Exclusive from WSJ: Musk acquires Twitter, some things you didn't know.

The Real Story of Musk's Twitter Takeover

Source: The Wall Street Journal

Author: Walter Isaacson

Translated by: czgsws, BlockBeats

The personal biography of Elon Musk, the world's richest person, founder of OpenAI and SpaceX, owner of X (formerly Twitter), and CEO of Tesla, will be officially published and released on September 12th. The book, written by Walter Isaacson, the author of "Steve Jobs," a well-known contemporary American biographer, has excerpted a portion of the "Twitter Wars" and released it in advance. BlockBeats has compiled and translated the content as follows:

Game addicts

In April 2022, everything went surprisingly smoothly for Elon Musk. Tesla's stock price has risen 15 times in 5 years, surpassing the total of the following 9 car companies. SpaceX launched twice as many rockets into orbit in the first quarter of 2022 as all other companies and countries combined. And Starlink satellites have just successfully created a private internet, providing network services to 500,000 users in 40 countries, including Ukraine.

If Musk can safely navigate through 2022, it will be a glorious year, but that is clearly not his nature.

Shivon Zilis is a manager at Neuralink (Musk's company dedicated to implantable brain-machine interfaces) and the mother of Musk's two children. In early April, she noticed that Musk was like a video game addict, unable to unplug even though he had already won and feeling restless.

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

"This is part of my default setting. I've always wanted to push the chips back onto the table or take on the next level of the game," Musk replied.

Fate intervened, and during this unsettling period of success, he exercised some soon-to-expiring stock options, which netted him around $10 billion in cash.

"I don't want to leave it in the bank," he said, "so I asked myself what products I like, and that's a simple question: Twitter." In January of that year, Musk secretly told his private business manager, Jared Birchall, to start buying Twitter stock.

Elon Musk's aggressive acquisition of Twitter and renaming it X signifies his current operating style: impulsive and disrespectful. This is a playground for him that is addictive. It has many features of a campus, including mockery and bullying. But for Twitter, smart kids win followers. They won't be pushed down stairs and beaten like Musk was when he was younger, owning it will make him the king of the campus.

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

Open up the pattern

More than 20 years ago, Musk founded a company called X.com, hoping to create a "universal application" that could handle all personal financial transactions and social relationships. After merging with PayPal, a payment service company co-founded by Peter Thiel, Musk fought hard to keep X.com as the name of the merged company, but his new colleagues resisted. At that time, PayPal had become a trusted brand name, with recognition and brand effects, like Twitter today, while the name X.com was associated with a "dirty website". Musk was ousted, but he remains steadfast to this day.

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

When he began buying Twitter stock, Musk saw it as a way to achieve his original ideas, and he also felt that the name Twitter was too limited in scope.

Elon Musk said: "Twitter may become what X.com should be, and we can help save freedom of speech in the process."

At that time, a new concern gradually emerged. Musk became increasingly worried about the danger of what he called the "awakening culture," believing that this virus was infecting the United States.

Elon Musk said seriously: "Unless the virus of 'awakening culture' is stopped, civilization will never develop into a multi-planetary mode."

Elon Musk's anti-awakening sentiment was partly triggered by his oldest child Xavier's (who was 16 at the time) decision to undergo gender reassignment.

"Hey, I'm a transgender person and my name now is Jenna," the child texted to Musk's brother's wife. "Don't tell my dad."

Later, Jenna cut off all ties with Musk, believing that any wealthy person is evil. Despite Musk's repeated attempts to reconcile, Jenna refused to spend time with him. He partly attributed this to the ideology Jenna absorbed while attending Crossroads School for Arts & Sciences in Los Angeles. He believed that Twitter has been influenced by left-wing voices.

"Twitter needs a Charizard"

On the evening after the news of his purchase of Twitter stock was made public, Musk called then-Twitter CEO Parag Agrawal and they decided to have a secret dinner with Twitter board chairman Bret Taylor on March 31.

Musk found Agrawal very likable. "He's a very nice guy," he said. But that's the problem. If you ask Musk what it takes to be a CEO, he wouldn't include being a genuinely nice person. One of his mottos is that managers should not aim to be likable. He said after the meeting, "What Twitter needs is a flamethrower, and Agrawal is not that."

At the time, Musk had not yet considered taking over Twitter himself. During their meeting, Agrawal invited him to join the Twitter board, which he agreed to, but the calm was only temporary.

