History and Background
It was not very long ago that the idea of a billionaire businessman and inventor, Elon Musk, taking over Twitter seemed far-fetched. As CEO of SpaceX and Tesla, as well as a board director of SolarCity, Musk is one of the most visible entrepreneurial figures of the 21st century. But recently the topic has been suddenly thrust into the spotlight.
As Musk himself explained when asked why he hadn’t taken it over yet, “There’s a lot of complexities to a Twitter acquisition and it’s not a small thing; it’s a very large thing.” It’s estimated that Twitter is worth around $20 billion, so any takeover bid would have to be tailored to address issues such as stock retention, legal issues, and potential conflicts of interest.
The Possibility of a Takeover
The question remains: can Musk make a credible bid to take over the social media giant? According to the company’s most recent filings, Musk directly holds about $2.4 billion worth of Tesla’s stock and indirectly holds about $1.5 billion in Space Exploration Technologies (SpaceX) stock. Considering these holdings, Musk has the financial clout to make a serious push to acquire Twitter.
That said, Don Gogel, chairman and managing partner of Apollo Global Management, a global investment firm with over $197 billion in assets under management, is skeptical. He highlighted the potential operational risks involved and suggested that “anyone considering acquiring Twitter had better have a strong stomach for wading into social media controversy.”
Industry Perspectives
In contrast to Gogel’s perspective, Twitter’s current CEO, Jack Dorsey, has welcomed the prospect of Elon Musk potentially taking over the company. During an interview on Fox News, Dorsey said that he was “certainly open to [Musk]” and believes he is the type of leader who could improve the platform.
Despite Dorsey’s endorsement, it is worth noting that other tech executives have raised doubts as to Musk’s ability to successfully manage a business of Twitter’s size and complexity. The head of a leading Silicon Valley venture capital firm, Todd Hinden, commented that “Elon Musk has a history of being a bit of a maverick and unpredictable, so it’s uncertain whether he has what it takes to effectively lead a giant corporation like Twitter.”
Implications and Analysis
If Musk were to be successful in acquiring Twitter, it would be a tremendous business move, proving his credentials as a businessman beyond any measure. It would also be a massive media coup, as Musk’s presence as the CEO and face of Twitter would turn the struggling platform into an industry leader.
Beyond any doubt, a takeover bid by Elon Musk would have a significant impact on the social media and tech industries. And while there is no clear answer as to whether or not Musk will make the leap, there is certainly ample evidence to suggest that it is a viable option.
SpaceX: A Potential Clue
Musk’s space exploration company, SpaceX, is a key factor to consider. Despite his wealth, SpaceX is his biggest financial commitment and could potentially be used as leverage in an acquisition bid. The aerospace manufacturer has become influential in the industry and is playing an increasingly vital role in furthering space exploration.
As former SpaceX employee and Forbes contributor Joel Moser has pointed out, the company “is a living example of Musk’s ability to take calculated risks and create a success story.” It’s certain that Musk sees his company as invaluable and if it happens to become involved in any potential acquisition of Twitter, then the prospects of the takeover will greatly increase.
Venting Frustration?
It is also worth considering that, in August 2018, Elon Musk notoriously tweeted “Am considering taking Tesla private at $420”, only to later delete the tweet and apologize for the goof. This could be seen as an indication that Musk, in a moment of frustration, considered a drastic action that he knew would get much press attention.
The fact that a takeover of Twitter may be equally drastic but yet also equally popular suggests that Musk might consider it viable. After all, SpaceX, Tesla, and SolarCity are Musk’s most notable success stories and the prospect of a fourth may be too tempting to overlook.
Diversity of Revenue Streams?
It’s also possible that Musk’s potential takeover of Twitter could be motivated by something a little more mundane. Acquiring the platform could be Musk’s way of diversifying his existing portfolio of companies. Having a hand in Twitter’s functioning would certainly provide a new angle of revenue and a platform to grow other businesses as well.
Twitter provides an intriguing opportunity for a variety of reasons, including leveraging the company’s substantial infrastructure, data sets and existing customer base. Additionally, given its 2.8 billion users, it could be the perfect vehicle to advertise the various businesses and services in which Musk is involved.
The Future of Twitter
In the end, it is clear that there is much to be said for Elon Musk’s potential takeover of Twitter. The prospect is exciting and has been welcomed by some industry leaders. However, there are still a significant number of obstacles that need to be ironed out before any bid can be taken seriously.
Whether Musk will take the plunge and make an offer of his own accord, or if he will have to wait for potential suitors to come forward and make the first move, remains to be seen. But however the saga plays out, few can doubt that Musk’s decision could have a lasting impact on the future of Twitter.
