Flirting with and subsequently ostracized by the world’s richest man, Twitter appears to be in a good position to win a court battle with Elon Musk for at least a $1 billion interim fee, but the company won’t suffer.

The outcome of the epic stunned the observers. Dan Ives, an analyst at investment firm Wedbush, said it was “one of the craziest business stories in history”.

“I think it started as a circus show and ends as a circus show,” Ives told AFP.

Musk, the founder of electric car company Tesla, took to Twitter on Friday, saying he’s withdrawing from a controversial deal he made in April to buy the platform for $54.20 per share, or a total of $44,000 million.

However, such merger deals are “designed to prevent buyers from backing down and deciding to walk away,” said Ann Lipton, a law professor at Tulane University who specializes in corporate litigation.

Musk, who also heads SpaceX’s aerospace business, accused the social network of making “false or misleading statements” about the number of fake accounts on its platform.

His lawyers also stated that Twitter was laying off employees and halting hiring, a practice they felt violated the company’s obligation to continue operating normally.

Describing the move as “bkey,” Lipton says these arguments may have some insight, but they don’t entirely benefit the business.

“This is not enough unless it can show that the statements about the fake accounts are not just false but question the fundamental foundations of the deal,” he explains.

“It gives the impression that Musk is legally wrong.”

twitter will die

This raises the possibility that the billionaire is actually trying to renegotiate for a lower price.

This tactic has been used successfully before, as with global luxury giant LVMH’s deal two years ago to buy Tiffany before it was discounted.

But experts don’t see how Musk and Twitter can agree on a different price at this point, given that the platform’s shares have lost more than a quarter since the end of April.

“Both have a lot to lose,” Lipton warns.

If Twitter wins the court, the unpredictable businessman will have to pay at least a billion dollars in damages.

In the worst-case scenario, he may be forced to honor his commitment and buy Twitter at an exorbitant price, as his wealth has eroded by tens of billions of dollars in recent months.

While this was a victory for shareholders, the company would leave Musk and his libertarian vision of absolute freedom of speech not shared by the many employees, users, and advertisers the model depends on. . process the platform.

“Twitter is worse now than it was six months ago, but in the long run it will be better without it,” says Creative Strategies analyst Carolina Milanesi.

“Like a toy that a spoiled kid wanted but didn’t know what to do with it, so he got bored and left it in a corner because he couldn’t give it the attention it deserved (…) Twitter would die slowly and painfully,” Milanese predicts.

War on all fronts

According to Lipton, any process is expected to take months, especially considering Musk will “extend”.

“Twitter is in a strong position,” he says.

But Musk speculates that he will “try to taunt his employees in a way that will be distracting and demoralizing.”

With more than 100 million followers on the platform, Musk has already harassed Twitter with highly critical tweets, sarcasm and odd usage suggestions celebrated by thousands of fans.

“There’s going to be a battle on all fronts, it’s going to be a battle on all fronts, it’s about retaining employees, following the competition after your job, brand issues, getting investors to believe the numbers,” says Ives, an analyst at Wedbush.

Unlike its Silicon Valley neighbors, Twitter has not been a money-making machine that can turn its users’ attention to astronomical advertising revenues.

“These months have been a huge distraction for Twitter, keeping it from focusing on the fundamentals of its business,” says Debra Williamson of Emarketer.

“If Musk can get the deal back, Twitter will continue to have the same problems it had before it entered the scene,” he said.

“Your user growth is slowing. While ad revenue continues to grow marginally, Twitter is now grappling with a slowing economy that could reduce ad spend across all social platforms.”