Here’s What’s Next for Elon Musk and Twitter: Live Updates – The New York Times


Twitter’s board has agreed to the takeover. Now comes shareholder approval and public scrutiny.
In tweets, Musk takes aim at Twitter executives, creating outrage.
Judge refuses to strike down Elon Musk’s settlement with the S.E.C. over his Twitter posts.
What Twitter’s deal documents tell us.
Musk may be about to sell some Tesla stock. How would that affect markets?
Those dedicated to limiting harmful posts worry about Twitter under Musk.
Why some traders are drawn to Twitter’s stock after it agreed to go private.
Elon Musk is making trouble on Twitter for Twitter’s executives.
Mr. Musk struck a $44 billion deal to buy the social media platform on Monday. He has said he wants to take the company private and promote more free speech on the platform. And while the transaction isn’t expected to close for three to six months, Mr. Musk did not hesitate to start making his feelings about Twitter’s executives known — on Twitter.
On Tuesday night, Mr. Musk began tweeting critically about Vijaya Gadde, Twitter’s top lawyer and safety expert, and Jim Baker, the deputy general counsel. Ms. Gadde has been instrumental in building up content policies at Twitter and was involved in last year’s decision to bar former President Donald J. Trump from the platform.
Mr. Musk responded to a tweet on Tuesday criticizing Ms. Gadde’s apparent response to Mr. Musk’s deal to buy Twitter. He also posted a critical comment about Mr. Baker’s past behavior.
Suspending the Twitter account of a major news organization for publishing a truthful story was obviously incredibly inappropriate
Sounds pretty bad …
Minutes later, Twitter users began tweeting abusive comments at Ms. Gadde and Mr. Baker, including racist and sexist attacks.
Mr. Musk tweeted again on Wednesday about Twitter’s content moderation policies, posting a photo of Ms. Gadde and essentially mocking the company’s speech rules.
pic.twitter.com/1CE7rjBrNH
Dick Costolo, who was Twitter’s chief executive from 2010 to 2015, weighed in on Wednesday to defend the Twitter executives.
“Bullying is not leadership,” Mr. Costolo tweeted. He also responded directly to Mr. Musk, writing, “what’s going on? You’re making an executive at the company you just bought the target of harassment and threats.”
Bullying is not leadership.
In what seemed to be a defense of employees, Parag Agrawal, Twitter’s chief executive, tweeted that he was “proud” of employees who worked to improve Twitter “despite the noise” surrounding the company.
I took this job to change Twitter for the better, course correct where we need to, and strengthen the service. Proud of our people who continue to do the work with focus and urgency despite the noise.
Some Twitter employees were not impressed with Mr. Agrawal’s statement. In private, workers grumbled that the chief executive wasn’t outspoken enough in defending them against what they felt was Mr. Musk’s bullying tactics, according to one current and one former employee. They were also frustrated with what they perceived to be Mr. Agrawal’s silence since the deal talks began three weeks ago.
Twitter declined to comment.
Mike Isaac contributed reporting.

Elon Musk could soon own Twitter, but his own use of the platform will remain constrained by a 2018 agreement he signed with securities regulators.
A federal judge in New York denied a request by Mr. Musk to end the agreement, which requires him to run his social media posts by a company lawyer if the statements contained material information about his electric car company, Tesla.
Mr. Musk had argued that the agreement to settle accusations of securities violations infringed on his right to freedom of speech and that the Securities and Exchange Commission had used the agreement as an excuse to “launch endless, boundless” investigations of his public statements. He claimed he accepted the settlement in the first place only because the litigation would have put too much financial pressure on Tesla.
“None of the arguments hold water,” Judge Lewis J. Liman of the U.S. District Court for the Southern District of New York wrote in a ruling issued Wednesday that dismissed Mr. Musk’s claims.
Mr. Musk’s assertion that he agreed to the S.E.C.’s conditions because of the financial burden was “wholly unpersuasive,” Judge Liman wrote. Mr. Musk, the judge said, “was already a multibillionaire in 2018 and one of the wealthiest individuals in the world.”
Alex Spiro, a lawyer at the firm Quinn Emanuel Urquhart & Sullivan who represents Mr. Musk, suggested that an appeal was likely.
“Nothing will ever change the truth, which is that Elon Musk was considering taking Tesla private and could have — all that’s left some half decade later is remnant litigation which will continue to make that truth clearer and clearer,” Mr. Spiro said in a statement, adding, “Stay tuned.” He declined to comment further.
The decision came two days after Twitter’s board agreed to sell the company to Mr. Musk for $44 billion — a transaction that still has to win the approval of shareholders. He had previously criticized the social network of censoring free speech and has said he thinks people should be allowed to speak more freely on Twitter, which in recent years has sought to restrict misinformation, hate speech and other problematic statements on its platform.
Tesla shareholders, who don’t get to vote on the Twitter acquisition, appear not to be in favor of Mr. Musk’s proposed acquisition. Tesla’s stock price has fallen 17 percent since the beginning of April. The drop reflects investor concern about Mr. Musk’s use of Tesla shares as collateral for bank loans and the risk that overseeing Twitter could distract him from the car business.
The court ruling was the latest round in Mr. Musk’s long-running battle with the S.E.C., an agency he has frequently mocked. The dispute at issue Wednesday has its roots in a Twitter post by Mr. Musk in 2018 asserting he had “secured” enough money to take Tesla private. It was later revealed that he had only had preliminary discussions with investors. The S.E.C. sued him for fraud.
As part of an agreement to settle that civil suit, Mr. Musk agreed to clear his social media posts with company lawyers. Mr. Musk, notorious for his freewheeling public statements, clearly chafed at the restriction and was accused of violating it several times.
Mr. Musk cannot get out of the agreement “by simply bemoaning that he felt like he had to agree to it at the time but now — once the specter of the litigation is a distant memory and his company has become, in his estimation, all but invincible — wishes that he had not,” Judge Liman wrote.

