Twitter, or rather X, has cemented itself as one of the most influential and popular social media platforms of the past decade. Since Elon Musk took over the company in October 2022, however, many changes, both positive and negative, started making their way through.
With the completion of a $44bn deal for the acquisition of Twitter, the corporation and brand dropped 65% in ad revenues until January 2023, and traffic also witnessed a significant decline of 7.7% in March 2023 compared to the same month in 2022. The buyout was characterised by uncertainty and clashes between Musk and the Twitter board, which is now non-existent. As a consequence, the two parties had to attend a trial which then set a specific deadline for the deal to be closed.
Between thousands of staff losing their job and policies quietly changing, Twitter is not what it used to be. In addition, in April 2023, Musk merged Twitter with a new shell company called X Corp and, consequently, Twitter Inc virtually does not exist anymore. Indeed, the latest update has been the announcement of the total rebranding of both the company and the website itself, now called X.com rather than Twitter.com.
Overall, all of this signals significant developments, but some balances have now been irreversibly broken.
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Does Elon Musk own Twitter now?
It took Elon Musk some time but he has completed his original $44bn deal to purchase Twitter. The billionaire, who is the largest stakeholder and CEO of Tesla, began negotiating with Twitter earlier in 2022.
Musk began purchasing Twitter stock in January 2022 and increased his holdings by about 5% by March. He also began contacting Twitter board members to inform them about his rising stocks, as well as starting a conversation about the potential of joining Twitter’s board.
On 4 April 2022, it was disclosed that Musk had quickly surpassed other investors to possess the largest share in Twitter, with a 9% interest valued at around $3bn.
Musk decided to postpone his purchase of the company because he claimed to need more details on fake and spam accounts on the site. He then withdrew from the deal because Twitter allegedly first refused to release this information and then provided what Musk described as inaccurate stats. Twitter executives refuted this claim.
This caused a chain reaction of legal actions: Twitter sued Musk to pressure him into closing the deal, but Musk filed a countersuit. A Delaware judge ended up mediating both parties and setting a 28 October 2022 closing date on the agreement.
Why did Elon Musk buy Twitter?
Musk justified his purchase of the social media platform (on Twitter, of course) by saying: “The reason I acquired Twitter is because it is important to the future of civilisation to have a common digital town square, where a wide range of beliefs can be debated in a healthy manner, without resorting to violence.”
The Tesla CEO reiterated that his reasoning goes beyond financial profit, but he did it to “help humanity”.
Musk also announced that the deal was sealed by tweeting a video of himself entering the Twitter HQ carrying a sink, captioning it “Entering Twitter HQ – let that sink in!”
Since his acquisition, Musk has been determined to make significant changes, mostly regarding free speech and inactive users. “Twitter cannot become a free-for-all hellscape where anything can be said without consequences!”, he added.
Following Musk’s takeover, it was announced Twitter’s CEO Parag Agrawal, chief financial officer Ned Segal, and legal and policy executive Vijaya Gadde are leaving the company. One of Twitter’s co-founders Biz Stone confirmed their departure via a tweet: “Thank you to [Agrawal], [Gadde] and [Segal] for the collective contribution to Twitter. Massive talents, all, and beautiful humans each!”
Why is Twitter changing to X?
Musk’s liking towards the letter X is not news, also seen in X.com, which then became PayPal, SpaceX, the artificial intelligence company X.ai and X Corp, which used to be Twitter Inc. On 23 July 2023, the owner announced on the social media platform that the world-renowned and iconic blue bird logo would not exist anymore and that it would be replaced by an interim ‘X’ on a black background. This change is already visible on the website, now called X.com rather than Twitter.com and, as Musk said, the corporation will soon “bid adieu to the Twitter brand and, gradually, all the birds”.
The reason behind this branding revolution sits within the purpose of the app, which will aim in the near future to become an all-rounder, an “everything app”, involving “audio, video, messaging, payment/banking”, as CEO Linda Yaccarino explained, to make it a “global marketplace for ideas, goods, services, and opportunities”. Therefore, Musk and his collaborators care to make it clear that X is not the same website that it was before his takeover.
Like everything Musk does, this decision has received mixed reviews. While some applaud it, others did not hesitate to share their disagreement with the decision. Marques Brownlee, for instance, a web video producer who has had a Twitter account since 2009, said that he is still going to call it Twitter despite the app’s rebranding to X. Musk replied: “Not for long”.
How has Twitter’s share price fluctuated?
Twitter’s stock price was declining in March due to rising interest rates and impending inflation. The social media platform’s advertising expenditures decreased, resulting in a decline in the stock price from $63 at its high in November to $33.
Musk began buying Twitter shares in January 2022 and by March had acquired a 5% stake in the firm. With a 9% stake, he became Twitter’s largest shareholder in April. The share price increased by about 50% as the news of these investments spread.
Musk put the transaction “temporarily on hold” after making an offer to purchase Twitter for $54.20 per share, which led him to try to back out. The price of Twitter stock dropped back to the previous $33 share price range when Musk filed a countersuit against Twitter after the company sued him for backing out.
Finally, after Musk approved the $44bn deal, Twitter’s prices increased by more than 12% once more, and ever since the social media business accepted the proposal, the share price has been between $50 and $54 ($53.70 to $54.20).
