All Access

Media Deals

Media Deals Alerts

Alert

Standard

Media Deals Thought Bubble

Thought Bubble

mustard

BFD Expert Voices - Media Deals

BFD Expert Voices

Barely four months into his tenure as Twitter's CEO, Parag Agrawal is already facing tough questions about his future leading the social media company amid Elon Musk's hostile takeover attempt. 

Why it matters: Only Disney CEO Bob Chapek has had a worse crisis to deal with so early in his tenure as a chief executive.

Agrawal faces leading Twitter through a strategic transition, as the company is in the midst of shifting from an ad-based social network focused on text to a subscription-based platform centered on smaller communities and multimedia.

He also inherited former CEO Jack Dorsey’s aggressive internal goals, which include growing Twitter to 315 million monetizable daily active users by the end of 2023.

State of play: Agrawal fielded questions during an all-hands meeting yesterday afternoon and told Twitter staffers that the board was still evaluating Musk's offer (more on that meeting below).

What they're saying: While arguing that Twitter should accept Musk's offer, MoffettNathanson analyst Michael Nathanson wrote in a research note yesterday that "the Board may want to give new CEO Parag Agrawal more time to prove himself and improve user growth and monetization to warrant a higher valuation."

Catch up quick: Agrawal was named CEO last November after Dorsey abruptly stepped down amid longstanding complaints he couldn't capably run two companies at the same time. (Dorsey is the CEO of Block, Inc., formerly known as Square.)

Agrawal, who has been with Twitter for more than a decade, was most recently CTO and led the company's major products efforts, including overseeing Twitter's decentralized social network standard called Bluesky.

Shortly after Musk disclosed his investment in Twitter last week, Agrawal initially tweeted that Musk was set to join the company's board — before Agrawal announced that would not be happening, adding the clairvoyant, and likely to be historic, forecast regarding distractions.

💭 Tim's thought bubble: It is not known what caused that reversal — though Musk has a long history of backtracking on his promises — but it certainly implies that Musk and Agrawal do not see eye-to-eye. 

What's next: The board is expected to rally behind Agrawal and fight off Musk's takeover attempt, possibly with a poison pill that would prevent him from upping his stake in the company. 

Saudi royal Alwaleed bin Talal, who claims to be one of Twitter's largest shareholders, already said he would reject Musk's offer.

Of note: A late filing yesterday said Vanguard's first-quarter purchases made the asset management behemoth Twitter's largest shareholder. 

1. Agrawal's baptism by fire 

Photo illustration of Parag Agrawal, CEO of Twitter, surrouded by the Twitter logo and abstract shapes.

Photo illustration: Gabriella Turrisi/Axios. Photo: courtesy of Twitter

Twitter — the company and the platform — is quite familiar with being in a state of turmoil. As early exec and former board member Jason Goldman told the New York Times earlier this week, "Twitter has always suffered more than its fair share of dysfunction."

Why it matters: Elon Musk's hostile takeover is the latest dramatic twist at Twitter, but the common thread from the launch of Twitter to yesterday's bid is dysfunction. 

Flashback: Feuding among the four co-founders — Biz Stone, Jack Dorsey, Ev Williams and Noah Glass — marked the early days of Twitter, as Nick Bilton chronicled in the book "Hatching Twitter."

Glass was pushed out in 2006 after Dorsey threatened to quit if Williams didn't let Glass go. Dorsey served as CEO until two years later, when Dorsey was fired and Williams stepped into the role.

Williams stepped down to focus on product in 2010, before leaving in 2011. He remained on the board until 2019. 

Dick Costolo was hired in 2009 as COO, and became CEO in 2010, leading the company through its IPO in 2013. Then Dorsey (and his long beard) returned as CEO in 2015. He resigned under pressure in 2021, bringing on the Agrawal era. 

Yes, and: Turbulence is not unique to the CEO seat. Twitter's head of product position has faced high turnover, drawing comparisons to Defense Against the Dark Arts teachers.

Be smart: Twitter's share structure left the company vulnerable to a hostile takeover when it went public. Unlike Meta or Alphabet, Twitter has only one class of shares with equal voting power. 

Musk noted that distinction during the TED conference yesterday when asked about media ownership. 

"You got Mark Zuckerberg owning Facebook and Instagram and WhatsApp with an official ownership structure that will have Mark Zuckerberg the 14th still controlling those entities," Musk said. 

Indeed, this isn't the first attack from investors. Elliot Management bought a nearly 5% stake, worth about $1 billion, in early 2020 and aimed to oust Dorsey.

What we're watching: Like everyone else, we have a new column on our TweetDeck for @elonmusk.

2. Twitter's history of dysfunction 

Data: Yahoo Finance; Chart: Simran Parwani/Axios

Twitter's stock closed at $45.08 yesterday, at levels near its first day of trading in 2013. Shares have always been volatile, and Musk's bid didn't change that. The stock jumped higher yesterday morning, but spent the rest of the day in a downtrend, closing 1.7% lower. 

