Written by Naina Mahajan, a grade 7 student.
“The first step is to establish that something is possible; then probability will occur.” These are the famous words spoken by American billionaire and entrepreneur, Elon Musk, who is currently, the richest man in the world.
Why is he in the news?
He’s been in the news for many reasons, but most recently he’s announced that he wants to buy Twitter – an US-based microblogging and social networking platform.
He says he plans to make it private and restore its commitment to free speech. His offer, however, appeared to fall flat on its face with investors on Thursday, the 21st of April.
Elon Musk bought about 9.1% of Twitter on March 14th, making him the currently public company’s largest shareholder outside of the company itself. This move made by the billionaire prompts a cascade of questions, like:
Why is he interested in Twitter?
Musk has been reported saying that the company hasn’t been living up to its status as a “platform for free speech.” He insists that he is not interested in making money out of Twitter and proclaimed on Thursday that his motivation really sprang from the realization that “having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization.” While most of Musk’s intentions of what to do with Twitter are unclear, after his comment on Twitter not living up to its potential as a “platform for free speech,” it appears that he would want to scale back content moderation.
However, in another tweet he posted he said, “We will defeat the spam bots or die trying,” which hints towards him wanting to make monitoring of possible non-human accounts stricter.
Can he just buy Twitter from his personal wealth?
While Elon Musk himself is the world’s richest man, with a nearly $625 fortune, much of his money is tied up in Tesla (he owns about 17% of the company, which by itself is valued at over $1 trillion) and SpaceX, his space company. It is rather unclear as to how much cash Musk has (more about these companies below)
What can Twitter do about all this?
Twitter is evidently not very happy with the whole idea, as they have hinted at using the “poison pill” strategy. The term refers to a defence strategy used by companies to make them look less attractive to an acquiring company. Although they aren’t generally the first or best way to defend a company, they are usually the most effective. Poison pills allow already existing shareholders of a company the right to purchase additional shares at a discount from the old rates, thus diluting the interest of an acquiring company substantially.
Well, whatever happens, all we can do is hope that the beloved social media platform that is Twitter, stays as well-loved and well-used as it currently is.
More about Elon Musk
While Musk has founded (and co-founded) many companies, he is best known for two – one being SpaceX , or Space Exploration Technologies (SpaceX) which is a pace company that make more affordable rockets. He recently partnered with NASA (the American space agency) to send a mission to space. The other is a company called Tesla that makes electric cars. He did start the company but funded it – becoming one of its major funders.
Headline Image source: https://upload.wikimedia.org/wikipedia/commons/3/34/Elon_Musk_Royal_Society_%28crop2%29.jpg
Attribution: The Royal Society, CC BY-SA 3.0 https://creativecommons.org/licenses/by-sa/3.0, via Wikimedia Commons