Twitter's lawsuit to Elon Musk is a paradox

Twitter's lawsuit to Elon Musk is a paradox

Elon Musk's troubled $ 44 billion acquisition of Twitter was an inspiration for several tweets. Among them, one of the most insightful was a cartoon published last week by one of the company's software engineers.

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Manu Cornet started working on Twitter last year after 14 years at Google, where his hobby of drawing cartoons served to make fun of the company's culture and scandals. His latest creation depicts an anthropomorphic version of the bird that stands out in the Twitter logo during a monologue: "Your strategy is a model of hypocrisy and bad faith - says the bird, presumably addressing Musk -. You attacked me, you sent my activities into chaos and you made my value collapse ". Then, however, the angry bird asks his interlocutor a pleading question: "Will you decide to adopt me?".

Illogical situation Cornet's cartoon captures the essence of the paradoxical situation in which Twitter finds itself stuck. In April, Musk signed an agreement to buy the company, only to announce this month that he plans to withdraw, arguing that the company would not provide him with the information necessary to calculate the number of bots on the platform. In response, Twitter has decided to initiate a lawsuit against Musk, accusing him of having made false accusations as part of a "hypocritical" strategy, which would show how the entrepreneur considers the company "an elaborate joke". According to Twitter, Musk should now be forced to become the owner of the company.

Twitter sues Elon Musk The platform has called its attempt to exit the acquisition agreement a "model of hypocrisy" and hopes that a court can force the closing of the agreement. A long legal battle begins Demanding an opponent considered untrustworthy to become the boss of your company may seem like a sensible move only in a parallel dimension. Twitter's strategy could cause several problems for society. After the insults launched by both sides, things are bound to get complicated if the leaders of Twitter manage to force Musk to take command of the company.

"From a negotiating point of view, the relationships tend to be the cornerstone of lasting and sustainable agreements, ”explains Paul Fisher, professor of negotiation at Oxford University's Saïd Business School. Fisher advises people engaged in a negotiation to try to separate the substance of the discussion from any personal feelings towards the people involved. "In this case, that doesn't seem to have happened. It doesn't bode well for the strength of the future relationship," he adds.

Michele Williams, assistant professor of management and entrepreneurship at the University of Iowa is d ' agreement with Fisher: "Once the sale goes through, they will have to work together; and neither side has created a situation that will make it easy." Late last week, Musk said Twitter's request to start a trial in September was incorrect due to the complexity of the case, reiterating that the company would be hiding the real number of bots on the platform. For its part, Twitter has repeatedly defended the methodology by which it establishes the number of bots.

The affair between Twitter and Musk is not the first time that an agreement has been complicated by interpersonal conflicts. Williams recalls the case of Disney's purchase of Pixar, which was stuck in a stalemate for years due to the bad relationship between Disney CEO Michael Eisner and Steve Jobs [who had acquired the production company in 1986, ed]. The deal was finally finalized in 2006 after Eisner was replaced by Bob Iger.

Possible scenarios Dan Ives, analyst at Los Angeles-based investment firm Wedbush Securities, believes there are four possible outcomes for the dispute between Twitter and Musk. According to Ives, there is a 20 percent chance that Musk will be able to break free of the deal by paying a billion dollars - as stipulated by a clause in the deal - or that he will win the case without having to pay a penalty to Twitter. >
The other two scenarios, which taken together are much more probable according to Ives, would see Musk complete the Twitter purchase for the agreed $ 44 billion, or withdraw from the agreement after settling compensation with the company worth between $ 5 and $ 10 billion.

The prospect that the bizarre logic of Twitter will eventually prevail and Musk becomes the owner of the social network he now seems to despise keeps some employees and users of the platform apprehensive: "There is no one to block this deal, although it's clear Musk is the last thing the world needs Twitter, says Brianna Wu, former video game developer and founder of progressive political action group Rebellion Pac. Investors want him to go in. port. The board of directors is ready to make billions and they will go to court to force their hand. "

Positions reversed How is it possible that a trade deal agreed by both sides and backed by some of the largest banks of the world turn into such a mess? Javier Marcos Cuevas, associate professor at Cranfield School of Management, describes the process that brought Twitter to this point as a case of "escalation of commitment" - the tendency to stick to positions that are unlikely to produce a positive outcome - which forced both Musk and Twitter to overturn their initial positions.

Musk initially had to offer a relatively high price to be considered a credible buyer, explains Marcos Cuevas: "It is possible that, after seeing the opinion of analysts on the price, he realized he had paid too much ". This feeling would have been heightened by the collapse of the financial markets that came not long after the deal was closed. According to Twitter this would have been one of the main reasons behind Musk's claims about the platform's bot problem.

As for Twitter, Marcos Cuevas believes that management has gone from believing that the company deserved a high price. to no longer being convinced of being able to sell. The logic behind the company's strategy would be that, in the face of Musk's turnaround, it is worth trying to force the entrepreneur to complete the purchase, securing the high price initially offered or alternatively forcing him to pay a large compensation. . "There has been a complete change in expectations on both sides - adds Marcos Cuevas -, which has led to a lack of trust and a fundamental reversal of initial positions".

Employee anxiety Many employees Twitter worries that Musk is not the right person to run the company and its services. Company staff have been banned from discussing the purchase or Musk himself on Slack, says an employee who said Twitter executives would like the deal more favorably. "I think many executives are more in favor of Elon than the staff - he says -. They own Tesla, have shares in the company and love Musk's mentality."

In case he eventually takes the lead of Twitter, Williams suggests that Musk could ease tensions by appointing another person at the top of the company: "He could tone it down," he explains.

At the moment, however, the situation is wearing out the employees of Twitter . Cornet, the engineer who with his cartoon has effectively described the current situation of the company, perceives the exhaustion of his colleagues: "There is probably a bit of tiredness - he says -. The new twists come one after the other. the other ".

This article originally appeared on UK.

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