Category Archives: Twitter

Twitter Calls Elon Musk’s Third Attempt To Scrap Acquisition Invalid

Twitter said that payments to a whistleblower did not breach any of its obligations under the $44 billion acquisition proposed by Elon Musk, after the billionaire sent a third letter to try and call off the deal, CNBC reported.

The social media giant said it intends to enforce the agreement and close the transaction on the price and terms agreed upon with Musk, according to a Securities and Exchange Commission filing. According to CNBC, Twitter shareholders will vote Tuesday on whether to approve or reject Musk’s takeover bid.

The Guardian reported that Twitter’s former head of security, Pieter “Mudge” Zatko, will appear in front of lawmakers in Washington on Tuesday. According to The Guardian, Zatko is expected to give damning evidence of data and information security failings at the social media platform, having outlined a litany of concerns in a whistleblower complaint last month.

The Guardian also reported that the Senate Judiciary committee hearing is not directly for the benefit of Elon Musk, who is trying to pull out of a $44 billion deal to buy Twitter and has been given permission to include Zatko’s revelations as another reason for walking away. According to The Guardian, Musk’s lawyers interviewed Zatko on September 9. But if Zatko’s actions are going to have an immediate impact, it will be at a trial in Delaware on October 17, where Twitter is attempting to force Musk to buy the company under the terms he agreed in April.

The Verge reported that Musk’s legal team cited Twitter’s multimillion dollar severance payment to former security chief and whistleblower Peiter Zatko as a violation of the merger agreement and a reason to end the deal. The letter was dated September 9, and sent to Twitter’s chief legal officer Vijaya Gadde.

According to The Verge, Twitter responded Musk and company on September 12, saying, “As was the case with both your July 8, 2022 and August 29, 2022 purported notices of termination, the purported termination set forth in your September 9, 2022 letter is invalid and wrongful under the Agreement… Twitter has breached none of its representations or obligations under the Agreement.”

Personally, I think this back-and-forth between Twitter and Elon Musk is getting tiring. I cannot see a way for them to work things out that results in making both sides happy. To me, this bickering between the two comes across as petty and annoying. Good luck to the judge who has to make the decision about how this mess gets resolved!

Elon Musk Has A New Reason To End His Twitter Takeover

A lawyer for Elon Musk argued in a letter Friday to Twitter Inc. that a roughly $7 million payment the company made to a whistleblower gives the billionaire more ammunition to walk away from a $44 billion deal to buy the social-media business, The Wall Street Journal reported.

Twitter agreed in June to pay a settlement to Peiter Zatko, who served as the company’s security head before being fired in January. The settlement was completed days before Mr. Zatko filed his whistleblower complaint in July, in which he accuses the company of failing to protect sensitive user data and lying about security problems, The Wall Street Journal first reported.

According to The Wall Street Journal, Twitter has denied the allegations and said Mr. Zatko was fired “for ineffective leadership and poor performance.”

Twitter didn’t reach out to Mr. Musk for consent before making the $7.75 million in payments to Mr. Zatko and his counsel, said Mr. Musk’s lawyer Mike Ringler, of Scadden, Arps, Slate, Meagher & Flom LLP. He also said Mr. Musk first learned of the payment when Twitter filed the separation agreement with Mr. Zatko in court last week where he is fighting with Twitter over his effort to abandon the deal.

The Verge reported that Elon Musk has sent a third letter to Twitter attempting to terminate his $44 billion acquisition of the company. According to The Verge, the letter was dated September 9th, was sent to Twitter’s chief legal officer Vijaya Gadde, and was used in a filing Twitter made with the SEC on Friday. The Verge has embedded a copy of the letter in their article.

So far, Elon Musk has attempted several times to end his deal with Twitter. In July of 2022, Elon Musk’s camp concluded that Twitter’s figures on spam accounts were not verifiable. Twitter responded that spam accounts make up less than 5% of the company’s daily monetizable users, which Twitter defines as daily users who are logged in and authenticated by Twitter.

Also in July of 2022, Elon Musk sought to terminate his deal by claiming that Twitter breached the terms of the deal by not being forthcoming about critical business information as it pertains to bots. He also requested that Twitter give him access to its “firehose” or stream of tweets.

In August, a judge rejected Elon Musk’s “absurdly broad” Twitter data request for years of data about Twitter Inc.’s spam and fake accounts. However, the judge ordered Twitter to provide a subset of the information to Mr. Musk’s lawyers.

And now, Elon Musk claims that the money that Twitter paid Pieter Zatko was a violation of the merger agreement and a reason to end the deal. Mr. Musk appears to be having a “buyer’s remorse” over his decision to buy Twitter.

