CEO of electric car maker Tesla and rocket manufacturer SpaceX Elon Musk made his presence felt at Twitter’s San Francisco headquarters Wednesday, posting a video clip of himself walking into the offices carrying a kitchen sink and changing his public profile descriptor to “Chief Twit.” He’s due to address staff Friday, the closing deadline for his planned $44 billion deal to take the company private.
The social-media platform is expected to come under Musk’s ownership by 5 p.m. New York time on Oct. 28, as lawyers and bankers on both sides race to finalize paperwork. Leslie Berland, Twitter’s chief marketing officer, sent a memo to employees Wednesday saying that Musk was visiting the company’s headquarters this week, according to people who received the note, per Bloomberg.
“Elon is in the SF office this week meeting with folks, walking the halls, and continuing to dive in on the important work you all do,” Berland wrote in the memo. “For everyone else, this is just the beginning of many meetings and conversations with Elon, and you’ll all hear directly from him on Friday.”
RELATED: Elon Musk Agrees To Own Twitter For $44 Billion
Musk has told prospective investors in his Twitter purchase that he plans to cut nearly 75% of Twitter’s employee base of 7,500 workers, leaving the company with a skeleton crew, according to the report. The newspaper cited documents and unnamed sources familiar with the deliberations.
San Francisco-based Twitter and a representative for Musk attorney Alex Spiro did not immediately respond to messages seeking comment.
While job cuts have been expected regardless of the sale, the magnitude of Musk’s planned cuts are far more extreme than anything Twitter had planned. Musk himself has alluded to the need to cull some of the company’s staff in the past, but he hadn’t given a specific number — at least not publicly, according to AP News.
“A 75% headcount cut would indicate, at least out of the gates, stronger free cash flow and profitability, which would be attractive to investors looking to get in on the deal,” said Wedbush analyst Dan Ives. “That said, you can’t cut your way to growth.”
Ives added that such a drastic reduction in Twitter’s workforce would likely set the company back years.
Twitter shares gained on these latest signs that billionaire Musk plans to make good on his agreement to pay $54.20 a share for the company. On Tuesday, Bloomberg reported that Musk has told bankers he expected the deal to close by the deadline. Banks were expecting a borrowing notice from Musk for $13 billion in debt financing, with the intention of the funds going into escrow Thursday.
The stock climbed 1.1% to $53.35 at Wednesday’s close in New York.
The Wall Street lenders, led by Morgan Stanley, had already been preparing in recent weeks to fund the debt, Bloomberg previously reported. But nothing had ever been certain with the mercurial Musk, who only weeks ago was seeking to back out of the deal. These latest developments suggest he is in the final stages of closing the transaction.
At least some of the equity investors in the transaction have already transferred funds in support of the deal, people with knowledge of the matter said. In recent days, Musk’s lawyers have written to investors backing the equity portion of the deal to confirm it’s on track to close by the deadline, one of the people said.
Completing the transaction would mark the culmination of a months-long saga that saw Musk amass a big stake in the company, agree to join its board before changing his mind and then embark on a hasty quest to take Twitter private. Aside from the debt financing, he also rounded up a who’s who of billionaire buddies and other investors to pony up part of the equity needed, signing the takeover agreement while waiving the right to examine Twitter’s financials.
As markets tumbled and it became clear that he had vastly overpaid, Musk turned heel again, backing out of the deal on the allegation that Twitter misled him about the prevalence of fake accounts. After Twitter took him to court in Delaware to force his hand, Musk relented and the two sides got back to negotiations, according to Bloomberg.
Many Twitter staff are greeting the prospect of ownership by Musk with trepidation. Potential investors were told that he plans to cut 75% of the workforce, which now numbers about 7,500, and that he expects to double revenue within three years, a person familiar with the matter said last week. In recent days, fears have been growing about a major reduction in headcount or another reorganization, another person said.
Musk would also allow for the return of former US President Donald Trump and others who have been kicked off the platform because Twitter will loosen content moderation standards, according to one of the people.
READ NEXT: Rihanna’s Comebacks With ‘Lift Me Up’ Music Track From Black Panther: Wakanda Forever Film
Sources: AP News, Bloomberg.
Source: Read Full Article