To understand the speed with which the Twitter board has accepted Elon Musk's $ 44 billion offer, do not look away from Wall Street's obscure view of Twitter's ability to achieve the highest financial goals announced after investment by Elliott Management in 2020 .
Why Elon Musk Just Bought Twitter
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On Monday, Elon Musk bought Twitter for $ 44 billion. Musk, C.E.O. of Tesla, the world's richest man, plans to take over a private communications company, and says he wants Twitter to be more...
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Tesla stock fell 11% on Tuesday as investors scrambled with Elon Musk for Twitter acquisition and increased EV competition. Musk uses most of his Tesla stake as collateral to finance the $ 44 billion acquisition on social media. Meanwhile, Ford said it was facing a strong demand for its F-150 and that it plans to produce 150,000 units by 2023. Tesla&#...
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Twitter has announced that it welcomes Elon Musk's $ 44 billion promise to buy on Monday. Jeff Bezos took to Twitter to ask if Tesla's business dealings in China would empower the company. Twitter has been banned in China since June 2009 as part of the country's "Great Firewa...
When Twitter reported quarterly financial results on Thursday, analysts expect user growth to lag behind what they need to achieve the 2023 growth targets of aggressive Jack Dorsey, founder and chief executive of Twitter at the time promised Wall Street. According to information, Twitter is expected to miss this target and remain inactive for up to a year.
Two weeks before the agreement was announced, Michael Nathanson, an influential technical analyst and media at MoffettNathanson, advised shareholders to "take the money and run."
The Twitter board has reached a similar conclusion. The directors had no confidence in the new CEO Parag Agrawal's ability to bring about a higher return than that offered by Musk, paving the way for a sell-out decision four days after the CEO of Tesla elaborated on his finances, according to sources familiar with board discussions.
Giving the CEO role to an untested leader, Agrawal, five months ago created additional risks on Twitter, said Ryan Jacob, chief investment officer of Jacob Asset Management, who owns 7.7 million shares on Twitter.
"They have strong intentions out there, and there's a lot of doubt that they can achieve those numbers," Jacob said. "The CEO has no record."
Eight current and former employees on Twitter, including management and staff, have told the old stories of internal inefficiency, decision-making and lack of accountability, which, in the view of one current employee, exacerbated the pressure to deliver on the promised results. .
After the announcement of a confidential agreement on Monday, Dorsey thanked Musk and Agrawal in a tweet for "getting the company out of the impossible," accusing it of being "Wall Street and an advertising model."
Twitter declined to comment. Tesla and Musk did not immediately respond to requests for comment.
ANOTHER REORG
Staff are also looking to find another change under Musk.
Current and former employees told Reuters that Twitter's history of earthquakes since its inception in 2006 has made it difficult for the company to commit to long-term plans, often leaving jobs hanging as it begins to bear fruit. Its last major reshuffle was in December under a new CEO.
Take the impetus into live sports, entertainment and news in 2016 aimed at harnessing the power of Twitter as a real-time platform. Twitter has signed top deals with partners like the NFL to broadcast the games and promote the brand more.
Dorsey has joined other executives at Digital Content NewFronts in New York to promote the line of service to advertisers.
The 2018 reshuffle has divided Twitter into 10 leaders who oversee business aspects such as technology, product and revenue, spreading responsibility for projects such as live video push, a former official and current employee told.
Without a clear owner in the competitive space, and a trial in Washington, D.C., new European privacy laws and financial pressures demanding the attention of management, live video is declining, they said.
Lack of high-level communication means that senior executives often pursue their goals without co-operation, said four sources.
The problem was particularly acute between product, engineering, technology and revenue managers, known internally as the "experience" team, sources said. After Elliott's arrival, the pressure to meet the 2023 growth targets exacerbated those problems, one current employee said, comparing the environment to "pressure testing."
Fleets, Twitter's short-lived Snapchat copy product, was one example.
Launched in late 2020, and backed by Agrawal and product director Kayvon Beykpour, the feature was ridiculed by Twitter users as a recent attempt to jump into the disappearing message chat.
The company assigned hundreds of engineers to work on building the Fleets, but Agrawal and Beykpour failed to work with their revenue-generating counterparts, and introduced the feature without ad placement plans, said two people familiar with the project.
“It was really a mess, to be honest,” said one former official. "It was the usual way to say 'hey, just push it there, we'll change it in time.'
Twitter shut down Fleets eight months after the launch and only a month later launched a limited edition ad for this feature.
HAND MANAGEMENT
Product differences and revenue may not have been uncommon if Dorsey had held those parties accountable, but a senior official adopted a management philosophy that led him to avoid making certain decisions, four former Twitter officials told.
One of the former bosses said Dorsey's approach was inspired by former Disney CEO Bob Iger, who was known for hiring strong officials and encouraging them to take risks.
"One of the criticisms about Jack is that he sometimes takes too long to make decisions, and he is reluctant to make decisions," said the chief executive. "Jack sees it as a leadership failure, because it means the management team has not yet resolved it on its own."
Some have succeeded under this independence, especially engineers who were inspired to innovate. But some say that this has left the company without a job.
"Everyone agrees that we need better accountability at decision-making levels," said the current employee.
On Monday, hours after the buyout announcement, employees at a company-wide meeting complained about Musk's "questionable ethics" and wondered what would happen to Twitter's work limiting hate speech on its platform. In response to a question about whether Donald Trump, the former U.S. president banned permanently from Twitter for risk of inciting violence, would return, executives admitted they were in the dark on the company's future.
What is clear is Twitter will soon have a new leader with strong views on what to do with Twitter, whatever they may be.
