So by now, you’ve surely seen the news that Elon Musk is buying Twitter and taking it from a publicly-traded company to a private one. What this means is that Musk is going to be calling the shots at Twitter from now on. Whilst Twitter former co-founder Jack Dorsey stood down as CEO late last year, it’s fair to say that Elon Musk will be replacing Jack Dorsey as the face of the company.
This is a bold move and undoubtedly one of the biggest private buyouts we’ve ever seen, but Elon Musk isn’t the only outspoken billionaire to take a public company private. Over the years, we’ve seen the same move from Richard Branson with Virgin and Michael Dell of Dell Computers, as well as big names on the UK high street, with Caffè Nero, Matalan and Iceland all moving off the public markets back into private hands.
So why do companies make this move, and what does it mean for Twitter? Essentially the key benefit for a company to go from being publicly traded to private is the level of information they need to release and, therefore, the amount of scrutiny they come under. It means that a company no longer has to make money or add users every quarter, as they don’t need to release any numbers publicly.
This can mean a longer-term strategy can be put in place without having to worry about short term performance and potential uproar from shareholders. This is a really interesting point because one of the reasons Jack Dorsey stood down as CEO of Twitter was because of pressure from Wall Street to drop his other interests (mainly Bitcoin and blockchain-focused projects, as well as payment platform Square) to focus on Twitter.
By taking over the company and owning it himself, Musk won’t have the same investors giving him grief about the scores of other businesses he runs, including Tesla, SpaceX, Neuralink and The Boring Company. It’s somewhat ironic that Elon Musk is replacing Jack Dorsey in a way that would potentially have allowed Dorsey to stick around as CEO.
Elon Musk has made it clear that one of the main reasons he’s decided to buy Twitter is to create a platform for free speech. There has been a huge amount of controversy surrounding Twitter and all other social media platforms in their handling of outspoken figures and those with views outside the mainstream.
Whilst there are certain people that most will agree should not be given a platform to spread hate or opinions that are not acceptable to be broadcast, there are other issues that can be muddier. The most high profile of these for Twitter was Jack Dorsey signing off on the banning of then-President Donald Trump from the platform.
Regardless of your political stance, removing a sitting President of the United States from one of the largest social media platforms in the world is not a straightforward situation. The expectation is that this would not have happened under Elon Musk, and we may even eventually see Trump’s Twitter account reinstated.
So, we’re potentially going to see Twitter become less locked down, less well moderated and less ‘woke’. Given that Twitter isn’t exactly known as a supportive and welcoming platform even now, it will need to be careful not to become a magnet for extremist and damaging content.
Although, given that Elon Musk won’t need to answer to anybody if it does, he may not care as long as it’s making money.
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