The dark future of Twitter … the “game” rejected by Elon Musk

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Twitter, which the richest man in the world aspired to buy and then quit, faces a legal battle whose board has every chance of winning, but the group will not get out unscathed.

“It’s one of the craziest economic problems I’ve ever seen,” analyst Dan Ives told AFP. “From the beginning it looks like a circus and ends up like a circus”. Elon Musk sent a letter to Twitter on Friday announcing that he had terminated the deal he concluded in April to purchase the platform for $ 54.20 per share, or $ 44 billion in total. But Tulane University law professor Ann Lipton says this type of contract is “designed to prevent buyers from panicking and deciding to give up.” The head of Tesla and SpaceX cites arguments, including the fact that the board underestimated the number of non-original active accounts on the platform and did not provide him with all the information necessary to properly assess the spam problem. Musk’s lawyers also talk about the recent Twitter employee layoffs and hiring freezes, which violate the group’s commitment to continue operating normally. But the trade dispute law expert believes that these are not sufficient reasons. “Musk looks for the weak points in the deal,” he said. “But for ‘false’ ads, for example, it is not enough to justify that they are false, but that they put the economic foundations of society into question.” “From a legal standpoint, it seems clear that Musk is wrong,” he added.

‘They can lose a lot’

The possibility remains that Musk is indeed looking to renegotiate the price cut. This tactic has been used successfully with the LVMH group. Two years ago, the luxury conglomerate cut an acquisition with Tiffany and subsequently cut the price.

But experts don’t know what price could currently allow for a deal between Musk and Twitter, as the group’s stake has lost more than a quarter of its value since April. “Both sides have a lot to lose,” said Anne Lipton. If Twitter wins in court, the entrepreneur will have to pay several billion in damages.

In the worst case, it may have to stick to the deal and buy the Californian group at the price it set first, which is very high compared to its current value, while its wealth has dropped by tens of billions in recent months. But this win for the shareholders will leave the group and the social network in the hands of Elon Musk. The vision of him does not correspond to the vision of a large number of employees, users and advertisers on which the economic model of this service depends. “Twitter is in worse shape than it was six months ago, but in the long run Musk better not have it,” said Creative Strategies analyst Carolina Milanesi.

humiliation

“It would be like giving a toy to a spoiled child who no longer wants it and doesn’t know what to do with it, and ends up forgetting it in a corner”, continued Milanesi. He added that “the blue bird” would “fade slowly and painfully”. The process is expected to take months, especially as Musk will work to slow it down, according to Anne Lipton.

And he added that the businessman, who has more than 100 million followers on the platform, “will try to humiliate them and this will be a source of frustration for the employees.” He has flooded the platform with critical and sarcastic tweets and outlandish suggestions with the encouragement of many of his fans of him. For Twitter, Dan Ives said: “It will be a battle on all fronts, to keep his engineers, not lose ground, maintain his brand image and answer investor questions.”

Unlike its neighbors in the Silicon Valley tech hub, the network has never morphed into a money-making machine capable of diverting users’ attention to astronomical ad revenue. “For the past few months, Twitter hasn’t been able to focus on their business,” said Debra Williamson of eMarketer Group. “They will have the same problems they had before Musk.” “User growth is slowing. Advertising revenue is growing slightly, but the group is now facing a slowdown in the global economy that is affecting the advertising budgets of all social networks,” she added.

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