Musk Takes Over Twitter And Fires CEO—Right here’s What It May Imply
The topline
The world’s wealthiest man Elon Musk has lastly accomplished his $44 billion deal to take over Twitter, in accordance with a number of studies Thursday night, and rapidly went to work rebuilding the corporate to his imaginative and prescient, firing executives like CEO Parag Agrawal—that is what could change on the platform, on the firm and for Musk and his different ventures.
Elon Musk’s buy of Twitter is full after six lengthy months.
Listed here are some key details
Government oustersCNBC’s Thursday Evening Report reported that Musk had proven a number of executives his first order of enterprise, together with Agrawal (CFO) Ned Segal.
Huge layoffs: Based on interviews and paperwork obtained by The, Musk intends to fireplace roughly 75% of Twitter staff if he turns into president. Washington Publish final week, indicative of Musk’s often-hostile relationship with Twitter and sharp criticism of its content material moderation insurance policies, beforehand accusing its workers of getting a “robust left wing bias” (Musk reportedly advised Twitter workers Wednesday the 75% determine is inaccurate).
Altering Twitter’s person expertise: Musk has floated a number of modifications to the positioning, together with charging a small payment, decreasing the variety of pretend and spam accounts from the positioning, altering the content material algorithm to boost “free speech,” loosening its moderation guidelines and includingAll customers have an choice to edit.
Trump and Kanye could return Musk mentioned in Could he plans to revive the Twitter account of former President Donald Trump, whom the platform banned in January 2021 “because of the danger of additional incitement of violence” following the lethal Capitol riot, although Trump claims he wouldn’t rejoin and can as an alternative stay on his new Fact Social website—Musk has additionally beforehand stood by Kanye West, calling the rapper his “good friend”Twitter had already banned West in April for his threats of violence towards Jews
Tesla continues to unload: Wedbush analyst Dan Ives estimated final week that Musk could have to promote one other $5 to $10 billion in Tesla inventory to finance the deal, including to the roughly $30 billion he’s already offered this yr, and shares of Tesla are down greater than 40% since April 4, when Musk disclosed his 9% stake in Twitter, largely as a result of considerations about Musk’s selloff and the social media agency pulling his consideration away from the electrical automobile agency.
X App: Musk has mentioned he could use his new $44 billion plaything to construct out what he calls his X “all the pieces app,” a cellular app which may carry collectively quite a lot of unrelated providers like social media, messaging, meals supply and funds below the identical umbrella, within the mannequin of Tencent’s WeChat in China.
The Key Background
Musk and Twitter confronted a Friday deadline from the courts to finish the acquisition, or to face a trial which may have seen him compelled to purchase Twitter. Musk seemingly confirmed the deal would undergo Wednesday when he modified his Twitter bio to “Chief Twit” and shared a video of him on the firm’s headquarters, and the New York Inventory Change suspended Twitter buying and selling for Friday in anticipation of the deal closing. Twitter accepted Musk’s unsolicited bid for the corporate in April, valuing the corporate at $54.20 per share, a couple of 30% premium. In July, Musk formally tried to again out of the deal, claiming the corporate knowingly misled him concerning the presence of bots on the positioning, prompting Twitter to file a lawsuit in Delaware’s Chancery Court docket to power via the acquisition. Musk said to Twitter on October 3 that he’ll proceed with the settlement at its unique phrases and keep away from the Delaware trial which was initially scheduled for October 17. A Bloomberg report final Thursday concerning the Twitter deal going through a attainable nationwide safety evaluation as a result of Musk’s friendliness with Russia briefly spooked traders on the chance of the deal going via, although the White Home denies any such evaluation is underway. Twitter and Musk haven’t but responded to this report. SME’ request for remark.
Necessary Quote
“The $44 billion price ticket for Twitter will go down as one of the crucial overpaid tech acquisitions within the historical past of M&A offers,” Ives mentioned in a Thursday word to purchasers, estimating a $25 billion true market worth for Twitter.
Tangent
The inventory of Twitter fell as little as $32 in the course of the summer time, as considerations about whether or not or not it might ever shut peaked. Traders who guess on the deal occurring make out as bandits. This contains billionaire Carl Icahn. Wall Avenue JournalReviews stand to make as excessive as $250 Million after buying greater than 500 million Twitter shares for $35.
SME Valuation
Musk’s estimated value is $221.5 trillion, which makes him the richest individual on the earth by $62 million. Musk’s fortune has tumbled greater than $100 billion this yr as Tesla’s inventory crashes from its pandemic peak.
