Parag Agarwal: According to those with knowledge of the matter, Elon Musk ultimately completed his $44 billion acquisition of Twitter Inc. after a six-month public and judicial struggle over the deal, giving the world’s richest man control over the struggling social network.
It was one of Musk’s first moves to change the leadership. Twitter’s CEO Parag Agrawal, director of legal, policy, and trust Vijaya Gadde, chief financial officer Ned Segal, who joined Twitter in 2017, and general counsel Sean Edgett, who has been the company’s general counsel since 2012, are among those who have left, according to people with knowledge of the situation. Edgett was led out of the building, according to two of the persons who asked to remain anonymous because the information is private.
Twitter will now be a private corporation and shareholders will receive $54.20 per share. The conclusion brings to an end a complicated process that started in January with the billionaire quietly building up a sizable investment in the business, his mounting displeasure with the way it’s handled, and an eventual merger agreement that he later spent months trying to undo.
On October 4, Musk decided to move forward with the terms he had first suggested, and a Delaware Chancery Court judge granted the two parties until October 28 to complete the transaction. That deadline was met, and now Musk, who also serves as CEO of SpaceX and Tesla Inc., also has the power of Twitter, which he frequently uses but openly criticizes and which he has promised to fundamentally alter. Shares of the company are not anticipated to trade on the New York Stock Exchange anymore.
Because many of Musk’s suggestions for changing the company are incompatible with the way it has been conducted for years, the company’s operations will immediately become disrupted by his ownership. He has stated that he wants to protect “free speech” on social network, which probably entails lowering the standards for content moderation. He also plans to reinstate some well-known accounts that were suspended from Twitter for breaking the rules, including the account of former US President Donald Trump. More generally, Musk’s activities pose a threat to reverse years of Twitter’s attempts to curtail bullying and harassment on social media sites.
As the deadline drew closer, Musk started to personalize the business, tweeting a video of himself entering the office and altering his platform designation to “Chief Twit.” According to those with knowledge of the situation, he scheduled meetings between Tesla engineers and Twitter product executives and planned to speak to the workforce on Friday. As of noon on Thursday in San Francisco, Twitter’s engineers were no longer able to make code modifications as part of an effort to guarantee that nothing about the product changes before the deal closes, according to the people.
Since the merger was revealed in April, Twitter staff have been preparing for layoffs, and Musk mentioned the concept of cost reductions to banking partners when he was initially raising money for the deal. According to a person familiar with the situation earlier this month, Musk informed some prospective investors that he expects to double Twitter’s income within three years and plans to reduce 75% of the company’s personnel, which currently numbers approximately 7,500.
According to those familiar with the situation, when Musk visited Twitter’s headquarters on Wednesday, he told employees that he did not intend to fire 75% of the workforce after taking over the firm.
Musk stated that Twitter “has to get healthy” in June during an all-hands meeting that followed the signing of his purchase agreement, making reference to cost-cutting. Additionally, he has stated that only “extraordinary” workers will be permitted to work from home; everyone else will be required to report to the office. One of the first significant businesses to guarantee to all employees the ability to work from any location “forever” was San Francisco-based Twitter.
Some of the work has been done for him by Twitter. The business postponed a 2023 company-wide trip to Disneyland, shuttered or downsized a number of offices throughout the world, and declared a hiring freeze in May.
In preparation for the deal’s conclusion, Twitter froze the stock award accounts for its employees last week. People with knowledge of the situation claimed that this led to worries among the workforce that the stock awards would not be paid, and some employees are already debating and researching labor regulations to ensure they receive the proper form of severance.
Long before Musk took over, it was obvious that Agrawal probably wouldn’t stay in command. The two men engaged in a heated dispute early in the deal-making process, according to text messages revealed during the case. Musk then made fun of Agrawal for missing some of the early negotiations because he was on vacation in Hawaii. After the announcement of the sale, Jack Dorsey, the former CEO of Twitter, attempted to reconcile them, but his efforts failed.
The inability to collaborate amongst you has at least been made plain, Dorsey texted Musk on April 26. “That made everything clearer,”
Gadde, on the other hand, was in charge of Twitter’s content policies, which Musk has criticized.
Since Musk openly entered the chat in April, Twitter’s business, which relies primarily on the advertising displayed in users’ news feeds on its social network, has struggled. The firm recorded its first year-over-year sales loss since the pandemic’s peak in the second quarter, and although Twitter hasn’t yet made any preparations to declare earnings, it’s probable that the third quarter saw a similar slump.
Not Here, “Hellscape”
Musk has suggested that Twitter might develop a membership plan to augment ad revenue, though it’s not clear which services or features would be chargeable extra. A tweet editing feature is currently available through Twitter’s premium service, Twitter Blue, but the company has stated that it is primarily geared toward power users. Musk isn’t feeling it. In a text conversation with a pal in April, he referred to Twitter Blue as a “crazy piece of s—t.”
Musk’s leadership raises the possibility of less stringent content monitoring, raising worries that discussion on the social network may degrade, undermining years of work by the firm and its “trust and safety” team to eliminate offensive or harmful messages. Musk wrote a message to advertisers on Thursday in an effort to convince them that he does not want Twitter to turn into a “free-for-all hellscape.”
For the past six months, it has been difficult for Twitter employees, who have only followed the roller-coaster deal’s ups and downs through news headlines.
Many people have expressed dissatisfaction with Musk’s involvement, and some have questioned his suitability to lead a social networking company. Many Twitter employees have expressed worry over his support of a far-right political candidate in Texas and sexual harassment claims made in May by a former SpaceX flight attendant. Some staff members made fun of Musk during a video Q&A with Musk in June on internal Slack channels. Through the course of the agreement, other people publicly mocked or chastised him on Twitter.