Elon Musk, who negotiated a $44 billion deal to buy Twitter Inc., told bankers that he would focus on the social media company’s bottom line and floated ideas about cost and job cuts, as per the individuals familiar with the matter.
More on Musk’s plan
During a call with a team of bankers, Musk had fielded questions like how he is to generate financial returns on Twitter. Musk did not have non-public financials with him, so he mentioned job cuts, according to people who did not wish to be identified. Musk did not specify which positions or departments would be affected.
At a TED conference, Musk said that he has ideas on monetizing the platform and boosting cash flows that would include a potential subscription service as they will drive recurring revenue. Musk publicly stated that he was not preoccupied with money and did not care about economics.
With Twitter to be held as a private company once the $54.20 a share transaction gets completed, investors to employees in Twitter want to know how Musk plans to run his company. Besides the public tweets, Musk has not shared many details on what he will change, and the Management of Twitter, after releasing the quarterly earnings, did not hold an investors’ call on Thursday.
While Twitter CEO Parag Agarwal said that business would be as usual until the deal closes, Musk said he wants to make the company better than before by introducing new product features that will enhance users’ experience, make changes in algorithms, and tackle spambots and authenticate all accounts as humans.
Musk’s pitch to the banks clearly said he would seek financial returns from the Twitter deal. He spoke regarding his track record at SpaceX and Tesla Inc. as evidence that he can generate returns and transition companies.
Musk spoke about ideas that he had tweeted, like the need for celebrities and influencers to be more active on the Twitter platform giving an example of an earlier tweet where he said how Taylor Swift, the music star, did not tweet in three months.
Musk’s acquisition of Twitter includes his own $21 billion equity commitment. One option of his own was to sell a portion of his Tesla shares to fund the equity. On Thursday, in five filings, Musk said he had sold 4.4 million shares for $4 billion, as per Bloomberg News. He further tweeted that there was no further plan to sell Tesla stocks.
Twitter announced on Thursday that its first-quarter revenues of $1.2 billion were below the estimates. The growth of 16% in sales was the worst in the past six quarters, and it would have been 22% had the numbers not been impacted by divesting the MO Pub’s ad-tech platform. Still, its performance is in line with reports of Meta Platforms Inc. and Snap Inc. Twitter shares closed on Thursday at $49.11, which is below the Musk acquisition price.
