Elon Musk buys Twitter. Really? Probably…

The agreement still stands, right…? With the Musk’s long flirtation with Twitter, it is impossible to know. In April, the world’s richest man agreed to join the company’s board of directors, but a week later he backed out. He later signed a purchase agreement for the company, but a few days later he was tweeting insults against his managers. In July he directly declared the agreement dropped, and Twitter sued him. And a couple of days ago, on October 3, He announced that he was going to buy it after all.

Are you serious this time? The markets believed him: Twitter shares jumped from $42 to $52 a share, just shy of the $54.2 per share offer offered by Musk. The shareholders of the birdie network have already given their approval for the sale and the antitrust agencies have raised no objections, so the acquisition could be completed in a matter of days.

Elon Musk again changed his mind about buying the platform.Twitter: Elonmusk

If so, Twitter will have won the big “chicken game” At the time, Musk justified his withdrawal because Twitter had more “bots” (fake users) than he admitted, something the company denies. But he really he surely regretted having to pay $44 billion for a company whose value in July had fallen to less than $30 billion, amid the slump in tech stocks. Many thought Twitter would offer Musk a discount to keep the sale afloat and avoid litigation in court. Finally, and against all odds, the one who wrinkled was Musk.

His arguments were destined to fail: the justification of the “bots” did not convince anyone. And if Musk hoped to get away with paying only a fine of 1 billion to cancel the agreement, in the previous hearings the judge in the case systematically took sides on Twitter, so Musk saw it coming that if he lost he would make him pay the US$44 billion, one on top of the other.

Musk could have played the same, but the advance of the judicial investigation proved to be detrimental to him. On September 28, the court released 33 pages of embarrassing text messages between the tycoon and his business associates. “Count on my sword,” Jason Calacanis, one of the potential investors on Twitter, wrote to him as a promise, with that quote from The Lord of the rings. “Get me in the game, coach!”

Tesla and SpaceX CEO Elon Musk speaks during an event in Washington, on March 9, 2020. (AP Photo/Susan Walsh, File)
Tesla and SpaceX CEO Elon Musk speaks during an event in Washington, on March 9, 2020. (AP Photo/Susan Walsh, File)

If dodging the lawsuit solves one of Musk’s problems, acquiring Twitter bought several more problems. The advertising business, the social network’s main source of income, was badly hit by the war in Europe and by supply chain disruptions in Asia. Also, Twitter staff wary of Musk and they’ll want it even less when it starts cutting costs like crazy. He will also have to get a new CEO to agree to take over, after a public brawl with Parag Agrawal, the current CEO, one of the few to emerge from the debacle with his reputation intact.

And there are problems simmering in Washington, too. On October 3, the US Supreme Court agreed to intervene in two cases involving social networks. One of those causes is against Youtube, owned by Google, where technology platforms are claimed to be legally responsible for the content recommended by their algorithm. The other is against Twitter, and argues that the platforms are complicit in terrorism by hosting material from their sympathizers. An adverse failure in any of the two causes would be catastrophic for the operation of Twitter and other social networks. That is the bargain that Elon Musk got, and for just $44 billion.

Translation of Jaime Arrambide

The Economist

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Elon Musk buys Twitter. Really? Probably…