Elon Musk's Proposed Takeover Of Twitter

Business magnate Elon Musk initiated the acquisition of American social media company Twitter, Inc. on April 14, 2022, and concluded it on October 27, 2022. Musk began buying Twitter shares in January 2022, eventually becoming the company's largest shareholder by April with a 9.1 percent ownership stake. Twitter invited Musk to join its board of directors, an offer Musk initially accepted before declining. On April 14, he made an unsolicited offer to purchase the company; Twitter's board initially responded with a " poison pill" strategy to resist a hostile takeover, but unanimously accepted Musk's buyout offer of $44 billion on April 25. Musk stated that he planned to introduce new features to the platform, make its algorithms open-source, combat spambot accounts, and promote free speech.

In July, Musk announced his intention to terminate the agreement, asserting that Twitter had breached their agreement by refusing to crack down on spambot accounts. The company filed a lawsuit against Musk in the Delaware Court of Chancery shortly thereafter, with a trial scheduled for the week of October 17. Weeks before the trial was set to begin, Musk reversed course, announcing that he would move forward with the acquisition. The deal was closed on October 27, with Musk immediately becoming Twitter's new owner and CEO, and Twitter was taken private. Upon acquiring Twitter, Musk promptly fired several top executives, including previous CEO Parag Agrawal. Musk has since proposed several reforms to Twitter and laid off half of the company's workforce. Hundreds of employees then resigned from the company after Musk issued an ultimatum demanding they commit to "extremely hardcore" work.

Reception to the buyout has been mixed, with praise for Musk's planned reforms and vision for the company, particularly his calls for greater free speech, but criticism over fears of a potential rise in misinformation, disinformation, harassment, and hate speech on the platform. Conservatives have largely been in support of the acquisition, while many liberals and former Twitter employees have voiced concerns about Musk's intentions. Since becoming owner, Musk has faced backlash for his handling of the company and his approaches to content moderation.

Prelude

Background

Business magnate Elon Musk published his first tweet on his personal Twitter account in June 2010, and had more than 80 million followers by April 2022. In 2017, in response to a tweet suggesting that he buy Twitter Inc., Musk replied, "How much is it?" On March 24, 2022, Musk began tweeting criticisms of Twitter, polling his followers on whether the company adhered to the principle that "free speech is essential to a functioning democracy". Days later, he discussed the future of social media with Twitter co-founder and former CEO Jack Dorsey and explored the possibility of joining Twitter's board of directors with private equity firm Silver Lake co-CEO Egon Durban. He relayed this idea to Twitter board chair Bret Taylor and CEO Parag Agrawal, proposing to either take the company private or start a rival social media platform. Dorsey responded to Musk with a text message, saying he hoped Twitter could become open-sourced and that he had unsuccessfully pushed for Musk's induction into Twitter's board a year earlier, a move that prompted his departure from his role as CEO.

Early developments

Musk began purchasing Twitter stock on January 31, 2022. On April 4, he announced that he had acquired 9.2 percent of the company's shares totalling $2.64 billion, making him the company's largest shareholder. Following the announcement, Twitter's stock experienced its largest intraday surge since the company's initial public offering (IPO) in 2013, rising by as much as 27 percent. The next day, Twitter invited Musk to join the company's board, which Musk accepted. This had been recommended to the board by Twitter's Nominating and Corporate Governance Committee three days earlier, with some board members expressing concern about potential "adverse impacts on stockholder value". The position would have prohibited Musk from going beyond a 14.9 percent ownership stake and limited his ability to speak publicly about the company. That day, Musk phoned Dorsey, who declined Musk's suggestion for him to remain on the board.

On April 11, after publishing several tweets critical of the company, Musk decided not to join the board. Instead, he informed Twitter that he intended to make an offer to take the company private. On April 12, Twitter's board met with lawyers and financial advisors to deliberate over the ramifications of such a deal as well as their options, while company shareholder Marc Bain Rasella sued Musk for allegedly manipulating the company's stock price and violating Securities and Exchange Commission (SEC) rules.

Buyout offer

Takeover bid

On April 14, Musk made an unsolicited and non-binding offer to Twitter to purchase the company for $43 billion, or $54.20 per share, and take it private. Though the offer was made to company management, the bid was described as a hostile takeover attempt because of the implied threat to purchase the outstanding stock if management declined. The board responded that it would "carefully review the proposal". In a TED interview, Musk said he aimed to make Twitter a "platform for free speech around the globe", hailing free speech a "societal imperative for a functioning democracy" and insisting that he had not made the offer to increase his wealth. Critics noted that he showed more interest in altering Twitter's moderation policies than in fighting government censorship. The price of $54.20 per share is believed to be a reference to 420, a slang term in cannabis culture for marijuana consumption.

On April 15, Twitter's board of directors announced a " poison pill" strategy, which would allow shareholders to purchase additional stock in the event of a hostile takeover; the plan will expire on April 14, 2023. On April 17, Taylor was urged by Twitter's largest institutional shareholders to "seriously consider" the offer. On April 20, Musk disclosed that he had secured financing provided by a group of banks led by Morgan Stanley, Bank of America, Barclays, MUFG, Société Générale, Mizuho Bank, and BNP Paribas, for a potential tender offer to acquire the company. The funding included $7 billion of senior secured bank loans; $6 billion in subordinated debt; $6.25 billion in bank loans to Musk personally, secured by $62.5 billion of his Tesla stock; $20 billion in cash equity from Musk, to be provided by sales of Tesla stock and other assets; and $7.1 billion in equity from 19 independent investors.

The initially proposed $13 billion in money borrowed by Twitter is equivalent to seven times the company's 2022 projected operating cash flow; some banks found that multiple too risky and opted to participate only in the $12.5 billion margin loan to Musk. The debt is estimated to cost Twitter approximately $1 billion in annual interest and fees. Two days after announcing his bid, Musk registered three holding companies under the name "X Holdings" in preparation for his takeover. Tesla shares fell 12 percent on the day after the acquisition was announced, amid smaller declines in the broader markets. Musk incurred a $21 billion paper loss that day. Within three days after Twitter agreed to be acquired, Musk had sold $8.5 billion of his Tesla shares.

