How Elon Musk’s Ownership of Twitter is Changing the Platform
By Cy Cheng
As we enter an era where online media increasingly influences the majority of public opinion, maintaining a functioning and up-to-date platform is essential for many companies. Twitter continues to dominate the front page of the internet; it is often the first resource creators use to reach a broad user base. However, Twitter has recently been under criticism for its restriction of free speech and profitability.
On April 4, 2022, Musk announced that he currently holds 9.2% of Twitter stocks, making him the biggest shareholder. Musk has been an active Twitter user and often uses his platform to make announcements about his plans and progress. His online presence is also a big part of online meme culture, and he occasionally makes light-hearted comments about social topics usually catered towards younger generations. Being the largest shareholder in the company, the Twitter board of directors invited Musk to join their board to make improvements. Musk initially declined the offer, but he later stated that the option was up for reconsideration. Musk’s hopes of making changes to Twitter did not end there, as he proposed purchasing Twitter as his private company for $44 billion. The board of directors first attempted to prevent Musk from taking over Twitter but eventually accepted his offer after Jack Dorsey, Twitter’s co-founder, stated Musk is “the singular solution that I trust.” The deal abruptly paused when Musk refused to continue negotiating until Twitter verified the number of bot accounts it estimated at 5%, whereas Musk believed it was closer to 20%. This eventually led to Musk terminating the deal, which proved to backfire, as Twitter filed a lawsuit against Musk for eating his words. On October 4, Musk agreed to finalize the deal of $44 billion, becoming the sole owner of Twitter.
Musk stuck to his words of a radical change in management: he instantly fired Twitter’s CEO, CFO, and other top executives. He continued by laying off around 3700 jobs across multiple departments, around half of Twitter’s workforce. Musk stated that this was the first step to solving Twitter’s profitability problem and that most employees did not want to work. This sparked massive negative feedback online, including on Twitter. Twitter was sued for laying off employees without enough notice, violating California law.
The Verify system, also known as the blue checkmark, also received some changes as part of Musk’s stance on bot accounts. Twitter charged users eight dollars monthly to get the checkmark, which turned into a disaster, as people were imitating massive corporations and tweeting fake announcements, creating chaos. In one case, people imitated Eli Lilly, a massive pharmaceutical company, claiming they were making insulin free. This led to the company losing around 5% in stock, which equates to $15 billion in market cap loss. Twitter was forced to close down the verify program, and they relaunched a renewed version on November 29. This series of setbacks on Musk’s early takeover massively tanked the company’s stocks and reputation. Many big advertisers also paused their advertisements on Twitter, leading to a “massive drop in revenue,” according to Musk. On November 10, Musk allegedly told employees that bankruptcy is “not out of the question.” It is reported that Musk is even considering stepping away from Twitter and focusing on his other projects.
Another controversial talking point about Twitter is freedom of speech, as it reinstated controversial accounts suspended in the past, such as Donald Trump, Kanye West, and Andrew Tate. Musk has long emphasized the importance of freedom of speech on the platform, and this was his first move to allow freedom of speech to return to the platform. This raised questions about his hypocrisy from Musk from critics, as Twitter had been suspending accounts criticizing Musk’s actions, making people wonder if Musk only wants freedom of speech when it benefits him.
This series of events regarding Twitter will set the standard for other platforms attempting to reform. It is clear that Musk had high expectations and wanted to make ambitious changes to Twitter, which backfired and sparked uncertainty surrounding his leadership. Firing half of the workforce was an overkill attempt to minimize company size since it is also reported that some fired employees received emails to return to the company. Musk’s change to the verification program was also rushed since installing new systems overwhelms users and companies that want to invest. In general, his changes to Twitter were not without purpose or reason but were certainly too rushed and ambitious. We can only speculate how Musk and Twitter will recover from this tricky situation.