“I’m trying to think what Twitter would get by NOT accepting the exact same offer,” a Twitter engineering manager wrote on Slack, in response to the sudden news. He shared his musings in a 2,000-person channel called #stonks, where employees traded advice about how to manage their Twitter stock options and debated the company’s financial performance.
Bitter responses flooded the channel.
“A lot lower stock,” one worker responded.
“It’d get to not be owned by Elon Musk,” another said.
“Not owned by a fucking moron?” an engineer chimed in.
Despite their disgust, the chattering employees understood that his $44 billion offer overvalued their company. Twitter’s stock rocketed upward with confirmation that a deal was all but done. Trading of Twitter’s shares was temporarily halted, and once trading resumed, Twitter closed out Tuesday up more than 22 percent at about $52 a share. The deal, as one employee in #stonks put it, would “put bread on the tables of shareholders” and that was all that mattered to Wall Street.
Edgett sent a terse note thanking employees for their patience. “We received the letter from the Musk parties which they have filed with the SEC,” he wrote. “Our intention is to close the transaction at $54.20 per share.”
The email seemed clownishly redundant. Of course Twitter intended to close the deal—it had been the refrain that executives drummed into employees all summer. But Twitter’s board members and legions of lawyers didn’t know what to make of Musk’s sudden pronouncement. He had ripped the rug out from under them, and they had no reason to trust anything he said. This could be a stall tactic, a way to wiggle out of his deposition or to delay the lawsuit until his loans expired the following April. Still, his pronouncement heightened the grim sense of duty in the boardroom. The members knew they must sell, but any optimism that Musk might be a good steward of the platform had long been erased.
In court, Twitter’s lawyers were fighting to get their hands on even more of Musk’s text messages that might reveal his true motives for tanking the deal—the billionaire had turned over no messages between May 24 and May 30, when Musk was arranging funds to replace his $6.25 billion margin loan, nor between June 1 and June 7, when Musk was whipped into a fervor over the supposed bot problem and directed his lawyers to tell Twitter he might back out of the deal. Savitt hadn’t found concrete proof that Musk’s bot complaints were a smokescreen, but it was possible.
Whatever Musk’s intentions, Twitter should press on until they saw $44 billion hit their accounts, Savitt insisted. He still wanted to proceed to trial in Delaware.
But Musk’s lawyers had other plans. They told Chancellor McCormick that they would close the deal by October 28 and that a trial was no longer necessary. On the evening of October 6, the chancellor agreed to give Musk what he wanted. If the deal wasn’t done by the end of the month, she told Twitter it could have a November trial date instead.
>>> The deadline to buy Twitter set off a frenzy in the Musk camp. After spending the summer insulting Twitter’s top executives online and claiming he wouldn’t buy the company, Musk suddenly had to corral the funds all his friends had promised him back in April. No matter that some of them might have had doubts about the value of Twitter in the meantime, Musk was coming to collect.
From the outset, Morgan Stanley had pitched the Twitter deal as an opportunity to back a generational entrepreneur. But rising interest rates meant investors were more cautious than they had been. Some of Musk’s potential funders, like Reid Hoffman, who had once considered putting in $2 billion from his venture fund, pulled out completely.
Other investors needed cajoling. Dorsey had wavered in his commitment to Musk. While he had been one of the biggest cheerleaders of Musk’s takeover in April, he had recently waffled about rolling his nearly $1 billion Twitter holding into Musk’s private version of the company. Dorsey had two options: he could either let Musk buy him out at $54.20, just like every other shareholder, or he could take a small ownership stake in whatever Twitter would become, perhaps increasing his fortune if Musk later re-listed the company on a public stock exchange.
Since early May, the two billionaires had discussed how to run the social network, but Dorsey seemed unconvinced by the man he once called the “singular solution I trust.” Dorsey was worth $6 billion, but most of that was tied up in equity in his company, Block, the new name of Square, and Bitcoin, and he didn’t have much cash on hand to invest. He considered taking the cash at the $54.20 price and leaving the site he helped create in the rearview mirror.
