The stakes are very high in the Twitter cat and mouse drama. The stage is set for Elon Musk to take control of the company, and he has already started to solicit investors and bank loans to finance the proposed leveraged buyout of Twitter.
So, what’s good about the proposal, and what’s bad?
Twitter is used by many powerful people as a means to communicate with followers and interested parties. It has become a significant player in the social media world. But, it’s also a platform that gives trolls an outlet to publish disgusting, hurtful and disrespectful messages. It gives any subscriber an opportunity to say whatever he or she wants to say, even to disseminate misinformation. And there’s the knock; the platform must be monitored. Who’s monitoring the tweets and posts made on the service and what are their protocols? This question is the basis of a gigantic freedom of speech controversy.
The existing Twitter has a strong liberal bias. There’s nothing wrong with their left-leaning perspectives unless they use it to boost their politics and opinions, and censor perspectives of others. To reiterate, it’s a free speech conundrum. The prospective new owner, Elon Musk, says he will not censor unless tweets are over a certain line where they encourage violence. We should expect liberal and conservative perspectives to be expressed freely on the platform if Musk is successful.
This all seems like a positive development for social media to offset some of the big players that have a liberal stance on controversial issues. Will the proposed transaction inspire yet another megalomaniac and his sycophants to share his perspectives and minimize others, except that he has a right-leaning viewpoint of the world?
Musk is on a mission to protect free speech in America. His words probably give many a positive vibe. How can freedom of speech ever be a bad thing? But do we really want a quirky, extraordinarily rich man guiding us through the free speech battleground.
To date, Musk has made a trillion dollars running a car company, which could very well be a prototype for electric cars in the future, and a rocket ship company. Is he also a philosopher and a legal scholar? Why should one give this man more power than he already has to control discourse on a monstrous stage? The answer to the question is that he isn’t breaking any laws and he has the resources to buy Twitter for over $40 billion plus.
The New York Times reported that Musk had already secured $7 billion from 18 entities. The group includes some Silicon Valley friends, including venture capital firms. The original capital raised included $13 billion in bank loans from seven banks, $21 billion of Musk’s money and $12.5 billion from a loan against Tesla stock. With the new inflow of $7 billion, he will reduce the loan against his Tesla stock. Funding for an additional $20 billion dollars has not been identified in public information.
Supposedly, Musk has suggested to investors that they may double or triple their money, but a 10 times return would be a challenge. Not a bad return!
Twitter’s annual income exceeds $13 billion and its earnings before interest, taxes and depreciation would potentially hit $6 billion by 2025. This is a bold prediction.
Needless to say, very smart money is chasing Musk based upon his previous successes. But what the hell does he know about managing a social media platform?
One issue that has not been addressed in any detail to this point is what impact a busted deal would have on the economy and the prospects for his investors? Seems to me that if Twitter ultimately fails, the banks and large investors could have a very difficult time. And what about interference by lawmakers and regulators? Will they make it difficult for Twitter in the future to achieve its projections and to expand into new areas?