When it comes to the actual value of the company, Twitter has seen several major advertisers leave the platform, which made its stake drop by 56%. Indeed, in January 2023, the social media company was valued at less than $20bn. However, the company’s market capitalisation in July 2023 reached $41.09bn.
How much of Twitter does Elon Musk own?
Elon Musk made the decision to take Twitter from being publicly traded to a privately held company, meaning that it will be exempt from the requirement to disclose financial and performance data publicly.
Free of the regulatory and shareholder pressures that come with running a public company, Musk has greater direct authority, and he will be able to directly manage Twitter’s content, policies and money, should he so wish.
Prince Alwaleed bin Talal of Saudi Arabia, on the same day that Musk concluded his deal, became the second-largest shareholder of the social media company by rolling over his $1.9bn in shares.
Why did Elon Musk sack the Twitter board?
The board of directors was fired by Musk and its nine members no longer have any influence over the organisation, making Musk the sole director. Musk made the choice of dissolving the board since he accused them of misleading both him and Twitter investors regarding the number of fake accounts on the platform. Agrawal and Segal, in particular, were escorted out as soon as the deal closed.
In addition, Twitter’s Trust and Safety Council, which got first together in 2016, also suffered losses. Three of its members, Anne Collier, Eirliani Abdul Rahman and Lesley Podesta, left the corporation. “We are announcing our resignation from Twitter’s Trust and Safety Council because it is clear from research evidence that, contrary to claims by Elon Musk, the safety and wellbeing of Twitter’s users are on the decline,” they wrote in a press release.
Who owned Twitter before Elon Musk?
Jack Dorsey, along with Noah Glass, Biz Stone, and Evan Williams, launched Twitter in 2006. According to a regulatory filing, institutional investors formerly held control over the platform, with the Vanguard Group holding the largest position (10.3%) at that time. Investment firms BlackRock and StateStreet both held 4.75%, while Morgan Stanley Investment Management had 8.4%.
With a 10.3% stake in Twitter as of April 2022, The Vanguard Group overtook Musk as the company’s largest stakeholder prior to his takeover.
The previous CEO, Parag Agrawal, also had substantial holdings (around 128,000 shares), which would be worth almost $7m under Musk’s current agreement, which stipulates that each share is worth $54.20.
Agrawal was initially scheduled to earn a $60m severance package in addition to the proceeds from the sale of the shares. It is still unclear, though, whether Musk still plans to uphold this agreement.
How did Elon Musk pay for Twitter?
Musk made his first offer to purchase Twitter for $44 billion around the middle of April, putting the board under pressure to negotiate after securing $46.5 billion in financing to acquire the business. After some legal conflicts due to Musk pulling out and Twitter suing him, the deal was consolidated in trial with a deadline on 28 October. When this happened, Twitter’s shares dropped while those of Tesla went up.
In order to support the purchase, other banks, including Bank of America Corp., also agreed to contribute $13 billion in loan financing. Another financial aid has been selling his Tesla stock, which also funds most of his estimated $220bln fortune.
Musk’s $33.5bn equity investment includes his $9.6% ownership in Twitter, which is worth around $4bn, as well as the $7.1bn he got from equity investors, including Larry Ellison, the co-founder of Oracle.
What happened to Twitter’s blue checkmarks?
The launch of Twitter Blue, an $8-a-month subscription that users can pay in order to receive their blue tick, was a way to make Twitter less reliant on advertisers and sponsors. This subscription service was first introduced shortly after Musk took over, but it did not generate much interest.
In April 2023, verified accounts on Twitter started noticing that their blue tick, which aims to differentiate official accounts from non-official ones, was removed. For instance, footballer Cristiano Ronaldo and author JK Rowling’s Twitter accounts were deprived of their mark of authenticity. Twitter’s new CEO Musk is behind the blue checkmark controversy, to try to increase the platform’s profits by motivating people to pay for Twitter Blue. However, this had the opposite effect. Less than 500 of the 400,000 legacy users signed up for it, and the rest just kept using the social media platform, generating an underwhelming revenue of less than $300 a month for the company.
Legacy-verified Twitter users also found a short-lived loophole. If one were to add the word “check” in their bio, the blue icon would appear next to their name for a short period of time. This code glitch was not enough to stop the understandable backlash that Musk’s initiative caused. Because of this, Twitter restored free verification for all celebrity users with more than one million followers.
The latest development in the blue checkmark saga sees only Twitter Blue subscribers as eligible verified accounts, meaning that even celebrities who do not pay a monthly subscription are not included in the checkmarked list.
What is X Corp and what else does it own?
Based in San Francisco, X Corp is another corporate company owned by Elon Musk. Its main focus is to create an “everything app”, as its CEO described.
In April 2023, X Corp was merged with Twitter, as court documents explained: “Twitter Inc. has been merged into X Corp. and no longer exists. X Corp is a privately held corporation, incorporated in Nevada, and with its principal place of business in San Francisco, California.”
Musk’s Twitter buyout was also motivated by his goal of creating this new app, called X, since it would allow him to set foot in the social media and tech field.
Apart from X Corp, Musk also created X.AI, an artificial intelligence company, which he then merged with X Corp. Today, the corporation’s CEO is Linda Yaccarino, who has covered this role since the first week of June 2023.