According to reports, Tesla CEO Elon Musk (Elon Musk) acquisition of Twitter deal has been announced for months, but so far still pending. In the face of Musk’s difficulties, Twitter CEO Parag Agrawal, who has always kept a low profile, decided to launch a counterattack, preferring to become a “sacrificial lamb” to facilitate the deal.
On April 14, Musk announced his plan to buy Twitter for $54.20 per share in cash, valuing the company at about $44 billion, and on April 26, the two sides reached a formal agreement. But a public clash between two very different executives has left the deal still up in the air. Musk, arrogant and outspoken, and Agrawal, cautious and slightly mellow.
Musk has publicly irritated the relatively little-known Agrawal on social media and repeatedly threatened to back out of the deal, citing concerns about Twitter’s fake account data. Meanwhile, Agrawal, who has been on the job for less than a year, has begun to stand up to Musk in front of employees and the public, demonstrating his determination to fight Musk to the bitter end (about the Twitter deal).
One former Twitter executive said, “Agrawal wants to step up and take more aggressive action within the company. twitter seems willing to fight Musk to the end to make this deal happen.”
That said, in private, the two men’s relationship seems less worrisome. Sources close to the situation say the two have weekly, relaxed and non-adversarial interactions to discuss the acquisition. And the two still agree on numerous issues such as how the company should be run, including the need to diversify revenue, attract a wider audience, and even loosen content censorship.
Fledgling vs. unpredictable
However, Agrawal’s critics have concerns: It’s unclear whether he will be effective as a “fledgling” leader in the face of an unpredictable opponent (Musk). Many point out that Agrawal is only 38 years old and lacks leadership experience. And, given the uncertainties, his negotiating leverage will be weakened if Twitter’s business starts to deteriorate.
Brian Wieser, president of global business intelligence at communications group GroupM, said, “Agrawal is in an unknown situation. The deal has been announced for months, but it’s still unclear how sincere Musk is, while Twitter is hell-bent on a sale.”
Born in India and having interned at Microsoft, Yahoo and AT&T, Agrawal joined Twitter after earning his Ph.D. at Stanford University and has risen through the ranks over the past 10 years. After four years as chief technology officer (CTO), he was named chief executive officer (CEO) last November.
As Twitter’s first “brilliant engineer,” Agrawal’s talents have earned him internal respect, according to Bruce Daisley, Twitter’s former vice president of Europe: “Agrawal’s eye for detail and his understanding that ‘other leaders might have overlooked it. I was impressed by the broad understanding of ‘issues that other leaders might have skipped’.”
Like Silicon Valley founders such as Steve Jobs and Mark Zuckerberg, Agrawal wears the same clothes to work every day: a black T-shirt and dark blue jeans, in keeping with the dogma that “minimalism can be efficient.
In May, Agrawal defended himself at a private dinner for tech executives hosted by Salesforce founder Marc Benioff, two people familiar with the matter said. Afterward, guests who were impressed with him lined up to talk to him.
Unlike his predecessor, eccentric founder Jack Dorsey, Agrawal is more of an obscure man. In his first few months on the job, he made few public appearances and rarely used his own platform, Twitter.
One ad agency executive said, “Agrawal felt more like an engineer put in charge of the product than a visionary. what Twitter needed was a leader who could step up and give Twitter a place in the marketplace.”
Skepticism from the board
To that end, Agrawal has also faced questions from some board members, particularly about his lack of experience as a public company CEO, or in leading large teams. Twitter’s board chose to implement the “poison pill” plan early in the negotiations in part to buy time, according to several people familiar with the matter. That would allow them to better understand Agrawal and his business plan for Twitter and to seek input from investors.
Some investors expressed concern about Agrawal’s ability to successfully implement his plan and were therefore inclined to accept Musk’s deal, two people familiar with the matter said.
In addition, the board discussed whether to allow Musk to make a buyout offer directly to shareholders, but later rejected that option in favor of negotiating the terms of the deal with Musk and deliberately building in some defenses and protections in case Musk changed his mind.
Agrawal and other members of the board have publicly stated that they want to proceed with the deal at the $54.20 per share price agreed with Musk. Twitter has also informed employees that it expects to hold a shareholder vote on the deal in early August.
Even so, there are challenges to completing the deal, as Twitter has said that it has less than 5 percent of bot accounts (fake accounts) on its platform. Musk believes that percentage could be at least 20 percent. For this reason, Musk has already said he will pull out of the deal if Twitter can’t prove it.
Debunking Musk’s Bluff
Some insiders and Twitter employees, meanwhile, believe this is just Musk trying to find leverage in negotiations or an excuse to get out of the deal altogether.
Last month, Twitter has provided Musk with at least “two batches” of massive data to analyze the percentage of bot accounts on the platform. Industry insiders say Agrawal’s move is a bid to expose Musk’s bluff.
One former Twitter executive said, “Opening up these data treasures is a classic Agrawal move to show that ‘we don’t lie, we have nothing to hide’.”
But a media report yesterday said Musk’s team has concluded that the data provided by Twitter is unverifiable, sparking speculation about his next move.
So far, Musk has not directly offered to renegotiate the terms of the deal with Agrawal, people familiar with the matter said. Agrawal’s success may depend in part on his ability to keep Twitter’s finances sound so as not to give Musk negotiating leverage.
Twitter has been blamed for sluggish growth, slow product innovation and a struggling advertising business at a time of overall market weakness. Last year, Twitter’s revenue was $5 billion, while Meta’s (Facebook) sales reached $118 billion. In April, Twitter admitted in its first-quarter earnings report that the number of users had been inflated by nearly 2 million over a period of about three years.
Preferring to be a casualty
After an initial low profile, Agrawal has now become relatively high-profile, spending several days a week in the office, three people familiar with the matter said. He has also recently visited several global headquarters. His focus has been on overhauling Twitter’s management structure to drive better performance and launch products at a faster pace.
In May, Agrawal decided to freeze hiring and implement cost-cutting measures. He also fired two popular advertising and product executives, to the shock of some employees. Though some pointed out that this was because they had failed to meet user and revenue goals.
Several employees said Agrawal was honest with employees rather than trying to placate them. This approach has won the support of loyal veteran employees, but has left new employees but uncomfortable.
Some media reports say that if Musk succeeds in buying Twitter, Agrawal will likely lose his job as Musk prepares to replace him as Twitter CEO for a while.
That said, Agrawal still has multiple motivations to get the deal done. In addition to saving face and avoiding any potential lawsuits, he will receive $60.1 million in compensation if he is fired as a result of the acquisition, according to regulatory filings.
On the other hand, if the sale falls through, he could be tasked with reviving a company whose stock price has plummeted and employee morale is low.
If the deal falls through, Twitter’s stock will plummet,” said one former Twitter executive. At that point, the company would face significant layoffs and would have to cut expenses.” . Another former executive said he believed Agrawal was willing to be the company’s “sacrificial lamb” (facilitating the deal and eventually leaving himself).