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Elon Musk owns Twitter now — and what happens next is anyone’s guess

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Published on October 28, 2022 with No Comments

Dismissal of company’s CEO, CFO among his first moves.

Elon Musk completed his $44-billion US acquisition of Twitter late on Thursday and almost immediately fired the company’s leadership team.

The head of electric car maker Tesla first proposed buying the social media company in April under the guise of ensuring free speech, but the journey to consummate the deal since then has been rocky.

He tried to back out of the purchase on the premise that he had been misled, before court proceedings compelled him to go ahead with it.

After a series of tweets on Wednesday and Thursday suggesting the deal was done, it became official on Thursday evening.

Within hours, he had fired CEO Parag Agrawal, head of legal Vijaya Gadde, chief financial officer Ned Segal and others. Agrawal and Segal were in Twitter’s San Francisco headquarters when the deal closed and were escorted out of the building.

Segal confirmed his dismissal in a series of tweets on Friday, but none of the other former executives have spoken publicly yet.

Reports suggest Musk has installed himself as CEO, but he has yet to confirm that.

Stock to be delisted

In an open letter to users and advertisers Thursday, Musk said he bought the company because “it is important to the future of civilization to have a common digital town square, where a wide range of beliefs can be debated in a healthy manner, without resorting to violence.”

But “Twitter obviously cannot become a free-for-all hellscape, where anything can be said without consequences,” he added.

He says he wants to crack down on the prevalence of “bots,” which are automated accounts designed to look like actual people but instead simply parrot and spread misinformation or a particular biased point of view.

Internal data from Twitter says roughly five per cent of the platform consists of such bots, but Musk says the problem is much bigger, and he wants to fix it.

Yet he has offered no suggestions on how he plans to do that

What happens now is far from clear, but one thing that will happen on Friday is the company’s shares will be delisted from the New York Stock Exchange. The shares closed on Thursday valued at $53.86, a slight discount to the $54.20 that Musk had agreed to pay for them.

Speculation about Musk’s long-term interest

In addition to his proclamations about free speech, there is speculation that Musk plans to eventually resell the company one day and make it public again. A report this week suggested he planned to fire three quarters of the company’s 7,500 staff.

“Employees are already worried about massive layoffs.” said Jasmine Enberg, an analyst with Insider Intelligence. “A Musk-owned Twitter is likely going to result in even more chaos.”

In his letter, Musk says he didn’t buy the company to make money. Instead he says 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 Oct. 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 per cent of monthly overall users but generate 90 per cent of all tweets and half of global revenue.

Musk said in May he would reverse the ban on Donald Trump, who was removed after the attack on the U.S. Capitol, although the former U.S. president has said he won’t return to the platform.

Trump has instead launched his own social media app, Truth Social. In a posting on the platform on Friday, Trump said “I am very happy that Twitter is now in sane hands. “Twitter must now work hard to rid itself of all of the bots and fake accounts that have hurt it so badly. It will be much smaller, but better.”

 

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