Elon Musk is now Twitter’s judge, jury, and executioner—with complete leeway to enact his version of “free speech” on the flailing platform. Image: Gizmodo
Things are really going off the rails at Twitter, as Elon Musk pushes forward in a hostile takeover that seems liable to ensure he’s eventually the only one left at the social media platform. In the latest set of deeply confusing declarations from the multi-CEO and “Chief Twit,” Musk reinstated Twitter accounts for the right-wing “parody” outlet the Babylon Bee, Jordan Peterson, and Kathy Griffin.
Musk announced the reinstatements after a cryptic post simply saying “Freedom Fridays.” He also paired the news with a confusing explanation of how content moderation on Twitter will supposedly operate moving forward. “New Twitter policy is freedom of speech, but not freedom of reach,” he wrote. “Negative/hate tweets will be max deboosted & demonetized, so no ads or other revenue to Twitter.”
Note: the below Tweet misspells Kathy Griffin’s name.
Musk didn’t un-ban Donald Trump, writing a “decision has not yet been made” about whether or not to allow the former poster-in-chief back on the site. He also said he would not allow conspiracy theorist Alex Jones back on the platform, in another tweet exchange. Though, like all of Musk’s promises—who knows how long it will last.
The sudden Twitter ban reversals beg the question: What happened to Musk’s previously announced plan to tackle reinstatements? Less than a month ago, the world’s richest man tweeted that, under his leadership, Twitter would form and rely on a “content moderation council.” “No major content decisions or account reinstatements will happen before that council convenes,” he wrote in an Oct. 28 post.
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Yet seemingly, Freedom Friday went ahead with no such council in place. And it’s abundantly possible that there simply aren’t enough staff left at Twitter to compose one. Initial layoffs slashed about 50% of the company, and more engineers and execs have fled since.
Among other questions that Gizmodo had related to Friday’s announcement:
What is a “negative tweet?”
Who decides that?
Who (or what algorithm) will be monitoring for these “negative tweets” to “deboost” them—and how?
Will there be an official shadowban council?
Gizmodo also isn’t sure, exactly, how single tweets can be “demonetized.” Twitter does not make money directly off of individual tweets, but rather paid posts by advertisers (and, uh, Twitter Blue subscribers). Unless Musk is talking about disallowing offensive ads (which presumably already aren’t allowed), this is seemingly just word salad, devoid of any actual functional policy shift.
Unfortunately, though Gizmodo has reached out with all of the above questions to Twitter’s press account, we do not expect to receive a response. Since Musk’s purchase of the company was finalized, Twitter has not been responding to our press inquiries. Press contacts from other companies run by Musk, like SpaceX and Tesla, are also notoriously difficult for media to reach.
On Friday evening, Tesla CEO Elon Musk finally made it crystal clear that he has no interest in adding “owner of Twitter” to his list of titles. The move was months in the making. Twitter is planning to sue in response.
In a letter to Twitter’s Chief Legal Officer Vijaya Gadde filed with the Securities and Exchange Commission, Musk notified the social media company that he would terminate the $44 billion acquisition deal he made in late April. However, it is not yet clear whether Musk can unilaterally end the agreement.
Musk has fixated on the number of spam accounts on the social network. Citing their proliferation of automated bots, he first claimed Twitter was in breach of its merger agreement in early June. Musk’s lawyers argue that the billionaire is backing out of the agreement because “Twitter is in material breach of multiple provisions of that Agreement, appears to have made false and misleading representations upon which Mr. Musk relied when entering into the Merger Agreement, and is likely to suffer a Company Material Adverse Effect.”
Twitter plans to sue Musk in response. Twitter CEO Parag Agrawal retweeted the company’s board chairman Bret Taylor’s promise of legal action minutes after the news broke in defiance of the Tesla CEO.
“The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery,” Taylor wrote.
