On April 24, 2022, Elon Musk, CEO of Tesla, Space X, The Boring Company, and Neuralink—and one of the most popular people on Twitter with one of the largest followings—reached an agreement to buy Twitter for roughly 44 billion dollars. On July 8, 2022, the deal failed to materialize after Musk withdrew from the negotiations due to his concerns about the company's alleged overabundance of fake Twitter user accounts, aka bots. As a result, the Twitter stock price plummeted by 15% after the announcement.

Now that his deal to buy Twitter has failed and culminated in a legal battle, Musk's public sentiment has reached all-time lows. The public sentiment for Twitter has also taken a hit. In general, public sentiment surrounding this deal was largely negative from both sides:

1. Musk's fans were disappointed because they thought it would allow him to spread his message about sustainable energy sources further.
2. Twitter's users were happy because they believed his involvement would have led to changes that would have made the platform less accessible than ever before.

But how exactly was public sentiment affected by the fallout of Elon Musk's failed Twitter acquisition? Let's find out. Here are five effects of the failed Musk-Twitter deal.

Notes: Dates on the charts follow the day/month/year format. Additional timeline source: “A timeline of Elon Musk's tumultuous Twitter acquisition attempt,” ABCnews.com, July 13, 2022.

1. Merger and acquisition sentiment dropped from the beginning

Musk had been exploring the possibility of purchasing Twitter as early as January 2022 when he began increasing his positions in Twitter stock. By March 14, Musk became the largest shareholder in the company, according to a securities filing. And that's when the sentiment toward the acquisition began to drop.

M&A sentiment experienced a further drop when Musk officially announced his offer to purchase the Twitter company on April 14, 2022. On Reddit, for example, members of the r/Economics community posted and engaged with the following: Elon Musk Launches $43 Billion Hostile Takeover of Twitter, a post that since has been removed but represents one of many sources feeding sentiment toward the topic.

In May 2022, Musk announced a hold on the deal, pushing M&A sentiment even farther down. And more recently, in late June and early July when Twitter sued Musk for breaching the M&A agreement, M&A sentiment fell deeper into the negative space.

2. Sentiment for Elon Musk and Twitter declined likewise

But how do Elon Musk's and Twitter's sentiments evolve with M&A mentions?

In measuring and analyzing M&A mentions in web data, we found that Twitter's brand suffered but not nearly as much as Musk's. Both of their sentiments dropped in April when Musk announced his offer. However, Musk's sentiment suffered more when he put the deal on hold in May and again in June when Twitter filed a lawsuit against him.

Figure 2 shows two additional drops in Musk's sentiment for July. These correspond to news events regarding the trial, including news about the trial's start date in October.

3. Musk's brands, Tesla and SpaceX, suffered, too

Unfortunately for Musk, his other brands also experienced a drop in sentiment. For example, Tesla's sentiment experienced corresponding declines compared to Musk's, but not nearly as much as SpaceX's (Figure 3). One reason for this disparity could be the open letter SpaceX's workers wrote. The workers voiced their concern about Musk's behavior in this letter, stating, "Elon's behavior in the public sphere is a frequent source of distraction and embarrassment for us."

Further, in Figure 3, we track Tesla's stock performance. Initial data shows a possible correlation between Tesla's stock price and sentiment. However, further analysis and backtesting are needed to confirm this correlation.

4. Musk's sentiment suffered more than Twitter's

Twitter's sentiment remained relatively stable, seeing only a minor drop when Musk became the largest shareholder. Even Twitter's stock price remained stable, experiencing a temporary increase when Musk purchased Twitter stock but settling after. It's worth noting that Twitter's stock price was declining before January 2022, which might have influenced Musk's decision to buy.

In contrast, Musk's sentiment took a huge hit when he became the largest shareholder.

5. It’s not only about Musk and Twitter

In late 2021 and early 2022, open-source sentiment polarity was dipping. It experienced its biggest dip after February 2022 when Twitter admitted it had mistakenly removed Ukraine open-source intelligence accounts.

However, in April 2022, Musk said that one of the ways he wanted to improve Twitter was to make its algorithms open source to increase trust. How did the open-source community take the news? According to the chart (Figure 5), well. Open-source sentiment polarity jumped back up.

Analyzing the M&A sentiments

Overall, Elon Musk’s sentiment polarity reached lower levels than those of Twitter and his other brands—although SpaceX took a significant hit, too. Whether because of his brash public statements or his employees criticizing his focus and intentions, data shows that netizens were not supportive of his attempted acquisition. And with the Twitter v. Musk court battle scheduled and looming, his sentiment doesn’t seem like it will be improving anytime soon.

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SESAMm, a leading provider of AI-powered ESG and reputational risk data, is pleased to announce that Flexstone Partners, a global private equity investment manager and advisor, has selected SESAMm’s platform to strengthen its pre-investment screening and portfolio monitoring processes.

With approximately €10 billion in assets under management, Flexstone Partners invests globally across all private asset classes, including private equity, mezzanine, and infrastructure, through primary and secondary investments in funds, as well as direct co-investments in buyout & growth capital transactions. As a signatory of the UN-supported Principles for Responsible Investment (UN PRI) and an affiliate of Natixis Investment Managers, the firm integrates ESG considerations across its strategies and throughout the investment lifecycle.

As part of its investment process, Flexstone Partners systematically screens potential and existing holdings for controversies and reputational risks. The firm will now leverage SESAMm’s AI-powered ESG and reputational risk data to identify issues such as human rights violations, corruption, and environmental breaches, even among non-listed firms.

