Elon Musk’s attempt to terminate his $44 billion acquisition of Twitter will likely trigger a protracted legal battle and a period of turmoil for the social media company that could lead to a mass exodus of employees, according to a prominent tech analyst.
“It’s a code red for the company,” Wedbush Securities tech analyst Daniel Ives told Insider.
“Employees could leave in droves.”
Twitter last week laid off a third of its talent acquisition team as economic headwinds take their toll on the tech giant, according to The Wall Street Journal.
Ives said that Musk’s bid to kill the deal and the likely court battle will lead to increased scrutiny of the company, which may now be “viewed as damaged goods.”
Musk has accused Twitter of failing to provide accurate information about the prevalence of spam and bot accounts. Twitter has denied the allegation.
Shares of Twitter nosedived just as the opening bell rang on Wall Street on Monday morning. The company’s stock was down nearly 6% as of 9:35 a.m. on Monday.
“[Musk’s announcement over the weekend] throws the company into a tailspin,” Ives said. “I think Twitter’s gonna be bruised through this. It’s gonna have to navigate this.”
Twitter executives are anticipating the unrest that the saga will generate among its workforce.
Nick Caldwell, the general manager for core technologies at the San Francisco-based company, tried to reassure his charges that “we’ll be OK.”
Caldwell took to Twitter’s internal Slack channel late on Friday night and wrote a lengthy message to company employees, Insider reported.
“Phew! This is a lot,” Caldwell wrote to employees.
“Getting the ‘u ok?’ text messages from my parents and friends today was no a great feeling,” he wrote.
“Nor was seeing the confusion from fellow Tweeps across our slack channels and on my home feed.”
Caldwell added: “That said, I DO think we’ll be okay.”
Twitter executives are also urging employees not to tweet or comment publicly about the recent brouhaha.
An internal company memo to employees tells staffers to “refrain from Tweeting, Slacking, or sharing any commentary about the merger agreement,” according to The Verge.
“We will continue to share information when we are able, but please know we are going to be very limited on what we can share in the meantime,” the company told employees in the memo.
While Twitter workers fret, Musk appears to be enjoying himself online while mocking the social media company’s management.
The Tesla CEO tweeted a meme which included photos of himself “reacting” to the legal battle with increasing levels of amusement – and referenced the likelihood of more revelations of the number of spam bots within Twitter’s user base.
“They said I couldn’t buy Twitter, then they wouldn’t disclose bot info,” the meme says. “Now they want to force me to buy Twitter in court, now they have to disclose bot info in court.”
Musk also shared a meme featuring a photo of actor Chuck Norris alongside a chessboard with the caption “Chuckmate,” though it’s unclear if that image was a reference to his looming battle with Twitter’s board.