Note: This was originally published as the daily newsletter at the Columbia Journalism Review, where I am the chief digital writer
On July 12, in a lawsuit in Delaware’s Chancery Court, Twitter accused Elon Musk of failing to complete his $44 billion acquisition of the company, an offer he initially made in April. Musk subsequently filed a countersuit, in which he alleged that Twitter was not telling the truth about some aspects of its business, including the number of fake and automated accounts on the service. Although the case won’t be heard until October 17, some evidence has been filed in court, as a result of motions by Twitter or Musk. In one such motion that was filed last week, Twitter’s legal team claimed Musk has not turned over all of his text messages related to the deal, as required by the court. In particular, Twitter’s lawyers said there are “substantial gaps… corresponding to critical time periods,” including the period in which Musk was allegedly reconsidering the purchase.
As part of its submission, Twitter entered several pages worth of text messages it had received from Musk, including some from technology investors who appeared to be desperate to get a piece of the Twitter deal. “You have my sword,” Jason Calacanis, an angel investor and entrepreneur, said in one text message, in what seemed to be a reference to the movie Lord of the Rings. Antonio Gracias, another investor and a former member of the Tesla board of directors, told Musk in a message that free speech is “a principle we need to defend with our lives or we are lost to the darkness.” Other texts to Musk included suggestions about what the sender believed were the best ways to fix what’s wrong with Twitter (Mathias Döpfner, CEO of Axel Springer, argued that it would be best if he ran the company). One unnamed texter, identified only as TJ, exhorted Musk to “buy Twitter and delete it” and “please do something to fight woke-ism.”
In a column for The Atlantic, Charlie Warzel argued that the texts with Musk “shatter the myth of the tech genius.” The unavoidable conclusion, he says, is just how “unimpressive, unimaginative, and sycophantic the powerful men in Musk’s contacts appear to be. Whoever said there are no bad ideas in brainstorming never had access to Elon Musk’s phone.” According to one former social-media executive who spoke with Warzel, “the dominant reaction from all the threads I’m in is Everyone looks fucking dumb.” Another common reaction, this executive said, is to ask: “Is this really how business is done? There’s no real strategic thought or analysis. It’s just emotional and done without any real care for consequence.” In one text, Larry Ellison, the CEO of Oracle, says he is in for “a billion … or whatever you recommend;” in another, Marc Andreessen, a top Silicon Valley venture investor, says $250 million is available “with no additional work required.”
Warzel asks: “Is it surprising that rich people (including one of the world’s 10 richest men) are throwing money at their friends the way you might on a low-stakes poker night? Not really, especially when the friend is the richest man in the world.” But the eagerness to get into bed with Musk and the lack of thought about the deal “reveal something deeper about the brokenness of this investment ecosystem and the ways that it is driven more by vibes and grievances than due diligence,” Warzel argues. It’s not just Musk’s inner circle that apparently haven’t spent much time thinking about the acquisition—Musk’s own texts sometimes give that impression as well. For example, a month after he first announced his bid to acquire Twitter, Musk is texting with Michael Grimes of Morgan Stanley about doing due diligence, something most people do before a bid.
Even Musk’s takeover offer seemed to happen on the spur of the moment, after he was asked to join the board and had to start working with Parag Agrawal, the CEO of Twitter. At first, their text exchanges seem pleasant enough, but then Musk asks in a public tweet: “Is Twitter dying?” and Agrawal admonishes him by text, saying his comments aren’t helpful. Less than a minute later, Musk replies: “What did you get done this week?” About 30 seconds after that, he says “I’m not joining the board. This is a waste of time,” and then, about 10 seconds later, Musk says: “Will make an offer to take Twitter private.” The idea of trying to acquire the company and reinvent it wasn’t totally out of the blue—by this time, the record shows that Musk had already been texting with Jack Dorsey, Twitter’s co-founder and former CEO, who said “a new platform is needed,” and that Twitter shouldn’t be a company at all, but “an open-source protocol.”
The text record also shows that just minutes before he told Agrawal that he would be making a takeover bid for the company, Musk told his brother Kimbal Musk he was thinking about creating a competing service much like Twitter, but based on the blockchain and paid for with cryptocurrency. “You have to pay a tiny amount to register your message on the chain,” Musk wrote, “which will cut out the vast majority of spam and bots. There is no threat to choke, so free speech is guaranteed.” Two weeks later, after being approached by people close to Sam Bankman-Fried, a billionaire cryptocurrency investor, Musk stated that “blockchain Twitter isn’t possible, as the bandwidth and latency requirements cannot be supported by a peer-to-peer network, unless those ‘peers’ are absolutely gigantic, which defeats the purpose of a decentralized network.”
During the coverage of Musk’s initial offer for Twitter in April, a number of observers wrote about his laissez-faire approach to making deals, even large ones like the Twitter acquisition. At one point, Musk said that he “didn’t care about the economics” of the deal, and also admitted to a friend that he “had no plan for how to finance or manage Twitter,” according to a report in the Times. Gilad Edelman, in Wired, wrote that “the most likely explanation for Musk’s conflicting statements is that he’s simply making this up as he goes and has not given any serious thought to how content rules should work on the social platform that he’s trying to spend $44 billion to buy.” Some of the messages included in the Twitter filing seem to lend credence to that hypothesis.
