Elon Musk.
Photoillustration: Patrick Pleul/picture alliance via Getty Images; Protocol

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Good morning! Elon Musk has acquired a sizable stake in Twitter, his platform of choice, amid a fight with the SEC over whether his tweets need to be preapproved. Maybe Musk has big plans, or maybe it’s an elaborate bit. Either way, are you not entertained? I’m Owen Thomas, and I once rode in Musk’s Tesla Roadster when he wasn’t behind the wheel.

The Twitter power player makes his move

Maybe Elon Musk deserves to own Twitter. All he has to do is post “Oh hi lol” and he can garner 150,000 likes an hour. That’s all he had to say for himself after an SEC filing revealed he’d taken a 9% ownership stake in Twitter to become its largest shareholder.

Twitter shares soared 27%, netting him an instant profit on his purchase. (It wasn’t clear from the filing what Musk paid, but Twitter shares closed at $33.03 on March 14, the day he reported buying them, and ended Monday just below $50.) He hasn’t said what he plans to do with the stake, but the type of filing he made indicated he planned to be a passive investor — meaning he wouldn’t agitate for a takeover or change in management.

Musk is the ultimate Twitter power player, and it’s not hard to imagine him asking for a board seat. Back in 2019, Twitter co-founder Jack Dorsey said Musk was his favorite user of the service.

  • Musk has 80 million Twitter followers compared to Dorsey’s 6 million. Dorsey is leaving the board in May, when his term expires, which in theory could open up a board seat for Musk.
  • But Musk hasn’t spent much time as an outside director. He announced last month that he would resign from his seat on the board of Endeavor Group Holdings, which he joined last year, in June.

Musk has made it clear he wants Twitter to change. Just read his tweets.

  • “The algorithm should be open source,” he tweeted on March 24. That would allow others to inspect the code that determines which tweets get displayed more prominently in users’ feeds. Twitter CEO Parag Agrawal, who recently replaced Dorsey, headed up a project to decentralize Twitter, which might accomplish some of the same goals by allowing others to substitute their own preferred tweet-ranking algorithms.
  • He also took issue with Twitter’s moderation policies on March 26: “Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy. What should be done?” In 2020, Agrawal, then Twitter’s CTO, said the company would “focus less” on free speech in battling misinformation.
  • Musk also suggested he might build a service to compete with Twitter, which would be awkward as a major shareholder.
  • On Monday night, Musk ran a poll on Twitter (of course) asking if Twitter should add an edit button. The response choices were “yse" or "on" (get it?).

But Musk could be a headache for Twitter, just by tweeting. He’s certainly caused plenty of trouble for Tesla.

  • After causing Tesla shares to soar by claiming falsely that he had secured funding to take the company private, the SEC charged Musk with securities fraud. He settled, agreeing to have his tweets reviewed.
  • A Tesla board committee is supposed to supervise his compliance with the agreement. There’s no evidence that it has done so, and Musk now wants to undo that agreement, on the grounds that the SEC is bugging him to actually comply with it.
  • Now imagine Musk, with privileged access to information about Twitter, tweeting freely about the business. If he can send shares soaring simply by revealing he owns some of the company, imagine what an actual opinion about the performance of the business might do. That’s a nightmare for Twitter management and the SEC.
  • Agrawal seems ready to scrap. He quote-tweeted Musk’s edit button poll with a wink and a nod to an earlier tweet by Musk, which most people read as a clapback.
  • Oh, and? The SEC has a 10-day deadline for reporting large stakes like the one Musk accumulated. He blew past that, which could garner him a fine. It wouldn’t be sizable compared to Musk’s wealth, but the SEC has levied millions in fines for reporting violations. What’s particularly noisome about Musk’s violation here is that it might have changed people’s views of his late-March tweets about Twitter if they had known about his stake then — as they should have. Oh hi lol, indeed.

There is a solution to all of this. Twitter’s bylaws require directors to be a “natural person,” which is a bummer for all the bots on the service, and questionable for Musk as well. That requirement seems stale in a time when money lives in smart contracts and your Twitter avatar can be an NFT. Why don’t Twitter and Musk embrace the decentralized future and put his shares on the blockchain, with voting controlled by a DAO of his followers? The result couldn’t be any loopier than what Musk would come up with on his own.

— Owen Thomas (email | twitter)

People are talking

IPCC’s Jim Skea said we need to make use of the tech that can create a habitable future:

  • "We need to get on with this now, or 1.5 degrees will slip beyond reach.”

Gary Gensler is looking into whether crypto platforms can register with the SEC:

  • “These crypto platforms play roles similar to those of traditional regulated exchanges. Thus, investors should be protected in the same way.”

Cyber-research fellow Valentin Weber said Russians pivot each time the country increases online censorship:

  • “There’s just so many loopholes. Endless possibilities.”

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Making moves

The cyberspace and digital policy bureau is officially here. It’ll be led by a Senate-confirmed ambassador.

Roelof Botha is replacing Doug Leone as Sequoia’s new leader. Botha’s now in charge of the firm’s global operations and compliance. (If you haven't already, you should read our Biz Carson's fantastic profile of Botha.)

Josh Adams and Billy Boozer quit Truth Social as heads of Tech and Product Development, respectively, Reuters reported.

Allison Brecklin and Kristene Turner joined Mixhalo as VPs of Client Operations and Marketing, respectively. Brecklin comes from DICE, and Turner’s from Motorsport Network.

Akshay Verma joined Coinbase as its first head of legal ops. Verma led legal ops at Meta since 2020.

In other news

Unions are a touchy subject at Amazon. The company now plans to block and flag any posts with keywords relating to labor unions, like “restrooms” and “plantation,” on an internal messaging app, according to documents seen by The Intercept.

Chip companies have ramped up their lobbying. Lobbying expenditures from chip firms have jumped about 50% since 2018 to just over $46 million last year.

Audible and Barnes & Noble never prepared for Google Play’s new billing policy, and now Android users can’t buy audible titles or digital books in their respective apps.

The British are coming for NFTs. The U.K. government has plans to mint its own NFT.

Google is helping people get to work with electric scooters. The company is reimbursing employees for subscriptions to 20 mph scooters from Unagi.

Mailchimp was breached, allowing an intruder to view about 300 accounts. The company didn’t say which clients were affected.

Workers walked out over Activision Blizzard’s dropped vaccine mandate. Company execs have since said that leaders of U.S. offices can figure out the best policies for them.

The rug pull rug

Rug pulls suck. But rugs themselves are nice. So imagine having an actual rug featuring logos of all the biggest crypto rug pulls. It’s actually a thing, and it’s called a rug pull rug.

The rug is advertised as “the scams you love, now firmly under your feet.” There’s only one rug being sold at the moment on the website rugpullrug.biz, and it’s going for about $25. If you’ve been the victim of a rug pull before, you can enter the promo code “IVEALREADYLOSTMILLIONSONARUGPULL” for $1 off. Only fiat is accepted.

A MESSAGE FROM DUCKDUCKGO

Tracking is a comprehensive problem — over 80% of websites, apps and emails contain third-party trackers. Because of that, people need a multi-pronged privacy solution. DuckDuckGo’s all-in-one privacy app can be used as an everyday browser with multiple features built-in, including private search, tracker blocking, encryption, and email protection.

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Thoughts, questions, tips? Send them to sourcecode@protocol.com, or our tips line, tips@protocol.com. Enjoy your day, see you tomorrow.

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