This left Musk in limbo, so he cut his friend a sweetheart deal. Not only did he promise not to damage Twitter, but he also swore that, if Dorsey ever wanted out, he’d pay Dorsey the full price of $54.20 per share for his stock. Unlike other investors, the Twitter cofounder had a guaranteed floor price if the company’s value decreased under Musk. That meant no inherent risk for Dorsey—other than relying on Musk’s word—and he agreed. For Musk, it seemed like a necessary compromise to ensure he had another $1 billion to put toward his acquisition. Musk believed there was no way Twitter could lose value under his management.
Another major Twitter stakeholder who experienced doubts was Al Waleed bin Talal Al Saud, a sixty-seven-year-old Saudi Arabian prince. The grandson of the first ruler of the Kingdom of Saudi Arabia, Al Waleed was a flashy figure who had studied at American colleges before becoming an investment manager of the royal family’s money.
In 2011, Kingdom Holding had put $300 million in Twitter, taking a more than 3 percent stake in a company that was valued at the time at $8 billion. Al Waleed’s company held on to the investment for more than a decade and he became an avid user, tweeting pictures from his palace compounds, his meetings with world leaders, and his private jet.
Kingdom Holding still retained its Twitter stake when Musk came knocking, but it had become less clear who actually controlled Al Waleed’s company. In December 2017, the Saudi billionaire was one of 320 royals and government officials who were rounded up and detained on the orders of Crown Prince Mohammed bin Salman, Al Waleed’s cousin. The prince, who came to be known simply by his initials, MBS, locked his family members and bureaucrats in Riyadh’s Ritz-Carlton for months, extracting concessions, payments, and pledges of allegiance to his cause to become the country’s next leader. The Wall Street Journal reported that MBS sought at least a $6 billion ransom payment from his cousin, while Al Waleed sought to obtain his freedom by offering MBS an ownership stake in Kingdom Holding. He was released in January 2018.
By 2022, Al Waleed had become an MBS loyalist. On paper, he remained Kingdom Holding’s chairman and was not a fan of Musk’s offer to buy Twitter. Like other longtime shareholders, he fondly recalled when Twitter’s stock soared above $70 per share in 2021 and tweeted that he was opposed to Musk’s offer, arguing that $54.20 didn’t come close to the “intrinsic value” of the company.
The insult stung Musk. He had held a grudge against Saudi Arabia after its sovereign wealth fund had declined to take Tesla private and told those close to him that Saudi money in the U.S. tech industry was everywhere, representing a threat to national security. Although he had his own hand out, he wasn’t wrong. The Saudi government had invested billions of dollars in companies across Silicon Valley. He fired back at Al Waleed’s post with a pointed tweet that referenced the execution of Washington Post columnist Jamal Khashoggi, a killing carried out at MBS’s command.
“Interesting. Just two questions, if I may,” Musk wrote on April 14. “How much of Twitter does the Kingdom own, directly & indirectly? What are the Kingdom’s views on journalistic freedom of speech?”
By October, however, both men had changed their tune. Al Waleed perhaps saw an advantage in remaining close to the world’s richest man, and Musk, whatever his morals, needed money. Kingdom Holding rolled over the entirety of its stake, which was valued at $1.9 billion, and was set to become one of the largest outside shareholders in Musk’s Twitter.
>>> With the sale of Twitter all but certain, Agrawal began having private conversations with his top executives about whether they would work for Musk. He asked them to set aside the way he’d been treated by the billionaire.
True to his engineering background, he encouraged them to gather information about the new owner before making up their minds. “Just because this is the way it’s gone for me, doesn’t mean it will go this way for you,” Agrawal said. “Get the data to make the right decision.”
That data would, of course, include personal calculations about money. Many of Twitter’s top executives, including Agrawal, had contracts with change-of-control clauses. That meant if there was an acquisition or new leadership brought in to run Twitter, they would receive lucrative exit packages that cashed out grants of stock they would otherwise have earned out over years of service. The payout was intended to erase biases against a buyer, keeping executives open-minded about an acquisition without fear of losing their salaries. If Musk wanted them to stay, he would need to extend new job offers to them. But the exit packages gave many of the leaders, who figured Musk would fire them, a comfortable financial cushion.Agrawal would earn his salary and unvested stock options, giving him a golden parachute of more than $57 million. Segal would earn more than $44 million and Gadde around $20 million.
