The world shifted last night as Elon Musk completed his takeover of Twitter.
Why it matters: One of the most influential communication platforms is now in the hands of an unpredictable leader.
Catch up quick: The nearly eight-month saga ended Thursday night, a day before today’s court-ordered deadline.
- Musk had met briefly with a handful of employees at Twitter’s headquarters on Wednesday, after notably bringing a sink into the lobby.
- On Thursday night, Twitter staffers began to hear details, through media reports and posts on Twitter, that the deal had closed and top executives had been fired.
- That includes news about the firing of CEO Parag Agrawal, CFO Ned Segal, general counsel Sean Edgett and Vijaya Gadde — the company’s head of legal, policy and trust who was involved in banning former President Trump.
The big picture: Despite shrugging off the idea in the past, Musk has reportedly appointed himself CEO of Twitter, for now, and he's expected to make swift decisions.
- His handling of account suspensions is the most anticipated.
- Musk has said he intends to limit permanent bans and believes in making Twitter a free-speech haven, raising concerns over increased hate speech and divisiveness.
- Musk also announced today that Twitter will form a content moderation council and that “no major content decisions or account reinstatements” will happen before it convenes, before also tweeting, “Anyone suspended for minor & dubious reasons will be freed from Twitter jail.”
Reality check: Advertising makes up nearly all of Twitter's revenue, and advertisers are watching closely for Musk's next moves.
- General Motors on Friday told CNBC it's temporarily suspending paid ads on Twitter while it gets a feel for "the direction of the platform under their new ownership."
- Musk has been conscious of this kind of risk, and wrote to advertisers on Thursday that "Twitter obviously cannot become a free-for-all hellscape."
What to watch: Musk is essentially fulfilling the role of a private equity company, Bloomberg corporate credit reporter Paula Seligson noted this morning during a Twitter Spaces conversation.
- If he acts like one, he'll have to significantly cut costs and grow revenue, she noted.
- Twitter's debt load has grown from about $2 billion to more than $13 billion, with an annual interest expense of $1.2 billion going forward, more than 12x what it is now, according to Seligson.
The bottom line: In order for Musk to make Twitter successful, and to grow its value in order to one day sell it again back to public investors — it’s in his interest to keep content “brand safe” for advertisers.
- It is vital they stick around to fund his vision for Twitter, which could be a form of a super app.
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