announcer: from the heart of where innovation, power, and money collide, in silicon valley and beyond, this is bloomberg technology with emily chang. emily: i'm emily chang in san francisco. this is “bloomberg technology.” coming up, the plot thickens. twitter adds elon musk to its board just a day after musk disclosed he is now twitter's largest shareholder. turns out former ceo jack dorsey

and the new ceo are in on it. what does it mean for twitter, free speech and the world's most public town square? we will uncover the story from all angles through the hour. plus, what is it like to work on the board with elon musk? we will be joined by former tesla boardmember steve wesley who will share the good, the bad, and the unexpected with having one of the world's most controversial innovators in the room. and he has fashioned himself as a free speech defender, but will musk be good or bad for free speech? could it open the door for former president trump to be unbanned from the platform? first, twitter shares up another 2% after a 27% spike monday. ed ludlow is here to break it all down. we can debate the long-term impact but no question it has been good for investors in the last 48 hours. ed: especially considering that stocks were lower and a lot of hawkish comments from the fed

weighed down shares. it has had its biggest two-day gain, above 30%. here's the reality of the situation. there's a staggering volume of twitter shares that exchanged hands over the last two days. that chart says it all. look at the right-hand side of the screen. that's after more than 250 million shares changed hands on monday. investors on the retail side, look at trading platforms like fidelity. a lot of demand for twitter shares as investors trying to work out is this a good thing? direction on the stock suggests so. there's a little irony in all of this. before the big surgery got on

monday, around 28%, another 2% on tuesday, twitter was down. it is now very firmly in positive territory and you can see we are outperforming tesla on a year-to-date basis, which is higher. and it is interesting, the elon musk effect you have with the stocks and how he uses twitter as a mechanism to communicate with investors. i'm sure we will be paying closer attention to him now. emily: yet another plot twist -- the twitter ceo announcing elon musk has joined twitter's board and jack dorsey is set to leave the board in may and says he's happy about it. twitter will cap his stock ownership. he is at 9.2% which will give him plenty of influence. that's discuss it with david kirkpatrick and max chafkin. elon musk has talked about his tesla master plan.

let's his master plan for twitter and how does it fit into twitter's master plan? max: elon musk likes twitter. he's an enthusiastic user and you can see why twitter would want him on the board. for musk, the master plan is about tesla. let happening here, i'm sure elon has big ideas for twitter around free speech but the game behind this is protecting tesla's most important marketing channel. ed mentioned it is elon musk's way of communicating with investors and raising an enormous, almost unlimited capital for tesla. it's also a great way he has been able to market himself in the cars. having a seat on twitter's board is going to help him in the long-term. yesterday, twitter's value went up bunch. tesla went up a lot less as a percentage but musk made a lot

more money on tesla. his money is still in tesla and we should be thinking about it in those terms. emily: looking at these tweets today, i'm excited to share we are appointing elon to our board. it became clear to us in conversations in recent weeks that he would bring great value to our board. jack dorsey re-tweeting this and what you can imagine is a coordinated effort, saying i'm really happy elon is joining the board. they both lead with their hearts and will be an incredible team. what do you make of their wholehearted embrace of this? david: we know jack dorsey and elon musk are good friends. they sort of think alike in a lot of ways, though certainly elon musk is a much more impetuous person than jack dorsey. but having the richest man in the world, one whose every move is attended to with such

incredible attention has got to be good for any company. certainly, it has been good for tesla and if he really cares about twitter, which he must, though this is something we are just learning, that he cares about it organizationally as opposed to just being one of its greatest power users, he is going to certainly bring tremendous value to the deliberations about strategy, product design, etc. emily: what kind of freedom do you feel elon musk feels he is lacking on twitter? he seems to have roamed there quite freely. max: there's some risk to his twitter presence. he is someone continually pushing the boundaries and twitter has been aggressive -- not aggressive, but has made some moves in terms of trying to rein in what it terms misinformation, hate speech and that sort of thing. he's also in the middle of this messy fight with the sec over tweets he sent years ago.

