Getting a large publicly traded company to integrate its management in 24 hours. This is the tour de force that entrepreneur Elon Musk put on Twitter at the beginning of the week. Monday, April 4, maker of Tesla and Space-X announced to everyone’s surprise that it had acquired 9.2% of the social network’s capitaland became the first shareholder.
The same evening (Tuesday 5 at 2:30 am French time), the billionaire and virulent critic of Twitter launched his first offensive : A poll to find out if users want to be able to edit their tweets afterwards. While the initiative may seem harmless on the surface, Musk hits a major sticking point here, as Twitter management vehemently opposed the idea of editing tweets after publication for fear of abuse, despite the popularity of the question. With this investigation, Musk therefore publicly questioned a decision that lies at the heart of the company’s moderation strategy.
Early in the morning on Tuesday, April 5, the self-proclaimed defender of freedom of expression, also accused of possible price manipulation by the financial market agent for comments on Twitter, obtained from Parag Agrawal, the current CEO of the social network, a seat on the board of management of the company.
I am delighted to share that we have an appointment @Elon Musk to our board! Through discussions with Elon over the past few weeks, it became clear to us that he would be of great value to our board.
— Parag Agrawal (@paraga) Apr 5, 2022
[Je suis ravi de partager que nous nommons Elon Musk au sein du conseil d’administration ! A travers les conversations avec Elon ces dernières semaines, il était devenu clair qu’il apporterait une grande valeur à notre Conseil d’administration]
Twitter shares were up 6% before the opening bell, after soaring more than 27% on Monday.
“Big” Changes Are Coming, Elon Musk Promises
On Monday morning, the billionaire with a chaotic relationship with Twitter had ensured that his spectacular entry into the capital was “passive” and not accompanied by any intention of influencing the company’s strategy in any way. A promise that is hard to believe given the stated desire to “fix” Twitter, as was noted at the time The gallery.
24 hours later, he’s sitting here on the board and his intentions are now crystal clear, contrary to what he told the SEC:
Looking forward to working with Parag & Twitter board to make significant improvements to Twitter in the coming months!
— Elon Musk (@elonmusk) Apr 5, 2022
[J’ai hâte de travailler avec Parag & le conseil d’administration de Twitter pour amener des améliorations majeures à Twitter dans les prochains mois!]
The question now is: where does it end? According to the document submitted by the company to the SEC . has been sent [Securities and Exchange Commission, le gendarme de la Bourse] and revealed by the site The edgeElon Musk will be promoted to class 2 director, i.e. to the general meeting of shareholders in 2024, making him one of 11 directors of the company. During his term of office and up to 90 days later, he may not hold more than 14.9% of the company’s capital, which allows him to exceed the 10% threshold and thus become an activist shareholder.
Elon Musk, a “free speech” activist against “censorship”
Twitter posted annual revenue in 2021 up 37% to $5.08 billion, for net income of $221 million. Costs also increased 35% in the last quarter as a result of recruiting, marketing and infrastructure investments. The platform announced 217 million daily users at the end of the year, an increase of 13% over a year and targets 315 million by the end of 2023… a 45% increase in users per year.
But if Twitter is an extremely influential medium around the world, the blue bird numbers pale in comparison to Mark Zuckerberg’s social networking empire, specifically Facebook, which claims 2.9 billion monthly users. The company has been criticized for its difficulties in significantly increasing its use – it has been stagnating at around 300 million for five years – and thus in monetizing its wealth of personal data.
Twitter has also been criticized for its moderation from all sides, with regulators accusing it of being lax in failing to prevent the spread of fake news, hate speech and harassment. At the other end of the spectrum, personalities like Donald Trump or Elon Musk accuse him of moderating too much and violating free speech by censoring comments deemed problematic.
In short, Twitter was the ideal target for an activist shareholder who quickly surfed the discontent of investors and some of the users. And now that he’s on the board, it’s hard to imagine Elon Musk, boss of two successful companies and the richest man in the world at the end of 2021, sitting quietly at the back of the room and remaining a second player. plan. The stock market is already beginning to appreciate: Twitter shares gained 6% before the opening bell, after closing more than 27% on Monday.