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Analysis: Musk's Twitter bid for case study perpetuation

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LONDON/NEW YORK (Reuters) – The story of Elon Musk’s $44 billion takeover of Twitter (TWTR.N) is immortalized in case studies of future industry leaders. All the drama you need is included. A social media platform and a unique management style create a union like no other.

The CEO of electric car maker Tesla (TSLA.O) said just as a Delaware court was preparing to rule, after months of trying to get out of the deal. I made a U-turn by offering to buy Twitter at the agreed price. standoff.

“This is often unique,” ​​says Arturo Bris, professor of finance and director of the IMD World Competitiveness Center. “It’s definitely a business school case study because it’s about poisons, penalties, lawsuits and animosity.”

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There are examples of bitter and hostile takeovers like AOL-Time Warner and Sanofi-Aventis-Genzyme, but here the richest man in the world – who has long used his Twitter account to demand free speech – but is trying to enforce his will… in another legal entity.

Vanderbilt University professor Joshua White said Musk’s attempt to take over Twitter was “a gift to professors and students” and said the situation was “unprecedented.”

unique look

Before making an offer to the company, Musk told Twitter chief executive Parag Agrawal, “Frankly, I hate doing administrative work,” according to legal documents related to the fight. ‘I wrote.

“I don’t think you should be somebody’s boss,” he wrote, but in another message, “It’s much better to interface with an engineer who can do hardcore programming than the program manager/MBA type.” It has said.

The message reflects his quirky approach to running a business, but controlling Twitter means controlling it, at least in the beginning. Musk has said he will hold the reins as his CEO, but that is until he finds a new executive with media industry expertise.

“It’s unclear what the future holds,” said Donna Hitchelich, a professor at Columbia Business School.

Musk did not respond to a request for comment on the company’s operational challenges following the controversial deal. Twitter declined to comment.

Academics and analysts say Musk should focus on reshaping the social media company’s business model after second-quarter earnings declined amid legal battles and a weakening digital advertising market.

Musk has hinted that he wants to turn Twitter into an “everything app” like China’s wildly popular WeChat, which offers everything from banking to chat. Analysts say it will be difficult, especially in the United States, where consumers are already well served by multiple services.

Whether or how Musk will succeed remains to be seen. What analysts and academics can agree on is that considerable energy and momentum could be lost by the expected heavy turnover among Twitter staff and senior management.

For months, Musk has criticized the company’s management, complained about salaries, and viewed it as political bias and an automated “bot account.”

Speaking directly to employees in June, he said there was a need for “staffing and cost rationalization,” stressing that employees who now have relative freedom to choose where they work should lean toward working in the office. did.

One thing is certain, as Musk figures out how to run Twitter, it will come under a lot of attention and scrutiny. Deaf experts say.

“I’m really, really looking forward to the end,” Bliss said. “So I can teach this case in my class.”

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Reported by Andres Gonzalez, Svea Herbst-Bayliss, and David Randall. Additional reporting by Sheila Dang and Hyun Joo Jin. Editing by Matt Scuffham, Megan Davies and Kirsten Donovan

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