tesla has this twitter sitter and right around the same time he was acquiring these twitter stakes, there is a filing where musk is complaining about his being muzzled, as he sought, by the sec. this is a way for him to ensure that he stays put. emily: it will be interesting how this impacts the rest of the social media landscape. there was quite a moment, elon musk in response to that question got a lot of feedback, including from andrew bosworth, who is the cto of facebook, saying they solve the question of editing on facebook that you just leave a log. he responded, facebook gives me the willies. what do you think having elon and twitter's quarter or at least on the board means for facebook? david: i would reiterate having him in your corner is bad for

your rivals. period. i would say many of us find things that have happened on facebook give us the willies in recent years, so i can understand why he would say that. i do think twitter, on balance, has been a more responsible platform than facebook. but the confusing thing is his repeated statements, several times saying he wants free speech to be more allowed on twitter, he thinks it's maybe too restrictive. it doesn't really make sense since he's never been restricted by twitter. he's been restricted by the sec and i think he's had second thoughts about some of his own tweets, but it's bad for facebook. i do i think maybe an edit function is a good idea for twitter. i personally have trouble using twitter. i just find it awkward and off-putting in many ways. i'm an outlier in the tech journalism community in that way.

but i can understand. twitter needs product improvement. even jack dorsey says that all the time and doesn't make any bones about it. emily: and yet, katie stanton, long time former twitter veteran says this is an expensive way to add an edit button if that's what you want. max, as you point out, elon musk likes making jokes but he's rarely doing it just to joke. i mean, his stake is now worth $4 billion. there has to be more than an edit button desire here. max: that's why, david's point not withstanding, twitter is playing with fire. elon musk is really good at attracting attention. there's a large community of investors who will buy anything he tells them to and that is really good. but if twitter has a bad quarter or loses 20% or 25% of its market value, that's disastrous for the management team and that's just a blip on elon musk's radar. it doesn't affect his long-term vision.

the fear, i think, is this is someone who has in the past have had trouble reigning himself in and is very impetuous and twitter, a relatively small company is attached to the elon musk train. it's going to ride that wave for better and probably worse. emily: here's an open question. what does this mean for former president trump, who has been banned from twitter? i've asked twitter executives many times if there's a path for him to come back, and he has had no. could this open a door? david: it's a very legitimate question, given the point musk has made about free speech, because the first thing you think of, if twitter were more lax in enforcing it speech

rules, number one implication would be trump might be allowed back on. i don't think of musk as a particular defender of trump. i think he's a libertarian by inclination, though he has a very complex mix of views. i would say if anything, it's positive for the ex-president but we can't know. there are so many things about this we can't know, the speed with which it all happened is dizzying, and i've been thinking what a weird thing -- the richest man in the world is so incredibly impetuous, you never know what he is going to do next. it is like he is a professional global entertainer or something. all these implications are only going to be found out only through time, i'm afraid. emily: the plot has thickened, indeed. thank you both. coming up, we will hear from a republican representative, darrell issa. his thoughts on what musk means by free speech and what is it like working on a board with elon musk? we will ask a former tesla board member. that's next. this is bloomberg. ♪ omberg. ♪

emily: lawmakers on both sides have plenty to say about twitter's handling of free speech on its platform. and for different reasons. here's republican representative darrell issa of california, earlier with my colleague, david westin. >> i've known elon musk for a long time and i watched him break a glass ceiling that kept him from competing in rockets and missiles, and he did so over a long time with his dedication. he believes in that free

enterprise system, so i think he's going to be a positive for a twitter that has been erring on the side of less free speech. you might remember taking down things as misinformation that later proved to be true. i think he's going to look at it as we are going to be for free speech in a bigger way and i think that is positive for twitter and positive for all of us who would like to see social media be less about censoring and more about simply being a conduit for people's ideas whether we disagree with them or not. >> i've been listening to congress over the last couple of years and i hear two concerns. one concern you've identified is twitter saying who can talk and who can't talk. i understand you are saying elon musk will make it freer, but also in terms of concentration -- there's a lot of concerned as you have an antitrust responsibly. are you concerned about the wealthiest man in the world now having significant influence

