Elon Musk, after several months of a turbulent saga, made yet another turnaround by again offering to buy Twitter on Tuesday. The two parties are now negotiating the next steps, but the mystery remains on many points.
What is going on?
Elon Musk, who had offered in the spring to buy the platform at $54.20 a share before abandoning it in July, sent a letter to Twitter indicating that he was again ready to buy the platform at the agreed price. initially. On two conditions: that the current procedure initiated by the social network so that the entrepreneur keeps his word is suspended, and that he receives the necessary funding. Twitter took note and indicated that it had always “the intention” to complete the transaction.
According to the New York Times, the business court judge overseeing the proceedings summoned the parties to a confidential meeting on Tuesday and asked them to work things out before coming back before her. If they reach an agreement, it would cancel the trial, supposed to start on October 17 in the state of Delaware.
Already scalded by the attacks and volte-face of Elon Musk, Twitter will undoubtedly want solid assurances before abandoning the procedure, such as the deposit of a huge sum of money in guarantee, advances Adam Badawi, professor of law business at UC Berkeley.
It is also mentioned the possibility that the group asks that the finalization of the agreement be supervised by a judge. Twitter’s lawyers did not immediately respond to requests from AFP.
Why this reversal?
Elon Musk is used to controversy, broken promises, and lawsuits. But even for the whimsical multi-billionaire, the sums at stake remain substantial. Determining the motivations for his latest decision remains speculative for now.
Several lawyers believe that he simply realized that he was probably not going to win the case, because he failed to sufficiently demonstrate his main argument to justify the cancellation of the agreement: the presence of automated accounts on Twitter much larger than recognized by the platform.
For Carl Tobias, professor of law at the University of Richmond, it is also possible that Elon Musk may have been embarrassed by the dissemination, within the framework of the procedure, of messages exchanged with other personalities from the business world and wished to avoid the publication of further messages.
The fact that he did not carry out a due diligence on the state of the company before his initial offer, as is usually the case in this type of agreement, also comes back to haunt him, says Mr. Tobias. “I believe that, on both sides, the situation has become embarrassing, revealing and not very constructive”he believes.
How is Twitter doing?
Twitter’s stock jumped 22% on Tuesday after Elon Musk’s new offer was revealed. But the company is not in its best shape.
It is suffering, like other tech giants, from falling advertising spending amid the economic slowdown, and its image has been damaged by the turbulence linked to the uncertainty around the potential takeover by Elon Musk. The group has seen its turnover decline by 1% in the second quarter, while employee morale is not looking good.
Recent accusations by its former security chief, Peiter Zatko, who was fired in January, have further shaken the reputation of the social network. The one who presents himself as a whistleblower blames management for not taking serious security breaches seriously enough.
“It’s quite ironic that for Musk the easiest part of this deal was buying Twitter”advance Dan Ives, analyst for the firm Wedbush Securities. “The hardest part will be dealing with issues around monetization and subscriber engagement.”
What would Twitter look like under Elon Musk?
The likelihood of a deal being struck has rekindled serious concerns about a possible resurgence of abuse and misinformation on the platform.
Elon Musk presents himself as an ardent defender of freedom of expression and has already warned that he plans to let Internet users express themselves as they see fit, as long as they do not break the law. In May, he also said he was ready to lift the permanent suspension of ex-President Donald Trump’s account on Twitter, decided after the attack on Capitol Hill in January 2021.