It’s not simply Elon Musk who’s impacted by the tumultuous deal.
Elon Musk’s takeover of Twitter has been chaotic, to say the least.
He repeatedly modified his thoughts in regards to the deal, making weed jokes and tweeting poop emojis alongside the best way. However now that his possession of the social media platform could be very actual, many have questions on what’s going to occur subsequent.
Whereas we’re nonetheless within the early days of Musk’s takeover, it’s already clear there are some individuals who have made main monetary, political, or reputational beneficial properties, and others who’re seeing actual injury or threat. Listed below are the winners and losers to date.
Delaware Courtroom of Chancery
Elon Musk is thought for breaking enterprise guidelines and norms. This has triggered issues with regulators, however he’s managed to nonetheless do what he needs with few or no penalties.
Even after the SEC fined Musk $20 million for posting an allegedly deceptive tweet about his plan to take Tesla non-public, Musk continued to push the boundaries of his settlement by posting unauthorized tweets — a threat the world’s richest man may afford to take.
So when Musk modified his thoughts about shopping for Twitter, many believed he would one way or the other get out of it, even when his authorized justification appeared flimsy. However this time, Musk didn’t get out of it. That’s as a result of, largely, of the Delaware Courtroom of Chancery, the enterprise courtroom overseeing Twitter’s lawsuit in opposition to Musk.
If he saved combating the case, Musk would threat having to reveal extra probably embarrassing texts from his mates that might injury his picture. And he was going through a choose with a no-nonsense repute who may rule in opposition to him in the long run. Even with an almost limitless provide of cash to fund the very best authorized workforce, Musk in the end backed down and closed the take care of Twitter on the unique phrases he’d agreed to in April.
This was a win for the rule of legislation, displaying that even for those who’re the richest man on the planet, typically you do must comply with via in your obligations.
Musk considers himself a “free speech absolutist” and has insisted his important motivation for purchasing Twitter is to make it a extra open, unregulated platform for individuals to precise their beliefs.
Conservatives see this as a serious win. US politicians like Rep. Marjorie Taylor Greene (R-GA) and Sen. Ted Cruz (R-TX) have been cheering on Elon’s takeover, hailing him as a frontrunner who will champion their persistent and unsupported declare that Twitter is biased in opposition to right-wing content material.
Former President Donald Trump stated that he’s joyful “Twitter is now in sane arms,” and “will now not be run by Radical Left Lunatics and Maniacs,” in keeping with a put up on his social media platform, Reality Social, on Friday. Musk has beforehand stated that Twitter banning Trump from its platform after the January 6, 2021, riot was a mistake, signaling that he could convey him again — though final week he stated he’s holding off on any selections about reinstating accounts till a yet-to-be-formed advisory council weighs in.
In the meantime, one in every of Musk’s first tweets as Twitter’s new proprietor was in response to conservative commentator “Catturd,” telling them he’ll be “digging in” to the consumer’s claims that his content material is being “shadow banned,” or secretly suppressed by Twitter.
Nonetheless, there are limits to what Musk can do to appease conservative influencers as a result of he additionally must maintain advertisers joyful. That’s why he promised advertisers in a tweet on Thursday that he wouldn’t flip Twitter right into a “free-for-all hellscape, the place something might be stated with no penalties!” Whereas now we have seen an uptick in some hate speech since Musk’s takeover, Twitter to date hasn’t publicly modified any of its insurance policies on content material moderation. Conservatives nonetheless see Musk’s takeover as a win.
Main Twitter shareholders
Shopping for Twitter for $54.20 a share is seen as a loss for Musk as a result of Twitter’s worth plunged shortly after Musk made his preliminary provide. However shareholders who purchased inventory within the firm for a lower cost have made a killing.
Most of the greatest shareholders are companies that make investments cash on behalf of prosperous purchasers, like Florida hedge fund Pentwater Capital, which is anticipated to make greater than $200 million, in keeping with a report from CNBC. Pension funds that make investments for lecturers, cops, and state employees in New York, California, Florida, and Wisconsin may additionally make a major return, in keeping with reporting from Reuters.
Elon’s interior circle
A part of what we realized via the Elon-Twitter authorized proceedings is simply what number of tech buyers, founders, and different figures within the tech world wished to get behind Elon by contributing funds to the Twitter deal.
“You recognize I’m journey or die brother — I’d soar on a grande [sic] for you,” stated angel investor Jason Calacanis in a textual content to Musk in April, which was revealed in courtroom paperwork.
Now, Calacanis and different tech leaders, like investor and former PayPal govt David Sacks, are providing their assist as advisers to Musk throughout this transition time.
In a single day, figures like Calacanis and Sacks — who additionally host their very own in style tech podcast — appear to have gained at the very least some affect over a serious platform vital for making information and even influencing inventory costs.