over twitter? >> you know, 10% doesn't run a company, and there are two extreme anti-oil people on exxon's board. so, i think it's the power of his argument that is going to be more powerful than his vote because he's going to be outnumbered essentially nine to one. but there's something else at work here, and that is twitter has a monopoly on one section. facebook has a monopoly on another section. these giants we are concerned about. but if they operate like your public utility, charging everyone the same amount to buy electricity and not shutting anyone off as long as the bill is paid, then the monopoly is pretty benign and that's one of the concerns we have in congress is not whether an entity has monopolistic power but how they use that power. whether they abuse it or simply have the luxury of being the dominant force.

that has been true in tech for a long time. i remember when microsoft basically owned your ability to get on the internet. that's not true today, but it did take looking at it and making sure they were an honest broker some years ago. emily: republican darrell issa of california, who himself has worked in tech and business. well, how will having elon musk in the boardroom influence twitter's handling of free speech, misinformation and so much more? let's get to that with someone who worked on a board with elon musk for many years. the founder of the wesley group and was in early investor in tesla and a former tesla board member. great to have you back. what is it like serving on a board with elon musk? steve: well, it's never boring. i think this is a big win for twitter. he's brilliant, he sees the future, he is a driver. look, for sure he is temperamental and irascible, but

he pushes people to be their best. he's also twitter's greatest power user. but he loves pushing boundaries and my advice to twitter executives is put on your track shoes now because elon is going to push you to pick up the pace. all in all, i think that's a good thing for twitter users and twitter investors. emily: elon is his own biggest marketer. how can that work to twitter's advantage? steve: i think the case can be made that elon is reinventing to 21st century marketing. look what he did at tesla. he had a marketing budget close to zero. he took every penny he could and invested it in innovation to make greater products. in contrast, gm, ford, toyota spent billions.

they could have spent it in r&d, in tired campaigns, super bowl ads, so on. you have to wonder how much further ahead would the major auto companies be if they had done what elon did at tesla? in a lot of ways, he's the perfect poster boy for what some might call 20th century marketing, forming that direct relationship with your customer and he's doing it all on twitter. what's a better advertisement for twitter than that? emily: he's going to have a very direct relationship with twitter's leaders and board members. what do you imagine his relationship with the new ceo will be? steve: it is not going to be quiet. i think he's going to push all of them. we are day one into this and he says it may be time to get that edit function in there. i think is going to shake things up. in the old days, we used to say if they broke, don't fix it. the new mantra is from steve jobs -- if you aren't busy updating your own project, someone else is.

i think he's going to shake things up and make a statement that you need to form a direct relationship with your customers. twitter is probably the most cost-effective way to do it. elon, for a charismatic guy, he is slightly awkward. but he's genuine and real. i think a lot of other ceo's ought to be taking note. emily: elon musk has used twitter to replace his own marketing apartment. i wonder how an investor fits into the portfolio? how does it relate to tesla, spacex, the boring company, hyperloop, for example? steve: look, elon is a big picture guy and i think what he is saying is i'm an innovator. i've transformed the american auto industry and transformed space. this old world marketing has got to go. ceo's of the future need a

direct relationship where they can tell the truth in real time to their customers and not wait six months. i think that is a step forward and i think he's going to become a role model for not just ceo's but politicians. having that direct relationship with the customer and voter and instead of the canned ads so many of us are used to is still a net positive. you will have to manage it well and we will see how they do. emily: where do you think elon musk falls on twitter's banning of president trump? steve: look, only elon knows that. a lot of people will say he's a free marketeer and will let trump back on. i don't think that's the case. he has high standards and holds people to a high standard and the reality is -- i say this for all of tech. tech, overall, needs to hold a higher standard for people telling the truth.

