Elon Musk Buys Twitter
Photo courtesy of NORAD and USNORTHCOM Public Affairs on Wikimedia Commons
On October 27th of this year, Elon Musk bought Twitter, officially becoming its new owner at a price of $44 billion. Since then, Musk has been making radical changes to Twitter’s staff and the way they operate, which has many people uncertain as to what the future holds for this major social media platform.
Musk began buying Twitter’s stock in January of 2022. This continued until April, when Musk owned a majority 9.2% of the company’s shares (which cost about $2.64 billion according to CNBC), making him the largest shareholder. The next day, Twitter executives invited Musk to join the company’s board of directors, although it was reported less than a week later that he had declined this offer. Not long after that, however, Musk offered to buy Twitter at a valuation of around $43 billion, which would make Twitter a privately owned company. After some back-and-forth negotiations, Twitter accepted Musk's offer in late April, valuing the deal at $44 billion. Musk put the deal on hold, however, in May, amid worries about the prevalence of bot and spam accounts on the platform.
A few weeks later, Twitter shareholders brought a class-action lawsuit against Musk, claiming that in his acquisition of Twitter, he had been manipulating the company’s stock prices. According to abcNews, Musk moved to “terminate his acquisition of Twitter, pointing to the issue of fake accounts.” Twitter, however, sued Musk for breaking the agreement and trying to stop the deal this late into his acquisition. The trial for the lawsuit was scheduled for October so that both parties would have an extended period to present their cases. On October 6th, Musk reversed his decision, offering to acquire Twitter for his original valuation of $44 billion. In the late afternoon of October 27th, Musk finally closed the deal, on the last day before the court trial would have moved forward. Musk tweeted after closing the deal, stating “the bird is freed.”
One of the first reforms that Musk made almost immediately after acquiring Twitter was firing four top executives, including the CEO Parag Agrawal, CFO Ned Segal, policy head Vijaya Gadde, and general counsel Sean Edgett. This escalated further on November 4th, when Musk began laying off an estimated 3,700 of Twitter’s 7,500 employees, nearly half of all of Twitter’s staff. Musk claimed in a tweet that this was done because Twitter had been losing over $4 million a day, and needed to cut costs. He also stated that those he was laying off were going to be given 3 months' worth of severance pay, which is apparently 50% more than he is legally required to give them.
Later, on November 16th, Musk delivered an ultimatum to the employees that still remained at Twitter: commit to “extremely hardcore” work in order to realize his vision of “Twitter 2.0,” or be fired. The next day, hundreds of Twitter employees denied the ultimatum and resigned. According to Business Insider, fewer than 2000 of Twitter’s original employees remained after the ultimatum’s deadline had passed. So many people were resigning that Musk began reaching out to workers who were deemed “critical,” trying to convince them to stay.
Overall, Musk’s acquisition of Twitter has been a bumpy and uncertain train of events that will continue on into the future.