In the other two outcomes, which together are much more likely, Ives says, Musk would either buy Twitter for the agreed-upon $44 billion, or walk away after reaching a settlement in which he would pay the company between $5 billion and $10 in damages. billion pays. “The stock considers a significant chance that Musk will eventually have to pay Twitter a large settlement of more than $1 billion, and may still have to buy the company at the agreed price,” Ives said.
The prospect of Twitter’s reverse logic taking over and Musk eventually taking ownership of the social network he now seems to despise is worrying some employees and users. “There’s no one to hold back on this deal, even if it’s clear that Musk is the last thing Twitter needs,” said Brianna Wu, a former video game developer and founder of the progressive political action group Rebellion PAC. “The investors want it to continue. The board is about to make billions and they will go to court to enforce the matter.”
How can a business deal negotiated by both sides and backed by some of the world’s largest banks turn out to be such a mess? Javier Marcos Cuevas, an associate professor at the Cranfield School of Management, describes the process Twitter brought here as an “escalation of commitment,” which forced both Musk and Twitter to reverse their original stances.
Musk initially had to offer a relatively high price to be considered a credible buyer, says Marcos Cuevas. “What may have happened then is that he realized, given what the price analysts believed, that he had paid too much,” he says. That sentiment would have been exacerbated by the widespread slump in the financial markets not long after the deal was closed. Twitter’s lawsuit claims it was a primary cause of Musk’s claims about a bone problem.
On the Twitter side, Marcos Cuevas believes the company’s leadership changed from believing the company deserved a high price to no longer believing it can’t sell the company at all. That reversal makes it worth trying to force Musk to close the deal, secure the high price being offered, or force payment of significant damages. “There has been a complete overhaul of the expectations of both sides,” said Marcos Cuevas, “resulting in a lack of confidence and a fundamental overhaul of their original positions.”
Many Twitter employees fear that Musk would be a poor steward of the company and its service. They have been told by executives not to discuss the purchase or Musk on Slack, says an employee, who suspects executives have a more favorable view of the deal. “I think a lot of senior leaders are more pro-Elon than staff,” the employee says. “They own Teslas, they own stocks and they like the Musk mindset.”
If Musk takes charge, Williams suggests he could de-escalate tensions by appointing someone else to run the company. “It could smooth out the ruffled feathers,” she says.
For now, life in the Twilight Zone carries on Twitter’s employees. Cornet, the cartoonist who captured the company’s predicament, feels it among his colleagues. “There’s probably some degree of fatigue.” he says, “New twists keep piling up.”