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Elon Musk made his bid, and now he might actually have to lie in it

Also, some career advice: run over your absentee boss

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Elon Musk stands, frowning, in front of flame emoji
Twitter’s lawyers are being too mean to Elon Musk, say Elon Musk’s lawyers :(
Illustration by Kristen Radtke / The Verge; Getty Images

Well, Twitter shareholders have approved Elon Musk’s Twitter dot com acquisition, so that’s nice. Musk has, at this point, sent several letters trying to terminate the deal, and who knows, maybe he’ll send more. His pretext for backing out of the deal — I am not going to try to pretend that he really believes this stuff — isn’t looking so good, partly because his whistleblower deus ex machina seems to be a bust. 

One way to implement the changes Zatko wanted was to run Dorsey over!

The pretext Musk is leaning on is that Twitter is knowingly lying about its user numbers, overcounting bots, and so on. A whistleblower complaint filed by Peiter “Mudge” Zatko maybe bolsters his case slightly, but not much.

I’ve been trying to take Zatko seriously. But Robert Graham really put into words the thing I was thinking: Zatko doesn’t know how to get things done in a corporate culture:

Underlings expect that their bosses will help defend them in their work disputes. But executives don’t have that luxury. They are at the top of the food chain and are themselves responsible for resolving conflicts. There is nobody to go to in order to complain, not the board who only wants results, and not HR, because you are above HR. Not anybody — you have to resolve your own disputes.

Zatko’s complaint seems to be about looking for dispute resolution in the court of public opinion, because he was unable to resolve his dispute with [Twitter CEO Parag] Agrawal himself.

Zatko also did a lot of whining about Jack Dorsey, the former CEO of Twitter, in his complaint. I’m no executive, but if you give me an absentee boss, I am simply going to do whatever the fuck I want. I am surprised this did not occur to Zatko because one way to implement the changes Zatko wanted was to run Dorsey over! He could have done that by plotting with other mutinous execs or just through rogue implementation. Given how Zatko describes Dorsey as a “disengaged CEO” who didn’t speak to him for “days or weeks,” steamrollering Dorsey should have been child’s play. 

The “Cyberwhistle” is now out of stock, and presumably, Tesla is many Dogecoin richer

In fact, the more I hear, the more I think current Twitter CEO Parag Agrawal had a point about Zatko’s “poor leadership,” which was one of the reasons Agrawal cited for Zatko’s firing. I’m not alone, either — Twitter shares closed up 2 percent after Zatko’s testimony on Tuesday, which doesn’t sound like much until you realize the rest of the stock market fell. Seems like investors didn’t think much of Zatko’s complaints, either.

Plus, as Techdirt’s Mike Masnick has noted, Zatko’s thoughts on Twitter’s measurement of monetizable users don’t square with Musk’s arguments about bots and fake accounts. 

There is one bright side for Musk here, though. (Well, besides the Zatko-related shareholder lawsuit.) He tweeted out a link to the Tesla merch store where one could order a “Cyberwhistle” for 1,000 Dogecoin. The “Cyberwhistle” is now out of stock, and presumably, Tesla is many Dogecoin richer.

What are Musk’s lawyers doing during all this? Well, according to Twitter, they are not complying with the discovery (discovery, discovery, discovery, discovery, discovery!) process.

In a filing, Twitter claimed that Musk didn’t produce texts he and the guy who runs his family office, Jared Birchall, sent each other. You may remember Birchall, aka “James Brickhouse,” from Musk’s 2019 defamation trial: he entered into a non-disclosure agreement with a con man promising to dig up dirt on the caver that Musk had called a “pedo guy” and also acquired the URL for Musk. 

“It won’t make sense to buy Twitter if we’re heading into WW3.”

Twitter says it knows these messages between Musk and Birchall exist because third parties have supplied them. “Defendants have refused to explain this discovery failure,” Twitter’s lawyers wrote. “The documents have either been improperly destroyed or improperly withheld.”

Twitter cites some messages Morgan Stanley produced between Musk and his banker Michael Grimes (no relation), where Musk tells Grimes to “slow down just a few days” for a speech from Russian leader Vladimir Putin. “It won’t make sense to buy Twitter if we’re heading into WW3,” Musk texted Grimes. These messages were sent on May 8th, after Musk had signed his merger agreement for $44 billion on April 25th, and they do suggest that Bloomberg’s Matt Levine is right: Elon Musk has no idea how a merger works.

A second set of texts between Grimes and Musk has Musk saying that they need to do due diligence, which Musk had already waived. “An extremely fundamental due diligence item is understanding exactly how Twitter confirms that 95% of their daily active users are both real people and not double-counted,” Musk texted on May 8th. (On May 17th, Musk would publicly announce the deal “could not move forward” because of the bots, so I assume he already had cold feet in the texts.) “If that number is more like 50% or lower, which is what I would guess based on my feed, then they have been fundamentally misrepresenting the value of Twitter to advertisers and investors.” 

Look, it sounds basically right to me that Musk based his bot estimates on his own personal Twitter experience. But that’s a terrible way to adjudicate how many real users are on Twitter. 

In response, Musk’s lawyers said that not handing all the texts over was just a wee accident, then complained about Twitter’s tone. (There’s even a sanctimonious footnote about how being too mean to other lawyers is unethical.) The lawyers cite some problems with Twitter’s production of other documents, then whine that Twitter’s “premature motion and overheated rhetoric” are meant to distract from Twitter’s own failures. Plus, those messages were produced eventually, Musk’s team complains. See, the real problem was the timeline, which is far too fast, and Twitter’s lawyers, who are just too mean.