Acquisition announcement

On April 23, Musk informed Taylor that his offer was "best and final", urging him to accept in a letter sent the following day. Multiple outlets subsequently reported that Twitter was in final negotiations to accept Musk's offer, with a deal expected to be reached by the next day, though Reuters cautioned that the deal could still fall apart. On April 25, Twitter shares rose by 5 percent following reports that Twitter was poised to accept Musk's offer. Twitter advisors Goldman Sachs and JPMorgan Chase both approved of the deal, deeming it fair from a financial perspective. Twitter's board publicly and unanimously accepted the buyout offer for $44 billion, and Twitter was to become a private company once the transaction was completed sometime in 2022. Negotiations with Musk were led by the board's transaction committee, composed of Taylor, Martha Lane Fox, and Patrick Pichette. The deal would require shareholder and regulatory approval before it could be finalized, though analysts believed it was unlikely to be challenged by regulators. Musk was barred from disparaging the company or its employees when tweeting about the acquisition before the transaction closed. The agreement also stipulated that if Musk failed to close the acquisition, he would be required to pay Twitter a $1 billion breakup fee. Agrawal was set to receive $39 million from the buyout, while Dorsey would receive $978 million. Musk had privately selected a new CEO to replace Agrawal upon completion of the acquisition, though he was expected to serve as interim CEO in the months after its completion. Tesla's stock sank by more than $125 billion the next market day, causing Musk to lose about $30 billion of his net worth.

After the acceptance was announced, Musk said that his first goal would be to make the algorithm that ranks tweets in the content feed open-sourced, in an effort to increase transparency. He has also stated that he intended to remove spambots and "authenticate all real humans", suggesting that he might convert Twitter's San Francisco headquarters into a homeless shelter. Musk said he lacked confidence in Twitter's corporate management, telling banks that he had considered reducing executive and board pay. He published tweets critical of decisions made by Twitter executives such as Vijaya Gadde, who was subsequently harassed by Twitter users using racist and sexist language. On April 28, Twitter told advertising agencies that their work would not be seen next to offensive material. Musk also discussed with bankers with the ideas of cutting jobs and costs, encouraging influencers to be creative, and adding subscription services to Twitter.

On May 4, the Digital, Culture, Media and Sport Committee of the House of Commons of the United Kingdom summoned Musk to discuss the effect of his buyout on free speech and "online harms". Musk secured another $7.1 billion in funding the next day, including from Oracle Corporation co-founder Larry Ellison, Saudi prince Al Waleed bin Talal Al Saud, venture capital firms Andreessen Horowitz and Sequoia Capital, as well as sovereign wealth fund Qatar Holding. The equity infusion reduced his original $12.5 billion personal bank loan to $6.25 billion and his required cash equity contribution from $21 billion to just under $20 billion. On May 11, ''The Wall Street Journal'' reported that the SEC and Federal Trade Commission (FTC) had launched investigations into events leading to the acquisition. The next day, Agrawal fired Twitter general manager Kayvon Beykpour and revenue product lead Bruce Falck.

Attempted termination

Alleged hold

On May 13, Musk revealed that he had placed the deal "on hold" in the wake of reports that 5 percent of Twitter's daily active users were spam accounts, causing Twitter shares to drop more than 10 percent. Musk clarified that he remained committed to the acquisition, and Agrawal stated he expected the deal to close. In response to a May 16 Twitter thread in which Agrawal said an external review into the platform's users was impractical, Musk tweeted out a poop emoji. The following day, Musk reiterated that the acquisition could not "move forward" until Twitter could prove the aforementioned reports false, urging the SEC to investigate Twitter's daily user numbers. The same day, Twitter filed new documents with the SEC, including a detailed timeline of Musk's purchase, and affirmed they would "enforce the merger agreement" regardless of Musk's actions. On May 25, Musk abandoned plans to partially fund the deal through margin loans against Tesla stock, instead opting to pledge an additional $6.25 billion in equity financing. Dorsey departed Twitter's board the same day, while Twitter investor William Heresniak filed a class-action lawsuit against Musk, alleging that he had violated corporate laws in California by manipulating the market. The lawsuit further declared that Musk was not permitted by the acquisition contract to place the deal on hold, and that Musk's misleading statements had contributed to declining Twitter stock prices.

On June 3, the acquisition was cleared by U.S. antitrust review. In an email sent by Musk's attorney to Twitter three days later, Musk threatened to terminate his agreement with Twitter because the company had refused to give him data pertaining to its users. Twitter responded that they would continue to cooperate with Musk to ensure that the transaction was closed in accordance with their agreement. On June 8, Twitter's board complied with Musk's demands, agreeing to provide him with a "firehose" data stream of tweets. A week later, the SEC asked Agrawal to provide information on how Twitter estimated its number of spam accounts, to which the company obliged; the SEC concluded its inquiry on July 27. Musk attended an all-hands meeting on June 16 to answer questions from Twitter employees, discussing Twitter's content moderation policy, freedom of speech, potential layoffs, remote work, and "the cosmic nature of Twitter". Musk also expressed his desire for Twitter to reach one billion active users, and pledged his commitment to advertising as a source of revenue for Twitter.

In a complaint filed by Whistleblower Aid with the SEC, U.S. Justice Department, and FTC on July 6, former Twitter security officer Peiter Zatko accused several Twitter executives, including Agrawal and certain board members, of making false or misleading statements about privacy, security, and content moderation on the platform in violation of the Federal Trade Commission Act of 1914 and SEC disclosure rules. These included misrepresentations to Musk made during the course of the acquisition bid, with the complaint specifically calling Agrawal's May 16 thread deceptive. In a July 7 conference call, Twitter revealed that over one million spam accounts were removed daily, and reiterated that it was impossible to externally determine the exact number of these accounts as it would involve private user data. That same day, ''The Washington Post'' reported that the deal was "in peril" amid a slowdown in discussions on funding.

