What would happen to Twitter if Elon Musk backs out now?

What would happen to Twitter if Elon Musk backs out now?
Twitter is committed to enforcing Musk’s $44 billion buyout
  • From talking about shadowbanning to calling out Twitter for its 'manipulative' algorithm, Tesla CEO Elon Musk has revealed quite a few loopholes in Twitter's algorithm.
  • If Musk backs out now, the social media platform Twitter will never be the same.
  • With Musk putting the spotlight on Twitter’s weaknesses, users are also questioning its credibility as a platform.
  • So, if Musk abandons, the platform will have to focus more on damage control, and improve its algorithm.
  • Here’s what brand and public communication experts have to say about it.
Weeks after Tesla CEO Elon Musk announced publicly that he is planning to buy the micro-blogging platform Twitter, there are signs that he might be hesitating now.

On Tuesday, Musk tweeted that his proposed $44 billion buyout is on hold now. He is waiting for Twitter to provide more information on the number of spam accounts that exist on the platform. Should the platform fail to provide proof it has fewer than 5% fake accounts, the deal might fall through.

"My offer was based on Twitter's SEC (Securities and Exchange Commission) filings being accurate," Musk tweeted. He added that the number of fake/ spam accounts on Twitter could be more than 20%.

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Musk hinting at negotiating a lower price is another sign that he may be getting cold feet. The billionaire had offered $54.20 a share but the stock was trading at around $37 on May 16, 2022.

Musk didn’t just call out Twitter for underreporting its spam accounts.


Since he announced his intentions to buy Twitter, Musk seems to be taking an aim at the platform’s algorithm and has revealed quite a few loopholes in Twitter's overall modus operandi.

Musk indicated the default Twitter feed, which shows tweets based on popularity and users’ interests, needed to be replaced and is ‘manipulative.’

"You are being manipulated by the algorithm in ways you don't realise," Musk tweeted. He later clarified that he wasn’t suggesting malice in the algorithm but it ‘inadvertently manipulates/amplifies your viewpoints’ without informing the user.

Shortly later, he warned the users of "potential bugs" in Twitter’s code.

In the past, Musk has also casually joked about shadowbanning, which is the secret censorship of a person, community or a topic on social media, confirming that it is real.

If Musk abandons, here’s what it’d mean for Twitter and how it can win its credibility back

If Musk backs out now, after bringing several issues at Twitter to the limelight, the micro-blogging platform will never be the same.

“His pointing to fake users and bots, will force Twitter to clean up its user base, that may be a setback in the short term but will make the platform far more credible over time,” says Lloyd Mathias, business strategist and independent director.

Mathias added that Twitter might benefit from his exit after all.

“If he does back out, it may seem like a setback, but I think Twitter could benefit from him opening up the possibility of a series of new monetizing opportunities and enable its move from being purely advertising dependent. There is little doubt that he has changed how people and investors see Twitter, before his current engagement.”

Independent communications consultant and social media expert Karthik Srinivasan says, “Twitter had its share of issues and controversies long before Musk brought them to the limelight through the proposed acquisition. Facebook has seen a lot more such controversies and yet, they are chugging along fine.”

From breaching users’ privacy concerns to manipulating election results, all social media platforms have had their credibility questioned.

However, after Musk and Parag Agarwal’s public feud, there has been a constant reminder of these shortcomings.

“The moment any social media platform becomes all too powerful and has the ability to influence global politics, sway election outcomes, distort public opinion, misrepresent facts and tamper with news feeds, there are immediate concerns about credibility and their role in society. These concerns have always been there in the background and have once again resurfaced, only this time, they are a lot more stronger and corporates cannot suppress or subvert the narrative,” says founder and CEO of communications and PR agency Communicate India, Akshaara Lalwani.

If the deal falls through, Twitter will have to pick up the pieces and change the narrative — shift the spotlight from its weaknesses to strengths.

Suggesting the best way out of this potential crisis, Tarunjeet Rattan, managing partner of public relations and communications agency Nucleus PR, says, “Crisis management is often not about the crisis itself but how you react to it and the narrative you can replace it with. Every crisis is an opportunity for you to take center stage. The spotlight is on you. Now, what you say in that spotlight can change the whole narrative. Apart from all the statements and clarifications they issue which should adopt a non-emotional matter-of-fact tone, Twitter can use its own platform to repair any cracks in its reputation.”

Should the billionaire back out, Twitter can use the opportunity to address and set some fundamentals right, says Mathias, and also examine some of the monetisation opportunities that Musk has hinted at.

Can Elon Musk back out now?

Well, not easily, as both parties have signed an agreement that gives Twitter more power.

It gives the platform the right to sue Musk to follow through with the deal, a legal clause known as “ specific performance.” If either party backs out, they would have to pay $1 billion as a termination fee.

Paying $1 billion for a man who has agreed to pay $44 billion to buy Twitter and whose net worth is $230 billion, may not be a big deal.

However, it won’t be as simple as paying his way out of it.

Twitter is committed to enforcing Musk’s $44 billion buyout and is seemingly willing to sue for specific performance. Through a lawsuit, Twitter can get Musk to close the deal if there's already financing in place and all conditions are met.

If Musk still walks out by settling the lawsuit and paying the termination fees, the microblogging platform will have nothing to worry about -- as far as its brand image and users’ trust is concerned.

Srinivasan says, “I'd think that if Musk backs off, it’d be perhaps a great moment for Twitter to start thinking afresh, in terms of reconstituting its board and look at ways to do things differently.”