Illustration: Sarah Grillo/Axios
Twitter's investors have divided into two camps: copacetic and apoplectic.
Why it matters: Elon Musk never intended to lead the site forever, both based on public and private comments. But investors were told that a transition would occur between the three and six month mark, not based on a crowdsourced decision just six weeks into his ownership.
Reminder: Musk is Twitter's majority owner, but his $44 billion takeover was partially financed by outside equity investors that include venture capital funds, mutual funds, wealthy individuals, corporations and sovereign wealth funds.
Catch up quick: It was a very messy weekend at Twitter, including some journalist accounts getting suspended, and the creation of an already-rescinded policy that blocked all users from mentioning or linking to their other social media accounts.
- It culminated in Musk launching a Twitter polllast night, asking if he should step down as "head" of Twitter, saying he'd abide by the result. More than 57% of users responded affirmatively.
- No successor appears to have been chosen, and it's unclear if Musk will step down immediately, or use the poll results to launch a CEO search process. It's also worth emphasizing that any new chief executive would report to Musk, so a switch may be more stylistic than substantive.
Some optimistic shareholders believe that Musk has largely done what he said he would do — stripping out costs and increasing engagement. Short-term pain for long-term gain.
- One source in this camp adds that while Musk is factually wrong in tweeting yesterday that Twitter was "on the fast lane to bankruptcy since May," it's a falsehood that Musk also has previously applied to SpaceX as a rhetorical tool to motivate both himself and others.
- There's acknowledgment that Musk had a very bad weekend, but his past success with SpaceX and Tesla gives confidence that he'll eventually figure things out.
But a group of worried investors include some limited partners of VC funds in the first group. One tells Axios that he’s dreading having to be grilled on this situation in front of his institution’s investment committee.
- All investors knew that Musk marches to the beat of his own drummer, and that he’s partial to nonlinear business decisions. But they’ve been taken aback by Musk publicly attacking Twitter advertisers (i.e., customers), getting distracted by media beefs and the CEO poll.
- The group's general sentiment is that Musk has already decided he overpaid, and thus is no longer valuing their investment as an owner should.
The bottom line: Musk last week reached out to existing Twitter shareholders, asking them to buy even more stock at the $44 billion price. No matter what investors are saying publicly or to reporters on background, we'll learn where they really stand by how they respond to his offer.
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