Twitter vs. Musk: The Many Different Ways the Story Could EndTwitter, which didn’t really want Musk, is now suing to make him its boss. They all hate each other. Can this work?
In the most recent episode of the Musk and Twitter show, Twitter was suing driverless car entrepreneur Elon Musk to compel him to buy the company at the original posted price — despite the fact that earlier, many employees didn’t want him to buy it at all. Also despite the fact that he says he no longer wants to.
Readers, this is happening only because Big Tech stock values are way down. A useful article by technology reporter Alex Sherman at CNBC (July 11, 2022) identifies eight ways the saga could end, namely
1 and 4: Musk just ends up paying the $1B breakup fee or some other settlement and Twitter continues with its meltdowns and bot problems, as long as it can afford to lose money.
2 and 3: Twitter wins in court and Musk either buys the company or pays damages. Either way, to make money, Twitter may need to address the bot problem (fake accounts that are not customers) that were Musk’s original argument for walking away from the deal he had concluded. Professional bot hunters warn that the problem is much more complex than is widely supposed.
5: Musk wins and just leaves without paying. Many — including Twitter employees, left-wing action coalitions, legacy media, and the European Union — will be happy with that (despite the fact that they would, in their ideal world, want Musk punished). They oppose Musk’s Twitter takeover because he says he intends to loosen up on censorship.
6: Musk caves, without a court judgement, and buys the shares at the original $54.20 price that is under dispute. That seems unlikely to many observers. But the richest man in the world is mercurial and has many irons in the fire. He may have reasons that he is not disclosing for wanting to own a social medium while he pursues driverless cars and private space travel as his main business areas.
7: Twitter agrees to let Musk buy the shares at a lower price “likely with a very painful breakup fee to ensure he doesn’t try to renegotiate again” — which would be the most sensible solution at the beginning of what looks like a serious recession. But Big Money, Big Tech, and Big Social Media do not need to follow the rules that govern, say, the small town commercial real estate market. They can afford to keep entire law firms and many courtrooms busy for years instead.
8: The last and — in Sherman’s view, least likely — scenario is that a “white knight” appears and rescues Twitter. So far, no takers but in any event, such a person would surely wait till the smoke clears. So we will likely see a few more episodes in the meantime.
Now, about the bot problem: It’s real. Yes, of course, Musk’s actual reason for dickering with Twitter is that he doesn’t want to pay over $50 each for shares that are now about $30 each after the recent Big Tech stock tank. But whoever ends up owning Twitter, the fake accounts — whether 5% as Twitter claims or 20% as Musk accuses — are not going away on their own. And Musk isn’t the only one who doubts Twitter’s sanitized version of the problem. At Yahoo Finance, technology editor Daniel Howley tackles the issue:
In the first quarter of 2022, Twitter generated $1.11 billion of its total $1.2 billion in revenue from advertising. That’s over 90% of its revenue. To say that Twitter depends on ads to continue growing its business is an understatement. The same, naturally, is true of its cohorts including Meta, Snap, TikTok, and Alphabet…
Bots don’t buy things like specialty shampoo, drive cars, or watch The Golf Channel. They exist to fire off tweets and nothing more. Twitter’s statement that less than 5% of its monetizable daily active users are bots is a means of assuaging advertisers’ concerns that real people aren’t seeing their ads.Daniel Howley, “What if Musk is right about Twitter’s bot problem?” at Yahoo Finance (July 16, 2022)
Bluntly, he says, if Musk is right (20%), “advertisers are lighting their cash on fire when they purchase ads on the platform.” But it’s not easy to tell up front because bot accounts don’t label themselves. Incidentally, many bot accounts exist to sway public opinion, by making a cause appear better supported than it is. That can certainly be a problem — and a story for another day — but it’s a separate headache from the damage bots do to the commercial advertisers.
Meanwhile, lots of interesting people are sure to have a say. And the rest of us are learning a lot about Big Tech manipulation for free. Stay tuned.
You may also wish to read: Elon Musk has walked out on Twitter … or has he? Some think it’s all theater. Others that he is compelling a price reduction “by other means.” Musk, meanwhile, isn’t saying too much. He has gone back to enraging the Woke. Father of nine, very much in the public eye, he mourns the current worldwide decline in births…