Elon Musk is learning how much free speech costs

Elon Musk will not let you down, and he will not give you up. You just have to have some faith in his sound, which is the one thing that he’s got.

That sound, as George Michael once sang, is freedom. Free speech! Freedom from Wall Street! Freedom from the SEC! Free beer, too, while we’re at it!

Musk is learning a painful lesson this week, as his plan to purchase Twitter to safeguard everyone’s freedom of speech, including his own prized privilege of unlimited gum-running, turns out to be far more costly than he might have imagined.

Free speech is expensive. The $44 billion Musk has agreed to pay for Twitter is just the start. Tesla’s shares have dropped almost 25% since April 4, the day Musk revealed his stake. That’s cost him about $48 billion — more than his bid for Twitter. The primary reason is that Musk, who has already indebted himself by borrowing against his Tesla shares, is going deeper into debt to buy Twitter. At some point, if Tesla shares drop enough, he may have to sell shares to avoid defaulting on those loans.

• Twitter is not a cash gusher. It had negative free cash flow last year, and its operating cash flow is less than the estimated cost to service the debt Musk has pledged to take on. Did we mention that interest rates were rising?
• The Twitter deal has a $1 billion breakup fee. Even failure is costly here.
• Twitter had to reach out to key advertisers to reassure them that Musk’s free-speech campaign wouldn’t mean a wave of harassing reply-guy accounts and spam bots taking over the service. Uh huh.
• Perhaps not surprising that Musk reportedly told banks during his fundraising flurry that he would cut costs at Twitter, including executive pay, as well as finding new ways to monetize tweets.

Musk uncharacteristically agreed to limit his speech to make the deal happen. Of course, just because Musk makes a contractual agreement to do something is no indication that he will abide by those rules.

• A clause in the deal prevents Musk from disparaging the company or its executives.
• So what has he been doing? Exactly that. In particular, he’s been amplifying negative messages about Twitter’s top lawyer, Vijaya Gadde, who has often made tough decisions about content moderation. Gadde is facing a fresh wave of online harassment as a result.
• As Twitter CEO, Jack Dorsey typically delegated those decisions to Gadde, whom he has often praised in the past. But he hasn’t spoken up in her defense recently. Another former Twitter CEO, Dick Costolo, has been the loudest voice in her defense.

Musk has suffered another reverse on the speech front. He has long battled with the SEC over his tweets.

• A judge ruled this week that Musk must abide by a 2018 settlement where he agreed to have Tesla review his tweets before they're posted. In a scathing ruling that at one point called one of Musk’s arguments “risible,” Judge Lewis Liman pointed out that Musk specifically agreed to waive the First Amendment rights he’s now claiming. If he’s such a believer in free speech, why did he sign those away?
• Of course, freedom of speech is not freedom from consequences, which is what Musk really wants. He wants to tweet about Tesla without anyone pointing out that investors take his tweets seriously and that misleading tweets can cost them money. He wants to tweet whatever pops into his mind about Twitter, regardless of whether it violates his purchase agreement.
• The question is whether Twitter’s board has the backbone to enforce its deal with Musk. If speaking has consequences, so does staying silent, and the silence from Twitter’s leadership on these crucial issues has been deafening.

This all gets into deep questions about what Twitter is — and what Musk is paying for. Is it the public square? Is it the crucible of democracy? Is it the last vestige of the revolutionary spirit of Web 2.0? Or is it just, you know, a place where people can post things? “Twitter is the closest thing we have to a global consciousness,” Dorsey wrote this week, adding that he trusts Musk’s “mission to extend the light of consciousness.” All of which probably makes more sense after a gallon of salt juice and an infrared sauna, and shows you that maybe we need to pay a little less deference to the freely offered speech of founders like Musk and Dorsey.

So will Musk take these lies and make them true somehow? (Yeah, I’m still on that George Michael kick. Bear with me, it’s a vibe.) Maybe. But more likely he’ll learn that owning Twitter really means that Twitter owns him.

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People are talking

Snap's Evan Spiegel called the metaverse "ambiguous and hypothetical":

• “Just ask a room of people how to define it, and everyone’s definition is totally different.”

The NAACP is pressing Elon Musk to keep Twitter’s ban on Donald Trump:

• "Do not allow 45 to return to the platform. Do not allow Twitter to become a petri dish for hate speech, or falsehoods that subvert our democracy."

Meanwhile, “Bitcoin Jesus” (Roger Ver) broke his social media silence to support Musk:

• “I am really, really grateful that Musk is out there calling out censorship.”

Dua Lipa tied a viral video of her dancing to the “toxic currency” of social media:

• “Social media is kind of run on this toxic currency of 'who can make people laugh at the expense of others.'”

Making moves

Prime Day is happening in July this year. It bounced around a few different months in the past, taking place in June last year and October in 2020.

Netflix laid off a handful of employees at Tudum, its editorial website that launched late last year.

Rajeev Rajan is joining Atlassian as CTO. Rajan was an engineering VP at Facebook.

Nina Jankowicz will lead the Disinformation Governance Board, a new group focused on tackling misinformation related to homeland security and other topics.

In other news

Airbnb employees can now work from anywhere. Their pay won't change by location, and employees will still meet up with their teams every quarter.

Apple and Amazon are still feeling the supply struggle. Amazon posted a quarterly loss for the first time in years, and while Apple had a great quarter, it's bracing for COVID-19 in China to hit sales.

Snap does drones now,but it wants you to call the gadget a Pixy. The small tool lets Snapchat users take selfies and video clips from a third-person view.

Rep. Marjorie Taylor Greene wants to abolish Sec. 230. She introduced the 21st Century Free Speech Act, another sign that Republicans want to take on Big Tech.

Activision Blizzard shareholders OK’d its sale to Microsoft, but it still needs FTC approval, which is an even bigger battle.

Twitter is trying to hang on to advertisers. It’s been contacting agencies, particularly car companies, worried about doing business under Elon Musk.

The U.S. got behind the “Declaration for the Future of the Internet,” a new document that outlines goals for an open and interoperable internet.

The weirdest subscriptions of them all

Toothpaste, letters from dead people and niche dating services are things people actually subscribe to with their own money, which made us wonder: Which of these services do people actually keep? Here’s what Truebill told us:

• Audible, Time, Amazon Kindle, The New York Times and BeenVerified have the highest cancellation rates. That $15 monthly charge for audio books isn’t worth it, huh.
• Wix, Dropbox and Zoom are the least-canceled subscriptions. Netflix is in there, too!
• Subscriptions for credit repair services are surprisingly high, which is quite sad.

A MESSAGE FROM INTEL

At Intel, we have an over 50-year history of manufacturing innovation, and we believe in the power of technology to create a more responsible, inclusive, and sustainable world for all. Discover how smart infrastructure solutions from Intel can help transform the future.

Learn more