Deal or no deal?
Good morning! Elon Musk really does not want to buy Twitter, at least if his constant harping on spam bots is any indication. Will that exit strategy work? Also: While everyone is waiting for Apple to reveal its next big device, at WWDC it's all about what wasn’t said. Happy Tuesday! Let’s get down to business.
Musk wants out
Elon Musk doesn’t want to own a company with a spam bot problem. And now, he’s claiming that he has the right to call his Twitter takeover quits because the company won’t give him the information he wants on the issue, according to a new SEC filing. But can Musk actually make this case?
Musk claims Twitter denied him information about the platform’s spam bots, which would violate the terms of the merger agreement.
- His letter states that Twitter needs to give Musk data about Twitter’s bot and spam accounts so he can conduct his own analysis of the issue.
- His lawyers denied Twitter’s claim that Musk only needs information for the “very specific purpose” of closing the deal, saying Musk is entitled to information for “any reasonable business purpose related to the consummation of the transaction,” as stated in the deal.
But will this argument actually get him out of the deal? The short answer is no, according to finance and securities law experts.
- Musk has two ways out of the acquisition: One would be a regulatory holdup, which doesn’t look likely now that the FTC’s window to intervene has closed. The other would be if Musk doesn’t gather enough debt funding for the deal to happen, in which case he’d pay Twitter $1 billion and break up with the company once and for all.
- “Musk does not have any ground to stand on to void the agreement that he signed,” said David Kass, a finance professor at University of Maryland's business school.
- The Texas attorney general is also investigating spam bots on Twitter for some reason, but it’s unlikely that the case will give Musk any leverage in the matter.
Musk could be setting himself up for a legal battle. He might be doing so to try to lower the price of the deal, according to Adam Pritchard, a securities law professor at University of Michigan’s law school.
- Tech stocks in general are plummeting, and Musk has likely realized that $44 billion is a lot more than Twitter is worth right now.
- “It's not like the understanding of the business has changed,” Pritchard told me. “It's just that stock market valuations have gone south and he’s just paying way too much for this company now.”
At the end of the day, Musk can send a letter threatening the deal. But he entered into an agreement, and it says what it says. Musk is going to great lengths to wiggle out of the acquisition (or at least make it cheaper), but it’s clear that there’s no simple exit strategy. Twitter now has 30 days to give Musk the data he wants about bots. What happens next is anyone’s guess.—Sarah Roach (email | twitter)
Apple’s post-iPhone future
Apple didn’t use its annual developers’ conference to show off a category-defining new device, but we were able to divine some tea leaves from the company’s WWDC keynote on Monday.
What Apple didn’t announce was almost more noteworthy than what it did. Eagle-eyed Apple watchers were looking for hints that the company’s long-rumored mixed-reality headset is incoming, which would put it in direct competition with Meta and its efforts to own the metaverse.
- There were a couple of signs that an AR/VR device is on the horizon, but you had to squint real hard to find them.
- The company announced improvements to hands-free Siri (essential for wearing a headset) and a new version of ARKit for more advanced augmented reality development. One new AR feature called RoomPlan lets developers include accurate room scans with adjustable dimensions in their apps. The use cases for VR are obvious.
- But those advancements were glossed over, which means Apple’s new product isn’t ready for primetime. That’s because we’ll have to wait until next year for the company to release the first device in a brand new product category, Bloomberg has reported.
Apple is still very much a computer company. The overhauled MacBook Air with M2 chip was one of the buzziest announcements from WWDC, and while the new laptop looks damn good, what’s inside is also key for the company’s future products.
- The M2 chip is reportedly one of the processors Apple is planning to use to power the mixed-reality headset. Its arrival is a sign that the new device isn’t all that far off.
- Apple has moved its chip design in-house so that its software and hardware work seamlessly together. That's going to be essential to ensure that an AR/VR headset offers powerful, seamless graphical experiences without heating up.
But Apple is also a services company. The company revealed its “buy now, pay later” service, called Apple Pay Later, at WWDC. Financial services have been a key focus for Apple this year.
- Apple Pay Later lets iPhone users pay for purchases in four installments over six weeks at no interest, and buyers can manage their payments in their iPhone Wallet app.
- The feature is launching at a strange time for the BNPL industry. Affirm’s stock price has cratered and Klarna recently slashed 10% of its workforce, but the larger BNPL trend shows no signs of slowing.
- Earlier this year, Apple rolled out a Tap to Pay feature that turns iPhones into payment terminals. The company has opened the feature up to Square, Shopify and Stripe.
The iPhone is not Apple’s future. Services are one important piece. And the hardware that ends up replacing its breadwinning device still remains to be seen — but we’re inching closer.
A MESSAGE FROM GOOGLE
Project Shield protects news and human rights organizations, government entities, and more from Distributed Denial of Service (DDoS) attacks.These digital attacks are used by bad actors and cyber criminals to censor information by taking websites offline.
People are talking
Bill Gates thinks technology is needed to help fight lots of challenges ahead:
- “Climate change is a big one. Political polarization is another big one — how can we work in a common way across humanity and minimize wars and violence?”
- “Would thwarting a potential bad actor violate the law and open us up to legal liability? Even pausing to ask the question would leave millions of users vulnerable for precious minutes while a potential security threat persists.”
- “Those who are forced to leave are a loss to America’s communities and workforce."
IBM is buying Randori, a Boston-based offensive security startup, for an undisclosed amount.
Bitly is a new member of the Digital Trust & Safety Partnership. Other partners include Apple, Google and Meta.
Katie Biber is Paradigm’s new chief legal officer. Biber last worked in the same role at Brex.
Guy Rosen is Meta’s new CISO. Rosen’s been the company’s head of site integrity.Liz Coddington is joining Peloton as CFO. Coddington is a former Amazon and Netflix exec.
In other news
The crypto industry will finally get federal oversight under new legislation. The bill would put the CFTC, not the SEC, in charge of regulating crypto.
A big win for the USB-C! Apple will need to move away from the Lightning port in Europe after lawmakers decided that mobile phones, tablets and cameras must have a common charging port by 2024.
Nine Axon AI ethics board members left after the company said it would build Taser drones to prevent school shootings.
A big four-day workweek push is underway in the U.K. Over 3,000 workers across companies are taking part in a shortened workweek pilot for the next half-year.
The SEC is investigating Binance over the 2017 offering of its BNB token. The agency is examining whether the token’s offering constituted a security sale, which would have needed to be registered with the SEC.
Citigroup is on a tech hiring spree. It's hiring over 4,000 tech staff to help digitize its institutional clients.
Joe Biden is giving Southeast Asian solar suppliers a break on new tariffs. The move would allow domestic suppliers to ramp up solar panel production.
Epic Games’ PC store is distributing its first blockchain title later this year. The game, a Western-themed battle royale called Grit, will be released in partnership with publisher Gala Games.
Tough wake-up calls
Is getting out of bed the toughest part of your day? For one TikTok user, the only way to wake up is to get shocked by a $150 bracelet. If you’re not into that, you could also try an alarm clock that literally runs away from you to force you out of bed, or one that pressures you to wake up by projecting the time on the wall. Washington Post writer Tatum Hunter reviewed the best alarms for heavy sleepers. Good luck, if you start using one of them.
A MESSAGE FROM GOOGLE
Google's Threat Analysis Group (TAG) is a team that investigates threat actors and combats cyber crime to help keep everyone safe online, including high-risk users, by increasing protections based on attacker techniques and through regular updates to the security community.
Thoughts, questions, tips? Send them to email@example.com, or our tips line, firstname.lastname@example.org. Enjoy your day, see you tomorrow.