An interesting change has taken place in the ownership and management structure of Twitter. Elon Musk, currently the richest man in the world, bought a 9% stake in Twitter (HERE). It didn’t cost him a lot of money, just three billion dollars (HERE); it’s about as much for him as if we mere mortals went on holiday to Croatia. Under the deal with the SEC, she can buy more stock, but up to a maximum of 14.9% of the entire company (HERE). Any expansion of the stake beyond this limit would be subject to further SEC approval.
Nine percent sounds like an almost negligible share, but it’s not. In fact, Musk thus becomes the largest individual shareholder of Twitter; for example, former CEO Jack Dorsey now owns just over two percent of the shares (HERE) a company he co-founded – and lost leadership last year to relatively small investor Elliott Management (HERE). Musk also almost immediately won a seat on the board of directors (board of directors – HERE), which represents the interests of shareholders. This is a specific function with a specific impact.
From Twitter’s perspective, it’s a minor earthquake as Musk has repeatedly criticized the company for its approach to free speech.
So will he try to uphold his much more liberal standards on Twitter? It’s entirely possible.
But let’s think about the situation a bit more broadly for a moment.
Musk doesn’t fit into classic corporate capitalism
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Elon Musk is a rather strange individual. He attracts both uncritical admirers and stubborn enemies, capable of writing a hateful and dismissive comment, perhaps even about the shirt he was wearing today. He named his youngest son XA A-Xii (HERE), which does not quite indicate his mental balance, and on Twitter, where he has tens of millions of followers, he gets into bizarre battles, which sometimes end in court.HERE).
By contrast, Musk doesn’t fit in very well with the atmosphere of classic corporate capitalism, where gray mice in gray suits beam to the cameras exactly the slogans the PR department emailed them in the morning. and order to repaint the profile. photos of their businesses on social media as needed. When Musk criticizes something or someone, he doesn’t take napkins. He has a libertarian bent and, as an immigrant from South Africa (he grew up in apartheid), seems to value traditional American freedoms more than many local natives who have come to believe that Rather, it is a dangerous burden inherited from old dead white men.
He is also a workaholic sitting on (too many?) several chairs at the same time. But at least two companies, SpaceX and Tesla, have grown from modest initial proportions to major global players. He founded SpaceX in his day (2002) and bought Tesla when it was still a totally unknown company (2004).
It’s this ability to drive business forward that’s likely why they’ve accepted Musk’s entry into Twitter, even though it culturally doesn’t fit the Californian environment. Twitter has a problem. And a long term problem at that.
Twitter weak, Facebook strong
Twitter is an even weirder phenomenon than Elon Musk.
In recent years it has gained a cultural influence that honestly excites me, as it has led to a deep infantilization of its frequent users. There is a disproportionate number of journalists on Twitter and if you move there too often (HERE), you’ll easily get the (wrong!!!) impression that the Twitter crowd is a representative mirror of the world and that the most important theme of the year is the use of correct pronouns in conversation. Then the real election results surprise and confuse you, and you seek the decisive influence of a Putin even where it is not needed, because how else to explain it?
And I don’t even want to upset the fact that it’s completely crazy when professional journalists produce articles about “Minister M wrote X on Twitter, and they replied Y to him, oh my god, that’s awful!” (HERE) and are probably also paid for them. I would expect that, perhaps from less read hobby blogs, but not from servers that call themselves news. But we used to think of such distortion of the media space as a new normal – and that certainly fits Twitter itself.
However, despite this cultural influence, Twitter as a business is clearly stagnating, especially when compared to other social networks. Since the stock market (2014), its market value has fluctuated up and down, but now it is even slightly lower than it was then, so the person who invested in it in 2014 or 2015 actually lost money (due to inflation).
It’s not something you would expect from a major social network that was created at the best possible time when smartphones started to spread massively. And compared to Facebook, whose market value has multiplied over the same period, Twitter’s lag is very clear.
That’s why Musk could now buy almost a tenth of all Twitter for just $3 billion. The company is relatively weak economically. It has significant sales, recently hitting five billion dollars a year (HERE), but still doesn’t earn much and has even been loss-making for about five consecutive years. He never paid dividends (HERE), which was once common in the computing world, but is slowly changing. It is not very tempting to invest in such a business.
If large investments in the future were the cause of poor profitability, the picture would be different, but Twitter would also seem petrified in this regard. New features are few and the number of users has stagnated for years at an unsatisfactory level of 330 million people. (Facebook has almost ten times more! – HERE) It is extremely worrying for the long-term prospect of the company that it is not appealing to young users, among whom TikTok has long reigned.
This is probably the main reason why Musk is now one of the board members of the company he so publicly criticized. He must ventilate it there and give the ossified structure an impetus for further development. Personally, I would expect that at least the current manager of Parag Agrawal (HERE) will have to leave. He doesn’t have a lot of experience, and while he hasn’t been at the helm of the company for a long time (since November 2021), he was chief technical officer (CTO) for several years, so the responsibility because the current stagnation is partly his responsibility.
But if Muske’s arrival on Twitter means fewer bans and fewer deletions, it’s sure to be fun to see how many people leave their current position of “a private company can do whatever they want” and start calling for strict regulation saying that “there is no way to leave such an important channel to eccentric billionaires.”
If you haven’t quit social media like me yet, collect some screenshots to remind them of their turnaround. It’s childish too, but at least it’s funny.
(Retrieved with the kind permission of the author from his website, where in addition to this article you will find other texts on politics and society. Marian Kechlibar’s books can be ordered HERE.)
It was published within the framework of the media cooperation with Literary journals. Published with permission from the publisher.
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