Elon Musk made his offer, and now he might have to lie

Elon Musk made his offer, and now he might have to lie

Well, Twitter shareholders approved Elon Musk’s acquisition of Twitter dot com, so that’s good. Musk has, at this point, sent several letters trying to end the deal, and who knows, maybe he will send more. His excuse to pull out of the deal – I’m not going to try to pretend he really believes in it – doesn’t look so good, in part because his whistleblower deus ex machina seems like a bust.

One way to implement the changes Zatko wanted was to overthrow Dorsey!

The excuse Musk relies on is that Twitter knowingly lies about its user count, overcounts bots, and more. A whistleblower complaint filed by Peiter “Mudge” Zatko may strengthen his case slightly, but not much.

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

Subordinates expect their bosses to help defend them in their labor disputes. But executives don’t have that luxury. They are at the top of the food chain and are responsible for conflict resolution themselves. There is no one to complain to, not the board who only wants results, and not HR because you are above HR. Not just anyone – you have to resolve your own differences.

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

Zatko also whined a lot about Jack Dorsey, the former CEO of Twitter, in his complaint. I’m not a manager, but if you give me an absent boss, I’ll just do all i fucking want. I’m surprised that didn’t happen for Zatko, because one way to implement the changes Zatko wanted was to overthrow Dorsey! He could have done this by conspiring with other mutinous leaders or simply by malicious implementation. Considering Zatko describes Dorsey as a “disengaged CEO” who hasn’t spoken to him for “days or weeks,” rolling Dorsey should have been a breeze.

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

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 down 2% after Zatko’s testimony on Tuesday, which doesn’t seem like much until you realize the rest of the stock market tear down. It seems investors haven’t given much thought to Zatko’s complaints either.

More, ace TechdirtAs noted by Mike Masnick, Zatko’s thoughts on Twitter’s measurement of monetizable users do not match Musk’s arguments about bots and fake accounts.

There is, however, a silver lining for Musk here. (Well, in addition to the Zatko-related shareholder lawsuit.) He tweeted a link to the Tesla merchandise store where you could order a “Cyberwhistle” for 1,000 Dogecoin. The “Cyberwhistle” is now out of stock, and presumably Tesla is much richer in Dogecoin.

What are Musk’s lawyers doing during all of this? Well, according to Twitter, they don’t follow the discovery process (discovery, discovery, discovery, discovery, discovery!).

In a filing, Twitter claimed Musk did not produce texts that 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 libel lawsuit: He entered into a nondisclosure agreement with a scammer promising to dig up dirt on the caver Musk called “pedo guy” and also acquired the justballs.com URL for Musk.

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

Twitter says it knows these messages between Musk and Birchall exist because third parties provided them. “Defendants declined to explain this discovery failure,” Twitter’s attorneys wrote. “The documents were either improperly destroyed or improperly retained.”

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

A second set of texts between Grimes and Musk has Musk saying they need to do their due diligence, which Musk had already given up. “An extremely fundamental piece of due diligence is understanding exactly how Twitter confirms that 95% of its daily active users are both real people and not double-counted,” Musk wrote on May 8. (On May 17, Musk would publicly announce that the deal “couldn’t go ahead” because of the bots, so I guess he already had cold feet in the texts.) “If that number is more like 50% or less is what I’m guessing based on my feed, they’ve fundamentally misrepresented Twitter’s value to advertisers and investors.

Listen, it seems basically fair to me that Musk based his bot estimates on his own personal experience on Twitter. But it’s a terrible way to estimate the number of real users on Twitter.

In response, Musk’s attorneys said not handing over all the texts was just a minor accident, then complained to Twitter. Your. (There’s even a sanctimonious footnote that being too mean to other lawyers is unethical.) The lawyers cite some issues with Twitter’s production of other documents, then complain that Twitter’s “premature move and overheated rhetoric” is meant to distract from Twitter’s own failures. Moreover, these messages were finally produced, complains Musk’s team. To see the real problem was the calendar, which is much too fastand Twitter lawyers, who are just too mean.

It’s like Musk’s money covered him in Teflon

I don’t find that convincing, but I’m not a judge.

Either way, Musk’s lawyers say the omission of texts with the Morgan Stanley banker was an oversight, and they had provided other texts between Grimes (the banker, not Musk’s ex) and Musk. They produced these messages, they say.

Another funny sideline occurs in a footnote in the Twitter folder. Apparently, a16z’s Marc Andreessen had discussed co-investing with Musk in Signal, a text messaging platform where messages can be set to be automatically deleted. Musk’s attorneys say he doesn’t typically use it for his business. I think Twitter’s lawyers are right to be skeptical of Musk’s claims that he doesn’t typically use Signal for business transactions, but as Musk’s lawyers point out, this exchange happened before Musk decide to give up. Messy, though.

I don’t know, man. I don’t blame the hedge fund managers who are betting that Musk will be forced to acquire Twitter. I’m not that impressed with Musk here! Looks like he’s a goofus who doesn’t really have any business! I love the drama, though: One of the hedge fund managers betting against Musk is David Einhorn, who was once posted a set of shorts after stating that he was shorting Tesla. (This was a brand promotion from a company selling shorts with a 5.5 inch inseam, not Musk.)

On the other hand, Musk managed to keep his emails from being discovered, a big win for him and a big loss for me, a person who likes to read other people’s emails.

Maybe he’ll be forced to buy Twitter, and I’ll finally log out of the site from hell. But it’s as if Musk’s money has covered him in Teflon – the consequences of his action elude him. The SEC was unable to hold him to account. Neither does NASA. The National Labor Relations Council, which ordered him to delete a tweet that is still online. Why would the Delaware Court of Chancery be any different?

#Elon #Musk #offer #lie

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