they need to remove people telling flat-out lies. they need to remove people for inciting violence. i hope he will set a higher standard firms like facebook can follow. emily: some would argue elon musk has peddled his own version of the truth, for example, the funding secured tweet that got him in trouble with the sec when funding was not secured. steve: look, elon is always pushing the boundaries. he will be one of nine board members. on the whole, i think he's going to push them to innovate. in terms of setting government policy, what the standards are, i don't know if he's going to be taking the lead on that. he is more of an innovator, more of a tech guy. but we will see. one thing i can promise you is that it will not be boring. emily: it won't be boring indeed. steve wesley, former tesla board member, good to have you back with us. so much more coming up. you don't want to miss it. this is bloomberg. ♪ is bloomberg. ♪

emily: a few other stories we continue to watch, amazon buying dozens of rocket launchers for its high-speed internet service. the company will buy as many as 83 launches. amazon's license with the fcc requires them to launch at least half of its 3200 satellites by july, 2026. mackenzie scott has transformed american philanthropy by giving away $12.4 billion often to overlooked causes and is stepping up donations outside the united states. her latest giving spree, $3.9 billion.

these serving causes across five continents, from micronesia to brazil. and ibm banking on the lingering relevance of mainframe computers at a time when many businesses are moving to the cloud. the company has unveiled a new model designed for corporate data centers. ibm has been marketing themselves as a key center for data storage both on the premise -- and in the cloud. coming up, more on what elon musk's plans could mean for twitter and free speech. that's next. this is bloomberg. ♪ bloomberg. ♪

emily: welcome back to "bloomberg technology." i am emily chang in san francisco. there are a lot of opinions out there about what elon musk means for twitter. bloomberg has been taking a look at the markets before this and so far, so good. is there any indication this could be bad for investors? ed: only a 2% gain on tuesday but the largest in the twitter

history. the broadway range -- the broad range of analysts show that you on muska is handling twitter and being appointed to the board and that has been largely positive. he will help by association. he has star power, but he also has good ideas. he has a track record of innovation that can help. but there is a gap between what people think is good for the platform and what they see him doing on the stocks. there has been a big pop in the stock. you see that on the right-hand side. the blue hotline -- the blue line is the annual price target for twitter, which you can see is around four to four dollars a share when we are currently trading at around $51 a share. i'm analysts even cut their price targets after this because they don't think there is much upside to run. there is this gap where they think elon musk could take

twitter and where they see the stock going. there is also the influence of retail investors. around 460 million shares at twitter had changed hands over the past two days. these are the top names on fidelity's trading platform over the last session. twitter number one, where than 10,000 by orders to twitter and over 18,000 hundred four tesla. the next is a biofarma company, but it is clearly not just wall street looking at this. the retail investor, just as they had done with the tesla story, they hang onto elon musk's every word. emily: thank you. i want to bring back some guests . this includes our columnist and

a professor. they have been talking to the -- to elon musk for weeks. why's this significant? >> he took a stake in this company being a passive investor which means that if you are following the classic definition that he would merely stop by, watch from the sidelines, and not seek great changes or significant changes in the company, not do things like seek a board seat, all of which was up in the air yesterday when investment was at a close. we find today that he has a board seat and that twitter's ceo has said that they have been talking together for weeks, which does not bear any hallmarks of the past metric. i don't think anyone thought he would be a passive investor in this but he is an activist by

nature. i also think it represents just another tiny chapter in elon musk flouting his -- turning his nose at convention and the fcc guidelines. he has had a long run in with the sec about tweeting information or deleting information. i a suspect this will be a little broader from the sec. emily: muska has been presenting himself as a free speech defender. what do you think that means for professor -- president trump ultimately? >> if anything twitter has become more about elon's speech. he is a large portion of this company and that is because he has figured out that this is a powerful platform. to be he took some notes from

mark zuckerberg and others, but you need to have an influence over a platform. i think if anything, the future for former president trump is still tbd, but i have never seen it as a band. it is a band for as long as those who are in control of the company wanted to be a ban and we need to be realistic about it. emily: tim, what is your response to that? you referred to elon as a world-class troll. tim: he describes himself as a free speech absolutist but he has routinely over the years tried to shut down his critics and silence them. he has used twitter to make fun of them. he has used twitter to talk up his own investments in things like cryptocurrencies. this whole time that he is in

recent weeks where he said that twitter is throwing blockades in the way of spirit -- of free speech and maybe he needs to launch a new platform, some of the enticing things he put out there prior to this investment day, it runs counter to his entire personal experience on twitter. but elon musk is a libertarian and i think he has a posture that is part of the far right zeitgeist right now that the social media platforms have turned against conservatives. what the social media platforms have finally woken up to, some of the virtues of policing divisive propaganda. emily: we have got some breaking news now.

