Billionaire Elon Musk is now officially in charge of Twitter and has fired several top executives after closing his US$44-billion deal to buy the social media company on Thursday, according to multiple reports.
The Associated Press, Reuters and the Washington Post all reported the news of Musk’s takeover, citing anonymous sources who were familiar with the move.
CEO Parag Agrawal, chief financial officer Ned Segal and legal policy chief Vijaya Gadde were escorted out of Twitter’s headquarters in San Francisco after the deal was completed, the reports said.
The closing of the deal caps a months-long saga that saw Musk, the founder and owner of Tesla and SpaceX, first offer to buy the social media platform and then try to walk away, sparking a court battle.
Musk agreed to return to his original offer earlier this month, and was given until Friday to complete the deal. The two sides would have been forced to return to court had the deal not been closed.
He had previously accused the outgoing executives of misleading him over the number of spam accounts on the platform and criticized them over content moderation and other issues, leading to his attempt to back away from the purchase.
But Musk, the world’s richest person, has since appeared to embrace his new venture.
He walked into Twitter’s headquarters on Wednesday with a big grin and carrying a porcelain sink, subsequently tweeting “let that sink in.” He also changed the description in his Twitter profile to “Chief Twit.”
He also tried to calm fears among employees that major layoffs are coming and assured advertisers that his past criticism of Twitter’s content moderation rules would not harm its appeal.
“Twitter obviously cannot become a free-for-all hellscape, where anything can be said with no consequences!” Musk said in an open letter to advertisers earlier on Thursday.
The Washington Post, citing interviews and documents, reported last week that Musk has told prospective investors he plans to cut up to 75 per cent of Twitter’s workforce. That would mean thousands more layoffs than the previous management had originally planned.
Musk has indicated he sees Twitter as a foundation for creating a “super app” that offers everything from money transfers to shopping and ride hailing.
The deal also means Twitter will return to being a private company, at least for the short term. The New York Stock Exchange notified investors that it will suspend trading in shares of Twitter before the opening bell Friday, according to a delisting notice.
The journey to Musk’s takeover began on April 4, when Musk disclosed a 9.2 per cent stake in Twitter — making him its largest shareholder.
He then agreed to join Twitter’s board, only to balk at the last minute and offer to buy the company instead for $54.20 per share, an offer that Twitter was unsure whether to interpret as another of Musk’s cannabis jokes.
Musk’s offer was real, and the two sides reached a deal at the price he suggested. This happened without Musk carrying out any due diligence on the company’s confidential information, as is customary in an acquisition.
In the weeks that followed, Musk had second thoughts. He complained publicly that he believed Twitter’s spam accounts were significantly higher than Twitter’s estimate, published in regulatory filings, of less than 5 per cent of its monetizable daily active users. His lawyers then accused Twitter of not complying with his requests for information on the subject.
The acrimony resulted in Musk giving notice to Twitter on July 8 that he was terminating their deal on the grounds that Twitter misled him on the bots and did not cooperate with him. Four days later, Twitter sued Musk in Delaware, where the company is incorporated, to force him to complete the deal.
By then, shares of social media companies and the broader stock market had plunged on concerns that the Federal Reserve’s interest rate hikes, as it seeks to fight inflation, will push the U.S. economy into recession. Twitter accused Musk of buyer’s remorse, arguing he wanted to get out of the deal because he thought he overpaid.
Most legal analysts said Twitter had the strongest arguments and would likely prevail in court. Their view did not change even after Twitter’s former security chief Peiter Zatko stepped forward as a whistleblower in August to allege that the company failed to disclose weaknesses in its security and data privacy.
On Oct. 4, just as Musk was set to be deposed by Twitter’s lawyers ahead of the start of their trial later in the month, he performed another u-turn and offered to complete the deal as promised.
—With files from Reuters