Elon Musk will fund his acquisition of Twitter with money from countries that restrict free speech. Saudi Prince Alwaleed bin Talal is eager to be with his new friend


When Elon Musk announced his offer to buy Twitter last month, he said he wanted to make the social network a beacon for free speech. But while Musk is working to consolidate funding for the $ 44 billion deal, the billionaire also plans to receive funding for the deal from two countries with a history of restricting free speech: Saudi Arabia and Qatar.

Last week, Musk sold $ 8.4 billion of his own Tesla stock, causing the stock price to temporarily drop 12%. Today, it has raised an additional $ 7.1 billion from 18 investors, from venture capital firms and asset managers to private funds and a cryptocurrency exchange, according to an SEC filing on Thursday. .

The Tesla boss has worked hard to get outside supporters to join his bold bid for the social media platform, even as traditional private equity firms involved in profitable buyouts have largely lost the deal. .

The operation will transform Musk, who is a self-proclaimed free speech absolutist and has nearly 91 million followers on the site, into a social media baron who controls how millions of people get information.

An SEC filing on Thursday revealed new financiers for Musk’s buyout plan, which includes Saudi Prince Alwaleed bin Talal and Qatar’s sovereign wealth fund. Both countries impose harsh censorship to curb dissent: a Qatari law states that spreading false or malicious news could result in a five-year prison sentence, while in Saudi Arabia critics of the government were arrested and even killed. Saudi Arabia is ranked 166that from 180 in the World Press Freedom Index, while Qatar is at 119at ranking, according to the Reporters Without Borders index.

The new methodology defines freedom of the press as the effective possibility for journalists, as individuals and as groups, to select, produce and disseminate news and information in the public interest, free from political interference. , economic, legal and social, and without threat. to their physical and mental safety. To capture the complexity of press freedom, five new indicators are now used to compile the Index: political context, legal framework, economic context, socio-cultural context and security.

The countries with the highest press freedom indexes are:

  1. Norway;
  2. Denmark;
  3. Sweden;
  4. Estonia;
  5. Finland;
  6. Ireland;
  7. Portugal;
  8. Costa Rica;
  9. Lithuania;
  10. Liechtenstein.

Note that France covers 26at area, an improvement over last year when it occupied 34at area even though its index did not undergo a significant variation (77.40/100 in 2021 versus 78.53/100 in 2022). Reporters Without Borders states that the legislative and regulatory framework promotes freedom of the press and editorial freedom, but the mechanisms for combating conflicts of interest in the media are inadequate, inadequate and outdated. In response to police brutality, a new set of regulations for police protests was adopted, which largely took into account the rights of journalists. But journalists have also been the target of numerous physical attacks from demonstrators.

Prince Alwaleed wrote on Twitter that Kingdom Holding Company, an investment company he controls, will renew its current $ 1.9 billion investment on Twitter to join Musk on this exciting journey: My “new” friend Elon Musk is great to connect with you. I believe you will be a great leader for Twitter to advance and maximize its huge potential. Kingdom KHC and I look forward to deploying our ~ $ 1.9 billion on the “new” Twitter and joining you on this exciting journey.

The move came after Alwaleed rejected Musk’s plan in a tweet last month, saying the Tesla CEO’s offer did not come close to the company’s intrinsic value. KHC has been a stakeholder of Twitter since 2011: I don’t believe Elon Musk’s bid ($ 54.20) is close to Twitter’s true value because of its growth prospects. both one of Twitter’s largest and longest -serving shareholders, Kingdom KHC, and I decline this offer.

Musk responded by asking about the size of the Kingdom stake on Twitter, as well as the country’s views on freedom of the press: Interesting. I only have two questions, if possible. How much on Twitter owns the Kingdom, directly and indirectly? What is the Kingdom’s view of freedom of expression?

Saudi Arabia has often been criticized for censorship and human rights abuses, including the 2018 murder of Washington Post journalist Jamal Khashoggi. The Saudi government has denied any involvement from its leaders.

