After Elon Musk’s hostile $43 billion takeover bid on Twitter, Twitter CEO Parag Agrawal attempts to calm employee anxieties.
According to two employees in attendance, Agrawal said at an all-staff meeting on Thursday that Twitter’s board is considering Musk’s offer and will act in the best interests of company shareholders.
Agrawal ignored an employee’s suggestion that Musk’s aggressive acquisition proposal felt like a hostage situation.
According to the staff, Agrawal said, “I don’t believe we’re being kept hostage.”
After the meeting, many people were shocked, claiming that they were kept in the dark about what was going on. A Musk-owned Twitter represents a nightmare scenario for them, given Musk’s background as a volatile business leader.
“The culture here and this platform deserve to be safeguarded, and I hope the Board does the courageous thing and rejects the offer,” one Twitter employee, who asked to remain anonymous, said. This employee stated, “Our democracy is more vital than a paycheck.” “I’m hoping the Board will agree.”
However, this Twitter employee noted, “It does feel like there isn’t much we can do as employees.”
Musk expressed interest in buying Twitter earlier by tweeting a file to the Securities and Exchange Commission, noting that the deal was contingent on “expected financing completion.”
Analysts pointed out that an investor interested in a takeover typically reveals financing and a proposal.
“I’m not sure I’ll be able to get it,” Musk said at the TED2022 conference in Vancouver, British Columbia, his first public appearance since announcing his Twitter purchase.
When asked if he had a “Plan B” in case his takeover failed, he said, “There is,” but declined to elaborate.
Musk’s offer could entice other Twitter bidders.
Musk’s offer of $54.20 a share is 38% higher than the value of the Twitter stock the day before his investment was publicly publicized and 18.2 percent higher than the closing price on Wednesday.
Musk tweeted on Thursday afternoon, “It would be totally inexcusable not to bring our offer to a shareholder vote.” “They, not the board of directors, own the corporation.”
However, Twitter shares fell 1.35 percent on Thursday, significantly below Musk’s offer price, indicating that investors may be wary of the billionaire’s offer.
Longtime Twitter shareholder, Prince Alwaleed bin Talal of Saudi Arabia, tweeted on Thursday that Musk’s bid does not come close to the company’s “intrinsic worth” and that he will reject it. “What are the Kingdom’s views on journalistic freedom of speech?” Musk responded on Twitter.
Interesting. Just two questions, if I may.
How much of Twitter does the Kingdom own, directly & indirectly?
What are the Kingdom’s views on journalistic freedom of speech?
— Elon Musk (@elonmusk) April 14, 2022
However, according to Scott Kessler, an analyst at research firm Third Bridge, Musk’s strategy may open the door to other interested purchasers who have their own designs for Twitter.
“This is truly the start of a process,” Kessler said, “and it’s not necessarily going to start and end with Elon Musk.”
Wedbush Securities analyst Dan Ives stated that he believes Musk will succeed in a note to clients.
“Any other bidders/consortium will find it difficult to emerge, and the Twitter board will be compelled to accept this bid and/or launch an aggressive process to sell Twitter,” Ives said.
Still, there are remaining problems, such as how Musk would balance his time as CEO of Tesla and SpaceX and how he would fund his cash offer. Tesla shares account for the majority of his $266 billion net wealth. Tesla’s valuation may be affected if he sells a portion of his stock.
From Twitter’s most outspoken user to the potential owner
The takeover bid is the latest twist in the billionaires and the social media platform’s crazy two weeks.
Musk announced on April 4 that he had been buying up Twitter shares and had become the company’s largest individual stakeholder. (A Twitter shareholder filed a securities fraud case against Musk earlier this week, arguing that his late disclosure of his stock cost investors money and saved Musk $143 million.)
Tesla’s CEO is a frequent Twitter user and a loud critic. Thus his investment instantly raised doubts about his motives. He had publicly questioned Twitter’s commitment to free expression and pondered about launching his own competing social network in the weeks before his stake became public.
The next day, Twitter CEO Agrawal announced Musk’s appointment to the board of directors and a cap on how many additional Twitter shares he could purchase. Both guys expressed interest in collaborating on the company’s future.
Those ideas, however, swiftly disintegrated. Musk announced on Twitter that he would not be joining the board after all, a decision that Agrawal described as “for the best.”
Musk had spent much of the weekend tweeting recommendations, critiques, and jokes about Twitter until his about-face became public Sunday night. “Is Twitter dying?” he wondered in one post, pointing out that many of the site’s most popular users, such as Barack Obama and Katy Perry, don’t tweet very often.
Musk is a self-professed free-speech zealot.
While it’s unclear why Musk changed his mind about joining the board, he reiterated his vision of Twitter’s role in society — and what’s required to accomplish it — in his filing on Thursday.
In a letter to Twitter chairman Bret Taylor, he stated, “I invested in Twitter because I believe in its potential to be the medium for free speech worldwide. I believe free speech is a societal requirement for a functioning democracy.” “However, since making my investment, I’ve come to recognize that the company, in its current form, can neither prosper nor serve this societal necessity.”
Musk has referred to himself as a “free speech absolutist” and has criticized Twitter’s guidelines around what users can discuss on the platform.
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Cracking open the “black box” of Twitter’s algorithm to increase openness about which tweets are promoted or degraded is one of Musk’s other recommendations for the social media network. He warned at the TED event that keeping the automated method hidden is “very perilous.”
Musk says, “I don’t like to lose.”
However, Twitter, which has a far smaller user base than social media platforms such as Facebook and TikTok, is also under pressure to expand its business. Users and advertisers may be turned off if the company changes its policy on hate speech and misleading claims about COVID.
“This is a money-making platform where your thoughts are amplified if they’re going to help the firm generate money,” said Karen Kornbluh, an expert on online disinformation at the German Marshall Fund.
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“When you survey people, they say they want moderation, they don’t want conspiracy theories floating around freely on their platforms, they don’t want harassment,” she explained. “I believe it’s a misinterpretation of what people want.”
Musk stated at the TED conference on Thursday that his interest in Twitter was not based on economics or profit. “Twitter has de facto become the town square,” he remarked. “It’s just critical that people have both the reality and the perception of being able to talk freely within the confines of the law.”
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