When a news story breaks, whatever the news may be, the first few minutes or days around the event are often blurry and uncertain, with more questions than answers. As reporters descend on the topic at hand, calling experts and sources, and detailing what has happened and what will happen in the future, the story becomes clearer. But when it comes to Elon Musk and the sale of Twitter, there have been a million bottles of ink spilled on the topic (a few of them by me), and yet there’s still not a lot of answers out there. At least, intelligent answers. People don’t know if the Twitter deal will actually go through, or, if it does, what Musk will do with the company after he buys it, or…how the entire saga will even come to an end. So here’s my best attempt at answering these questions—somewhat intelligently.
Q: I’m so confused. First Musk wants to buy Twitter, then Musk doesn’t want to buy Twitter, and then Musk does want to buy it again?
A: Trust me, you should be confused! But here goes: Two weeks ago, in the lead-up to his trial against Twitter, hundreds of text messages between Musk and VCs, CEOs, and fanboys in Silicon Valley revealed how the deal came to be. In short, Musk was about to join the board of Twitter, but in typical Musk fashion, he was still throwing bombs at the company and tweeted, “Is Twitter dying?” This pissed off Parag Agrawal, Twitter’s 89th CEO (just kidding), who told Musk to stop. This, in turn, sent Musk into such a tizzy that he quipped: “I’m not joining the board. This is a waste of time.” And then: “Will make an offer to take Twitter private.” Cut to a few months later—when Musk realized he didn’t really want to own the most controversial company in Silicon Valley—and he pulled out of the deal. But mergers and acquisitions don’t work like that. Twitter sued Musk. Texts were made public. The judge in the case ruled (mostly in favor of Twitter), and Musk was about to be deposed when he decided he probably should actually buy Twitter.
Q: So what happened that made him change his mind again?
A: It depends whom you ask—and trust me, I’ve asked a lot of people. In short, it seems to come down to three things. First, if Musk had been forced to testify, he would have been asked questions related to Tesla and SpaceX, and could have been put in a situation that would force him to reveal how he runs both companies—and their deepest, darkest secrets—on the stand. Second, Tesla’s latest quarterly results were lower than Wall Street’s expectations, which made the stock fall precipitously. If the stock had continued to fall (which it has) and he’d then lost his case and been forced to buy Twitter, he would have needed to sell more Tesla stock to make up the difference, a surely unfavorable outcome. If the writing was on the wall that he was likely to lose, then it made more sense to just get it over with sooner rather than later, as it would obviously cost him less money. Finally, if Musk had lost the case and been forced to buy Twitter, but still refused, he would have potentially faced hefty fines. On top of that, according to bankers I’ve spoken to, he would have possibly been barred from running a public company, which would have seen him lose control of Tesla.
Q: Okay. But now he’s definitely buying the company, right?
A: Maybe? Probably? Yes? One banker I spoke to said the only scenario where Musk doesn’t have to buy Twitter is if a black hole swallows earth or the planet is destroyed by a meteor. That doesn’t mean Musk won’t still try to find a way out of this deal, though. It’s clear he doesn’t want to go through with it, but it’s also clear he might not have a choice. But yes, barring a black hole ending life as we know it, it looks like he’s going to own Twitter by the end of the year.
Q: What happens once he gets the keys?
A: You know the saying that you sometimes see in a shop window, “You break it, you buy it”? That’s a pretty good analogy to what’s going on here. Musk is the king of Twitter, and he is (next to Donald Trump when he was on the platform) the number one sh*t-stirrer on there. That’s worked wonders for Musk getting attention, but most people don’t like the constant negativity on the platform. As such, Musk is going to have to make some tough decisions: Does he allow unmitigated free speech, which will obviously lead to more vitriol and negativity on Twitter, and likely slow any user growth, or does he push the dial in the other direction to try and get new users to sign up? I think he’s going to find this challenge more difficult than rocket science.
Q: Does this mean Donald Trump will be allowed back on the platform?
A: Yes. Musk has already said that he would allow Trump back on Twitter. Trump has said he doesn’t want to come back, but come on, let’s be realistic here: Once Trump sees that little white box and that flash keyboard sign and smells his millions of faithful MAGA followers, all it’ll take is one tweet for him to be back.
Q: Oh, God.
A: Sorry.
Q: Is there anything good that can come from all of this?
A: Actually, yes. Say what you want about Musk, but he is a product genius—or at least really good at delegating people to make a great product. Teslas are incredible cars and have some of the best safety ratings of any cars on the road. His rockets take people (successfully) to the International Space Station; his solar panels are some of the best in the industry; and the AI prowess his companies have is second to none. Twitter is a mess, with slowed user numbers, failed new features, a revolving door of CEOs, and a largely ineffective board. By taking Twitter private, Musk has the opportunity to change all of that. What will he do? I don’t know. But let’s be honest, he can’t really make it much worse.
