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Thursday, May 26, 2022

Musk turned Twitter into a manipulation machine

Latest NewsMusk turned Twitter into a manipulation machine

The chaos surrounding Elon Musk’s Twitter buyout, and how Musk uses Twitter to manipulate the market’s response to it, is a demonstration of how the platform has become an impressive manipulation tool with worrisome implications for both policy and financial market confidence. After announcing his intention to buy the company in April, Musk took a sharp turn back this Friday: He announced that his Twitter purchase was on hold until it could be verified how many of its users were actually bots. The official explanation is that Musk doesn’t believe these non-human users account for just under 5%, as Twitter claims, and this could affect the valuation of the company, whose revenue depends on the number of effective users. Musk stressed that he is determined to complete the purchase operation, but many doubt his true intentions.

According to other analysts, Musk’s intention is to get out of a too risky and complicated operation, especially in the face of the financial collapse of cryptocurrencies (of which he is a big supporter) and tech companies seen in recent days. Both Tesla shares (which he would have had to use in a buy operation) and Twitter shares have plummeted in recent days, and Musk may have been looking for a way out of an acquisition whose economic case seemed dubious from the start. without paying a billion dollar fine. Or he could simply use one of the typical financial speculation tactics: create a panic and lower the price of the company’s shares, then buy them at a better price, and then raise them to sell again. Be that as it may, we are dealing with very unscrupulous behavior, which Musk has already accustomed us to during his entrepreneurial career.

Musk’s purchase of Twitter, accompanied by a steady stream of tweets from his account, ostensibly to sway public opinion and markets in his favor, took many analysts by surprise. With 92 million followers, Musk’s account already ranks among the top 10 accounts on the platform, to which he has repeatedly expressed his affection and has shown intent to acquire it in the past. But many believed that this was just another of his funny memes. Things have changed rapidly in recent months. Musk announced his intention to create the “new Twitter” in April and shortly thereafter bought a 9.2% stake in the company, giving him the right to sit on its board of directors. But Musk turned down the job only to raise the stakes radically: On April 14, he offered to buy the entire company for $43 billion.

It would be the largest purchase ever made by one person. Musk was going to use his own capital, as well as a $13 billion debt to Morgan Stanley that would require him to pay $1 billion a year in interest, and a $12 billion loan secured by Tesla stock. Even before the financial crisis of recent days, this was considered a very dangerous strategy that could doom the company to bankruptcy.

In addition, the operation had many political complications. Tesla develops most of its production in China, a country with which Twitter has had friction. In addition, he launched a crusade in favor of freedom of expression and against alleged censorship of the Internet. Musk, in typical libertarian tone, confirmed that he wants to “liberate Twitter” and make it a “fun space” again without censorship. and without restrictions. “Free speech is the foundation of a well-functioning democracy, and Twitter is the town square where issues vital to the future of humanity are discussed,” Musk said, adding that in order for democracy to work, you need to be able to say: any stupidity, you want.”

In particular, Musk promised to unblock Donald Trump’s account, which was vetoed after the January 6, 2021 storming of Capitol Hill, following a campaign in which the 45th President of the United States denied the results of the election and repeatedly used foul language. contrary to the rules that govern Twitter. Many fear that under the Mask, Twitter could become a toxic space in which racism and aggressiveness are tolerated. Behind the oligarch’s promise of neutrality is a clear right-wing libertarian political agenda; On numerous occasions, the Tesla boss has demonstrated his antagonism with both the left and the Biden administration and its proposals for new taxes.

Regardless of how this operation ends, we are faced with an episode of political and financial manipulation that demonstrates how an unprecedented concentration of wealth in one person is harmful to either democracy or capitalism itself. Musk has already come under investigation by the SEC, the agency that regulates the US financial markets, for tweets accusing him of artificially inflating the value of Tesla shares and meme cryptocurrencies like dogecoin to make huge profits. Some believe that what has been observed in recent days is an example of the same dynamics. After the recent crash of cryptocurrencies, this behavior has become even more reprehensible. What is clear is that social networks, far from the space of freedom, as Musk argues, have become a mechanism of influence without control, which allows those who already have enormous economic power to mobilize public opinion and financial markets to become richer.

Paul Gerbaudo Sociologist and political theorist at King’s College London and the Scuola Normale Superiore, and author of the Agenda Pública.

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