Elon Musk was widely expected to provide a much-needed dose of clarity today in the ongoing saga around his attempts to take Twitter private. Well, the CEO of Tesla did finally meet those expectations at the just-concluded all-hands meeting of Twitter employees. Musk started the meeting by saying: Highlighting his vision for Twitter, Musk was all praise for China-based WeChat. While noting that he wants to increase Twitter’s active user base to 1 billion, the CEO of Tesla wants the platform to become more friendly toward video-based content, thereby tapping another lucrative monetization avenue. On the thorny issue of work-from-home directives, Musk conceded that “excellent” contributors could still be productive remotely. Musk also attached potential layoffs to performance reviews. On the issue of freedom of expression and moderation, Musk said that people should be able to say “pretty outrageous things” but that the platform does not have to give such views a wider reach.
— FXHedge (@Fxhedgers) June 16, 2022 Finally, on the issue of Twitter’s fake accounts, Musk reiterated that any algorithm that the platform uses to moderate fake accounts and bots should be made available to the public for scrutiny. Musk also floated the idea of using user verification to rank content. In compliance with repeated demands from Musk for additional clarity on the proportion of fake accounts or bots that make up Twitter’s Daily Active Users (DAUs) metric, the social media platform had agreed last week to provide the CEO of Tesla unfettered access to its “firehose” – a massive stream of internal data that comprises of over 500 million tweets that are posted each day. This development came after Musk had termed Twitter’s prevarications on the issue of fake accounts a “clear material breach” of the agreement between the two parties. As a refresher, Twitter’s CEO Parag Agrawal had brushed off Musk’s earlier demand for a third-party audit of the platform’s DAUs. Twitter had taken a particularly dim view of the fact that Musk did not seek any “non-public info” or enter into a confidentiality agreement with the company before the takeover deal was finalized. Consequently, the social media platform had simply interpreted Musk’s laser focus on the issue of fake accounts in an attempt to renegotiate a lower takeover price. Nonetheless, with the CEO of Tesla refusing to budge on this issue and with the Texas Attorney General (AG), Ken Paxton, launching a probe into whether Twitter’s reporting on the quantum of fake accounts populating its platform was “false, misleading, or deceptive” under the Texas Deceptive Trade Practices Act, the social media giant was left with no feasible option other than to blink first. In a new investment note published today, Wedbush’s Daniel Ives wrote that the initial deal was now “essentially [of] out the window,” given the existing spread between the original takeover price of $54.20 per share and the current stock price of Twitter. This means that the drama surrounding Musk’s takeover of Twitter is far from over.
