Elon Musk’s acquisition of Twitter hasn’t been finalized yet. But that doesn’t stop him from making the headlines time and again. As the world patiently waits and watches the entire saga unfold, newer information keeps popping up regarding this mega takeover. The latest speculation: Is Elon Musk set to become Twitter’s temporary CEO?
The News That Sent the World Atwitter
Elon Musk made headlines last month when he became Twitter’s largest shareholder. Following this, came his offer to buy the social media platform outright for a whopping $44 billion. Though Musk is the world’s richest man, this number accounts for approximately 17% of his estimated $253 billion net worth.
On April 21, the Twitter board of directors accepted Musk’s bid to take the company private. And by the look of things till now, Musk looks set to become a very active owner. Per CNBC, Musk is expected to serve as the company’s temporary CEO until the transition is complete. The current CEO, Parag Agrawal, has led the company only for a few months. It’s unclear whether or not he will retain the position after the takeover is complete.
Agrawal replaced Twitter co-founder Jack Dorsey as CEO in November 2021, but Dorsey might invest in Musk’s endeavor. There have been discussions between the two about contributing shares on or before the sale concludes.
On Thursday, May 5, an SEC filing revealed that Musk had secured $7.14 in funding to buy Twitter. This has come from friends and investors, including $5 million from Honeycomb Asset Management. Larry Ellison, the co-founder of Oracle, has pledged $1 billion to the sale.
Changes in Leadership
Talk of a change in leadership at the Twitter HQ only came up last month. The news broke when Reuters reported that Musk was eyeing a new CEO for Twitter. Agrawal told employees at a company town hall meeting that their future was uncertain with Musk at the helm. Specifically, he didn’t know which direction the platform would move once the takeover was complete. A frequently asked question was whether Donald Trump would be allowed to return to the platform under Musk’s ownership. The former president was permanently suspended from Twitter in 2021.
This takeover is occurring at a turning point for the company. Agrawal has focused on growing Twitter’s user base and introducing new products. In its latest earnings report, Twitter disclosed it had 229 million monetizable daily users. This is a 15.9% increase over last year’s performance. Musk used these numbers as a base for his financial projections to secure investment capital.
Despite this increase, Musk told investors that he felt Twitter’s gross earnings were too low. He also felt the company had too many engineers who were not doing enough to propel growth. This assessment led to yet another headline-grabbing announcement.
Charging Businesses and Governments to Tweet?
On May 4, Musk suggested charging governments and corporations for using Twitter in another proposed change via a tweet. Citing the reason for the Freemason’s downfall as giving away their services for free, Musk pitched the idea of a “slight cost” for commercial tweets. However, he did specify that the platform will remain free for casual and personal use.
At the time, this is nothing more than a potential idea. Yet, it does align with Musk’s vision for the platform and his dissatisfaction with Twitter’s financial growth. It meets the fundamental law of supply and demand as Twitter is a free product that users want. In this event, why not charge for commercial/government use?
While this suggestion might seem logical, some may argue that it is flawed. Musk wants to make Twitter a safe haven for free speech. If that be the case, charging a fee for a constitutional right is counterintuitive. Moreover, making Twitter chargeable also creates a substantial set of administrative challenges, including how to implement the costs. Another consideration is how much to charge and the criteria to base this on.
Determining factors could be company size or revenues, but finding the suitable price tiers will require a delicate balance. It could not make any difference to the bottom line by charging too little. Charging too much, on the other hand, could lead many users to abandon the platform.
Digital Nod CEO & digital marketing expert Karishhma Mago understands Musk’s logic. However, she has concerns about the idea’s impact on social media marketing. Mago offers a reminder that “brands and companies rely on platforms like Twitter for no-cost advertising. There is a risk of reducing the network effect by charging for commercial social media use. Businesses would definitely feel the impact after being used to tremendous return on little to no marketing investment.”
One thing people can agree on is that no one knows what Musk has actually planned for Twitter. He runs his companies on instinct and has a well-known disdain for business plans. With a modus operandi of taking things moment by moment, Elon Musk has mastered keeping people on their toes.