Tesla and SpaceX CEO Elon Musk this week made headlines by becoming Twitter’s largest shareholder and joining its board of directors. Conservatives hope Musk will use significant influence to restore free expression on Twitter and possibly reinstate former President Donald Trump’s account.
Lifting the ban on Trump’s Twitter page will be “a litmus test for change” in the social media platform, according to Bill Flaig, who runs an investment fund that invests in companies supporting conservative values.
“I’d say the two companies that are the most disliked among conservatives are social media companies, Facebook and Twitter,” he told The Epoch Times. “Twitter is kind of a lightning rod in the conservative community.”
On April 4, regulatory filings revealed that Musk had taken a 9.2 percent stake in the social media company, paying roughly $2.89 billion. Musk, who’s a frequent Twitter user, has recently been critical of the social media platform and its rules.
In recent weeks, Musk accused Twitter of “failing to adhere to free speech principles” and announced that he was giving “serious thought” to building a new social media platform.
Musk’s investment in Twitter is “a very positive development,” according to Flaig.
As a major stakeholder, Musk can now directly change or influence the management team, Flaig noted. In addition, Musk’s public prominence means that he may have more influence on the management than a typical large shareholder.
Flaig’s fund, American Conservative Values ETF (NYSE: ACVF), which has $35 million in assets under management, focuses on large-capitalization U.S. stocks. The fund states that it’s currently boycotting 27 companies, as they push for the “woke” agenda—and Twitter is among the boycotted companies.
“I wouldn’t jump in and buy it just yet, but we are totally reevaluating our stance on Twitter,” Flaig said. “The culture of the company still has to change.”
In response to a question regarding Trump’s ban, a Twitter spokesperson told The Mercury News on April 5 that “our policy decisions are not determined by the board or shareholders, and we have no plans to reverse any policy decisions.”
Last month, Musk polled his 80 million Twitter followers, asking if the platform adhered to free speech principles. He received 2 million votes, with more than 70 percent of those who responded voting no.
Free speech is essential to a functioning democracy.
Do you believe Twitter rigorously adheres to this principle?
— Elon Musk (@elonmusk) March 25, 2022
Musk took the stake in Twitter not solely for enhancing freedom of speech, according to Flaig. Most activist investors come into a company believing that there’s a value they can unlock by making changes to business strategy or management, he noted.
“So ultimately, I think that’s his angle too,” he said. “I think he’s planning on making some money as well.”
Twitter shares surged by nearly 30 percent this week after the billionaire became the top shareholder.
The Vanguard Group, Morgan Stanley, BlackRock, and State Street are among the largest shareholders of Twitter after Musk.
Michael Arone, State Street’s chief investment officer, told Fox Business that he hoped the new shareholder would help Twitter keep moving in the right direction, both in terms of free speech and profitability.
“Musk could seek to influence the openness of the platform and how it controls content or push to invest in the subscription model more aggressively,” Ali Mogharabi, senior equity analyst at Morningstar, wrote in a recent note.
Musk has claimed that the platform hinders free expression, particularly since Parag Agrawal replaced Jack Dorsey as CEO.
“Musk has already indicated that he did not agree with the appointment of Agrawal and that he desires some changes. This creates a bit more uncertainty about how Agrawal and the firm may respond to the firm’s new largest shareholder,” Mogharabi wrote.
“At the same time, such news will continue to gather attention to, and possibly increase, users and their engagement on the platform, attracting more ad dollars.”