Tag 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.

Social Media Companies Killed A California Bill To Protect Kids

California lawmakers killed a bill Thursday that would have allowed government lawyers to sue social-media companies for features that allegedly harm children by causing them to become addicted, The Wall Street Journal reported.

According to The Wall Street Journal, the measure would have given the attorney general, local district attorneys and city attorneys in the biggest California cities authority to try to hold social-media companies liable in court for features that knew or should have known could addict minors. Among those targeted could have been Facebook and Instagram parent Meta Platforms, Inc., Snapchat parent Snap Inc., and TikTok, owned by Chinese company ByteDance Ltd.

In June of 2022, Meta (parent company of Facebook and Instagram) was facing eight lawsuits filed in courthouses across the US that allege that excessive exposure to platforms including Facebook and Instagram has led to attempted or actual suicides, eating disorders and sleeplessness, among other issues. More specifically, the lawsuits claim that the company built algorithms into its platforms that lure young people into destructive behavior.

The Wall Street Journal also reported that the bill died in the appropriations committee of the California state senate through a process known as the suspense file, in which lawmakers can halt the progress of dozens or even hundreds of potentially controversial bills without a public vote, based on their possible fiscal impact.

The death of the bill comes after social media companies worked aggressively to stop the bill, arguing that it would lead to hundreds of millions of dollars in liability and potentially prompt them to abandon the youth market nationwide. Meta, Twitter Inc., and Snap all had individually lobbied against the measure according to state lobbying disclosures.

This doesn’t mean that a similar bill cannot be passed by the federal government. Politico reported earlier this month that the Commerce Committee advanced the floor considerations for two bills: It approved the Children and Teens’ Online Privacy Protection Act on a voice vote and the Kids Online Safety Act by a unanimous 28-0.

According to Politico, The Kids Online Safety Act was co-sponsored by Richard Blumenthal (Democrat – Connecticut) and Marsha Blackburn (Republican – Tennessee). That bill, if passed, would require social media platforms to allow kids and their parents to opt out of content algorithms that have fed them harmful content and disable addictive product features.

The Children and Teens’ Online Privacy Protection Act was sponsored by Bill Cassidy (Republican – Louisiana) and Ed Markey (Democrat – Massachusetts). That bill, if passed, would extend existing privacy protections for preteens to children up to age 16 and bans ads from targeting them. It would also give kids and their parents the right to delete information that online platforms have about them.

Personally, I think that parents of children and teenagers who have allowed their kids to use social media should have complete control over preventing the social media companies from gathering data on their children. Huge social media companies need to find other ways of sustaining revenue that doesn’t involved mining underage people in the hopes of gaining money from ads.

Elon Musk Sells $7.92 Million Tesla Shares Worth $6.88 Billion

How are things going with the Twitter – Musk lawsuit, that is scheduled for October of 2022? Signs point to it not going very well for Elon Musk, who wants to terminate his $44 billion deal to buy Twitter.

CNBC reported that Tesla CEO Elon Musk sold 7.92 million shares of Tesla worth around $6.88 billion, according to a series of financial filings published Tuesday night. According to CNBC, Musk’s transactions occurred between Aug. 5 and 9, the SEC filings revealed, following Tesla’s 2022 annual shareholder meeting on August 4 in Austin, Texas.

The centi-billionaire is in the midst of a contentious legal battle with Twitter, the social networking giant he agreed to acquire in April for about $44 billion or $54.20 per share, CNBC reported.

The Wall Street Journal reported the Tesla boss has been on a selling spree over the past year, during which he has cashed out roughly $32 billion worth of shares in the electric-vehicle maker. That includes around $8.5 billion of sales in April, while Mr. Musk was lining up to take over Twitter. At the time, he tweeted: “No further TSLA sales planned after today.”

According to The Wall Street Journal, Mr. Musk has since tried to walk away from buying Twitter, which is suing him to enforce the takeover. If the judge were to force Mr. Musk to consummate the transaction, he could be on the hook for more than $33 billion in equity financing, according to a regulatory filing. He already owns 9% of Twitter, valued at roughly $3 billion at $54.20 a share, Mr. Musk’s buyout price.

If the Twitter deal doesn’t close, Mr. Musk would buy Tesla stock again, he said. He also suggested he might set up his own social media platform – X.com – if the deal falls through. He said before agreeing to buy Twitter that he was “giving serious thought” to such an endeavor, the Wall Street Journal reported.

In March, Reuters reported that Elon Musk was giving “serious thought” to build new social media platform. This was in response to a Twitter user’s question on whether he would consider building a social media platform consisting of an open source algorithm and one that would prioritize free speech, and where propaganda was minimal.

Reuter’s also reported that none of the other social media companies, including Donald Trump’s Truth Social, Twitter competitors Gettr and Parler and video site Rumble have come close to matching the reach and popularity of the mainstream platforms so far.

If I had to guess, I would say that the judge who is presiding over the Twitter-Musk lawsuit is going to force Elon Musk to consummate the transaction to buy Twitter. If that happens, I expect there will be dramatic changes to how Twitter functions, and who it attracts.

However, if Musk’s lawyers can make a convincing case that causes the judge to allow him to opt-out of the transaction to buy Twitter – I suppose that would leave Mr. Musk open to starting his own social media company.