In an email to staff on Friday obtained by the Verge, Sean Edgett, Twitter’s general counsel, told folks not to share any commentary on the merger on Twitter or Slack.
“Given that this is an ongoing legal matter, you should refrain from Tweeting, Slacking, or sharing any commentary about the merger agreement. 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,” Edgett wrote. “I know this is an uncertain time, and we appreciate your patience and ongoing commitment to the important work we have underway.”
Jesse Fried, a Harvard Law School professor, told Gizmodo in an email on Friday that Musk could not “simply walk away from the deal” and is probably trying to lower the price of the acquisition.
“He is bound to buy Twitter if he has adequate financing, as it seems he does. There are narrow outs,” Fried said. “Given the contract and Twitter’s post-signing conduct, Musk is highly unlikely to get a Delaware court to give him a ‘get-out-of-merger free card.’ He has presumably been told that by his lawyers.”
The news that Musk is backing out of the acquisition agreement follows months of public buyer’s remorse expressed on Twitter itself. The company says automated bots and spam accounts make up just 5% of the social network’s users, a figure Musk believed was much higher. He requested and received more data on Twitter’s user base but ultimately said the information provided was insufficient.
On Thursday, the Washington Post reported that the billionaire’s deal to acquire Twitter was in “serious jeopardy” and that Musk had stopped engaging in funding discussions. The outlet cited doubts from Musk’s team over the data provided on the number of fake accounts and spam bots provided to it by Twitter.
The back-and-forth with Musk has had detrimental effects on Twitter. The stock price of the company had fallen to $36.10 as of Friday, well below the $54.20 he offered. The company laid off members of its recruiting team on Friday as well, though layoffs have struck the tech industry writ large as the stock market has tumbled in recent months. Musk cited the layoffs in his deal termination letter as well as several high-profile resignations. In June, amid a flurry of Musk mayhem, Twitter said it was still committed to closing the deal and hinted that it was unafraid to take legal action. When asked about the Post’s report early today, Twitter reiterated its June response: “We believe this agreement is in the best interest of all shareholders. We intend to close the transaction and enforce the merger agreement.”
Musk, Twitter’s largest shareholder, has behaved like Twitter’s owner for weeks now: He’s taken questions from Twitter employees in a town hall, given them product advice (make Twitter more like TikTok).
Fried said it’s all probably just a game to Musk.
“Litigation will be costly for Twitter, and it may agree to lower the price to settle the litigation. This is probably Musk’s game plan here,” the professor said.
Musk’s lawyers delved into further detail of Twitter’s perceived slights and contract violations, the majority of which centered on the blue bird company apparently declining to provide or providing incomplete information to the billionaire.
The billionaire’s accusations are as follows:
Spam and Fake Accounts
As is to be expected, Musk complained about a lack of information from Twitter related to Twitter’s spam and fake accounts. His lawyers state that the social media company did not provide the following:
“(1) daily global mDAU data since October 1, 2020; (2) information regarding the sampling population for mDAU, including whether the mDAU population used for auditing spam and false accounts is the same mDAU population used for quarterly reporting; (3) outputs of each step of the sampling process for each day during the weeks of January 30, 2022 and June 19, 2022; (4) documentation or other guidance provided to contractor agents used for auditing mDAU samples; (5) information regarding the user interface of Twitter’s ADAP tool and any internal tools used by the contractor agents; and (6) mDAU audit sampling information, including anonymized information identifying the contractor agents and Quality Analyst that reviewed each sampled account, the designation given by each contractor agent and Quality Analyst, and the current status of any accounts labelled “compromised.”
The billionaire said he did not receive data on the methodology Twitter uses to suspend spam and fake accounts.
According to the letter, Musk apparently wanted “access to the sample set used and calculations performed” to determine that less than 5% of Twitter’s mDAUs are fake or spam accounts, which is what the company claims. The request included the daily measures of mDAUs for the past eight quarters. The letter states that the social media company has provided “certain summary data” regarding its mDAU calculations, but not the complete daily measures. In addition, Musk requested materials provided to Twitter’s board about mDAUs’ calculations. Again, he claims he received incomplete information.
