Analysis: Musk’s acrimonious Twitter bid heads for business school case study immortalisation

LONDON/NEW YORK, Oct 9 (Reuters) – Elon Musk’s $44 billion Twitter (TWTR.N) takeover saga brings all the drama needed to be immortalized in case studies for future captains of industry as the tycoon’s constant pursuit of the social media platform and unique leadership style make a union like no other.

The CEO of electric carmaker Tesla Inc (TSLA.O) did a U-turn by proposing to buy Twitter at the agreed price after months of trying to walk out of the deal just as a Delaware court was preparing to rule on it the distance.

“This is unique in many cases,” said 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 poison pills, breakup fees, lawsuits and animosity.”

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While there are examples of bitter or hostile takeovers like AOL-Time Warner and Sanofi-Aventis-Genzyme, here’s the world’s richest man — who has long used his own Twitter account to push for more freedom of speech — at work to shape his will enforce on another company.

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

UNIQUE STYLE

“Honestly I hate doing mgmt stuff,” Musk wrote in a text message to Twitter CEO Parag Agrawal ahead of a bid for the company, according to legal documents related to the fight.

“I kind of don’t think anyone should be anyone’s boss,” he wrote, while another message noted that he “could communicate much better with engineers who are capable of doing hardcore programming than with program managers.” /MBA Types”.

While the news reflects his unusual approach to running a business, controlling Twitter will mean managing it, at least initially. Musk has said he would take the reins as CEO, but only until he finds a new executive with media industry expertise.

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“What’s to come is unclear,” said Donna Hitscherich, a professor at Columbia Business School.

Musk didn’t respond to a request for comment on the challenges of running the company after such a controversial deal. Twitter declined to comment.

Academics and analysts say Musk should focus on restructuring the social media company’s business model after second-quarter revenue tumbled amid litigation and a flagging digital advertising market.

Musk has hinted that he wants to turn Twitter into what he calls an “everything app,” like China’s hugely popular WeChat, which offers everything from banking to chat. That will be difficult, analysts said, especially in the United States, where consumers are already well served by several services.

Whether or how Musk pulls this off remains to be seen. Analysts and academics agree that significant energy and momentum could be sapped by what they forecast to be high turnover among Twitter employees and management.

Musk spent months criticizing the company’s management, complaining about salaries, what he perceived as political bias, and automated “bot accounts” — which he says there are a lot more of than Twitter estimates.

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Speaking directly to employees in June, he said there needed to be a “rationalization of staffing levels and spending” and stressed that employees, who are currently relatively free to choose where they work, are choosing to work in should tend to an office.

One thing is for sure: Musk will get a lot of attention and scrutiny if he figures out how to run Twitter. Success or failure, it will immediately be a business school staple, experts say.

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

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Reporting by Andres Gonzalez, Svea Herbst-Bayliss and David Randall; additional reporting by Sheila Dang and Hyun Joo Jin; Edited by Matt Scuffham, Megan Davies, Kirsten Donovan

Our standards: The Thomson Reuters Trust Principles.

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