Twitter’s board approved Elon Musk’s $44 billion takeover offer this week, but the deal won’t be final until it’s put to a shareholder vote. Twitter has taken the first step in that process, filing its merger document with the Securities and Exchange Commission.
Here are a few things that caught the eye of the DealBook newsletter:
A $1 billion breakup fee. Twitter would have to pay Musk $1 billion if it enters into a deal with another bidder, and Mr. Musk would have to pay Twitter the same if financing for the deal falls apart. The fee, while large, is roughly 2.5 percent of the deal’s value, which is standard. In fact, given Mr. Musk’s unpredictability, many deal makers expected a larger termination fee. The smaller fee is perhaps a sign of the leverage Mr. Musk had.
Mr. Musk can tweet about the deal. But, according to the merger agreement, he can’t disparage Twitter or any of its employees. Is it an issue that Mr. Musk has already criticized Twitter employees? Disparage is “in the eye of the beholder,” Eleazer Klein of the law firm Schulte Roth & Zabel told DealBook. “The only way that’s going to really play out is if someone wants to go to court and fight over it,” he said. “And what are they going to do? They’re going to terminate the agreement if he goes a little bit too close to the line?”
“Elon Musk” doesn’t count as a risk to the deal. It’s typical for deals to detail if there are unusual circumstances that would allow one of the parties to walk away without having to pay a breakup fee. Twitter’s merger deal, though, specifies at least one instance in which Mr. Musk wouldn’t be able to do that. According to the document, if Twitter loses all or most of its users before the deal “by reason of the identity of Elon Musk,” there is no backing out. (As the saying goes: You break it, you buy it.) Indeed, the day Twitter announced its agreement with Mr. Musk, it saw a lot of user churn.
The deal has an Oct. 24 “drop-dead date,” meaning both sides could walk away if a deal hasn’t closed by then. If the deal is still awaiting regulatory approval, Mr. Musk and Twitter would have another six months to close it. Regulators in the United States may examine Musk’s purchase of Twitter, but they are unlikely to sue to block it because it is not an example of a company buying a competitor. The deal may face tougher scrutiny in Europe, though, where officials warned yesterday that Twitter under Musk’s ownership would have to abide by the European Union’s new Digital Services Act, which requires social media companies to police content more aggressively. Mr. Musk recently pinned a tweet to his profile addressing his free speech philosophy: “By ‘free speech,’ I simply mean that which matches the law.”

