Elon Musk’s winning strategy on Twitter: ‘Ready, shoot, aim’

Elon Musk has a long history of delivering flashy product ads that are light on detail — a human-like robot, a brain-computer interface, a supersonic transportation system — years before the innovations he’s promoting were ready for market, if at all.

That was the approach he took in his campaign to buy Twitter, initially announcing his $44 billion offer with no funding or plan to run the San Francisco company. Wall Street dismissed it as another piece of musk pottery.

But just 11 days after Musk offered to buy Twitter, and three weeks after becoming its largest shareholder, the social media platform announced that it had agreed to sell itself to the billionaire. The deal, valued at $54.20 per share in cash, is expected to expire this year.

Although Musk’s tactics this month appeared unconventional or even half-baked, M&A experts say his strategy included sound negotiating principles — with a touch of his signature unpredictable style.

Richard Shell, a professor at the University of Pennsylvania and director of the Executive Negotiation Workshop at Wharton: “You’re along on the journey with Elon Musk and it’s not going to be the standard journey for the company.” “Musk is ready, shoot, target. It is not a private equity firm that has a sober, methodical group of CEOs trying to beat the market return.”

Attempts to take over a company often result in endeavors that can last for months. In contrast, Musk’s stalking of Twitter began when he bought a 9.2% stake in the company on April 4, bluntly punctuating the news.oh hi loltweet.

The next day, CEO Parag Agrawal announced that Twitter had appointed Musk to its board of directors, a decision that was reversed five days later, after a tweet in which Musk questioned whether Twitter “.the death“Because of low activity among top users like Taylor Swift and Justin Bieber.

Then, on April 14, Musk tweeted: “I made an offer” with a link to SEC . deposit In which he laid out his plan to make the company private. He said the opening presentation was “the best and the last”.

“I don’t play a back-and-forth game. I went straight to the end,” he said in the filing. It’s a high price and the shareholders will love it. If the deal doesn’t work out, since I don’t have confidence in management and I don’t think I can drive the necessary change in the public market, I will need To reconsider my position as a shareholder. This is not a threat.”

Musk, a prolific Twitter user, used the platform to garner support for his show as the company adopted a poison pill, a defensive measure to ward off unwanted takeovers.

And Musk wrote on Twitter with A vote It garnered over 2.8 million votes (83.5% of respondents said yes).

“If our Twitter demo succeeds, we’ll defeat the spam bots or die trying!” he is chirp after a week.

“He was negotiating in a way that suited his public persona,” said Danny Ertell, co-founder of Vantage Partners, which helps companies negotiate, whether it’s a sideshow or strategy. “He wants to do something controversial, that’s a bit controversial, and he’s going to make use of the tools he has, which is his personal presence, his 80 million Twitter followers, and his balance sheet.”

In the end, it was the money — Musk offered a 38% premium to Twitter’s April 1 stock closing price — more than just public statements that mattered. Some analysts also speculated that the company’s quarterly earnings, which are due to be announced on Thursday, are weak and that no other exhibitors are interested.

Offering that much money to buy a company like Twitter is unusual,” said Ed Prudeau, negotiation expert and author of Negotiation Boot Camp. “But Musk has an extraordinary reputation — he’s not your company-run business manager.”

Prudeau said Musk’s other unconventional moves — such as including an explicit reference to marijuana in his $54.20 share price — were “in keeping with his personality.” “He’s honest, he’s unique – you’d better take him seriously because he’s the richest man in the world.”

Being passive during negotiations can have unintended consequences, said Elizabeth Omfris, professor of management at the University of Washington’s Michael J. Foster School of Business. Since Musk assumes control of Twitter, he may have to deal with disgruntled employees and frictions that would not otherwise exist had he discussed it in a more professional and buttoned-up manner.

Amfries said research has shown that respect in negotiations is more likely to lead to positive outcomes for both parties involved — even though Musk’s strength and influence have given him a pass. “People with billions of dollars can sometimes violate these assumptions,” she said.

“However, we really want to make our negotiations unworthy of television,” she said.

The acquisition schedule and the turbocharger are Musk’s signature, said Shell, the Wharton professor, reflecting his true passion rather than entertainment for the sake of entertainment.

“It’s easy to think of him as an eccentric when he’s actually a genius,” he said. “As the deals went on, it was fast, and it was furious. That speed and that change of direction and the kind of speed it all unfolded: very unusual. Turn left, turn right, go straight, it was over.”

Less clear is what Musk will do with the company once he becomes its official owner.

“When Warren Buffett buys a company, we rate it on ‘Did Warren Buffett make another good deal?'” Shell said. “With Elon Musk, we have a different set of metrics for judging success for him: is he transformative in some way? Does it change the way we think about something? Does it open our imagination to a new way of doing business or innovation? “

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