3. Charted: Twitter's stock history

Among other reasons he's provided the board to say no, Elon Musk already manages a bunch of big and complex companies.

Why it matters: It's doubtful Musk has time to run Twitter effectively. And hasn't Twitter tried the distracted CEO once already?

Details: Musk is already CEO of Tesla and SpaceX. Plus, he founded and manages The Boring Company and Neuralink.

What they're saying: "[W]ho is going to run the company? Musk? If nothing else, that would be sort of ironic since TWTR was criticized for years for having a CEO who ran two large companies at the same time. Musk would have that and more if he were the one who slides into Agrawal's seat," Gordon Haskett's Don Bilson said in an analyst report yesterday. 

Of note: Tesla shares fell more than 3.6% on yesterday's news. 

The bottom line: "I hope it's not too miserable," Musk quipped yesterday at the TED conference about running Twitter. 

4. Isn't Elon Musk busy?

Photo of Elon Musk by himself getting out of a car and looking up at the sky.

 Photo: Al Drago/Bloomberg via Getty Images

Agrawal was pelted with questions Thursday about what Musk's takeover attempt meant for the rank and file staffers, Axios' Sara Fischer reports.

Why it matters: As we said above, Agrawal is still very new at the CEO job and needs to maintain support of not only the board, but employees as well.

Details: Sources in the meeting said Agrawal was unable to answer many of the questions, either because the board is still evaluating Musk's offer or for legal reasons.

Instead, Agrawal sought to reassure employees and told them to "control what you can control." One source added that "Parag is a very caring leader." He spent time explaining the board's fiduciary responsibility to shareholders and the company's valuable assets, which includes employees.

The meeting was broadcast globally to all employees. Twitter's chief marketing officer Leslie Berland fielded the questions to Agrawal.

At one point, Agrawal responded to a question about whether Musk acquiring Twitter will serve the public conversation — a mantra at Twitter HQ — with "why don't you ask him?"

But overall, sources said Agrawal was making an effort to give as much information as he could without speculating about Twitter's options.

The bottom line: "It's the speculation of the unknown that's hardest on folks," one source said. "And what that means for jobs."

5. Nervous birdies grill Agrawal 

Illustration of a water cooler, with the word "nope" bubbling up from the bottom.

Billionaires eye parallel media universe (Axios)

"A small group of tech moguls believe America is in the midst of what they call a 'free speech' crisis, and they're investing time and money to change the terms of public discourse," Sara Fischer and Dan Primack write.

How Musk's free-speech Twitter dream ends (Axios)

"In the past, online free-speech havens have either been forced to reverse course and add rules — or they've turned into free-fire zones enjoyed chiefly by extremists and trolls," writes Scott Rosenberg.

Elon Musk gives Twitter reasons to reject his bid (Axios)

"I don't care about the economics at all," Musk said yesterday at the TED conference, reflecting how he views Twitter more as a public utility than a private, for-profit business.

Musk's saga reveals how core Twitter is to U.S. politics (Axios)

No single company does more to drive the moment-to-moment political conversation. For all its toxicity and biases, Twitter is politicians' first stop for breaking news and shaping views.

Elon Musk goes into full goblin mode (Axios)

The world's richest man is increasingly behaving like a movie supervillain, commanding seemingly unlimited resources with which to finance his mischief-making.

The people determining Twitter's fate (The Information)

Those who will decide the company's fate include Elliott Management's Jesse Cohn, Prince Alwaleed bin Talal, Silver Lake's Egon Durban, and former CEO Jack Dorsey — all of whom have a history with Twitter and Musk. 

An Elon Musk-owned Twitter risks rattling its biggest revenue source — advertisers (Insider)

"There is growing concern amongst advertisers about the control platforms exert and, in particular, if that control and speech is managed by one billionaire man, it raises questions and concerns, and I would expect certain advertisers to pull back," Greg James, global chief transformation officer at Havas Media Group, said.

Elon Musk could have competition: Thoma Bravo considers Twitter bid (NYPost)

"It's not clear how much Thoma Bravo might bid or when it might make an offer. The firm has an internal team working on the potential transaction," Josh Kosman reports.

6. Channel surfing 

Illustration of a television with a tie dye pattern on the screen.

🐦 Situational awareness: It's Friday, and Media Deals is going goblin mode, diving headlong into all the ramifications of Elon Musk's hostile takeover bid for Twitter! 

Twitter CEO Parag Agrawal proved prescient last week when he said "there will be distractions ahead" after the board seat fiasco. But that bit of soothsaying won't make the days and weeks ahead any easier. 

🏄  What we're actually surfing: Nothing on TV tonight can top the drama currently playing out inside (and on) Twitter. 

Thank you for reading Axios Pro Media Deals! Please ask your friends, colleagues and Musk to sign up.

April 15, 2022

1. Agrawal's baptism by fire