Elon’s Acquisition of Twitter: The Messy Aftermath
On October 27th 2022, Elon Musk officially completed his long-awaited acquisition of Social Media Giant Twitter. This deal was not without its obstacles, with Musk almost terminating the acquisition in July due to a less-than-satisfactory due diligence process involving bots and Twitter's subsequent lawsuits against the tech mogul. After months of endless negotiations, Musk finally bought Twitter, paying $54.20 a share at a total cost of $44 billion. The aftermath has proven to be incredibly difficult for all parties involved.
After the deal was closed, Elon Musk promptly fired key executives including CEO Parag Agarwal, CFO Ned Segal, and Head of Legal Policy Vijaya Gadde. This major move was made to completely overhaul Twitter’s image and outlook. Along with firing key executives, Elon Musk released a statement saying that Twitter must undertake a major reduction in its workforce in order to cut costs. Yoel Roth, Twitter’s Head of Safety & Integrity, reported that 50% of Twitter’s 7,500 employees have been laid off. Musk mentioned in a tweet that Twitter was losing $4 million daily, making these mass layoffs an unfortunate but necessary action.
In a controversial move, Musk also decided to launch a premium service on Twitter, which allowed users to gain access to the coveted blue tick verification mark at a cost of $8 a month in a far-fetched attempt to give "power to the people". Prior to the acquisition, the verification mark was only reserved for well-known individuals and organisations in order to prevent impersonation. This new feature was rapidly exploited by users parodying celebrities and organisations. Everyone from Donald Trump to Lebron James had a parody account created in their name to spread misinformation and make jokes.
Perhaps the most notable case of impersonation was Eli Lilly & Co, the American pharmaceutical giant, which had its stock price fall from $358 to $348 after a fake account tweeted that insulin would be free. This feature has since been shut down by Twitter and has led to bad publicity as advertisers are now moving away from using the social media platform.
Elon Musk, however, is still confident that his acquisition of Twitter and the decisions he is making as the sole board director and CEO will ultimately be beneficial for the social media platform. Musk previously tweeted that he bought Twitter “to try to help humanity". His desire to turn the app into a platform which promotes free speech stems from the belief that Twitter is falling behind on this key pillar of online discourse.
Musk’s big vision for Twitter is to turn it into an ‘everything app’. Drawing inspiration from the Chinese messaging app ‘WeChat’, he ambitions to remodel Twitter into a platform where users can do anything, from playing games to online shopping and facilitating payments.
However, the future is not looking bright for the social media platform, as Musk's vision can only be possible if Twitter ends up becoming more popular than it already is. The negative publicity Twitter is facing right now, combined with the mass layoffs and the account impersonation, makes it unlikely that the firm's user base will increase. Many large businesses and celebrities have already left Twitter as a result and more users are stopping their use of the platform as a sign of disapproval.