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Elon Musk vs. Twitter: A Recap Of The Rollercoaster Of The Year

When most read that headline, they might assume Elon Musk met the same fate as former president Donald Trump: A Twitter time-out due to violating guidelines with polarizing and misinforming tweets. But what happened was even more entertaining. 


 


On April 14th, 2022, Elon Musk, billionaire CEO of Tesla and Space X, offered to purchase Twitter for $54.20 a share, a conservative total of $43 billion. On April 25th, Twitter accepted the deal. Less than three months later, Musk wanted to bail. 


 


Twitter then sued Musk in a case initially headed to Chancery Court in Delaware for a five-day trial in October. However, on October 3rd, before the problem was meant to start, Musk sent a letter to Twitter to cement his original offer. Dizzying right?! I know!


 


The safety bars on the rollercoaster came down in 2017 when Musk responded to a tweet suggesting he buy Twitter with a simple question: “How much is it?” Then in March 2022, Musk took to Twitter to begin criticizing the platform's adherence to the principle of free speech. One tweet polled his followers on whether they believe the company adhered to the principle that “free speech is essential to a functioning democracy.” It’s clear Musk has mastered the art of subtlety. 


 


In early April, Musk announced he acquired 9.2 percent of Twitter’s stock for $2.64 billion, making him the company’s largest shareholder. The next day, Twitter invited Musk to join the company’s board of directors. This position would not only prohibit him from assuming beyond a 14.9 percent ownership stake but also limit his ability to speak publicly about the company. 


 


On April 11th, Musk reversed his decision to join the board after tweeting several criticisms of the company. He informed the board of his intention to privatize Twitter, a deal that led to Twitter’s board meeting with lawyers and financial advisors to discuss the ramifications, like the potential for adverse effects on stockholder value. During this time, company shareholder Marc Bain Rasella sued Musk for manipulating the company’s stock and violating Securities and Exchange Commission (SEC) rules. 


 


Musk stated that he has a "strong, intuitive sense that having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization.” In a TED interview, he spoke on his avocation for free speech “within the bounds of the law.” But what does Elon Musk consider to be law?


 


This left many users concerned that Musk’s Twitter will become a breeding ground for extremist and fringe content as he has said he believes content moderation is a “gray area” that is very subjective. This kind of principle begs the question of whether concrete compliance policies will be implemented to ensure user safety. Many people are unsure whether Twitter made a deal with the devil or not, given the rise of political misinformation and harassment on social media.


 


In the same TED interview, Musk also insisted he had not made the offer to increase his wealth. Sure. Everyone has dreams of running an insanely large and historically chaotic social media platform in the age of trolls and hackers. 


 


Some argue if Musk were concerned with the issue of free speech, he would perhaps make plans to combat government censorship around the world and not just within a single app. If you were to ask me, signs would point to his motivation being satisfying his ego and ensuring his unfiltered thoughts can make their way onto people’s phones. I would suggest greed, but how much desire could a single billionaire muster? Oh, wait. 


 


After it was announced that Twitter accepted his bid, Musk declared that his first plans would include creating an algorithm that increases transparency and providing a mechanism to “authenticate all real humans” to filter out spam bots. 


 


On April 20, Musk disclosed that he had secured financing from Morgan Stanley, Bank of America, Barclays, MUFG, Société Générale, Mizuho Bank, and BNP Paribas in the form of senior secured bank loans, subordinated debt, and personal loans. Musk provided cash equity supported by Tesla stock and other assets. 


 


Musk announced on May 12th that the deal had been put on hold due to an upwards of 10% drop in Twitter shares. On June 3rd, the acquisition was cleared by the U.S. Antitrust Review. On July 6th, in a complaint filed with the U.S. Justice Department, former Twitter security chief Peter Zatko accused Twitter executives of misleading statements about privacy, security, and content moderation on the platform. Someone that was misled by those misleading statements? Musk. 


 


The peak of the rollercoaster came when on July 8th, Musk announced his plans to terminate his agreement with Twitter, claiming that Twitter had breached their agreement by refusing to eradicate spam accounts. Twitter quickly countered with a lawsuit, and company executives and Musk went back and forth for months juggling subpoenas, termination letters, and special requests. One was a private offer from Musk to purchase Twitter for a discounted price of $31 billion and $38.6 billion. I’ll let you guess how Twitter responded. 


 


On October 3rd, Musk’s legal team contacted Twitter saying that Musk wanted to move forward under the original terms on the stipulation that Twitter dropped its lawsuit. Many were skeptical of the timing of Musk’s sudden change of heart and that he didn’t even attempt to undercut his initial offer. Some attribute it to concerns that Musk’s defense wouldn’t be able to prove grounds for breach of contract. Others see the new development as a response to, or perhaps a distraction from, leaked texts between Musk and his friends that discussed the deal. 


 


As the rollercoaster pulls into the long-awaited landing, Musk stated in a Tesla earnings call that while he was "obviously overpaying for Twitter right now, the long-term potential for Twitter, in my view, is an order of magnitude greater than its current value.” 


 


Even former U.S. President Donald Trump expressed his approval of the deal but stated that he would not rejoin the platform even if his ban is lifted, citing his preference for his own social media platform, Truth Social. Not too late, Musk indicated his plan to reverse Twitter’s ban on Trump. No more time-out. Yay. 


 


Twitter’s users have responded to the twists and turns as well. Conservative Twitter accounts experienced a significant increase in followers, while liberal ones saw a slight decrease. Many left-leaning users also left the platform following Musk’s purchase, expressing apprehension about the deal and the type of content Musk’s leniency would allow. 


 


As for other reactions, Amazon founder Jeff Bezos called into question whether Tesla’s business interest in China would grant the Chinese government leverage over Twitter. Microsoft co-founder Bill Gates inquired if Musk would tolerate the spreading of misinformation, particularly that relating to vaccines. Facebook and Meta Platforms founder and CEO Mark Zuckerberg expressed uncertainty over the buyout. You and me both, Mark. 


 


On Oct. 26, Musk shared a video of him strutting into Twitter’s San Francisco office carrying what appeared to be a porcelain bathroom sink in his hands, captioning it, “Entering Twitter HQ - let that sink in!” Yes, the motion sickness is sinking in.


 


The breaks screeched on Oct. 28, as the deal that started with a satirical tweet but quickly morphed into a saga reminiscent of a reality show finally came to a close. On Oct. 27, however, sources reported that Musk completed his takeover by firing Chief Executive Parag Agrawal and Chief Financial Officer Neg Segal. Do we think they got to use the sink first?


 


Musk’s latest management moves include laying off half of Twitter’s staff and proposing a paid subscription for public figures looking to secure the blue check. These moves are Musk’s attempts at generating revenue for a company saddled with debt.  


 


So, what can we expect from Musk’s Twitter? The future of perhaps the most unhinged, currently unstable social media platform is unclear, although we can always rely on Musk to tweet his commentary. It looks like we’re getting back in line for a second ride. Hold onto your hats. 


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