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Why did Elon Musk spend $2.9 billion to join Twitter’s board of directors? Here are 3 likely reasons

April 7, 2022, 5:04 PM UTC

Elon Musk disclosed a 9.2% stake in Twitter worth $2.9 billion on Monday, and on Tuesday he got a seat on the board of directors. 

According to an SEC filing, Musk will serve as a Class II director, and his term at the company will expire in 2024. During his tenure, Musk won’t be able to own more than 14.9% of common stock. 

The Tesla CEO is a famously active user—and critic—of the platform, using it to shake markets, argue with politicians, make predictions, and promote his companies. He has also criticized it for failing to protect free speech.

Already the world’s richest man (unless you believe Musk that Russian President Vladimir Putin is “probably” richer than he is), buying Twitter won’t make him any richer. However, it will give him more power over the platform he actively uses, and he already promised that changes are coming.

But what does he really want? There are three leading possibilities.

Protecting free speech

Last year, after the Jan. 6 insurrection, Trump was kicked off the platform. Musk, who has actively advocated for free speech on Twitter, gave some hope this week that his board seat could mean a Trump Twitter comeback.

Republican lawmakers and social media users alike called on the Tesla CEO to restore the former president’s Twitter privileges after Musk announced he had purchased a stake in the social media platform.

Congresswoman Marjorie Taylor Greene, who has served as the U.S. representative for Georgia since 2021 and occupies a post-Trump far-right position on Twitter and in Republican politics, also took to the platform to request that Elon Musk restore free speech on it.

However, the company has dismissed this link. A spokesperson for Twitter told the Daily Mail, “Our policy decisions are not determined by the Board or shareholders, and we have no plans to reverse any policy decisions.”

Musk also flirted with the idea of, like Trump, creating his own rival social media platform, musing about the possibility during the very time, we now know, that he was acquiring Twitter shares. Now that he is both a majority shareholder and sits on the board of directors of Twitter, this won’t be necessary anymore, and he could be motivated to implement the vision he had for his social media platform on Twitter.

Safeguarding a major promotional tool?

Musk knows how to use Twitter to his advantage and has historically used the platform to promote his companies, acquisitions, and thoughts. He is almost always trending.

More than a CEO, Elon Musk is a brand, and he has used this status to promote his companies and eliminate the need for advertising, and Tesla’s main advertising platform is Musk’s Twitter account. Just one tweet from the Tesla CEO can get tremendous news coverage.

To compare it to other vehicle brands, in 2019, Hyundai spent $2,000 in advertising per vehicle sold. On the other hand, Tesla spent just 14 cents, according to Newsthink.

If you compare Musk’s following to those of other car brands, he surpasses them by millions. Currently, he has 80.9 million followers, while Hyundai USA has 409,000, Honda has 1.1 million, and Volvo has 230,600, just to name a few.

Or take the case of Dogecoin. In 2020, Musk posted a tweet showing a cloud of dust with a Shiba Inu face (which represented Dogecoin), taking over a city (which represented the global financial system). Just this one tweet made the currency soar 20% in value and cemented the power of Musk’s Twitter feed.

The following year, he continued tweeting about the cryptocurrency. His posts caused an increase in the value of the Bitcoin alternative’s sales, according to Newsweek.

Now Musk is using Twitter to announce that Tesla will allow people to buy brand merchandise using Dogecoin. Again, Twitter was a tool that was invaluable for Musk’s brand and his business.

Musk has also used the platform to leverage himself by posting outlandish predictions about the future, some of which are literally out of this world.

By becoming Twitter’s largest shareholder, Musk isn’t just saving millions in advertising, he’s safeguarding a fundamental part of his business interests.

The edit button

As soon as Musk officially joined Twitter’s board, he was writing a typically provocative tweet, creating a poll asking Twitter users if they wanted an edit button.

The answers are misspelled, saying “yse,” and “on” instead of “yes” and “no,” making his point that it would be good to have the ability to edit a tweet after posting. 

Parag Agrawal, Twitter’s current CEO, immediately validated Musk’s poll by retweeting it and saying the question was important.

However, adding an edit button to the platform is not so easy. Jack Dorsey, Twitter’s cofounder and former CEO, has been against it in the past, saying Twitter will “probably never” add an edit button. 

In a video Q&A with Wired in 2020, Dorsey argued that the social network started as a text messaging service, and text messages can’t be edited after being sent. 

It’s also still unclear how an edit button would work. Would retweets also change if the original tweet is edited? Would users be able to edit tweets indefinitely? 

On April Fools’ Day, just before the Musk investment dropped, Twitter sent a joke tweet about how they were working on the situation.

It was a joke until it suddenly wasn’t—maybe.

Further improvements

While it is uncertain what other changes might unfold from Musk’s investment, changes could come in the next few months. 

The timing of Musk’s investment comes at a critical time for the company, as Agrawal, who became Twitter’s CEO in November, is already under pressure to reach the company’s internal goals. These include growing the platform to 315 million monetizable daily users by the end of next year.

One big happy Twitter family

While now Musk is all in with Twitter, it hasn’t always been that way. Last year aside from criticizing the company, he shared a meme in which he compared Agrawal and Dorsey to Joseph Stalin and Nikolai Yezhov, who were, respectively, the dictator who ruthlessly presided over the Soviet Union from the late 1920s to early 1950s and his head of secret police during an era historians call the Great Purge.

But regardless of the love-hate relationship Musk has with the platform and its CEOs, it looks like the company is looking to move forward and welcome Musk with open arms.

Agrawal said Musk would be of value to the company as a “passionate believer and intense critic.” 

Dorsey took to the platform to add to the appraisal.

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