• Dorsey says Musk should have just paid the $1 billion breakup fee
  • The Bluesky backer also said the board shouldn't have forced Musk to buy Twitter
  • Dorsey had previously said he believed in Musk's vision for Twitter

Twitter co-founder Jack Dorsey has openly criticized Elon Musk's leadership, saying the new Twitter boss shouldn't have pushed through with the buyout deal. He also said Twitter's board shouldn't have pursued the deal when Musk wanted to get out of it.

"I think he should have walked away and paid the $1b," Dorsey said while discussing the acquisition with users on his Twitter alternative site Bluesky, CNBC reported Saturday.

Dorsey was referring to the $1 billion break-up penalty attached to the deal. However, it was unclear whether Musk or Twitter actually had the option of paying the breakup fee at the time.

When a user asked Dorsey if he thought the Tesla CEO was the leader Twitter needed, he replied, "No. Nor do I think he acted right after realizing his timing was bad. Nor do I think the board should have forced the sale. It all went south."

Musk first declared his desire to purchase Twitter in April last year, but in the months leading to the October completion of the buyout, the SpaceX founder tried to get out of the deal.

Twitter in July sued Musk to get him to abide by his commitments to the $44 billion buyout contract. At the time, Twitter lawyers accused the tech mogul's exit tactics as "a model of hypocrisy," asking for a trial on the case.

In response, Musk asked the court to delay the lawsuit trial through 2023. He cited "misleading" statements from Twitter regarding fake accounts on the platform as his reason for pulling out of the deal.

Musk completed the purchase of Twitter late in October.

Dorsey had previously supported Musk buying the social media platform, tweeting that the billionaire was the "singular solution I trust."

But it appears Dorsey's view changed after that. The former Twitter CEO broke his silence about the Twitter takeover on Nov. 5, a day after the company announced thousands of layoffs.

"I realize many are angry with me. I own the responsibility for why everyone is in this situation: I grew the company size too quickly. I apologize for that," he tweeted at the time.

Aside from mass layoffs, Musk also brought about many other changes to the platform. He lifted the blue checkmarks from all "legacy" verified accounts, which were used by celebrities and other influential people, and introduced the Twitter Blue subscription service for verification.

The 51-year-old businessman has also made some controversial tweets, which some observers say may have contributed to his dwindling reputation.

"His reputation has been diminished significantly with Twitter ... and once you lose it, it's very difficult to recover. It would be a good opportunity for [Musk] to rethink whether or not ... he's really leadership material," William Kleppler, a management professor at Columbia Business School, told CNN.

Meanwhile, Dorsey-backed Bluesky has seen a rise in demand in recent weeks, reported Fortune Magazine.

The company reportedly saw the "biggest single-day jump in new users," with a two-fold jump from the previous day. Some big names have also started using the Twitter alternative, which includes Rep. Alexandria Ocasio-Cortez, D-N.Y., and model Chrissy Teigen.

The invite-only, decentralized platform has gained interest from people who have been searching for an alternative to Twitter. Dorsey is on its board of directors.

Bluesky began rolling out to users in private beta mode in February. The company is yet to announce when it will launch to the broader public.

Former Twitter software engineer Jay Graber, who is the CEO of Bluesky, has said the platform will be opened for all once a stronger moderation system is established to ensure a "safe, enjoyable" experience for users.

Twitter CEO Jack Dorsey addresses students during a town hall at the Indian Institute of Technology (IIT) in New Delhi
Twitter co-founder Jack Dorsey previously supported Elon Musk's bid to purchase Twitter.