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Musk begins his Twitter ownership with firings, declares the 'bird is freed'

Stock Markets Oct 28, 2022 09:13AM ET
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© Reuters. Twitter logo and a photo of Elon Musk are displayed through magnifier in this illustration taken October 27, 2022. REUTERS/Dado Ruvic/Illustration
 
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By Sheila Dang and Greg Roumeliotis

NEW YORK (Reuters) -Elon Musk has taken ownership of Twitter Inc (NYSE:TWTR) with brutal efficiency, firing top executives but providing little clarity over how he will achieve the ambitions he has outlined for the influential social media platform.

"The bird is freed," he tweeted after he completed his $44 billion acquisition on Thursday, referencing Twitter's bird logo in an apparent nod to his desire to see the company have fewer limits on content that can be posted.

The CEO of electric car maker Tesla (NASDAQ:TSLA) Inc and self-described free speech absolutist has, however, also said he wants to prevent the platform from becoming an echo chamber for hate and division.

Other goals include wanting to "defeat" spam bots on Twitter and make the algorithms that determine how content is presented to its users publicly available.

Yet Musk has not offered details on how he will achieve all this and who will run the company. He has said he plans to cut jobs, leaving Twitter's 7,500 employees fretting about their future. He also said on Thursday he did not buy Twitter to make more money but "to try to help humanity, whom I love."

Less that 10% of 266 Twitter employees who participated in a poll on messaging app Blind expected to still have their jobs in three months. Blind allows employees to air grievances anonymously after they sign up with corporate emails.

Musk fired Twitter Chief Executive Parag Agrawal, Chief Financial Officer Ned Segal and legal affairs and policy chief Vijaya Gadde, according to people familiar with the matter. He had accused them of misleading him and Twitter investors over the number of fake accounts on the platform.

Agrawal and Segal were in Twitter's San Francisco headquarters when the deal closed and were escorted out, the sources added.

Musk, who also runs rocket company SpaceX, plans to become Twitter's interim CEO according to a person familiar with the matter and following an earlier report by Reuters. Musk also plans to scrap permanent bans on users, Bloomberg said, citing a person familiar with the matter.

Twitter, Musk and the executives did not immediately respond to requests for comment.

'CHIEF TWIT'

Before closing the deal, Musk walked into Twitter's headquarters on Wednesday with a big grin and a porcelain sink, subsequently tweeting "let that sink in." He changed his Twitter profile description to "Chief Twit."

Musk said in May he would reverse Twitter's ban on Donald Trump, who's account was removed after the attack on the U.S. Capitol. A representative for Trump did not immediately respond to a Reuters request for comment, but the former U.S. president previously said he won't return to the platform and has instead launched his own social media app, Truth Social.

Musk tried to calm Twitter employee fears that major layoffs are coming and assured advertisers that his past criticism of Twitter's content moderation rules would not harm its appeal.

"Twitter obviously cannot become a free-for-all hellscape, where anything can be said with no consequences!" Musk said in an open letter to advertisers on Thursday.

As news of the deal spread, some Twitter users were quick to flag their willingness to walk away.

"I will be happy to leave in a heartbeat if Musk, well, acts as we all expect him to," said a user with the @mustlovedogsxo account.

European regulators also reiterated past warnings that, under Musk's leadership, Twitter must still abide by the region's Digital Services Act, which levies hefty fines on companies if they do not control illegal content.

"In Europe, the bird will fly by our EU rules," EU industry chief Thierry Breton tweeted on Friday morning.

European Parliament lawmaker and civil rights proponent Patrick Breyer suggested people look for alternatives where privacy is a priority.

"Twitter already knows our personalities dangerously well due to its pervasive surveillance of our every click. Now this knowledge will be falling into Musk's hands."

Musk has indicated he sees Twitter as a foundation for creating a "super app" that offers everything from money transfers to shopping and ride-hailing.

