Elon Musk is back, and now he wants to have Twitter again! delicious.
Today let’s talk about the background against which he made this decision, whether it is somehow an incredibly elaborate attempt to get from of the deal, and what Twitter’s beleaguered employees are saying internally.
Did the news come as a surprise? Sure, I think. The billionaire Tesla CEO has been unusually sticking with the message for months now, holding on to his claim that the amount of bots and spam on the platform should be reason enough for him to cancel his deal. His legal team seemed buoyed by the recent appearance of a whistleblower willing to allege that the current Twitter poses a threat to national securityand changed his lawsuit against the company in his third and possibly final attempt to end the $44 billion acquisition.
I’ve changed my attitude to not expect anything from Musk at all. I’m done making predictions.
But this relative consistency is, on balance, an anomaly in the multiverse of madness that makes Elon Musk’s feelings about Twitter, Inc.
In those early days of the story, I sometimes wrote here that you can expect the unexpected with regard to Musk. Since then, I’ve changed my attitude to expect nothing from Musk at all. I’m done making predictions. He has a whimsical leadership style and his whims follow no pattern that I can discern. The man signed a deal, spent months wrecking it, did everything he could to get out of it, and on Monday night informed Twitter’s lawyers that he wanted to sign it anyway. Anyone who tells you they can draw a straight line through those events is writing fanfiction.
But if I can’t pretend to draw a straight line here, I can at least offer a scatter plot.
Observation One: The past week has been a tumultuous period online, even for Musk. On Monday he tweeted a typical half-baked idea to end the Russian war against Ukraine, with Ukraine unilaterally giving up some of its territory, along with a yes-or-no poll. “No” won with 59.1 percent of the vote, blaming Musk on bots; even more embarrassingly, the Ukrainian ambassador to Germany told him to “fuck off”.
Days earlier, Musk had also been embarrassed by: the disclosure of several texts sent to him by millionaires and billionaires offering advice, money and other support while trying to acquire Twitter. I will always remember a handful of these texts — starting with Marc Benioff, the CEO of Salesforce, who sends Musk a message: “Twitter Conversation OS – the town square for your digital life” (???) – but the most striking point is that the discovery in the lawsuit began to blow back on him and his friends.
On the surface, these events may not be enough to make a man spend $44 billion to regain control of the product and story. But I wouldn’t bet my life on it.
Observation two: Musk’s lawsuit did not go well. If you’re looking for Occam’s razor’s explanation for today’s events, this is the one. Twitter’s lawyers had written a very good merger agreement, and Musk signed it without any due diligence. Like most US tech companies, Twitter is headquartered in Delaware, which prides itself on upholding the rule of law and properly handling merger disputes.
And as Jef Feeley, Ed Hammond and Kurt Wagner point out at: Bloomberg, in several preliminary investigations, the Chancery Court judge continued to side with Twitter:
Musk’s legal team felt the case was not going well, as Judge Kathaleen St. J. McCormick repeatedly sided with Twitter in rulings ahead of the trial, according to a well-known person. Even with the belated emergence of a Twitter whistleblower claiming executives were unaware of security and bot issues, there were concerns that Musk’s side would not be able to prove a material adverse effect, the legal standard that required to terminate the contract.
In addition, Twitter had just been granted the right to search Musk’s posts to see if the Twitter whistleblower, Peiter “Mudge” Zatko, had contacted Musk before attempting to pull out of the deal, potentially sparking unpleasant new questions. has called for both sides. them.
In any case, Twitter is filing a lawsuit to force Musk to close the deal; faced with likely defeat – and a lot of embarrassment along the way – he may have decided to capitulate.
But here too there is cause for confusion. If Musk had lost, he faced two possible consequences. One is that the judge would have sided with Twitter and forced him to buy the company for $44 billion; the other, however, is that she would have sided with Twitter and forced Musk to pay only the $1 billion severance payment stipulated in the merger agreement.
If you’re Elon Musk, wouldn’t you play dice?
The last option may not have been very likely; as Matt Levine explained in July, it would be bad for the business world and the legal system that underpins it“Having the richest person in the world come out of a deal for a nominal fee because he got fed up with it undermines the rule of law and the predictability of merger deals in Delaware.”
But if you’re Elon Musk, and you’ve been criticizing Twitter’s executives, policies, bots, security, and so on for months; and you have lost a significant portion of your personal wealth due to a downturn in the markets; and said the downturn in the markets made the $44 billion you bid for Twitter in April seem ridiculously high — well, wouldn’t you roll the dice? Wouldn’t the chance to save yourself $43 billion justify a rough few weeks in Delaware?
It would be for me! And maybe that’s why I read the letter Musk’s legal team sent to Twitter with skepticism: the way it asks the court to adjourn or suspend the trial before reaching a settlement; the way it refuses to waive its ability to sue if “Twitter fails or refuses to honor its obligations under the…merger agreement.” (Musk’s team has been nagging endlessly that Twitter has refused to abide by the deal from the start as a way to delay the closing of the deal.)
Maybe that’s all just a standard legal boilerplate. But it seems to me that if Musk was really willing to make the deal, he would have teamed up with Twitter to release a joint statement saying so.
How will Twitter react? “We have received the letter from the Musk parties who have filed them with the SEC,” the company told me today. “It is the company’s intent to close the transaction at $54.20 per share.”
Of course, Twitter always intended to close at $54.20; if they want to reach a new settlement with Musk after all this, they will certainly ask for new guarantees from their future owner. And how Musk responds to that request, I think, will tell us a lot about how real today’s move really is.
As usual, the latest twist in the Musk saga fell hardest on Twitter’s employees. Many of them were 45 minutes into a three-hour planning session for 2023, I’m told, when news of Musk’s latest antics hit the timeline. Meeting suspended, I think!
On the company’s #stonks Slack channel, an employee was similarly suspicious of Musk’s letter, according to screenshots shared with platform game. “I don’t understand why Elon should propose the deal again,” they wrote. “The original still stands. Just write the check, mate.”
Another employee summed up the mood by saying that employees generally have a low opinion of Musk, and whatever happens, they’d rather he and Twitter were on it now.
On Blind, an app where employees discuss their workplace under pseudonyms, a poll asked, “What are you going to miss on the most post-privatized Twitter?”
“I saw the post, thought ‘haha my job’ then saw it was a poll option so I picked it but now realize I won’t miss the job I currently have,” one employee wrote according to screenshots. “I will and will miss my job in 2019/2020/2021, but I will not miss my job in 2022.”
“Now time to leave the theme park and let the new owner raze it to the ground”
“So true,” another employee responded. “As bad as [former Twitter CEO] Jack [Dorsey] was at work (maybe because of that?) Twitter had one of the best cultures / [work-life balance] / advantages in the industry under him. Learned a lot, met great people, enjoyed the ride, now time to get out of the theme park and let the new owner raze it to the ground and build what he wants (metaphorically).”
Worth mentioning: Twitter saw turnover of more than 700 employees in the past months.
Employees also praised Twitter CEO Parag Agrawal, who has been largely silent since the start of the legal battle against Musk, but seems to have the upper hand for now. (He is ready to receive $42 million assuming Musk fires him after he took over.)
“You just completed the game,” the employee wrote in a message headlined “Congratulations, Parag.” “You outsmarted Musk, came out unscathed and millions of dollars richer. You are under 40, have FU money and your reputation is mostly intact. You just won in life. Have to respect that. And to someone else : don’t hate the player, hate the game.”
— Zoe Schiffer contributed to this column.