Elon Musk is set to temporarily run Twitter after its $44 billion takeover. Until the acquisition of the social media company is complete, Parag Agrawal, who was named CEO of Twitter in November, is expected to remain in his post. On Thursday, an SEC department revealed that Musk got another $7 billion from his friends and investors to buy Twitter. Meanwhile, Tesla shares have plunged more than 8% as investors fear Musk’s involvement in Twitter could distract him from running Tesla.
There have been a lot of rumors swirling about Twitter’s future since the board announced it had agreed to a $44 billion deal on behalf of social media company Elon Musk. While Musk was expected to appoint a new CEO to lead the company when the deal closes, people familiar with the matter reported this week that this is unlikely to be the case. According to these sources, Musk is expected to serve as CEO of Twitter himself for some time after the takeover. Musk, the world’s richest man, is also CEO of Tesla and runs two other companies, The Boring Company and SpaceX.
Tesla shares fell more than 8% on Thursday. Investors fear that Musk’s involvement in Twitter could distract him from managing the world’s most valuable electric car maker. Tesla’s market capitalization fell $855 billion in the day on Thursday, but climbed $876 billion an hour as we write its lines. Shares of Twitter, meanwhile, extended their gains and were up about 4% to $50.89, closer to the deal price of $54.20, as investors bet the new funding made the deal close. of agreement more likely.
Parag Agrawal, who took over from Jack Dorsey as Twitter CEO last November, is expected to stay in his role until the Musk company sale is complete. In addition, Musk is also already the influx of funds needed for the transaction. He embarked on the sale of several million of his shares in the manufacturer of autonomous cars. He reportedly sold about $8.5 billion worth of Tesla stock in the days following the Twitter takeover deal. And on Thursday, Musk numbered a group of top investors who are willing to provide $7.14 billion in funding for his Twitter offering.
A filing with the United States Securities and Exchange Commission (SEC) also mentions this financing. According to some sources, Musk would have handpicked the investors. Commitments range from $1 billion to Oracle co-founder Larry Ellison, $5 million to Honeycomb Asset Management, which has invested in SpaceX. The rumor also indicates that Jack Dorsey, co-founder of Twitter, could support the operation. Dorsey, who is a strong supporter of cryptocurrencies and mainly bitcoin, left his place Agrawal in November to dispense with the management of Block, his blockchain company.
Saudi investor Prince Alwaleed bin Talal, who in April said the deal price was not enough for him to sell his shares, said Musk would be a “great leader” for Twitter and agreed to incorporates its $1.89 billion stake in the transaction. Other investors include cryptocurrency firm Binance, the company of New York real estate mogul Steven Witkoff and DFJ Growth IV Partners, which has investments in The Boring Company, SpaceX, SolarCity and Tesla. Some fear, however, that these investors will greatly influence the future of Twitter.
We hope we can play a role in bringing social media and Web3 closer together and expanding the use and adoption of cryptocurrencies and blockchain technology,” said Changpeng Zhao, CEO of Binance. Other sources say Musk is also in talks with big investment firms and very wealthy people to secure more funding for his Twitter acquisition and commit less of his wealth to the deal. The SEC filing says Musk is expected to speak with Dorsey and current Twitter executives to tender shares in the proposed acquisition.
Musk, a self-proclaimed free speech absolutist who has advocated user-friendly changes to Twitter such as an edit button and cracking down on “spamming bots” who send out overwhelming amounts of unwanted tweets, said he would try to keep as many investors in Twitter as possible. Investors inquired whether Musk would close the deal on Twitter. Indeed, in April, after taking a roughly 9% majority stake in Twitter, Musk decided at the last minute not to take a seat on the company’s board.
Under the terms of the deal, Musk would have to pay Twitter a $1 billion severance fee if he backs out, and the social media company could also sue him to complete the deal. Additionally, Musk’s acquisition of Twitter comes at a key moment for the company. Agrawal said he is building on growing Twitter’s daily active user base and bringing new products to customers. In its latest company earnings report, Twitter said it reached 229 million monetizable daily active users.
This represents an increase of 15.9% compared to the same period last year. On the other hand, sources reported that Musk recently made presentations in front of investors, where he gave financial projections based on his analysis of Twitter. Musk reportedly told investors he felt Twitter’s profit before interest, tax, depreciation and amortization margin was too low and that the company had “too many engineers who don’t do it.” not enough”. Musk has also reportedly pledged to make the company a “talent magnet.”
Source: Twitter SEC Filing
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