Elon Musk Took Twitter From Troubled to Tanking

Billionaire Elon Musk cackled as he carried a sink into Twitter's lobby. 

"Entering Twitter HQ – let that sink in!," Musk tweeted alongside a video of his entrance on Oct. 26.

The bizarre moment marked the start of his chaotic leadership of the influential social media company. Musk offered to buy Twitter in April, then tried to back out of the deal, only to reverse course again after the company sued. By the time he strolled in with a white porcelain meme in hand, he had spent months fighting not to own it. But once he was boss, he wasted no time making his mark.

With massive layoffs, users flocking to alternatives and advertisers pulling back spending on Twitter, Musk acquired an embattled platform and turned it into a collapsing circus for all of its 238 million users – and the rest of the world – to watch.

"Twitter's future is especially uncertain – and it doesn't look good," said Mike Proulx, research director at Forrester.

Musk flip-flops

The first public whisper that Musk was mulling a Twitter shakeup came as little more than a hint: He polled his followers with a tweet, asking if they thought that Twitter "rigorously adheres" to free speech principles. "The consequences of this poll will be important," Musk tweeted. "Please vote carefully," 

After 70% of 2 million voters answered "No," Musk in March purchased a roughly 9% stake in Twitter, making him its single largest shareholder.

In the following weeks, Musk was elusive about what he wanted to do about Twitter. At first, he seemed poised to join Twitter's board of directors. Then he backed away. Finally, he made an offer that would change the course of the company irrevocably: He wanted to buy it for $44 billion.

But even after Twitter accepted his proposal, Musk reversed yet again. He wanted to abandon the deal, he said, claiming the social network misled him about how many fake and spam accounts it had. Twitter sued to enforce the deal.

"Musk apparently believes that he … is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away," Twitter's lawsuit against Musk in July said.

The legal battle ended in October when Musk, facing a deadline to go head to head with Twitter in what could be a messy public trial, changed his mind yet again and agreed to buy Twitter after all. Musk's purchase of Twitter was the fifth-largest tech deal of the last two decades, according to an analysis by S&P Global Market Intelligence. 

While the back-and-forth drama between Musk and Twitter stole the spotlight, the social network's other problems kept growing.

A whistleblower emerges

After years of data breaches, a Twitter insider – and famed security expert – accused the company of flagrantly failing to protect users' safety. 

Peiter "Mudge" Zatko, Twitter's former security chief, revealed in late August that he had filed a whistleblower complaint against the company. Zatko, who was fired from Twitter, alleged he uncovered "extreme, egregious deficiencies" in Twitter's handling of user privacy, security and content moderation.

Twitter pushed back against the allegations, saying in a statement that the complaint was "riddled with inconsistencies and inaccuracies and lacks important context."

The complaint, though, caught the attention of US lawmakers and regulators. Zatko testified before the US Senate Judiciary Committee in September, three weeks after his complaint became public.

"When an influential media platform can be compromised by teenagers, thieves and spies and the company repeatedly creates security problems on their own, this is a big deal for all of us," he told lawmakers. 

Zatko alleged that Twitter violated an 11-year-old settlement with the Federal Trade Commission by falsely claiming it had a comprehensive security program. If the accusation is true, Twitter could face fines from the agency, all while it struggles with an advertising pullback, a difficult ramp-up of subscriptions and heavy payments due on Twitter's mountain of debt. 

Twitter's woes are far from over 

When Musk completed his purchase of Twitter, it closed a chapter of distracting drama for the company – and opened a whirlwind of upheavals and disruptions.  

Musk cut roughly 50% of Twitter's workforce, or about 3,700 workers, in November – layoffs that spurred lawsuits alleging workers' rights violations. More Twitter executives and workers quit, with so many defecting that Twitter users feared the site would crash. As Musk cut costs and jobs, he also made (and remade) rapid changes to the service, like rolling out a new system for verifying accounts and reinstating controversial accounts like that of former US President Donald Trump, who Twitter had booted from the platform for violating the site's rules against glorifying violence. He kept changing his mind about Twitter's rules on sharing private information and links to rival social media sites, temporarily suspending journalists and other accounts. 

Musk's erratic changes quickly caused brands to pull back spending on the platform as some worried about their posts showing up alongside hateful posts. In late November, left-leaning nonprofit Media Matters for America reported that Musk had driven away half of Twitter's top 100 advertisers, which accounted for more than $750 million in ad dollars in 2022. For his part, Musk wanted to reduce Twitter's reliance on ads anyway, hoping to amp up subscription revenue by offering users a coveted blue check mark and other features if they sign up for a Twitter Blue membership. 

But Twitter fumbled the initial rollout of its revamped Blue subscription, and major brands ended up paying the price. One verified fake account posed as Eli Lilly and falsely tweeted that the pharmaceuticals company was giving away insulin for free, prompting the company's stock to fall. Another pretended to be video game company Nintendo, sharing posts with rude hand gestures. Twitter relaunched the subscription service in December with more safeguards to prevent imposter accounts, but paying for more features is still a tough sell to users. 

Analysts say Twitter's subscription efforts won't make up for its losses in advertising dollars. Fewer than 20% of Twitter users in the US, UK and France are willing to pay for Twitter Blue, according to a survey from Forrester.

In December, Musk rolled out yet another poll, asking if he should step down as Twitter's CEO. Of the 17.5 million Twitter users who responded, 57.5% said he should. Shortly after the poll closed, Musk said he would vacate the post, as soon as he might "find someone foolish enough to take the job."

"Without a consistent and growing cashflow and [with] a CEO who causes chaos, Twitter will continue to devolve," Forrester's Proulx said. But if Twitter can find a chief who can win the trust of stakeholders with a "clear, unifying vision," he said, it could survive.

Whether he takes a backseat to a different chief executive or not, Musk will remain the owner of Twitter for the foreseeable future -- even if he sinks it.