Musk additionally introduced up a number of concepts to spice up income for the corporate, akin to paying “influencers” to create content material, following a enterprise mannequin that helped make TikTok a powerhouse social media app, the folks stated. He additionally introduced up the thought of subscription companies that the corporate might promote.
The concepts got here up in “working teams” with bankers as he sought to safe financing for the deal, in accordance with the folks. The talks point out the Tesla CEO isn’t simply occupied with First Modification points relating to working Twitter, which he agreed to buy for $44 billion this week. He needs to make cash, too.
The personal conversations provide among the solely clues about Musk’s enterprise technique for taking on Twitter. Whereas Musk has made minor public strategies akin to including an “edit” button for tweets, he has not spoken publicly about his broader technique and has as a substitute centered on the content material moderation choices the corporate has made. He has spoken publicly about free speech on the platform, which he known as the de facto city sq..
Musk beforehand stated the financials weren’t his concern.
“I don’t care concerning the economics in any respect,” he stated.
Nonetheless, the personal conversations with bankers display among the enterprise savvy that has made Musk so profitable at working his corporations electrical automobile producer Tesla and rocket ship firm SpaceX.
Twitter and Musk didn’t instantly reply to a request for remark.
Twitter reported earnings Thursday, saying its variety of every day energetic customers — which has grown slowly — had grown to 229 million. First-quarter income climbed to $1.20 billion, which fell wanting analysts’ estimates, in accordance with a Bloomberg compilation.
Bloomberg Information first reported that Musk spoke to bankers about job cuts.
Musk’s acquisition of Twitter is uncommon in some ways, together with simply how rapidly it got here collectively. When he first made a suggestion to purchase Twitter for $54.20 per share, he had not disclosed how he would finance the deal. Whereas Musk is the world’s richest particular person, a lot of his wealth is tied up in shares he’s hesitant to promote. Musk started approaching banks over Easter weekend and some days later got here away with agreements from banks to mortgage him greater than half the $44 billion wanted to finish the deal.
On Tuesday and Wednesday, Musk offered about $4 billion price of Tesla shares, presumably for the aim of the acquisition, in accordance with securities filings made public Thursday night. Tesla’s inventory was down 2.6 % in after-hours buying and selling. Musk tweeted Thursday evening that he doesn’t plan to promote extra Tesla inventory.
Twitter’s board, which had initially rejected the provide, instantly started negotiating with Musk as soon as he had secured financing and the deal was reached early this week.
Musk’s concepts about tips on how to reinvigorate Twitter weren’t a part of a proper plan, these folks stated, and the loans he used to finance the deal weren’t contingent on any perception that Musk might make the social community extra financially profitable. Within the working teams, Musk was crucial of the best way Twitter has been run, each financially and from a product standpoint.
These folks stated the deal got here collectively so rapidly, particularly contemplating the greenback quantity, primarily as a result of Musk has such invaluable belongings that there’s nearly no likelihood that he’ll default on the loans. Twitter’s enterprise prospects, these folks stated, weren’t a major issue.
As a result of Musk’s provide to purchase Twitter was hostile, bankers had been unable to see something past public monetary details about Twitter’s enterprise well being.
Whereas Musk is thought for his deal with know-how and as soon as thought of getting a PhD in physics, in accordance with books and biographies, he’s additionally a eager monetary operator able to recognizing alternatives to rapidly flip a revenue.
Rachel Lerman and Faiz Siddiqui contributed reporting.