The mysterious app ‘X’, layoffs and economic distress: what will happen now between Elon Musk and Twitter

The first season of the series that narrates the purchase of Twitter by Elon Musk ended with one of its characteristic script twists. The last chapter left the protagonists preparing to face each other in court and decide whether the businessman should buy the company or not. The ground was prepared for the second season to tell his legal battle in the Delaware courts, but a new change of opinion of the tycoon has changed the scenario again.

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Elon Musk now agrees to buy the company at the price he originally agreed, $44 billion. But these six months have changed many things in his relationship with the social network, as shown by some of the evidence that Twitter has brought to the trial. This is how the second season of the series begins:

Will there be a trial?

Musk’s offer to resume the agreement he signed in April resolves the main plot of the legal process. But experts in this type of acquisition warn that this is just the broad brush and there may be many details about the purchase that end up being settled in court. A proof is the statement published by Twitter this Wednesday, in which it does not speak of a new agreement: “We have received the letter from Musk. The company’s intention is to close the transaction at $54.20 per share.”




“The lawsuit is not going to stop dead, but will continue,” he explained to TheVerge Columbia University Law Professor Eric Talley. “The machinery is still oriented to the trial of October 17,” he points out. The judge could give the parties more time to negotiate by delaying the process, but until there is a full agreement, the trial will not be cancelled.

A process – that of trying to annul the purchase of Twitter in court – that may end up costing Musk some 200 million dollars, according to calculations by Business Insider. Their respective firms charge $2,500 an hour and have been working on the trial since July. In total there are 100 million for the minute of each part.

The mysterious ‘X’ app

Musk is an inveterate user of Twitter, but when he stars in one of his plot twists, he usually stays silent. At most, he makes a few cryptic comments. This has happened again this time: “The purchase of Twitter is an accelerator to create X, the application for everything”, has tweeted.

What exactly is ‘X’? Aside from a lyric that Musk really likes, it’s a mystery. He has named one of his children like this (“X Æ A-12 Musk” he named his seventh child, born in 2020), his spacecraft company (SpaceX) or his first company, which merged with another to create Paypal and make you a millionaire (X.com).

However, this is not the first time that Musk has mentioned his intentions to create a multifunction app. In the past he has stated that he would like to turn Twitter into a wechat, a Chinese app that began as a messaging service but now combines this function with that of an electronic market, a social network, an employment portal, a dating app, video calls or a payment platform. All controlled by the Chinese government.

In the evidence provided to the trial there is a series of messages from Musk that he sent to his brother Kimbal detailing how the WeChat model could be replicated in the West. “I have an idea for a blockchain social media system that works both for making payments and for sending short text messages/links like Twitter,” he told her in a conversation on April 9.

“You would have to pay a small amount to register the message in the chain, which will eliminate the vast majority of spam and bots. Freedom of expression is guaranteed. The second piece of the puzzle is a huge real-time database that keeps a copy of every message on the blockchain in memory, as well as every message sent or received by you, your followers, and those you follow. . The third piece is a Twitter-like app on your phone that accesses the cloud database,” she added.

The dome, in the trigger

Musk’s private messages give much more detail about his plans with the company. “You are free to tweet “is Twitter dying?” or anything else. But I think it’s my responsibility to tell you that it doesn’t help me improve Twitter,” said Parag Agrawal, the CEO of the social network, to the billionaire after he tweeted that the profiles with the most followers on the platform barely comment or upload anything. content, which was a symptom that Twitter was dying.

“What have you done this week?” Musk replied immediately. “This is a waste of time,” he added next. Agrawal tried to call him on the phone but the businessman did not answer him. He then called the chairman of Twitter’s board of shareholders, who contacted Musk to ask what had happened.

Drastic measures need to be taken. We must restructure and take the company back to the stock market

Elon Musk
Private messages provided as evidence at trial

“I’m going to make an offer for all of Twitter. Fix Twitter chatting with Parag will not work. Drastic measures need to be taken. This is hard to do as a public company, as the purge of fake users will make the numbers look dire, so the restructuring needs to be done as a private company. This is Jack’s opinion too,” Musk replied.

“You have to restructure and take the company back to the stock market,” concluded the billionaire.

The messages reveal Musk’s roadmap for Twitter and why he decided to take control of the company. They also anticipate a possible replacement of both Parag Awragal and the rest of the leadership, since Musk’s “restructuring” could even lead to the dismissal of employees.

Economic problems

The big change now from when Musk sent those messages is that the economic situation has completely changed. The billionaire is concerned about the state of his main company, Tesla, whose price has been in free fall for months. He has announced job cuts and effect measures as extravagant as his intention to sell a humanoid robot. This is a problem because his intention is to finance the purchase of Twitter with shares of this company.

This change in the economic backdrop is why many experts suspect that Musk called off the purchase in the first place. A world recession is not the best situation to try the reforms that he had planned for the social network.

But if it was not good for Musk to finalize the purchase of Twitter, even less so for the banks that were going to collaborate on it. It has come at the worst time for them. “As with any big acquisition, the banks would look to sell the debt to get it off their books. But investors have lost their appetite for riskier debt, spooked by rapidly rising interest rates around the world, fears of recession and market volatility fueled by Russia’s invasion of Ukraine. various financial experts Reuters: “They will have to assume losses with this operation.”

Twitter has only turned a profit in two of the last ten years, so Musk’s intention to take an economic impact while restructuring the company could fall on deaf ears until the global situation improves.

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The mysterious app ‘X’, layoffs and economic distress: what will happen now between Elon Musk and Twitter