company is working on an edit but it internally, a feature they have been testing and working on since last year. tim? your reaction. tim: elon musk tweeted last night after his investment was disclosed, but i suppose this is twitter making a public statement that the response is what elon musk wants to see but they have been working on this for a long time. if they step up the pace on things like better user experiences on twitter because elon musk is there, that is great and that is good for the users. that is a part of what he might do to either curtail or pervert actual free speech on the platform itself. emily: professor, elon aside, how do you think an edit button would change twitter? this is something that users have been asking for for a long time. in the name of maintaining and protecting the authenticity of

the platform. prof. grygiel: i don't think this is about typos. i think he is trying to use this as a way to look like he is appealing to the public in some type of rebel leader. elon musk is -- the only thing i'm sure of is that he is good at conflating wealth to his power. again, this stems the conversation of being careful of what you edit and facebook and twitter are not the things. as i mentioned, things around the world have not been offending -- upending facebook post on the stories. that would change with the platform is. maybe that is what elon wants to do. i don't know why he is taking a stake in this otherwise that he has figured out that it will somehow help him serve his agenda. we will have to wait and see and it could culturally change what

twitter is. a bee that is for the best. maybe he wants to burn it down and may be that is a good thing. it is just a bunch of politicians and state actors circumventing it and perhaps that is not that great anymore. emily: tim, in your article this week where you suggested that elon musk could be bad for free speech, the venture capital reposted it and did not agree with your premise. you on mosque then commented saying that such an article is always good for a laugh. -- elon musk then commented saying that such an article is always good for a laugh. what do you feel about quote unquote activist for free speech criticizing your free speech? tim: i am ok with that. i think the market and elon musk

are cut from the same cloth. the view of the world from silicon valley is individualistic. when you are talking in the context of why they have an interest about the kind of speech that appears on twitter, it has nothing to do with free speech and has everything to do with their own biases being put to the test by the things that appear on twitter. emily: tim o'brien and jennifer grygiel, so much to continue to debate. then q both. -- thank you both. how elon musk being on twitter's board could influence the platform's crypto aspirations. we speak more with our guest up next. ♪

emily: let's get to our crypto reports. elon musk joining twitter's aboard. how will this shape the platform's future and will this blinged -- bring the elements of blockchain into twitter? we speak more with kristin smith , executive director director of the blockchain association. they have got this blue sky project that they have been exploring, but what do you make of elon musk's influence on the crypto community and how that could influence twitter? kristin: these are all great

questions. i think elon musk's news about him taking such a large steak and joining the board of twitter is important. one of the reasons is that he truly values -- understands the value of cryptocurrency. he has -- he knows the value of open source networks and he knows the value when you have many minds inking and building on how to create -- thinking and building on how to create an cord -- create a network. what is going to be interesting is if he is going to bring these elements of the crypto world, these anti-censorship elements, the open source elements, and allow for way to people come in and import their own algorithm that could go through and sort the news in a way that they want to be seeing, not in a way that twitter is dictating.

i think there is potential for innovation here given that we work in the crypto industry at the blockchain association, we are hopeful that by bringing in this mindset that there will be new ways to get this platform to a place that serves more of its users because it certainly is a powerful platform, i would argue the most powerful platform for sharing and receiving information. emily: just how important is twitter to the crypto community? there is a very passionate communities of cryptocurrency supporters on twitter. we call it crypto twitter. crypto topics are trending on twitter because of the volume of these users there. kristin: crypto twitter is a real thing and it is interesting because what you have, twitter enables developers across the globe to debate whether or not they should make technological

changes to open source networks. it is a forum for this kind of debate and it is a public comment for changing -- exchanging ideas and people that have very targeted interests to find one another and build community. i think the crypto community uses twitter more than any other community out there. it is also a powerful tool for the crypto community. we think back to summer last august and we had over 40,000 phone calls generated to the u.s. senate over the course of five days because they shared a link on twitter and it went viral and you have crypto twitter influencers, members of the house and senate tweeting these links, celebrity influencers, business leaders. this is a tool for political activism and a tool for sharing ideas.

