Elon Musk wants to buy and run Twitter, this much is true. He loves the platform and the platform loves him with his 94.8m followers, forthright views and his evangelism for bitcoin, the outlaw’s currency of choice.
Like Marmite, Musk divides opinion. He revels in being a ‘say it is like it is’ businessman, something made much easier by his vast personal wealth and a phalanx of lawyers at his bidding for whenever he gets into public spats, which unsurprisingly, isn’t that rare.
Musk is never going to be short of a bob or two and, for the moment, he seems pretty much unsackable. So much so that even as a public company boss (Tesla, his electric car business, trades on Nasdaq in the US) he openly admitted on a podcast to smoking weed and is hardly a shrinking violet when it comes to self-publicity.
Twitter, like Tesla, is a public company, which means any deal Musk does has to be negotiated out in the open, every move subject to the glare and attention of financial and media professionals, and vast numbers of the public who fear him ruining their beloved platform through his predilection for ‘free speech’.
Like any other company traded daily on a stock market, Twitter’s market value changes each time its share price moves either up or down. And Twitter’s current share price volatility is causing Musk something of a problem.
Since his generous offer a few weeks ago of $54.20 a share for Twitter’s business, valuing it at $44bn, the shares have taken a bit of a tumble. In fact, they were trading down by around 35% of that value at nearly $38 but have come back a bit since last week to $40 a share after Musk found extra funding for the bid. According to the Guardian, an SEC filing last week revealed that he was upping his personal backing from $27.3bn to $33.5bn, and had secured an additional $6.25bn in equity funding. Shareholders will be relieved because this takes some of the pressure off the costs of servicing the debt on bank borrowings if the deal goes ahead.
Before last week’s rejigged offer, Musk was clearly finding it hard to justify the huge sums being shelled out and was getting pushback from Tesla shareholders for the damage it had caused to that company’s share price.
It seems Musk is still seeking information from Twitter about how many bots and fake accounts are on the platform, because the more of these there are, and the fewer the number of genuine users – the less advertisers will be willing to put up with top dollar rates hawking their wares to an army of ghosts.
Money and shareholder value aside, Musk has another issue on his hands besides the cost of the Twitter acquisition. While Musk might have the luxury of saying exactly what he thinks in public, totally unfettered free speech doesn’t apply to almost all other corporate Twitter users.
He might offer forthright personal opinions on public platforms like Twitter but the directors, senior executives or even humble company employees of companies who have accounts on the platform have no such freedoms. They have to be much more circumspect.
Interestingly, senior company executives have almost universally adopted a liberal, tolerant, inclusive attitude as their public face. Whether its how they really think we’ll never know, but they have calculated that by expressing liberal and tolerant views, this plays well to the biggest numbers of customers, shareholders, staff and suppliers. They also value highly not rocking the boat, which is how most of them rose to the top. It may be a little dull, but that’s just how they like it.
This is why Musk, despite his bluster, will have to play safely if Twitter continues to be a platform of influence. Even if the bid goes through and he can take the company private, he will still need to keep the large corporate customers (and their huge advertising budgets) onside. Any hint of trouble and they will walk away with all their money and their audiences. Of this we can be in no doubt. Look at how quickly high-profile sports, film or music stars are dropped by corporate sponsors the moment they fall foul of the court of public opinion.
And look how quickly Stuart Kirk, boss of HSBC Global Asset Management, was suspended when he pulled a Musk and very unwisely chose to give a public speech that attacked ESG investing and the beliefs that underpin it.
No, corporate bosses and their professional advisers in communications will not be willing to undermine their messaging and their appeal to the broadest possible audiences to indulge their private opinions in public.
With Twitter’s market value still beneath Musk’s offer price, there’s still a chance that he will walk away from the deal, despite public protestations.
But if the deal goes through, Musk will have to reconcile the needs of corporate customers and their ad revenues with those of libertarian free speechers, which, let’s face it, is a migraine of a task and almost certainly unachievable.