'6-Month Turmoil Ends' Musk Completes Twitter Acquisition (Comprehensive Report 2)

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Elon Musk, CEO of Tesla, finalized the acquisition contract for the social networking service (SNS) Twitter and secured management rights on the 27th (local time), one day before the court-ordered deadline. This marked the end of a chaotic six-month process that saw cancellations and reversals following the acquisition agreement announcement in April.

The market, which had been closely watching the situation with the mindset of "It’s not over until it’s over," is now expected to focus on Twitter’s changes, including its delisting. Musk emphasized freedom of expression, a core aspect of Twitter’s business, seemingly mindful of advertising revenue, stating that Twitter "cannot become a free-for-all hellscape," reassuring advertisers and officially beginning his activities as Twitter’s owner.

◆ Musk’s First Move After Acquisition: Executive Dismissals

David Faber, a CNBC reporter, cited sources on his Twitter that Musk is now overseeing Twitter. He added that Parag Agrawal, Twitter’s CEO, and Ned Segal, Chief Financial Officer (CFO), have left the company and will not return. The Wall Street Journal (WSJ) and Financial Times (FT) also reported, citing multiple sources, that Musk has completed the Twitter acquisition contract.

Musk appears to have acquired Twitter shares at $54.20 per share (approximately 77,000 KRW), totaling $44 billion (about 62 trillion KRW), according to the April contract. After announcing the acquisition agreement in April, he declared the contract void in July, citing issues with fake and spam accounts, but retracted the cancellation three months later in October and proceeded with the acquisition as planned. The court ordered the acquisition to be finalized by 5 p.m. on the 28th and warned that failure to comply would result in litigation starting in November.

Bloomberg reported that Vijaya Gadde, Head of Legal and Policy, and Sean Edgett, Legal Counsel, who handled Twitter’s legal affairs, also left the company. The Washington Post (WP) described a tense atmosphere as senior Twitter executives hurriedly exited the San Francisco headquarters building.

Parag Agrawal, Twitter CEO (right) [Image source=Reuters Yonhap News]

During the acquisition process, Musk expressed distrust toward Twitter’s current senior management and promised sweeping reforms. Early in the negotiations, clashes with CEO Agrawal occurred, making their departure inevitable once the acquisition was finalized. WSJ reported that it is still unknown who will replace Agrawal and Segal. FT predicted that Musk himself would take on these roles until new executives are found.

◆ Musk Reassures Advertisers... Denies Layoff Reports to Employees

Before reports of the acquisition’s completion surfaced, Musk had already sent messages effectively acting as Twitter’s CEO. On the same day, he posted an open letter to advertisers on his Twitter account, just one day after sharing a video of himself carrying a sink into Twitter’s San Francisco headquarters.

In the letter, Musk stated, "There has been much speculation about why I am buying Twitter and what I think about advertising, most of which is wrong," adding, "The reason I acquired Twitter is because having a shared digital town square is important for the future of civilization." He acknowledged concerns that current SNS platforms cause hate and social division and emphasized that Twitter can "allow broad discussions in a healthy way without relying on violence."

Musk explained, "Twitter clearly cannot become a free-for-all hellscape," and "Our platform must be a warm and welcoming place that complies with the law." He added, "I want Twitter to be the world’s best advertising platform that strengthens your brand and grows your business."

This letter followed Musk’s repeated emphasis on freedom of expression during the acquisition process. Although he has not disclosed specific operational policies for Twitter, concerns grew among some advertisers about a surge in hateful content on Twitter. Since advertising accounts for 90% of Twitter’s revenue, Musk’s assurance that Twitter will remain a healthy cyberspace even under his ownership seems aimed at calming market anxieties.

Elon Musk, CEO of Tesla, appearing in a video he posted on his Twitter on the 26th. He is seen carrying a sink into Twitter's San Francisco headquarters.
[Image source=AP Yonhap News]

Musk also visited Twitter’s San Francisco headquarters the previous day to ease employee concerns. According to Bloomberg and others, he met with employees at the company’s coffee bar and denied reports of laying off 75% of the staff. Earlier, the Washington Post and Bloomberg reported that Musk had informed investors of plans to reduce Twitter’s approximately 7,500 employees by 75%, downsizing to about 2,000 employees.

◆ Market, Which Had Been Watching Closely, Now Focuses on 'Twitter’s Changes'

Due to these events, the market had maintained a wait-and-see attitude until Musk’s acquisition was finalized on the 28th. Usually, investor attention wanes after an acquisition contract is signed, but this deal attracted continuous attention due to frequent changes and legal disputes. Bloomberg and WSJ reported, citing sources, that some investors had already transferred funds to support Musk’s acquisition, and every move by Musk was major news.

The New York Stock Exchange (NYSE) announced that trading of Twitter shares would be temporarily suspended on the 28th to protect investors. Securities regulators can halt trading of specific stocks for up to 10 business days to protect investors and the public interest under securities laws.

Musk’s initial declaration not to proceed with the acquisition, followed by a reversal three months later, appears to be based on the judgment that legal disputes would not be advantageous to him. If Musk had not proceeded with the acquisition as planned, litigation would have started immediately in November.

However, experts assessed that Musk’s chances of winning such a lawsuit were slim. Bloomberg reported that Delaware Chancery Court Judge Kathaleen McCormick, overseeing the case, had shown an unfriendly stance toward Musk in previous rulings related to evidence. Brian Quinn, a professor at Boston College, said, "In my view, there is a 99% chance this deal will go through," adding, "All signs indicate Musk is accepting his fate."

[Image source=AP Yonhap News]

With Musk completing the acquisition process, the market is expected to focus on Twitter’s changes. Foreign media predict that related procedures will proceed quickly, as Musk had repeatedly stated during the acquisition process that he would delist Twitter. Bloomberg reported, "Shareholders will receive $54.20 per share, and Twitter will operate as a private company."

Bloomberg also cited multiple sources reporting that Musk plans to list a new holding company for Twitter within the next 3 to 5 years. Additionally, since Musk has emphasized freedom of expression and announced measures such as lifting restrictions on former U.S. President Donald Trump, his forthcoming operational policies for Twitter are expected to attract significant attention. Furthermore, ongoing concerns about Twitter’s profitability and efficiency suggest that cost-cutting measures will also be announced.

As the scheduled acquisition date approached, Twitter’s stock closed at $53.70, up 0.66% that day. Twitter’s stock price, which had fallen to the $32 range in July when Musk declared the acquisition void, fluctuated before recovering to the $50 range after the cancellation withdrawal in October. The gap between Twitter’s stock price and Musk’s acquisition price has now narrowed to less than $1.

This content was produced with the assistance of AI translation services.