Just days after Netflix reported a shrinking subscriber base, and CNN announced that they were cancelling the launch of CNN+, the world appeared shaken by the impending takeover of another ailing giant, Twitter.
Twitter’s American user base has failed to grow for years even amidst the isolation induced by the pandemic. Their overseas growth has been modest, but is now largely seen as unsustainable as digital protectionism becomes increasingly common across the world.
Twitter has now been banned or restricted in some of its largest markets, including China and Russia. This will certainly create headaches for Elon Musk, the CEO of another overvalued company, Tesla (current PE 136.37), who has suggested that his aim is to use the corporate social media firm as a platform for free speech.
Twitter’s third largest market, and one on which it relies for platform growth, is currently India, a country in which the firm has had to delete accounts critical of the government to avoid being shut down under national security laws, creating a tension between one its largest revenue streams and Musk’s claim of commitment to free speech.
It is unlikely that India is making empty threats, as they have not shied away from banning other incredibly popular apps in the country, such as TikTok, also under public safety concerns.
Musk, if his bid is successful, must then decide whether the company will continue to be a profit-seeking venture focused on growth, or an ideological vessel and personal broadcasting service.
So far, in talks with Twitter, there is no indication that Musk is willing to put forward any of his own cash, which suggests that rather than gaining full autonomy over Twitter’s management, Musk is simply exchanging the existing board for the new oversight of Morgan Stanley and other creditors, whose loans will be backed by the highly overvalued Tesla stock.
It remains doubtful whether the financial industry would share Musk’s indication that he might be willing to sacrifice revenue for a so-called commitment to free speech, especially on a platform whose main goal is still profit-based, putting a question mark over whether Musk will be able to enact any of the foundational changes he has suggested.