Elon Musk’s deal to buy Twitter leaves many key questions unanswered
SpaceX founder Elon Musk reacts to a post-launch press conference after the SpaceX Falcon 9 rocket, carrying the Crew Dragon spacecraft, took off on an unmanned test flight to the International Space Station from Cape Kennedy Space Center Canaveral, Florida, USA, March 2, 2019.
Mike Blake | Reuters
The Twitter board accepted a $ 44 billion takeover offer from the billionaire Tesla CEO Elon Musk. Beyond that, little is known about what the richest person in the world intends to do with their favorite social media platform.
Under the terms of the deal, Musk is paying $ 54.20 per share in cash for Twitter. The announcement ended a week-long saga that Musk began when he made an offer to buy the company at that price, which he called his “best and final offer.”
In Monday’s statement, Twitter said Musk is providing approximately $ 21 billion and secured $ 25.5 billion in debt and “marginal loan financing,” adding that “there are no financing conditions for closing the business. transaction”.
Moss is taking over. But nearly all of the other key questions about Twitter’s future remain unanswered. Users, employees, investors and politicians look forward to learning more about the following topics:
A big question facing Twitter is who Musk will appoint as the new CEO.
Current CEO Parag Agrawal led the company just five months after succeeding co-founder Jack Dorsey. Agrawal was quickly forced to contend with an aggressive Musk, who took about 9% of the shares and briefly agreed to join the council.
So Musk scraped that deal and chose to chase the whole company instead. Agrawal warned of “future distractions”.
He’s gotten his distraction and it seems unlikely that Agrawal and Musk have a future together. Agrawal’s only comment in Monday’s press release was, “Twitter has purpose and relevance that impact the world. Deeply proud of our teams and inspired by work that has never been more important.”
The board of directors, headed by sales force co-CEO Bret Taylor took a “poison pill” to try and fend off a potential hostile takeover by Musk. This came after Musk renounced his agreement to join the board.
Musk has the ability to clear the list, and the list of potential candidates to help him on the journey is long. He and Dorsey have appeared friendly lately. Are you joining forces with your fellow billionaire tech founder?
Twitter said the company was acquired by “a wholly owned subsidiary of Elon Musk”. This says nothing about how much control Musk will exert.
Musk is currently CEO of Tesla, which has a market cap of $ 1 trillion, and SpaceX, which has a private market value of $ 100 billion. He also has his own startups Neuralink and The Boring Company.
It will take the Jeff Bezos approach with the Washington Post and allow an independent management team to carry out the operations? Or will he be a practical owner? The answer will go along the way to knowing what to expect from content moderation and whether the many high-profile people who have been kicked off the site will be back soon.
Musk attempted to garner views on Twitter’s features, asking his more than 83 million followers to rate whether they would like certain changes such as an edit button. Will he make decisions based on what his followers want?
Here’s what he said in the release:
“Free speech is the foundation of a functioning democracy and Twitter is the digital city square where vital issues for the future of humanity are debated. I also want to make Twitter better than ever by improving the product with new features, by opening up source algorithms to boost trust, defeat spam bots and authenticate all humans. Twitter has tremendous potential: I’m looking forward to working with the company and the user community to unblock it. “
What does Musk mean by free speech? In a tweet on Monday, he wrote “I hope even my worst critics stay on Twitter, because that’s what free speech means.”
Will he let everyone stay? Content moderation is important to prevent a social network from becoming a fire in a dumpster. Free speech for a private company doesn’t have to mean what it does in the First Amendment.
Former president Donald Trump was banned from Twitter last year for violating its rules, a move that attracted the ire of Trump and many conservative politicians. Musk has made it clear that he doesn’t like what he considers the company’s censorship policies. So Trump wants to come back? Will users leave as a result? Will open sourcing help us understand who is coming, who is going and why?
trump he told CNBC He wouldn’t be back on Twitter on Monday even if Musk lifted the former president’s ban, saying he’ll be at his service, Truth Social, “within a week.”
“We did a lot for Twitter when I was in the White House.” Trump said. “I was disappointed with the way I was treated by Twitter. I will not return to Twitter.”
By making the company private, Musk must devise an entirely new structure for employee compensation. Existing stock grants and rewards are no longer significant. Will they be replaced with shares in the new version of Twitter, giving employees a potential benefit should the company go public a second time?
The tech industry is facing an increasingly tight and highly competitive market for talent. Employers are under more pressure than ever to keep what they have. Why stay on Twitter and why go somewhere else?
And who keeps Musk? If it removes content moderation practices, many employees are suddenly deemed irrelevant. Does the musk army become Twitter’s workforce?
If you bet on Tesla at $ 1 trillion, you are probably betting on Musk to keep working his magic. He already has a lot of distractions. Is this too big for the stomach? Tesla shares fell slightly on Monday and are down 2.3% from Musk’s April 14 offering. The Nasdaq is in further decline.