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Elon Musk Closes $44bn Deal to Buy Twitter

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Elon Musk has closed his $44bn deal to take Twitter private, bringing an end to one of the most high-profile and dramatic buyout sagas in recent memory after months of legal wrangling between the world’s richest man and the social media platform.

As the billionaire entrepreneur took over on Thursday night, he fired Twitter’s chief executive Parag Agrawal and chief financial officer Ned Segal. Vijaya Gadde, Twitter’s head of legal, policy and safety, and general counsel Sean Edgett were also dismissed, one person said.

“[T]he bird is freed,” Musk tweeted.

A regulatory filing from the New York Stock Exchange on Friday morning confirmed that the deal had closed the previous day, and said trading in shares had been suspended ahead of Twitter’s delisting on November 8. Analysts sent out notes saying that they were dropping their coverage of the platform now that it was private.

The announcements conclude an acquisition that has been both unpredictable and unprecedented and puts Musk, a self-described “free-speech absolutist”, at the helm of a platform that is popular among global politicians and relied on by millions of users around the world for news.

Musk has promised to cut jobs and costs at Twitter, while boosting product innovation in an attempt to build a “super app” that incorporates payments, commerce and messaging.

He has also vowed to loosen content moderation rules, including reversing permanent bans, which could pave the way for former US president Donald Trump, who was kicked off the platform following the January 6 2021 attack on the US Capitol, to return.

On Friday, Trump wrote on Truth Social, the alternative social media platform that he set up following his ban, that he was “very happy that Twitter is now in sane hands”. He told Fox News that he was “staying on Truth” although he did not rule out a return to Twitter if allowed to do so.

Musk, already chief executive at Tesla and SpaceX, is expected to act as the chief executive at Twitter until he picks new leadership. He has already started embracing his new role with characteristic bombast, visiting Twitter’s San Francisco office on Wednesday to meet staffers while carrying a sink, tweeting “Let that sink in” and changing his Twitter profile to read “Chief Twit”.

He also told some employees that he did not intend to cut 75 per cent of jobs, dismissing a previous report, according to a person familiar with the situation.

Striking a more serious tone on Thursday, Musk sought to reassure advertisers — which make up the majority of the platform’s $5bn annual revenues — that Twitter would not become “a free-for-all hellscape” and that it “aspired to be the most respected advertising platform in the world”.

“[L]et the good times roll”, Musk posted on Twitter after the deal officially closed. Responding to one user called Catturd who complained that they were “shadowbanned” on the platform — meaning their content is restricted from being shown to others without their knowledge — Musk wrote that he would be “digging in more today”.

The deal has already divided opinion among the platform’s users. Some raised fears it might unleash a torrent of toxicity and abuse, while others celebrated what they saw as an end to the censorship of free speech.

Many Twitter employees paid tribute to the departing executives, though some noted that they were due to receive healthy payouts — including about $60mn for Agrawal — thanks to a clause in the merger agreement.

Musk had originally agreed in April to buy Twitter for $54.20 a share. A few months later he sued the San Francisco-based company to back out of the deal, alleging the platform had misled investors and regulators over fake accounts and cyber security. The social media company pushed back and countersued in an attempt to force the billionaire to close the acquisition, sparking a fraught legal battle and discovery process.

Just weeks before the two were due to stand off in a Delaware court over the matter, Musk announced he was willing to buy the company at the originally agreed price if the legal action was dropped. Twitter resisted an immediate resolution, and the court ordered the parties to find a way to close the deal by October 28 or face a November trial.

CNBC first reported news of Agrawal and Segal’s exit. Twitter declined to comment on the deal closing or departures. A representative for Musk did not respond to a request for comment.

The deal, once coveted by bankers, could turn into a nightmare with some of the biggest names in the leveraged finance industry facing steep losses.

A group of banks led by Morgan Stanley and including Bank of America and Barclays, committed $13bn in financing for the deal in April when debt markets were still relatively stable.

Those banks would typically sell debt to fund the deal, but market volatility has left them with few options other than to fund it themselves and keep it on their balance sheets.

Musk has committed to coming up with $33bn of equity in total. He has said he has raised at least $7bn for his bid from a roster of investors including Oracle co-founder Larry Ellison, cryptocurrency platform Binance and asset management groups Fidelity, Brookfield and Sequoia Capital.

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Source: ft.com

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Iceland Introduces ‘turkey Promise’ to Ensure Shoppers Get ‘low Price’ Meat

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Iceland has frozen the price of its festive fowl.

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Bankman-Fried Empire Includes Billions of Dollars of Illiquid Investments

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Sam Bankman-Fried’s business empire includes billions of dollars of illiquid venture capital investments, according to internal records seen by the Financial Times, underscoring the uncertain recovery facing customers of his collapsed FTX exchange.

The 30-year-old entrepreneur, once a star of the crypto industry, on Friday placed FTX international, its independent US arm, and his proprietary trading firm Alameda Research into a joint bankruptcy process in Delaware federal court.

Initial filings listed both assets and liabilities of the group at between $10bn and $50bn. FTX’s new chief executive John Ray, who was brought in to chair Enron during its liquidation, said the companies had “valuable assets” and that the bankruptcy would maximise recoveries.

The sprawling venture capital portfolio will add to the complexity of the insolvency proceedings, which itself includes more than 130 companies controlled by Bankman-Fried. FTX’s collapse is among the most dramatic failures in the crypto industry not just this year, but since the creation of bitcoin more than a decade ago.

