Topline
The world’s wealthiest man Elon Musk has lastly accomplished his $44 billion deal to take over Twitter, in accordance to a number of stories Thursday night, and shortly 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 Twitter buy is now ultimate after six dramatic months.
Key Details
Govt ousters: One in all Musk’s first orders of enterprise gave the impression to be displaying a number of prime executives the door, together with Agrawal and CFO Ned Segal, CNBC first reported Thursday night time.
Large layoffs: Musk plans to fireside about 75% of Twitter workers when he takes energy, in response to paperwork and interviews obtained by the Washington Submit 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 informed Twitter workers Wednesday the 75% determine is inaccurate).
Altering Twitter’s person expertise: Musk has floated a number of modifications to the location, together with charging a small price, decreasing the variety of pretend and spam accounts from the location, altering the content material algorithm to boost “free speech,” loosening its moderation guidelines and including an edit button for all customers.
Doable return of Trump (and Kanye): Musk stated in Might he plans to revive the Twitter account of former President Donald Trump, whom the platform banned in January 2021 “as a result of threat of additional incitement of violence” following the lethal Capitol riot, although Trump claims he wouldn’t rejoin and can as a substitute stay on his new Reality Social website—Musk has additionally beforehand stood by Kanye West, calling the rapper his “good friend” earlier than Twitter banned West earlier this month for threatening violence towards Jews.
Additional Tesla unloading: 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 bought this 12 months, and shares of Tesla are down greater than 40% since April 4, when Musk disclosed his 9% stake in Twitter, largely as a consequence of issues about Musk’s selloff and the social media agency pulling his consideration away from the electrical car agency.
X app: Musk has stated he could use his new $44 billion plaything to construct out what he calls his X “every thing app,” a cellular app which may convey collectively quite a lot of unrelated companies like social media, messaging, meals supply and funds underneath the identical umbrella, within the mannequin of Tencent’s WeChat in China.
Key Background
Musk and Twitter had a court-imposed Friday deadline to both shut the acquisition or face a trial that might have resulted in a choose forcing him 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 Trade 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 in regards to the presence of bots on the location, prompting Twitter to file a lawsuit in Delaware’s Chancery Court docket to pressure via the acquisition. Musk informed Twitter October 3 he would transfer ahead with the deal on the unique phrases, avoiding the Delaware trial initially slated to start October 17. A Bloomberg report final Thursday in regards to the Twitter deal dealing with a potential nationwide safety assessment as a consequence of Musk’s friendliness with Russia briefly spooked buyers on the chance of the deal going via, although the White Home denies any such assessment is underway. Twitter and Musk didn’t instantly reply to Forbes’ request for remark.
Essential Quote
“The $44 billion price ticket for Twitter will go down as some of the overpaid tech acquisitions within the historical past of M&A offers,” Ives stated in a Thursday observe to purchasers, estimating a $25 billion true market worth for Twitter.
Tangent
Twitter inventory traded as little as $32 this summer time as doubts in regards to the deal ever closing peaked. Traders betting on the deal going via make out like bandits, together with billionaire Carl Icahn, who the Wall Avenue Journal stories stands to revenue as a lot as $250 million after shopping for up greater than $500 million in Twitter shares at about $35 this summer time.
Forbes Valuation
We estimate Musk to be price $221.5 billion, making him the wealthiest individual on the planet by $62 billion. Musk’s fortune has tumbled greater than $100 billion this 12 months as Tesla’s inventory crashes from its pandemic peak.
