Fine. Let’s talk about it.
Elon Musk is a genius (the above tweet being an exception). Let’s just start out by acknowledging that. The man, with the help of massive teams, has revolutionized private space travel and vehicle electrification[1]. I won’t (and don’t know if I could) quantify the impact he’s had on our progress towards a greener future, but I can tell you that it’s more than most people have done in their entire lives. As a society we should (and I believe mostly are) incredibly happy that our medium of capital allocation has allowed for such innovative ideas to blossom and is encouraging investment in his ideas. I know people get mad a Elon for being a billionaire and all, but damn, as far as those richest among us – at least he gave the world something. He’s not just some aristocrat living off the rents of fortunes long-since accumulated – he’s genuinely worked and produced to achieve it. So as a capitalist, and a fan of tech companies doing more than just optimizing clicks and hurting democracy – I applaud Elon.
So now that we’ve gotten past the socialist argument against Elon (which is often used to discredit any action without having to critically evaluate the actual issue at hand) – let’s look at the situation with Twitter.
What’s going on – is there some context I’m missing?
Twitter accepted Elon’s offer to purchase Twitter for $44 billion – but deal is not expected to close for up to six months. He does not own Twitter yet. That means he can’t actually change anything at Twitter beyond his role as the largest shareholder, so any claims you’ve seen that Twitter is changing are at the direction of CEO Parag Agrawal. But why is it taking so long? Well generally M&A is very complicated – but a key point is that Elon needs to come up with the $44 billion in actual cash. Most of his wealth is in Tesla stock – and raising that much money is far more difficult than one might imagine. With all of this in mind, Twitter is trading at $49.11 (at the time of my writing this) which implies a ~90% chance of completion, since at the time of close every shareholder will receive $54.20. So what’s driving that 10% of doubt? I’ll lean on one of my favorite columnists, Matt Levine to help summarize the scenarios:
He could change his mind (can’t happen without good reason, but that’s why you have lawyers)
The financing could fall through. As I mentioned, he needs to come up with $44 billion in cash, a large portion comes from loans and margin loans against Tesla Stock. So if Tesla’s stock dropped significantly there could be an issue supporting the margin loans. The level of concern seems to be ~$740 / share. The day before Elon announced his deal Tesla was at $1,085 a share…it now sits at ~$880.
There could be a higher bidder. Not really likely, but there is a possibility
The Board could change its mind – Musk’s letter said the following. Presumably the board plans to recommend the proposal to shareholders…but it’s still not set in stone
I have attached a merger agreement that is “seller friendly” and that does not require you to recommend in favor of my offer. This will provide all shareholders a voice, and allow for a democratic decision consistent with Twitter’s ethos.
Finally regulators could block the deal – but doubtful that will happen
However you cut it – this is not a done deal. Elon has famously played fast and loose with a lot of his pet projects, be it taking Tesla private at $420 / share, or everying about Doge Coin. He’s an eccentric man with a metric fuckton of money who likes to have fun. What’d you expect?
Why are people mad?
Well I think we can group the people who are upset into four categories[2]:
Believes in Twitter pre-Elon who truly see value under the current regime…the stock was north of $70 / share less than a year ago. Basically finance bros.
Lefties who think that billionaires shouldn’t exist and this is a lavish display of vanity
People who don’t like that Elon’s a troll and (seems to be) doing a lot of this for fun / attention
People who think that Elon’s stance on free speech will allow for the proliferation of hate speech, similar to a platform like 8chan
I don’t think we need to talk about #1 and I already addressed my take on #2 – so let’s start with Group 3 – the anti-Troll folks.
Look, there’s no denying that he’s a troll – and let’s be clear on what that means. According to Wikipedia (I know, I know) an internet troll is someone who posts inflammatory, insincere, digressive, extraneous, or off-topic messages in an online community. Basically that person in your life who doesn’t believe in anything but likes to see you get annoyed and that’s where their joy comes from. Elon definitely does this. From his outright war with the SEC over his tweet about taking Tesla private, to his use of JPEGs in financial statements to fool investors, or his infamous smoke session with Joe Rogan – the guy just likes to rile the people up! He’s having his own twisted sense of fun with one of the largest social media companies in the world – what’s dystopian about that? (/s)
But in all seriousness – I think Elon is what people thought Trump was. A secret genius who merely acted like a fool on stage to excite the base and behind closed doors would be able to use his political power to achieve his many goals with Frank Underwood-like savviness. Trump was clearly the same fool he was on stage behind doors. But Elon? Well, he’s different. Sure he calls his cars S, 3, X, and Y – but that’s because he understands when the engineering works – the rest should be fun! And is he promising too much with his varying Hyper/Express Loop programs? Absolutely! But that’s admittedly a side project – and I for one appreciate that someone is trying to make transport sexy. So yes, the guy is undoubtedly a troll – but that doesn’t make him a bad manager or promoter or engineer.
