Elon Musk’s offer to buy Twitter is not driven by possible monetary benefits but his desire to fix things at the microblogging platform, feels Manish Maheshwari, former head of Twitter India and now founder and CEO of edtech firm Invact Metaversity.
“Elon is not driven purely by the monetary outcome, he is driven by his other needs of proving a point and fixing a few things,” Maheshwari told ET in an exclusive interview. “It’s not driven by the business sense to a great extent. The way Elon is thinking is more like, ‘I think it should be run differently’, and he’s probably making a public statement by saying that he wants to walk the talk.”
He said Twitter’s influence is disproportionate to the size of the business or the user base because it is the place where news breaks and narratives are shaped, making it for a media play that is significant and powerful.
Twitter has been making headlines since Musk on Thursday made a $43-billion cash takeover bid for Twitter at $54.20 per share. The offer is at 38% premium to the closing price of Twitter’s stock on April 1, the last trading day before the Tesla CEO’s 9.2% investment in the company was announced.
Maheshwari finds Musk’s bid “attractive”, legitimate and credible. He said Twitter is a company that has not been able to deliver good returns to its shareholders, and there is a possibility for someone like Musk to acquire, turn it around, and unlock value.
Twitter cofounder Jack Dorsey had on Sunday said the board has “consistently been the dysfunction of the company” and even agreed with venture capitalist Gary Tan who posted that a badly run board “can literally make a billion dollars in value disappear”.
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Twitter has adopted a limited duration shareholder rights plan, or ‘poison pill’, to resist Musk’s offer.
Maheshwari said the outcome will depend more on whether Musk is serious about acquiring the company as he can find his way around the poison pill. “The poison pill only makes it difficult, but not impossible,” he said. “If he wants to pursue it, he can clearly go ahead. If he is just trying to pressurise, then it’s a different issue.”
Regardless of whether the deal goes through, Maheshwari said it was a wakeup call for the company to investigate why the stock is not performing or growing, and fix whatever is wrong.
He said financial investors will most likely want the deal to go through as they have not seen much appreciation in their share prices and would want a turnaround – something that could come through if Musk takes over the reins.
Maheshwari did foresee some resistance from non-financial investors, though, as he said they were more mission-driven rather than financial outcome-driven. In fact, last week, Saudi prince Alwaleed bin Talal, who owns a stake in the social media platform, had publicly rejected Musk’s offer.
“Twitter is a very interesting media play for many people,” Maheshwari said. “They hold it even though it is not a good business idea because they feel like it’s a piece of power. And when you are talking about power, then you don’t worry about the financial outcome at times.”
Asked why Google or Meta haven’t considered swooping in to rescue Twitter, Maheshwari pointed out that Twitter always finds itself in the spotlight given the nature of the platform. Further, he said, Google already has YouTube while Facebook has Instagram, both of which are doing fairly well, but Twitter is less monetisable and requires a lot more work to manage.
“From a regulatory perspective, it’s too much work to manage for not enough pay off,” he said. “So, it doesn’t make good business sense for them to acquire Twitter and also jeopardise their existing assets like YouTube or Instagram. Facebook already has its own share of troubles; why would they want one more? Google has always stayed away from controversy, and this would be no different.”