Judge Rejects Elon Musk’s “Absurdly Broad” Twitter Data Request

A Delaware judge called Elon Musk’s request for years of data about Twitter Inc.’s spam and fake accounts “absurdly broad” but ordered the social-media company to provide a subset of the information in the continuing legal battle over the billionaire’s soured $44 billion takeover, The Wall Street Journal reported.

Chancellor Kathaleen McCormick said in a decision Thursday that the request by Mr. Musk’s legal team to compel the company to produce “trillions upon trillions of data points” for more than 200 million users was overly burdensome and “no one in their right mind has ever tried to undertake such an effort.”

According to The Wall Street Journal, the judge ordered Twitter to produce a narrower section of the data requested, including a historical snapshot of accounts that were reviewed by the company to determine the number of spam and fake accounts on its platform, an issue central to the dispute over Mr. Musk’s effort to terminate the merger agreement and substantiate his counterclaim of fraud.

The Washington Post reported that Musk had been angling to exit the deal since he terminated his agreement in July, after agreeing to purchase the social media giant for $44 billion in April. Twitter sued shortly after, followed by a countersuit from Musk.

According to The Washington Post, Musk’s team had been seeking information that could more deeply reveal Twitter’s internal methodologies and understanding of the bot issue. Musk’s lawyers referenced a whistleblower complaint obtained by The Washington Post during a Wednesday hearing, in which former head of security Peiter Zatko alleges Twitter was not incentivized to accurately count bots and spam.

The Verge reported that Musk’s lawyers wanted “all of the data Twitter might possibly store for each of the approximately 200 million accounts included in its mDAU count every day for nearly three years,” covering trillions of data points, McCormick wrote in her ruling “Plaintiff [Twitter] has difficulty quantifying the burden of responding to that request because no one in their right mind has ever tried to undertake such an effort. It suffices to say, Plaintiff has demonstrated that such a request is overly burdensome.”

Personally, I think this push for “all the data Twitter might possibly store” for three years is a tactic being used by Musk’s lawyers in an effort to get out of the $44 billon agreement that he signed with Twitter. I believe that Elon Musk is very likely going to be willing to spend whatever it takes to sever himself from the deal that he signed with Twitter – and then changed his mind about. In this situation, it appears Musk and his lawyers want to be as annoying as possible – until Musk gets what he wants.

According to The Verge, however, the judge partially agreed to Twitter’s request for documents from Musk’s side as Twitter pursues information on data analysis Musk performed before he attempted to exit the deal. “At a minimum, Defendants must produce the Analyses,” writes [Judge] McCormick, as well as identification of related information on a privilege log so that Twitter’s lawyers could request access to specific documents.

Twitter Former Security Chief Claims Twitter Misled Regulators

Twitter executives deceived federal regulators and the company’s own board of directors about “extreme, egregious deficiencies” in its defenses against hackers, as well as its meager efforts to fight spam, according to an explosive whistleblower complaint from its former security chief, The Washington Post reported.

According to The Washington Post, the complaint from former head of security Peiter Zatko, a widely admired hacker known as “Mudge,” depicts Twitter as a chaotic and rudderless company beset by infighting, unable to properly protect its 238 million daily users including government agencies, heads of state and other influential public figures.

The Washington Post obtained a copy of the complaint, which states that Twitter violated the terms of an 11-year-old settlement with the Federal Trade Commission by falsely claiming that it had a solid security plan. Zatko’s complaint alleges he had warned colleagues that half of the company’s servers were running out-of-date and vulnerable software and that executives withheld dire facts about the number of breaches and lack of protection for user data, instead presenting directors with rosy charts measuring unimportant changes.

The Wall Street Journal reported that the complaint from Peiter Zatko was filed to the Securities and Exchange Commission, the Federal Trade Commission and the Justice Department, which are expected to investigate. It was also sent to lawmakers on the Senate Judiciary and Intelligence committees, who pledged to conduct their own investigations.

According to The Wall Street Journal, Mr. Zatko’s decision to publicize his complaint is unusual for SEC whistleblowers, whose identities are kept secret by the SEC. Some whistleblowers choose to go public with their allegations because it can create more political and public support for an investigation.

Senator Dick Durbin (Democrat – Illinois) tweeted the following in response to a tweet from the Washington Post about their article: “The whistleblower’s allegations of widespread security failures at Twitter, willful misrepresentations by top executive to government agencies, and penetration of the company by foreign intelligence raise serious concerns.”

Senator Dick Durbin continued in a second tweet: “If these claims are accurate, they may show dangerous data privacy & security risks for Twitter users around the world. As Chair of @JudiciaryDems, I will continue investigating this issue and take further steps as needed to get to the bottom of these alarming allegations.”

