As Elon Musk takes over, will some Twitter operations move to Austin?
Tesla CEO and Texas resident Elon Musk has completed his deal to buy social media giant Twitter, adding to an ecosystem of companies the billionaire owns. Some industry analysts say that could eventually lead to a significant presence for the social media platform in Austin, which has increasingly become a center of operations for Musk and his companies.
Friday morning filings with the Securities and Exchange Commission confirmed that a merger between Twitter and X Holding, which is owned by Elon Musk, went through on Thursday. The filings said each share was exchanged for $54.20 in cash, without interest and less any applicable withholding taxes. The company subsequently went private. A filing notified the SEC that Twitter had been removed from the New York Stock Exchange..
Trading on the company's stock was suspended Thursday, and Twitter was valued at $53.70 a share at the time. The stock has gained about 40% in value since July.
Late Thursday night, Musk announced the deal in a tweet that said, "The bird is freed."
Top Twitter executives, including CEO Parag Agrawal and Chief Financial Officer Ned Segal, were fired Thursday, according to The Washington Post.
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Musk, who moved to Texas in 2020, is CEO of Austin-based automaker Tesla, aerospace company SpaceX and neurotechnology company Neuralink, and he founded the Central Texas-based tunneling and infrastructure firm the Boring Company.
Musk has said the Twitter deal brings him closer to creating "X, the everything app" which refers to his vision of creating an app combining messaging, video, payments and commerce.
The deal closed after months of back and forth and legal fighting between Musk and Twitter that started in April, when Musk announced he had bid $44 billion to acquire the social media platform. The sale was agreed to by Twitter's board, but in July, Musk said he was calling it off over issues with spam bots and fake accounts on the platform. Twitter sued, seeking to force Musk to go through with the takeover of the company. In September, Twitter shareholders formally approved Musk’s original bid to purchase the company.
Musk’s argument had largely rested on his allegation that Twitter misrepresented how it measures the magnitude of “spam bot” accounts. But a number of legal experts believed he faced an uphill battle to convince the court.
Musk offered several hints this week that he planned to go through with the deal. On Wednesday he changed his Twitter bio to “Chief Twit” and visited the company’s San Francisco headquarters, strolling in carrying a porcelain sink and tweeting, “Entering Twitter HQ - let that sink in!”
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Much remains unclear about Twitter’s future as Musk takes over. According to The Washington Post, the billionaire has said he plans to lay off 75% of Twitter’s 7,500-person workforce and double the social media giant's revenue in three years. Bloomberg later reported that Musk denied saying he would reduce the staff by that amount. On Thursday he also tried to settle worries from advertisers, saying Twitter won’t become a “free-for-all-hellscape,” arguing that he is buying the platform to “help humanity” and saying he wants Twitter to be “the most respected advertising platform in the world.” On Friday, Musk said Twitter would have a content moderation council with "widely diverse viewpoints" that will discuss major content decisions and account reinstatements.
There has been speculation that Musk could move Twitter's corporate headquarters to Austin, which has increasingly become a hub for his companies.
Dan Ives, an analyst with Wedbush Securities, said with Musk adding Twitter to his broader ecosystem, it’s likely that Twitter will have a big presence in Austin, perhaps even opening a second headquarters.
“We believe Twitter will open up an office in Austin as this now is the foundation of the Musk ecosystem,” Ives said.
It’s an idea that has garnered support from Gov. Greg Abbott, who in April tweeted to encourage Musk to “bring Twitter to Texas to join Tesla, SpaceX and the Boring Company.”
Earlier this year, one Central Texas rancher even took to Twitter to offer Musk free land to move Twitter's headquarters to rural Williamson County. Jim Schwertner, president and CEO of Schwertner Farms, tweeted an offer of 100 acres free of charge if Musk would move Twitter's corporate offices to the site in Schwertner, an unincorporated community east of Jarrell. Friday morning, Schwertner took to Twitter to reiterate the offer and congratulate Musk.
Congratulations @ElonMusk on your new purchase of Twitter! We are standing by to host your World Headquarters in Schwertner, Tx. Home of FREE Speech.
— Jim Schwertner (@JimSchwertner1) October 28, 2022
Musk has already moved headquarters or opened offices for many of his other companies in Central Texas. Last year, he announced he was moving Tesla's corporate headquarters from California to Travis County, on the site of the automaker's $1.1 billion manufacturing plant just outside Austin. Musk moved the headquarters of his tunneling and infrastructure company, the Boring Co., to Central Texas, and he has opened offices for SpaceX and Neuralink in the region. He also moved his private foundation, the Elon Musk Foundation, to Austin.
Thom Singer, CEO of the Austin Technology Council, said that Musk has moved other companies to Austin and that it's reasonable to assume the billionaire will make a place for Twitter in the city. He said such a move would benefit the Austin technology sector.
"It is a good thing for Central Texas when companies move their headquarters to Austin or open an office that will employ local tech workers," Singer said. "The future of Austin's tech community will be successful because of a combination of homegrown startups and larger companies relocating or creating offices. More well-paying tech jobs in the region will spur collaboration and entrepreneurship. This provides opportunities for people at all levels in our community."
Roger Kay, an analyst with Endpoint Technologies Associates, said a lot about Twitter's future remains to be seen, from the company's structure to whether it will open an office in Austin. He added that Musk probably will want at least a small office in Central Texas.
"If he's going to have a lot of operations in Texas, and is going to be there himself and then I would expect him to have a stronger presence of Twitter staff there but again, with operations you could put anywhere literally," Kay said.
He added that attempts to get some Twitter employees to move to Austin could be met with mixed reactions, and while many Twitter jobs could be done from anywhere in the world, keeping key developers at the company is also important.
Still, Kay said a Twitter office would be a win for Central Texas, which has seen a number of companies move or expand into the region in the past several years. Competitors TikTok and Meta, Facebook's parent company, already have a presence in the region.
"That'd be a boomlet among the other booms of tech companies investing in that part of the world," Kay said.
This month on a Tesla earnings call, Musk said he was excited about the Twitter deal and said the platform had "incredible potential."
"Although obviously myself and other investors are overpaying for Twitter right now," Musk said, "the long-term potential for Twitter is an order of magnitude higher than its current value."
The Twitter saga has been affecting Tesla in recent months. In August, Musk sold nearly $7 billion worth of shares in Tesla ahead of the court battle with Twitter. The share price for Tesla took a hit as investors raised concerns that Musk was spreading himself too thin and that he might sell more Tesla stock to pay for the deal.
Ives said Musk completing the Twitter deal is probably good news for Tesla.
“While it’s a risky deal for Musk that he way overpaid, now the goal is turn Twitter into a WeChat-like app like they have in China here in the U.S. that could benefit Tesla down the line," Ives said. "The more Musk owns, the better for Austin.”
This article originally appeared on Austin American-Statesman: As Elon Musk takes over, will some Twitter operations move to Austin?