Will Twitter ever change as a private company if it’s led by Elon Musk, or will it face a downfall?
Elon Musk used Twitter similarly to how he used Tesla. They are delisting to the company’s stock and then removing it from the big hands of public shareholders as part of a $44 billion acquisition of the social media service. This provides him with several advantages.
Elon Musk sought advice from Michael Dell in August 2018. Musk, who is attempting to acquire Tesla, his electric vehicle company, inquired about the process and the best lawyers from Dell, which did the same thing with his eponymous computer company in 2013. for careless commercial use
“In fact, I’m wondering if he thinks he’s a nice guy in private?” Musk mentioned Tesla’s efforts in a deposition. “Does he miss his solitude?”
Dell warned Musk that the process would be “very difficult,” but he was glad he went through with it, according to court documents.
Musk, the last person to consider taking Tesla private, is now thinking about taking Twitter private. It is delisting the company’s shares and removing them from the hands of public shareholders as part of a $44 billion acquisition of the new social media service, which closed on Thursday.
Making Twitter a private company benefits Musk in a variety of ways. Private companies, unlike publicly traded companies, are not required to disclose quarterly performance information. They are also subject to stricter regulatory oversight and can be more tightly controlled by their owners.
That means Musk can go shopping on Twitter without fear of investor backlash, including changing the platform’s content rules, finances, and priorities. Brian J.M., Professor “It’s difficult to run a public company if you believe you should be in charge and aren’t open to the opinions of others, such as shareholders,” said Quinn of Boston University. “Fourth, you seem more adaptable.”
Personal Twitter account of Elon Musk.
As part of the Twitter acquisition, Musk is combining Twitter with X Holdings, a Delaware-based company he founded. X will control the service after purchasing all of Twitter’s shares, while Musk will control the parent company.
What happens to Twitter’s stock price?
According to a securities filing, Twitter will be delisted from the New York Stock Exchange and its shares will no longer trade on the open market as of November 8. Twitter shareholders approved Musk’s acquisition of the company in September, and agreed to sell their shares to him for $54.20 per share. Investors will be able to claim their shares’ cash value.
What’s the deal with Twitter’s board of directors?
Twitter’s board of directors will be disbanded, and the company’s operations will no longer be overseen by its nine members. Musk will most certainly appoint or hire a new board of directors comprised of friends and investors who contributed to the acquisition’s funding. Twitter’s future as a private company will be decided by the new board of directors.
According to Columbia Law School professor Eric Talley, “the law still requires a board, which will almost certainly include Elon Musk and other large equity investors in the company.” Mr. Musk should govern it as if it were a friendly dictatorship.”
What happens to Twitter’s top executives?
Musk has already begun to clean up the mess, laying off several top Twitter executives on Thursday.
Among those let go is Twitter CEO Parag Agrawal, who has clashed with Musk both publicly and privately. Agrawal responded to Musk’s claim that Twitter had an unregulated spam problem earlier this year. Musk’s response was a poo emoji.
According to court records, Agrawal texted Musk at another point, telling the billionaire that his criticism was harming Twitter.
“What a waste of time,” Musk shot back.
Other CEOs who have been fired include Twitter’s chief financial officer, Ned Segal, a top law and policy official, and general counsel Sean Edgett.
According to the merger agreement, Agrawal will receive a golden parachute worth approximately $60 million, Segal will receive $46 million, and Gadde will receive approximately $20 million. It was unclear whether Musk intended to make the payments.
What about the employees of Twitter?
Twitter employs approximately 7,500 people. Some of them have been concerned about Musk’s purchase of the company for months. When their new employer takes over, many may face layoffs or job changes.
Their pay will most likely change as well. Employees are usually given stock options in the company. Employees will be paid in cash for shares they already own, rather than the stock options they were supposed to receive under the merger agreement, because Twitter’s stock has been delisted. Some employees are concerned that Musk will not uphold his end of the bargain.
Quinn explained, “The majority of these employees have previously worked for a public company and are accustomed to liquid public option grants.” “They’ll have to find another Silicon Valley-friendly way to retain employees.”
When Twitter goes private, what financial constraints will it face?
Twitter will avoid some public scrutiny by going private because it will no longer be then required to make a quarterly disclosures about the health of its business. This gives Musk some leeway as he changes Twitter.
Banks that lent him $12.5 billion for the transaction, on the other hand, will put pressure on him to start repaying his debt. Financial analysts estimate that the annual cost of repaying those loans could reach $1 billion.
Quinn explained, “He was under less public pressure to make the payments, but he was under a lot of pressure from the banks.” “An operations-focused manager who is lean and capable of paying the day-to-day bills, as most private equity firms do, will be required.”
Musk received $7.1 billion from equity investors to help finance the transaction. He may also face pressure from investors who expect him to take Twitter public at some point in the future in order to recoup their investment.
To pay off debt, some business owners have chosen to sell off branches of their companies. On Twitter, Musk could do something similar.
“Some aspects of Twitter may be cut, sold, or spun off to raise funds to pay off debt,” said Talley. “Twitter is currently focusing on its core mission. They must be more inventive.
