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Elon Musk, a South African-born American business magnate and investor, owns Twitter. He acquired the company on October 27, 2022, making him the sole owner and CEO.
Twitter was previously a publicly-owned company listed on the New York Stock Exchange (NYSE) under the ticker symbol $TWTTR. Before his acquisition, Elon Musk had been a Twitter user since 2009 and had publicly expressed his views on the platform’s content moderation policies and his commitment to free speech. These factors, along with a series of negotiations and lawsuits, led to his purchase of the social media service.
Brief overview of Twitter & its social media significance
Twitter is a popular social media platform founded in 2006. Users post short messages, images, and videos called “tweets” for others to see on their timelines. It’s used globally for communication and information sharing.
- Diverse Usage: Individuals, businesses, governments, and celebrities use it for news, promotion, and personal expression.
- Brevity: Tweets are limited to 280 characters, promoting concise messages. Longer content can be shared via tweet threads.
- Engagement: Users can like, comment, retweet, or quote-tweet others’ tweets, facilitating interaction.
- Hashtags: These keywords with “#” organize tweets by topic, aiding activism and trending discussions.
- Trends: Twitter highlights popular topics and hashtags based on tweet volume, keeping users informed about current events.
- Direct Messages (DMs): Users can privately message each other.
- Global Impact: Twitter shapes public discourse, spreads news quickly, and serves as a vital tool for businesses and organizations.
- Political Significance: Governments sometimes ban Twitter to control information flow, especially in times of unrest.
In essence, Twitter’s simplicity and reach make it a powerful platform for communication, information sharing, and engagement across the world.
History of Twitter ownership
The history of Twitter’s ownership is as follows:
Founding and initial ownership (2006):
Twitter was founded on March 21, 2006, by Jack Dorsey, Evan Williams, and Biz Stone. They were all part of Odeo, a podcasting company. Facing competition, Odeo’s leadership decided to change direction and brainstormed ideas for a rebrand.
Twitter’s concept emerged from these discussions. Jack Dorsey, an NYU student, proposed the idea of connecting people through text messages over the phone, and it was chosen for prototyping. On March 21, 2006, the first version of Twitter was created, and Jack sent the first tweet. Twitter was originally called “Twttr” due to domain name availability.
Acquisition by founders (2006):
Jack Dorsey, Evan Williams, Biz Stone, and some Odeo members formed a new company and acquired Odeo’s assets, making Twitter and its parent organizations owned by them.
Twitter’s growth and emergence of Jack Dorsey as CEO:
Twitter gained popularity, attracting celebrities and influential figures. Jack Dorsey became the CEO, and the platform expanded with new features.
Initial public offering (IPO) (2013):
On November 7, 2013, Twitter went public with its IPO on the New York Stock Exchange at $26 per share for 70,000,000 shares. This transformed Twitter into a publicly traded company with multiple shareholders.
Evan Williams, with a 10.4% stake, was the largest shareholder, but he gradually sold his shares and left the board in 2019. Jack Dorsey held a 4.3% stake worth approximately $1.1 billion. Former COO and CEO Dick Costolo had a stake worth around $346 million, and early investor and board director Peter Fenton’s stake was valued at $1.4 billion.
Rumored Takeover (2016):
In 2016, Twitter’s shares surged by 20% amid rumors of potential takeovers by companies like Microsoft, Alphabet (Google’s parent company), The Walt Disney Company, Verizon, and Salesforce.com. However, these takeover talks did not materialize due to various reasons.
Current owners of Twitter
Elon Musk is the current owner of Twitter as of October 27, 2022. He purchased the company after initially acquiring a 9.2% stake in Twitter on April 4, 2022. This made him the largest shareholder in the company at the time. Musk’s interest in Twitter grew due to his advocacy of free speech and his desire to unlock the platform’s potential.
After discussions with Twitter’s CEO and board, Musk was invited to join the board of directors but declined. Instead, he made an offer to take Twitter private for approximately $44 billion. This offer sparked a series of negotiations and legal actions.
Musk secured financing for the acquisition totaling $46.5 billion from various sources, including bank loans, personal loans, cash equity, and independent investors. Twitter’s board accepted Musk’s deal with some added terms, including a $1 billion termination fee if Musk violated the contract or publicly criticized the company during the acquisition process.
However, Musk temporarily placed the deal on hold, citing concerns about the percentage of spam or fake accounts on Twitter. After Twitter agreed to provide him with data on user accounts, the deal continued.
Amid legal battles and negotiations, Musk eventually agreed to continue with the acquisition process. As the new owner of Twitter, he stirred controversy by announcing plans to lay off a significant portion of the company’s staff, though he later clarified that the layoffs would not be as extensive as initially reported.
On October 27, 2022, the acquisition was finalized, officially making Elon Musk the owner of Twitter.
