The fight between Twitter and Elon Musk does not have sympathetic figures—none less so than the remorseful buyer himself. Musk, the richest person in the world, was apparently bored for a few weeks last spring, so he agreed to purchase Twitter. Then the stock market went down, and Musk also probably lost some interest as he realized what an excruciating ass pain it would be to own the social networking site. (This was obvious from jump.) He telegraphed for months that he was snooping around for ways out of the binding agreement he had signed, and then he did indeed file to terminate the deal, at which point Twitter sued him in the Delaware Court of Chancery to make him pay up. Twitter is not a fan favorite, either. It may be merely a second-tier social network, but it is a rich one, and many of us spend too much time on it. The company’s board took Musk’s $44 billion offer (at a premium of $54.20 per share) because it had a fiduciary obligation to Twitter’s shareholders, who themselves are mostly giant financial institutions and also not warm and fuzzy. The saga has many peripheral figures—investment banks, venture capitalists, lawyers and so on—who are largely involved not because Musk’s offer to buy Twitter ever looked like a can’t-miss opportunity, but because they wanted to stay in the good graces of a billionaire who also controls Tesla and SpaceX.
The trial in Twitter v. Musk is set for Oct. 17. The sides continue to jockey in advance of that date. Musk got a win last week, when the judge let him spiff up his case against Twitter, which he has been making up as he’s gone along, to include recent whistleblower charges against the company. But he also took a loss. He’s been trying for months to push the trial back as far as possible, and the court won’t bite. The trial is going to happen soon, and a ruling won’t be far behind. For most of us, this fight has been a sideshow. Soon it’ll be a sideshow with an actual outcome, one that’ll have a lot to do with not just corporate law but the user experience of one of the internet’s most popular platforms.
If you are Musk, you want to get out of buying Twitter. If you are a Tesla shareholder, you want that for him, because Musk’s ordeal with Twitter has exerted downward pressure on Tesla’s stock. If you are one of Musk’s financial backers, you definitely want him to win, both because Musk’s deal for Twitter looked like a bad deal from his side and, maybe more importantly, because you want to stay friends with him. If you are one of Musk’s many fans who just likes him for reasons, then you have already hitched your personality to him and want him to win. If you are a Twitter shareholder, your interest is equally obvious. Every share you own in the company is trading at about $42 today. If Musk wins, it will trade for far less. But if Musk loses, your share will disappear into the abyss and be replaced with $54.20, which is more than you have now. If you are the Twitter board of directors, you are probably stoked to make this company someone else’s problem while also cashing in your stock.
But what about the peanut gallery? What should we want? Well, it depends, and we have choices.
Option 1: Root for a settlement that costs Musk a ton of money but doesn’t make him buy Twitter.
Let’s say that you do not want America’s corporate judicial system to allow the richest guy on the planet to get away with literally anything he wants. Let’s say that you put a high priority on the integrity of contract law and on the idea that when people agree to do something, they have to do it. But let’s also say that you find Musk to be repulsive and do not want him to be the lone person in charge of a megaphone that, while lacking the reach of some other platforms, still has outsize influence over a lot of our lives.
A negotiated resolution, then, might be the way. What would it look like? Musk could pay Twitter a chunk of cash for every share in the company, but something less than the $54.20 he agreed to in April. Twitter’s stock price would go down as Musk got out of the deal, but it wouldn’t go to zero, so a fair payment from Musk would be whatever the difference is between $54.20 and where the stock would trade post-settlement. Twitter could pay a dividend in that amount to every shareholder, and the shareholders would then have both the cash and the stock, rather than $54.20 for their stock. Coming up with the number would involve a good deal of guesswork and negotiation, but, as Bloomberg’s Matt Levine wrote back in July, it is not an atypical remedy for disputes of this type. Musk would pay billions of dollars, Twitter’s shareholders would get some cash in their pockets along with a likely lower-trading stock, and that would be that. And if Musk agreed to pay, say, $27.10 per share, he’d still be out $22 billion, which is at least a little bit of blood.
Option 2: Root for Musk, because it’d be bad if he owned Twitter, and the ship has already sailed on people like him being subject to the same laws as the rest of us.
