A look at the real story behind Musk's acquisition of Twitter

By Walter Isaacson

Compilation: czgsws, BlockBeats

The personal biography of Elon Musk, the world's richest man, founder of OpenAI, SpaceX, owner of X (formerly Twitter), and Tesla CEO, "The Biography of Elon Musk" will be officially published on September 12. Written by Walter Isaacson, the author of "Biography" and a well-known contemporary American biographer, "The Wall Street Journal" excerpted part of the "Twitter War" and released it in advance. BlockBeats organized it and compiled it as follows:

Game Addicts

In April 2022, things are going surprisingly well for Elon Musk. Tesla's stock price has risen 15 times in 5 years, surpassing the sum of the next 9 car companies. SpaceX will launch twice as many rockets into orbit in the first quarter of 2022 than all other companies and countries combined. Starlink satellites have just successfully created a private Internet that provides network services to 500,000 users in 40 countries, including Ukraine.

If Musk can survive 2022, it will be a great year, but this is obviously not his nature.

Shivon Zilis is an executive at Neuralink, Musk's company that works on implantable brain-computer interfaces, and the mother of Musk's two children. In early April, she noticed that Musk, like a video game addict, had won but couldn’t pull the plug and felt agitated.

Shivon Zilis once persuaded Musk: "You don't have to be in a state of war all the time, or when you are in a war period, will you find greater psychological comfort?"

"It's part of my default setting, I always want to push the chips back on the table, or challenge the next difficulty of the game." Musk replied.

As fate would have it, that period of unsettling success coincided with the exercise of some expiring stock options, leaving him with about $10 billion in cash.

“I didn’t want to leave it in the bank,” he said, “so I asked myself what product I would like, and it was a simple question: Twitter.” That January, Musk confidentially told his personal business manager, Jared De Birchall (Jared Birchall), started buying Twitter stock.

The way Musk aggressively acquired Twitter and renamed it X foreshadowed the way he operates now: impulsive and irreverent. It's an addictive playground for him. It has many of the hallmarks of schoolyards, including taunting and bullying. But when it comes to Twitter, the smart kids win the followers. They won't be pushed down the steps and beaten like Musk was when he was a kid, and having it will make him the king of campus.

Elon Musk (right) and Peter Thiel's companies merged to form PayPal in October 2000. Photo credit: PAUL SAKUMA/AP

Pattern Open

More than 20 years ago, Musk founded a company called X.com, which he hoped to build into a "universal application" that could handle all personal financial transactions and social relationships. When it merged with Paypal, the payment service co-founded by Peter Thiel, Musk fought hard to keep X.com as the name of the combined company, but his new colleagues resisted. By then PayPal had become a trustworthy company. The brand name is as recognizable and branding as Twitter today, while the name X.com is reminiscent of a "dirty website." Musk was ousted, but he remains steadfast to this day.

Musk said: "If you just want to be a niche player, then PayPal is indeed a good name, but if you want to take over the world's financial system, then X is a better choice."

When he started buying Twitter stock, Musk saw Twitter as a way to realize his original idea. He also felt that the Twitter name was too small.

"Twitter could become what X.com should be, and we can help save free speech in the process," Musk said.

By then, a new concern was surfacing, with Musk growing concerned about the dangers of what he calls "woke culture," a virus he believes is infecting the United States.

Musk said seriously: "Unless the virus of the "awakened culture" is stopped, civilization will never develop into a multi-planetary model. "

Musk's anti-woke sentiment was sparked in part by his eldest child, Xavier (then 16), deciding to transition.

"Hey, I'm trans, my name is Jenna now," the child texted the Musk brothers' wives. "Don't tell my dad."

Jenna later severed all ties with Musk. He believes that anyone who is rich is evil. Although Musk has repeatedly offered to be friendly, Jenna is still unwilling to spend time with Musk. He blamed it in part on the ideologies Jenna absorbed at Crossroads School, a progressive school she attended in Los Angeles. He believes Twitter has been influenced by left-wing voices.

"Twitter needs a charizard"

One night after his Twitter stock purchase became public, Musk called then-Twitter CEO Parag Agrawal, and they decided to meet with Twitter Chairman Bret Taylor on March 31. Meet in secret for dinner.

Musk found Agrawal likeable. "He's a very nice guy," he said. But here's the thing. If you asked Musk what traits a CEO needs, he wouldn't include being a truly good person. One of his maxims is that managers should not aim to like people. "What Twitter needs is a fire-breathing dragon, and Agrawal is not that," he said after the meeting.