Attempted withdrawal by Musk

On July 8, Musk announced his intention to terminate the proposed acquisition, claiming in a regulatory filing that Twitter was in "material breach" of several parts of the agreement by refusing to comply with Musk's requests for spambot account data and dismissing high-ranking employees. In response, Taylor pledged to pursue legal action against Musk at the Delaware Court of Chancery with the goal of completing the acquisition, with the ensuing lawsuit once again overseen by the Twitter board's transaction committee. Twitter's stock sank by 7 percent after the news, dropping by a further 11 percent the next day. On July 10, Twitter hired the law firm Wachtell, Lipton, Rosen & Katz to represent its case, including "key lawyers" William Savitt and Leo Strine, along with Potter Anderson & Corroon, Ballard Spahr, Kobre & Kim, and Wilson Sonsini Goodrich & Rosati. Musk again employed the services of Quinn Emanuel Urquhart & Sullivan after previously doing so for ''Unsworth v. Musk'' and ''SEC v. Musk'', including his personal lawyer Alex Spiro, as well as Skadden, Arps, Slate, Meagher & Flom.

Twitter formally launched its lawsuit against Musk at the Delaware Court of Chancery on July 12, with Musk tweeting in response, "Oh the irony lol". Twitter requested that the trial be held from September 19 through September 22, before the deal's originally scheduled "drop dead" date on October 24. Musk's legal team rejected this, asking for the trial to be held from February 13 through February 22, 2023. On July 19, judge Kathaleen McCormick ruled that the trial would last for five days in October, with Twitter seeking an October 10 start date. During its quarterly earnings investor call on July 22, Twitter cited the "chaos" caused by the proposal as the primary factor for its decline in revenue. In a letter to McCormick on July 26, Musk's lawyers complained that Twitter had hindered them from commencing the discovery process and requested an October 17 start date, which McCormick granted three days later with a duration of five days.

In a tweet on August 6, Musk challenged Agrawal to a public debate on Twitter's spambot accounts, before polling his followers on whether they believed that less than 5 percent of Twitter accounts were "fake/spam". On August 10, Musk sold 7.92 million Tesla shares worth a total of $6.9 billion as backup should he lose the lawsuit, despite previously stating he would no longer sell Tesla stock. The next week, McCormick ordered Twitter to produce documents from Beykpour, which Musk's team had requested along with files from 22 other Twitter employees and 41 "custodians". Shortly thereafter, Musk subpoenaed Dorsey. Other businessmen and investors subpoenaed include Marc Andreessen, Ellison, David Sacks, and Joe Lonsdale, while Twitter and Musk also subpoenaed Goldman Sachs, Morgan Stanley, JPMorgan Chase, Andreessen Horowitz, Sequoia Capital, Salesforce, Mastercard, and more. Sacks and Lonsdale were both irritated that they were being subpoenaed, with the former filing a failed motion to dismiss the subpoena. In total, lawyers for Twitter issued over 84 subpoenas, while Musk's lawyers issued more than 36.

Facing increasing pressure from Musk, Twitter announced that it would combine its health team, tasked with preventing non-consensual nudity and child sexual exploitation on the platform, with its anti-spam team. McCormick rejected much of Musk's team's "absurdly broad" request for data pertaining to all of Twitter's users, but ordered the company to produce data from 9,000 accounts it previously audit sampled. Musk filed a "termination letter" with the SEC on August 29, citing Zatko's claims as evidence Twitter breached their contract, before asking McCormick to delay the trial by a few weeks. McCormick rejected the request, and Musk's team sent a third termination letter to Twitter. On September 13, Zatko testified before the Senate Judiciary Committee, while Twitter shareholders voted in favor of the acquisition. Musk privately offered to purchase Twitter at the reduced prices of $31 billion and $39.6 billion, both of which the company rejected.

Revival and closure

Revitalization of bid

On October 3, Musk's legal team informed Twitter that Musk had changed his mind and decided to move forward with his proposed acquisition at the originally agreed-upon price of $54.20 per share, on the condition that Twitter drop its lawsuit. The reason for this reversal was attributed to concerns from Musk's team that they would not be able to prove that there was a material adverse effect justifying a break from contract. Musk and Agrawal's depositions were originally scheduled for October 6 and 10, respectively. Musk stated that his purchase of Twitter was part of his ambition to create an "everything app" called X, which would offer many different services. In response, McCormick asked both sides to propose to her how they should proceed. Twitter shares surged by 23 percent as a result of Musk's announcement. Neither Twitter nor Musk responded to McCormick's request, prompting her to announce that the trial would go forward as planned.

On October 6, McCormick agreed to a request by Musk to postpone the trial to October 28 so Musk could finalize his debt financing for the acquisition, adding that the trial would be rescheduled to November if the deal did not close by then. A week later, it was revealed that Musk was being investigated by the U.S. government for his conduct in the proposed buyout. Musk later stated that he believed Twitter's long-term value would exceed the price of $54.20 per share, which he considered an overpayment. On October 20, ''The Washington Post'' reported that Musk intended to terminate 75 percent of Twitter's staff, and that Twitter executives were keen on selling the company to Musk so they could mitigate their planned payroll and infrastructure cuts. In an open letter, Twitter employees condemned Musk's intentions and warned of negative consequences on the future of Twitter. Bloomberg News and the ''Post'' further reported that officials in the U.S. Biden administration were considering a national security review of Musk's proposed acquisition and other ventures via the Committee on Foreign Investment (CFIUS), with the possibility of President Joe Biden blocking the purchase if need be. The White House has refuted those reports as well.

By October 21, both parties' bankers and lawyers were set to complete the paperwork for the acquisition by the end of the month, with the deal expected to close by then. The banks funding the acquisition were to hold the $13 billion worth of debt incurred as opposed to selling it. In a video call with banks who helped Musk fund the acquisition, Musk assured them he would complete the buyout by the deadline. Musk made a trip to Twitter's headquarters on October 26, tweeting a video of him carrying a kitchen sink at the site's lobby and changing his Twitter bio to "Chief Twit". Musk also told Twitter employees that while layoffs were still likely to happen, he did not intend to do so at the scale the ''Post'' had previously reported. The next day, Musk wrote in an open letter to advertisers that Twitter would not become a "free-for-all hellscape", reiterating that his motives for the purchase were not based on greed but rather a desire to create "a common digital town square". He then asked Tesla engineers to meet with Twitter's product managers in order to assess the platform's codebase, which was frozen until November 1.

