Twitter’s Board of Directors officially accepted Elon Musk’s offer of $54.20 per share in cash, valuing the company at around $44 billion. The deal would allow Musk to take the 16-year-old social media platform private and implement a wide range of changes to the struggling tech firm.
There are still many hurdles to overcome for the transaction to be completed. It will be difficult to ascertain how long the regulatory process will take, while experts expect that it will likely be a few weeks before the stock is delisted on the New York Stock Exchange.
Who Will Lead Twitter 2.0?
Will Musk keep Parag Agrawal as CEO, or will he appoint a new CEO? What about the Board of Directors?Musk has been highly critical of Agrawal since being chosen to succeed co-founder Jack Dorsey. In December, he shared a meme that compared Agrawal taking the reins from Dorsey and Josef Stalin’s censors removing Soviet secret police official Nikolai Yezhov from photographic records.
Agrawal, who could receive $42 million if he is terminated from his position, was short in his remarks following the deal announcement.
“Twitter has a purpose and relevance that impacts the entire world,” he said. “Deeply proud of our teams and inspired by the work that has never been more important.”
Regarding the rest of the workforce, Elon Musk will need to determine a different structure for employee compensation since stock grants and rewards are not feasible. There is some speculation that staff members could be given equity in the next incarnation of Twitter, which would be beneficial if the tech firm goes public again.
In addition, should Musk dismantle many of the content-moderation policies, many employees might no longer be needed.
The next stage is determining how much control Musk will have over Twitter and whether he can navigate through the murky waters of social media, says Eric Dahan, CEO at Open Influence, a marketing company focused on social media platforms.
“Even though Twitter has been around forever, Musk is bringing a lot of hype to it,” he told The Epoch Times. “The question is, can Elon innovate from a social standpoint and build features that are going to increase user engagement and usage in general on the platform?”
New Twitter Possibilities
Dahan explained that social media platforms need to keep users regularly engaged and interact with one another. He notes that outlets that generate tremendous buzz and hype in the beginning can quickly fade without this tactic in place.In a way, Twitter needs to emulate TikTok by making it more engaging and simple to use, argues Chris Tompkins, the CEO and founder of The Go! Agency, a digital marketing firm.
“They need to get more people active. Twenty-five percent of Twitter users are responsible for 97 percent of the posts. For a platform that thrives on volume, it doesn’t look like engagement is that important,” he told The Epoch Times.
TikTok, for example, has nailed it by making it fun and simple for people to join and stay engaged, he explained.
The number of people who start using Twitter could determine the next big step in the platform’s rebirth.
Since Musk has become the new owner of Twitter, there has been an exceptional expectation of returning free speech to the platform, says Jeff Brain, the CEO of CloutHub, a platform that defines itself as a non-biased social network.
But what does this entail exactly?
“It’s perhaps returning accounts that have been banned for reasons that they shouldn’t have been,” Brain told The Epoch Times. “The other thing is loosening the rules about what’s allowed and what’s not allowed and being consistent in those rules.”
What Wall Street Says
Today, Twitter still functions as a publicly-traded company on the New York Stock Exchange. Investors can purchase shares for about $50 and buy and sell until the deal is finalized and the stock is delisted.In addition to what investors can or cannot do, what does Wall Street say about the Musk-Twitter saga?
Indeed, there could be a lot at stake, be it digital advertising or subscriptions.
Musk has made it clear he wants to overhaul Twitter Blue by cutting the price, removing ads for subscribers, and allowing users to pay with Dogecoin.
After years of stagnation and a lack of product innovation, some say it is unclear if conditions will improve or worsen under Musk. Evercore ISI analyst Mark Mahaney warned of a potential advertiser exodus, projecting that users might not be interested in easing content moderation and subscription offerings.
“We’re skeptical that less moderation will lead to a material rise in user growth. And interest in a subscription offering has always been limited in our surveys, with only 13 percent of respondents in our latest survey expressing interest,” he stated.
“That said, Musk’s ideas of allowing tweet edits and removing text character limits strike us as very sound and user-friendly.”
“Twitter as a company has always been my sole issue and my biggest regret. It has been owned by Wall Street and the ad model. Taking it back from Wall Street is the correct first step,” the ex-CEO said, likely referring to the continuing pressure on public companies from Wall Street to maximize short-term earnings.
“We did not believe another bidder was out there and that Elon Musk’s offer was a steal of a deal for shareholders given the operating, monetization, and valuation challenges at the company,” he said. “Twitter’s sale for $54.20 is final evidence that the idea of Twitter has been far more valuable than the actual long-run operations of Twitter!”
Twitter is scheduled to deliver its first-quarter 2022 results on Thursday. The tech giant forecasts total revenues between $1.17 billion and $1.27 billion.
Twitter shares tumbled about 3 percent to around $50 on Thursday.
