Elon Musk became the owner of Twitter Inc on Thursday, firing top executives and providing little clarity on how he will achieve the lofty ambitions he outlined for the influential social media platform. The CEO of electric car maker Tesla Inc said he wants to “defeat” spam bots on Twitter, open up the algorithms that determine how content is presented to users and prevent the platform from becoming an echo chamber of hate and division. although it limits censorship.
Still, Musk didn’t offer details on how he’ll accomplish all of this and who will run the company. He said he plans to cut jobs, leaving around 7,500 Twitter employees worried about their future. He also said Thursday that he didn’t buy Twitter to make more money, but “to try to help humanity, which I love.” Musk fired Twitter CEO Parag Agrawal, CFO Ned Segal and head of legal affairs and policy Vijay Gadde, according to people familiar with the matter. He accused them of misleading him and Twitter investors due to the number of fake accounts on the social media platform.
Agrawal and Segal were at Twitter’s headquarters in San Francisco when the deal was closed and were escorted away, the sources added. Twitter, Musk and executives did not immediately respond to requests for comment.
Ahead of closing the $44 billion acquisition and never afraid to indulge in theatrics, Musk walked into Twitter headquarters on Wednesday with a big smile and a porcelain sink, then tweeted “let it sink in.” He changed his description on his Twitter profile to “Chief Twit”. He also sought to assuage fears among employees that major layoffs were coming, assuring advertisers that his past criticism of Twitter’s content moderation rules would not hurt its appeal. “Twitter clearly cannot become a free-for-all hell where anything can be said without consequence!” Musk made the announcement in an open letter to advertisers on Thursday.
Musk hinted that he sees Twitter as the basis for creating a “super app” that offers everything from money transfers to shopping and driving. “Twitter’s long-term potential, in my view, is orders of magnitude greater than its current value,” Musk said on Tesla’s Oct. 19 call with analysts. However, Twitter strives to engage its most active users, who are vital to the business. These “heavy tweeters” make up less than 10% of total monthly users, but generate 90% of all tweets and half of global revenue.
Musk also said in May that he would lift the ban on Donald Trump, which was lifted after the attack on the US Capitol, although the former US president said he would not return to the platform. Instead, he launched his own social media app, Truth Social. A representative for Trump did not immediately respond to a Reuters request for comment.
The deal is the culmination of a remarkable saga full of twists and turns that has cast doubt on whether Musk will complete the deal. It started on April 4, when Musk disclosed a 9.2% stake in the company, making him its largest shareholder. The world’s richest person then agreed to join Twitter’s board, but balked at the last minute and offered to buy the company for $54.20 a share instead, an offer Twitter wasn’t sure it would match interpret as another of Musk’s cannabis jokes.
Musk’s offer was genuine, and in a single weekend later in April, the two sides reached an agreement at the price he proposed. This was done without Musk doing any due diligence on the company’s confidential information, as is customary with an acquisition. In the weeks that followed, Musk had other ideas. He publicly complained that he believed Twitter’s spam accounts were significantly higher than Twitter’s estimate disclosed in regulatory filings, at less than 5% of its monetizable daily active users. His lawyers then accused Twitter of failing to comply with his requests for information on the subject.
As a result, Musk notified Twitter on July 8 that he was terminating their agreement on the grounds that Twitter had misled him about bots and was not cooperating with him. Four days later, Twitter sued Musk in Delaware, where the company is incorporated, to force him to complete the deal. By then, shares of social media companies and the broader stock market had plunged on fears that the Federal Reserve’s rate hikes, which are trying to fight inflation, would push the US economy into recession. Twitter accused Musk of buyer’s remorse, saying he wanted out of the deal because he thought he had overpaid.
Most legal analysts said Twitter had the strongest case and was likely to prevail in court. Their opinion didn’t change even after former Twitter security chief Peiter Zatko came forward as a whistleblower in August, claiming the company had failed to uncover weaknesses in security and privacy. On October 4, just as Musk was set to be deposed by Twitter’s lawyers ahead of their trial later in the month, he made another U-turn and offered to complete the deal as promised. He did so just one day before an Oct. 28 deadline set by a Delaware judge to avoid trial. Shares of Twitter were trading up 0.3% at $53.86 in New York on Thursday, a slight discount from the sale price of $54.20 a share. The stock will be delisted from the New York Stock Exchange on Friday.
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