Completion of purchase

In the afternoon of October 27, Musk and Twitter closed the deal, with Musk tweeting "the bird is freed". Musk immediately became Twitter's new owner, promptly firing Agrawal, chief financial officer (CFO) Ned Segal, Gadde, and general counsel Sean Edgett, with the executives escorted out of the company's headquarters by security. Agrawal, Segal, and Gadde were set to receive "golden parachute" sums of $38.7 million, $25.4 million, and $12.5 million, respectively, but Musk circumvented the agreement by asserting the executives were dismissed "for cause" and that the company had been mismanaged. Dorsey retained his $1 billion ownership stake, and several other executives departed Twitter in the ensuing days.

Musk assumed the position of CEO, merging the company with X Holdings and dissolving Twitter's board of directors. Musk uses the title "Chief Twit" to refer to his position as CEO. A "war room" was established at Twitter, with Musk meeting with Spiro, Sacks, and others to discuss his next steps. According to ''The New York Times'', the group's two primary objectives were to reduce the size of Twitter's workforce and overhaul the platform's mobile app. Twitter employees were not formally informed of the change in management, with Musk originally said to be planning a town hall meeting with employees but ultimately not doing so. The next day, Twitter shares ceased trading in accordance with Musk's pledge to take the company private; the company's stock ticker was delisted from the New York Stock Exchange (NYSE) on November 8.

Post-acquisition

Initial reforms

On October 27, Musk announced that a "content moderation council" with diversified viewpoints would be established to inform the platform's content policy, and declared a moratorium in "major content decisions or account reinstatements" until then. The council was never formed, with Musk claiming that it was part of a deal he made with activists which they allegedly dishonored. He also signaled his intention to do away with lifetime account suspensions and unban those suspended for "minor rdubious reasons". On October 30, technology newsletter '' Platformer'' reported that Twitter would require users to purchase a Twitter Blue subscription in order to retain their blue checkmarks indicating they were "verified" on the platform, which was later confirmed by Musk as a measure to combat spambot accounts. The feature began rolling out on November 5, but was then delayed until after the U.S. midterm elections due to concerns of potential election interference. Twitter's trust and safety team opposed the change. Musk ordered Twitter employees to revamp multiple aspects of the program by the end of the week, enlisting employees from his other companies such as Tesla, the Boring Company, and Neuralink, as well as investors Jason Calacanis and Sriram Krishnan. To meet these deadlines, many Twitter staff members were directed to extend their working hours. Musk later stated that he would not alter Twitter's content policies or restore banned accounts until after the midterms.

On November 9, one day after Election Day, Twitter launched its revamped verification program on iOS devices, with all users now able to obtain a blue checkmark by purchasing Twitter Blue. To distinguish between those who had been verified before the change and those who received the checkmark via Twitter Blue, secondary gray checkmarks labeled "official" were briefly added to the former's profiles before Musk overruled the feature hours later. Instead, a pop-up message indicating which of the two groups a verified user belonged to was also added to the blue checkmark. The gray checkmarks were inexplicably restored the next day, and then Twitter halted new verifications via Twitter Blue amid a spike in impersonator accounts. The program relaunched on December 12, with Musk introducing gold checkmarks for businesses and gray checkmarks for government accounts. Musk also met with advertisers via Twitter Spaces to outline his plans to fulfill his pre-acquisition pledges, previewing forthcoming features and allaying fears of a rise in disinformation and hate speech. He also named Community Notes, a fact-checking tool formerly known as Birdwatch, as a prospective substitute for Twitter's current approaches to content moderation.

Layoffs and mass resignations

On November 4, Musk and Twitter began laying off a substantial portion of the company's workforce and Twitter temporarily closed its offices, with ''The New York Times'' estimating that roughly half of employees had been let go. The night before the layoffs, five Twitter employees based in San Francisco and Cambridge, Massachusetts filed a lawsuit against the company, alleging that mass layoffs would violate federal and California WARN Acts. Musk explained that the layoffs were a cost-cutting measure and stated that the company had been losing over $4 million a day, criticizing activist groups who had called on advertisers to cease doing business with the company. The ''Times'' described the layoffs as "haphazard", with employees learning of their firings through a variety of means. Workers in Dublin and Tokyo received emails regarding the layoffs, while those in Ireland and Britain remained in their offices at night to await official word on their employment status. Others learned that they had been laid off when they found themselves locked out of their work applications. Twitter's internal directory, Birdhouse, was taken offline and Twitter offices worldwide were closed for the weekend. On November 6, Twitter asked some employees who had been laid off to return to the company, either because they had been fired by mistake or because they were belatedly deemed important to the health of the business.

Days after the layoffs, Twitter terminated a large number of its contractors, and Musk fired a series of employees who criticized him publicly or within the company. On November 16, Musk delivered an ultimatum to employees via email: commit to "extremely hardcore" work in order to realize Musk's vision of "Twitter 2.0", or leave. In response, hundreds of Twitter employees resigned the next day, hours before the deadline to respond to Musk's email, rendering many of Twitter's core functions nonviable. ''Business Insider'' reported that less than 2000 employees remained at the company. Musk and his advisers met with several employees to dissuade them from leaving the company, while Twitter offices were once again closed until November 21. Despite the closures, Musk summoned all Twitter software engineers to Twitter's headquarters on November 18, seeking greater insight into the platform's solution stack. Additional layoffs occurred later that month, and the company resumed hiring.

Content moderation

Musk began unbanning banned accounts in late November, beginning with Jordan Peterson, Kathy Griffin, ''The Babylon Bee'', and Trump. Multiple anti-fascist accounts were suspended, many of which had been named by far-right figures who urged Musk to take action. Among those banned include a group that provides security to LGBTQ+ events and several accounts parodying Musk. Twitter also announced it would no longer enforce its policy prohibiting COVID-19 misinformation, and dissolved its Trust and Safety Council responsible for Twitter's policies on hate speech, child sexual exploitation, and self-harm content. After previously indicating his intention to review Twitter's policy against "misgendering or deadnaming of transgender individuals", Musk relaxed the platform's hate speech policies, with '' Vanity Fair'' describing the policy protecting transgender people as "effectively dead".

