The $44 Billion Question: Who Will Run Twitter?
Elon Musk’s $44 billion deal to acquire Twitter is creating a stir, from European regulators concerned about less moderation on the platform to employees of the social media giant voicing concerns about their compensation and culture. The real question to consider, though, is who will run Twitter after the transaction closes.
It appears all but certain that Twitter’s current CEO Parag Agrawal will be terminated from the position he assumed just five months ago. In a New York Times account of a Twitter employee meeting, Agrawal reportedly told employees, “Once the deal closes, we don’t know what direction this company will go in.” These do not sound like the words of a CEO who is negotiating with a new owner about staying on in his current position.
That raises the possibility that Musk could take on the CEO role himself; but if he does, that would be a serious leadership mistake. Musk, who tops Forbes’ Real-Time Billionaires List, may have more than 83 million followers on Twitter, but that’s hardly the same as running a mammoth social media platform and unlocking its economic potential.
He needs to put together a senior leadership team that possesses skills that are significantly different from his, in terms of industry expertise and even temperament. It’s one of the biggest challenges for leaders, being self-reflective enough to not only recognize their own strengths and weaknesses, but also to purposefully hire close associates who are strong where they are weak.
Without question, Musk is a visionary, but his boldness frequently crosses the line into brashness, as his frequent taunts of the Securities and Exchange Commission (SEC) attest.
In buying Twitter, Musk has proclaimed himself a defender of “free speech” with Twitter functioning as “the digital town square where matters vital to the future of humanity are debated.” But saying that is one thing, and enacting policies to carry it out are another.
Regulators will be watching closely to see what happens on a Musk-owned Twitter platform. A top European Union official and digital regulator has already warned that the social media platform would have to obey new stricter European standards for content moderation or else risk the consequences of fines or a potential ban.
On the technology side, Musk has promised to enhance Twitter with “new features,” open-source algorithms, and authentication of human users. He appears to be backing away from Twitter’s advertising model but will still need to generate revenues from some source. Musk may be putting up $21 billion in cash, but he secured financing for the rest of the deal, and those financiers will be looking for a return on their money. Twitter, which went public in 2013, only posted a profit in 2018 and 2019, with losses every other year.
Musk has not given many particulars about his plans, other than to say he sees “tremendous potential” for Twitter. “I look forward to working with the company and the community of users to unlock it,” he said in a statement.
But he clearly has his hands full as CEO of his other enterprises: electric vehicle company Tesla and SpaceX, which just this week concluded its first all-private astronaut mission to the International Space Station. Investors in Tesla, which once enjoyed a $1 trillion market cap (it lost $125 billion in value on Tuesday), will want their CEO focused on that company, which just recently reported record profit margins and earnings for the first quarter of 2022.
As manufacturing companies, Tesla and SpaceX are far more synergistic and a closer fit for Musk, who prides himself on being an engineer at heart. He was recently inducted into the National Academy of Engineering for his SpaceX designs.
Twitter is clearly a different sort of company, with a “work remotely forever” option for employees, even as offices reopened. Agrawal tweeted in March that employees should work “where you feel the most productive and creative.”
In contrast, in the early months of the pandemic, the New York Times reported, Musk reopened a Tesla production plant.
Without question, Musk has a vision for Twitter, but that vision should not include giving himself the CEO title. For Musk to truly unlock Twitter’s potential, he will need to build a strong leadership team capable of challenging him.