What’s left of Twitter now that Hurricane Elon Musk has passed?
Musk wanted to buy Twitter, gave the company weeks notice via its personal Twitter account and abruptly canceled the purchase on Friday. The social media company, meanwhile, has been left confused. Without a plan for the future, in anticipation of a legal battle that will undoubtedly take years.
Tesla’s CEO and Twitter had agreed a sum of $ 44 billion (41 billion euros at the time) in April, more than $ 54 per tonne. shares. In retrospect, it was an excellent deal for Twitter. The company’s stock price is currently more than $ 20 lower.
But shortly after the deal was made, doubt hit Musk. The U.S. stock market – especially technology stocks – took a dive, and Musk appeared to have bid too much money on Twitter. Financing the deal proved to be a difficult business even for the richest person on earth. Musk said Twitter was in breach of contract by failing to clarify the number of spam accounts on the platform. According to Musk, this “false and misleading information” was the reason for canceling the transaction without consequences.
Whether this is true will ultimately be decided by the judges of the Enterprise Chamber in Delaware. Twitter lawyers called Musk’s attempt to terminate the deal “invalid and illegal” in a letter Sunday, saying Musk “knowingly, intentionally and materially” broke his agreement to buy the company.
Musk responded to his Musks: with a meme via Twitter† With a series of photos of themselves laughing out loud and reading, “Now they want to force me into court to buy Twitter.”
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It’s hard to say how it will end. According to several legal experts interviewed by US media in recent days, Twitter has a strong case. The deal includes a clause that allows Twitter to sue Musk if the deal does not go through. In addition, Musk will have to pay $ 1 billion in damages, an amount that Musk – with a fortune of about $ 200 billion – could easily miss. Shareholders who would be bought out of the deal can also get the amount they are missing back from Musk. In that case, the damage could run into the billions.
When luxury brand LVMH (Louis Vuitton Moët Hennessy) bought the jewelry chain Tiffany & Company for $ 16.5 billion in 2020, LVMH tried to get out of the deal after the outbreak of the corona crisis. In the end, LVMH bought the company after the judge’s intervention with a discount of $ 425 million. If the judge now follows such reasoning again, there is a chance that Musk could still buy Twitter for less than the $ 44 billion he would initially pay for it.
Twitter’s reputation, which is already not so good, has been further damaged by the case
Either way, this is bad news for Twitter. Twitter’s reputation, which is already not so good, has been further damaged by the case. Since announcing the deal, Musk has sent a stream of negative messages about the company. Incidentally, partly via Twitter itself (Musk is the most influential Twitterer in the world with over 100 million followers).
In letters to the SEC and in presentations to investors, Musk criticized Twitter’s “declining business and economic prospects” and held management responsible for a – according to Musk – less innovative and inferior product. The company also made a critical mistake by removing then-President Donald Trump from the platform to continue spreading disinformation, Musk said.
All of this has led to a defeated atmosphere in the Twitter workplace, according to New York Times and technical side Wired, who spoke to Twitter employees. The current CEO Parag Agrawal’s company is in the middle of a savings operation, not hiring new employees and recently forced a number of top executives to leave.
Twitter is struggling with a difficult online advertising market and has seen the number of users grow much slower than other competing social media for years. The cost savings were to prepare the company for a new era, led by Elon Musk.
“Musk messed with us, screwed up the stock price and caused a lot of layoffs,” a Twitter employee told Wired. “But morale is so damn low now that no one wants to be here anymore.”