Chaos or control?

Elon Musk, the billionaire founder of Tesla and SpaceX among other companies, offered this morning to buy Twitter for $43 billion and turn it into a private company. For those who are just catching up on this rapidly moving story, here’s what’s happened so far. Musk disclosed last week he had purchased stock in Twitter amounting to, at the time, fully 9.2 percent of the value of publicly available shares. When investors acquire a stake in a company of 5 percent or more, regulators require them to file a disclosure form. Musk filed the type of form that indicates he did not intend to take control of the company, but he also failed to answer a question about his plans for the company by writing “not applicable” on the form, which left the question of his intentions unclear.

Unsurprisingly, Twitter’s stock price went up substantially in response to that news, which is typical in cases where a major player buys a large stake in a company. Hostile takeovers are generally good for stock prices. But it was not at all clear that Musk was planning one. Interestingly, as Twitter shares surged, Tesla shares dropped, suggesting that perhaps investors were concerned that the battle over Twitter might distract Musk from his day job—not an unreasonable concern given his history of getting sidetracked by social media battles.

Current Twitter CEO Parag Agrawal soon afterward announced that Musk would join the company’s board. Such a move would limit Musk’s ability to take over Twitter since the company caps the number of shares board members can hold.

Then, suddenly, Agrawal announced (on Twitter) that Musk would not join the board after all. Agrawal also took a few not-too-subtle shots at Musk, suggesting that the board would have had to vet Musk with a background check and insist he act in the best interest of shareholders if he became a board member. Musk is one of the most visible people on earth, and there’s nothing that a standard-issue board background check is likely to unearth that an army of hostile press have not. And as to the duty to act in the best interest of shareholders, it’s hard to square Agrawal’s comment with Twitter’s decision to join other large companies in signing the Business Roundtable’s statement endorsing “stakeholder” as opposed to shareholder capitalism. It’s also ironic to chide Musk over potentially not putting shareholders first. Musk’s skin in the game as a shareholder is roughly 140 times the size of Agrawal’s. Moreover, Agrawal is significantly underinvested in the company he leads.

Then, this morning, Musk threw another curveball. Instead of being an outside provocateur or engaging in a traditional hostile takeover where he would buy a majority of the stock, he is instead offering to pay a hefty premium to buy all of Twitter and take it private, which means completely taking it off the market so that the public could no longer purchase its stock. He also implied a threat to sell his shares if Twitter’s board does not accept the offer, which would likely add volatility to the stock’s price.

Volatility has been a constant with Musk in general and in this public battle. He has repeatedly tweeted and deleted a series of provocative comments, including a call to turn Twitter headquarters into a homeless shelter. This is on-brand for Musk, who has a long history of public mischief-making. He seems unable to bridle his tongue and is at times a case study in unstable leadership.

But sometimes providence uses chaos to undermine systems of control. Twitter has metamorphosed from what was claimed to be a free-speech platform to a self-appointed ministry of truth for the nostrums of the ruling class. Debates about COVID risk, vaccine effectiveness, the effectiveness of various treatments, and whether boys can force us to call them girls or vice versa are suppressed through outright bans or death by pseudo-fact-check, and always with a thumb on the scale pulling to the left.

Musk’s personal views seem to lean libertarian, techno-utopian, with respect but not commitment to Christianity. He is not the leader we’re looking for. But that is not to say that his moves against Twitter will not prove useful. These days, any serious challenge to the leftist direction of social media empires might be good news. Time will tell.