Elon Musk is expected to serve as a temporary CEO of Twitter for a few months after he completes his $44 billion takeover of the social media company, sources told CNBC’s David Faber.
An SEC filing on Thursday revealed Musk secured approximately $7.14 billion in equity commitments from friends and other investors to buy Twitter. Faber said Musk handpicked the investors. Commitments range from $1 billion from Oracle co-founder Larry Ellison to $5 million from Honeycomb Asset Management, which invested in SpaceX. Faber added that Twitter co-founder Jack Dorsey may back it, and Musk is talking to him about the possibility of contributing shares immediately or before the closing of the merger.
Twitter CEO Parag Agrawal has only led the company for a few months, after assuming the helm from Dorsey last November. Until now, there hadn’t been much discussion about whether Musk’s takeover of the company would lead to a leadership shake-up. Last month, Reuters reported Musk had lined up a new CEO for Twitter, citing a source familiar with the matter.
Agrawal told employees during a companywide town hall meeting last month that the future of Twitter is uncertain under Musk, according to a separate Reuters report.
“Once the deal closes, we don’t know which direction the platform will go,” Agrawal reportedly said when asked whether the company may allow former U.S. President Donald Trump to return to the platform when Musk takes over. Trump was permanently suspended from Twitter last year.
Musk’s acquisition of Twitter comes at a key time for the company. Agrawal has said he would focus on growing Twitter’s daily active user base and bringing new products to customers. In the company’s latest earnings report, Twitter said it hit 229 million monetizable daily active users, a 15.9% increase from the same period last year.
Musk, who is the CEO of Tesla and SpaceX, has recently led presentations in front of investors, where he gave financial projections based on his analysis of Twitter, according to sources familiar with the situation who spoke with Faber.
Musk told investors that he felt Twitter’s earnings before interest, taxes, depreciation and amortization margin was too low and the company has “too many engineers not doing enough,” Faber said, citing sources familiar. Musk also pledged to make the company a “magnet for talent,” Faber added.
Shares of Twitter rose 2.8% on Thursday. Tesla’s stock slid more than 8% amid a broader market selloff.
Leave a Reply