Twitter is the pedestal of controversy. Cancel culture, conspiracy theories and perpetual conflict and debate frequent the platform. It is no wonder then, that Elon Musk, the walking embodiment of controversy, wanted a piece of the social media network, or more accurately: all of it.
The business magnate and Tesla CEO launched his bid to purchase Twitter in April this year, but the proposed acquisition quickly fell apart, with both parties launching accusations against one another.
Misrepresented user numbers, bot accounts, or the erratic behaviour of the world’s richest man… who and what is to blame for the collapse? Can the deal be salvaged, or will Musk be forced to spend a casual $44 billion?
What is the deal with this deal? Pun intended.
A Blast From The Past? 🚀
Over the past 20 years, Musk has founded, procured or invested in several companies, including the likes of SpaceX, Tesla, and Neuralink. SpaceX has successfully launched multiple rockets into orbit, Tesla has produced the most commercially successful electric car of all time, and Neuralink have… implanted chips into monkeys. That last venture aside, Musk’s various enterprises have yielded success after success, which begs the question… why Twitter?
Twitter’s active users, as of January 2022, numbered 436 million, which, whilst not to be shrugged off, pales in comparison to the 1.4 billion active Instagram users. Moreover, Twitter seems out of place amongst rocket manufacturers, automotive companies and neurotechnology startups, so why was Musk so keen to make the acquisition?
It may have something to do with Musk’s humble (spoiler alert: not so humble) beginnings. Borrowing a cool $28,000 of his father’s money, Musk dropped out of Stanford University after just two days, deciding to launch his own company. (If you are reading this, then chances are you lasted longer than two days at law school, which means you outperformed Elon Musk, congrats!) Musk founded Zip2, a web software company, which was eventually acquired by Compaq for $307 million.
Musk’s interest in web software, which appeared to have taken a backseat over the past two decades, may explain his interest in purchasing Twitter. Equally, Musk has championed the right to ‘freedom of speech’, and by acquiring Twitter, Musk can ensure he is free to say whatever he likes, incite whatever discourse he wants, and circumvent the censorship he is currently subjected to.
Regardless, Twitter has been labelled as ‘both a total mess and extremely influential’: perhaps Musk simply wanted to own a platform he felt he related to.
The Deal 🤝
There are so many interactions between Twitter and Musk that it can be easy to lose track. We created a timeline of the key dates of everything that has occurred so far.
A Bitter Breakup 💔
We have established that the Twitter-Musk relationship went ‘sour’, but before we label either party a ‘traitor’, we need to find out what went wrong.
Musk’s endeavours to terminate the proposed acquisition of Twitter were allegedly due to Twitter misrepresenting the number of daily active users, after reports that 5% of such users were spam accounts. In his countersuit to Twitter’s legal action, Musk’s legal team alleged that, according to Botometer, an online tool that tracks spam accounts, a third of ‘visible accounts’ on Twitter are fake or spam accounts. The founder of Botometer, Kaicheng Yang, has since stated that the figure “doesn’t mean anything”. In reality, only Twitter itself has the relevant data to accurately determine the number of spam accounts, as only it has access to private data such as user’s IP addresses.
Consequently, both Twitter and Musk have hired legal representation, namely Wachtell, Lipton, Rosen & Katz, and Quinn Emanuel Urquhart & Sullivan, respectively. The former is the world’s most profitable law firm, the latter employs partner Alex Spiro, Musk’s personal lawyer, who is renowned for representing celebrity clients, including the likes of Jay-Z and Kendall Jenner. The trial is set to begin on October 17th 2022, and it seems likely that Twitter will emerge victorious, unless Musk’s lawyers can prove that Twitter materially breached a term of the acquisition agreement by failing to disclose relevant information regarding the number of fake accounts. Musk has subpoenaed Twitter founder and personal friend Jack Dorsey to testify at the trial, in the hope that he may sway the trial in Musk’s favour. Musk’s lawyers have even written to Twitter to state they would be willing to go ahead with the deal at the original offering price, in exchange for the adjournment of the trial. Nonetheless, Musk sold 7.92 million of his shares in Tesla, valued at $6.88 billion, in case he is forced to complete the transaction. This breakup is getting expensive.
The $44 billion agreed by Twitter and Musk fails to touch the sides of the Tesla CEO’s personal wealth, which is estimated at $262 billion. Moreover, given his legions of fans, particularly in the cryptocurrency community, his reputation is hardly at stake. It is worth asking: is this all just a game to Musk? Furthermore, if Musk is forced to buy Twitter, what will happen to the safeguards that are currently in place across the platform? Musk has already stated that if he owned Twitter, he would remove the ban on Donald Trump’s Twitter account. What else would be reversed or introduced in an attempt to realise Musk’s vision of true ‘freedom of speech’?
Perhaps this breakup was inevitable. Twitter, the birthplace of cancel culture, and Musk, the man everyone wants to cancel. Not a great match. Now all that remains to be seen is whether Musk and Twitter are able to sign the divorce papers, or whether they will be forced to endure a long, unhappy marriage.
This article was written by Toby Johnston. Toby is a Content Writer for According To A Law Student and a third-year Law LLB student at the University of Liverpool. Toby has aspirations to become a commercial solicitor.