The prince did not publicly respond to Musk’s questions, but in his tweet Thursday, he called Musk “a” new “friend and a” great leader. “

Qatar’s sovereign wealth fund will also contribute $ 375 million to Musk’s takeover deal. In 2020, the country enacted a law threatening to imprison anyone who disseminates, publishes or republishes false or biased gossip, statements or news, or inflammatory propaganda, inside or outside the country, with intent to harm the national interest, disturb public opinion or harm the social system or the public system of the state.

Last year, the government arrested seven people for using social media to spread fake news during its election. The country also has a history of suppression of free speech. In 2012, a Qatari poet was sentenced to 15 years in prison after reciting a poem critical of the government.

When the 2020 law was enacted, Amnesty International called it another blow to freedom of expression in the country and said it was a “grave violation of international human rights law”. Musk said he wants to ensure free speech on Twitter as long as it doesn’t violate local laws. Qatar’s financial involvement therefore puts it in a potentially precarious position.

The funding and the conflicts of interest it has created underscore the difficulty Musk will face as he tries to implement his vision for Twitter. Musk said last month that he sees the platform as a digital public square. My strong intuitive sense is very important for the future of civilization to have a public platform of the highest trust and broad companionship for the future of civilization, ”he said.

Since in Saudi Arabia, a social media post denouncing the Quran could get you five years in prison and 1,000 lashes, we’re sure the internet loudmouth and his friend Prince Alwaleed will have a lot of trouble. things to say on their exciting journey to create this new Twitter. , says one analyst.

Other investors include Larry Ellison’s Lawrence J. Ellison Revocable Trust, the private equity fund of Oracle co-founder, which pledged $ 1 billion, Sequoia Capital, which invested $ 800 million, and Vy Capital, which invested 700 million dollars. Musk said he received letters of commitment from every investor on May 4th.

Musk’s bid to buy Twitter is not a done deal, as it must be approved by shareholders and regulators. However, he is already thinking of ways to change the structure and management of the company, as well as adding features and new ways to monetize tweets.

Among other things, Musk plans to part ways with CEO Parag Agrawal, who is expected to stay until the deal is finalized. It appears, however, that the auto billionaire doesn’t have a perfect replacement in mind, so he will serve as interim CEO until the right person arrives, CNBC reports. “Once the deal is done, we don’t know which direction the platform will go,” Agrawal told staff at a company meeting last month.

Musk had previously said he wanted to launch a cryptocurrency payment system and make Twitter less reliant on advertising to make money. He also suggested that organizations and governments pay to use the site, noting that Twitter will always be free for casual users.

Making governments and corporations pay to tweet is simpler, but still tricky to implement. For example, how big should a business be before you charge it to use Twitter? You probably don’t want The Coca-Cola Company to pay the same price as a local brewery, for example. But if not, how do you tell the difference? Do you assess fees based on the number of subscribers (which may not reflect the size of a business), or revenue (which will require verification), or something else? And how much do you charge, even in a tiered system? Ask too much and you’ll push people away, which will reduce the impact of the network that provides great value to social media in the first place. Too small and it won’t make any difference to your income. Etc. These are not unresolved questions, but they are also not that simple.

Elon Musk also wants the platform’s direct messaging service to support end-to-end encryption and less strict content moderation.

Sources: SEC, Reporters Without Borders, Prince Alwaleed (1, 2)

And you?

What do you think was the idea of ​​receiving money from entities from countries that restrict free speech when Elon Musk established himself as a champion of free speech and wanted to make it a mantra on Twitter?

See also:

The Twitter board unanimously accepted the deal to buy Elon Musk for $ 44bn, the deal is expected to close in 2022
Elon Musk suggests charging governments and businesses small fees to use Twitter, saying Twitter is always free for casual users
Elon Musk sold approximately $ 8.5 billion worth of Tesla shares in the days after the Twitter acquisition deal, he wants to hire a new CEO for Twitter

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