According to people familiar with the matter, Elon Musk completed his $44 billion acquisition of Twitter Inc., putting the world’s richest man in charge of the struggling social network after six months of public and legal wrangling over the deal.
Changing leadership was one of Musk’s first moves. According to people familiar with the matter, departures include Twitter Chief Executive Officer Parag Agrawal; Vijaya Gadde, the head of legal, policy, and trust; Chief Financial Officer Ned Segal, who joined Twitter in 2017; and Sean Edgett, who has been general counsel at Twitter since 2012. Edgett was escorted out of the building, according to two people who requested anonymity because the information isn’t public.
Twitter will now operate as a private company, with shareholders receiving $54.20 per share. The completion caps a complicated saga that began in January with the billionaire’s quiet acquisition of a significant stake in the company, his growing dissatisfaction with how it is run, and an eventual merger agreement that he later spent months trying to unravel.
Musk agreed to proceed on his original proposed terms on Oct. 4, and a Delaware Chancery Court judge gave the two parties until Oct. 28 to finalize the deal. That deadline was met, and now Musk, the CEO of both Tesla Inc. and SpaceX, also controls Twitter, a service he frequently uses but openly criticizes, and which he has promised to drastically change. The stock of the company is no longer expected to trade on the New York Stock Exchange.
Musk’s ownership will cause an immediate disruption to Twitter’s operations, in part because many of his ideas for changing the company run counter to how it has been run for years. He has stated that he wants to ensure “free speech” on the social network, which is likely to imply looser content moderation standards, and that he intends to restore some high-profile accounts that were banned from Twitter for violating rules, such as former US President Donald Trump’s. More broadly, Musk’s initiatives risk undoing years of work by Twitter to reduce bullying and abuse on the platform.
As the deadline neared, Musk began putting his stamp on the company, posting a video of himself walking into the headquarters and changing his profile descriptor on the platform he now owns to “Chief Twit.” He arranged meetings between Tesla engineers and product leadership at Twitter, and he planned to address the staff on Friday, people familiar with the matter said. Twitter’s engineers could no longer make changes to code as of noon Thursday in San Francisco, part of an effort to ensure that nothing about the product changes ahead of the deal closing, the people said.
Twitter employees have been bracing for layoffs since the transaction was announced in April, and Musk floated the idea of cost cuts to banking partners when he was initially fundraising for the deal. Some potential investors were told Musk plans to cut 75% of Twitter’s workforce, which now numbers about 7,500, and expects to double revenue within three years, a person familiar with the matter said earlier this month.
While visiting Twitter headquarters on Wednesday, Musk told employees that he doesn’t plan to cut 75% of the staff when he takes over the company, according to people familiar with the matter.
During an all-hands meeting in June following his purchase agreement, Musk stated that Twitter “needs to get healthy,” a reference to cost-cutting. He has also stated that only “exceptional” employees will be permitted to work from home, with everyone else required to come to the office. Twitter, based in San Francisco, was one of the first large corporations to promise all employees the ability to work from anywhere “forever.”
Twitter has assisted him in some of his efforts. In May, the company announced a hiring freeze, closed or downsized several offices worldwide, and canceled a companywide retreat to Disneyland in 2023.
Twitter froze employee equity awards accounts last week in anticipation of the deal closing. Employees are concerned that their stock awards will not be paid, according to people familiar with the situation, and some are discussing and researching labor laws to ensure they receive the proper type of severance.
It was long assumed that Agrawal would step down once Musk took over. Text messages revealed during the lawsuit show that the two men had a heated exchange early in the process, and Musk later mocked Agrawal for being on vacation in Hawaii during some of the early negotiations. Former Twitter CEO Jack Dorsey’s efforts to bring them back together after the deal was announced failed.
On April 26, Dorsey texted Musk, “At least it became clear that you can’t work together.” “That was helpful.”
Meanwhile, Gadde oversaw Twitter’s content policy efforts, which Musk has chastised.
Twitter’s business, which is primarily based on the advertising displayed in users’ feeds on its social network, has struggled since Musk publicly entered the debate in April. The company reported its first year-over-year sales decline since the peak of the pandemic in the second quarter, and Twitter is likely to experience a similar slump in the third quarter, though the company hasn’t announced plans to report earnings.
No ‘Hellscape’ Here
Musk has mentioned the possibility of building a subscription product for Twitter to supplement ad revenue, though it’s unclear which products or features might cost extra. Twitter already offers a subscription product, called Twitter Blue, which includes access to a tweet editing feature, but the company has said it is primarily targeted at power users. Musk hasn’t been impressed. In April, he called Twitter Blue an “insane piece of s–t” in a text message to a friend.
The prospect of less restrictive content moderation under Musk’s leadership has prompted concerns that dialogue on the social network will deteriorate, eroding years of efforts by the company and its “trust and safety” team to limit offensive or dangerous posts. On Thursday, Musk posted a note to advertisers seeking to reassure them he doesn’t want Twitter to become a “free-for-all hellscape.”
The past six months have been challenging for Twitter employees, who have primarily followed the ups and downs of the roller-coaster deal through the news headlines.
Many people have expressed dissatisfaction with Musk’s involvement, with some questioning his qualifications to lead a social networking company. Many Twitter employees are concerned about his support for a far-right political candidate in Texas, as well as sexual harassment allegations made by a former SpaceX flight attendant in May. Some employees mocked Musk on internal Slack channels during a video Q&A with Musk in June. Throughout the transaction, others publicly mocked or chastised him on Twitter.
At Twitter headquarters’ coffee bar, @elonmusk pic.twitter.com/vy5Cw7zttf
— Walter Isaacson (@WalterIsaacson) October 27, 2022
