This month’s Elon Musk antic: trying to buy Twitter for $43 billion.
The Tesla and SpaceX CEO multi-billionaire is seeking to take ownership of this highly influential social media platform. In a public letter, Musk defended the values of free speech anti-censorship, stating, “I now realize [Twitter] will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company.”
Musk’s approach to this is to purchase 100% of Twitter at $54.20 per share, labeling it as a 38% premium the day before he had made the announcement.
However, Twitter’s board of directors is not tempted by Musk’s spoils. In an attempt to negotiate with Musk, Twitter offered to let him join its board of directors. Though Musk initially accepted, it was almost immediately reversed, as he is focused on the pursuit of his own complete private takeover.
Twitter has since enacted a shareholder rights plan, often dubbed a “poison pill.” Musk currently owns 9.2% of the company, and if he expands his ownership to 15%, the company will begin to sell new shares to diminish Musk’s ownership. This type of plan is designed to deter this type of investment takeover, and invokes ethical questions as a publicly traded company.
This makes it apparent that there are motivations outside of Twitter shareholders. To dilute your own stock to prevent a certain party from engaging in market activities is no less than an indicator of a major fault of our current system. The Twitter board owns collectively an insignificant amount of shares. Though Twitter’s CEO states it must “act in the best interests of the company and all our shareholders,” it is strange to think Twitter could refuse to capitalize on Musk’s offer.
Twitter is not only a social media platform, but one of the primary channels of online communication. There is undoubtedly large sums of social power endowed to people that own it.
It is often argued, by Musk especially, that Twitter serves as a “de facto town square” where social media platforms have the same function as a public space. And this seems for the most part true. Though Twitter is a private company, it makes up the few platforms within the social media oligopoly. Being prevented from interacting on a popular platform is effectively reducing one’s ability to interact on the internet by a large fraction.
One may argue that free speech only applies to the government, not a private company. However, legal jurisdiction indicates otherwise. Under Packingham v. North Carolina, the Supreme Court unanimously reached the decision that social media websites must uphold the First Amendment as social media qualifies as a medium for lawful speech. Justice Anthony Kennedy states “a fundamental principle of the First Amendment is that all persons have access to places where they can speak and listen, and then, after reflection, speak and listen once more” and everyone is entitled to “exploring the vast realms of human thought and knowledge” unbarred from private entities, who can otherwise willingly decide who is able to participate on the platform, as long as the law is followed.
It is well known that social media and tech giants do not follow this legal precedent. Though Musk controlling one of the largest online platforms is dubious, he at least upturns the need for social media reform. Ought someone be able to simply purchase Twitter, regardless of how benevolent their motivations are? Are free market activities being engaged in, or is Twitter a hotbed for coups and political turmoil? We must push to introduce the enforcement of legal rights into this new space.
Social media is an unprecedented channel of communication. Musk, though unknowingly, exposes the problems of both social media and his wealth. Our generation is the first to deal with technology and its consequences and it is clear market forces are too weak to dictate the correct behavior in both legal principles and the best interests of shareholders. The U.S. government must position itself more firmly in the online social space.