“Preliminary analysis by Mr. Musk’s advisors of the information provided by Twitter to date causes Mr. Musk to strongly believe that the proportion of false and spam accounts included in the reported mDAU count is wildly higher than 5%,” the letter states.
Materials Related to Twitter’s Financial Condition
Furthermore, the billionaire’s lawyers claim that he is entitled to certain financial data related to Twitter, including information that aims to help him secure financing for the deal. Musk purported asked for a Twitter’s financial model and budget for 2022, an updated draft plan or budget, and a “working copy” of the Goldman Sachs’ valuation model. He reportedly has only received a PDF copy of Goldman Sachs’ final board presentation.
Access to APIs and Query Restriction
When Musk was provided with information, his lawyers claim it came “with strings attached.” For instance, they claim that Musk was initially not given the same access given to customers to eight Twitter developer APIs. This was only remedied after explaining the lack of access to the company.
Nonetheless, the APIs reportedly contain a “query cap” that prevents Musk and his team from carrying out their desired analyses of the data. The cap was only removed after Musk complained about it twice.
Twitter Fired Two High-Level Execs, Laid Off People, and Froze Hiring
Finally, Musk’s lawyers state that Twitter was obliged to “preserve substantially intact the material components of its current business organization,” something they claim it did not do. The violations in this area began when the blue bird app fired Kayvon Beykpour and Bruce Falck, its general manager of product and general manager of revenue, respectively, in May.
The letter also cites Twitter laying off 30% of its talent acquisition team this past Thursday and its hiring freeze. As if that wasn’t enough, Musk is also purportedly mad that Twitter didn’t stop its head of data science; the vice president of Twitter service; and a vice president of product management for health, conversation, and growth from leaving.
“The Company has not received Parent’s consent for changes in the conduct of its business,” Musk’s lawyers wrote.
Update 7/9/2022, 6:26 a.m. ET: This post has been updated with information about Edgett’s email to staff.
File photo of Elon Musk walking from the the justice center in Wilmington, Del., on July 12, 2021.Photo: Matt Rourke (AP)
Elon Musk sold roughly $5 billion worth of Tesla shares, according to a new filing with the U.S. Securities and Exchange Commission. Musk launched a Twitter poll over the past weekend, asking if he should sell 10% of his Tesla stock to pay taxes.
“Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock,” Musk tweeted on Saturday.
“I will abide by the results of this poll, whichever way it goes,” Musk continued.
The unscientific poll attracted about 3.5 million responses and while the results showed that 57.9% of respondents believed Musk should sell, he didn’t actually unload 10% of his shares, instead selling roughly 3%.
As the BBC notes, roughly one-fifth of the total shares Musk sold were already scheduled to be sold before the billionaire’s Twitter poll. The rest, while not necessarily a direct result of the poll, seemed to have been sold after Musk signaled his interest in unloading a lot of shares.
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From the CNBC:
His trust sold more than 3.5 million shares worth over $3.88 billion in a flurry of trades carried out Tuesday and Wednesday. Those transactions were not marked as 10b5, meaning they were not scheduled sales.
Earlier Wednesday evening, filingsshowed Musk is selling a separate block of Tesla shares via a plan that he set in motion on Sept. 14 this year. Those sales amount to more than 930,000 shares worth over $1.1 billion.
Musk, the wealthiest person on the planet, has received criticism recently for not doing more to help his fellow humans who don’t have enough to eat. The head of the United Nations World Food Program explained last month that a one-time donation of $6 billion from the world’s richest people would help save 42 million people from salvation.
In response, Musk said he’d make the $6 billion donation if he was promised that his donation would solve hunger forever. His ridiculous conditions couldn’t be met, obviously, yet fans of the Tesla CEO insisted that it showed he was serious about charity.