Less than two weeks from now, Elon Musk was due to face off against Twitter in Delaware’s Court of Chancery. Suddenly, the $44bn takeover that neither side particularly wants is back on the table.
What must the eclectic cast of investors who offered to support Musk be feeling about the latest volte-face? If Twitter accepts Musk’s offer to buy the microblogging website for the original $54.20-per-share price, they will avoid being dragged further into the legal battle.
This threatened to compound discomfort triggered by the release of humiliatingly solicitous text messages to Musk. Jason Calacanis, for example, wrote: “You have my sword . . . Twitter CEO is my dream job.”
Musk’s apparent inability to prove that more than 5 per cent of Twitter’s users are fake meant he had only a slim chance of winning. Now his plan to fix Twitter will come back into focus. Can he turn Twitter into a profit machine where co-founder Jack Dorsey failed?
He can hardly make it worse. Twitter is awash with spam and relies on poorly targeted advertising for income. Its monetisable daily user tally is less than a tenth of Meta’s.
Regardless, it remains extremely popular with influential people who like sharing their thoughts directly with the world. Musk himself continued posting on Twitter even as he was trying to back out of the deal.
Messages released by the court suggest there is no profitability master plan. Investors like Oracle co-founder Larry Ellison proffered billions of dollars without asking to see one. Saving “free speech” and getting involved in a deal with Elon Musk were sufficient incentives.
Twitter shares rose 13 per cent on the news before trading was halted. They remain below their level in April when Musk first bid and more than a tenth below his offer price. Further gains are likely.
This has been a needless distraction for a man who already runs multiple companies, including $769bn electric carmaker Tesla and $127bn private rocket company SpaceX.
Users may be unhappy if Musk levies subscriptions. Opponents of hate speech and conspiracy theories will complain if he lifts permanent bans on maverick users. Twitter’s management, including chief executive Parag Agrawal, are unlikely to establish a working relationship with the new owner.
But a deal at the original price would not only benefit jaded Twitter investors. It would also show that US capitalism is robust enough to ensure tycoons keep their side of a bargain, no matter how powerful or wayward they may be.
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