On December 14, Musk suspended ElonJet, a Twitter bot account operated by Jack Sweeney which tracked Musk's private jet in real-time using publicly accessible data, in addition to several of Sweeney's other accounts. He had previously stated, "My commitment to free speech extends even to not banning the account following my plane, even though that is a direct personal safety risk." Defending his decision to suspend the accounts, Musk declared a ban on doxxing real-time location data, and Twitter followed suit by updating its policies page. The next day, Twitter banned the accounts of multiple journalists who had been covering the ElonJet incident, as well as the Mastodon account on Twitter, on the grounds that they had violated the new doxxing policy. Some of the suspended journalists joined a Twitter Spaces mass audio call with Musk, where Musk was asked about the their suspensions; Musk quit the call, and the call was abruptly ended before the entire Twitter Spaces service was temporarily taken down. Musk attributed the shutdown to a software bug, while a Twitter senior software engineer acknowledged that Spaces had been "taken offline". Most suspended journalists were later reinstated, but found themselves unable to post new tweets until their policy-violating tweets had been taken down.

By December 17, Twitter was blocking some links to Mastodon as being "potentially harmful" or "malware". On December 18, Twitter announced a new policy barring users from promoting certain social media platforms, including Mastodon, but rescinded it within a day following significant backlash. Musk apologized and pledged to poll Twitter users before enacting "major policy changes" going forward.

Resignation poll

On November 16, Musk stated that he planned to eventually appoint a new CEO to oversee Twitter, shortly thereafter beginning the process of searching for his successor. On December 18, amid growing public discontent surrounding the ElonJet and Mastodon controversies, Musk conducted an unscientific Twitter poll asking whether he should resign from his position as Twitter CEO, claiming that he would "abide by the results". The poll resolved to "yes" after 57.5 percent of 17.5 million users voted in favor of him stepping down.

After this result, Musk responded "interesting" to unfounded theories that the result of the resignation poll had been influenced by bots, agreeing with a user's suggestion to restrict future polls on policy changes to paid Twitter Blue subscribers. On December 20, he announced he would step down as CEO as soon as his replacement was selected, but would continue to lead Twitter's software and server teams.

Reactions

Takeover bid

Following Musk's induction to Twitter's board of directors on April 5, Agrawal wrote that he believed Musk's appointment would bring long-term value to the company, while Dorsey wrote that Musk "cares deeply about our world and Twitter's role in it". Dorsey privately relayed his appreciation to Musk for his commitment, texting that he trusted Musk. On April 11, Agrawal stated that he believed Musk's withdrawal from the board was "for the best", noting that the company would "remain open to his input".

Musk's offer to take over Twitter was met with both praise and criticism. On April 14, Twitter employees expressed concern with Musk's views on free speech. Media outlets expressed concerns that his proposed changes to Twitter would result in an increase in disinformation and online harassment. Jim Cramer of CNBC opined that the Twitter board would have "no choice" but to reject Musk's offer due to potential personal liability faced by the board members. On April 19, the National Urban League urged Twitter to turn down Musk's takeover bid, warning of potentially negative consequences on users' civil rights.

Conservative and Republican commentators and politicians in the U.S. who believed Twitter discriminated against right-wing speech expressed enthusiasm for Musk's proposed changes. On April 22, U.S. House Republicans demanded that Twitter's board preserve all records pertaining to Musk's takeover proposal, which sets the stage for a potential congressional probe following the 2022 midterms. Jimmy Patronis, the Chief Financial Officer of Florida, praised Musk's offer and was critical of Twitter's "poison pill" strategy. According to a poll conducted by Harvard University's Center for American Political Studies (CAPS) and the Harris Poll, 57 percent of American voters approved of Musk's purchase of Twitter.

Acquisition announcement

Agrawal applauded the purchase and assured employees that no layoffs were planned at that time, adding he was proud of Twitter employees "despite the noise" around the company. He also led an all-hands meeting on April 29 to address concerns raised by employees. Dorsey endorsed the sale, saying that "taking witterback from Wall Street is the correct first step" and that he trusted Musk to be the owner of the company. Former Twitter CEO Dick Costolo denounced Musk's criticism of the company. Twitter general counsel Vijaya Gadde allegedly cried during a meeting about the announcement and was subjected to online trolling. Musk's June 17 meeting with employees was generally negatively received by participants, who found Musk's statements "incoherent" and "uninspiring". Musk was repeatedly derided and mocked by Twitter employees on their internal Slack channels after the deal was brokered.

Republican lawmakers in the U.S. Congress such as Jim Jordan, Yvette Herrell, Marsha Blackburn, and Ted Cruz praised the deal, calling it a restoration of free speech. Meanwhile, Democratic lawmakers such as Pramila Jayapal, Jesús García, Marie Newman, Mark Pocan, and Elizabeth Warren criticized Musk and the buyout. In June, Texas attorney general Ken Paxton launched an investigation into whether Twitter had misled authorities on its number of spambot accounts, alluding to prior claims made by Musk. Former U.S. President Donald Trump expressed approval with the deal but stated that he would not rejoin the platform, even if he is unbanned, due to his preference for his own social media platform, Truth Social; Musk later indicated his intention to reverse Twitter's ban on Trump. Mexican President Lopez Obrador stated that he hoped Musk would rid Twitter of "the corruption that's there, manipulation with bots". Federal Communications Commission (FCC) commissioner Brendan Carr responded to calls for the agency to block the purchase by saying that it has no authority to do so, calling such requests "absurd". Thierry Breton, the European Commissioner for Internal Market, emphasized that "any company operating in Europe needs to comply with heirrules", while the European Union (EU) announced that new online rules would "overhaul" the digital market and Tech Giants.

By April 27, 30,000 new users had joined the decentralized network of servers running open-source Mastodon software. Conservative Twitter accounts experienced a significant increase in followers, while liberal ones experienced a slight decrease; additionally, thousands of left-leaning users deactivated their accounts following the buyout. LGBTQ+ users and activists expressed apprehension about the deal based on tweets by Musk mocking transgender people, fearing that the re-platforming of suspended Twitter accounts would lead to a rise in online harassment and hate speech. On June 3, a group of political advocacy groups which included the Center for Countering Digital Hate, GLAAD, and MediaJustice initiated a campaign to block the proposal by calling for a review of the deal by the government and a boycott of the platform by advertisers.