it is an incredibly important platform and i think it is one where the crypto world will only improve the way the platform can work. emily: the sec has been paying attention to elon musk and he has had runs with them before. how do you imagine the sec is watching this stake in twitter? kristin: i think the sec pays close attention to what he does. definitely a lot of eyes going on out there. i think as long as he is transparent with what is going on and brings more transparency, i don't think that is necessarily a bad thing for him to be a part of it and i don't think it should pose any problems for the sec at this time. i am sure they have to keep a close eye on him just like they do with many other people in the

crypto space. emily: they are most definitely watching. kristin smith, executive director of the blockchain association, thank you for joining us. will the twitter share platform continue to rally? we talk about that next. this is bloomberg. ♪

>> re-think he can do something really good for society with this platform. >> he is certainly making a statement and it is a statement about censorship. he doesn't agree with censorship for a functioning democracy. >> i interpret this as a sign of how influential elon musk is. there is nothing changed in the fundamental outlook for twitter. >> this starts what is going to

be a broader strategic initiative for elon at twitter. >> i think it is an expensive way to get yourself an edit button. it is an interesting move. elon is definitely a power user. >> it will either be >> while -- argawal changing it to be open-source source or calling people out on censorship, or it will be a management change. i don't know what is going to happen. emily: twitter shares have skyrocketed since the news of elon musk's stake in the company. jeffries joins us now and are you sticking with it? >> at the end of the hall, he had a big move. really a positive move on more of the company not taking any

way on that side but when you have a 20 plus percent move, it is depending on a lot of the fundamental improvement which we have not seen. as we pointed out in the earlier segment, many of us have been asking advertisers if there is any change, and answer is no. i have called this a foundation of a great car and that elon is very good at letting the dog in the car and they hold interface in terms of what he has done is in the auto world. he can bring a lot to this world and he is going to have no doubt stay positive. investors are begging -- betting that a year out that is going to have an improvement which is great for long-term shareholders. emily: here's the question.

will this materially change the game for twitter's business? there was an argument earlier that twitter could spend less on marketing because elon musk could do that for them via twitter. but when you look at the balance sheet, how will this change? brent: the board is stacked and they have a phenomenal worker on there. taylor is a great guy and a thumbs-up from facebook. he knows how to work on these economics, so they are surrounded by a lot of good people. right now the worst issue they have at twitter is the usability issue. in is what many of the advertisers and end-users are still looking for better solutions from them. one advertiser last year said it perfectly. snap has had 10 improvements to their platform in the last year, but twitter has not had that

many in a decade. that is an opportunity and that is why he is betting a huge amount of his own net worth in because he sees the future. that if they can make these changes and make it more usable, there are over 2 billion on facebook's platform and that many as a tiny number today. emily: what are the risks of bringing elon musk into the room? brent: big ideas can go haywire. you can see the management team making big bets and any time you do that, things can flareup. we think he is going to have a positive impact. i think one person's view and opinion on this as a board

member, there is going to be a lot of other voices and it is going to be run well over time. i think the risk right now is just the near term returns on this. if fundamentals do not turn where they expect them to, investors are going to be put on hold in the short term. i think he knows that we do bound to go over and we have got a nice floor to put in on the short-term given his arrival, but the risk and the recent run of stock combined with this is going to take several reports. this is not going to be an overnight experiment that turns out for a solution. emily: it is certainly going to be an entertaining one. brent thill of jeffries, we are along for the ride. that does it for this addition of -- edition of "bloomberg technology."

bitcoin 22 kicks off in miami and we will have a slew of special guests. i am emily chang in san francisco. this is bloomberg. ♪

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