(Bloomberg) — Elon Musk completed his $44 billion acquisition of Twitter Inc., according to people familiar with the matter, putting the world’s richest man in charge of the struggling social network after six months of public and legal wrangling over the deal.
Most Read from Bloomberg
Among Musk’s first moves: changing the leadership. Departures include Twitter Chief Executive Officer Parag Agrawal; Vijaya Gadde, the head of legal, policy and trust; Chief Financial Officer Ned Segal, who joined Twitter in 2017; and Sean Edgett, who has been general counsel at Twitter since 2012, according to people familiar with the matter. Edgett was escorted out of the building, said two of the people, who asked not to be identified because the information isn’t public.
Shareholders will be paid $54.20 per share, and Twitter will now operate as a private company. The completion caps a convoluted saga that began in January with the billionaire’s quiet accumulation of a major stake in the company, his growing exasperation with how it’s run and an eventual merger accord that he later spent months trying to unravel.
On Oct. 4, Musk agreed to proceed on his originally proposed terms, and a Delaware Chancery Court judge gave the two sides until Oct. 28 to wrap up the deal. That deadline was met, and now Musk, who is CEO of both Tesla Inc. and SpaceX, also controls Twitter, a service he uses often but criticizes openly, and that he has promised to change dramatically. The company’s shares are no longer expected to trade on the New York Stock Exchange.
Musk’s ownership will bring immediate disruption to Twitter’s operations, in part because many of his ideas for how to change the company are at odds with how it has been run for years. He has said he wants to ensure “free speech” on the social network, which is likely to mean looser content moderation standards, and plans to restore some high-profile accounts that were kicked off Twitter for breaking rules, such as former U.S. President Donald Trump’s. More broadly, Musk’s initiatives threaten to undo years of Twitter’s efforts to reduce bullying and abuse on the platform.
As the deadline neared, Musk began putting his stamp on the company, posting a video of himself walking into the headquarters and changing his profile descriptor on the platform he now owns to “Chief Twit.” He arranged meetings between Tesla engineers and product leadership at Twitter, and he planned to address the staff on Friday, people familiar with the matter said. Twitter’s engineers could no longer make changes to code as of noon Thursday in San Francisco, part of an effort to ensure that nothing about the product changes ahead of the deal closing, the people said.
Twitter employees have been bracing for layoffs since the transaction was announced in April, and Musk floated the idea of cost cuts to banking partners when he was initially fundraising for the deal. Some potential investors were told Musk plans to cut 75% of Twitter’s workforce, which now numbers about 7,500, and expects to double revenue within three years, a person familiar with the matter said earlier this month.
While visiting Twitter headquarters on Wednesday, Musk told employees that he doesn’t plan to cut 75% of the staff when he takes over the company, according to people familiar with the matter.
In June, during an all-hands meeting following his purchase agreement, Musk said that Twitter “needs to get healthy,” a reference to trimming costs. He has also said only “exceptional” employees will be able to work from home and everyone else must come to the office. San Francisco-based Twitter was one of the first large companies to promise all employees they could work from anywhere “forever.”
Twitter has done some of the work for him. The company announced a hiring freeze in May, closed or downsized several offices around the world, and canceled a 2023 companywide retreat to Disneyland.
Last week, Twitter froze the equity awards accounts for employees in anticipation of the deal closing. That prompted concerns among workers that he stock awards will not be paid, people familiar with the matter said, and some employees are discussing and researching labor laws to ensure they get the correct type of severance.
It was long clear that Agrawal probably wouldn’t remain in charge once Musk took over. Text messages unveiled during the lawsuit show that the two men had a contentious exchange early on in the deal process, and Musk later mocked Agrawal for being on vacation in Hawaii during some of the early negotiations. Efforts by former Twitter CEO Jack Dorsey to bring them back together after the deal was announced ended poorly.
“At least it became clear that you can’t work together,” Dorsey texted Musk on April 26. “That was clarifying.”
Gadde, meanwhile, oversaw Twitter’s content policy efforts, which Musk has lambasted.
Twitter’s business, which relies mainly on advertising placed in users’ feeds on its social network, has struggled in the time since Musk publicly entered the chat in April. In the second quarter, the company reported its first year-over-year sales decline since the height of the pandemic, and Twitter likely experienced a similar slump for the third quarter, though the company hasn’t announced plans to report earnings.
No ‘Hellscape’ Here
Musk has mentioned the possibility of building a subscription product for Twitter to supplement ad revenue, though it’s unclear which products or features might cost extra. Twitter already offers a subscription product, called Twitter Blue, which includes access to a tweet editing feature, but the company has said it is primarily targeted at power users. Musk hasn’t been impressed. In April, he called Twitter Blue an “insane piece of s–t” in a text message to a friend.
The prospect of less restrictive content moderation under Musk’s leadership has prompted concerns that dialogue on the social network will deteriorate, eroding years of efforts by the company and its “trust and safety” team to limit offensive or dangerous posts. On Thursday, Musk posted a note to advertisers seeking to reassure them he doesn’t want Twitter to become a “free-for-all hellscape.”
The past six months have been challenging for Twitter employees, who have primarily followed the ups and downs of the roller-coaster deal through the news headlines.
Many have been unhappy with Musk’s involvement, with some questioning his qualifications to run a social networking company. His support of a far-right political candidate in Texas, plus sexual harassment accusations from a former SpaceX flight attend in May, have raised concerns with many of Twitter’s workers. During a video Q&A with Musk in June, some employees mocked Musk on internal Slack channels. Others have ridiculed or chided him publicly on Twitter throughout the deal process.
(Updates with executive departures in fourth paragraph.)
Most Read from Bloomberg Businessweek
©2022 Bloomberg L.P.