Wrong place, wrong time: How things went so wrong for Twitter’s CEO so quickly

New York
CNN business

When Parag Agrawal took over as CEO of Twitter last November after founder Jack Dorsey unexpectedly stepped down from the role, he was well known outside the company.

Ten months later, Agrawal has been singled out in a whistleblower exposé, berated by name in a congressional hearing and criticized both publicly and privately by the world’s richest man (and his possible future boss).

The tensions have not subsided. Agrawal was scheduled to be suspended Monday morning in San Francisco as part of the ongoing legal battle between Twitter ( TWTR ) and Elon Musk’s $44 billion acquisition deal. He has also been under pressure to answer questions from Congress about whistleblower disclosure.

Even for a company accustomed to upheavals, Agrawal’s tenure as Twitter leader has been marked by an unusual level of chaos: a nightmarish acquisition battle with Musk; a former executive accused of serious security vulnerabilities; and the economic downturn hitting its core advertising business.

That would be a lot to navigate even for the most CEOs. But Agrawal, a decade-long Twitter veteran who previously served as its CTO, had never run a company, let alone one of the world’s most important social media platforms.

“I think Parag got promoted because they thought everything was going to be status quo,” said Columbia Business School management professor Bill Klepper. Except for that last year.

Despite the challenges, Agrawal has managed to keep growing the platform’s user base and has rolled out several new features, including testing the long-awaited edit button. But there are honest doubts whether Agrawal will survive another year because Musk is forced to buy the company and then get rid of him, or if the board replaces him if the deal falls through.

Meanwhile, some lawmakers and regulators are suggesting that Agrawal may be investigated over the allegations, which directly implicate Agrawal, both as CEO and in his previous role at CTO.

“I’m sure when he goes home at night, he says to himself, ‘What the hell did I get myself into?'” Klepper said.

Twitter declined to comment for this story.

From the start, Agrawal had a daunting task. The company’s first goal was to somehow add 100 million daily active users by 2023. A 45% increase from the fourth quarter of 2021, and annual revenue grew to $7.5 billion, up from more than $5 trillion in 2021. At the same time, it was exploring new revenue opportunities, such as the Twitter Blue subscription service and cryptocurrency. -related features.

“Twitter’s challenge is that they haven’t yet been able to grow their user base and improve their monetization to the point where their monetization is commensurate with their impact,” Forte said.

Then came Musk.

In March, months after Twitter’s stock had quietly piled up, Musk met with Dorsey, though not Twitter’s CEO, to “discuss the future direction of social media,” according to a company filing. In the days that followed, Musk met with Twitter’s board and some of its management team, including Agrawal; publicly announced that he would become Twitter’s largest shareholder; and accepted a seat on the company’s board.

A few days later, Musk tweeted: “Is Twitter dying?” Later that day, Agrawal texted Musk to say the tweet was making life difficult for him as CEO.

“You’re free to ask ‘Is Twitter dying?’ or anything else about Twitter,” Agrawal said in a text to Musk, revealed in a court filing last week, “but it’s my responsibility to tell you that it’s not helping me improve Twitter in the current context. Next time we talk, I’d like you to give I would like [your] An insight into the level of internal distraction right now and how [it’s] damaging our ability to do the job… I’d love to get to a place where we’re a more resilient company and we’re not distracted, but we’re not now.’

Musk vaguely replied, “What have you been up to this week?” In two follow-up texts, he canceled the agreement to join the board, and said: “I will not join the board.” This is a waste of time.’

Musk then gave up his board seat, threatened to take adversaries and eventually agreed to buy Twitter for $54.20 per share, a significant premium to the company’s stock price at the time, only to try to pull out of the deal a month later, citing concerns. number of bots and spam accounts on the platform. Twitter is suing to make it up the agreement

Throughout, Agrawal has had to reassure shareholders, advertisers and employees about an acquisition by a billionaire who has been publicly critical of the platform, facing public jabs from someone who could be its new boss.

In May, Musk and Agrawal openly sparred on Twitter over the Tesla CEO’s claims about bots. Agrawal posted a tweet thread trying to explain the prevalence of fake and spam accounts on the platform and the company’s efforts to quantify and correct them; Musk responded with a poop emoji.

With Twitter, which many legal experts say has the strongest case, Musk wants to force a judge to enforce the acquisition agreement. In that case, it seems likely that either Musk would retain Agrawal as CEO or Agrawal would choose to stay.

After signing the deal in a text message exchange with Dorsey in April, Musk hinted that he would not be able to work with Agrawal. “Parag is moving very slowly and trying to please people who won’t be happy,” Musk said in a text.

If Musk takes over the company and Agrawal is fired, Agrawal could receive a payout worth tens of millions of dollars, including compensation for his stock options.

But even if Musk wins, or even if the two sides agree to a deal that allows Musk to exit the deal, Klepper said Agrawal’s stay as CEO could be long. If Musk walks, Twitter stock could take a hit. The company would also face the same challenges as its business, with added attrition amid uncertainty with Musk.

“They have a lot to clean up,” he said. “The first thing they’re going to do is bring in new leadership, someone with change experience.”

As the legal battle with Musk heated up, Twitter took another hit: Peiter “Mudge” Zatko, the company’s highly regarded former security chief. A figure in the world of information security, he went public with a whistleblower’s complaint.

The company alleged that Zatko had serious security vulnerabilities that threatened users, investors and US national security. He also alleged that the company was vulnerable to foreign interference and that its executives, including Agrawal, misled regulators and the company’s board.

Klepper said the first few months of a new CEO’s tenure are spent meeting with various parts of the company and discussing strategy with his board. But according to internal documents included in Zatko’s whistleblower disclosure, in December and January, Agrawal was also raising Zatko’s concerns that the new CEO and other executives had presented the board with false information about the company’s security posture, which Zatko believed it might have. fraud In January, Twitter’s audit committee launched an investigation into Zatko’s concerns.

Twitter says the investigation concluded that Zatko’s allegations were unfounded and that he was fired for poor performance; Zatko says he was fired for speaking out. Twitter said the whistleblowers’ disclosure paints a “false narrative” of the company that is “riddled with inconsistencies and inaccuracies and lacks relevant context.”

However, the whistleblower’s claims have brought even more attention to the company and Agrawal. Earlier this month, senior members of the Senate Judiciary Committee sent a letter to Agrawal seeking information, asking him for responses by September 26. It is unclear whether Twitter has responded to the letter.

During a Senate hearing with Zatko, Senator Chuck Grassley blamed Agrawal for not accepting an invitation to testify with the whistleblower. Twitter declined to make Agrawal available on the grounds that his testimony could jeopardize the company’s ongoing litigation with Musk, according to Grassley.

Grassley didn’t stop there. If Zatko’s claims are accurate, he said, “I don’t see how Mr. Agrawal can maintain his position on Twitter.”