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About Flexstone Partners

Flexstone Partners ("Flexstone") 6 is an affiliate of Natixis Investment Managers, one of the largest asset managers in the world with over $1,427 billion in assets under management. The company manages $10.6 billion in assets 7and offers institutional investors worldwide tailored investment and advisory services in private equity. Flexstone's strategies in co-investment and the secondary market primarily focus on small and mid-cap segments, growth equity, and emerging managers in the United States, Europe, and Asia. With over 56 experts based in New York, Paris, Geneva, and Singapore, Flexstone’s international team addresses the needs of its clients around the globe. Composed of a team of specialists with complementary profiles, Flexstone has in-depth market knowledge and unique expertise in private equity. It is present in the most promising markets across North America, Europe, and Asia. For more information: www.flexstonepartners.com

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SESAMm is a global leader in controversy data, leveraging advanced large language models and generative AI to uncover ESG, reputational, and supplier risks in seconds. Our AI-powered platform surfaces real-time insights, even in low-disclosure markets, on millions of companies and infrastructure projects, supporting more informed decisions, enhanced due diligence, and regulatory alignment at scale. We work with leading firms, including Carlyle, Warburg, Natixis, RBI, Sustainable Fitch, Oddo, and others. SESAMm has raised $50M from renowned investors and operates across four continents. Learn more at www.sesamm.com

SESAMm’s AI Technology Reveals ESG Insights

Discover unparalleled insights into ESG controversies, risks, and opportunities across industries. Learn more about how SESAMm can help you analyze millions of private and public companies using AI-powered text analysis tools.

One of the biggest challenges in risk monitoring is sifting through mountains of irrelevant data. Whether you're using search engines, financial news platforms, or even specialized in-house analytics, you end up with too much noise. Scrolling through to page 12 of Google is not only time-consuming, but leaves you with the nagging feeling that you could still be missing something.

Artificial Intelligence (AI) is a hot topic, with new breakthroughs and possible applications popping up every day. The question is no longer simply “can AI help me with that?” but rather “how can I use AI to help with that?” For Environmental, Social, and Governance (ESG) controversy and risk monitoring, AI is used to sift through enormous data sets at unparalleled speeds, bringing critical insights to the forefront faster and more efficiently than humanly possible.

When there are hundreds of companies to monitor, for example in a large investment portfolio or a group of suppliers, the advantages of AI are obvious. But what about smaller portfolios? How do you know it’s time to start using AI? Based on our experience working with private equity firms, asset managers and commercial banks, we’ve pulled together five signs that it’s time to consider AI.

1. Overwhelmed by Data: There's Too Much Noise

An AI-powered tool filters out the noise, even in situations where seemingly only humans would be able to do it, giving you the peace of mind that there’s no controversy lurking in the dark corners of the web. All of the key information is gathered in one place, ready for you to evaluate and decide the best course of action.

2. Difficulty Finding Critical Information: The Black Hole of Private Companies

On the flip side - sometimes instead of finding too much data, you can’t find any data at all. For private companies, information can be scarce, especially for smaller companies based overseas, where the only news coverage is local and in the local language. In this case, ESG ratings agencies often aren’t able to fill the gap either. There are millions of firms worldwide and less than 50,000 of them are covered by rating agencies (source).

AI, on the other hand, enables systematic coverage and statistically relevant results without human intervention, analyzing millions of websites and providing coverage on millions of public & private companies. If you are struggling to find information on a company, AI might be the answer.

3. Can't Accurately Analyze an Event: The Context is Missing

Beyond the actual controversy or event itself, understanding the context and history around it is essential for risk assessment. Is this a one-off concern or part of a recurring pattern? To get the full picture, you need to take a closer look not only at the company in question, but the key players, i.e. key executives, and the industry as a whole to understand if this is within the norms.

AI has an important role to play here also. By simply expanding the search, AI can provide you with a full picture of the controversy, including a quick summary and a benchmark against competitors in just a matter of minutes.

4. Missed Critical Window for Action: The Cost of Inefficiency

Markets can change quickly - and it’s only getting worse as information is spreading faster and more widely. The more time it takes you to gather and analyze information, the less time you have to react. This can be a challenge whether you are monitoring 30 companies or 100’s. If you find yourself trapped in a cycle of reacting to news rather than acting proactively, AI can help. Because AI scans and analyzes information in seconds, the alerts to potential controversies are in near real-time, allowing you as much time as possible to take action.

5. Missing ESG Expertise: The Knowledge Gap

To top it all off, ESG is complex and constantly evolving. Understanding what data is relevant and how to evaluate it requires real expertise. ESG rating agencies provide some guidance, but they typically leverage self-reported data - which is naturally biased. Take greenwashing for example where a company misleads its stakeholders, investors, and consumers about its environmental practices by communicating positive environmental performance contrary to its actual, less positive execution. It’s difficult to identify greenwashing using self-reported data.

Because AI relies on external stakeholders, such as online forums or news sources, it offers an unbiased take on a company’s ESG performance. Additionally, by choosing an AI with ESG expertise built-in, you benefit from an expert analysis without increasing the burden on your team.

As the speed and amount of information available continues to grow, AI offers a scalable way to monitor your partners, suppliers and portfolio. To learn more and find out if AI is a good fit for your company, contact our experts at SESAMm.