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28 Stan. J.L. Bus. & Fin. 307 (2023)
How Twitter Pushed Stakeholders under the Bus

handle is hein.journals/stabf28 and id is 319 raw text is: How Twitter Pushed Stakeholders under the Bus Lucian A. Bebchuk,* Kobi Kastiel,' & Anna Toniolo* Abstract This study focusses on the acquisition of Twitter by Elon Musk. Our analysis indicates that when negotiating the sale of their company to Musk, Twitter's leaders chose to disregard the interests of the company's stakeholders and to focus exclusively on the interests of shareholders and the corporate leaders themselves. In particular, Twitter's corporate leaders elected to push under the bus the interests of company employees, as well as the mission statements and core values to which Twitter had pledged allegiance for years. Our analysis can inform the heated debates on corporate stakeholders and their treatment by corporate leaders. Our findings indicate that, contrary to the predictions of the implicit promises and team production theories of Coffee (1986), Shleifer-Summers (1988) and Blair-Stout (1999), corporate leaders selling their company should not be expected to look after the interests of stakeholders. In addition, rather than supporting the stakeholder governance, our findings also support the agency critique of stakeholder governance (Bebchuk and Tallarita (2020)), which stresses that corporate leaders have incentives not to serve stakeholders beyond what would serve shareholder value. Finally, our findings are consistent with the view that corporate mis- sion and purpose statements are mostly for show. Keywords: stakeholders, stakeholder capitalism, stakeholder governance, corporate social re- sponsibility, corporate purpose, Twitter, Elon Musk. JEL Classification: D21, G32, G34, G38, K22. James Barr Ames Professor of Law, Economics, and Finance, and Director of the Program on Corporate Governance, Harvard Law School. t Professor of Law, Tel Aviv University Faculty of Law; Senior Research Fellow and Lecturer on Law, Harvard Law School. Postdoctoral Fellow at the Program on Corporate Governance, Harvard Law School. We have benefited from helpful discussions with and suggestions from many individuals in- cluding Oliver Hart, Roberto Tallarita, participants at two Harvard Law School workshops, and editors of The Stanford Journal of Law, Business, & Finance. 307

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