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Musk Takes Over Twitter And Fires CEO—Here’s What It Could Mean
The topline
The world’s wealthiest man Elon Musk has finally completed his $44 billion deal to take over Twitter, according to several reports Thursday evening, and quickly went to work rebuilding the company to his vision, firing executives like CEO Parag Agrawal—this is what may change on the platform, at the company and for Musk and his other ventures.
Elon Musk’s purchase of Twitter is complete after six long months.
Here are some key facts
Executive oustersCNBC’s Thursday Night Report reported that Musk had shown several executives his first order of business, including Agrawal (CFO) Ned Segal.
Massive layoffs: According to interviews and documents obtained by The, Musk intends to fire approximately 75% of Twitter employees if he becomes president. Washington Post last week, indicative of Musk’s often-hostile relationship with Twitter and sharp criticism of its content moderation policies, previously accusing its staff of having a “strong left wing bias” (Musk reportedly told Twitter staff Wednesday the 75% figure is inaccurate).
Altering Twitter’s user experience: Musk has floated several changes to the site, including charging a small fee, reducing the number of fake and spam accounts from the site, changing the content algorithm to enhance “free speech,” loosening its moderation rules and addingAll users have an option to edit.
Trump and Kanye may return Musk said in May he plans to restore the Twitter account of former President Donald Trump, whom the platform banned in January 2021 “due to the risk of further incitement of violence” following the deadly Capitol riot, though Trump claims he wouldn’t rejoin and will instead remain on his new Truth Social site—Musk has also previously stood by Kanye West, calling the rapper his “friend”Twitter had already banned West in April for his threats of violence against Jews
Tesla continues to unload: Wedbush analyst Dan Ives estimated last week that Musk may need to sell another $5 to $10 billion in Tesla stock to finance the deal, adding to the roughly $30 billion he’s already sold this year, and shares of Tesla are down more than 40% since April 4, when Musk disclosed his 9% stake in Twitter, largely due to concerns about Musk’s selloff and the social media firm pulling his attention away from the electric vehicle firm.
X App: Musk has said he may use his new $44 billion plaything to build out what he calls his X “everything app,” a mobile app which could bring together a variety of unrelated services like social media, messaging, food delivery and payments under the same umbrella, in the model of Tencent’s WeChat in China.
The Key Background
Musk and Twitter faced a Friday deadline from the courts to complete the acquisition, or to face a trial which could have seen him forced to buy Twitter. Musk seemingly confirmed the deal would go through Wednesday when he changed his Twitter bio to “Chief Twit” and shared a video of him at the company’s headquarters, and the New York Stock Exchange suspended Twitter trading for Friday in anticipation of the deal closing. Twitter accepted Musk’s unsolicited bid for the company in April, valuing the company at $54.20 per share, about a 30% premium. In July, Musk formally attempted to back out of the deal, claiming the company knowingly misled him about the presence of bots on the site, prompting Twitter to file a lawsuit in Delaware’s Chancery Court to force through the acquisition. Musk stated to Twitter on October 3 that he will continue with the agreement at its original terms and avoid the Delaware trial which was originally scheduled for October 17. A Bloomberg report last Thursday about the Twitter deal facing a possible national security review due to Musk’s friendliness with Russia briefly spooked investors on the likelihood of the deal going through, though the White House denies any such review is underway. Twitter and Musk have not yet responded to this report. SME’ request for comment.
Important Quote
“The $44 billion price tag for Twitter will go down as one of the most overpaid tech acquisitions in the history of M&A deals,” Ives said in a Thursday note to clients, estimating a $25 billion true market value for Twitter.
Tangent
The stock of Twitter fell as low as $32 during the summer, as concerns about whether or not it would ever close peaked. Investors who bet on the deal happening make out as bandits. This includes billionaire Carl Icahn. Wall Street JournalReports stand to make as high as $250 Million after purchasing more than 500 million Twitter shares for $35.
SME Valuation
Musk’s estimated worth is $221.5 trillion, which makes him the richest person in the world by $62 million. Musk’s fortune has tumbled more than $100 billion this year as Tesla’s stock crashes from its pandemic peak.
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