Twitter in dire straits after Musk’s announcement to withdraw from the purchase agreement

Elon Musk’s attempt to walk away from his deal to buy Twitter Inc. leaves the company worse off regardless of the outcome of the case, Bloomberg reports.

If the CEO of Tesla Inc. succeeds in closing the deal, Twitter’s stock will likely plummet, and staff already frustrated by months of Musk’s public criticism of the site will suffer another emotional blow. If Twitter prevails in court, the company will be run by an unpredictable and reluctant owner while still struggling to meet ambitious growth goals.

Musk’s regulatory filing on Friday, in which he announced his plans to exit his $44 billion buyout, set off a nightmare scenario for Twitter, where only bad options remain. Chairman Brett Taylor responded by promising to enforce the deal in court, but the company’s leadership has already lost the trust of staff after months of uncertainty and stress.

Many of Twitter’s employees were already worried about the impact of Musk’s arrival. During a Q&A he held with Twitter employees in June, some employees mocked Musk via internal slack channels for telling employees that only those who were “great” could continue to work from home.

In the weeks leading up to the Q&A, others worried that Musk had no idea how to run a social network, and some posted their dismay at allegations that Musk had sexually harassed former SpaceX employees. After Twitter leadership failed to acknowledge the allegations, one employee wrote that “as a woman who works at Twitter, I find this radio silence extremely disheartening.”

Those sentiments were directed at Musk when employees believed he still wanted to buy the company. His change of heart has intensified frustration with Musk and Twitter’s management and board, which some employees have publicly mocked on Twitter — though there is an internal directive not to speak publicly about the deal, according to people familiar with the matter. issue.

Staff have also been under strain due to recent executive departures and leadership restructuring, which makes product development more difficult, the person said. Twitter has laid off about 100 employees this week, with staff expecting layoffs to continue.

“If Musk succeeds in closing the deal, Twitter will be left with the same problems it had before he came on the scene,” wrote Debra Aho Williamson, principal analyst at Insider Intelligence. “Its user growth is slowing. And while ad revenue is still growing marginally, Twitter now faces a slowing economy that could squeeze ad spending across social platforms.”

If Twitter goes to court and fails to force Musk to buy the San Francisco-based company, then it will likely sell its 9% stake and exit. Twitter’s stock price — already short of the $54.20 per share Musk had agreed to pay — will undoubtedly slide well below Friday’s close of $36.81. After months of waiting for a deal, Twitter will suddenly find itself back where it started in April when Musk showed up on its doorstep.

The company had expressed its doubts when Musk made his offer. The company had set lofty user and revenue growth targets for 2023, and the user target looked more ambitious with each new quarter. Since Musk made his offer, Twitter has also implemented a hiring freeze, fired two top executives and cut some jobs.

The Twitter-Musk feud isn’t over. Musk will try to prove that Twitter violated their merger agreement, and Twitter will fight to show that it fulfilled its obligations. It’s possible that Musk and Twitter will renegotiate the buyout amount, or perhaps Musk will walk away but pay Twitter a hefty settlement. Despite Musk’s claims, the deal has not been canceled.