Top Twitter individual shareholders
Elon Musk is the main owner of Twitter, but he has some individual shareholders who helped him buy the company. These shareholders are:
Prince Alwaleed bin Talal al Saud:
He is a Saudi prince and the founder of Kingdom Holding Company, an investment firm in Saudi Arabia. He’s a wealthy individual known for investing in companies like Apple, Twitter, Citigroup, and Four Seasons Hotels and Resorts. Alwaleed is the second-largest Twitter shareholder, owning about 5.7% of the company, which is worth approximately $2 billion.
Ellison is an American entrepreneur and the co-founder of Oracle Corporation, a major software company. He’s also friends with Elon Musk and the third-largest Twitter shareholder. Ellison contributed around $1 billion towards Musk’s Twitter acquisition, giving him a 3% stake in the company.
Dorsey is the founder and former CEO of Twitter, as well as the current CEO of Block, Inc., a digital payments company. He played a crucial role in Musk’s interest in Twitter and influenced some of Musk’s decisions. Dorsey has a 2.9% stake in Twitter, with an estimated investment of $1 billion. He had shares in Twitter from his previous tenure as CEO and kept them when Musk acquired the company.
These individual shareholders helped Elon Musk in purchasing Twitter and continue to have significant stakes in the company.
Top Twitter institutional shareholders
In Elon Musk’s bid to acquire Twitter, several institutional shareholders and holding companies played crucial roles. These institutions are:
- Andreessen Horowitz (a16z): A venture capital firm based in California, a16z invests in early-stage and growth-stage tech companies across various sectors, including software, healthcare, fintech, and crypto. They are known for providing capital, operational support, and strategic guidance to their portfolio companies. a16z contributed approximately $400 million to Elon Musk’s Twitter acquisition.
- Sequoia Capital: This venture capital firm, also based in California, has a long history of successful tech investments, including Apple, Google, and PayPal. Roelof Botha, a partner at Sequoia Capital, has a close association with Elon Musk and played a role in Sequoia’s investment in Twitter. The firm invested about $800 million, acquiring a 2.4% stake in Twitter.
- Vy Capital: A private equity and venture capital firm headquartered in Dubai, Vy Capital focuses on investing in technology companies in emerging markets like Asia, Europe, and the Americas. They hold around a 2.1% stake in Twitter with an investment of about $700 million.
- Binance: Binance is a global cryptocurrency exchange platform, founded in 2017. After Elon Musk’s initial bid for Twitter, Binance contributed $500 million to the acquisition deal. They believe in the potential for Twitter to explore cryptocurrency-related technologies and solutions.
- Qatar Investment Authority: This sovereign wealth fund, owned by the State of Qatar, manages assets of over $400 billion. It invests globally in various asset classes and made a significant contribution of approximately $375 million toward Elon Musk’s Twitter acquisition. The fund seeks long-term investment opportunities aligned with its risk profile.
Apart from these institutional shareholders, banks like Morgan Stanley, Bank of America, Barclays, Mitsubishi UFJ Financial Group, Mizuho, Société Générale, and BNP Paribas played a crucial role by contributing over a quarter of the total funding used by Elon Musk to acquire Twitter.
While these banks do not have a stake in the company, they are guaranteed an estimated $1 billion in interest annually and hold half of Elon Musk’s Tesla shares as collateral in case of payment default. Additionally, investors who contributed $250 million or more receive special access to confidential company information as part of the deal.
Top individual Twitter shareholders before Elon Musk takeover
Before Elon Musk’s acquisition of Twitter, most of the company’s shares were held by institutional investors. The few shares owned by individual investors were primarily held by Twitter board members, executives, and some staff members. Here’s a breakdown of Twitter’s top individual shareholders prior to Elon Musk’s takeover:
- Jack Dorsey was Twitter’s largest individual shareholder, owning approximately 18 million shares, which accounted for around 2.4% of the outstanding shares at the time of the latest filings.
- Dorsey was one of Twitter’s co-founders and served as CEO from its inception in 2006 until 2008, and then again from 2015 until 2021.
- During his tenure at Twitter, Dorsey played a pivotal role in shaping the company’s vision, direction, and the development of key features and innovations.
- Despite facing criticism for Twitter’s handling of issues like hate speech and misinformation, Dorsey remained committed to the platform’s mission of facilitating global communication and information sharing.
- Omid Kordestani is a well-known technology executive and a former board member and executive chairman of Twitter, also holding shares in the company.
- He possessed approximately 934,247 Twitter shares, valued at just over $50 million.
- Before joining Twitter, Kordestani had a distinguished career at Google, where he held various senior executive positions, including Chief Business Officer and Senior Vice President of Global Sales and Business Development.
- Bret Taylor is a notable figure in the tech industry and was a member of Twitter’s board of directors.
- He co-founded and became CEO of Salesforce, a leading customer relationship management software company.
- Prior to his role at Salesforce, Taylor served as Chief Product Officer at Facebook and co-founded the social network FriendFeed, which was later acquired by Facebook.