Henrik Fisker, co-founder of electric vehicle maker Fisker Inc. and a rival of Musk's, left Twitter shortly after the acquisition announcement. Amazon founder Jeff Bezos questioned whether Tesla's business interest in China would give the Chinese government leverage over Twitter via Musk, before answering that it would "probably not". Microsoft co-founder Bill Gates questioned if Musk would allow the spread of public health misinformation, including vaccine misinformation. Wikipedia co-founder Jimmy Wales speculated that Twitter could either thrive or fall within five years under Musk's supervision. Bitcoin investor Roger Ver and Coinbase CEO Brian Armstrong welcomed the buyout, citing the potential for reduction of perceived censorship on Twitter. Google and Alphabet CEO Sundar Pichai said that he hoped Twitter would improve over time due to its importance to society, while Facebook and Meta Platforms founder and CEO Mark Zuckerberg expressed confusion and uncertainty over the proposed buyout.

Attempted termination

Edgett instructed employees not to share commentary on the purported cancellation; nonetheless, several Twitter employees posted humorous messages making light of the situation. Tesla shares rose 2.11 percent in the hours after Musk's announcement. Trump criticized Musk and called the acquisition "rotten", which led to a protracted feud between the two. With the exception of Trump, most conservatives sided with Musk, with former White House chief strategist Steve Bannon attacking Twitter for allegedly lying about the prevalence of its spambot accounts and Turning Point USA CEO Charlie Kirk musing that Musk may have been seeking to "expose" Twitter the whole time. In an email sent to Twitter's employees in response to Zatko's complaint, Agrawal sharply rejected the claims and called them a "false narrative".

Completion of purchase

Trump responded approvingly of the purchase after the deal was closed, saying that he was pleased Twitter was "in sane hands", rather than what he termed "radical left lunatics". Other Republican politicians, including Dan Crenshaw, Darrell Issa, Marjorie Taylor Greene, Marsha Blackburn, Anthony Sabatini, Amy Kremer, Lauren Boebert, Dick Black, Cruz, and Jordan applauded the purchase as well. Democrat Amy Klobuchar voiced her distrust of Musk and called for tighter government regulation of the platform, while Democrat Chris Murphy advocated for a federal investigation into the role of Saudi Arabia in the purchase. Dmitry Medvedev, deputy chairman of the Security Council of Russia and former President of Russia, was pleased with the news, stating that he hoped Twitter would eliminate "political bias and ideological dictatorship". Breton again emphasized that Twitter was bound by the EU's laws, alluding to the recently-passed Digital Services Act.

Internally, Twitter employees expressed concern that Musk would lay off employees before they receive their compensation payments, among other messages criticizing Musk and voicing solidarity with each other. Amid conflicting reports on whether Musk was planning sweeping layoffs, many employees expressed uncertainty and fear on Slack, Discord, and LinkedIn. Women's rights activist Seyi Akiwowo tweeted her disappointment with Gadde's dismissal, while children's rights activist Beeban Kidron said that Musk's newfound power would not result in more free speech. Podcaster Joe Rogan praised Musk for his aspirations, while right-wing Twitter account Libs of TikTok rejoiced over the news of the purchase. Media personality Stew Peters, who had been blocked from Twitter for months, attempted to circumvent the block after the purchase using a new account, which was later suspended. Margarita Simonyan, editor-in-chief of the Russian state-controlled RT broadcasting service, demanded that Musk lift her Twitter suspension. Bin Talal Al Saud congratulated Musk on the purchase, and JPMorgan Chase CEO Jamie Dimon urged Musk to eradicate spambot accounts. Tesla rival General Motors announced it would temporarily stop paid advertising on Twitter. Advertising agencies IPG Mediabrands and Omnicom Media Group recommended their clients temporarily pause advertising on Twitter due to safety and trust concerns over Musk's ownership. A slew of companies proceeded to do so, including Audi, Bentley, the Carlsberg Group, General Mills, Lamborghini, Mondelez International, Porsche, Pfizer, REI, and the Volkswagen Group. Media buying agency GroupM also advised its clients against procuring advertisements from Twitter. Alt-tech social media platform Parler welcomed Musk's purchase, while alt-tech platform Gettr was more skeptical, believing Twitter was "fundamentally broken".

Online reception to Musk's completion of the purchase was mixed. According to Memetica, a digital investigations company, several far-right figures experienced a significant increase in followers after the deal was finalized, while many progressives experienced a significant decrease, although it is unclear if Musk's takeover drove the changes in followers. Mastodon once again experienced a surge in sign-ups. Multiple celebrities in the entertainment industry announced their departure from the platform, while some left-wing influencers such as John Pavlovitz and Rob Reiner urged fellow leftists to remain on Twitter for the time being. The Network Contagion Research Institute (NCRI) observed a 500 percent spike in the use of the racial slur " nigger" in the 12 hours after Musk completed the acquisition, while ''The Washington Post'' noted an increase in pro-Nazi, misogynistic, and anti-LGBTQ+ tweets. Basketball player LeBron James expressed concern over the NCRI's report, condemning "unfit people saying hate speech is free speech". Twitter responded by saying that the accounts using racial slurs were part of a " trolling campaign" and would be banned summarily. The Center for Countering Digital Hate reported that anti-Black, anti-gay, and anti-transgender slurs had increased since Musk took control of Twitter, while the Anti-Defamation League reported an increase in antisemitic content.

Post-acquisition

Author Stephen King, Democrat Alexandria Ocasio-Cortez, and Democrat Ed Markey criticized Musk's decision to charge Twitter users for the blue checkmark. Tweeting in support of Ocasio-Cortez, actor Mark Ruffalo called on Musk to give up ownership of Twitter. Social media platform Tumblr mocked the revamped verification program by selling a pair of functionless blue checkmarks parodying that of Twitter's. Biden expressed concern with Musk's plans for Twitter, saying that it "spews lies all across the world". After the layoffs, employees flooded the anonymous forum service Blind with negative comments about Musk, with Dorsey expressing gratitude toward laid-off employees and apologizing for growing the company too rapidly. The FTC commented that it was closely monitoring developments at Twitter, stressing that Musk must abide by its consent decrees, while EU Data Protection Commissioner Helen Dixon stated that her office had reached out to Twitter to discuss privacy concerns.

On November 9, 2022, Biden expressed support for a U.S. government review of the foreign investors backing Musk's purchase, alluding to national security concerns. However, U.S. Treasury Secretary Janet Yellen stated that she did not see a reason to investigate the acquisition and unaware of any national security concerns. Seven Democratic senators urged the FTC to investigate Musk's rapid changes to Twitter, while pharmaceutical company Eli Lilly suspended all advertising campaigns on Twitter after a false tweet from an impersonator account went viral. Former head of consumer product Jeff Seibert expressed disappointment and frustration over Musk's changes to Twitter. In the wake of mass employee resignations on November 17, many Twitter users posted humorous messages on the platform expressing grief and anticipating a possible shutdown of Twitter, with some posting links to their other social media accounts.

