EMusk’s $44 billion purchase of Twitter will not only mean big changes to the way the social media giant does business, but it will also affect users of the platform.
Musk’s stated intention to buy the company is to realign its mission. The Tesla and SpaceX CEO views free speech as the unchanging foundation on which democracy rests and has criticized the social media giant’s handling of speech on its platform in the past.
“Free speech is the foundation of a functioning democracy, and Twitter is the digital public square where issues vital to the future of humanity are debated,” Musk said after the news broke. which Twitter’s board had accepted its offer to buy the company at $54.20. per share – a significant premium to where the stock was just a month ago.
Many of the changes will invariably relate to topics related to free speech and transparency, but the business model and the company itself will also see a shake-up, given that Musk intends to take the company private. The process on the corporate side will involve a multitude of lawyers and mountains of paperwork. Twitter CEO Parag Agrawal said it would likely take three to six months to complete the deal.
Darrick Mix, partner and head of the capital markets practice at Duane Morris, told the Washington Examiner that the deal between Musk and the board seems like a pretty standard, straightforward merger deal.
The next step in the process is a shareholders’ meeting where Twitter shareholders will have the opportunity to vote on whether or not to approve the sale. Federal regulators will also review the proposed purchase, although they are not expected to attempt to block the transaction.
Mix said that for Twitter and Musk, closing the deal could be smooth, although there are a few potential hurdles that could be encountered. “As is standard in this type of merger agreement, there are possible ways for Twitter’s board of directors to terminate the agreement with Elon Musk if it obtains a superior proposal from another. potential buyer,” he said.
Musk will also face a $1 billion termination fee if he is unable to secure funding for the multi-billion dollar deal or if the plan to take Twitter privatizes ultimately fails.
The fact that Musk wants to privatize the company is indicative of the next course change awaiting Twitter.
By depriving Twitter, the main benefit for Musk is that he will essentially have unilateral control over the company and how it operates. He has very specific opinions about the social media platform and its value to society and will use the power to control the company to make policy changes to reflect those beliefs.
Additionally, anything in Twitter’s documents will no longer be public, and Musk won’t have to file the same documents with the Securities and Exchange Commission or discuss topics like executive compensation and corporate strategy. business.
Mark Weinstein is the founder of social media service MeWe and an expert on privacy and free speech. Weinstein said he foresees Musk revamping Twitter to have a “mission orientation,” meaning that instead of just exploiting the platform to make as much money as possible, Musk envisions a platform that operates according to certain new standards.
One of the big changes will concern content moderation. Musk thinks Twitter currently has too heavy a hand in moderating who tweets and what people tweet about. While details on what the new platform’s speaking policies will look like are likely months away, Musk hinted at his vision for how the platform’s users will be able to interact.
Much of the updated user experience will likely come in the form of increased transparency, including who is behind certain accounts. “I also want to make Twitter better than ever by enhancing the product with new features, making algorithms open source to increase trust, defeating spambots, and authenticating all humans,” Musk said.
Identity verification can be done in a number of ways, although given the millions of Twitter accounts that exist, this will likely result in a massive purge of users from the platform, according to Weinstein.
“Whatever your opinion, it will affect you,” Weinstein told the Washington Examiner. “And that’s very interesting because, in a way, it’s an invasion of privacy. On the other hand, it’s a way of ensuring that what people say is linked to who they say. are really so they can’t just spread any type of lie and be anonymous so no one can really fact check even the person.”
And while Twitter will likely hemorrhage millions of users following Musk’s identity verification push, Weinstein said he also expects other users whose accounts have been suspended by the platform are restored.
Twitter could also see a wave of users who have vowed to leave the social media platform in favor of competitors such as GETTR, Parler and Truth Social to join Twitter because Musk has pledged to put freedom first. of expression. These platforms have grown in popularity as a reaction to current Twitter policies.
Additionally, there could be a big shake-up of Twitter’s board after the purchase. Weinstein expects there to be a shift away from technocratic executives in favor of a more mission-driven team.
In terms of the revenue model, Weinstein said there would likely be a push back from so-called “surveillance capitalism,” which seeks to profit from customer data through means such as targeted advertising.
There will likely be some revenue loss from this change, which could be offset by levers such as a subscription model, although Musk stressed that he doesn’t necessarily need Twitter to be a profitable business. because he is more focused on his mission rather than money.
“Twitter experimented with a subscription model and failed, and that’s because there’s no inspiration. Twitter can’t inspire its members to want to support,” Weinstein said.
With Musk at the helm and Twitter repurposed to promote free speech, curb bots and tone down propaganda, users might feel more inclined to support the company financially through some form of subscription that complements its free product.
Any upcoming changes are highly speculative. The changes will ultimately come down to what Musk and his team believe will best promote his vision of free speech and social discourse after acquiring the company.
“We just don’t have good visibility on exactly how it will be governed after the transaction, but it looks like he will control it and be able to shape it in accordance with his vision,” Mix said of Musk’s plans. .
Original location: What Musk’s purchase of Twitter will mean for the company and users
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