After months of dropping hints that he would, Tesla CEO Elon Musk announced his intention to pull out of his deal to buy Twitter on Friday. No one should be surprised. This outcome was always a possibility dating back to just days after Twitter accepted Musk’s memeified, inflated offer of $54.20 per share when he disparaged lead Twitter lawyer and safety director Vijaya Gadde despite a clause in the merger agreement barring him from badmouthing Twitter employees during the deal’s approval period.
Musk’s stated reason for pulling out of the deal centers on Twitter’s process for identifying and removing bot accounts from the platform. According to the filing, Musk believes that Twitter is withholding information about the number of bots on the platform and that is reason enough for him to end efforts to purchase the company for $44 billion. He made these claims despite Twitter giving him internal information on the amount of bot accounts and Twitter CEO Parag Agrawal outlining the site’s approach to identifying and eliminating spam accounts in a public Twitter thread. Musk responded to that thread with a poop emoji.
The validity of Musk’s claim and the legalities that surround its relationship to the merger agreement will now likely be answered in Delaware court, but the more this battle of billion-dollar entities plays out, the more it feels like there is nothing waiting for the victor in the winner’s circle.
If Musk is able to actually exit the deal without being legally forced to complete it, he’ll still likely have to pay $1 billion or more to do so. While his sycophant fans would likely celebrate this outcome as another example of Musk’s “genius,” it would damage his reputation in corporate circles to some extent.
There is also the spectre of this whole scenario being a cover for Musk to liquidate $8.5 billion in Tesla stock without raising the eyebrows of Tesla investors. As Insider founder and CEO Henry Blodget pointed out on Twitter, “Elon’s 10-year Tesla options were about to expire, so he had to sell them.”
That outcome could also spell trouble for Twitter itself. Shares of the company have swiftly fallen similar to other tech stocks in the months since the Musk deal was announced, and not completing the deal could open the company up to shareholder lawsuits.
The future of Twitter is almost completely unknown should Musk be forced to complete the purchase and become its new owner. The SpaceX CEO has made claims of quintupling the platform’s revenue by 2028 despite Twitter’s lengthy struggle to actually monetize its platform. Musk continually harped on eliminating bot accounts, weakening moderation practices and revamping Twitter Blue, the company’s premium subscription service, as ways to do so without publicly providing much, if any, information on how those tactics would tangibly accomplish those goals.
What is known is Musk’s warped understanding of hate speech, that he would reinstate the account of former President Donald Trump and the miscalculation of his framing of Twitter as a “town square” for free speech despite Twitter trailing competitors in user counts and varying international free speech limitations flying in his face. Elon Musk understands Twitter from a user perspective but his public comments come nowhere close to making him a competent corporate leader for the company.
That misunderstanding will ultimately hurt those that matter the most in this whole scenario: people. Some Twitter employees have expressed their dissatisfaction with the prospect of working under Musk and Twitter users, especially those from underrepresented populations, have expressed concern about the potential for Twitter to become even more rife with hate speech than it is now. If Twitter doesn’t sell, current user concerns regarding hate speech on the platform will still exist. Though Twitter will likely continue to tweak moderation protocols, the status quo will persist in the immediate.
The phrase “Twitter is a hellscape” felt overplayed years ago, but that feeling is where a lot of people engaging with the platform (and the larger social media landscape) live. The Musk deal, the will-he-won’t-he of recent months and the lengthy legal battle on the horizon have centered discussion on a billionaire fight rather than what people actually interact with on the platform. Sounds a lot like many of the endpoints this whole situation could reach. No one wins.