Musk's suspension of journalists covering the ElonJet incident was widely condemned. CNN and ''The Washington Post'', whose reporters were banned, criticized Musk's hypocrisy and impulsiveness, while Digital Content Next CEO Jason Kint demanded Musk explain his actions. Democrats Lori Trahan, Yvette Clarke, Ro Khanna, Ritchie Torres, and Martin Heinrich all criticized Musk, while Democrat Don Beyer also voiced disapproval with Musk's labeling of Mastodon links as malicious. Lawmakers from the EU, France, and Germany sided with the journalists and threatened to take retaliatory action against Musk.

Critical analysis

Takeover bid and acquisition announcement

Elizabeth Lopatto of ''The Verge'' predicted that a Musk takeover would lead to a mass employee exodus and a possible reinstatement of Trump's Twitter account. After the acquisition announcement, Alex Werpin of ''The Hollywood Reporter'' warned of widespread repercussions. Greg Bensinger of ''The New York Times'' argued that Musk's acquisition was "about controlling a megaphone" rather than free speech, while Elizabeth Dwoskin of ''The Washington Post'' remarked that Musk's free speech vision for Twitter was considered by technologists to be outdated and impractical. Don Pittis of CBC News noted the controversy associated with the wealthy gaining control of media platforms. Brendan O'Neill of ''Spiked'' observed that Musk's purchase of Twitter and the resulting backlash represented a "battle for control of the Internet", with ''Business Insider'' Ben Gilbert calling the purchase the latest "battleground" in the culture war between Democrats and Republicans. Michael Hiltzik of ''The Seattle Times'' commented that Musk's impact on Twitter would depend on his policies and how he chooses to implement them. David Auerbach of '' UnHerd'' saw the purchase as indicative of a "major flashpoint" in the transition of society to "a more decentralized, chaotic, and devolved world". Paul R. La Monica of CNN Business suggested that Tesla's declining stock price indicated that Wall Street investors were doubtful on whether Musk's purchase would go through. ''CleanTechnica'' Matt Pressman believed that Musk's purchase would benefit Tesla because owners of the company's cars often engaged on the platform, and Lindsey Bakes of ''Deseret News'' wrote that Musk could integrate cryptocurrency within Twitter.

Kevin D. Williamson of American conservative magazine '' National Review'' likened Musk's purchase of Twitter to the Donald Trump 2016 presidential campaign, labeling it a publicity stunt, his colleague Rich Lowry said that liberal politicians' strong reaction to Musk's purchase was an indication that Twitter's existing policies had "political consequences", and the editors of the publication wished Musk well in his quest to promote free speech on Twitter. Bonnie Kristian of evangelical magazine ''Christianity Today'' felt that the purchase would only "add to the confusion" surrounding the contentious debate on free speech, while Paris Marx of American socialist magazine ''Jacobin'' dismissed Musk's proclamations that he sought to protect free speech as an "example of his hubris". Corbin K. Barthold of conservative public policy magazine '' City Journal'' believed it would be difficult but "worth the struggle" to end censorship on Twitter, while Peter van Buren of ''The Spectator World'' opined that Musk should simply take Twitter offline. Cathy Young of center-right news website '' The Bulwark'' felt that Musk's planned reforms to Twitter were "unlikely to succeed", further observing that commentators who opposed the purchase viewed it as right-wing backlash against "perceived left-wing social media bias". Robby Soave of American libertarian magazine ''Reason'' postulated that Musk's purchase would not threaten Twitter or democracy, suggesting that those overstating the importance of the platform were "Musk's critics in progressive and mainstream media", with James McElroy of ''The American Conservative'' further arguing that many journalists' condemnation of the acquisition was motivated by "professional anxiety". J. Robert McClure III of American conservative magazine ''Washington Examiner'' and Ben Shapiro of American conservative news website '' The Daily Signal'' declared that the negative reaction to Musk's purchase was rooted in an opposition to the idea of free speech.

Equity analyst Angelo Zino believed that Twitter's acceptance of Musk's proposal may have stemmed from its realization that alternative bidders would be unlikely to emerge due to social media companies' declining asset prices. Associate professor Brian Quinn of Boston College Law School noted that it would be difficult for Musk to arbitrarily pull out of the deal due to the contractual doctrines of fair dealing and good faith. Kate Klonick, a law professor at St. John's University, argued that to allow "all free speech" to exist on Twitter would open the door to the spread of pornography and hate speech. Similarly, Joan Donovan, research director at Harvard's Shorenstein Center on Media, Politics and Public Policy, stated that the lack of moderation on Twitter would lead to online harassment. Bill George, a senior fellow at Harvard Business School and former CEO of Medtronic, argued that Musk's purchase of Twitter would harm both society and Musk himself, while analyst Mike Proulx of Forrester Research cautioned that other companies may leave Twitter if Musk loosens its moderation policies. Proprietary trader Dennis Dick opined that Musk's spambot claims were tactics by him to lower the price of the purchase. Analysts noted that the involvement of foreign entities as independent investors could cause the transaction to face national security scrutiny by the CFIUS. Left-leaning media watchdog Media Matters for America and think tank Australian Strategic Policy Institute suggested that China could use its influence to extract political concessions or manipulate Twitter due to Musk's ties to the country. American Civil Liberties Union (ACLU) executive director Anthony D. Romero warned of the potential danger of Musk wielding excessive power.

Attempted termination

Following Musk's announcement that he intended to terminate the agreement, legal experts generally agreed it would be difficult for him to do so. Law professor James Park of the University of California, Los Angeles found Musk's spambot argument weak and doubted it was material, while Case Western Reserve University business law professor Anat Alon-Beck observed that Twitter was compelled to enforce the merger so as to disprove Musk's allegations. Professor Jennifer Grygiel of Syracuse University mused that Musk may reverse course and revisit the deal. Tulane University Law School associate dean for faculty research Ann Lipton and mergers and acquisitions expert Julian Klymochko both expressed doubts that Musk could prove there was a material adverse effect.

