In 2020, one of the most talked about topics on social media was whether Elon Musk owns Twitter or not. Many have asked whether the billionaire entrepreneur, investor and philanthropist is the owner of the website or if he only has partial ownership. How this topic came to be has been a topic of debate, with some believing that Tesla CEO owns the platform, while others have argued that the tech billionaire is just a high-profile user who has harnessed the platform to get his message out to the world.
To answer this question, one must first understand who owns Twitter. The platform is owned by a small group of investors that includes the Saudi royal family, SoftBank, Paulson & Co., Silver Lake and Microsoft. The President and CEO of Twitter, Jack Dorsey, also holds a substantial stake in the company, along with former CEO, Dick Costolo. Consequently, all these investors own a portion of the company’s stock. As for Elon Musk, he is not one of these shareholders and does not possess a stake in Twitter.
At the same time, however, the tech genius still has immense influence on the platform. Elon currently has the most followed account with 45.7 million followers, having recently overtaken pop star Justin Bieber. He also has the ability to shape both public and market opinion with his tweets. One example of this came in February when Elon tweeted “Tesla stock price is too high”, causing the company’s shares to plummet by 6%.
Not only that, but Elon has also been credited with revolutionising how businesses and governments communicate directly with their customers and constituents. He himself has used the platform to communicate major events and news as well as to promote his companies and his philanthropic efforts. Elon also has been known for using Twitter to take shots at his critics and adversaries, making him a polarizing figure among both his supporters and detractors.
Ultimately, while it may appear as if Elon Musk owns Twitter, the answer to that question is a resounding “no”. However, the tech entrepreneur has still made a lasting impact on the platform. He has revolutionised how businesses and governments use the platform as a form of communication, as well as how companies, both large and small, can distribute their messages to their constituents, who are often potential customers. He has also created a permanent, creative platform for himself, one in which he can express his opinions and possibly shape public opinion – good or bad.
Elon Musk’s Influence on Social Media
Elon Musk’s influence on social media is undeniable. Ever since he signed up for Twitter in 2009, he has managed to create a significant crowd around him. As of December 2020, he had 45.7 million followers, more than double of that 3 years ago when he had only 19.7 million followers. This implies that Elon’s influence is exponentially growing, even after 11 years of activity on this social network.
The crowd around Elon Musk’s network is mainly created by his many ‘Twitter storms’ – his series of tweets often made while communicating on big news that involve him. Through these storms, both long-term and short-term users, those who remain with him through his tweets and those who come just to watch his behaviour, have the possibility to take part in a show. Musk’s tweets can be not only direct messages towards people and organizations, but also jokes and hints towards mysterious future projects.
Apart from Twitter, Elon Musk also has influence on other networks like Instagram, YouTube, and Reddit. On YouTube, Elon has regularly appeared on the Joe Rogan Experience podcast, a well-known network show, where he talks about his projects and performs several stunts. On Reddit, Musk has often been a source of speculation among its well-known ‘subreddits’, like r/elonmusk, r/teslamotors and r/spacex, amongst others. His periodic involvement in these networks has created a somehow ‘illusion’ of dependence, giving the impression that he owns them.
Economic Impact of Elon Musk Tweets
Investors and traders constantly review the news to gauge potential financial investments. As a result, Elon Musk’s tweets have become a major source of information for many investors. Throughout the years, his comments have been known to cause extreme market volatility, stepping away from systemic and regulatory influences and into the center of the trading environment. His influence has caused markets to quickly jump up and come down, forcing investors to make decisions on a moment’s notice.
One of the most well-known examples of this phenomenon occurred in 2018, when the Securities and Exchange Commission (SEC) filed a complaint against Musk after he tweeted to his 22 million followers that he had “secured” funding to take his electric car company Tesla Inc. private. The tweet immediately caused Tesla’s stock to spike more than 7% that day, resulting in the SEC hitting Musk with fraud charges.
It is clear that investors need to understand the risks associated with trading following one of Musk’s tweets. The risks include market mania, which can lead to unsustainable trading opportunities, as well as the potential to lose money if the Bitcoin or Dogecoin investments he promotes fail to materialize.
Regulating Elon Musk’s Tweets: Is it Possible?
With Elon Musk’s tweets often having financial implications, this has caused governments around the world to consider regulating the business magnate’s Twitter use. They argue that the potential to manipulate markets and devalue companies with his tweets can have far reaching implications, not only for those who are trading in these stocks, but also for financial markets in general.
The challenge with regulating Elon Musk’s tweets is that there is currently no framework in place. While the SEC was able to levy a $20 million fine against him in 2018 in order to settle a legal case against him, it is not known if this would serve as a committed precedent for future cases. Additionally, as Tesla Inc. is currently a publicly traded company, it is unclear as to what scope of regulation could apply to its CEO.
Furthermore, other governments and financial watchdogs do not necessarily have the same powers as the SEC in terms of carrying out any punitive measures against Elon Musk. This is because, whereas the SEC is a US federal agency with powers to pursue legal action, most governments lack the statutory mandate and jurisdiction to do this. As such, while these agencies may be aware of Musk’s activities on social media, they are limited in their ability to intervene.
Implications for Investors and Companies
The implications of Elon Musk’s tweets for investors and companies are significant. While investors are often able to capitalize on the increased price movements that follow his tweets, there is always the danger of a reversal in price action as well. This means that investors need to always be careful when following tips from the billionaire, particularly when investing in small cap stocks.
For companies, particularly those that Elon has an interest in, they face a unique situation. On the one hand, they have an icon of industry at the helm, someone who possesses the charisma and networks to help propel their business forward. On the other, they are also at the mercy of his tweets, with their stocks being prone to the erratic swings that follow his comments. As a result, Tesla Inc. and other companies must have contingency plans in place in order to be prepared for any potential disasters.
The Impact of Elon Musk on the Media
Elon Musk’s influence has also had a major impact on the media. Journalists and editors flock to his tweets for news stories and many of his tweets become instant headlines. The media also amplifies Elon Musk’s claims, which often leads to even more volatile swings in stock prices. This is one of the key issues with Elon Musk’s tweets and the financial markets: the lack of filtering.
The media, as of yet, has not developed a process by which it can separate fact from fiction in Elon’s tweets. As a result, a news story can quickly turn into a rumor, leading to misinformed investor decisions and a rise in stock prices and/or market share. The potential fallout from this can, and has, been detrimental to markets and companies.
At the same time, the media has also been responsible for taking Musk’s tweets and the subsequent discussion out of the financial sphere and into the public’s awareness. Through responsible reporting practices, journalists have been able to address the potential impact of Musk’s tweets on the economy at large and thus raise awareness of the risks associated with investing on a whim.
Ultimately, the question about whether Elon Musk owns Twitter or not is one that still remains unanswered. While the tech mogul does not possess any shares of the platform and does not hold any executive board positions, he still has immense influence over it. He has used the platform to communicate major events, launch his companies and charities, as well as to rally his supporters, and in some cases, to provoke controversy.
At the same time, his tweets can also have considerable financial implications, with many investors taking tips from him for their trading strategies. Consequently, this has led to numerous governments and financial watchdogs considering the regulation of Elon’s tweets and their effects on market sentiment. In addition, the media has also played a part in helping to raise awareness of both the positives and the risks associated with investing along with the tech billionaire.