Elon Musk has lined up a new CEO for Twitter and told banks that agreed to help fund his $44 billion acquisition offer about his plans to monetize tweets, according to a new report from Reuters.
A source told Reuters that Musk has decided on who he plans to appoint as the new chief executive of Twitter, but the source didn’t name the person. Twitter’s current CEO Parag Agrawal, who took the role after Jack Dorsey stepped down in November, is expected to remain as CEO until the deal is completed.
Reuters reports that Musk told Twitter chairman Bret Taylor that he does not have confidence in the company’s management, which is a sentiment that he also stated in SEC filings.
Agrawal would be set for a significant compensation package if the deal closes and Musk brings in new management, as he would receive $38.7 million due to a clause in his contract, according to the company’s latest proxy filing.
Reuters reports that Musk told banks that he plans to develop more ways to make money from tweets. For example, he said that he plans to create a way to monetize tweets that go viral or include important information. He also suggested the idea of charging a fee when third-party websites quote or embed tweets from verified accounts.
Musk has been inundated with offers from potential equity partners to join him in the Twitter deal, and he will decide in the coming weeks if he teams up with someone, one of the sources said to Reuters. It is unlikely that Musk would partner with a private equity firm given that the deal is not structured as a traditional leveraged buyout, the source added.
Musk disclosed this week that he sold $8.5 billion worth of Tesla shares, a move likely aimed at helping finance his deal for Twitter.
The Tesla chief executive also told the banks he will seek moderation policies on the social media platform that are as free as possible within the legal constraints of each jurisdiction Twitter operates, the sources said, a position that he has repeated publicly.
The $13 billion Twitter loan is equivalent to seven times Twitter’s 2022 projected earnings before interest, taxes, depreciation and amortization. This was too risky for some banks who decided to participate only in the margin loan, the sources said to Reuters.
