The Twitter Saga
Twitter, is an app that is always at the helm of affairs. An app that promises its users free speech and transparency. And an app that is quite controversial. Twitter in recent times has undergone many ups and downs and has successfully managed to run the course, but the problem it poses now is quite interesting.
Why Twitter?
Twitter, a microblogging and social networking service founded by Jack Dorsey, Evan Williams, Biz Stone and Noah Glass dates back its humble beginnings to 21 March 2006. Twitter’s origins lie in a “daylong brainstorming session” held by board members of the podcasting company Odeo. Jack Dorsey, then an undergraduate student at New York University, introduced the idea of an individual using an SMS service to communicate with a small group.
The original project code name for the service was ‘twttr’, the disemvowelled version of the word Twitter, an idea that Williams later ascribed to Noah Glass, inspired by Flickr and the five-character length of American SMS shortcodes.
Twitter is a notoriously dysfunctional business. It has failed to keep pace with its competitors, such as Facebook and TikTok, and its advertising-based business model has barely changed since it launched in 2006. Moreover, many people blame the entity for censoring free speech.
It is often considered the epicentre of controversies and no one wants to take it upon themselves and yet someone has to corral its potential for damage. Elon Musk with over 82.9 million followers on the platform (as of this article being published) seems intent on unleashing it. On March 14th, Elon Musk bought slightly more than 9% of Twitter, making him the public company’s largest outside shareholder. He was then offered to be a board member but rejected the proposal as it would restrict him to owning only 15% of the shares.
Musk in a letter sent to Twitter Chairman Bret Taylor and disclosed in a securities filing wrote:
“I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy,”
So why does Elon musk wants to takeover Twitter?
His acquisition quest appears to be less about increasing the company’s profits. He’s trying to frame the whole takeover bid as some sort of crusade to protect free speech.
According to Musk, the social media company needs to go private because it can “neither thrive nor serve” free speech in its current state. As a result, Musk made an offer.
An offer to take over Twitter, valuing it at about $46.5 billion to fund his offer of $54.20 a share.
The five things that Musk wants to change in Twitter:
- Make the platform’s algorithm open source
- Eliminate the scam bots
- Bringing the much-demanded edit feature that will give users the ability to edit their Tweets after they are posted.
- Strict adherence to free speech
- Make the verifications simpler
Twitter’s board already has thrown hurdles in Musk’s path. A day after he announced his offer, the board adopted a defensive measure known as a “poison pill” to fend off Musk and give directors more time to consider what to do.
The term poison pill refers to a defence strategy used by a target firm to prevent or discourage a potential hostile takeover by an acquiring company. Potential targets use this tactic to make them look less attractive to the potential acquirer.
But if investors find Musk’s deal to be attractive, then they are in for a deal. But currently stock is trading well below Musk’s offer price, suggesting shareholders are sceptical about the deal. Thus what would happen in near future remains unclear. But one thing’s for sure, Twitter and its saga continues…
Edit (Dated: 26 April 2022)
It’s official. Musk now owns Twitter completely. The board has decided to dissolve the pill and side with Elon’s offer. And moreover, he got the approval of its co-founder, Jack Dorsey.
So, the guy who builds electric cars and sends rockets to space is now a social media mogul.
THANKS
