Just a day after it was revealed that Elon Musk had bought US$3-billion of Twitter’s shares, making him its single largest shareholder, the company’s CEO took to Twitter to announce how the world’s richest man had decided to exercise his leverage.
“I’m excited to share that we’re appointing @elonmusk to our board!” tweeted CEO Parag Agrawal on Tuesday. “Through conversations with Elon in recent weeks, it became clear to us that he would bring great value to our board.”
Wait a minute. What’s this “conversations with Elon in recent weeks” stuff? Musk disclosed on Monday that his investment in Twitter was “passive”, meaning he had only stopped by to invest in the company and not to do any of the things “active” stakeholders do — such as taking a board seat or offering significant corporate guidance that other shareholders have to vote on. Now Musk has a board seat and Agrawal, who succeeded Jack Dorsey only last November, has let everyone know that the two men had been chatting for weeks.
That all sounds suspiciously active, despite Musk clothing his manoeuvre in passivity. Add it to the list of issues for the US Securities and Exchange Commission to sort out, along with the other potential conflicts raised by Musk’s investment in Twitter. Musk, who fashions himself as a defender of free speech but has a history of stifling his critics, might pose a danger to how Twitter approaches free speech. Now that he’s officially on the board, it’s worth weighing some of the possible pluses and minuses of his presence.
Agrawal himself synopsised the virtues of having Musk on board: “He’s both a passionate believer and intense critic of the service, which is exactly what we need on @Twitter, and in the boardroom, to make us stronger in the long-term. Welcome Elon!”
Musk, the steward of Tesla and founder of SpaceX, is a bona fide visionary and innovator. He’ll bring that mojo to Twitter, a company born from innovation but short on vision. Twitter, founded in 2006, has never been particularly well managed, and Dorsey’s departure from the company was long overdue. Agrawal, who is 37, is a career technologist with no previous experience running a company. Musk could offer insight about how to cultivate and empower talent at Twitter.
Musk could also help Twitter stretch. The platform is a favourite haunt for journalists, celebrities, political leaders and influencers, but not a lot of regular folks use it, and it has never outgrown its early role as a forum for debate, analysis, promotion and self-expression. There’s a case to be made that it doesn’t need to — but even so, Musk could lay out alternative missions and possible partnerships for Twitter that would allow it to become more popular and influential.
Twitter’s functionality has always been kludgy. Search, editing and sharing tools, for example, have improved at a painfully slow pace. That hasn’t served the company’s users or investors well. Twitter still hasn’t fully figured out how to manage advertising and marketing on the platform, either. Musk could bring fresh thinking to these problems.
Perhaps Musk’s most valuable contribution would be to change Twitter’s metabolism and culture — forcing it to move faster and take bolder risks. That could be exciting for everyone working there and would be fun to watch.
Now for the downsides.
For one, it’s still not clear how serious Musk is about bringing authentic institutional change to Twitter. He could just be trying to rattle Twitter’s cage and air his grievances that the company inhibits free speech — despite the fact that he has been able to wander across the platform, unconstrained, as a world-class troll.
The SEC had to order Tesla and Musk to appoint someone at the electric car company as a Twitter babysitter, empowered to monitor Musk’s irresponsible, questionable and market-moving tweets about Tesla’s operations. Musk revelled in thumbing his nose at the SEC, the SEC filed contempt charges against him, and it was all so unseemly and frequent that it led my colleague Liam Denning to ask why Musk didn’t just stay off Twitter.
It’s a good question, even as it’s also clear that but Musk is on Twitter because he likes the spotlight. Whatever his motivation for publicly airing inside information — some of it inaccurate or misleading — his tweets help erode the expectation that executives of public companies should be judicious and law-abiding.
Now Musk is a shareholder and director of a public company (Twitter) with a platform he has used in the past to promote his own company (Tesla) and his financial holdings (cryptocurrencies). Will he be live-tweeting Twitter’s board meetings or sharing non-public information about its finances? That’s likely. Will Agrawal be Musk’s sock puppet instead of his protégé? Also likely. In that context, Agrawal’s tweets about Musk’s arrival smack of Stockholm syndrome.
And how does Musk want to shape Twitter’s overall voice? He’s used the platform to wage vendettas against his critics and enemies, and his rants about speech being curtailed on Twitter seem to be more informed by his libertarian leanings than reality. Despite a stated preference for a hands-off approach to free speech, does he actually see himself as Twitter’s gatekeeper?
No one familiar with Musk’s track record expected him to be a passive presence at Twitter. It only took a day to reveal how active he intends to be. It will take a little longer to find out whether his involvement in Twitter is for the better — or for the worse. — (c) 2022 Bloomberg LP