What’s Next for Twitter and Elon Musk – From Closing the Deal to Opening the ‘Free Speech’ Floodgates

With Elon Musk striking a $44 billion deal to acquire Twitter and take it private, the social media platform faces an uncertain future.

With Musk as owner, there are some big unknowns, ranging from its content moderation policies to the potential reinstatement of previously banned users — including former President Donald Trump and Rep. Marjorie Taylor Greene — to its ability to increase revenue, from advertising, subscriptions or other products.

“Where Twitter goes from here following Musk’s acquisition is honestly anybody’s guess,” Aron Solomon, chief legal analyst for Esquire Digital, said. “What is certain is that Musk and any other people who helped facilitate his bid are banking on the fact that Elon Musk at the helm of Twitter is going to … allow Twitter to grow and scale as it has yet to prove that it can do.”

Musk himself has been vague on his next steps to “unlock” the potential of Twitter — even admitting two weeks ago that “this is not a sort of way to make money” and “I don’t care about the economics at all.” Instead, the “Tesla Technoking” has spent much of his energy criticizing the platform for its content moderation and championing his role as an advocate for unfettered free speech.

Still, investors have responded favorably to Musk’s maneuvers. Twitter shares closed at $51.70 on Monday — still shy of Musk’s $54.20 offer price — after increasing around 5.6% from Friday. This Twitter purchase would mark the largest deal to take a company private in at least two decades, according to data from Dealogic.

Let’s break down our top burning questions now that the billionaire gains control of Twitter.

How will Musk’s acquisition affect content moderation on social media?

Twitter may start to see its content moderation policies come into even greater focus as Musk gets more involved. The billionaire has been a major critic of Twitter’s policies, especially in this last month, blasting the platform for not defending free speech and, in his words, “undermining democracy.”

“I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy,” he wrote in announcing his hostile takeover bid after acquiring a 9.2% stake in the company. “I now realize the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company. … Twitter has extraordinary potential. I will unlock it.”

But many are now concerned about what Musk’s ownership of Twitter could mean for the platform, especially the potential for hate speech and misinformation to run rampant. Allowing such content on the site could prompt pushback from both users and the advertisers who are crucial to its revenues, experts say.

“Without vigorous content moderation, the platform Musk seeks to own would be swamped by spam, porn, anti-vaccination misinformation, QAnon conspiracies, and fraudulent campaigns to undermine the midterms and 2024 presidential election,” Paul Barrett, deputy director of the NYU Stern Center for Business and Human Rights, told TheWrap. “That’s not a business that most social media users or advertisers would want to associate with.”

Does Musk really need to worry about advertisers?

While Musk is wealthy enough to buy Twitter outright, more than half the $46.5 billion funding for his offer comes from debt commitment letters from Morgan Stanley and other financial firms. According to Twitter on Monday, Musk has secured $25.5 billion of fully committed debt and margin loan financing and is providing approximately $21.0 billion equity commitment from his own substantial personal wealth.

That leaves Musk on the hook to repay that debt — with interest — and therefore motivated to maintain and even grow the company’s revenues in the short and medium term. More than 88% of Twitter’s revenue still comes from advertising, which added up to $4.5 billion out of a total revenue of some $5 billion in 2021.

So unless Musk can ramp up other revenue streams, like subscription fees from the new Twitter Blue service, he will need to maintain the support of advertisers.

Will Musk’s Twitter reinstate Trump and other banned users?

It’s unclear what content moderation policies specifically Musk finds objectionable in Twitter’s current incarnation — and how he would do things differently. But many expect that a Musk-run Twitter would restore currently banned and suspended accounts.

Of these, the most prominent is that of Trump, who received an indefinite suspension from Twitter in January 2021 after the U.S. Capitol riots. The company said it decided on his ban following the attack by Trump supporters to prevent further “incitement of violence.” Trump had gained more than 80 million followers on the platform.

“It is imperative that Twitter’s Board of Directors acknowledge that with Musk in charge, Donald Trump, who had been banned from the platform for repeated violations of terms of service and incitement to violence, including right-wing extremists and white supremacists, will likely have their accounts restored,” Bridget Todd, communications director of the advocacy organization UltraViolet, said in a statement. “Republicans in Congress are already cheering Musk’s bid for Twitter — and looking forward to this exact moment.”

