How much is Twitter worth?
Apparently, $44 billion. On October 27th Elon Musk closed a groundbreaking (and highly criticized) deal making him the new owner of Twitter and taking it private. If you’re wondering why, part of the answer can be found in Musk’s ongoing litigation with Twitter from earlier this year. Two of the many questions now being raised are how Musk’s management will change Twitter as a company, and freedom of speech on the platform.
Musk himself is currently valued at $201.9 billion, making him the richest man in the world. Since gaining his bachelor’s degree in 1997 from the University of Pennsylvania, Musk founded multiple companies. He is CEO of Tesla and SpaceX, runs start-ups Neuralink and The Boring Company, and co-founded (and sold) PayPal.
On the date of his acquisition, Musk released a long tweet. In it, he claims his reason for buying Twitter is not “to make more money. I did it to try and help humanity, whom I love. And I do so with humility, recognizing that failure in pursuing this goal, despite our best efforts, is a very real possibility”.
To provide some background, Musk originally agreed to purchase Twitter back in April. He voiced that he wanted more free speech on Twitter. Yet this July, Musk announced his retreat from the deal: leading to Twitter suing him in the Chancey Court of Delaware. In what appears as a last ditch attempt to save face, Musk bought the company (before he could be forced to) weeks before the trial was set to start on October 17. This reasoning is in contrast to his October 27th tweet.
What happens to the employees?
Under Twitter’s new leadership, rampant company turnover has occurred. Specifically, Musk quickly fired many top executives. This included the chief executive, chief financial officer, a legal and policy executive, and the acting general counsel. Further, November 4 marked the tail end of Musk’s decree that fired about 3,700 of Twitter’s 7,500 workers: a shocking cut down of almost half of Twitter’s staff. What added to this turmoil was the execution of these layoffs. According to multiple employees, they were abruptly shut out of company access. For some, this happened in the middle of the night with no other information. Laid off employees were outraged by this treatment.
In response, former workers banded together and filed a class-action lawsuit against Twitter on November 3. The lawsuit claims that they were not fired in accordance with the federal Worker Adjustment and Retraining Notification Act (WARN). Workers hope the court will mandate Twitter to follow the WARN act, and stop Twitter from encouraging employees to sign away their right to take legal action.
Why were the cuts made?
Twitter came with a plethora of financial problems, which Musk said the staff reductions were meant to counteract. Quoted by the BBC, Musk expressed that he had “no choice” but to do so. Twitter loses “more than $4m (£3.5m) a day”.
Additionally, according to The New York Times, Musk “is under financial pressure to make the deal work, having taken on $13 billion in debt for the buyout“. The Times continues with, “the company has lost money for eight of the past 10 years and, like other social media companies, faces a decline in digital advertising amid a slowing economy”. Taking over Twitter meant taking on debt.
Since the wave of layoffs and outraged reactions, Twitter has attempted to recall dozens of workers. Musk also acknowledged the repercussions of the layoffs in a November 15th tweet. “Important to admit when I’m wrong & firing them was truly one of my biggest mistakes”.
Is this political?
On the political front, Democrats and Republicans have had drastically different reactions to Musk’s ownership. Particularly in regards to the impact of increasing free speech on Twitter. Jack Dorsey, former CEO and co-founder of Twitter in 2006, supported content moderation. According to CNN, “the company banned many accounts promoting abuse and spam, added labels for false or misleading information, and banned the misgendering of transgender people” under its previous leadership. Musk, however, leans towards slackening these media restraints.
Musk has stated that Twitter should be more “reluctant to delete things”, and “very cautious about permanent bans.” His opinion includes reversing the permanent ban on former president Donald Trump, which was instituted after the January 2021 Capitol riot. Republicans rejoiced at both of these possibilities, which could help shift Twitter towards the right. On the flip side, Democrats worry about increased misinformation and derogatory language usage. The impact of Musk’s ownership on matters such as voting is also called into question.
Already, Musk has expressed his own political affiliation on Twitter on Election Day. He encouraged voters to vote Republican for this past midterm, in a tweet. While Musk is not closed off to the Democratic Party, the level of power he has on the media platform will surely sway subscribers. The extent that Musk will alter the political landscape is yet to be seen.