After Musk’s deal closed, he instantly fired Twitter’s prime executives: CEO Parag Agrawal, CFO Ned Segal, and head of authorized coverage, belief, and security Vijaya Gadde. Now, he’s transferring on to the remainder of Twitter’s 7,500 workers.
Staff count on Musk to make drastic cuts; the most recent estimate from the Washington Publish put that quantity at round 25 p.c of the corporate. An earlier report, which Musk has denied, put that quantity as excessive as 75 p.c of the corporate’s employees.
As a way to maintain their jobs, some Twitter engineers are being requested to work lengthy shifts and ship on new product concepts underneath tight deadlines, or in any other case threat being dismissed.
Staff are being “pulled left and proper into frantic huddles or initiatives to attempt to save their jobs,” stated a Twitter worker who spoke on situation of anonymity, calling the frenzy “pure chaos.”
Different workers who’ve much less hope are quietly ready to be fired.
“Individuals are bored with speaking about it, bored with being in limbo,” stated the worker. “I believe at this level everyone seems to be hoping for the following chapter.”
Musk may attempt to hearth workers with trigger as an alternative of laying them off, which might assist him keep away from paying severance and advantages.
Whereas a majority of Twitter’s employees may survive the Elon-Musk transition — and a few workers are excited for a change — working all through a publicly tumultuous enterprise deal has been a nerve-racking, demoralizing expertise for a lot of.
Elon’s different firms
Elon Musk is a busy man. Other than operating Twitter, he’s CEO of electrical automotive agency Tesla and rocket firm SpaceX.
Each firms now stand to lose the eye of their hands-on chief. Musk is pulling away a few of his senior employees too — reportedly pulling greater than 50 Tesla engineers from the corporate’s autopilot workforce into Twitter.
All this implies Musk and his prime lieutenants may have much less time to construct automobiles and rockets whereas they spend extra time determining the intricacies of operating a politically contentious social media firm.
Individuals who invested on this deal are going through main losses. That features members of the Saudi Arabian authorities, non-public people, and main banks akin to Morgan Stanley, Financial institution of America, and Barclays.
That’s as a result of they purchased on to Elon’s now-inflated shopping for worth of $54.20 a share earlier than Twitter’s share worth fell steeply because of the latest financial slowdown that has additionally tanked the valuations of many different main tech firms.
Some buyers even publicly expressed remorse in regards to the deal, saying they hoped it didn’t undergo.
There’s a tiny little violin taking part in someplace for this group — significantly the large banks and rich international governments — that has ranges of money readily available unfathomable to on a regular basis individuals.
Until Musk manages to make their funding worthwhile in the long term by growing Twitter’s worth, they’re a number of the most fast losers within the Elon-Twitter saga.
We nonetheless must see how this performs out, however for now, Twitter customers are going through quite a lot of uncertainty in regards to the app’s future.
Anybody who used Twitter in pre-Elon instances is aware of it may typically be a cesspool of harassment, bullying, and dangerous conspiracy theories. For the previous a number of years although, the corporate has constructed out inner groups associated to content material moderation and consumer security to attempt to enhance that have. And a few proof reveals their work has made an impression.
Musk’s takeover may put these enhancements in danger. He’s stated he doesn’t consider Twitter ought to be doing as a lot content material moderation, and is anticipated to make vital cuts to Twitter’s groups doing that work.
Musk has additionally stated he received’t take down any content material that’s authorized — which leaves room for a large swath of offensive content material like racial slurs, violent imagery, and harassment that’s protected within the US underneath the First Modification.
Already, Twitter has confronted an uptick in hate speech because the Musk deal closed. One examine by the Community Contagion Analysis Institute discovered a 500 p.c improve in use of the n-word on Twitter inside 12 hours of Musk taking on. Twitter’s head of website integrity has stated this wasn’t resulting from any adjustments in Twitter’s insurance policies in opposition to hate speech, however a coordinated trolling marketing campaign to tweet extra situations of the slur, timed to Musk’s takeover.
This might negatively impression Twitter’s enterprise. Final week, GM, a serious advertiser, stated it’s going to droop spending on the platform till it sees what course Twitter takes underneath its new management. Musk must discover a stability between maintaining these advertisers joyful whereas additionally maintaining his dedication to letting customers say what they need.
Musk himself is toeing that line. In latest weeks, he’s posted memes of himself aligned with overtly antisemitic Kanye West, and he shared a hyperlink to a conspiracy principle in regards to the assault on Speaker Nancy Pelosi’s husband Paul Pelosi (Musk later deleted these tweets).
After all, customers may even have lots to achieve if Musk exceeds critics’ expectations and manages to show Twitter right into a extra open platform that on the similar time protects consumer security. However given Musk’s private historical past of selling on-line harassment and misinformation, and the truth that different social media platforms like Fb, TikTok, and YouTube have struggled for years to strike this stability, it appears unlikely that Musk — the perpetual shitposter — would be the one to all of the sudden determine it out.