“The bird has been released”, tweeted Elon Musk. For better, but mostly for worse, the marriage between Twitter and Elon Musk is sealed. The announcement fell on the night of Thursday 27 to Friday 28 October. After seven months of “I love you, me neither”, of “follow me, I flee you” and vice versa, the billionaire bought the social network, counting 229 million active users per day. Cost of the operation: 44 billion dollars (44 billion euros).
In the wake of the announcement, the new boss immediately fired chief executive Parag Agrawal and two other executives, chief financial officer Ned Segal and chief legal officer Vijaya Gadde, according to unnamed sources from CNBC and the Washington Post.
To wrap up the saga, the boss of Tesla, renowned for his troll abilities, was able to manage his announcement effect. In a statement posted on his Twitter account, followed by 110 million subscribers, he told advertisers Thursday to buy the network because it is “important for the future of civilization to have an online public square where a wide variety of opinions can debate in a healthy way, without resorting to violence”. Rather appropriate for the one who, a few weeks ago, proposed a far-fetched diplomatic solution to end the war in Ukraine.
This Wednesday, he also shared an enigmatic video. A sink in his arms, he entered the premises of Twitter in San Francisco, a broad smile on his lips. “Entering Twitter HQ – let that sink in!” he wrote in the description. A pun on the double meaning of the word sink (“sink” but also “sink”, “sink”) youtranslatable by: “Entry into Twitter headquarters – absorb the information”. While no official announcement had been made, her profile description had also been changed. A sober and direct “Chief Twit” now sits there, “Twit” also meaning “dumbass”.
And the alliances were made in extremis. Because the two newlyweds almost divorced even before the wedding night. The Court of Chancellery of Delaware had indeed imposed the deadline of Friday, October 28 for the takeover to be finalized. Without this agreement, Twitter and Musk would have had to tear themselves apart in court, specializing in dispute resolution, from November.
Wind vane technique
The reason: after having made, at the end of April, an acquisition offer of 44 billion dollars, reluctantly accepted by Twitter, the businessman had retracted. Elon Musk then accused the blue bird company of having lied to him about the number of monetizable users, thus rendering the agreement null and void. Suspecting the SpaceX founder of wanting to dodge a purchase that had become too expensive for him, the company’s board of directors had filed a complaint.
Estimated at 224 billion dollars by the magazine Forbes, Elon Musk’s fortunes have indeed been jostled recently by the fluctuating stock prices of Tesla and SpaceX. To complete its financing, it took out $13 billion in bank loans backed by Twitter and called on investment funds.
In addition, the mega legal battle, which should have initially started on October 17, seemed to give the company a clear advantage. However, ten days before entering the ring, the multi-billionaire operated yet another about-face. After having wanted it, no longer wanted it, he again wanted the platform and said he was ready to conclude the transaction at the price initially promised. For its part, the social network shared its intention to finalize the transaction at 54.20 dollars per share (price agreed in April).
After Parag Agrawal
His new toy now in his pocket, what will Elon Musk do? According to his first declarations in April, the libertarian businessman wants to make the network the platform of a “absolute freedom of expression”. The multi-billionaire would like to relax the moderation rules. A position praised by the American conservative right, defended by Donald Trump, with his Truth Social network, or rapper Kanye West, in the process of buying the Parler platform.
“That said, Twitter obviously can’t be a hellish place where anything can be said without consequence”, however qualified the CEO of Tesla in a message addressed to advertisers, on the eve of the deadline for the closing of the operation. More recently, he also claimed that profitability was not his priority, that he would fight spam better and made cryptic allusions to “X”, his vision of an application to do everything (messaging, social network , financial services, etc.), such as WeChat in China.
In one of his announcements, Elon Musk also assured that he wanted to take Twitter out of the stock market. A measure which, if followed, would allow the company to more easily escape any external control. Rather accommodating for its new owner who now has a lot of new powers. The wealthy fifty-year-old has the freedom to immediately replace the members of the board of directors as well as the management of the group.
75% of employees made redundant
And the current CEO will probably not be the only one to leave. Elon Musk has reportedly told investors that he ultimately intends to lay off almost 75% of Twitter’s 7,500 employees, according to information published last week by the washington post. “It screwed up a lot of people”notes a Twitter employee, who spoke to AFP on condition of anonymity.
According to the latter, more than 700 employees have already left the group since June. “These are rather voluntary departures, either for ethical reasons or for basely financial reasons, because an unlisted company is less interesting”, he believes. He himself prefers to leave the “the benefit of the doubt” to the businessman, but he will leave if the platform veers to the extreme right.
Even though the profitability of the company is not currently among its priorities, certain statements by Elon Musk suggest that he intends to rework the economic model. Among the tracks mentioned in his previous statements, the billionaire toyed with the idea of reducing the share of advertising revenue from the site and increasing that of subscriptions thanks to the Twitter Blue formula.
Petit Poucet des Gafa, the network presents a turnover of 1.18 billion dollars in the second quarter of 2022, down 1% compared to the previous year. A figure 28 times smaller than that of its competitor Meta. “Obviously we’re going to pay way too much, but the potential [de la plateforme] is much higher than its current value, Elon Musk told analysts recently at Tesla’s earnings conference. It remains to be seen concretely what definition the entrepreneur gives to the word “potential”.