Headlines blaring about Musk’s offer to buy Twitter are missing the point entirely.
Elon Musk, the world’s richest man, is bored again. How can you tell? Because he’s offering (threatening?) to buy Twitter. You know, because a totally normal thing to do is casually offer to spend nearly $40 billion on a lark, just to see what will happen. Most people took up knitting as a hobby during a pandemic, but trolling a corporation with a hostile takeover is certainly one way to kill some time.
On Thursday morning, Musk filed with the Securities and Exchange Commission (SEC) his first and, he says, final offer to buy Twitter. He’s offering to buy up the social media platform for $54.20 per share, a solid premium over the company’s current stock price, and enough for the total price tag to reach $43 billion. Should the purchase go through, Musk is promising to take the company private in order to make wholesale changes to it (i.e., firing the staff en masse and installing his own regime). And if Twitter doesn’t take the deal, well, Musk says he might just have to sell all his shares — a threat that would likely drop Twitter’s share price, at least in the short term.
The thing is, it’s hard to really take the offer seriously. First of all, while Musk is absolutely loaded, what he’s worth (an estimated $265 billion) and what he actually has in cash are two totally different things. Musk’s wealth is tied up in his stock holdings of Tesla and SpaceX, so in order to come up with $43 billion, he’d have to either sell that stock — wildly unlikely, because he’d lose some control over his businesses. He could in theory borrow against that stock, but that option is also not super feasible given Tesla’s stock is already taking a hit simply because of Musk’s wildly irrational obsession with Twitter. Banks probably wouldn’t be enthused to loan out money on shares that are tanking in value.
Also, there’s a question of vision. If Musk takes over Twitter, anyone who backs him is going to want to know what he’s going to do to make them money. His plans thus far are not exactly inspiring. He’s said that he’ll finally add an edit button, which, sure though Twitter was already working on that. Beyond that, there’s no real plan. He said he’ll turn Twitter HQ into a homeless shelter, which ... hey why don’t you just spend $43 billion on fighting homelessness?
Less censorship and more freedom is a thing that Musk has promised, though he’s not exactly a reliable defender of those things in practice. He’s fired employees who disagree with him and attempted to keep them from posting videos about his company. He’s tried to pay people off to keep them quiet, as he did with the teenager who created a bot to track Musk’s jet. He dissolved Tesla’s press office in response to receiving critical media coverage. When Musk says he wants free speech, what he really means is that he wants to speak freely without risk of criticism. He couldn’t care less about the ability of others to speak their truth.
Oh, and then there’s Musk’s little ultimatum: that he’ll sell his shares if Twitter rejects the deal. While that is designed to force Twitter to accept, it might do the opposite: Ann Lipton, a law professor at Tulane University, noted that this can be considered an attempt at coercion, and Twitter’s board can reject the takeover attempt on that basis.
So if Musk’s offer to buy Twitter isn’t serious, what is the point, exactly? Well, it seems like it’s mostly part of an ongoing effort to troll the company just for the hell of it. It also keeps his name in the headlines, which helps to drown out some of the other things he’s in the news for — you know, like stories from former Black employees who have been detailing the racist work environment at his companies, or the $122 million settlement Tesla agreed to in response to racial discrimination lawsuits, or the $40 million settlement for breaking SEC rules in 2018, or the lawsuit claiming Musk failed to disclose his position in Twitter in a timely manner and hurt investors.
Musk may claim to believe censorship is wrong, but make no mistake that what he’s doing is not much different. He’s creating lots of noise to drown out what he doesn’t want you to hear.