马斯克的 X.com 愿景

->

Musk's X.com Vision

On the afternoon of April 6th, the second day after Musk announced his joining the Twitter board, Musk's friend, Luke Nosek, and Ken Howery expressed their concerns about this at a gathering, "This could cause trouble." Musk happily admitted at the meeting, "Obviously, the asylum is run by prisoners." He talked about the Twitter staff.

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

Musk reiterated his simple view that if Twitter stops trying to restrict users' speech, it would be beneficial to democracy. Although Howery agrees with Musk's liberal view of free speech, he gently countered, "Should it be like the telephone system, where what is input on one end is exactly what comes out on the other end? Or do you think it's more like a system that manages the world's discourse, perhaps with some intelligence added to the algorithm to distinguish between priorities or lower priorities?"

"Yes, this is a tricky question," Musk replied. "There is also the question of to what extent freedom of speech should be elevated or amplified, perhaps the way tweets are promoted should be more open, it could be an open source algorithm on GitHub, so people can filter it."

Later, Musk threw out some other ideas. "What if we charged people a small fee, like two dollars a month, for verification?" he asked. Musk believes that obtaining users' credit card information will eliminate "bots," provide new sources of revenue, and promote his goal of turning Twitter into a payment platform, much like his vision for X.com, where people can transfer money, distribute tips, and pay for stories, music, and video content. Because Howery and Nosek had worked with Musk at PayPal, they liked this idea.

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

The next day, Kimbal, Musk's brother, told him during lunch that it would be best to launch a new blockchain-based social media platform. Musk was very interested in this and entered a dazzling state. He half-jokingly said that maybe it could have a payment system using Dogecoin (DOGE), a semi-serious cryptocurrency that Musk has been quietly supporting its development. After lunch, he sent Kimbal several text messages, elaborating on the idea of "a blockchain social media system that can both make payments and communicate via short messages like Twitter."

Then he flew to Lanai Island in Hawaii for a quiet date with Australian actress Natasha Bassett, whom he occasionally dates. But Musk didn't treat it as a relaxing mini-vacation, instead spending four days thinking about how to handle Twitter.

Most of the first night, Musk had trouble sleeping and was worried about the problems facing Twitter. When he looked at the list of users with the most followers, he found that they were no longer very active. So at 3:32 a.m. Hawaii time, he tweeted, "Most 'top' accounts tweet very little and their content is sparse. Is Twitter dying?"

About 90 minutes later, Twitter CEO Agrawal sent a text message to Musk: "You are free to tweet 'Is Twitter dying?' or any other content related to Twitter, but I have a responsibility to tell you that it does not help me make Twitter better in the current environment." This is a restrained message with cautious wording.

When Musk received the text message, it was just past 5am in Hawaii, but he was still alert. He responded sharply, "What have you done this week? I won't join the board, it's a waste of time. I will propose to privatize Twitter."

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

Parag Agrawal, photographed in July 2022, was the CEO of Twitter at the time of its acquisition by Musk. Photo credit: KEVIN DIETSCH/GETTY IMAGES

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

"Fixing Twitter by talking to Agrawal is not going to work," Musk replied. "We need to take strong action."

Elon Musk's "One Proposal"

Musk said that when he arrived in Hawaii, he realized clearly that he would not be able to fix Twitter or turn it into X.com by joining the board: "I decided that I didn't want to be coaxed into becoming a board member, nor did I want to be a pleaser in the board." There was another factor. Musk was emotionally unstable and impulsive at the time.

As usual, his thoughts fluctuated greatly with his emotions. While he was aggressively trying to acquire Twitter, he was also discussing with Kimbal via text message about their idea to start a new social media company. "I think we need a new social media company based on blockchain technology and including payment functions," he wrote.

But later that afternoon on April 9th (Saturday), he still chose to pursue the idea of acquiring Twitter. "It already has a certain user base and needs this booster to launch X.com," he sent a text message to his private business manager Birchall.

Later, Musk flew to Vancouver to meet his on-and-off girlfriend, Claire Boucher, a performance artist known as "Grimes". She had been urging Musk to come see her so she could introduce their son, X (yes, X), to her parents and elderly grandparents. But when she was about to drive to see 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 messaged Twitter Chairman Taylor to express his formal decision. "After several days of careful consideration - this is obviously a serious issue - I have decided to continue to privatize Twitter." he said.

