Elon Musk, the co-founder of SpaceX and Tesla, was appointed to Twitter’s board of directors on the 4th of April, Tuesday, just one day after announcing his acquisition of a 9.2% stake in the company. The acquisition comes just days after Elon stated that he was “seriously considering” creating a new social media platform.
What does Elon Musk’s purchase of a Twitter stake mean?
Elon Musk’s 9.2 % stake, worth nearly $3 billion, makes him the company’s largest shareholder, surpassing the 8.8 % stake held by the Vanguard Group, the 8.4 % stake held by Morgan Stanley, and the 2.2 % stake held by Twitter co-founder Jack Dorsey.
Elon Musk’s stake and board seat are also likely to give him more flexibility in suggesting tweaks and changes to the microblogging site. For example, on March 25, nearly ten days after acquiring the stake, He first tweeted a poll asking his followers if Twitter strictly adhered to the principles of free speech, which he claimed were essential for functioning democracy.
He then suggested that people “vote carefully” because the “consequences of the poll” could be significant. After more than 70% of voters said they did not believe Twitter was rigorously implementing free speech principles, Elon Musk posted another tweet on March 26 seeking a solution, claiming that Twitter, which “serves as the de-facto public town square,” had failed to adhere to free speech principles, undermining democracy.
In a later tweet, he asked his followers if a new platform was required. He also asked if the microblogging site should have an edit button.
Twitter’s newly appointed CEO, Parag Agrawal, responded to the tweet by urging people to vote carefully because the outcome of the poll would be significant. Later that day, He announced Elon Musk’s appointment to Twitter’s board of directors.
What could this mean for Twitter?
Twitter’s stake purchase comes at a time when the company’s annual revenue stood at $5 billion in December 2021 and it has set a revenue target of $7.5 million by 2023. With Elon Musk, one of the world’s richest people, formally appointed as the largest shareholder, the microblogging platform may gain financial clout to compete with other platforms such as Facebook and Instagram.
Twitter has branched out into newer products like audio tweets and spaces. The funds from the stake purchase could help the platform grow and improve the quality of its services.
The stake purchase could also help the platform’s image, which has been accused by users and governments alike of suppressing free speech and favouring tweets and content with Left-leaning ideologies.