However, Trump told Fox News on Monday that he wouldn’t return to Twitter even if his account was reinstated. “I want everybody to come over to Truth — conservatives, liberals, whatever,” Trump said. “The response on Truth is much better than being on Twitter.”

How will Musk’s takeover affect alternative platforms?

From Parler to Gettr to MeWe to Trump’s fledgling Truth Social, many Twitter and Facebook alternatives have launched in recent years targeting conservative social media users. But that growth could be stopped dead in its tracks if the old-school social media platform becomes a more open forum for fringe theories across the political spectrum.

Indeed, conservative leaders who have long criticized Twitter and Facebook for what they call “censorship” of extreme viewpoints have been supportive of Musk’s stance on free speech and his interest in taking over Twitter.

However, as Mark Weinstein, founder of conservative social platform MeWe, pointed out, this could also mean increased competition for his site and others targeting conservatives. “Musk is against the practice of paid propaganda filling up user newsfeeds, a position I heartily agree with — and one that is not permitted on MeWe,” Weinstein said. “Musk’s ownership is likely to have a negative impact on the growth of newer Twitter alternatives such as Parler, Gettr, and Truth Social who espouse similar values.”

Is this a done deal? Could anyone else swoop in with an offer?

While the deal is expected to close in 2022, this isn’t yet a done deal. Twitter’s board still needs to give final approval through a shareholder vote, and the deal will need to receive regulatory approvals. Typically, the approval process is perfunctory when a company reaches an agreement with another company for a combination, but a takeover by nature is less predictable.

While Musk’s purchase price represents a 38% premium to Twitter’s closing stock price on April 1, it’s well below the $73.34 high that the stock hit last summer. A media giant or another tech player could also swoop in with an offer — Salesforce, Disney and Alphabet have all expressed interest in Twitter in the past.

Any stumbles could leave Twitter open to other billionaire suitors. A quick scan of “The Richest in 2022” list on Forbes would indicate that Jeff Bezos, Bill Gates or Warren Buffet all have estimated net worths above $100 billion — and could make a play for Twitter. Musk currently holds the top spot at $219 billion. Google founders Larry Page and Sergey Brin also have net worths of more than $100 billion.

Peter Csathy, chairman of CREATV Media, said it’s possible Musk’s deal has enticed other buyers to make their own offers for Twitter. “Twitter is undervalued in the marketplace,” he said. “Elon has made a play. It’s time for others now to put up, or shut up.”

Could regulators block the deal?

Musk’s acquisition must get the approval of the U.S. Justice Department and the Federal Trade Commission — but former officials from both agencies told the New York Times that the deal is unlikely to get blocked since it doesn’t present the same antitrust issues as another media giant taking over the platform.

Still, Musk is no stranger to regulatory pressure. He has been especially critical of the Securities and Exchange Commission, which in 2018 forced him to step down as chairman an pay $40 million in fines over a tweet that the commission deemed ran afoul of insider trading rules. (Musk, who retained the CEO title, had tweeted that he had lined up funding to take the electric car manufacturer private.)

As part of his SEC settlement, Musk also accepted social media restrictions that included an advance review of all tweets about Tesla — something that the billionaire has railed against ever since. On Monday, he issued a series of tweets bashing the SEC as “shameless puppets of Wall St shortseller sharks.”

What does Elon really want? A profitable company or a personal megaphone?

Honestly, who wouldn’t want both those things? Musk said in a TED interview two weeks ago that he hopes to “open source the algorithm” to try and improve trust in the platform. In addition to his distaste for Twitter’s content moderation policies, Musk believes the platform fails at upholding its “free speech principles.” He has also mentioned wanting to address Twitter’s scam bots and crypto scams, as well as an edit feature — which Twitter confirmed is already coming.

But Solomon of Esquire Digital warns that any of these immediate changes won’t happen overnight — and Musk isn’t likely to do anything that will damage or jeopardize the value of his acquisition.

“While many people were and are concerned that Twitter may become a completely open playing field with no filters on speech, the ‘forum for free speech’ angle may have simply been a distraction for Musk to acquire control of what he sees to be a company that can dramatically increase in value,” Solomon said. “Twitter will absolutely change and continue to evolve as a platform, but anyone who is expecting these changes to happen overnight is going to be sorely disappointed.”