That night, Grimes, the girlfriend of the cryptocurrency industry practitioner, returned to the hotel and found Musk relaxing in a new video game called "Elder Scrolls". He downloaded the game onto his laptop. The game has carefully rendered mysterious clues and strange twists and turns in the plot, requiring players to concentrate, especially when calculating when to attack. Musk spent a lot of time in the game's most dangerous area. "He didn't sleep," Grimes said. "He played until 5:30 in the morning."

Shortly after playing, Musk tweeted: "I made a tender offer."

On October 26, 2022, just before the completion of his acquisition of the company, Musk jokingly walked into Twitter headquarters holding a sink. Photo source: Musk's personal Twitter account.

Later, Musk began to seek external investors to help him fund the acquisition. He asked his brother Kimbal, but Kimbal declined. The fundraising plan achieved greater success under the leadership of Lawrence Joseph "Larry" Ellison, the founder of Oracle. "Yes, of course," Ellison replied when Musk asked him if he was interested in investing in the deal.

"How much can you provide approximately?" asked Musk. "I'm not asking you to do anything, but this transaction is already oversubscribed, so I have to reduce or kick out some participants."

"Ten billion," Ellison said, "or you name the number."

Ellison hasn't tweeted in a decade. In fact, he doesn't remember his Twitter password, so Musk had to reset it for him. But Ellison believes Twitter is important. "It's a real-time news service, and there's nothing better than that. If you agree that it's important for democracy, then I think it's worth investing in," he said.

"My nonsense detector goes off like a red alert"

Sam Bankman-Fried (SBF) is someone who wants to participate in this transaction. He is the founder of the cryptocurrency trading platform FTX, but he quickly fell from grace. Morgan Stanley urged Musk to call SBF, stating that he "will be responsible for social media blockchain integration engineering" and will invest 5 billion US dollars in the acquisition transaction.

Despite discussing the idea of building a social network on the blockchain with Kimbal, Musk believes that this approach is too slow to support fast-paced Twitter posts. So he doesn't want to see SBF. When his banker insisted that SBF "can pay $5 billion," Musk responded directly with a "dislike" expression to the information. "Blockchain Twitter is impossible because peer-to-peer networks cannot support such high bandwidth and latency requirements," Musk said. He said he might meet with SBF at some point, as long as he doesn't have to have a difficult blockchain debate.

In December 2022, Musk rejected the proposal from FTX founder Sam Bankman-Fried. Bankman-Fried sent Musk a message saying that he was "very excited about what he was going to do with TWTR." Photo source: KENNY WASSUS/The Wall Street Journal

SBF then directly sent a message to Musk, saying that he was "very excited about what he will do with TWTR." SBF said that he owns $100 million worth of Twitter stock, which means that once Musk privatizes it, his Twitter stock will be converted into shares of the new company.

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

Elon Musk's attitude led to SBF calling again in May. "My bullshit detector went off like the red alert on a Geiger counter," Musk said. SBF started speaking quickly, all about himself. "He spoke at a sprinting pace, a mile a minute," Musk said. "I thought he should be asking me questions about the deal, but he kept telling me what he was doing. I was like, 'Dude, chill.'" However, this feeling was mutual, and SBF also thought Musk seemed crazy. The call lasted half an hour, and SBF ultimately did not invest.

Completion of Acquisition

Musk successfully raised funds, and the Twitter board accepted his plan at the end of April. That night, Musk did not celebrate, but flew to the Starbase rocket launch site in southern Texas. There, he attended a routine night meeting on redesigning the Raptors engine and spent over an hour thinking about how to deal with the unidentified methane leak problem they encountered. Twitter's news was the hottest topic in the world, but SpaceX engineers knew he liked to focus on the task at hand, so no one mentioned it. Then he met Kimbal at a roadside cafe in Brownsville, where local musicians were playing. They stayed until two in the morning, sitting at a table in front of the stage, just listening to music.

In April 2023, SpaceX Starship rocket launched for testing in Boca Chica, Texas. Photo source: PATRICK T. FALLON/AFP/GETTY IMAGES

During the few months between the agreement of the trading protocol and the formal transaction, Musk's emotions fluctuated greatly. "I am very excited about the final realization of X.com, just as it should be, using Twitter as a catalyst!"

