Mayank Chhaya-
Elon Musk’s offer to buy Twitter outright puts its CEO Parag Agrawal in a peculiarly challenging position.
Barely five months after he took over as Twitter’s boss in November last year, he is staring at the rampaging 800-pound gorilla of the business world in Musk. As Twitter CEO, Agrawal is obliged to seriously consider the offer of about $43 billion in the interests of the shareholders.
Despite his last name the Tesla chief is not coy about raising a stink on regular basis and the prospect of him owning Twitter as a private company are not altogether edifying. Although Agrawal has interacted with Musk with apparent enthusiasm, it is anybody’s guess what their relationship might become if the latter owns it wholly. After a mixture of some initial flirtation and browbeating Musk was offered a seat on the Twitter board following the revelation that he owned nine percent of its stock, making him the largest shareholder.
In an official statement on his Twitter handle, Agrawal said on April 10, “The Board and I had many discussions about Elon joining the board, and with Elon directly. We were excited to collaborate and clear about the risks. We also believed that having Elon as a fiduciary of the company where he, like all board members, had to act in the best interests of the company and all our shareholders was the best path forward.”
In the same statement, however, Agrawal also seemed to talk at cross purposes. He said that Musk was expected to become a board member from April 9, that very morning he announced his decision not to. In the same breath he said, “I believe this is for the best.”
So which one is it? Is it the best with Musk on the board or not on the board?
Musk perhaps quickly realized that becoming a board member meant putting on fetters since as a fiduciary he could not undermine it’s the company’s ways. Staying outside and mounting a very public takeover bid was clearly a better option given his often capricious ways.
If he does indeed manage to acquire Twitter, something he himself is quite unsure about, it would be interesting to watch what happens to Agrawal. If the two have a cordial relationship, Agrawal could well continue. However, operating within a private setup, where there are no comparable shareholder and regulatory dos and don’ts could be challenging for the 37-year-old.
For Musk, on the face of it, acquiring Twitter seemed like a personal project. He was quoted as saying today, “Having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization. I don’t care about the economics at all.”
He may say that he does not care about the “economics at all” but $43 billion is not a measly sum, even for the world’s richest man with a net worth of $270 billion. It is not as if he has $43 billion stashed away in an attic somewhere. He will have to leverage a lot of his own holdings in Tesla to be able to raise that amount of cash.
A factor that he may or may not have considered that a platform like Twitter is uniquely vulnerable to governmental and societal whims across the world, especially because being a free speech absolutist he wants to make that its global approach. Quite quickly Musk would discover how hard it is for Twitter to operate in the manner he wants outside America and perhaps a few European countries. Add to that the woes and potential legal troubles an unrestricted free speech platform could expose itself to.
A no-holds-barred Twitter is not the same as a no-holds-barred Musk. The idea that he can turn his private toy into a platform offering limitless expressive freedoms sounds highly attractive on paper but to actually make it so globally is next to impossible. Such bluster has a way of running into all kinds of political and cultural walls worldwide.
At a deeper level, it could be a matter of serious worry if a single individual, namely just Musk, or even a group of a handful of individuals, all versions of him in varying degrees, are allowed to control a tool that has become so powerful and yet not profitable. Despite its 217 million daily active users and its revenue of $1.56 billion in the final three months of 2021, which was a 22 percent increase from a year earlier, it had earned $176 million in income, a 34 percent decline from a year earlier.