Twitter has not responded to either The Washington Post nor The Wall Street Journal. However, Donie O’Sullivan – a CNN Correspondent – tweeted a copy of a letter that CEO of Twitter Parag Agrawal sent to staff.

“There are news reports outlining claims about Twitter’s privacy, security, and data protection practices that were made by Mudge Zatko, a former Twitter executive who was terminated in January 2022 for ineffective leadership and poor performance. We are reviewing the redacted claims that have been published, but what we’ve seen so far is a false narrative that is riddled with inconsistencies and inaccuracies, and presented without important context.

“…Given the spotlight on Twitter at the moment – we can assume that we will continue to see more headlines in the coming days… We will pursue all paths to defend our integrity as a company and set the record straight…”

To me, it sounds as though Twitter realizes that this situation is serious, and is trying to encourage its staff to stick around. The CEO appears to be very concerned that things are going to get rough for Twitter as more news sites report about the whistleblower’s information.

Personally, I think Twitter might actually be headed for trouble this time. It will be investigated by the SEC, the Federal Trade Commission, the Senate Judiciary Committee, and the Justice Department. There is a chance that at least one of these investigative groups might find reasons to prosecute Twitter.

Twitter Warns Staff Of Potential Cuts To Employee Bonuses

Twitter logoTwitter warned staff that the size of bonus payments this year was at risk because of financial difficulties, adding to belt-tightening measures tech companies are implementing during an economic downturn, The Wall Street Journal reported.

According to The Wall Street Journal, Twitter told its employees that it had “experienced significant challenges” to revenue since January. It linked those to a variety of factors, including problems in the global economy and others tied to uncertainty over Elon Musk’s $44 billion acquisition of the social-media platform, which the billionaire is trying to abandon.

Social-media businesses that rely heavily digital advertising for their sales have been among the tech companies hardest hit by the economic downturn, which has caused some companies to curtail ad spending. It has also caused several social-media companies to reassess their priorities, The Wall Street Journal reported.

The New York Times reported that Twitter warned its employees on Friday that they might receive only half of their typical annual bonuses as the social media company grapples with economic uncertainty.

According to The New York Times, Twitter, which is fighting a legal battle to complete a $44 billion sale to Elon Musk, made the announcement in an email to employees and blamed its financial performance for the potential bonus cut. When the company reported quarterly earnings last month, its revenue declined for the first time since 2020 and it swung to a net loss.

The New York Times also wrote that advertisers, who generate most of Twitter’s revenue, have been skittish as economic fears over the war in Ukraine tamp down spending and Mr. Musk’s acquisition bid generates uncertainty about the company’s future.

In an email to employees on Friday, Ned Segal, Twitter’s chief financial officer, said these challenges would probably affect the annual bonuses that they receive, with the bonus pool currently at 50 percent of what it could be if the company met its financial targets, according to two employees who received the message. The figure could fluctuate throughout the year, based on bonuses to its performance against revenue and profitability goals.

The New York Times reported that a Twitter spokesperson confirmed the accuracy of the email and declined further comment. According to The New York Times, Twitter has slowed hiring and reduced its real estate footprint.

Business Insider reported that Twitter, Meta, Alphabet, and other platforms that rely at least in part on digital advertising for revenue are grappling with a downturn in the ad market amid fears of recession.

It sounds like Twitter is just one of the social-media companies that are having trouble because of its reliance on ad revenue. Perhaps this could lead social-media companies to move away from ads – and towards features that are seen as useful and interesting to consumers.

There was a time when ads were enough to sustain revenue for the big social media companies. Today, that plan feels very outdated, especially since Apple’s Add Tracking Transparency allows people to learn exactly what data the social media apps on their phone want to grab – and to opt-out of it.

Twitter-Musk Lawsuit Scheduled For October

Twitter won its first legal fight against Elon Musk on Tuesday when a Delaware judge granted the company’s request to fast-track its lawsuit seeking to compel the world’s richest person to complete his $44 billion purchase of the social-media site, The Wall Street Journal reported.

According to The Wall Street Journal, Chancellor Kathaleen St. Jude McCormick, the chief judge of the Delaware Chancery Court, ordered a five-day trial in October, over Mr. Musk’s objections. Chancellor McCormick said the case should be resolved quickly, agreeing with Twitter’s claim that it could be harmed by uncertainty about its future as a public company.

“Those concerns are on full display in the present case,” Chancellor McCormick said. “Typically, the longer the merger transaction remains in limbo, the larger the cloud of uncertainty cast over the company and the greater the risk of irreparable harm to the sellers.”