At that time, Musk had not thought about taking over Twitter himself. During their meeting, Agrawal asked him to join Twitter's board of directors, he agreed, and the calm was short-lived.

Musk’s vision for X.com

On the afternoon of April 6, the day after Musk announced that he would join the Twitter board of directors, Musk’s close friends Luke Nosek and Ken Howery expressed this at a gathering "This could cause trouble," Musk said, jovially admitting at the meeting. "Obviously, asylums are run by inmates," he said of Twitter's staff.

The Twitter logo on the floor of the New York Stock Exchange in November 2021. Photo credit: RICHARD DREW/AP

Musk reiterated his simple view that it would be good for democracy if Twitter stopped trying to limit users' speech. While Howery shares Musk's libertarian views on free speech, he offers a mild rebuttal. "Is it supposed to be like a telephone system, where what goes in on one end comes out exactly the same on the other end? Or do you think it's more of a system for managing the world's discourse, and maybe there should be some intelligence built into the algorithm to prioritize things? level or lower priority?"

"Yeah, that's a tough question," Musk responded. "There's also the question of how far free speech should be promoted or amplified, and maybe the way to promote tweets should be more open, and it could be an open source algorithm put on GitHub so people can filter it."

Musk then tossed out some other ideas. “What if we charged people a small fee, like two dollars a month, to verify?” he asked. Musk believes that access to users' credit card information will eliminate "bots" and provide new revenue streams, and further his goal of turning Twitter into a payments platform, like his vision for X.com, where people can send money , distribute tips and pay for stories, music and video content. Howery and Nosek liked the idea because they had worked with Musk at PayPal.

"It can realize my original vision of X.com and PayPal." Musk said with a smile.

The next day, Musk’s brother Kimbal told him over lunch that it would be best to launch a new social media platform based on blockchain. Musk was intrigued and into a dazzling state. He half-jokingly suggested that maybe it could have a payment system using Dogecoin (DOGE), a semi-serious cryptocurrency whose development Musk has been quietly funding. After lunch, he sent several text messages to Kimbal, detailing the idea of "a blockchain social media system that can not only make payments, but also communicate through text messages like Twitter."

He then flew to the Hawaiian island of Lanai, a trip for a quiet date with a woman he occasionally dated, Australian actress Natasha Bassett. But rather than treating it as a relaxing mini-vacation, Musk spent four days figuring out what to do with Twitter.

Musk spent much of that first night awake, troubled by the problems facing Twitter. When he looked at the list of users with the most followers, he saw that they were no longer very active. So at 3:32 a.m. Hawaii time, he tweeted: "Most 'top' accounts tweet very little and publish very little content. Is Twitter dying?"

About 90 minutes later, Twitter CEO Agrawal sent Musk a text message: "You are free to tweet 'Is Twitter dying? It doesn't help me make Twitter a better place in the current environment." It was a restrained message, carefully worded.

It was just after 5 a.m. in Hawaii when Musk received the text message, but he was still in high spirits. He shot back sternly: "What did you do this week? I'm not going to join the board. It's a waste of time. I'm going to make a proposal to take Twitter private."

Agrawal was shocked. "Can we talk?" he asked plaintively.

Parag Agrawal, pictured in July 2022, was CEO of Twitter when Musk bought it. Photo credit: KEVIN DIETSCH/GETTY IMAGES

Within three minutes, Twitter Chairman Taylor texted Musk, requesting a similar conversation. "Can you give me five minutes to understand what's going on?" he asked Musk.

"Fixing Twitter by chatting with Agrawal is not going to work," Musk replied. "Strict action is needed."

Musk’s “A Proposal”

Musk said that when he arrived in Hawaii, it became clear to him that he would not be able to fix Twitter or turn it into X.com by joining the board: "I decided I didn't want to be co-opted and be on the board, and I didn't want to be on the board. Become some kind of people pleaser." There's another factor. Musk was in a manic mood and acted impetuously.

As usual, his thoughts fluctuated wildly with his emotions. Even as he was pushing to acquire Twitter, he was texting with Kimbal about their idea of starting a new social media company. "I think there is a need for a new social media company based on blockchain and including payment capabilities," he wrote.

But later that afternoon (Saturday, April 9), he settled on the idea of buying Twitter. "It already has a certain user base and needs this boost to get X.com off the ground," he texted Birchall, his personal business manager.

Musk then flew to Vancouver to meet his on-and-off girlfriend, Claire Boucher, a performance artist known as "Grimes." She's been urging Musk to find her so she can introduce their son, X (yes, X), to her parents and elderly grandparents. But as she drove to visit her parents, she decided to leave Musk at the hotel. "I could tell he was in stress mode," she said.

