BRAZIL - 2022/05/22: In this photo illustration, Elon Musk's official Twitter profile seen on a computer screen through a magnifying glass. (Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images)
Photo Illustration: Rafael Henrique/SOPA Images/LightRocket via Getty Images

Elon Musk already runs Twitter

Source Code

Good morning! Twitter’s annual shareholder meeting telegraphed Elon Musk’s influence — and he doesn’t even own the company yet. So what can we expect from a Twitter under Elon? Suddenly, company executives are changing their tune. I’m Hirsh Chitkara, and I will boycott a Celtics-Warriors NBA Finals.

Twitter execs toe Musk’s line

In his opening remarks at Twitter's annual shareholder meeting yesterday, CEO Parag Agrawal said he wouldn't discuss the pending acquisition bid from Elon Musk. That didn’t matter much: Musk’s fingerprints were all over the event, even overshadowing Jack Dorsey’s departure from the Twitter board.

Twitter executives paid lip service to Musk’s agenda. Their tone has shifted on key issues such as free speech and hiring for product development.

  • “Silencing political commentary is antithetical to our commitment to free speech,” Agrawal said. “Our tools and processes aim to enforce these rules without any bias and do so dispassionately and equally for all users, regardless of their background [or] political affiliation.”
  • Agrawal took a much different stance on the issue two years prior, when he said Twitter should focus “less on thinking about free speech, but thinking about how the times have changed.”
  • And remember when Musk said Twitter would be “hardcore” about hiring engineering talent under his ownership? Twitter CFO Ned Segal told investors that Twitter had “focused our hiring more on engineering and product than on other areas to ensure that we continue to develop scalable technology solutions to the opportunities that we see.”

Conservatives will also cheer a “public forum” reference. “Twitter is obviously a public forum and we serve the public conversation,” General Counsel Sean Edgett said, echoing Musk’s labeling of Twitter as the “de facto public town square.”

  • That “public forum” positioning supports Supreme Court Justice Clarence Thomas’ argument that social networks and other mass communications tools are "sufficiently akin" to common carriers, which in his view takes away their "right to exclude."
  • By reclassifying social media firms as common carriers, the Supreme Court could find a rationale to strip protections inherent in Sec. 230, an outcome Texas’ HB 20 social media law is also trying to advance.

Some disgruntled shareholders directly addressed Musk, who has no formal role at Twitter and didn't even speak on the call. “Mr. Musk, if you’re listening, we hope that you’ll join us in voting for this proposal,” said Ethan Peck, an associate at the National Center for Public Policy Research, who unsuccessfully tried to rally shareholders on a DEI-related proposal.

And you know, Musk might actually buy this company, after weeks of this will-he-or-won’t-he. A new SEC filing revealed that he had raised his equity commitment to the deal to $33.5 billion, making it less reliant on debt financing or outside investment.

  • The deal previously seemed to be on shaky ground due to Musk’s concerns over how Twitter estimates the number of bots on the platform.
  • Investors reacted positively to the new development, sending TWTR up more than 6% after hours.

While Twitter executives are seemingly warming up to Musk’s ideas, it’s unclear what they hope to get out of it: He has strongly suggested he'll clean house if he takes over. The ease with which they've changed their tune, though, tells us something. Whether or not his deal goes through, Musk has changed Twitter.

Hirsh Chitkara (email | twitter)

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People are talking

Elon Musk said he supports “tight” background checks after the school shooting in Uvalde, Texas, but also scolded the media:

  • “The shooters are obviously doing this to generate the most amount of attention possible. Why is the media doing exactly what the mass murderers want?”

The SEC’s Hester Peirce said the U.S. had really messed up on crypto regulation:

  • “We’re not allowing innovation to develop and experimentation to happen in a healthy way, and there are long-term consequences of that failure.”

Making moves

Twitter founder Jack Dorsey officially left the company’s board of directors. Still, we know Jack is pretty tight with Elon, so his influence could still be felt, albeit indirectly.

Silver Lake co-CEO Egon Durban was voted off Twitter’s board. Durban, a long-time Musk associate, tendered his resignation to the board after the vote; now the board has to decide whether or not to accept it.

Peter Thiel stepped down from Meta’s board after 17 years. The company announced that Thiel would be leaving the board in February. So, all the more time to back conservative political candidates now.

Christopher “CJ” Moore is leaving Apple after less than a year. Moore, a manager on Apple’s car project, will join self-driving car technology company Luminar to lead global software development.

In other news

The FTC is fining Twitter $150 million for “deceptive” account security practices. The fine settles allegations that the company collected data for securing user accounts, then gave it to advertisers.

Amazon beat back 15 proposals from activists and worker advocates at its annual shareholder meeting, maintaining its track record of winning votes.

Terra is coming back. Its founder, Do Kwon, got the green light to reboot the fallen cryptocurrency. The original blockchain will be known as Terra Classic and its luna token renamed luna classic.

Payments company Bolt is laying off at least 100 employees amid “structural changes,” CEO Maju Kuruvilla told workers.

Amazon opened its first physical clothing store near Los Angeles on Wednesday. Called Amazon Style, the store will sell brands including Lacoste, Levi’s and Steve Madden.

The U.K. launched a new probe into Google, this one focused on the company's advertising practices and how it may have favored its own services.

Apple is increasing pay for its workers in the U.S. Starting pay for hourly workers will rise to $22 an hour, and starting salaries are also expected to rise. It also discouraged retail workers from joining unions.

Ed tech companies have been tracking students and sharing their information with advertisers for targeted ads, Human Rights Watch found.

How involved should shareholders be in shaping a company?

Shareholder proposals are becoming an increasingly common way for activist investors to force companies to face deeper issues. But how responsible should shareholders be in deciding the future of a company? Who should really have sway on board leadership, executive pay or internal audits? Respond to this email and let us know your thoughts, and we’ll round up our favorites in the Sunday edition of Source Code.

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There is so much more we need to do to make sure our future is more equitable and inclusive and maximizes America’s potential. It is not enough just to ensure everyone is connected. We also need to extend the full scope of digital opportunity to the people, the communities, and the institutions.

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