What does the Twitter stake buy mean for Elon Musk?
The 9.2 per cent stake, worth nearly $3 billion, makes Musk the biggest shareholder in the company, more than the 8.8 per cent stake held by the Vanguard Group, 8.4 per cent held by Morgan Stanley, and 2.2 per cent stake held by Twitter co-founder Jack Dorsey.
The stake and a board seat is also likely to give Musk more freedom to propose tweaks and changes to the microblogging site. For example, on March 25, nearly 10 days after he had already acquired the stake, Musk first tweeted a poll asking his followers if Twitter rigorously adhered to the principles of free speech, which he said was essential to a functioning democracy.
He had then hinted that people should “vote carefully” as the “consequences of the poll” could be important. After more than 70 per cent of the voters said that they did not believe that Twitter was rigorously implementing the principles of free speech, Musk, on March 26, again posted a tweet seeking a solution as Twitter, which “serves as the de-facto public town square”, had failed to adhere to free speech principles which in turn undermined democracy.
In a subsequent tweet, he also asked his followers if a new platform was needed. On Tuesday, Musk asked if the microblogging site should have an edit button.
Twitter’s newly appointed CEO Parag Agrawal replied to the tweet asking people to vote carefully as the consequences of the poll would be important. Later in the day, Agrawal announced the appointment of Musk to Twitter’s board.
What does it mean for Twitter?
For Twitter, the stake buy comes at a time when its annual revenue as of December 2021 stood at $5 billion and has targeted achieving $7.5 million in revenue by 2023. With Musk, one of the richest persons in the world formally being appointed on board as the largest shareholder, it could give the microblogging platform more financial muscle to compete with other platforms such as Facebook and Instagram.
Twitter has expanded into newer products such as audio tweets and spaces. The funds from the stake buy may help the platform expand and further improve the quality of these services.
The stake buy could also mean an image boost for the platform which has been criticised by users and governments alike of suppressing free speech and being biased towards tweets and content with Left-leaning ideologies.
Newsletter | Click to get the day’s best explainers in your inbox