But for workers outside the executive suite, a soft landing wasn’t guaranteed. Some decided they would work for such an erratic owner only if Musk offered improved compensation. Others, realizing their bosses would likely vanish, dreamed of climbing the ladder. Workers panicked about the impending deal, fearing layoffs or cuts to Twitter’s cushy benefits. Executives tried to reassure them by pointing out Musk’s contract required him to leave pay and benefits unchanged for a year after buying the company, but the promises rang hollow. Employees knew Musk didn’t always honor his agreements.
The executives’ exit packages, which were publicly disclosed in the company’s financial filings, drove a wedge between the company’s leadership and its rank and file. The money was more than any regular worker dreamed of making in a lifetime. They couldn’t believe Agrawal would be paid so much for spending less than a year in the top role. Twitter had supposedly been a place where executives cared about what happened to their employees. Now they were on their own.
>>> With the deal back on, Twitter executives were called in to a series of whirlwind meetings to provide some semblance of a transition before October 28, the court-mandated closing date. Most acquisitions included a coordinated transition period, with both parties hammering out the details over months. But this was unlike any takeover. In mid-October, Musk and Gracias met virtually with two finance leaders: Julianna Hayes, a vice president on Twitter’s finance team, and Robert Kaiden, Twitter’s chief accounting officer.
Kaiden was not a typical Twitter employee. He had spent almost twenty-seven years as an accountant at Deloitte. He joined Twitter in 2015, and stood out among the hoodied crowd with his khakis and blue oxford shirts. Kaiden had developed a reputation as a hard-ass who scrutinized the company’s financials to the point of driving his counterparts in other departments mad.
Kaiden and Hayes were meant to give Musk an overview of the company’s finances, but Twitter’s lawyers still believed that Musk might abandon the deal and insisted no one give him insider information. It quickly became apparent to the execs that Musk lacked basic knowledge of the merger agreement he had signed.
Hayes and Kaiden brought up the fact that on November 1—after Musk was supposed to take over—many employees were set to receive their vest, a bonus grant of company stock. But because Twitter would no longer be a public company, the workers would be entitled to cash bonuses with each share they held equivalent to a $54.20 payout. It would cost Twitter about $200 million.
Musk, however, was confused and asked why he couldn’t reissue new stock in his soon-to-be private company. That simply wasn’t in the agreement, Kaiden told him, much to the annoyance of the billionaire who was now on the hook for a massive sum.
“No, you agreed to that,” Gracias noted.
“Interesting,” Musk responded.
>>> On Wednesday, October 26, Twitter headquarters was buzzing. The Friday court-ordered deadline for the deal to close was looming, and employees still knew little about what to expect.
One cluster of employees huddled around a table in the cafeteria at lunchtime, swapping rumors about Musk and what he might do to their beloved company. While they openly debated which executives might be on the chopping block, one woman’s face dropped. “It’s Ned,” she hissed at her coworkers.
The clean-cut chief financial officer had walked up behind them and was quietly eavesdropping on the discussion. He flashed a bright smile, trying to put the workers at ease. Despite the gloom in the building, Segal appeared buoyant. After months of anxiously waiting, it was time for him to get to work on the transaction and hammer out all the financial details.
“Ned, what’s going to happen?” one of the workers asked.
“I think we’re going to be fine,” Segal said. “We’re in good hands.”
The assembled group of employees was taken aback at Segal’s apparent confidence. Surely he couldn’t be referring to Musk? But the finance chief seemed so assured and relaxed. He must know something we don’t, the employees thought. It was one of the few moments when they felt like maybe, just maybe, Musk wouldn’t be so bad.
Segal chatted for a few more minutes, cracking jokes with his staff. They had held together through months of uncertainty and pain, continuing to put the company first while other coworkers resigned or threw up their hands, and Segal seemed eager to comfort them. Then he excused himself. Musk would arrive within hours. He needed to prepare.