Tesla Founder Elon Musk has bought himself leverage in swaying Twitter‘s controversial handling of speech on its platform after suddenly becoming the company’s largest shareholder.
Musk, the world’s wealthiest person and a critic of Twitter’s handling of speech, appears poised to shake up the massive social media network after buying 9.2% of the company.
“The ultimate endpoint of it all is that if you feel like companies are doing a bad job at content moderation or doing it in a way that is not proper, you have options,” Ari Cohn, free speech counsel at TechFreedom, told the Washington Examiner. “You can either build your own, or you can try to exert some kind of pressure on companies to do things differently.”
Musk’s purchase, revealed in a Securities and Exchange Commission filing published on Monday, likely cost the Tesla and SpaceX founder nearly $3 billion.
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The move was portended by a Twitter poll last month when Musk asked his 79 million Twitter followers whether they think the social media giant facilitates free speech. As of Monday afternoon, more than 2 million people had responded to the survey, with a vast majority, more than 70%, challenging that notion.
“The consequences of this poll will be important. Please vote carefully,” Musk added.
“Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy. What should be done?” Musk asked. “Is a new platform needed?”
Mark Weinstein, founder of social media service MeWe and an expert in privacy and free speech, told the Washington Examiner that Musk’s decision to purchase such a large stake in the company is a major move and is “significant, not symbolic.”
Musk’s holding now far overshadows that of other individual investors, including the stake owned by Twitter co-founder and former CEO Jack Dorsey, who owns 2.25% of the company.
It is worth noting that the form Musk used to disclose the holdings is one that indicates he isn’t planning to engage in activism or join the board, although he could eventually transition his “passive” position to an active one in future filings.
However, Musk is hoping to see a social media platform on which free speech is plentiful, according to Weinstein.
“There’s an old philosophy: The best way to change something is from the inside,” Weinstein said. “So he goes inside, he becomes the largest shareholder, he now has influence on the future of Twitter … It’s clear he has a philosophy, it’s clear he made what he believes is a very smart move, it’s clear he definitely will have influence on Twitter.”
Weinstein predicted it wouldn’t be long until Musk finds himself at a seat on Twitter’s board, which would allow him to push the company further to bend to a model favoring increased expression of free speech and transparency with its algorithms.
Twitter has faced blowback, especially in conservative circles, for its moves to censor or add context to certain posts. The social media banned former President Donald Trump after the Jan. 6 riot and temporarily prevented a New York Post story about Hunter Biden from being shared just before the 2020 election. Even more recently, Twitter has suspended accounts for referring to U.S. Assistant Secretary of Health Rachel Levine, who identifies as a transgender woman, as a man.
Twitter is facing three main competitors: Gettr, Parler, and former President Donald Trump’s Truth Social, according to Weinstein. Musk’s decision to invest in Twitter and shun investing in the other companies further bolsters Twitter’s standing among the competition and is, on balance, a net negative for the other social media networks.
Musk’s musings and statements about Twitter provide a guide for the changes he might seek.
Last month, the billionaire posted another survey asking his followers whether Twitter’s algorithm should be open-source. More than 82% of respondents agreed it should, and Dorsey even joined in the conversation.
“The choice of which algorithm to use (or not) should be open to everyone,” said Dorsey, who announced his resignation in November.
Weinstein described Musk as a “dancer” and said the investor might make one dance move and then immediately pivot to another move or approach.
It is likely the board will extend an invitation for Musk to have a seat because it would make more business sense to keep the company’s largest investor close and on the inside rather than outside slinging mud at Twitter, he said.
“I think that’s very likely to happen quickly, I think Musk’s philosophy is going to impact the platform,” Weinstein said.
Musk now has upward and downward leverage over the company’s finances in the sense that he can choose to either buy even more of the company or sell his shares.
If he buys more shares, it would boost the stock price of Twitter and benefit the shareholders, to whom the board answers. Alternatively, Musk could get angry and offload some of his holdings and hurt the company financially.
“He’s got huge leverage now as an investor, and I think we’ll see him use that leverage,” Weinstein said.
Musk has also used the Twitter platform to express his seemingly libertarian political views. Earlier this year he tweeted that President Joe Biden is “treating the American public like fools.”
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While Biden was trying to enact his now-dead Build Back Better tax and spending plan, Musk blasted the “trickery” of the bill, channeling the words of free-market economist Milton Friedman.
“Nothing is more permanent than a ‘temporary’ government program,” the billionaire said, which is a nearly exact quote from Friedman, who was known for his defense of free-market capitalism and one of the leaders of the Chicago school of economics.
