Twitter CEO Parag Agrawal has cut loose two top executives and announced a hiring freeze ahead of the company’s acquisition by Elon Musk, whose share purchases are reportedly being investigated by the SEC.
Consumer product chief Kayvon Beykpour tweeted today that “Parag asked me to leave after letting me know that he wants to take the team in a different direction.”
“It’s not how and when I imagined leaving Twitter, and this wasn’t my decision.”
Bruce Falck, the general manager of revenue and head of product for its business side, is also gone.
A Twitter spokesperson said that effective this week, Twitter is also pausing most hiring and backfills, except for business critical roles, and pulling back on non-labor costs “to ensure we are being responsible and efficient.” Hiring freezes aren’t unusual ahead of a likely change in control.
Jay Sullivan is now the new GM of Bluebird, the consumer team, and interim general manager of Goldbird, the revenue team.
Agrawal, a software engineer and Twitter’s former chief technology officer, took over as CEO from Jack Dorsey last November.
Twitter’s board of directors accepted Musk’s $54.20 a share cash bid, about $44 billion, for the company last month after he teamed up with a handful of big investors to raise cash. He had previously acquired 9.2% of the company.
According to a WSJ report, the SEC is probing the timing of Musk’s disclosures of his Twitter stock purchases as he built up his stake.
Investors must file publicly with the SEC when they buy more than 5% of a company’s shares. The rule is clear and functions as an early alert to shareholders/companies that someone has a significant stake and may challenge management. Musk filed his form April 4, at least 10 days after his stake surpassed the trigger point. He also likely reaped significant savings on stock purchases over that period since news of his interest would have boosted the share price. Shareholders are suing Musk over the late disclosure.
A separate lawsuit by the Orlando Police Pension Fund in Delaware Chancery Court says that Delaware law forbids a quick merger in this case because of Musk’s agreements with other big Twitter shareholders, like his financial adviser Morgan Stanley and ally and Twitter founder Dorsey, to support the buyout — making him the effective owner of more than 15% of the company.
Twitter shares are down 4% at $44. The broader market is way down too but that’s still ten dollars below Musk’s offer price, indicating lingering skepticism that the deal will get done.
