire media moguls. A few notable names on this list are Mark Zuckerberg who owns Facebook, Instagram, and Whatsapp. Jeff Bezos who owns the Washington Post. Ruper Murdoch who owns Fox News, the New York Post, and The Wall Street Journal. Michael Bloomberg who owns the media giant Bloomberg. And Donald Trump who recently launched his own social media platform: Truth Social. Now that the deal is more-or-less finalized, let’s examine what Musk wants to do with Twitter. Changes to Twitter During the buying process, Musk made it clear that he wants Twitter to be a home for free speech. One way that he might try to achieve this is by making Twitter’s algorithm open-source. This would give the public more insight into how Twitter’s platform works and prevent the company from prioritizing certain types of content over others. Musk is also interested in making more money off of Twitter. To do this, he has toyed with a few ideas. He has tossed out subscription services, monetizing tweets that go viral, and charging a fee when third-party websites quote or embed tweets from verified accounts. Another overarching theme that Musk mentioned is that he wants to wane Twitter off its dependence on advertising. In the short term, Musk has also stated that he wants to improve Twitter’s profitability. The quickest way to do this is by cutting costs. One major cost that Elon stated he might slash is the lofty compensation packages of top executives and board members. To learn more about current events as they pertain to finance, economy, business and executive compensation, consider subscribing to the official Veritas newsletter: Compensation in Context.