Twitter CEO expects Elon Musk acquisition to close, addresses spending cuts

Why is Elon Musk putting Twitter deal on hold?

Evolution VC Partners founder Gregg Smith discusses Elon Musk’s Twitter deal on hold.

Twitter CEO Parag Agrawal said he still expects Elon Musk's $44 billion acquisition to close in 2022 despite the Tesla chief executive's recent tweet that the deal is temporarily on hold.  

"While I expect the deal to close, we need to be prepared for all scenarios and always do what’s right for Twitter," Agrawal said in a Twitter thread on Friday. "I’m accountable for leading and operating Twitter, and our job is to build a stronger Twitter every day."

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The deal, which would take the social media giant private at $54.20 per share, is currently on hold pending details supporting calculations that spam and fake accounts represent less than 5% of Twitter's users. In the first quarter of 2022, Twitter's monetizable daily active user base grew 15.9% year-over-year to 229 million, including 39.6 million daily active users in the U.S. and 189.4 million international daily active users. 

Musk has previously vowed to crack down on spam bots to improve the user experience on Twitter. The self-described "free speech absolutist" has also expressed interest in open sourcing Twitter's algorithm to increase transparency and said he would overturn former President Donald Trump's ban. 

In order to close, the deal must also receive shareholder and regulatory approval and satisfy other customary closing conditions. 

Musk emphasized in a follow-up tweet on Friday that he is "still committed" to completing the acquisition.

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Agrawal also addressed the company's recent decision to cut back on "non-labor" spending. 

"Our industry is in a very challenging macro environment – right now," he explained. "I won’t use the deal as an excuse to avoid making important decisions for the health of the company, nor will any leader at Twitter."

In addition to the spending cuts, Twitter has announced plans to pause most hiring and backfills, except for business critical roles. 

Twitter's general manager of the consumer product division, Kayvon Beykpour, and revenue product lead, Bruce Falk, have also both been let go. Jay Sullivan, Twitter's vice president of consumer products, will serve as the general manager of BlueBird and interim general manager of Goldbird. 

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Going forward, Agrawal says that he will continue to "embrace the deep complexities" of Twitter and that users and investors should "expect more change for the better." He added that he will "try to bring more transparency" to users regarding the company's work. 

"You won’t see tweets from me on the ‘topic of the day’ or the loudest sound bite, but rather on the ongoing, continuous, and challenging work our teams are doing to improve the public conversation on Twitter," he concluded. 

Twitter stock finished Friday's trading session down more than 9%, closing at $40.69 apiece. The stock is down nearly 5% year-to-date and approximately 21% in the past year. 

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