Twitter purchase can add to Elon Musk’s India troubles

The world’s richest man is in the news again. This time due to his offer to purchase Twitter — the microblogging site used by more than 200 million people across the world.

Days after purchasing nearly a 10% stake in Twitter — and refusing to be part of the board — Elon Musk has proposed an all-cash offer to buy Twitter.

Some experts believe that the CEO of Tesla and SpaceX – who has 80 million Twitter followers– refused a seat on Twitter board because he would’ve had to limit his stake to just 14.9%. Obviously he had bigger plans. His proposal to purchase Twitter has shocked many.

His proposal values Twitter at $43 billion, a 38% premium to the share price on April 1, the last trading day before his 9.1% stake platform was disclosed.

The 50-year-old said he has “sufficient assets” to pull of the acquisition, adding that he has a Plan B if Twitter’s board of directors rejects his offer. He’s worth $251 billion, according to Bloomberg’s calculations. But most of that wealth is tied to his stake in Tesla Inc. So to get the $43 dollars, Musk may have to sell the Tesla shares, or he may opt for borrowing against the shares.

Meanwhile, according to a Reuters report, Twitter CEO Parag Agrawal has told his employees that the company was not being “held hostage” by news of Elon Musk’s offer. Agrawal reassured his employees saying that “we as employees control what happens”.

A self-described ‘free speech absolutist’, Musk had slammed Twitter when it had censored Donald Trump two days after the attack on the Capitol.

Musk had tweeted that technology companies of the US shouldn’t be acting “as the de facto arbiter of free speech”.

For long, he had been advocating for “uncontrolled” internet.

The billionaire has been outspoken about the changes he’d like to see at the social media company. He wants Twitter to open-source its algorithms and minimise interventions and policing content.

He said it was “quite dangerous” to have “tweets be mysteriously promoted and demoted” and have a “black-box algorithm”. In March, he ran a poll asking users whether the site adhered to the principle of free speech.

Although odds are stacked against him. But what if Musk succeeds in buying Twitter? How will it shape his and that of microblogging site’s ties with India?

Musk has had multiple run-ins with the Indian government in the past.

Two years after he first announced that Tesla would come to India, this January he said the company was “still working through a lot of challenges with the government.”

Musk has made no secret through Twitter that India’s import duties of up to 100% on electric vehicles are among the highest in the world.

Tesla had asked for a sharp reduction in import duties as a condition for entry. But India was not too impressed. Government officials said Musk cannot demand duty reduction without committing to manufacturing in India.

His problems with the government extend to SpaceX — which runs Starlink. The satellite broadband service provider was pulled up by the Department of Telecommunications (DoT) recently for offering Indian customers pre-booking opportunities.

DoT put out an advisory warning subscribers that Starlink did not have a licence to operate, violating telecom rules.

And, at the start of this year, SpaceX had to announce that it was returning to over 5,000 customers the $99 each that they had paid for pre-booking.

While on the other hand, the regulatory environment for social media companies has toughened in India, which last year introduced new digital rules.

India is Twitter’s third-largest market behind the US and Japan with more than 20 million users.

Twitter was engaged in a stand-off with the Indian government last year when it refused to fully comply with an order to take down accounts and posts accused of spreading misinformation about farmers’ protests.

It argued that some requests were not in line with Indian law. In the following months, it had blocked several tweets and accounts at the government’s demand, including tweets that were critical of the government’s handling of the pandemic.

Last May, Twitter expressed concern over freedom of expression in India after Delhi police visited its offices for adding ‘manipulated media’ label to a BJP leader’s tweet.

In February, Rajeev Chandrasekhar, the minister of state for electronics and IT, called for global coordination to make big tech players accountable to communities.

“Often, this attempt of regulation or even to create some sort of sanity, rules and accountability is spun as a challenge to free speech,” Rajeev Chandrasekhar, the minister of state for electronics and IT.

Chandrasekhar said the government’s attempt to create some sort of sanity, rules and accountability is being spun as a challenge to free speech.

How Musk pursues his vision of getting Twitter to adhere to his free speech principles while satisfying the local regulations and the demands of the government will be an interesting balancing act to watch. Business Standard