Okay – so you’re good with all of this so far – let’s talk about Group 4, because I get it. Let’s start in a dark corner of the internet, 8chan – the message board site for those who think that Reddit and 4chan are too PC – it has (essentially) only one rule:
“Do no post, request, or link to any content illegal in the United States of America. Do no create boards with the sole purpose of posting or spreading such content.”
That’s pretty clear – as long as it’s not illegal (basically, child pornography) it’s allowed. This has lead to a flurry of (Constitutionally-protected) hate speech, ranging from Anti-Semitism, Mass Shooting Manifestos, to other unspeakably vile content. This of course was not without challenge – following the El Paso mass shooting in 2019 it was discovered that 8chan had become a go-to resource for extremists (including Christchurch) and provided a platform for these murders to go viral with their messages. This, as a reminder, is arguably not illegal.
Now this is a discussion I think we can have as a society – should we have laws that more strictly restrict speech online? I don’t have the answer to that one. While I have not fully-fleshed out this view I’m inclined to think that for all the hate Cancel Culture™ gets – it serves as a kind of speech moderator that allows free speech to flourish. You can say whatever you want – literally no one is stopping you – but if you decide to take it too far, individual groups may choose to exclude you – and even then, not forever. (I’m sure I’ll come back to this at some point, so I’m not entirely sure this is right).
The point is – Elon seems, at least on the surface, to favor some kind of speech protection that hasn’t been seen in most main-stream environments. There have been many controversies around certain Reddit communities, and various levels of action have been taken – that’s what created 4chan. And when 4chan became too restrictive (was that really possible?) – people left for 8chan. Basically what I’m getting at is that most people don’t want totally unfiltered and vile content being available 24/7 on their favorite sites – they want moderation! I mean Jesus Christ – the Republican party is currently throwing a fit in Florida because Disney is “grooming” their children – what do you think will happen if there are no restrictions on Twitter?
So I get it – I think there is a real concern around Elon not fully-understanding what he’s getting into. But I do believe that he has a pragmatic side that will see the folly in his free speech absolutism and do his best to maintain and improve the site.
Wait a second, Duncan – free speech?
Good point – we really should address this. As people keep tossing this around without a care in the world let’s maybe take a second, refresh our knowledge of the First Amendment to the Constitution and it’s purpose.
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.
Yeah – Congress. When Americans talk about Freedom of Speech – it’s about being protected from the government, not private institutions. I could get fired from my job for saying ****, or *****, but I’m not getting thrown in jail! When people moan and yell about being canceled it’s not anything related to free speech – it’s about those in the community accepting or not accepting what you have to say. You might be tossed out of the country club – but you’re not headed to the big house. So I implore you all to keep that in mind, not only during cancel culture nonsense, but also when pro-Elon figures bring up his plan – the first amendment does not apply to Twitter, and never will.
And why are people happy?
Well – generally people are happy if they’re Elon-absolutists and think he can do no wrong (sorry to bust your bubble, he can) or if they think that new ownership will drastically change the apparent bias of the site. People like Ben Shapiro like to think that the favorability of liberal ideas on the site are the result of some nefarious scheme – when in reality it’s based on the user base! Twitter users are 60% Dem/Lean Dem vs. 35% Rep/Lean Rep per Pew Research Center.
No amount of overhaul is going to shift the divide that much – it’s just math! If you had a site with a 60% Star Wars fans and 35% Bridgerton fans, guess which posts would garner the most support? I generally think conservatives who think that Elon ownership will make it a more Conservative-friendly place will be sorely disappointed, and Elon agrees with me.
Okay – so Duncan, you’re a shareholder, you have Twitter Blue, and you spend a ton of time on the site, what do you think?
Thanks for asking – I honestly don’t really care. I’ll make a little money if the deal goes through, I’ll still probably make money if it doesn’t in the long term. I like Twitter a lot – but there’s always room for improvement, and I think fresh ideas are rarely a bad thing. I think Elon has some awesome ideas around verifying Twitter Blue users, trying to remove bots, and encrypting DMs — and whether or not the purchase actually goes through I’d like to see all these changes enacted by the current leadership. Importantly, I don’t think Elon’s going to turn Twitter into a lawless land of hate speech and pornography – I think he has too much sense throw away $44 billion. So don’t let Ben Shapiro frame you as some “if Trump wins I’m moving to Canada”-type. Take a deep breathe, realize a billionaire owns Facebook, Instagram, the Washington Post, Fox News, Snapchat, and even Twitter up until a few months ago, so this isn’t a radical shift in the money/power dynamic. It’s just Technoking Elon having fun – and the more you get angry – the happier he gets.
For those who came from Twitter — I’d rather have Elon running it. I’ve already been shut down and moderated by my good friend Matt Kasper enough, ready for someone new to do it.
Cheers, and don’t forget to follow @mrdunkamp.
[1] One interesting aside from the whole Elon discussion is his status as Tesla “founder”. He’s not. Wikipedia weirdly buries the topic from the side bar to the meat of the article (I think to avoid controversy from his fanboys), but I fully understand this and still am comfortable with the label.
[2] If you’re looking for a video to sum up the outrage, check this one out. Even with that — I don’t think that Polly really makes any points I didn’t address.