When Elon Musk laid out the financing for his bid to buy Twitter, he promised to put up $21 billion in cash.
Even for Mr. Musk, who is worth well north of $200 billion, that’s a lot of cash to come up with. Most of his wealth is tied up in Tesla stock, and one of the most obvious ways to raise the money would be to sell some of those shares.
Given Tesla’s enormous market capitalization and its inclusion in major stock indexes, almost everybody with a 401(k) probably owns some Tesla stock. The potential for Mr. Musk to sell some of his holdings, and spend less time on Tesla as he shifts his focus to Twitter, has raised questions about the outlook for Tesla’s share price. The stock dived 12.2 percent on Tuesday, as the S&P 500 index fell 2.8 percent.
Tesla’s shares have lost about 20 percent of their value since Mr. Musk first revealed that he had bought a big stake in Twitter, kicking off takeover speculation. Jim Cramer, the frenetic host of CNBC’s “Mad Money,” accused Tesla of “hurting this market pretty badly.”
It’s too early to know. Such sales would have to be reported to the Securities and Exchange Commission, but those reports are not instantaneous. Sales can take a few days to be made public.
Even a sale of a huge portion of Mr. Musk’s Tesla stock would be unlikely to affect Tesla’s share price for too long.
Mr. Musk is Tesla’s biggest shareholder, holding about 17 percent of the company’s shares — about 175 million shares in total.
He would need to sell nearly 24 million shares at Tuesday’s price to generate $21 billion in cash. That’s about an average day’s trading volume for Tesla stock — a lot, but not enough to overwhelm the market. On Tuesday, about 45 million shares were bought and sold.
Mr. Musk’s financing package for Twitter also includes $12.5 billion in loans using his Tesla shares as collateral. If Tesla’s stock falls far enough, lenders would require Mr. Musk to add collateral to support the loans, potentially forcing him to sell more stock to come up with the cash.
Mr. Musk has sold off large tranches of Tesla’s stock before. Last year, he sold some 15 million shares, worth more than $16 billion, over two months. Those sales did not appear to measurably drive Tesla’s price down, though it’s unknowable whether the price would have gone up had he not been selling.
Tesla is a component in both the S&P 500 and the Nasdaq composite index. In addition to being barometers of how stocks in the United States are performing, both indexes are mirrored by numerous mutual funds that are invested in widely.
The S&P 500, considered the benchmark U.S. index, weights companies according to their market value. Tesla, which is worth about $900 billion, is one of the most influential stocks in the index.
For every dollar that Tesla’s stock dropped on Tuesday, the S&P 500 lost 0.099 points, according to Howard Silverblatt, a senior index analyst at S&P Dow Jones Indices. That means the drop in Tesla’s stock accounted for nearly a tenth of the S&P 500’s fall on Tuesday.
“So it did have a very large impact,” Mr. Silverblatt said, but “not the highest.” Apple, with nearly three times the valuation of Tesla, has far more impact. Its stock’s drop of 3.7 percent on Tuesday contributed more to the overall index’s decline.
Tesla is a famously volatile stock. Tuesday’s 12.2 percent fall was its worst daily decline since Sept. 8, 2020, when it shed about 21 percent of its value. But in the past six months, Tesla shares have twice fallen nearly 12 percent, on Nov. 9 and Jan. 27.
Some — including Mr. Musk, at times — have suggested that Tesla is overvalued. Among those who believe in Tesla’s valuation, which is much higher than rival automakers’ relative to the size of its operations, a lot of the argument depends on Mr. Musk’s stewardship. Even Tesla acknowledges this, stating as a risk in its most recent quarterly report: “We are highly dependent on the services of Elon Musk, techno-king of Tesla and our chief executive officer. Although Mr. Musk spends significant time with Tesla and is highly active in our management, he does not devote his full time and attention to Tesla.”
A lot about Mr. Musk’s plan to buy Twitter is unknown, including how involved he would be. “Tesla investors are worried that Musk might spend too much time trying to fix the social media giant’s problems and that will take away his laserlike focus” on Tesla, said Edward Moya, a senior market analyst at OANDA.
Or as Mr. Silverblatt put it: “It’s anticipation of something that hasn’t occurred yet. It will be a while before we know anything.”

