(Bloomberg) – Elon Musk has completed his $44 billion acquisition of Twitter Inc., according to people familiar with the matter, putting the world’s richest man in charge of the struggling social network after six months of public wrangling and legal on the agreement.
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Shareholders will receive $54.20 per share and Twitter will now operate as a private company. The completion caps a convoluted saga that began in January with the billionaire’s quiet accumulation of a major stake in the company, his growing exasperation with the way it is run and a possible merger deal he then spent months trying to sort it out.
On Oct. 4, Musk agreed to proceed under the terms originally offered, and a Delaware Court of Chancery judge gave both parties until Oct. 28 to complete the deal. That deadline was met, and now Musk, who is CEO of Tesla Inc. and SpaceX, also controls Twitter, a service he often uses but openly criticizes, and which he has promised to radically change. The company’s shares are no longer expected to trade on the New York Stock Exchange.
Among Musk’s first moves: changing direction. Departures include CEO Parag Agrawal; Vijaya Gadde, Head of Legal, Policy and Trust; CFO Ned Segal, who joined Twitter in 2017; and Sean Edgett, who has served as general counsel at Twitter since 2012, according to people familiar with the matter. Edgett was escorted out of the building, said two of the people, who asked not to be identified because the information is not public.
Musk’s ownership will immediately disrupt Twitter’s operations, in part because many of his ideas for how to change the company are at odds with how it has been run for years. He said he wanted to ensure “freedom of speech” on the social network, which would likely mean looser content moderation standards, and plans to restore some high profile accounts that were kicked out of Twitter for having breaks the rules, like former US President Donald Trump’s. More broadly, Musk’s initiatives threaten to undo years of efforts by Twitter to reduce bullying and abuse on the platform.
As the deadline approached, Musk began putting his stamp on the company, posting a video of himself entering the corporate headquarters and changing his profile handle on the platform he now owns to “Chief Twit”. He set up meetings between Tesla engineers and Twitter product management, and he planned to address staff on Friday, people familiar with the matter said. Twitter engineers could not make any more changes to the code starting midday Thursday in San Francisco, as part of an effort to ensure nothing about the product changes before the deal closes, the analysts said. people.
Twitter employees have been preparing for layoffs since the deal was announced in April, and Musk floated the idea of cost cuts for banking partners when he initially raised money for the deal. Some would-be investors have been told Musk plans to cut 75% of Twitter’s workforce, which now has around 7,500 people, and expects to double its revenue within three years, a person familiar with the matter said earlier this week. this month.
During a visit to Twitter headquarters on Wednesday, Musk told employees he did not plan to cut 75% of staff when he takes over the company, according to people familiar with the matter.
‘Get healthy again’
In June, at a town hall meeting following his takeover deal, Musk said Twitter “needs to get healthy,” a reference to cost cutting. He also said only “exceptional” employees will be able to work from home and everyone else must come into the office. San Francisco-based Twitter was one of the first big companies to promise all of its employees they could work from anywhere “forever”.
Twitter did some of the work for him. The company announced a hiring freeze in May, closed or reduced several offices around the world and canceled a 2023 company-wide retreat at Disneyland.
Last week, Twitter froze employee stock award accounts ahead of the deal closing. This has prompted workers to fear that stock awards will not be paid, people familiar with the matter said, and some employees are discussing and studying labor laws to ensure they are getting the right kind of payout. departure.
It had long been clear that Agrawal was unlikely to remain in charge once Musk took over. Text messages uncovered during the trial show the two men had a contentious exchange early in the settlement process, and Musk later mocked Agrawal for vacationing in Hawaii during some of the early negotiations. Former Twitter CEO Jack Dorsey’s efforts to bring them together after the deal was announced ended badly.
“At least it’s become clear that you can’t work together,” Dorsey emailed Musk on April 26. “It was a clarification.”
Gadde, meanwhile, has overseen Twitter’s content policy efforts, which Musk lambasted.
Twitter’s business, which relies primarily on advertising placed in users’ feeds on its social network, has struggled since Musk entered the chat publicly in April. In the second quarter, the company reported its first year-over-year sales decline since the height of the pandemic, and Twitter likely saw a similar decline in the third quarter, although the company did not announce its intention to publish its profits.
No “Hellscape” here
Musk mentioned the possibility of creating a subscription product for Twitter to supplement ad revenue, though it’s unclear which products or features might cost more. Twitter already offers a subscription product, called Twitter Blue, which includes access to a tweet editing feature, but the company said it’s aimed primarily at power users. Musk was unimpressed. In April, he called Twitter Blue “a senseless piece of shit” in a text message to a friend.
The prospect of less restrictive content moderation under Musk’s leadership has raised fears of a deterioration in dialogue on the social network, eroding years of efforts by the company and its “trust and safety” team to limit posts. offensive or dangerous. On Thursday, Musk issued a note to advertisers seeking to reassure them that he didn’t want Twitter to become a “free-for-all hellscape.”
It’s been a tough six months for Twitter employees, who have mostly followed the ups and downs of the deal on a rollercoaster ride through the headlines.
Many have been unhappy with Musk’s involvement, with some questioning his qualifications to run a social networking business. His endorsement of a far-right political candidate in Texas, as well as accusations of sexual harassment from a former SpaceX flight in May, raised concerns among many Twitter employees. During a video Q&A with Musk in June, some employees mocked Musk on internal Slack channels. Others publicly ridiculed or berated him on Twitter throughout the transaction process.
(Updates with executive departures in fourth paragraph.)
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