Elon Musk’s $44 billion takeover of Twitter has all the drama needed to be preserved in case studies for aspiring business leaders, as the tycoon’s intermittent pursuit of the social media platform and distinctive management approach result in a union unlike any other.
Just as a Delaware Court was about to rule on the standoff, the CEO of electric car manufacturer Tesla Inc. made a U-turn by offering to buy Twitter at the agreed-upon price after spending months trying to get out of the deal.
According to Arturo Bris, professor of finance and director of the IMD World Competitiveness Center, “this is unusual in many cases.” “Undoubtedly, it is a case study from a business school. Because it involves poison pills, breakup costs, legal battles, and hostility”
While hostile takeovers have occurred in the past, such as the ones involving AOL-Time Warner and Sanofi-Aventis-Genzyme, this one involves the world’s richest man, who has long advocated for greater freedom of speech on Twitter.
Professor Joshua White of Vanderbilt University called Musk’s attempt to take over Twitter “unprecedented” and said it was “a gift to professors and students.”
According to court documents related to the dispute, Musk texted Twitter CEO Parag Agrawal before making a bid for the company, saying, “Frankly I hate doing mgmt stuff.”
In another message, he stated, “I could interface way better with engineers who can do hardcore programming than with programme manager/MBA types.” “I kinda don’t think anyone should be the boss of anyone,” he wrote.
Even though the messages show his unconventional management style, taking over Twitter will require management—at least at first. Musk has stated that he will take over as CEO, but only while he looks for a replacement executive with experience in the media sector.
Professor Donna Hitscherich of Columbia Business School said, “What is to come is unclear.”
A request for comment on the difficulties in managing the business after such a contentious deal went unanswered by Musk. Twitter opted not to respond.
After second-quarter revenue declined due to the legal dispute and a declining digital advertising market, analysts and academics advise Musk to concentrate on restructuring the social media company’s business model.
Musk has made suggestions that he wants to make Twitter into a “everything app,” similar to the hugely popular WeChat in China, which provides everything from banking to chatting. That will be challenging, according to analysts, particularly in the US where consumers are already well-served by a variety of services.
What remains to be seen is whether or how Musk succeeds. Analysts and academics can all agree that Twitter’s senior management and staff will likely experience high turnover, which could significantly sap the company’s energy and momentum.
The company’s management was criticised by Musk for months, and he also expressed dissatisfaction with wages, political bias, and automated “bot accounts,” of which he believes there are many more than Twitter estimates.
In a June speech to the staff, he emphasised that there needed to be “rationalisation of headcount and expenses” and urged the staff, who at the time had some flexibility in where they worked, to lean toward working in an office.
There is no doubt that Musk will come under intense scrutiny as he learns how to run Twitter. Success or failure, it will quickly become a standard in business school classrooms, according to experts.
Bris said, “I’m really, really looking forward to the end.” To be able to present this case in class.
(Editing by Matt Scuffham, Megan Davies, and Kirsten Donovan; reporting by Andres Gonzalez, Svea Herbst-Bayliss, and David Randall; additional reporting by Sheila Dang and Hyun Joo Jin)