Elon Musk says he’s putting the Twitter deal 'on hold.' What does that even mean?

The answers to all the Musk-iest Twitter acquisition questions.

Elon Musk with little Elon Musk Twitter birds flying out of his mouth

Keep in mind that Elon Musk isn't exactly known for telling the truth.

Photo illustration: Getty Images; Unsplash; Protocol

Elon Musk can tweet anything he likes, because he’s Elon Musk, and he’s buying Twitter, and free speech is awesome. What he can’t do is make false tweets true.

Musk said Friday that the Twitter deal was temporarily on hold while he looked into a report that spam bots and other fake accounts made up less than 5% of its users. He added, hours after his first tweet, that he was “still committed to [the] acquisition.” Investors promptly sold off shares of Twitter, thinking that Musk’s words somehow had meaning, embodied intent or otherwise had an impact on the world. They did not, eppur si muove, and yet the stock market moved.



Keep in mind that Musk is a lying liar who lies, a documented serial hyperbolist, a free-wheeling fabulist and also a person who says things that are not true, routinely.

So let’s answer a few questions you might have.

Can Musk put the Twitter deal on hold?

No. First, “on hold” has no meaning here. The deal must be consummated by Oct. 24, according to his agreement with the company. Between now and that date, Musk can say the deal is “on hold” or “steaming ahead” or “just scrumptious.” None of those statements would have any meaning. Under the agreement, it’s binary: Either he does the deal or he doesn’t.

Can Musk say things like this without getting in trouble with the SEC or Twitter?

He most likely won’t face trouble from either. Musk is perfectly in his rights to seek information from Twitter: That’s a normal part of any deal. What’s not normal is announcing to the world that he’s doing it.

The SEC has gone after Musk for tweeting about his companies before, but those involved specific claims about having funding secured to take Tesla private or sharing misleading details about car deliveries.

In 2013, the SEC clarified that Regulation FD, its rules for disclosures to investors, could apply to social media, provided that companies advised investors where they should look. Musk’s agreement with Twitter and his other filings specifically mention he might tweet about the deal, which seems like reasonable notice to investors that they should follow his Twitter account.

Twitter might be able to argue that declaring the deal “on hold” constituted a violation of the merger agreement. Section 6.8, Public Announcements, holds that both parties must consult with each other before making statements about the deal. However, it allows for Twitter and Musk to discuss a “dispute between the parties.”

It also offers Musk a big carve-out to tweet as he likes: “Notwithstanding the foregoing, the Equity Investor shall be permitted to issue Tweets about the Merger or the transactions contemplated hereby so long as such Tweets do not disparage the Company or any of its Representatives.”

Twitter did not respond to a request for comment on Musk’s statements.

Did Musk disparage Twitter?

Kind of, in implying that Twitter’s regulatory filing about spam bots might have been false or misleading. But he only asked to see the “details supporting [the] calculation” that bots comprise less than 5% of Twitter’s users.

It would be a big deal if Twitter’s filing were indeed false. Besides potentially violating terms of its agreement with Musk, Twitter could face sanctions from the SEC and lawsuits by investors.

That said, Musk has actively attacked two company lawyers, Vijaya Gadde and Jim Baker, sending waves of trolls after them. Twitter hasn’t offered any public support for its executives or commented on whether it considered that a violation.

Is Musk trying to get out of the deal?

As we noted, he said Friday that he’s still “committed” to the deal. He’d have to pay Twitter $1 billion if he broke things off, and Twitter could also pursue a term called “specific performance,” basically compelling Musk to go through with the deal. Musk is also reportedly seeking more equity funding to lessen the amount he’ll have to borrow against his Tesla stake, which doesn’t seem like something he’d do if he were trying to weasel his way out.

There are very limited circumstances in which Musk can cancel the deal and have Twitter instead pay him a $1 billion breakup fee, and those mostly center around the possibility of a superior bid. With the stock market melting down, Twitter’s board is looking smart every day for taking Musk’s $54.20 per share offer; it has little incentive to bust up the deal.

Is Musk going to get in trouble for this tweet?

The parties that might take action are Twitter investors, particularly those who sold their shares on the basis of his “on hold” statement. If the stock rebounds, they might argue that Musk caused them to take a loss based on misleading information.

The problem with that is that Musk could argue, as he did in his 2019 “pedo guy” defamation trial, that he’s just an “idiot,” and that any sensible investor would understand that he was bound by his agreement with Twitter and couldn’t actually put the deal on hold. It’s kind of like when he asked Twitter users to vote on whether he should sell some of his Tesla stake when he had actually planned the sale months before. You can’t ignore what Musk says, but you don’t have to believe it either.

