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October 7, 2022
After all the fuss and drama of his bizarre legal drama with Twitter, new reports suggest it was all just a negotiating ploy by Elon Musk.
When Musk first made his surprise bid to buy Twitter it was at a fairly hefty premium over the market price, although far from an exceptional one. Unsolicited acquisition bids generally try to make shareholders an offer they can’t refuse and it looks like Musk even threw in a cheeky reference to cannabis culture for a laugh.
But soon after, the joke was on him as his offer was accepted and then global stock markets tanked. Musk appeared to suffer from buyers remorse and, under the guise of the due diligence that should have been completed before making the bid, tried to wriggle out of the position he had put himself in. His main objection was they he felt Twitter had been dishonest about the level of spam and bot accounts on the platform, thus invalidated the terms of the acquisition agreement.
Much legal jostling ensued augmented, appropriately enough, with a superfluous battle for public hearts and minds conducted mainly over Twitter. As the legal moment of truth loomed, however, Musk apparently lost his nerve and this week decided he would proceed with the deal as agreed months ago.
The most obvious inference to take from that sequence of events is that Musk never fancied the thought of actually going to court over the matter. Which begs the question of what the prior legal shenanigans were all about. Surely Musk was either trying to reduce the amount he would have to compensate Twitter for backing out of his commitment, or he was trying pay less for completing the agreed acquisition.
According to reporting by the WSJ, among other media, Musk had been trying to get the price down until quite recently. Assuming those reports are accurate it’s therefore hard to avoid the conclusion that Musk was never really that bothered about bot accounts and was merely using the claim as a way of renegotiating the price after it had been agreed.
How the US legal system feels about being used as a pawn in Musk’s corporate games remains to be seen. The whole thing would really backfire on him if the court insisted on proceeding regardless. That seems unlikely but, if nothing else, Musk’s reputation as a business genius has taken a hit from his failed attempt at what now seems to have been a massive bluff.
As the Editorial Director of Telecoms.com, Scott oversees all editorial activity on the site and also manages the Telecoms.com Intelligence arm, which focuses on analysis and bespoke content.
Scott has been covering the mobile phone and broader technology industries for over ten years. Prior to Telecoms.com Scott was the primary smartphone specialist at industry analyst Strategy Analytics’. Before that Scott was a technology journalist, covering the PC and telecoms sectors from a business perspective.
Follow him @scottbicheno
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