Indeed. Later that afternoon, Musk texted Twitter Chairman Taylor to make his decision official. "After several days of careful consideration - and this is clearly a serious matter - I have decided to move forward with taking Twitter private," he said.

Back at the hotel that night, girlfriend Grimes found Musk relaxing with a new video game, "Elden's Circle," which he had downloaded to his laptop. With its well-rendered cryptic clues and strange twists, the game demands intense concentration, especially when it comes to figuring out when to strike. Musk spends a lot of time in the most dangerous areas of the game. "He didn't sleep," Grimes said. "He played until 5:30 in the morning."

Shortly after the play, Musk tweeted: "I made an offer."

On October 26, 2022, shortly before his deal to buy the company was about to close, Musk jokingly walked into Twitter headquarters with a sink in hand. Photo source: Musk’s personal Twitter account

Musk then began looking for outside investors to help him fund the acquisition. He asked his brother Kimbal, but Kimbal refused. The fundraising effort has been more successful under the leadership of Oracle founder Lawrence Joseph "Larry" Ellison. "Yes, of course," Ellison replied when Musk asked if he would be interested in investing in the deal.

"Approximately how much can you provide?" Musk asked. "Not asking you to do anything, but this deal is oversubscribed, so I have to reduce or kick out some participants."

"A billion," Ellison said, "or you name it."

Ellison hasn’t tweeted in ten years. In fact, he couldn't remember his Twitter password, so Musk had to reset it for him himself. But Ellison thinks Twitter is important. "It's a real-time news service, there's nothing like it, and if you agree that it's important to democracy, then I think it's worth investing in."

"My bullshit detector is going off like a red alert"

One eager to get in on the deal was Sam Bankman-Fried (SBF), the founder of cryptocurrency trading platform FTX, who quickly became discredited. Morgan Stanley urged Musk to call SBF, saying he "will be in charge of the social media blockchain integration project" and commit $5 billion to the acquisition.

Although the idea of building a social network on the blockchain was discussed with Kimbal, Musk felt that this approach was too slow to support the fast-paced Twitter posts. So he doesn't want to meet SBF. When his banker insisted on reiterating that SBF "can pay $5 billion," Musk responded directly to the message with a "dislike" look. "Blockchain Twitter is impossible because peer-to-peer networks cannot support such high bandwidth and latency requirements." Musk said that he may meet with SBF at some point, as long as there is no need to have a difficult blockchain debate .

In December 2022, Musk rejected an offer from FTX founder Sam Bankman-Fried, who texted Musk that he was "very excited about what he will be doing with TWTR." Photo credit: KENNY WASSUS/Wall Street Journal

SBF then texted Musk directly to say he was "very excited about what we're going to do with TWTR." SBF said he owns $100 million worth of Twitter stock, which means that once Musk takes it private, his Twitter stock will be converted into shares in the new company.

"Sorry, who sent this message?" Musk replied to the text message. When SBF apologized and introduced himself, Musk replied curtly: "You're welcome to join."

Musk's attitude led to another call from SBF in May. "My bullshit detector went off like a red alarm on a Geiger counter," Musk said. SBF started talking fast, all about himself. "He spoke like he was sprinting, a mile a minute," Musk said. "I thought he was supposed to ask me questions about the deal, but he kept telling me what he was doing. I was like, 'Man, calm down.'" However, the feeling was mutual, and SBF agreed that Musk seemed Crazy, the call went on for half an hour and SBF ended up not investing.

Complete the acquisition

Musk successfully raised money, and Twitter's board accepted his plan in late April. Instead of celebrating that night, Musk flew to the Starbase rocket launch site in south Texas. There, he attended a routine nightly meeting about redesigning the Raptor's engines and spent more than an hour thinking about how to deal with an unexplained methane leak they were experiencing. News on Twitter is the hottest topic around the world, but the SpaceX engineer knows he likes to focus on the task at hand, so no one mentions it. Then he met Kimbal at a sidewalk cafe in Brownsville with local musicians. They stayed until two in the morning, sitting at a table in front of the bandstand, just listening to music.

In April 2023, the SpaceX Starship rocket lifts off for a test in Boca Chica, Texas. PHOTO CREDIT: PATRICK T. FALLON/AFP/GETTY IMAGES

In the months between the deal being agreed and the deal officially closing, Musk experienced wild mood swings. "I'm so excited to finally get X.com off the ground, just like it's supposed to be, using Twitter as the catalyst!"