A word of caution as Elon Musk takes over Twitter:
Elon Musk now has complete control over Twitter. His takeover began with a public declaration of intent titled “message to advertisers,” and it is expected to be completed this week. It was published the day before today and provides some insight into his motivations, stating that his possession is motivated by “attempting to assist humanity” rather than monetary gain.
He acknowledges that Twitter can achieve this lofty goal by becoming “a commonplace virtual city square in which a diverse range of ideals can be debated in a healthy manner.” Positive commentators see this change as clean in light of Twitter’s well-documented challenges in achieving consumer and sales growth, or a new product vision. But how would such a possession option affect Indian users or the local media ecosystem?
Twitter has a small, metropolitan following in India, with an estimated 24 million users. Many of those debts, according to Musk, are unsolicited mail or forgeries, and a single character or entity may have signed up for several, if not a number of them. This extraordinarily small and elite range wields a disproportionate cultural and social influence due to the profile of proper consumer debts that may be used by public officers and celebrities.
Twitter is also a public desire medium for diplomatic engagement, politician narrative-putting, and media corporation statements. As a result, a change in ownership, followed by a change in Twitter’s project, can have a big impact in India. The most important thing to remember here is Twitter Inc’s transition from a publicly traded to a privately held company.
This will strengthen the board and allow for more agile decision making, given Musk’s ownership stake. For optimists, this means he can make significant changes to the platform’s experience without having to worry about a quarterly profit report.
It may also imply a clean-up of the bots and unsolicited mail that abound on Twitter without testing, which can be difficult for a publicly traded social media company to audit and dismiss as it may result in a decrease in consumer engagement.
A more pragmatic assessment, on the other hand, will maintain that Twitter’s financial sustainability may be a component within the product mathematics, as the “message to advertisers” mentions the company’s desire to be the “most reputable marketing and advertising platform.”
One can only hope that Musk’s statement is legal posturing, and that he is well-versed in the complexities of legal compliance in jurisdictions such as India based on operational experience. In situations like this, we should consider how much trust and responsibility we place in a private social media platform owner to influence our media ecology. Social media platforms may be better suited to serving as independent cafes or chai tapris rather than the “digital town square.”
However, as Musk assumes control of the platform, I, like many early adopters, express caution while hoping for better, healthier online discussions.
Elon Musk cannot run Twitter like Tesla or SpaceX for five reasons.
1. You chose Twitter “because it is far more critical to the future of civilization to have a common virtual metropolis square, in which a wide range of ideals can be debated in a healthy manner, without resorting to violence,” according to you. This is an excellent concept. However, examination after examination, as well as a slew of whistleblowers from all social media businesses, show that display screen time is maximized while humans are drawn in.
On Twitter, negativity appears to thrive, with slicing commentary or even abuse gaining more traction than genuine debate. You’ve called a rescue diver a “pedo guy” and feuded with rappers Eliza Banks and Roberto Escobar. I’m sure you’ve considered how to strike a balance between free speech (at the expense of public stupidity, of course) and healthy debate. To put it mildly, this titration may be far more challenging than even the most sophisticated machine.
2. Of course, not all violent pronouncements are offensive. There is, however, the possibility of verbal violence. Your previous claims that banning Donald Trump from Twitter was a bad decision that revealed a political bias are correct. But what about rape threats? What about theft, such as the posting of revenge porn? There are no simple answers to these questions. As any skilled editor will tell you, removing the unprintable and correcting errors isn’t always the best way to reduce speech. And, without a doubt, you have entered the publishing fray.
3. To be fair, you do state in your brief letter that Twitter “must not develop into a free-for-all hellscape” and must adhere to “the law of the land.” What country is this? As you will soon discover, some countries have a lower tolerance for what is said in the “virtual public square” than others. Will you obey government orders or fight for people’s freedom of expression in countries where you no longer live? Will your concerns about the “destiny of civilisation,” including free speech, outweigh your fiduciary responsibility to your shareholders?
4. Your letter’s intended audience is advertisers, who will eventually compensate you for the billions of dollars you paid for Twitter (forgive the scepticism approximately your now no longer looking to make cash). Furthermore, not every advertiser can now scale your noble principles. You may be able to weed out what is hazardous and inappropriate, unlike your competitors. However, as you are aware, in the United States, money is a form of free speech, which may appear contradictory in a democracy where all citizens must have an equal voice. Taking over vested interests, even those outside your adopted country, can be more difficult than terraforming Mars for free speech.
Finally, sir, a concern shared by many people around the world. Social media has grown to wield enormous power. You can buy more influence than almost any mainstream media mogul with a single purchase. Previously, there was a cloud over your Twitter activities, including allegations that you used your tweets to manipulate stock prices. Fees are simply that. However, for any political system to function, a system of checks and balances is the only viable solution – and a platform that allows or denies everyone’s voice is inherently political. We have a one-man show for you.
You’ve accomplished incredible and innovative things at Tesla, SpaceX, Neuralink, The Boring Company, and in far too many other ways and places to list. However, please don’t just be a CEO when it comes to managing the trajectory of public conversations, debates, and disagreements. Your competitors and forerunners have simply suffered significant setbacks in terms of free speech and societal harm.