Musk and Twitter or the chronicle of a millionaire melodrama

First modification: 05/10/2022 – 15:42Last modification: 10/05/2022 – 15:40

After months of recriminations and attempts to cancel the deal, Musk called a truce on Tuesday and agreed to honor his initial offer.

Some of the key points of the saga:

“Passionate Believer”

Musk is a longtime Twitter user with more than 100 million followers. He uses the platform as a megaphone for his personal and business ambitions.

On April 4, it formalized a purchase order for 9.2% of Twitter shares for 2.9 billion dollars.

The social network’s shares soared, Musk won a seat on the company’s board, and Twitter CEO Parag Agrawal described him as a “passionate believer and intense critic of the service.” That “is exactly what we need,” he said then.

“Poison Pill”

The idyll between the parties lasted only one day. Musk decided not to join the board, and Agrawal said that was for the best.

Musk launched a hostile bid on Twitter, according to documents dated April 13, and the company resorted to the “poison pill,” a mechanism that allows shareholders to be offered more shares at a low price.

Reverse

Twitter then reversed course, revealing on April 25 that it had agreed to sell the entire company to him for $44 billion.

Musk then divested $8.4 billion of Tesla stock, promising to use up to $21 billion of his personal fortune and getting friends to chip in a few billion.

The tycoon, famous for his provocative messages, said he planned to reinstate former President Donald Trump on Twitter, from where he was expelled after the assault on Capitol Hill in 2021.

To the court

Then Musk backed down. On May 13, he said the deal was “temporarily on hold” while he searched for information about fake accounts and spam on the platform.

After two months of public discussions on the matter, he called off the deal and accused Twitter of making “misleading” statements. The company immediately took legal action to enforce the purchase agreement.

Reconciliation

Both sides prepared for a long and costly showdown in a special court in the state of Delaware.

Musk was helped by revelations from a former Twitter official that exposed the company’s shortcomings in counting fake accounts and bots, as well as its apparent negligence in security matters.

Twitter, however, strictly maintained that its agreement with Musk was sealed and that consequently it had to be fulfilled.

Musk took to Twitter on Tuesday to announce that he had agreed to honor the deal.

“I think Musk warned that he would not win the trial,” said law professor Carl Tobias.

The future

Previously, in messages to Twitter staff, Musk had said he envisioned a platform with a billion users but was unclear about possible layoffs or limits on freedom of expression.

But even before Twitter’s future can be mapped out, details of the sale can still be discussed by either side.

While a potential court showdown has subsided, it remains a possibility.