Elon's exit strategy
Good morning! It’s beginning to look a lot like Elon Musk doesn’t actually want to buy Twitter. There are a whole bunch of ways this deal could shake out, and you can bet Musk will tweet his way through it. I’m Owen Thomas, and my copy of “GuRu” by RuPaul is the only thing vaguely keeping me together these days.
Elon’s unconventional acquisition playbook
Elon Musk is too busy owning Twitter to actually buy it. The performative grift of his offer is becoming more evident every day.
Musk is incensed about bots, a peeve some attribute to the tendency of crypto spammers to attach themselves to his tweets. This isn’t as big an issue for the vast majority of Twitter’s users, who don’t have 93.6 million followers and hence aren’t as attractive a target. But when you’re a raging narcissist, your problems are what matter.
- Twitter says less than 5% of its active accounts are bots or spammers. At a tech conference in Miami Monday, Musk estimated, without providing any evidence, that the number was more like 20%, or even as high as 90%.
- Twitter CEO Parag Agrawal gamely tried to explain that the company is aware of the bot problem, devotes a reasonable amount of resources to combating an ever-changing army of spammers and can’t reveal all of its methods and data lest the people it’s trying to fight gain insight into its defenses.
- Musk’s response: a poop emoji, which is a fairly good indicator that this is not a serious adult having a serious conversation.
- Overnight, Musk also tweeted that Agrawal had "publicly refused to show proof of <5%," and added that the "deal cannot move forward until he does."
- Side question: Is the SEC’s EDGAR database even capable of rendering poop emoji?
Is Musk being a jerk as a negotiating tactic? At the Miami conference, Musk said it was “not out of the question” that he’d try to lower the price of the deal.
- Twitter shares promptly sank 8% to $37.39, which is 31% below the $54.20 price Musk offered. That’s a screaming signal that Wall Street thinks it’s highly likely that Musk’s deal won’t go through — or perhaps that he’ll manage to haggle the price down.
- Why would Twitter’s board allow that to happen, though? Given the rout in tech stocks, the board is looking smarter every day in locking Musk in at that price.
- On the other hand, this is the same board that, faced with Musk’s takeover offer, couldn’t find any other buyers and didn’t feel confident enough to make the case for a Musk-free Twitter to Wall Street. It’s within the realm of possibility that they might timidly fold under pressure.
There are two important words in the Twitter deal that Musk might regret. They are “specific performance.”
- Specific performance is a legal remedy that allows a party to compel the other to abide by an agreement. It’s spelled out in the agreement between Twitter and Musk — which is a smart thing to have when dealing with a person known for wiggling out of binding legal contracts.
- The fact that Twitter has recourse to specific performance, not just monetary damages, is significant. And it might actually give Twitter’s board some backbone.
- The agreement is pretty ironclad, giving Musk few outs besides a failure to assemble financing. Investors might reasonably make a case that the board should have stuck to its guns and invoked the specific performance clause to compel Musk to buy the company at $54.20 a share. Poop emoji versus shareholder lawsuits? The board will probably tolerate some poop emoji.
Twitter still wants this deal to go through, but it's hard to see any of this ending well. Maybe Musk is acting out because he’s hoping to make the banks financing the debt component of the deal nervous. If they back out, he can safely drop his Twitter bid and blame the cowards on Wall Street. And the spam bots! Really, though, it’s surprising Musk isn’t more sympathetic to the spammers. All they really want is our attention. He of all people should understand that.
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People are talking
LinkedIn’s Reid Hoffman told Vanderbilt grads to get friends who will say the truth:
- “Having friends who trusted and permitted me to help them has brought me greater joy than nearly anything else in my life.”
Flink is buying Cajoo, a France-based instant delivery startup, for close to €100 million, according to TechCrunch.
Rodney Clark is leaving Microsoft. He’s been with the company for over two decades and last served as its channel chief.
Angela Chadwick joined Alphabet’s Wing as general counsel. Chadwick was an associate general counsel at Tesla.
Dawn Woodard joined LinkedInas a distinguished engineer. Woodard previously led machine learning and data science at Uber.
Liz Brittain joined Foursquare as CFO. She most recently held the same role at HackerOne.
Bakul Patel joined Google as its new senior director of global digital health strategy. Patel is the former head of digital health at the FDA.Joyce Kim is Twilio’s new CMO. Kim previously worked on marketing at Genesys and Arm.
In other news
Tech companies need to tackle online radicalization solo. It's unlikely that Congress will step in anytime soon, and smaller platforms need to catch up with the steps larger tech companies have taken to address online hate.
Color of Change wants a racial equity auditof Twitch after the shooting in Buffalo, New York, this weekend. Twitch said it’s working with a different third-party organization on another audit.
Microsoft is setting aside more money for employee pay. The company plans to double its global budget for merit-based salary raises and bump its annual stock ranges.
Meanwhile, Coinbase's hiring plans changed. The company wanted to triple its headcount this year, but it now plans to slow down hiring.
Donald Trump is required to prioritize Truth Social, according to an SEC filing. He has to post there first before another platform, and he can’t publish the same content on a rival site for six hours.
Here’s a photo of a delivery robot that got lost in the woods. Our colleague thinks the robot would make for a great Pixar movie.
CNBC's Disruptor 50 is out today. Flexport, Canva, Stripe and Blockchain.com are among the top 10 on the list this year.
Your fun read of the day: Nuns on TikTok. They’re participating in viral trends and riding lawn mowers on the platform, and some nuns said their presence could help get new members.
Travel is back
Uber’s quest to be a “super app” continued yesterday at its annual Go/Get event. This year, it’s preparing for a lot more parties and fun — and planning accordingly. Here’s what it has in store:
- Uber Travel, essentially a concierge service that pulls your travel details from your email to coordinate rides for trips.
- Uber Charter, which lets you book a party bus. Brace yourself for wedding parties booking their transportation on Uber.
- You can now use your voice to order Uber Eats via Google Assistant.
- Vouchers for a large group of Uber riders. They also work for Uber Eats deliveries.
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