Elon Musk bought 9.2% of Twitter’s shares, an operation valued at 3 billion dollars. This has made him the largest shareholder of the social network and could prove decisive for Twitter’s future, as well as for global e-commerce. Why? Let us dive into the reasons, the scope, and possible consequences of Elon Musk’s recent Twitter “adventure”
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The first thing we need to remember is that Twitter has had multiple issues with Elon Musk in the past. The richest man in history – some claim he is even more wealthy than the fable Mansa Musa – has been very vocal and remarkably strategic in his use of Twitter: he has used this social media as a business tool.
Weaponizing Twitter for business
Musk’s tweets have promoted and demoted companies, brands, and above all, cryptocurrencies. And for many people used to the stock market tricks of the trade, what Musk has been doing is nothing short of speculation: he promoted Dogecoin and the currency skyrocketed 10% in just 4 hours since he tweeted. Elon Musk’s legion of over 80 million followers via Twitter created a massive global demand for an unknown cryptocurrency in the blink of an eye. For anyone with knowledge of stock markets behaves, this power is dangerous.
And Twitter did try to control Musk’s messages but to no avail. The multimillionaire was able to use the free speech “get out of jail card” to argue that, well he can recommend whatever business he wants, as he is using his right to free speech. Something that Twitter was unable to argue, and yet, the Securities and Exchange Commission of the U.S. did not agree: Musk has been in fact formally charged on several occasions with fraud charges for practices like short-selling, among other common illegal activities.
In short: Elon has weaponized – from a business perspective – its followers via Twitter. And social media has tried several times to contain Elon’s influence in the global markets. Well, it seems that if Elon’s new plans for Twitter work out, that contention will fly out of the window, both for him and for every other business.
What plans has Elon Musk for Twitter?
Elon Musk has been very vocal: he wants to return “free speech” to Twitter. And being the largest single shareholder of the company, he has a good chance of pushing toward this goal.
And so far, the “Musk effect” is working again: Twitter’s stock jumped 4% following the board announcement about Elon Musk buying 9,2% of the shares. It was the best day since the company’s IPO in 2013.
There is, undoubtedly, a direct consequence between Musk’s actions and the value of companies and businesses or as it was expertly put by Howard Fischer, a partner at the law firm Moses & Singer in New York and a former lawyer at the Securities and Exchange Commission: “It’s nice when a company reports profits — it seems much better if a company reports its association with Elon Musk,” said to CNBC.
All in all, it is still not clear how Musk will be present on the Twitter board. In addition to leading Tesla, Musk is also CEO of rocket company SpaceX and Neuralink, a company that aims to develop implantable brain chips. What is sure is that the richest man in the world will push for tweeting whatever he wants. And checking back on recent history, it is a reason for concern.