The legal debacle surrounding Elon Musk’s purchase of Twitter in April 2022 was to foreshadow events to come. Twitter has seen extensive news coverage for all the wrong reasons since Musk completed the purchase of the platform and ascended to ‘Chief Twit’ in October 2022. These developments are increasingly degrading users’ confidence on Twitter and may ultimately threaten Musk’s reputation.
Twitter’s woes are of Musk’s own making
The social media company is currently facing a class action lawsuit by former Twitter employees after 50% of its workforce was laid off, including the entire senior leadership. Swathes of the remaining 50% have resigned following an email from Musk demanding that workers agree to an “extremely hardcore” working environment involving “long hours at high intensity” or leave the company. The subsequent and unsurprising mass exodus has left Twitter severely understaffed. Concerns are growing that Twitter is now vulnerable to maintenance issues and cybersecurity threats.
Simultaneously, Twitter’s new ‘Blue Tick’ policy has resulted in a series of blunders that have affected celebrities and multinational corporations, including Nintendo and Eli Lilly: the latter resulting in a 4.37% drop in Eli Lilly’s share price. Up to a million users have reportedly migrated to other platforms such as Mastodon and Hive Social. Confidence in Twitter is falling fast, with #RIPTwitter trending throughout November 2022.
Unclear policies will negatively affect user confidence
At the center of Twitter’s newfound controversies is Musk’s stance on freedom of speech, believing everyone should be allowed on the platform with as minimal moderation as possible. However, Musk is yet to clarify the details of Twitter’s new moderation policies going forward, and what the exact limits of freedom of speech will be.
In November 2022, Twitter reinstated accounts belonging to controversial figures, including Ye (Kanye West), Andrew Tate, and Donald Trump. Ye was previously banned for antisemitic posts, while Tate was banned for sharing misogynistic and sexist views. Trump was issued a permanent ban under former Twitter management for inciting violence related to the January 6 Insurrection at the US Capitol, when rioters attempted to overturn the 2020 election result. However, when asked if Alex Jones’ account would be reactivated, Musk responded that “he had no mercy” for anyone who “would use the deaths of children for gain, politics, or fame.”
This comes after Musk previously said no decisions would be made until a moderation board had been established at Twitter. This is yet to happen. These actions clearly demonstrate the subjective nature of account reactivation and moderation. Fundamentally, there are no processes, and no one left to challenge Musk’s decision-making. Company-wide policy is being determined by the whims of a single man who has demonstrated his unpredictable nature, hence why confidence in Musk (and by extension Twitter) is so low.
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Twitter’s new management has caught the eye of regulators
Thierry Breton, European Commissioner for the Internal Market tweeted “In Europe, the bird will fly by our rules.” This tweet regarding Musk’s purchase of the platform clearly referenced the Digital Services Act which was passed into EU law in October 2022. As governments around the world crack down on misinformation, regulators will be closely watching Musk’s new approach to Twitter.
Without detailed policies on content moderation, confidence in Twitter will continue to decline, leaving a vacuum ripe for another social media platform to steal market share. Meanwhile, the vast number of ex-Twitter employees will be quickly snapped up by competitors. In the wake of these controversies, Musk faces reputational risk.
According to GlobalData’s Social Media Analytics, Musk’s net sentiment score dropped from 0.29 on 27 October 2022, when he took control of Twitter, down to 0.07 on 23 November 2022 evidencing a decline in public opinion. As Twitter’s financial, regulatory, and user acquisition issues come to a head, the possibility of bankruptcy or resale looms. Musk would be reluctant to write off his $44 billion purchase so early and may instead attempt to recoup some of his costs by selling the company or handing the reigns over to someone else to save himself.