The star-crossed union of Elon Musk and Twitter’s board ended this weekend before it even began. Surprising as the late Sunday news may be, the preemptive split looks eminently predictable in hindsight.
From the moment Musk agreed to join Twitter’s board, a move enabled by his acquisition of a 9.2% stake in the social media company, the marriage felt rickety at best. Despite some mutual overlap in their vision for Twitter, the two sides seemed wholly unaligned in their approach to reforming the microblogging service.
While Musk and Twitter officials haven’t officially disclosed any immediate disagreements that led to the quick divorce, the past several days illustrated the inherent conflict of the pairing.
From the outset, Musk’s interest in joining Twitter appeared to stem from personal frustrations with his experience on the service, which he routinely uses to troll critics and float half-baked ideas before 80 million followers. He seemed less interested in Twitter’s broader user base and corporate bottom line—despite the fiduciary duty to the company and its shareholders that accompanies a board seat.
This dynamic played out over the weekend, as Musk posted (and later deleted) several thoughts about Twitter’s operations.
In one tweet, Musk, a self-described “free-speech absolutist,” suggested that Twitter shouldn’t have ads because “the power of corporations to dictate policy is greatly enhanced” if the company subsists on marketing money. Never mind that advertising accounted for 89% of Twitter’s $5.1 billion in revenue last fiscal year.
In a related tweet, Musk proposed that Twitter users pay $2 a month to access the service, ostensibly as a way to reduce the prevalence of scammers and spambots he finds annoying. Never mind that Twitter would need virtually every single one of its 217 million daily active users to sign up for a subscription to reach $5 billion in revenue.
(In a third tweet, Musk polled his 80 million–plus followers about their support for removing the “w” in Twitter, offering two choices: “yes” and “of course.” Never mind that he’s a 50-year-old man.)
Musk’s approach contrasts sharply with the Twitter board’s decision late last year to appoint longtime employee and chief technology officer Parag Agrawal as the company’s new CEO.
Unlike Musk, Agrawal is known for his low-key, methodical, out-of-the-spotlight managerial style. Following his selection, Agrawal has focused largely on internal reorganization and technical improvements, spurning immediate changes to the platform’s core features.
Agrawal obliquely alluded to these tensions in a statement Sunday night, which some tech pundits interpreted as a not-so-subtle subtweet directed at Musk’s disregard for Twitter’s greater good.
“We were excited to collaborate and clear about the risks,” Agrawal wrote. “We also believed that having Elon as a fiduciary of the company where he, like all board members, has to act in the best interests of the company and all our shareholders was the best path forward.”
With Musk no longer intent on a board seat, any number of scenarios could play out.
Musk could take a more aggressive stance against Twitter, buying up more shares now that he’s no longer bound by an agreement, contingent on his board presence, to limit his stake to 14.9%. (A regulatory filing Monday stated that Musk “has no present plans or intentions” to gobble up shares, though he isn’t exactly known for the accuracy of his forward-looking statements.)
Musk also could keep his current stake and continue carping from his timeline, hoping to indirectly influence changes. Or he could cash out at a big profit—he’d pocket roughly $750 million if he sold all of his shares today—and move on, declaring Twitter unworthy of his time and money.
Twitter board members also could proactively move, employing a “poison pill” or other tactics designed to obstruct the unpredictable Musk.
By now, it’s become a fool’s errand to predict what will emerge from Musk’s whirligig of a brain. This much we do know: The world’s wealthiest man became much more dangerous to Twitter’s leadership this weekend.
Want to send thoughts or suggestions for Data Sheet? Drop me a line here.
Failure to launch. Amazon’s drone delivery service is still a long way from liftoff as the company continues to struggle with technical, safety, and staffing issues, a Bloomberg investigation showed Sunday. Despite investing more than $2 billion over the past decade to expand drone deliveries, Amazon continues to fall well short of its test flight goals and likely will miss current targets by wide margins. Amazon is launching a pilot (no pun intended) delivery program this year in College Station, Texas, and Lockeford, Calif., two cities with bountiful space for flying between buildings.
