Musk Takes Over Twitter And Fires CEO—Here’s What It Could Mean

Breaking Business Musk Takes Over Twitter And Fires CEO—Here’s What It Could Mean Derek Saul Forbes Staff I cover breaking news with a focus on markets and sports business. Following New! Follow this author to stay notified about their latest stories. Got it! Oct 27, 2022, 09:18pm EDT | Updated Oct 27, 2022, 09:21pm EDT Share to Facebook Share to Twitter Share to Linkedin 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 Twitter purchase is now final after six dramatic months. FilmMagic Key Facts Executive ousters : One of Musk’s first orders of business appeared to be showing several top executives the door, including Agrawal and CFO Ned Segal, CNBC first reported Thursday night. Massive layoffs: Musk plans to fire about 75% of Twitter employees when he takes power, according to documents and interviews obtained by the 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 adding an edit button for all users. Possible return of Trump (and Kanye): 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” before Twitter banned West earlier this month for threatening violence against Jews. Further Tesla unloading: 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. Key Background Musk and Twitter had a court-imposed Friday deadline to either close the acquisition or face a trial that could have resulted in a judge forcing him 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 told Twitter October 3 he would move forward with the deal at the original terms, avoiding the Delaware trial originally slated to begin 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 did not immediately respond to Forbes ’ request for comment.

Crucial 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 Twitter stock traded as low as $32 this summer as doubts about the deal ever closing peaked. Investors betting on the deal going through make out like bandits, including billionaire Carl Icahn, who the Wall Street Journal reports stands to profit as much as $250 million after buying up more than $500 million in Twitter shares at about $35 this summer.

Forbes Valuation We estimate Musk to be worth $221. 5 billion, making him the wealthiest person on the planet by $62 billion. Musk’s fortune has tumbled more than $100 billion this year as Tesla’s stock crashes from its pandemic peak.

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