SAN FRANCISCO — After Brianna Wu, a software engineer and game developer, faced violent threats on Twitter in 2014 as part of a virulent campaign that came to be known as “Gamergate,” she worked with the company to build tools to expunge misogyny, violence and disinformation online.
Today she worries that all of that could be undone by Twitter’s new owner: Elon Musk, the world’s richest man, who reached a deal to buy Twitter this week for roughly $44 billion.
Mr. Musk’s vow to protect free speech as he “unlocks” the company’s potential has raised alarms among those who have in some cases devoted careers to fighting the toxic and at times dangerous flow of misinformation and disinformation.
Although his exact plans remain unclear, they cite his promises to remove barriers to free speech, as well as his own record of provocative, at times insulting, statements on Twitter, including calling a British diver involved in the 2018 rescue of children trapped in a cave in Thailand a pedophile.
“I think it’s going to just be an increasing free-for-all,” Ms. Wu said in a telephone interview.
For Media Matters for America, the liberal-leaning research organization, reasons for concern could be found in the celebratory responses from people Twitter had expunged from the platform for violating its rules of behavior.
They include prominent conservative figures like Steve Bannon and Representative Marjorie Taylor Green; the broadcaster Infowars; and even a QAnon figure called “Clandestine,” who helped spread a Russian conspiracy theory about American biological weapons labs in Ukraine.
Angelo Carusone, the president of Media Matters for America, said that Mr. Musk would have the power as Twitter’s sole owner to unwind many of the efforts that have put the company in the vanguard of social media companies when it came to restricting harmful or hateful abuses.
In a tweet, he compared Mr. Musk’s takeover to the launching of Fox News in the name of providing a balance to what its founders, Rupert Murdoch and Roger Ailes, viewed as the “liberal media.”
1/ Musk acquiring Twitter has a lot of parallels to Roger Ailes/Murdoch starting Fox News in late 90s. When they started Fox News, they saw it as the balance to the "liberal media." Similarly, Musk sees Twitter as the balance to the rest of social media disinfo/extremism policies
Though smaller than other platforms — with 217 million daily users, compared with billions on Facebook and Instagram — Twitter’s moderation efforts had served as an example that campaigners like Mr. Carusone could point to when urging other companies to do more to rein in dangerous misinformation.
“Do I think Elon Musk is going to be a vanguard about addressing the problems of disinformation and rising extremism? No, I just don’t,” he said, adding, “I think there’s a very strong case to be made that there’s going to be a dilution of whatever policies Twitter has had in place.”
Mr. Musk’s fortune and celebrity — he is also behind Tesla and SpaceX — will give him a powerful bully pulpit in the roiling debates over the limits of free speech, which he called “the bedrock of a functioning democracy” in a statement on Monday announcing the purchase.
He could also face financial and political constraints, like a new law by the European Union to require social media platforms to scrub their sites of misinformation and abuse. That could temper some of the “sky is falling” fears of his takeover.
At least one idea he has floated, making public the algorithms the company has designed, echoes those put forward by people in favor of reducing harmful content.
They include, most prominently, former President Barack Obama, who last week outlined a vision for combating disinformation at a conference at Stanford University that included subjecting algorithms to greater scrutiny and regulation.
“The real problem,” said Rachel Goodman, counsel for Protect Democracy, a nonpartisan nonprofit, “is that the future of how we share and advance knowledge and debate the issues central to our democracy shouldn’t depend on whether a single person in control is a superhero or supervillain.”

Twitter agreed on Monday to sell itself to Elon Musk for $54.20 per share. But investors could still buy the stock for less. In fact, shares of Twitter fell nearly 4 percent on Tuesday, the day after the deal was announced, to less than $50 per share.
For investors thinking of buying Twitter’s stock before Mr. Musk takes the company private, that gap is enticing.
When the 10-year Treasury bond yields 2.7 percent, and the stock market looks increasingly risky given rising interest rates, a slowing economy and war in Europe, the potential gain from buying Twitter’s shares now and holding them in hopes that a deal closes may seem worth it. If Mr. Musk successfully closes his acquisition of Twitter, investors would receive $54.20 for each share that they own, 9 percent higher than Tuesday’s closing price.
Source: Sentieo
By The New York Times
It’s not unusual for the shares of an acquisition target, like Twitter, to trade for less than what a suitor has promised to pay for them. The gap reflects the risks that an announced deal may not become official, for a variety of reasons. Trying to make money off that gap is known as merger arbitrage.
Often, institutional investors sell shares of an announced acquisition target after the initial “pop” in its shares and so-called arb investors step in. With Twitter, a number of individual investors are making this bet. Twitter was the second-most traded stock on Tuesday among Fidelity’s self-directed retail customers, which do not include mutual funds or retirement accounts. (The first was Tesla.) There were more than twice as many orders to buy than to sell Twitter’s stock.
Many acquisitions take a while to close, as the final paperwork, regulatory reviews and other tasks are completed. The longer a deal takes to close, the higher the risk that something might go wrong and the lower the annualized return on the trade.
A deal can break down because financing dries up, regulators block it or some other unforeseen event derails it. In that case, a company’s stock often falls far below the offer price and arb investors lose out. Since Mr. Musk disclosed that he had bought a large stake in Twitter, the company’s stock is up 26 percent.

In many ways, Elon Musk uses Twitter like the rest of us. He likes to joke around, but he isn’t as funny as he thinks he is; he overshares and loves memes; he occasionally goes too far and gets himself in trouble; he seems to think the platform is unfairly suppressing the views of people with whom he identifies. Thanks to the flattening effects of Twitter, the only real difference between the site’s median user and Mr. Musk is about $257 billion and 85.4 million followers.
Willy Staley, a story editor for The New York Times Magazine who recently edited a special issue about billionaires, writes that what he finds so unsettling about the deal is the strong sense that — even at its most anodyne — it’s an act of vanity, a means of improving the personal experience of one user of the agora.
And this is what’s so dizzying about living in a society with individuals who control so much wealth, he writes: Their whims can be made into reality with startling ease — and their whims can be shaped by the same dumb websites we all use to waste company time. It’s not as if Twitter was run like a kibbutz beforehand, but it responded to a diverse web of stakeholders: Wall Street, customers, users, the press, governments, etc. And now, one $44 billion lark later, it will respond to one man whose frankly complex relationship to the site’s services is apparent to anyone who cares to look.
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