A few days later, his mood became even more sombre. "I need to live at Twitter headquarters. It's so difficult to handle. It really depresses me. I can't sleep there." Musk expressed doubts about taking on such a chaotic challenge. “I have a bad habit of chewing more than I can chew,” Musk admitted in one long talk. "I guess I just need to think less about Twitter."

Revelations from a whistleblower and others reinforced his conviction that Twitter was lying about its actual user numbers and that his initial $44 billion offer was too high. He wanted a more suitable trade offer. Throughout September, he spoke to his lawyer on the phone three or four times a day. He gets emotional at times, insisting they can defeat Twitter's lawsuit in Delaware. "They're throwing bricks at the dumpster fire they're in," he said of the Twitter board. "I can't believe the judge is going to pass this deal, it's not going to pass the public's approval."

Musk's lawyers eventually convinced him that if they took the case to court, he was bound to lose and that it was best to just close the deal on the original terms. By then, Musk had even regained some enthusiasm for taking over the company. “Arguably, I should pay the premium, because these people who run Twitter are fools and idiots, and the potential of Twitter is so huge, there are many things I can solve.” Eventually Musk agreed to formally close the deal in October.

On October 27, 2022, Musk celebrated the completion of the Twitter deal with a bottle of Pappy van Winkle bourbon. Photo credit: WALTER ISAACSON

"All these damn birds must go"

Musk plans to visit Twitter in San Francisco on Wednesday, October 26, to explore and prepare for the formal closing of the deal, which was originally scheduled for Friday. He seemed surprised as he wandered around the headquarters. Headquartered in a 10-story Art Deco building built in 1937, the former mart has been renovated in a techno-chic style and includes a coffee bar, yoga studio, gym and game room. The spacious café on the ninth floor offers free meals, ranging from handmade burgers to vegan salads. A sign on the restroom reads "Gender Diversity Welcomes Here," and as Musk was rummaging through cabinets full of Twitter-branded merchandise, he spotted a T-shirt emblazoned with the words "Stay Awake," which he brandished as an example. , which he believes has infected the company.

There is a fundamental difference of opinion between Twitter and Musk's business metaverse. Twitter prides itself on being a friendly platform where coddling is considered a virtue. "We definitely have a high level of empathy and care deeply about inclusion and diversity; everyone needs to feel safe here," said Leslie Berland, who served as CEO until Musk fired her. Chief Marketing and People Officer. The company instituted a permanent work-from-home option and allowed one mental "day off" each month. One of the buzzwords the company uses frequently is "psychological safety." Be careful not to cause discomfort.

Musk gave a wry smile when he heard the word "psychological safety," which made him disagree. He sees it as urgency, the enemy of progress. His favorite buzzword is "hardcore." He believes that discomfort is a good thing, a weapon used against complacency. Vacations, work-life balance, and days of "mental rest" have nothing to do with him.

He's first amused, then disgusted by Twitter's iconic bluebird logo that's ubiquitous across the company. Musk is not a lively person, preferring dark and stormy drama to refreshing and lighthearted chit-chat. "All these damn birds have to go," he told a middle manager.

The Twitter deal was scheduled to close on Friday. When the stock market opened that morning, an orderly transition was already in place. Funds will be transferred, stocks will be delisted, and Musk will gain control. That would allow Agrawal and his top Twitter lieutenants to receive severance pay and stock options.

But Musk thinks he doesn't want that. The afternoon before the scheduled close, he methodically planned a jiu-jitsu exercise: He would force a quick close that evening. If his lawyers and bankers time things right, he could fire Agrawal and other Twitter executives "with cause" before their stock options vest.

The new X logo on the roof of Twitter's headquarters in San Francisco on July 29, 2023. PHOTO CREDIT: JOSH EDELSON/AFP/GETTY IMAGES

It's bold, even brutal. But Musk thinks this is reasonable, because he firmly believes that Twitter's management has misled him. When the plans unfolded late Thursday afternoon, Musk told the crowd: "Choose to close tonight and close tomorrow morning, and there's a difference of $200 million in the cookie jar."

At 4:12 PM PT, once they confirmed the funds had been transferred, Musk pulled the trigger to complete the transaction. That's when his aides handed Agrawal and three of his top executives termination letters. Six minutes later, Musk's top security official came to the second-floor conference room to say that everyone had "exited" the building and that their access to email had been cut off.

Cutting off emails on the fly is part of the plan. Agrawal has prepared a resignation letter citing a change of control. But when his Twitter email was cut off, it took him a few minutes to get the document into his Gmail message. By then, he had been fired by Musk.

"He tried to resign," Musk said.

"But we beat him," his lawyer for the gunman, Alex Spiro, responded.