Elon Musk’s Messy Acquisition of Twitter

Elon Musk formally acquired Twitter on October 28th, 2022. He made the original offer, valuing Twitter at $44 billion, in April of the same year. This was valuing Twitter at $54.20 a share, well over the company’s stock price at the time.

  Although Twitter accepted the offer on April 25th, Musk put the deal “temporarily on hold” on May 13th, due to alleged problems with spam and bot accounts. Musk continued to make public statements about problems he saw at Twitter, despite the fact that Twitter had already accepted his offer. This was ultimately deemed a breach of contract by Twitter, and a lawsuit surfaced, with Musk countersuing, accusing Twitter of fraud. 

The trial between Twitter and Musk was postponed until the end of October, giving both parties the opportunity to work out a deal to avoid a trial. Finally, on October 28th of 2022, Musk finalized the acquisition, marking the start of a catastrophe that would impact everything under the umbrella of Elon Musk.

Twitter employees faced the brunt of this catastrophe. Musk ordered a massive wave of layoffs, bringing Twitter’s staff from an estimated 7,500 employees when Musk acquired the company to an estimated 3,700 employees. By 5 PM on Thursday, November 17th, Twitter employees were forced to make a decision: they could either stay with Musk’s loose and unclear business model and lifestyle that he had planned for Twitter, or they could leave. For the employees remaining, their office buildings were temporarily locked and their badge access restricted through the next Monday. This was due to Musk’s apparent concern for safety and suspicion that employees would sabotage offices when leaving. By December 22nd, Musk reported that the company had “a little over 2,000 people” still working. On top of that, the people who are still at the company have had to resort to things like bringing their own toilet paper to the office due to budget cuts on janitorial services. 

Another area that has taken a hit is Musk’s companies’ stock value. Elon Musk is the founder and primary owner of many companies, including Tesla, SpaceX, and The Boring Company, as well as the co-founder of Neuralink and OpenAI. He has a large portfolio built of many companies, so any decisions that are deemed irresponsible or rash by the public will affect the stock of those of the companies that are public. For example, Tesla stock has dropped a total of 69% this year regarding Musk’s Twitter takeover and other matters. Twitter stock also took a hit, going down 45% in the two months after Musk’s takeover.
All of this loss has definitely not left Musk’s wealth unscathed. In fact, he is breaking historical records with his losses. At the peak in November 2021, Musk’s net worth was $340 billion. Now, as of January 3rd, 2023, Musk’s net worth is $137 billion. This makes him the first person to ever lose $200 billion in history. 

Amid all the loss, there has been some legal debate going on surrounding Musk and Twitter, as some of Musk’s tweets have come back to bite him. On Friday, January 20, 2023, Musk went to court for a tweet from 2018 saying that he had “secured” money to take the company private at $420 a share. Glen Littleton, the shareholder in question, accused Musk of making him lose 75% of his Tesla portfolio’s value as an impact of this tweet. The court was adjourned, and a final decision has not been reached. 

This whole Twitter crisis is still evolving. However, it is on a clear downhill trend in multiple categories, including public sentiment surrounding Musk and his related companies, stock performance, and possibly Musk’s self-confidence as the CEO of Twitter. On December 20th, he tweeted that he would resign as CEO of Twitter when he found someone “foolish enough” to take the position. Whether he was serious or joking about this matter is unknown. He may resign in the future, or he may continue to be the CEO of Twitter and attempt to learn from his mistakes and fix Twitter for good. Looking objectively, he has had numerous successes in previous years in the tech industry, and perhaps he can turn Twitter around for the better.