Here’s more on Twitter and Musk:
Entourage: Hollywood super-agent Ari Emanuel has offered to help broker a deal between Twitter and Musk, according to Bloomberg: “Emanuel contacted Twitter board member Egon Durban within the past few weeks and suggested the two sides find a solution to their dispute over the buyout ahead of upcoming court proceedings,” Bloomberg reported. Emanuel has close ties to both Musk and Durban, the news service said. Durban sits on the board of directors at Endeavor Group Holdings, the talent agency founded by Emanuel. Musk held a seat on the Endeavor board and stepped down earlier this year. The two were reportedly spotted holidaying together in Greece this summer.
Weak stance: The text record “ikely puts Musk in a weaker legal stance,” Dan Inves, a Wedbush Securities analyst, told Business Insider. Matthew Schettenhelm, a litigation analyst for Bloomberg Intelligence, said Musk’s texts appear to tell a story that is “in tension with his lead argument,” because he refers to purging fake users, suggesting that he knew the extent of the problem. The messages also suggest Musk was considering a competing service, Ann Lipton, a Tulane University law professor, told the Washington Post. “To the extent Musk is armed with confidential internal Twitter data that he could use to harm the company in the future—perhaps by establishing a competitor—that might weigh in favor” of forcing Musk to close the deal, she said.
Silicon Valley: In Vanity Fair, Nick Bilton wrote that “Musk spoke to some of the highest-level thinkers in Silicon Valley and New York media, and bankers across the country, including the investor Marc Andreessen, former Facebook president Sean Parker, CBS This Morning cohost Gayle King, Microsoft CEO Satya Nadella, and former CEO of Twitter, Jack Dorsey—and as far as I can tell, not one of them said, ‘Hey, Elon, maybe buying this company when you’re already trying to run half a dozen other companies, and personally populate the world, isn’t the best idea right now.’” Bilton wrote that another tech industry insider said that the whole affair felt like the writers behind Succession got together with the writers behind the TV comedy Silicon Valley.
Other notable stories:
Former President Donald Trump has sued CNN for defamation, accusing the network of smearing him with its coverage—including frequent comparisons to Adolf Hitler—to undermine a potential run for re-election in 2024, Bloomberg reported. The suit says that CNN has tainted Trump’s image by using “ever-more scandalous” labels to describe him in broadcasts, including “racist,” “Russian lackey,” and “insurrectionist,” culminating in false comparisons to Hitler, according to a suit filed Monday in federal court in Florida.
Ksenia Sobchak, a Russian journalist who often shares stories critical of Russian military efforts on Telegram, faces up to three years in prison for publishing a story that the Russian police said was “fake,” according to a report from Reuters that was based on a news item from TASS, the state news agency. Sobchak, whose father was the mayor of St. Petersburg and worked closely with Vladimir Putin, hosts a YouTube channel with over 3 million subscribers. She wrote a story about the “state funding of festivals,” prompting a criminal investigation into her work, and in the past, Sobchak has been scrutinized by authorities for sharing “LGBT propaganda” and writing about Ukraine.
The Wall Street Journal’s editorial board condemned Donald Trump’s rhetoric of violence in an article published on Sunday. The board was responding to Trump’s post on his social media platform, Truth Social, in which he called Senate majority leader Mitch McConnell’s support of democrat-sponsored bills a “death wish” and accused McConnell of hating him. The Wall Street Journal called Trump’s “tirade” and provocation of violence “reckless.” “It’s all too easy to imagine some fanatic taking Mr. Trump seriously and literally, and attempting to kill Mr. McConnell,” the board wrote.
Reporters in Ethiopia continue to highlight how media blackout has resulted in many unreported deaths from the civil war happening in the country, according to the Telegraph. There has been limited reporting on the conflict after the Ethiopia government cut phone and internet lines to the region and blocked media access to the warring region. Last week, the BBC reported on the intensity of the war, calling it one of the world’s most hidden conflicts. In the past, journalists who have attempted to report on the war in Ethiopia have been arrested by the government.
Mobile phones belonging to at least two Mexican journalists and a human rights activist were infected with Pegasus spyware between 2019 and 2021, according to a new investigation by Red en los Defensa de los Derechos Digitales (R3D), a Mexican digital rights organization. The findings, which were confirmed by Citizen Lab , a cyber security watchdog at the University of Toronto, came after Mexico’s President López Obrador assured the citizens that spyware abuses would stop.
The BBC said Thursday that it plans to end its 84-year-old radio programme in Arabic as part of a series of cost-saving moves at the British national broadcaster. The news was greeted with sorrow by some journalists who said BBC Arabic provided a relatively independent voice that was not curtailed by the censorship that affects many national news channels in the region. The BBC said it will continue to publish digital content in Arabic, but will no longer broadcast on the radio.
German media giant Bertelsmann, which owns Europe’s largest television group RTL and Penguin Random House, faces pushback from regulators as it attempts to consolidate more media companies under its umbrella, reports The Financial Times. Bertelsmann is attempting to acquire Simon & Schuster, the world’s fourth largest book publisher, but the Department of Justice claims the deal would damage competition. The company faced a similar challenge when France’s competition authority blocked its attempt to merge its French TV channel with a larger one.