‘Chief Twit’ Musk lugs sink into Twitter HQ as $68b deal deadline looms

The Washington Post reported last week that Musk told prospective investors that he plans to cut three quarters of Twitter’s 7,500 workers when he becomes owner of the company. The newspaper cited documents and unnamed sources familiar with the deliberation.

One of Musk’s biggest obstacles to closing the deal was keeping in place the financing pledged roughly six months ago.

‘I think I’ve got a good sense of where to point the engineering team with Twitter to make it radically better.’

Elon Musk

A group of banks, including Morgan Stanley and Bank of America, signed on earlier this year to loan $US12.5 billion of the money Musk needed to buy Twitter and take it private. Solid contracts with Musk bound the banks to the financing, although changes in the economy and debt markets since April have likely made the terms less attractive. Musk even said his investment group would be buying Twitter for more than it’s worth.

Less clear is what’s happening with the billions of dollars pledged to Musk by investors who would get ownership stakes in Twitter. Musk’s original slate of equity partners included an array of partners ranging from the billionaire’s tech world friends with like-minded ideas about Twitter’s future, such as Oracle co-founder Larry Ellison, to funds controlled by Middle Eastern royalty.

The more equity investors kick in for the deal, the less Musk has to pay on his own. Most of his wealth is tied up in shares of Tesla, the electric car company that he runs. Since April, he has sold more than $US15 billion worth of Tesla stock, presumably to pay his share. More sales could be coming.

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Musk, 51, has shared few concrete details about his plans for the social media platform. While he’s touted free speech and derided spam bots since agreeing to buy the company in April, what he actually wants to do about either remains a mystery.

Although Musk’s tweets and statements have been cryptic, technology analysts have speculated that Musk wants to use Twitter to help re-create a version of China’s WeChat service, which allows users to do video chats, message, stream video, scan bar codes and make payments.

He gave a little more detail during Tesla’s annual shareholder meeting in August, telling the crowd at a factory near Austin, Texas, that he uses Twitter frequently and knows the product well.

“I think I’ve got a good sense of where to point the engineering team with Twitter to make it radically better,” he said.

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Musk’s flirtation with buying Twitter appeared to begin in late March. That’s when Twitter said he contacted members of its board — including co-founder Jack Dorsey — and told them he was buying up shares and was interested in either joining the board, taking Twitter private or starting a competitor.

Then, on April 4, he revealed in a regulatory filing that he had become the company’s largest shareholder after acquiring a 9 per cent stake worth about $US3 billion.

At first, Twitter offered Musk a seat on its board. But six days later, CEO Parag Agrawal tweeted that Musk would not be joining the board after all. His bid to buy the company quickly followed.

Inside Twitter, Musk’s offer was met with confusion and falling morale, especially after Musk publicly criticised one of Twitter’s top lawyers involved in content-moderation decisions.

In July, Musk abruptly reversed course, announcing that he was abandoning his bid to buy Twitter. His stated reason: Twitter hadn’t been straightforward about its problem with fake accounts he dubbed “spam bots.”

Twitter sued Musk in Delaware Chancery Court to force the deal through. Two weeks before a five-day trial was scheduled to begin, Musk changed his mind again, saying that he wanted to complete the deal after all.

AP

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