Oct 28, 2022
Elon Musk's Twitter ownership starts with firing top executives
Oct 28, 2022
Elon Musk has taken ownership of Twitter Inc with brutal efficiency, firing top executives but providing little clarity over how he will achieve the ambitions he has outlined for the influential social media platform.
"The bird is freed," he tweeted after he completed his $44 billion acquisition on Thursday, referencing Twitter's bird logo in an apparent nod to his desire to see the company have fewer limits on content that can be posted.
The CEO of electric car maker Tesla Inc and self-described free speech absolutist has, however, also said he wants to prevent the platform from becoming an echo chamber for hate and division.
Other goals include wanting to "defeat" spam bots on Twitter and make the algorithms that determine how content is presented to its users publicly available.
Yet Musk has not offered details on how he will achieve all this and who will run the company. He has said he plans to cut jobs, leaving Twitter's 7,500 employees fretting about their future. He also said on Thursday he did not buy Twitter to make more money but "to try to help humanity, whom I love."
Musk fired Twitter Chief Executive Parag Agrawal, Chief Financial Officer Ned Segal and legal affairs and policy chief Vijaya Gadde, according to people familiar with the matter. He had accused them of misleading him and Twitter investors over the number of fake accounts on the platform.
Agrawal and Segal were in Twitter's San Francisco headquarters when the deal closed and were escorted out, the sources added.
Twitter, Musk and the executives did not immediately respond to requests for comment.
Before closing the deal, Musk walked into Twitter's headquarters on Wednesday with a big grin and a porcelain sink, subsequently tweeting "let that sink in." He changed his Twitter profile description to "Chief Twit."
Musk tried to calm Twitter employee fears that major layoffs are coming and assured advertisers that his past criticism of Twitter's content moderation rules would not harm its appeal.
"Twitter obviously cannot become a free-for-all hellscape, where anything can be said with no consequences!" Musk said in an open letter to advertisers on Thursday.
As news of the deal spread, some Twitter users were quick to flag their willingness to walk away.
"I will be happy to leave in a heartbeat if Musk, well, acts as we all expect him to," said a user with the @mustlovedogsxo account.
European regulators also reiterated past warnings that, under Musk's leadership, Twitter must still abide by the region's Digital Services Act, which levies hefty fines on companies if they do not control illegal content.
"In Europe, the bird will fly by our EU rules," EU industry chief Thierry Breton tweeted on Friday morning.
Musk has indicated he sees Twitter as a foundation for creating a "super app" that offers everything from money transfers to shopping and ride-hailing.
But Twitter is struggling to engage its most active users who are vital to the business. These "heavy tweeters" account for less than 10% of monthly overall users but generate 90% of all tweets and half of global revenue.
Musk will face a challenge building revenue "given that the controversial opinions he appears to want to give more of a free rein to are often unpalatable to advertisers," said Hargreaves Lansdown analyst Susannah Streeter.
The deal's road to fruition was full of twists and turns that sowed doubt over whether it would happen at all. It began on April 4, when Musk disclosed a 9.2% Twitter stake, becoming the company's largest shareholder.
The world's richest person then agreed to join Twitter's board, only to balk at the last minute and offer to buy the company instead for $54.20 per share.
Over the course of just one weekend later in April, the two sides reached a deal without Musk carrying out any due diligence on the company's confidential information.
In the weeks that followed, Musk had second thoughts. He complained publicly about Twitter's spam accounts and his lawyers then accused Twitter of not complying with his requests for information on the subject.
The acrimony resulted in Musk telling Twitter on July 8 he was terminating the deal. Four days later, Twitter sued Musk to force him to complete the acquisition.
By then, the stock market had plunged on concerns about a potential recession. Twitter accused Musk of buyer's remorse, arguing he wanted out of the deal because he thought he overpaid. Most legal analysts thought Twitter would likely prevail in court.
On Oct. 4, Musk performed another U-turn, offering to complete the deal as promised. He managed to do that, just one day ahead of a deadline to avoid going to trial.
Twitter shares ended trade on Thursday up 0.3% at $53.86, just under the agreed price. The stock will be delisted from the New York Stock Exchange on Friday.
© Thomson Reuters 2023 All rights reserved.