A few days later, his mood became even more gloomy. "I need to stay at Twitter headquarters. The situation here is too difficult to handle and it really makes me frustrated. I can't even sleep there." Musk expressed doubt about accepting such a chaotic challenge. "I have a bad habit of being too greedy," Musk admitted in a long conversation. "I think I just need to think less about Twitter."

A whistleblower and other sources convinced him that Twitter had lied about its actual number of users and that his initial offer of $44 billion was too high. He wanted a more appropriate deal price. Throughout September, he spoke with lawyers three or four times a day. Sometimes he became emotional, insisting that they could beat the lawsuit filed against Twitter in Delaware. "They're throwing bricks at the dumpster they're in," he said of Twitter's board. "I can't believe a judge would approve this deal. It won't pass public scrutiny."

Musk's lawyer ultimately convinced him that if they took the case to court, he would certainly lose, and it would be best to simply complete the transaction according to the original terms. By then, Musk had even regained some enthusiasm for taking over the company. "You could say that I should pay a premium, because the people running Twitter are all fools and idiots, and Twitter has such enormous potential, there are many things I can solve." In the end, Musk agreed to officially complete the transaction in October.

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

"All these damn birds must go."

Elon Musk plans to visit Twitter in San Francisco on Wednesday, October 26th to explore and prepare for the official completion of the transaction originally scheduled for Friday. As he wandered around the headquarters, he seemed surprised. The headquarters is located in a 10-story Art Deco building built in 1937, formerly a commodity market, and has been renovated with a tech-savvy style, featuring a coffee bar, yoga studio, gym, and game room. The spacious cafe on the ninth floor offers free meals, from handmade burgers to vegan salads. The sign in the bathroom reads "Welcome to Gender Diversity". As Musk browsed through the cabinets filled with Twitter-branded merchandise, he found a T-shirt with the words "Stay Woke" printed on it. He waved the T-shirt as an example, believing that this mindset has infected the company.

There is a fundamental disagreement between Twitter and Musk's commercial metaverse. Twitter prides itself on being a friendly platform where indulgence is considered a virtue. "We absolutely have a high degree of empathy, care deeply about inclusivity and diversity; everyone needs to feel safe here," said Leslie Berland, who served as chief marketing and HR officer before being fired by Musk. The company has implemented permanent work-from-home options and allows for one mental "rest day" per month. One of the company's commonly used catchphrases is "psychological safety." Be careful not to cause discomfort.

When Musk heard the term "psychological safety", he smiled bitterly, which made him disagree. He believes that this is the enemy of urgency and progress. His favorite buzzword is "hardcore". He believes that discomfort is a good thing and a weapon against complacency. Holidays, work-life balance, and "mental rest" are not related to him.

He first found it funny, and then felt disgusted by the ubiquitous iconic blue bird logo within Twitter.

Twitter's transaction was originally scheduled to be completed on Friday. A smooth transition had been planned for the opening of the stock market that morning. Funds will be transferred, stocks will be delisted, and Musk will gain control. This will allow Agrawal and his senior Twitter colleagues to receive severance pay and stock options.

But Musk doesn't want that. On the afternoon before the scheduled closing, he planned a jujitsu exercise: he would force a quick close that evening. If his lawyers and bankers were on the ball, he could "justifiably" fire Agrawal and other Twitter executives before their stock options vested.

On July 29, 2023, the new X logo was built on the roof of Twitter's headquarters in San Francisco. Photo source: JOSH EDELSON/AFP/GETTY IMAGES

This is bold, even cruel. But Musk believes it is reasonable because he is convinced that Twitter's management misled him. Later on Thursday afternoon, when the plan was unfolding, Musk told everyone: "Choosing to shut down tonight and shut down again tomorrow morning will result in a difference of $200 million in the cookie jar."

At 4:12 PM Pacific Time, once they confirmed the funds had been transferred, Musk pulled the trigger to complete the transaction. At that moment, his assistant handed Agrawal and his three executives termination letters. Six minutes later, Musk's senior security officer arrived at the second-floor conference room, stating that everyone had "evacuated" the building and their access to email had been cut off.

Instantly cutting off email is part of the plan. Agrawal had a resignation letter ready citing a change in control. But when his Twitter email was cut off, it took him a few minutes to send the document to his Gmail. By then, he had already been fired by Musk.

"He tried to resign," said Musk.

"But we beat him," answered his gunman lawyer, Alex Shapiro.

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