Elon Musk became Twitter's owner on Thursday, firing top executives and providing little clarity over how he will achieve the lofty ambitions he has outlined for the influential social media platform.
The CEO of electric car maker Tesla has said he wants to
"defeat" spam bots on Twitter, make the algorithms that determine how
content is presented to its users publicly available, and prevent the platform
from becoming an echo chamber for hate and division, even as he limits
censorship.
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 approximately 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."
Musk terminated 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 social media
platform.
Agrawal and Segal were in Twitter's San Francisco
headquarters when the deal closed and were escorted out, the sources added.
Twitter, Musk and the executives did not immediately respond
to requests for comment.
'Chief Twit'
Before closing the $44-billion acquisition, and never afraid to indulge in
theatrics, Musk walked into Twitter's headquarters on Wednesday with a big grin
and carrying a porcelain sink, subsequently tweeting "let that sink
in." He changed his description in his Twitter profile to "Chief
Twit."
He also tried to calm fears among employees 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.
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.
"The long-term potential for Twitter in my view is an
order of magnitude greater than its current value," Musk said on Tesla's
call with analysts on October 19.
But Twitter is struggling to engage its most active users
who are vital to the business. These "heavy tweeters" account for
less than 10 percent of monthly overall users but generate 90 percent of all
tweets and half of global revenue.
Musk also said in May he would reverse the ban on Donald
Trump, who was removed after the attack on the US Capitol, although the former
US president has said he won't return to the platform. He has instead launched
his own social media app, Truth Social.
A representative for Trump did not immediately respond to a
Reuters request for comment.
A saga
The deal is the culmination of a remarkable saga, full of
twists and turns, that sowed doubt over whether Musk would complete the deal.
It began on April 4, when Musk disclosed a 9.2 percent stake in the company,
making him its 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, an offer that Twitter was unsure whether to interpret as
another of Musk's cannabis jokes.
Musk's offer was real, and over the course of just one
weekend later in April, the two sides reached a deal at the price he suggested.
This happened without Musk carrying out any due diligence on the company's
confidential information, as is customary in an acquisition.
In the weeks that followed, Musk had second thoughts. He
complained publicly that he believed Twitter's spam accounts were significantly
higher than Twitter's estimate, published in regulatory filings, of less than 5
percent of its monetizable daily active users. His lawyers then accused Twitter
of not complying with his requests for information on the subject.
The acrimony resulted in Musk giving notice to Twitter on
July 8 that he was terminating their deal on the grounds that Twitter misled
him about the bots and did not cooperate with him. Four days later, Twitter
sued Musk in Delaware, where the company is incorporated, to force him to
complete the deal.
By then, shares of social media companies and the broader
stock market had plunged on concerns that the Federal Reserve's interest rate
hikes, as it seeks to fight inflation, will push the US economy into recession.
Twitter accused Musk of buyer's remorse, arguing he wanted to get out of the
deal because he thought he overpaid.
Most legal analysts said Twitter had the strongest arguments
and would likely prevail in court. Their view did not change even after
Twitter's former security chief Peiter Zatko stepped forward as a whistleblower
in August to allege that the company failed to disclose weaknesses in its
security and data privacy.
On October 4, just as Musk was set to be deposed by
Twitter's lawyers ahead of the start of their trial later in the month, he
performed another u-turn and offered to complete the deal as promised. He managed
to do that, just one day ahead of an October 28 deadline given by the Delaware
judge to avoid going to trial.
Twitter shares ended trade on Thursday in New York up 0.3
percent at $53.86, a small discount to the $54.20 per share deal price. The
stock will be delisted from the New York Stock Exchange on Friday. © Reuters
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