Elon Musk Considers Building New Social Media Platform

Tesla and SpaceX CEO Elon Musk has criticised his favoured communication platform Twitter, and said he is giving “serious thought” to building a rival platform.

Musk hit out at Twitter for “failing to adhere to free speech principles” and asked whether a new platform was needed.

Then on Monday Musk admitted he has Covid for a second time, just days after he returned from Germany where he opened up Tesla’s new Giga Berlin factory in Grünheide.

Social platform

Musk has previously caught Covid in November 2020, but in a tweet confirmed he has it again, but has “almost no symptoms.

It comes after Tesla was recently forced to temporarily suspend production for several days at its Shanghai factory, as China tightened restrictions in response to a worrying Covid-19 outbreak.

But it was Musk’s tweet last Friday about his frustration with Twitter that gathered the most attention.

“Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy,” he wrote on Twitter. “What should be done?”

He followed up asking whether a new platform is needed.

In a reply to one user, Musk said he is giving “serious thought” to building a new social media platform. However he did not share any specifics on what the hypothetical social media platform would look like or how it would work.

Regulatory oversight

It should be remembered that Musk is deeply unhappy that his tweets are still subject to scrutiny by regulators and lawyers.

Earlier this month Musk asked a US federal judge to terminate his 2018 agreement with the US securities regulator, that requires some of his tweets to be vetted by a lawyer.

It comes after Musk and Tesla publicly accused the SEC last month of ‘unrelenting harassment’ in a New York courtroom.

The SEC responded to US District Judge Alison Nathan in Manhattan and argued that Tesla was not following proper procedures.

Shortly after that, it emerged that the SEC was investigating Elon Musk and his brother Kimbal Musk over recent stock sales.

That investigation began last year after Kimbal Musk sold Tesla shares valued at $108 million, one day before Elon Musk had polled Twitter users, asking whether he should offload 10 percent of his stake in Tesla.

The users voted yes and Musk began selling tranches of shares.

Kimbal Musk did not know about the Twitter poll ahead of it, Elon Musk said.

SEC settlement

Judge Alison Nathan presides over a 2018 SEC settlement between Tesla and Elon Musk.

The need for the agreement dates back to August 2018, when Elon Musk unexpectedly tweeted that he was considering taking Tesla private and that he had secured funding to do so.

Tesla stock then went into a period of unusual volatility and the privatisation deal never materialised.

As a result, Musk was almost immediately hit with two lawsuits which alleged that Musk’s tweets were fraudulent effort to attack short sellers.

A further lawsuit was added last November, when investment bank JPMorgan Chase also sued Tesla for $162 million, alleging Elon Musk’s privatisation tweet in 2018 cost it millions of dollars.

Those privatisation tweets brought Musk to the attention of the SEC, which accused Musk of securities fraud, and alleged he made a series of “false and misleading” tweets about potentially taking Tesla private.

Indeed, the SEC sought to ban Elon Musk from acting as an officer or director of a publicly traded company.

But in the end, the US financial regulator forced Musk to step down as chairman of Tesla and pay $20m in penalties.

In addition, Tesla itself also had to pay a $20 million penalty.

Musk however was allowed to retain the CEO role.

As part of that deal, Musk had to submit any public statements (including tweets) about the company’s finances to vetting by its legal counsel before publishing them.

Last June the SEC also notified Tesla that two of Musk’s tweets from 2019 and 2020 – one about Tesla’s solar roof production volumes and one about the company’s stock price – hadn’t received the required pre-approval.