Following the news that Elon Musk has offered to buy Twitter for a total of $43.4 billion, analysts from GlobalData’s Thematic Research team offer their view;

Daniel Clarke, Thematic Analyst at GlobalData, comments:

“The offer to buy Twitter outright reflects Elon Musk’s distaste for orthodox board bureaucracy and what he sees as unnecessary regulatory hurdles.

“Board membership requires certain behavioral standards. Becoming a board member might not have been the most effective way for Musk to achieve his goals.

“Twitter is a platform that has barely changed its user interface for over a decade. It is struggling to add new users, but its existing users are the most loyal across all social media platforms.

“The potential for growth and commercialization of the platform is huge. Perhaps most importantly, Twitter is the social media platform where political debate, business announcements, and popular culture intersect. It is the best place for a tech billionaire like Musk to curate his image.”

Robert Penman, Thematic Analyst at GlobalData, comments:

“It is no surprise that it’s hard to see a link between Twitter, Tesla, and Space X. Musk is known to sleep on Tesla’s factory floor and pour over engineering concepts day and night, while Twitter is his outlet, where he also spends a lot of his time. From statements about Tesla’s share price to memes and ad hominem attacks on a variety of targets, Musk views Twitter as a platform for all manner of conversation.

“Whether Twitter’s loyal users and shareholders share Musk’s vision is yet to be seen, and this will likely lead to months of wrangling.”

Rachel Foster-Jones, Thematic Analyst at GlobalData, comments on the regulatory aspect of the deal:

“Regulators worldwide will be wincing at the potential free speech implications should Musk’s takeover bid succeed.

“Musk is clearly serious about promoting free speech for the benefit of democracy, but the line between free speech and hate speech or misinformation is becoming increasingly muddied, and attempts to change Twitter could easily lead to these issues spiraling out of control.

“This follows a trend of billionaires looking to control digital media, taking in Donald Trump and Jeff Bezos. A major concern is that the veil of free speech may be used to create the perfect breeding ground for the spread of misinformation and online abuse.”