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How Elon Musk could kill Trump’s social media company

Yahoo Finance's Rick Newman discusses the implications of Elon Musk's offer to buy Twitter on Trump's social media platform, Truth Social.

Video Transcript

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- Well, Elon Musk's offer to buy Twitter could not only alter the future path of Twitter, but also Trump's social media platform, Truth Social. That's at least according to our very own, Rick Newman. Let's bring in Rick. Rick, can we just start by talking about what we have heard from every analyst today who says the board is just not going to accept this offer? But you're operating on the assumption that he does move forward, and take over.

RICK NEWMAN: So I'm playing this out. I think Elon Musk could get Twitter if he wants to. He'd have to raise the offer. I mean, at some point, I guess it would be a hostile takeover. But if he offers enough, I mean, the board would really have no choice. But that's for you guys to argue when I'm off-air.

So let's say he does buy it. In Trump world, the biggest question-- I mean, they're ecstatic about this possibility, because they think Elon Musk would let President Trump back onto Twitter. Twitter, of course banned Trump after three days after the January 6 riots in 2021. And they said, he was fomenting, or glorifying violence.

So Trump has now started his own social media company, called Truth Social, which is under this blank check company which is public, called Digital World Acquisition Corp. And Truth Social, Trump's own social network, which is just trying to get off the ground right now, is their most visible launch. So if you just play this out, let's say Elon Musk says, sure, I'd be happy to have Trump back on Twitter. What would Donald Trump do?

Well, True Social is getting no traction at all. Trump is not even posting on there, because he wants it to become a hit first. But without Trump posting, what's the point? Nobody wants to be there if they can't see what Trump is saying. So I think Trump would come back onto Twitter in a heartbeat.

And if he does that, what's the point of Truth Social? It's hard to see there's any purpose for it at all. There are already a couple of other conservative, or right wing social media networks. They're nowhere near the size of Twitter, Gab, and Parler, and I guess they're probably a couple of others.

So if you play this out, and these things happen, it's hard to see why Trump's social would-- excuse me-- Truth Social would even exist. And if you look at the shares for the public parent company, DWAC, they are down about 4% today. So those shareholders are getting wind of the idea that this could be bad for the new Trump company.

- Yeah, I mean, I guess they might as well call it Trump Social. But I wanted to ask you, is there maybe some feedback circle in the reverse, right, from the perspective that is, Elon looking at what's going on with Truth Social and saying, well, I would have otherwise just started my own social media company, but that really crashed and burned, so I should just go out and buy the other one.

RICK NEWMAN: We don't have any idea what Elon Musk is thinking. I mean, we don't.

- I know we don't.

RICK NEWMAN: We have glimpses though. And one of the complaints Elon Musk has made about Twitter is this issue of free speech, I mean, as if Twitter is impinging free speech. And that is a buzz phrase that some conservatives use for the way Twitter basically deals with misinformation and lies, which I'm sorry to tell the universe this, but it just happens to be fringe conservatives who post lies and misinformation on Twitter more than any other political group. And that's why conservatives have taken up this so-called cause of free speech, which is a red herring.

But Elon Musk has echoed that, which is why-- and look, we know Elon-- he's not an overt Trump supporter, but he's Trumpy. He's libertarian in leanings, and he pushed back hard against COVID lockdowns in 2020, and things like that. So that's why Trump supporters really are loving this idea that even if he doesn't buy the company, if he takes enough control of Twitter, that he could let Trump back on. Elon Musk has not indicated he would do that.

But look, our job, we're commentators and speculators at this point. And nobody even saw Elon Musk making this bid for Twitter a couple of weeks ago. So surprising things can happen.

- I mean, I guess if you summarize it, Rick. I mean, the reality is, all these attempts to start new social media platforms just haven't worked. Whether it is Trump's Truth Social, or some of those other ones you mentioned, I mean, there are established players here. And that's why I probably for Elon Musk it made sense to go in on that.

But a conversation we, of course, I'm sure we'll continue next week. Thanks so much for that, Rick. By the way--

RICK NEWMAN: I've got more to say.

- A company we haven't mentioned today, Tesla. Elon Musk's other company, down more than 3% in the--s