The Verge reported: This is a win for Twitter, which asked for a shorter timeframe than Musk. The trial will be five days – longer than Twitter asked for but shorter than Musk did. The exact dates have not yet been scheduled.

According to The Verge, Twitter’s counsel said that Musk’s conduct was “inexcusable.” Musk has held up an employee retention plan and is engaging in “needless value destruction”. Musk’s lawyers suggested that Twitter was giving Musk the run-around with bot data. Both teams of lawyers agreed that Musk’s team had run millions of queries on Twitter’s firehose, a real-time feed of Tweets as they are sent.

The Verge contributed the 62-page lawsuit to DocumentCloud.

Politico reported: This lawsuit marks the latest in a monthlong back-and-forth between Twitter and Musk over his April offer to buy the platform for $54.20 per share and take the company private. Market conditions have since depressed Twitter’s value. Musk is trying to get out of the deal over claims that the company has failed to cooperate with his endeavors to determine the number of fake accounts on the platform.

According to Politico, a Twitter spokesperson said the company is “pleased that the court agreed to an expedite the trial.” Twitter’s attorney William Savitt said during the Tuesday hearing, “Musk has been and remains contractually obligated to use his best efforts to close this deal. What he’s doing is the exact opposite of best efforts.”

The Guardian reported that on July 8, Musk said he was terminating the deal for three broad reasons: Twitter had breached the agreement by failing to provide enough information on spam accounts; that it had misrepresented the number of spam accounts in its disclosures to the US financial watchdog; and that it had breached the agreement by failing to consult with him when firing senior employees recently.

Based on what I’ve read on Twitter, there are Elon Musk fans who hope that Elon Musk will buy Twitter, because they believe he will never ban any content or account from the site. There are also people who said they will leave Twitter if Elon Musk buys it.

Judge In Twitter v. Musk Trial Schedules Hearing

The judge overseeing Twitter Inc.’s $44 billion lawsuit against Elon Musk has a no-nonsense reputation as well as the distinction of being one of the few jurists who has ever ordered a reluctant buyer to close a U.S. corporate merger, Reuters reported.

According to Reuters, Kathaleen McCormick took over the role of chancellor or chief judge of the Court of Chancery last year, the first woman assigned that role. On Wednesday, July 13, she was assigned the Twitter lawsuit which seeks to force Musk to complete his deal for the social media platform, which promises to be one of the biggest legal showdowns in years.

Reuters also reported that, in contrast to Elon Musk’s volatile behavior, Chancellor Kathaleen McCormick is known for being soft-spoken, approachable and amiable – but a person who stands her ground. She advocates respect among litigants and integrity at legal conferences.

The Chancellor has scheduled the first hearing for Friday, July 19, in Wilmington, where she will consider Twitter’s request to expedite the case and conduct a four-day trial in September.

The Wall Street Journal reported that lawyers for Mr. Musk filed papers with the Delaware Chancery Court, their first public response to the lawsuit filed earlier this week by the social-media company seeking agreement to enforce the terms of their merger agreement. Should the court reject Twitter’s “unjustifiable request to rush this,” they said in their filing.

According to The Wall Street Journal, Twitter asked the court to expedite the proceedings, citing risks from the recent economic downturn and being held in limbo by a buyer. The company requested a trial by mid-September “to protect Twitter and its stockholders from the continuing market risk and operational harm resulting from Musk’s attempt to bully his way out of an airtight merger agreement.”

TechCrunch reported that with Twitter pressing for a quick trial, Elon Musk’s lawyers are making a case to slow things down. TechCrunch also reported: Twitter, likely tired of being in limbo as the drama drags on, requested that the trial be expedited with a start date as soon as September.

According to TechCrunch, in the lawsuit Twitter filed against Elon Musk, Twitter argued that it would only need four days to prove that the court should require Musk to follow through with his agreement to buy it for $44 billion. Twitter stated that not only was Elon Musk trying to back out of the deal but also was dragging the social network through the mud in the process.

Elon Musk’s lawyers reportedly responded that the case will require “forensic review and analysis” of a deep pool of data, referring to his argument that Twitter undercounts its number of spam and otherwise fake accounts. The lawyers for Elon Muck are aiming for a February 13, 2023 trial date.

It appears that the Chancellor assigned to this case “stands her ground”, which could potentially make this case shorter than expected. There are two potential outcomes. The court forces Elon Musk to make good on his offer to buy Twitter. Or, the court decides that Musk’s lawyers show valid reason for him to abandon his offer. Until then, people who use Twitter will probably speculate widely about how they think this case will end.