When Twitter co-founder Jack Dorsey invited Elon Musk to speak at a companywide meeting in early 2020, he asked the Tesla CEO a hypothetical – but prescientific question: “If run Twitter, what will you do? By the way, I wanted to ask if you would like to run Twitter?” Dorsey joked making the staff laugh.
Musk, who at the time wasn’t the richest person in the world nor the one who caused Twitter the most “headache” then answered Jack Dorsey’s question seriously. “I think it would be very helpful to distinguish real accounts from fake accounts” Musk replied. The Tesla CEO’s face was projected onto several giant video screens inside the Houston convention center as more than 4,000 Twitter employees sat listening.
Two and a half years later, Musk’s thoughts on the problems with Twitter are more than just curiosity. His offer in April to buy the company back for $44 billion — and the bitter fight that followed when he tried to pull out of the deal (and then agree to buy it again at the original price) — caused a stir and shook the business world for months.
A trial to determine whether Twitter can force Musk to abide by the terms of the acquisition is scheduled to begin on October 17. But, Musk flashed in the last seconds, saying he would eventually buy Twitter at its original price. As a result, the judge gave the two sides until October 28 to finalize the deal before proceeding with the trial.
If the deal closes, Twitter shareholders will be paid $54.20 a share and Musk will have full control of the company. That will inevitably lead to some awkward situations at the office: Musk has publicly stoned Twitter’s top management, alienating his more than 7,000 (future) employees. Twitter’s lawyers say he is a dishonest hypocrite who has purposely damaged the company’s reputation by regretting the acquisition.
Financially, it’s easy to see why Musk wants to flip the deal. He made his buy offer at a time when the stock market was much better, and by Wall Street standards, Twitter hadn’t been in the business for years.
But the Twitter drama is much more than numbers, given the social network’s role in American political and social life. Musk said the company had inappropriately restrained free speech. He also said he would relax Twitter’s content guidelines and allow former President Donald Trump to return to the platform, rescinding the previous ban.
Some have praised this stance, especially because it spurred the libertarians to revolutionize. But Twitter’s most ardent fans see the social network as a toxic dumping ground; Musk’s critics fear his plan to curb content moderation will make content significantly worse in ugly ways.
If negotiations for the takeover somehow fail and Musk then convinces a judge to get out of the deal, Twitter’s stock price could drop. Billions of dollars in market value will be blown away. And the company will be back to where it was earlier this year, as a prominent social network that has never been able to build the kind of sharp business that rival networks like Facebook and YouTube do.
According to Bloomberg, for Twitter, there is no good outcome for the Elon Musk case.
Sorrow appeared when Musk spoke to Twitter employees on June 16, nearly two months after first reaching an agreement to buy the company. Twitter employees inherently earn less than their colleagues at other big tech companies. Many people expressed disagreement with Musk’s views on content moderation. Furthermore, they were also distracted by an allegation that Musk sexually harassed a SpaceX employee (which Musk denies).
During that meeting, Musk didn’t seem to convince the skeptics. As he alluded to the end of telework and the possibility of layoffs, some employees used Slack to mock their soon-to-be boss.
The meeting was the worst part of a sad Twitter spring, and it’s worth mentioning that things look set to get even worse soon. After years of steady profits, the company reported a net loss in July, as well as a drop in revenue year-over-year.
The following week, they announced that they would be closing or downsizing offices in New York, San Francisco, Sydney, and several other cities. Notably, that came after the company halted hiring and canceled job offers for some candidates. On top of that, Twitter has also fired several key senior executives and asked employees to quit scheduled for early 2023 at Disneyland.
The meeting also offered a glimpse of what could happen to Musk as the leader of the social network. Twitter’s board of directors will be dissolved. Musk is also likely to restructure departments internally, and many employees in groups he criticizes – including law, policy and the media – are bracing for the possibility that they will soon be laid off.
It seems almost certain that Musk will remove current CEO Parag Agrawal, as well as Twitter’s top lawyer, Vijaya Gadde, who oversees all content moderation. Text messages included in the court filings show that Musk and Agrawal quickly realized they were at odds.
In early April, when Musk was still appointed to join Twitter’s board, he sent out a series of tweets criticizing the company, including one asking if celebrities were less likely to use the service is a sign that the platform is “dead”.
Agrawal texted Musk: “You are free to tweet: Twitter is dying or whatever else it is about Twitter – but it is my responsibility to tell you that it does not help me improve Twitter in the current context”. Musk shot back within a minute: “What did you do this week?” 40 seconds later, Musk continued: “I am not on the board. This is a waste of time.”
A few weeks later, Dorsey — who chose Agrawal to succeed him as CEO and encouraged Musk to buy Twitter — made an attempt to mediate the disagreement between the two men over a phone call. Dorsey then texted Musk: “Obviously you two can’t work together. That has been made clear.” As can be seen, Dorsey’s attempt failed.
On the operational front, Musk’s most visible impact will likely be his loosening of Twitter’s efforts to prevent misinformation and abuse. The company has spent years trying to prevent coordinated deception and slurs about its services, but Musk himself prides himself on it. His approach to content moderation is essentially that “everything will go well” and he told Twitter staff that users should be allowed to post “quite outrageous stuff.”
Another focus of Musk’s will probably be an attempt to reduce the popularity of bot accounts. When trying to get out of the deal, Musk said his reasoning was that Twitter’s leadership team misrepresented the number of users.
The company’s income statement includes a line stating that bots and spam accounts account for less than 5% of the company’s overall reported user base. Musk claimed the number was much higher, but he did not provide any evidence and said Twitter had hindered its efforts to analyze its user base. When Agrawal tweeted in May that Twitter’s internal estimate for the previous 12 months was actually 5% lower in bot accounts, Musk responded by retweeting a vulgar emoji.
Musk has vowed to remove bots but his plans to do so are vague.
Exactly what Musk will do in implementing any of these changes remains unclear, especially as he has responsibilities at other companies. The new CEO of Twitter is Dorsey – also has two jobs, but he tweeted in May that he will “never be CEO again” and is now almost entirely focused on promoting Bitcoin.
“Being CEO is going to be a lot of work” Musk told Twitter employees in June when asked about his expected role at the company. But even if someone else holds the charge, there’s no doubt that Musk will have the final say. “I don’t really care what the title will be” he said. “But obviously people need to listen to me.”
Source: Bloomberg BusinessWeek