- Taylor joined Twitter’s board in 2020 and actively supported the company’s vision and strategy. His Twitter shares were valued at around $3 million at the time of Musk’s purchase.
Other minor shareholders before Elon Musk’s acquisition included individuals like Parag Agrawal (former CEO of Twitter), Ned Segal (former CFO of Twitter), Vijaya Gadde (former head of legal policy, trust, and safety at Twitter), and Sarah Personette (former chief customer officer at Twitter), among others.
Top institutional Twitter shareholders before Elon Musk takeover
Before Elon Musk’s takeover of Twitter, the majority (about 80%) of Twitter’s shares were owned by institutions, private firms, and investment funds. Here are the top institutional shareholders of Twitter before the acquisition:
The Vanguard Group
Vanguard was an institutional shareholder, meaning they held Twitter shares for their clients, who are mainly individual investors. Vanguard is a major asset management company globally, with over $7 trillion in assets managed as of 2021.
They held approximately 10% of Twitter’s outstanding shares before the acquisition. Vanguard’s investment was part of a diversification strategy for their clients’ portfolios. While they had some influence on Twitter’s decisions, their primary duty was to act in their clients’ best interests.
Morgan Stanley Investment Management
Morgan Stanley, an investment bank and financial services company, also held Twitter shares for their clients. They were the second-largest institutional shareholder with about 8.5% of Twitter’s outstanding shares.
Morgan Stanley could provide financial advisory services to Twitter and other tech companies but prioritized maximizing returns and managing risk for their clients.
BlackRock, a global investment management firm, was another institutional shareholder of Twitter. They held Twitter shares for both individual and institutional clients and owned about 6.5% of the company’s outstanding shares.
BlackRock is active in engaging with companies they invest in on issues like corporate governance and sustainability, but their primary goal was to maximize returns while managing risk for their clients.
State Street Corporation
State Street Corporation, a U.S. financial services and bank holding company, also held Twitter shares on behalf of their clients, including both individuals and institutions. They were the fourth-largest institutional shareholder, with approximately 4.5% of Twitter’s outstanding shares. State Street is known for its expertise in investment management and custody services, often serving institutional investors like pension funds and endowments.
These institutional shareholders had significant stakes in Twitter and could influence certain decisions, but their core responsibility was to manage their clients’ investments effectively while considering factors like diversification, financial advisory services, and responsible investing practices.
What does the future hold with Twitter under Elon Musk?
Under Elon Musk’s leadership, Twitter has undergone several notable changes. Here’s a detailed breakdown of these changes:
- Layoffs and Mass Resignation: Elon Musk began his tenure by implementing staff reductions, primarily targeting executive members of the old publicly traded Twitter. This downsizing eventually extended to regular employees, affecting approximately half of Twitter’s workforce of 7,500 full-time employees. Some remaining employees either resigned in protest of Musk’s stringent rules or to express their dissatisfaction with the new management.
- Account Reinstatements: Musk initiated a free speech policy, vowing to eliminate lifetime bans and reinstate accounts previously banned for minor or questionable reasons as of October 27, 2022. He followed through on this promise, with around 60,000 previously banned accounts being reinstated. Twitter introduced an appeal process for account suspension, allowing users to regain access if they meet specific requirements, starting from February 1, 2023.
- Paid Verification: The verification badge system was revamped. Now, anyone can obtain a blue verification badge next to their name by paying a monthly fee of $8 to Twitter. This change aims to combat impersonation by permanently banning accounts engaged in such activities.
- View Counts: Elon Musk made view counts on tweets visible to all Twitter users. In the past, this information was only accessible to the tweet’s author via tweet analytics.
- Bookmarks: The number of times a tweet has been bookmarked is now visible to all users when they expand a tweet, promoting transparency in engagement metrics.
- Curation of Timeline: Twitter users’ timelines are divided into two categories: “For you” (featuring tweets recommended for the individual) and “Following” (displaying tweets exclusively from accounts they follow). This change broadens the content users are exposed to, potentially increasing engagement.
- Ban on Remote Work: Elon Musk discontinued Twitter’s work-from-home policy, requiring employees to be physically present in the office for at least 40 hours a week.
These changes reflect Musk’s efforts to reshape Twitter and steer it toward profitability. While they have garnered both positive and negative reactions from the public, Musk maintains that Twitter’s financial situation has improved as a result of these measures, signaling his dedication to turning the platform into a profitable enterprise.
The bottom line
In conclusion, despite transitioning from a publicly traded to a privately owned company, Twitter remains a highly influential social media platform globally. While its founder, Jack Dorsey, played a significant role in its early development, subsequent changes in ownership have not hindered its success.
Twitter’s adaptability to evolving user preferences is a key factor behind its success. Its commitment to both free speech and combatting misinformation has strengthened its credibility, ensuring continued relevance in a rapidly changing media landscape. While Twitter may encounter challenges under new leadership, it is premature to predict its failure at this point.