FTX and its affiliates have not yet disclosed the exact size of their liabilities and assets, and the shortfall that likely exists. FTX’s recently departed head of institutional sales, Zane Tackett, said on Twitter on Friday that the shortfall ran into billions of dollars. FTX did not immediately respond to a request for comment.

Any gap between assets and liabilities will be influenced by the value that can be recovered from almost $5.4bn that FTX and Alameda invested in almost 500 crypto companies and venture capital funds, according to the records seen by the FT.

The largest of those investments is $1.15bn that Alameda ploughed into crypto mining group Genesis Digital Assets between August 2021 and April 2022, the records show.

Publicly traded mining companies have sold off sharply over the past year as the crypto market has declined. The HashRate crypto mining index, which tracks such stocks, is down 75 per cent since August 2021. Genesis did not immediately respond to a request for comment.

The records also list more than $1bn invested across about 40 funds run by venture capital firms, including some that were investors in FTX such as Sequoia Capital. Those holdings include a $300mn investment by Alameda in K5 Global, the firm run by Michael Kives. The investment amounts to 30 per cent of K5’s general partnership, and $225mn of the total sits in Elon Musk’s SpaceX and Boring Company, and other unidentified businesses, according to the records.

Earlier this year, texts released during Musk’s litigation with Twitter showed Kives suggesting Bankman-Fried as a co-investor in the social media company. Musk was dismissive of the FTX founder and ultimately took money from the head of rival exchange Binance, Changpeng Zhao.

Other big bets detailed in the records include a $500mn investment in Anthropic, an artificial intelligence “safety and research company”, made by Bankman-Fried through Alameda earlier this year. Anthropic did not immediately respond to a request for comment.

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Sam Bankman-Fried’s $32bn FTX Crypto Empire Files for Bankruptcy

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FTX, the once high-flying crypto currency group, has filed for bankruptcy protection in the US, marking a stunning collapse of the $32bn empire built by the colourful 30-year-old entrepreneur Sam Bankman-Fried.

The filing in Delaware federal court on Friday included the main FTX international exchange, a US crypto marketplace, Bankman-Fried’s proprietary trading group Alameda Research and about 130 affiliated companies.

FTX’s failure came after Bankman-Fried desperately sought billions of dollars to save the exchange this week after it was unable to meet a torrent of customer withdrawals in a run prompted by concerns over its financial health and links to Alameda.

The collapse of such a prominent group, which advertised during the US Superbowl and whose shorts-wearing, charismatic founder was a leading donor to the Democratic party, has rocked the notoriously volatile crypto industry.

Bitcoin dropped 5 per cent to a fresh two-year low of $16,492 after the FTX bankruptcy was announced. Changpeng Zhao, chief executive of Binance, earlier on Friday said the fall of FTX left crypto facing a financial crisis akin to 2008 and that more businesses could fail in its wake.

Bankman-Fried, who one week ago was among the most respected figures in the sector with a $24bn personal fortune and close links with Wall Street and celebrities, resigned as FTX’s chief executive on Friday. John R Ray, a restructuring specialist who oversaw the Enron and Nortel Networks bankruptcy cases, will take the reins.

“The FTX Group has valuable assets that can only be effectively administered in an organised, joint process,” Ray said.

In just over three years, FTX had secured a $32bn valuation and had wooed a roster of blue-chip investors, including Paradigm, SoftBank, Sequoia Capital and Singapore’s Temasek. Venture capital firms Sequoia and Paradigm have in recent days marked their investment down to zero.

The sprawling business empire run by a tight-knit group of longtime associates around Bankman-Fried, many of whom lived together in a Nassau penthouse in the Bahamas, has around 100,000 creditors and $10-50bn of assets and liabilities, according to the filing.

The US Securities and Exchange Commission is investigating FTX, which includes examining the platform’s cryptocurrency lending products and the management of customer funds, according to a person familiar with the matter.

The bankruptcy filing follows a frantic week in digital asset markets. Rumours about the financial health of FTX and its trading affiliate Alameda Research culminated on Monday in a run on the exchange with insufficient readily accessible assets to meet $5bn in customer withdrawals.

After appeals to its investors and rival exchanges, FTX halted the demands on Tuesday and agreed a rescue by the world’s largest crypto bourse, Binance, led by Zhao, a one-time partner turned arch-rival of Bankman-Fried.

That deal fell through a day later after Binance said due diligence revealed insurmountable financial problems at FTX. Last-ditch efforts to find another investor to supply up to $8bn failed in recent days.

FTX Digital Markets Ltd, the group’s subsidiary in the Bahamas, where it is headquartered, is not included in the bankruptcy proceedings. The Securities Commission of The Bahamas froze the subsidiary’s assets on Thursday and appointed a provisional liquidator.

LedgerX, a regulated US futures exchange, and a subsidiary in Australia are among other units not included in the filing. The group’s Australian business has already been placed into administration while Japanese watchdogs suspended operations of FTX’s affiliate in the country.

Bankman-Fried has blamed mistaken accounting of the exchange’s liquidity and leverage for the collapse.

“I’m really sorry, again, that we ended up here,” he said following Friday’s filing. “I’m piecing together all of the details, but I was shocked to see things unravel the way they did earlier this week.”

Additional reporting by Stefania Palma in Washington

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