It’s like Musk’s money has coated him in Teflon

I do not find this convincing, but I’m not a judge.

Anyway, Musk’s lawyers say that the omission of the texts with the Morgan Stanley banker was an oversight, and they’d supplied other texts between Grimes (the banker, not Musk’s ex) and Musk. They’ve produced these messages, they say.

One other fun sideline occurs in a footnote of the Twitter filing. Apparently, Marc Andreessen of a16z had been discussing co-investing with Musk in Signal, a text messaging platform where messages can be set to auto-delete. Musk’s lawyers say he does not ordinarily use this for business. I think Twitter’s lawyers are right to be skeptical of Musk’s claims that he doesn’t ordinarily use Signal for business transactions, but as Musk’s lawyers point out, this exchange happened before Musk decided to renege. Messy, though.

I dunno, man. I don’t blame the hedge fund managers who are betting Musk will be forced to acquire Twitter. I’m not that impressed by Musk here! It kind of seems like he’s a goofus who doesn’t really have a case! I do love the drama, though: one of the hedge fund managers betting against Musk is David Einhorn, who was once mailed a set of short-shorts after he declared he was shorting Tesla. (This was brand promotion from a company selling shorts with a 5.5-inch inseam, not Musk’s doing.)

On the other hand, Musk has managed to avoid having his emails enter discovery, a significant win for him and a significant loss for me, a person who loves reading other people’s email. 

Maybe he’ll be forced to buy Twitter, and I’ll finally log off from the hell site. But it’s like Musk’s money has coated him in Teflon — consequences for his action slide right off him. The SEC hasn’t been able to hold him to account. NASA hasn’t, either. Nor has the National Labor Relations Board, which ordered him to delete a tweet that’s still up. Why would the Delaware Court of Chancery be any different?

Today’s Storystream

Feed refreshed Sep 25 Not just you

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Rihanna’s headlining the Super Bowl Halftime Show.

Apple Music’s set to sponsor the Halftime Show next February, and it’s starting out strong with a performance from Rihanna. I honestly can’t remember which company sponsored the Halftime Show before Pepsi, so it’ll be nice to see how Apple handles the show for Super Bowl LVII.

Emma RothSep 25
Starlink is growing.

The Elon Musk-owned satellite internet service, which covers all seven continents including Antarctica, has now made over 1 million user terminals. Musk has big plans for the service, which he hopes to expand to cruise ships, planes, and even school buses.

Musk recently said he’ll sidestep sanctions to activate the service in Iran, where the government put restrictions on communications due to mass protests. He followed through on his promise to bring Starlink to Ukraine at the start of Russia’s invasion, so we’ll have to wait and see if he manages to bring the service to Iran as well.

External Link
Emma RothSep 25
We might not get another Apple event this year.

While Apple was initially expected to hold an event to launch its rumored M2-equipped Macs and iPads in October, Bloomberg’s Mark Gurman predicts Apple will announce its new devices in a series of press releases, website updates, and media briefings instead.

I know that it probably takes a lot of work to put these polished events together, but if Apple does pass on it this year, I will kind of miss vibing to the livestream’s music and seeing all the new products get presented.

External Link
Emma RothSep 24
California Governor Gavin Newsom vetoes the state’s “BitLicense” law.

The bill, called the Digital Financial Assets Law, would establish a regulatory framework for companies that transact with cryptocurrency in the state, similar to New York’s BitLicense system. In a statement, Newsom says it’s “premature to lock a licensing structure” and that implementing such a program is a “costly undertaking:”

A more flexible approach is needed to ensure regulatory oversight can keep up with rapidly evolving technology and use cases, and is tailored with the proper tools to address trends and mitigate consumer harm.

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Get ready for some Netflix news.

At 1PM ET today Netflix is streaming its second annual Tudum event, where you can expect to hear news about and see trailers from its biggest franchises, including The Witcher and Bridgerton. I’ll be covering the event live alongside my colleague Charles Pulliam-Moore, and you can also watch along at the link below. There will be lots of expected names during the stream, but I have my fingers crossed for a new season of Hemlock Grove.

Andrew WebsterSep 24
Looking for something to do this weekend?

Why not hang out on the couch playing video games and watching TV. It’s a good time for it, with intriguing recent releases like Return to Monkey Island, Session: Skate Sim, and the Star Wars spinoff Andor. Or you could check out some of the new anime on Netflix, including Thermae Romae Novae (pictured below), which is my personal favorite time-traveling story about bathing.

A screenshot from the Netflix anime Thermae Romae Novae.
Thermae Romae Novae.
Image: Netflix
Jay PetersSep 23
Twitch’s creators SVP is leaving the company.

Constance Knight, Twitch’s senior vice president of global creators, is leaving for a new opportunity, according to Bloomberg’s Cecilia D’Anastasio. Knight shared her departure with staff on the same day Twitch announced impending cuts to how much its biggest streamers will earn from subscriptions.

Tom WarrenSep 23
Has the Windows 11 2022 Update made your gaming PC stutter?

Nvidia GPU owners have been complaining of stuttering and poor frame rates with the latest Windows 11 update, but thankfully there’s a fix. Nvidia has identified an issue with its GeForce Experience overlay and the Windows 11 2022 Update (22H2). A fix is available in beta from Nvidia’s website.