Felix Salmon of '' Axios'' noted that a clause in the contract opened the door for a judge to grant specific performance and order Musk to move forward with the deal. CNBC's Jonathan Vanian described Musk's withdrawal as the product of months of buyer's remorse, while his colleague Alex Sherman observed that paying the stipulated breakup fee would not relieve Musk of compensations or sanctions. Writing for ''The Wall Street Journal'', Holman W. Jenkins Jr. questioned whether Musk had proposed the acquisition "out of mouth momentum or excessive enjoyment of the limelight or for some mysterious reason that causes an onlooker to throw up his hands". Various news publications believed that Zatko's complaint provided potential evidence in Musk's favor, though Bloomberg News columnist Matt Levine argued that the complaint confirmed Twitter's monetizable daily active users counts do not include spambots.

Revitalization of bid

Greg Varallo of the Bernstein Litowitz Berger & Grossmann law firm observed that if Musk fails to secure funding and close the acquisition, he could be barred from claiming that he can terminate the acquisition as per the legal doctrine of judicial estoppel. New York University's Center for Social Media and Politics executive director Zeve Sanderson cautioned that if Musk does lay off 75 percent of Twitter's workforce, it would make it more difficult for the company to moderate its content. Professor David Kaye of the University of California, Irvine School of Law and Professor Eric Goldman of the Santa Clara University School of Law concurred, warning of a potential increase in misinformation and harassment on the platform. However, they noted that the layoffs could still be mitigated through an increase in automated content moderation.

Completion of purchase

Conservative commentators celebrated the purchase's closure. Fox News host Tucker Carlson argued that Musk's ''laissez-faire'' approach to moderation on Twitter would reshape American political discourse. Shapiro wrote that he hoped other social media platforms would implement Musk's proposals and called on Musk to reverse Peterson's suspension from Twitter. Political commentator Matt Walsh saw the purchase as an opportunity to rally opposition against the "trans agenda". Political columnist Benny Johnson called on Musk to reverse the suspensions of several prominent conservatives. ''Spiked'' O'Neill claimed that liberals' negative reaction to the closure reflected their fear of freedom and liberty, while ''Washington Examiner'' Christopher Tremoglie disapproved of Musk's idea for a moderation council as continued censorship.

Lauren Hirsch of ''The New York Times'' observed that Musk would face financial challenges in owning Twitter, including the company's difficulty in turning a profit. Richard Waters of the ''Financial Times'' echoed Hirsch's sentiments, adding that it would difficult for Musk to allow the right amount of free speech on the platform. Kate Ferguson of Deutsche Welle viewed Musk as unreliable and therefore unfit to operate Twitter, and Hamilton Nolan of ''The Guardian'' felt the purchase was an attempt by Musk to "control the conversation". Barbara Ortutay, Tom Krisher and Matt O'Brien of the Associated Press noted Musk's contradictory and vague messages in the past regarding his vision for Twitter, while Ben Burgis of ''Jacobin'' criticized liberals' technocratic views and their downplaying of the importance of free speech in response to the purchase, though he remarked that Musk had a history of suppressing his critics. Also writing for ''The New York Times'', Kate Conger, Ryan Mac, and Tiffany Hsu noted that Musk's meetings with civil rights activists and his plans for a content moderation council were reminiscent of the actions taken by Zuckerberg following backlash on Facebook's handling of the 2016 U.S. elections. ''Politico'' Jack Shafer noted that media coverage of Musk's purchase foretold "chaos, greater political oversight, and outright failure."

Edward Niedermeyer, an author and critic of Musk, argued that Twitter may fail due to Musk's hubris. Scholars who study the First Amendment, such as professor Jonathan Turley of the George Washington University Law School, praised Musk's plans to tone down content moderation on Twitter. New York University's Center for Business and Human Rights deputy director Paul M. Barrett speculated that a moderation council under Musk would face skepticism due to Musk's "erratic and imperious" behavior in the past. Alex Stamos of Stanford University's Center for International Security and Cooperation questioned how Musk would respond to foreign governments attempting to influence Twitter's userbase. Those in the cryptocurrency field, such as podcaster Bryce Paul and investor Cathie Wood, expressed excitement at the prospects of Musk's ownership.

Media Matters for America president Angela Carusone warned that Musk's leadership would lead to an increase in disinformation, conspiracy theories, and harassment on Twitter. Literary group PEN America opined that the midterm elections in November would serve as a test as to whether Musk would allow disinformation to spread rapidly on the platform, while American left-wing activist coalition Stop the Deal warned of real-world consequences if a rise in hate speech occurs on Twitter. Over 40 civil rights groups signed an open letter to 20 Twitter advertisers urging them to abandon the platform if Musk lifts its content moderation measures. Anti-Defamation League CEO Jonathan Greenblatt said he was "cautiously optimistic" about the purchase, but expressed concerns over a potential rise in hate speech. Fight for the Future director Evan Greer appreciated Musk's idea for a moderation council, but noted that Musk had supreme authority on any decisions made. Eliot Higgins of Bellingcat believed that Musk's attempts to promote free speech would backfire under increased government regulation. LGBTQ+ advocacy group Human Rights Campaign voiced concern at Twitter's new ownership and argued that Twitter has the responsibility to stop its platform from turning into a "dangerous media environment".

Post-acquisition

The first weeks of Musk's tenure at Twitter have been widely described as chaotic and tumultuous by the media. Harvard professor Sandra Sucher called Musk's mass layoffs "poorly handled". Gerald Hathaway of the Faegre Drinker Biddle & Reath law firm argued the opposite, believing that Musk had done what was necessary to curb Twitter's losses, assuming his claims about Twitter's losses were true. Jason Wilson of the Southern Poverty Law Center criticized Musk's perceived disinterest in "policing hate speech", observing an increase in verified white nationalists and other far-right extremists. Branko Marcetic of ''Jacobin'' accused Twitter of bias after several left-wing accounts were suspended. Experts with the Brookings Institution noted that the importance of Twitter "as a platform for political discourse in the U.S." raised implications for national security, while cybersecurity expert Peter W. Singer detailed multiple cybersecurity concerns stemming from Musk's acquisition.

See also

* Twitter Files

References

Further reading

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External links

Press release of acquisition announcement

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