Musk has been dishonest throughout this escapade. He does not care about the things he has pretended to care about in his effort to get out of the deal. If he succeeds, it will be an unmistakable signal that the well-financed and well-lawyered among us are able to get out of almost anything with enough billable hours. But maybe you think that ship has already left port. What is one more uber-rich man with a devoted fan base not facing consequences for anything he does? It was established long ago that Elon Musk does not care about how corporate and securities law might apply to him. This wouldn’t be new.
And, look: Musk owning Twitter would suck, whether he wants it or not. Twitter is a cesspool, to be sure, but it’s also a rallying ground for important political organizing and fundraising for worthy causes. It’s a place where businesses make money. (For example, I am convinced that almost every dollar I make has at least a little bit to do with my having a presence on Twitter.) When Musk actually wanted to buy Twitter, he talked about it in terms of making it a maximalist free speech operation, which in practice would mean rolling back content moderation and allowing the worst people in our society to use Twitter to spew all sorts of spam, hate, and targeted harassment. There’s a reason the far right was so into the idea, before attempting to make it seem like a victory when Musk attempted to get out of it.
This is not a good business plan, and it might not hold up in a hypothetical Musk Twitter. The company makes most of its money from advertisers, and those advertisers (and most of the users they’re courting) would probably not like the version of Twitter that sprang from massively curtailed moderation. But it would result in a worse user experience to whatever extent Musk tried it. If you get something positive out of your Twitter experience now, maintaining it may be more valuable to you than Musk taking an L.
Option 3: Root for Twitter. You want Musk to pay up for a company he doesn’t want, and you’re willing to accept what his ownership of the company might mean.
The joy of seeing Musk saddled with a $44 billion impulse buy may be too much for you to resist. You may believe that it’s bad for billionaires to be able to use contracts as toilet paper, and you may believe that Musk getting out of the deal would signal that the law does not apply to the well-connected and well-lawyered. You may not care so much about one of the internet’s biggest public squares falling under the dominion of an edgelording charlatan.
Maybe you shouldn’t care if Musk owns Twitter. It is easy to overstate Twitter’s power, because it’s a preferred social network of the professional media and political classes. In 2021, Twitter had a little more than 200 million daily active users per month, it estimated in a Securities and Exchange Commission filing. Facebook, meanwhile, reports that it has more like 2 billion users per day and 3 billion per month. Mark Zuckerberg, one man with an ego that is at least close to as big as Musk’s, controls that company, and the results have been disastrous in almost too many ways to count, so I won’t try. Musk having unilateral control of Twitter would be bad, but there is a fair argument that it wouldn’t even scratch the surface of how bad one guy’s control of a social media platform could be for the world. Let’s throw TikTok into this pantheon, too. Relatively speaking, Twitter is a minnow, and Musk wrecking its business by making the platform unusable may not cause anything more than a drop in the bucket of societal harm.
There is a lot to like in this version of events. Musk takes a multibillion-dollar haircut and has to be in charge of an inherently ungovernable platform. Maybe he just shuts down Twitter at some point because he wants people to beg him to bring it back. Maybe he runs it into the ground. If you think social media has a corrosive effect on democracies, or something like that, then this may be a good path.
Option 4: Root for carnage.
That could come about in any number of ways. Perhaps Musk wins in court and gets out of the deal, then continues to mess with Twitter out of spite: hectoring executives, buying and selling shares at inconvenient times for the board, throwing his weight around in shareholder votes while still being just a minority holder. (Or maybe the judge tells him he needs to stay away from Twitter. Maybe he doesn’t listen?) Maybe all of this frustrates Tesla investors, who think Musk is distracted, and maybe the main source of Musk’s wealth takes a big hit while Twitter’s stock also languishes at his hands. Or perhaps Twitter wins, and Musk, believing that he exists outside of the law, simply refuses to pay. What then? I recently discussed this possibility with a corporate governance expert from Stanford, and he didn’t exactly know. I don’t think anyone does. That kind of defiance would raise major questions about the stability of the deal-making environment in this country, and hey, maybe that appeals to you. It probably does to Musk.