The week after: Twitter starts Musk makeover, plans hefty new subscription
The aftermath and cleanup of a contentious leveraged buyout of Twitter (TWTR) is under way the Monday after billionaire Elon Musk wrapped up a $44B leveraged buyout of the social-media platform.
A lengthy SEC filing Monday morning confirmed a number of previously reported moves: That Musk consummated the purchase, that shares were canceled and converted into the right to receive the planned $54.20 each in cash consideration, and that Musk fired the board and became sole director.
Also Monday, Musk asked Delaware Court of Chancery Judge Kathaleen McCormick to dismiss the lawsuit over which she was presiding, Twitter v. Musk et al., with both sides (now, effectively both Musk) agreeing to drop the matter.
Another filing confirms that Saudi Prince Alwaleed bin Talal rolled some $1.89B in stock into Musk's takeover, making the prince and Kingdom Holding Co. the second-biggest investor in Twitter, behind Musk.
Late Sunday, Musk made his first major product move - to begin remaking the company's subscription offering at a substantially higher price, and to tie its account verification system to subscriptions.
That verified account system - Twitter's "blue checks" next to notable names - had involved an elaborate approach to determine notable posters. Musk has now directed that it be linked to Twitter Blue, the company's subscription service, where the price would go from about $4.99 per month to $19.99 per month.
Current verified users would have 90 days to subscribe at the new higher price or lose their verification. And employees working on the project were told Sunday to get it in place by Nov. 7 or face firing, The Verge reported.
"The whole verification process is being revamped right now," Musk tweeted Sunday evening.
Twitter Blue had largely launched about a year ago, at $2.99 per month per user, and the company boosted its price to $5 per month in July. It offered users the chance to see ad-free posts from some publishers as well as extra organizing and editing tools.
Twitter's aggressive new monetization of key users could have ripples for rival social media platforms - particularly Meta Platforms (NASDAQ:META), whose Facebook is already heavily penetrated (it has just under 2B daily active users, and just under 3B monthly active users) and which has its own challenges to consider for user monetization.
Snap (NYSE:SNAP) also is counting on its own subscription offering, Snapchat+. It started rolling it out at $3.99 per month in the summer, and CEO Evan Spiegel's September strategy memo laid out a plan to boost revenues 20%, with $350M in new revenue coming from Snapchat+.
Important for social-media rivals' subscription hopes, Musk is vying to take a heavily ad-supported Twitter and make subscription revenues around half of the total.
Musk is reportedly working with a small "war room" of confidants on Twitter issues right now, including venture capitalist David Sacks, investor Jason Calacanis, venture capitalist and Twitter ex Sriram Krishnan, and his reps Alex Spiro and Jared Birchall.
Kayvon Beykpour - Twitter' former head of product, fired by now ex-CEO Parag Agrawal in May, was spotted in the building again, the NYT said.