Elon Musk's Twitter Plans: Private Company, Subscriptions, and Free Speech

By

Apr. 15 2022, Published 10:57 a.m. ET

Tesla’s CEO and the world’s richest person, Elon Musk created waves by taking a 9.2 percent stake in Twitter. However, when an event is related to Musk, it's usually full of antics. Even Musk’s offer price of $54.20 per share of Twitter has “420” in it, which is generally used for marijuana and is reminiscent of his infamous tweet about taking Tesla private at $420 per share.

Article continues below advertisement

Markets are debating several aspects of Musk’s offer to buy Twitter. Many are contemplating whether he's really serious about buying and how he would arrange the funding. A section of the market is also debating his real intention behind buying Twitter. As Musk pushes forward with his hostile takeover of Twitter, here's what happens to the microblogging site if Musk buys it.

Twitter would become a private company if Musk buys it.

First, Twitter would become a private company if Musk buys it. The company wouldn't need to disclose its financial and operating numbers every quarter.

Article continues below advertisement

Public companies face heightened scrutiny from regulators. By going private, Twitter would avoid the constant gaze of analysts and securities regulators. However, Musk has said that he wants to retain as many current stockholders as allowed legally.

Article continues below advertisement

Incidentally, Musk’s disdain for regulators and "questioning" Wall Street analysts aren't a secret. He has frequent run-ins with regulators, especially the SEC, which he has rechristened “Shortseller Enrichment Corporation” in his very “Musk way.”

Article continues below advertisement

Musk could build a platform around subscription.

Musk has said that he wants to build the platform around subscriptions instead of the current advertisement-driven platform. He intends to offer a blue checkmark to all paying subscribers. Musk wants to lower the monthly subscription price by $1 to $2 but would charge the amount upfront.

Twitter’s approach to “free speech” and “hate speech” might change.

Musk calls himself a “free speech absolutist” and if he gains control of Twitter, he would push to change Twitter’s current restrictive policies on free speech and hate speech. Twitter has taken a tough approach toward hateful and abusive content on the platform. Many conservatives have accused the company of suppressing their voices.

Article continues below advertisement

Parag Agrawal, who became Twitter’s CEO in 2021 and replaced Jack Dorsey, has only tightened the company’s policies over hate speech. With Musk at the helm, we could see significant changes in the way Twitter moderates content on its platform.

Article continues below advertisement

In his SEC filing, Musk said, “I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy.” He intends to “transform” the company even though he hasn’t provided many details on how he intends to do so.

Article continues below advertisement

Some advertisers might be wary of Twitter.

If Twitter loosens its content moderation policies, some advertisers might be wary of putting their ads on the platform. Not many platforms would want their brand placed alongside hateful content. Some of the brands even exited Facebook over hate speech on the platform.

Watch out for senior management exits at Twitter if Musk buys it.

While things have been relatively stable at Tesla over the last few years, the company used to be notorious for top management exits. If Musk buys Twitter, we could see several top management exits at the social media company and Agrawal could be among the casualties.

Advertisement

Latest Twitter Inc News and Updates

    Market Realist Logo

    © Copyright 2022 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.