Mounting a change. Shopify plans to ask investors later this year to approve a 10-to-1 stock split and a share restructuring that would increase the voting power of cofounder and CEO Tobi Lütke, the Wall Street Journal reported Monday. Shares of the Canadian e-commerce company traded at $607 as of Monday afternoon, an amount that makes it harder for Shopify to compensate employees and entice retail investors to buy its stock. The share restructuring would boost Lütke’s voting power to at least 40% of the company, up from 34%, helping him stave off any takeover attempts.
An epic fundraising haul. Fortnite developer Epic Games recently received a $2 billion investment from PlayStation maker Sony and Lego brand holder Kirkbi, further bolstering the value of the gaming startup, CNBC reported Monday. The two companies each invested $1 billion in Epic Games, with Sony upping its ownership and Kirkbi formalizing a financial stake following last week’s announcement of a Lego-centered metaverse partnership. Epic Games CEO Tim Sweeney said the funding would help “accelerate our work to build the metaverse.”
More spy games. Top European Union officials were targeted in 2021 with surveillance technology designed by the Israeli outfit NSO Group, which has been accused by digital activists of selling products used to spy on the phones of political leaders, dissidents, and journalists, Reuters reported Monday. Citing two sources familiar with the investigation and newly obtained documents, Reuters reported that at least one EU statesman and four European Commission aides were targeted with the spyware. It’s not known whether the hackers were successful in gaining access to the devices or who used the NSO Group product.
FOOD FOR THOUGHT
A measure of success. Facebook earned some goodwill from the left in January 2021 when it appointed Roy Austin Jr., a veteran attorney and advocate, to a new vice president position focused on civil rights matters. So how’s it going for him so far? Protocol reported Sunday that civil rights advocates see some promising moves by Austin’s eight-person unit in curbing discriminatory practices on Facebook. Still, social justice proponents say the company has yet to fully embrace protocols that could alienate conservatives critical of speech restrictions, limiting the scope of Austin’s power.
From the article:
In its first year, the team has made some initial progress, including doing away with sensitive ad targeting categories and making a major public commitment to study Facebook’s impact on people of different races, a topic that has been a third rail inside the company for years.
But despite these and other steps, interviews with a dozen people who have worked with Meta on civil rights issues both inside and outside of the company suggest that while Austin and his team have a lot of people rooting for them, they also have a lot left to prove.
IN CASE YOU MISSED IT
Ethereum just ran a major ‘merge’ test, bringing it one step closer to a game-changing upgrade, by Taylor Locke
Self-driving robotaxi caught on video speeding away from San Francisco police during a traffic stop—but Cruise says it was all part of the plan, by Massimo Marioni
Elizabeth Holmes prosecutors push back on her bid for new trial, by Joel Rosenblatt and Bloomberg
Elon Musk says Tesla will begin selling its Cybertruck in 2023. He said the same thing last year. And the year before, by Andrew Marquardt
Amazon and SpaceX are in a race to provide satellite internet access from space. Here’s how they compare so far, by Amiah Taylor
Russian-born Ethereum cofounder Vitalik Buterin quietly donates $5 million to Ukraine relief efforts, by Taylor Locke
BEFORE YOU GO
Claw and order. In the civil justice system, canine-based offenses are considered especially heinous by Google. In California, the dedicated lawyers who litigate these not-so-vicious cases are members of a Fido-friendly squad at the law firm Cooley. This is one of their stories. (Dum dum.) As Insider reported Monday, the tech giant’s outside lawyers are hounding a website owner they accuse of running an online puppy scam, seeking an injunction and unspecified amount of bones in damages. The alleged perpetrator posts pictures and descriptions of the pups, gets potential buyers to invest their time and money in the dogs, then never delivers an animal. It’s apparently become a common tactic among online grifters, who are seizing on the pandemic-driven demand for pets. What animals.
This is the web version of Data Sheet, a daily newsletter on the business of tech. Sign up to get it delivered free to your inbox.