Does a Musk Acquisition of Twitter Make a Trump Presidency More Likely?
Despite my predictions, it seems like no.
The last few weeks, the news has been dominated by the possibility that Elon Musk would acquire Twitter. The rough timeline is this.
April 1: SEC filing reveals that Musk owns over 9% of Twitter’s shares
April 6: Musk offered a seat on Twitter’s Board of Directors, in a deal that prevents him from owning more than 14.9% of Twitter’s shares
April 9: Musk accepts offer and is appointed to Twitter’s Board
April 10: Musk reverses decision and decides not to join Twitter’s Board
April 13: Musk offers $43 billion to buy 100% of Twitter shares, valuing each share at $54.20
April 14: Twitter adopts “poison pill” takeover defense, diluting Musk’s shares if he were to acquire more than 15% of Twitter shares
April 21: SEC filing reveals that Musk may make a tender offer to buy Twitter, in effort to circumvent Board’s takeover defense
April 25: News breaks that Musk might acquire Twitter by the end of the day
UPDATE: Twitter has been acquired by Musk, for $44 billion on April 25. The next two italicized paragraphs lay out why I thought this was likely. You can skip them.
It seems likely that the deal will go through. This can be seen in financial markets' responses to today’s news. For example, we can look at trading on Polymarket, a popular online prediction market, where people can bet on the likelihood of events happening. Here is their odds that Twitter will be acquired by Musk on or before June 1. The market indicates that the odds of this are over 97% as of 11:58 am PT.
Similarly, Twitter shares prices are currently hovering around $51.63 per share, very close to Musk’s offer price of $54.20, after they had been hovering in the mid forties just days before. This is consistent with the behavior we would expect from the market if an acquisition for $54.20 per share were imminent.
So, it seems likely that Twitter will soon come under Musk’s ownership. Aside from what this means for Twitter, I am nervous that this would make it more likely that Donald Trump is elected President in 2024. Here’s why.
Elon Musk, along with several other tech and internet tycoons, like Marc Andreessen, are free speech absolutists, with regard to speech on the internet. This means that they believe there should be essentially no moderation or censorship of content posted online1 (e.g. to Twitter, Reddit, etc). And that, instead, people are intelligent enough to sort out the good from the bad themselves.
I’ll admit that I used to be in this camp too. I think it is a defensible position. But also has been proven wrong.
There is some rigorous academic research on this topic. But, for me, it boils down to this. While Trump was President, he tweeted all kinds of unhinged things. As much as I found a lot of his posts infuriating and despair-inducing, I also thought it was important that the American public be exposed to the thoughts of their President, however insane. My mind was changed once Trump was banned from Twitter and Facebook, shortly following the Capitol Hill riots. As I see it, the world got better after he was banned. News cycles were less dominated by whatever controversy he stirred up on a given day. There was more room to focus on consequential world events. And at least half the country could breath easier—knowing that they didn’t have to wake up to news of whatever semi-horrifying discourse their President had inflamed. Obviously, if I were a supporter of Trump, this likely wouldn’t be my view. But, while I don’t have the space to make the argument here, it seems to me that, regardless of your political view, the world overall was a better place with Trump not on Twitter or Facebook. Here, is a great thread by Yishan Wong, the CEO of Reddit from 2012 to 2014, explaining his view on how free speech absolutism has become a less tenable position since the early days of the internet.
Why is any of that relevant here? Given that Musk is a free speech absolutist, it seems likely he will reinstate Trump’s account, if he acquires the company. Evidence of this appears, for one, in Elon’s own stated views.
Another source of evidence comes, again, from the markets. Polymarket has a market on whether Trump will tweet again before July 1, which obviously can only happen if his account is reinstated. The odds of that happening have jumped from around 1% on April 22 to as high as 45% at various points throughout April 25, the day that Musk’s acquisition of Twitter became very likely.
If Trump gets back his Twitter account, it seems to me, that this would increase his odds of winning the Presidency in 2024. Regaining access to his account would increase his ability to dominate the news cycle, once again making himself central to the country’s political discourse—and thus a more visible and influent political figure, more likely to be elected.
Yet, this is not what the markets seem to be saying. We can look again to Polymarket, as well as PredictIt (a real-money political betting market), and Metaculus (a popular online prediction market, where the rewards are reputational).
Metaculus’s market on whether Trump will win the 2024 election has been inching upward since September 1, 2021. Worryingly to me, it currently stands at 26%. However, that market does not seem to have budged much on today’s news.
Likewise, PredictIt has a market on whether Trump will be nominated as the Republican Party’s 2024 Presidential candidate—which would need to happen for Trump to become President in 2024 (unless he were to run as a third-party candidate, an unlikely possibility). Here too, the odds have hardly changed. In the last seven days, the odds that he wins the nomination have been hovering between 38% and 39%. Today, market prices have not moved out of this range.
Thus, my initial hunch seems to be wrong. The markets don’t seem to believe Trump’s access to Twitter will have much of an impact on his likelihood of becoming President in 2024.
Why? Perhaps the events in the causal chain that need to play out for Trump to become President again are more important than the possible influence of his tweeting. For one, Trump needs to choose to run for President in 2024. I simply have no sense of how likely this is. Another possible impediment to a Trump Presidency is that his myriad legal woes stymie his run—another event I have not been following closely enough to gauge the odds for.
Of course, it also possible that the markets are wrong. We will see if the markets move if Trump’s account does get reinstated. I hope it doesn’t.
This is my own contention. However, I think it’s likely that they would agree with this characterization.