Policy

How 'Zuck Bucks' saved the 2020 election — and fueled the Big Lie

The true story of how Mark Zuckerberg and Priscilla Chan’s $419 million donation became the 2020 election’s most enduring conspiracy theory.

Mark Zuckerberg is smack in the center of one of the 2020 election’s multitudinous conspiracies.

Illustration: Mike McQuade; Photos: Getty Images

If Mark Zuckerberg could have imagined the worst possible outcome of his decision to insert himself into the 2020 election, it might have looked something like the scene that unfolded inside Mar-a-Lago on a steamy evening in early April.

There in a gilded ballroom-turned-theater, MAGA world icons including Kellyanne Conway, Corey Lewandowski, Hope Hicks and former president Donald Trump himself were gathered for the premiere of “Rigged: The Zuckerberg Funded Plot to Defeat Donald Trump.”

Keep Reading Show less
Issie Lapowsky

Issie Lapowsky ( @issielapowsky) is Protocol's chief correspondent, covering the intersection of technology, politics, and national affairs. She also oversees Protocol's fellowship program. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University's Center for Publishing on how tech giants have affected publishing.

Sponsored Content

Why the digital transformation of industries is creating a more sustainable future

Qualcomm’s chief sustainability officer Angela Baker on how companies can view going “digital” as a way not only toward growth, as laid out in a recent report, but also toward establishing and meeting environmental, social and governance goals.

Three letters dominate business practice at present: ESG, or environmental, social and governance goals. The number of mentions of the environment in financial earnings has doubled in the last five years, according to GlobalData: 600,000 companies mentioned the term in their annual or quarterly results last year.

But meeting those ESG goals can be a challenge — one that businesses can’t and shouldn’t take lightly. Ahead of an exclusive fireside chat at Davos, Angela Baker, chief sustainability officer at Qualcomm, sat down with Protocol to speak about how best to achieve those targets and how Qualcomm thinks about its own sustainability strategy, net zero commitment, other ESG targets and more.

Keep Reading Show less
Chris Stokel-Walker

Chris Stokel-Walker is a freelance technology and culture journalist and author of "YouTubers: How YouTube Shook Up TV and Created a New Generation of Stars." His work has been published in The New York Times, The Guardian and Wired.

Fintech

From frenzy to fear: Trading apps grapple with anxious investors

After riding the stock-trading wave last year, trading apps like Robinhood have disenchanted customers and jittery investors.

Retail stock trading is still an attractive business, as shown by the news that crypto exchange FTX is dipping its toes in the market by letting some U.S. customers trade stocks.

Photo: Lam Yik/Bloomberg via Getty Images

For a brief moment, last year’s GameStop craze made buying and selling stocks cool, even exciting, for a new generation of young investors. Now, that frenzy has turned to fear.

Robinhood CEO Vlad Tenev pointed to “a challenging macro environment” marked by rising prices and interest rates and a slumping market in a call with analysts explaining his company’s lackluster results. The downturn, he said, was something “most of our customers have never experienced in their lifetimes.”

Keep Reading Show less
Benjamin Pimentel

Benjamin Pimentel ( @benpimentel) covers crypto and fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Google Voice at (925) 307-9342.

Enterprise

Broadcom is reportedly in talks to acquire VMware

It hasn't been long since it left the ownership of Dell Technologies.

Photo: Yichuan Cao/NurPhoto via Getty Images

Broadcom is said to be in discussions with VMware to buy the cloud computing company for as much as $50 billion.

Keep Reading Show less
Jamie Condliffe

Jamie Condliffe ( @jme_c) is the executive editor at Protocol, based in London. Prior to joining Protocol in 2019, he worked on the business desk at The New York Times, where he edited the DealBook newsletter and wrote Bits, the weekly tech newsletter. He has previously worked at MIT Technology Review, Gizmodo, and New Scientist, and has held lectureships at the University of Oxford and Imperial College London. He also holds a doctorate in engineering from the University of Oxford.

Podcasts

Should startups be scared?

Stock market turmoil is making VCs skittish. Could now be the best time to start a company?

Dark times could be ahead for startups.

Photo by Startaê Team on Unsplash

This week, we break down why Elon Musk is tweeting about the S&P 500's ESG rankings — and why he might be right to be mad. Then we discuss how tech companies are failing to prevent mass shootings, and why the new Texas social media law might make it more difficult for platforms to be proactive.

Then Protocol's Biz Carson, author of the weekly VC newsletter Pipeline, joins us to explain the state of venture capital amidst plunging stocks and declining revenues. Should founders start panicking? The answer might surprise you.

Keep Reading Show less
Caitlin McGarry

Caitlin McGarry is the news editor at Protocol.

Latest Stories
Bulletins