But Twitter is struggling to engage its most active users who are vital to the business. These "heavy tweeters" account for less than 10% of monthly overall users but generate 90% of all tweets and half of global revenue.

Musk will face a challenge building revenue "given that the controversial opinions he appears to want to give more of a free rein to are often unpalatable to advertisers," said Hargreaves Lansdown analyst Susannah Streeter.

A SAGA

The deal's road to fruition was full of twists and turns that sowed doubt over whether it would happen at all. It began on April 4, when Musk disclosed a 9.2% Twitter stake, becoming the company's largest shareholder.

The world's richest person then agreed to join Twitter's board, only to balk at the last minute and offer to buy the company instead for $54.20 per share.

Over the course of just one weekend later in April, the two sides reached a deal without Musk carrying out any due diligence on the company's confidential information.

In the weeks that followed, Musk had second thoughts. He complained publicly about Twitter's spam accounts and his lawyers then accused Twitter of not complying with his requests for information on the subject.

The acrimony resulted in Musk telling Twitter on July 8 he was terminating the deal. Four days later, Twitter sued Musk to force him to complete the acquisition.

By then, the stock market had plunged on concerns about a potential recession. Twitter accused Musk of buyer's remorse, arguing he wanted out of the deal because he thought he overpaid. Most legal analysts thought Twitter would likely prevail in court.

On Oct. 4, Musk performed another U-turn, offering to complete the deal as promised. He managed to do that, just one day ahead of a deadline to avoid going to trial.

Twitter shares ended trade on Thursday up 0.3% at $53.86, just under the agreed price. The stock will be delisted from the New York Stock Exchange on Friday.

Musk begins his Twitter ownership with firings, declares the 'bird is freed'
 

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Comments (23)
Dennis Chuck
Dennis Chuck Oct 28, 2022 3:22PM ET
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That indian should be fired!
Patron Silver
Patron Silver Oct 28, 2022 10:02AM ET
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Maybe he can sell vitamins on there like jo meathead
Kerry Ditto
Kerry Ditto Oct 28, 2022 9:28AM ET
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key source of superpower strength og us comes from superiority of us tech companies like military tech. supporting stable growth of us tech stocks should be #1 mandate of fed
Zhehui Liu
Zhehui Liu Oct 28, 2022 9:27AM ET
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Nice! Fired those who supported Democrats who destroy freedom of speech.
Kerry Ditto
Kerry Ditto Oct 28, 2022 9:19AM ET
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3rd mandate of Fed should be stock market's stable growth. if so, fed should buy big tech stocks now.
Maximus Maximus
Maximus Maximus Oct 28, 2022 9:03AM ET
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there will be some moderation no matter what, if you let all the unhinged tinfoil-hat rightwing maga lunatics roam free with all their hate and delusions, twitter will not last long..
Jamie Kent
Jamie Kent Oct 28, 2022 9:03AM ET
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maximum projection
Rick Meyer
Rick Meyer Oct 28, 2022 8:59AM ET
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Free speech for both sides of the aisle now. If only the media would now center themselves.
Kerry Ditto
Kerry Ditto Oct 28, 2022 8:40AM ET
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Must should buy meta.
gab nea
gab nea Oct 28, 2022 6:49AM ET
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the king of hype and dump overpaid and didnt due his due diligence! terribly bad investor! no wonder he didnt use his own money lol ! he says he loves humanity but wouldn't marry any of his babies mamas! another charlatan!
Nacho García
Nacho García Oct 28, 2022 5:08AM ET
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why is Twitter delisted?
Geo Don
Geo Don Oct 28, 2022 5:08AM ET
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cause owners agreed to sell the company for $54.2 a share. acquisition finalised and is becomming a private comany now. it has elon musk as owner.
Tom Woosley
Tom Woosley Oct 28, 2022 5:08AM ET
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That's what "going private" means. No longer a publicly owned company.
 
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