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Elon Musk Officially Seeks to Terminate Twitter Takeover Deal

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Elon Musk Launches Hostile Takeover Bid for Twitter

It seemed inevitable, and now, Elon Musk has officially filed a motion with the SEC to terminate his $44 billion takeover of Twitter, based on Twitter’s failure to provide accurate information on the number of fake accounts on its platform.

In a letter filed on behalf of Musk and his investment partners at Morgan Stanley, Musk is seeking to cancel the acquisition due to a ‘material breach of multiple provisions’ of the original merger agreement.

As per the filing:

‘[Twitter] appears to have made false and misleading representations upon which Mr. Musk relied when entering into the Merger Agreement, and is likely to suffer a Company Material Adverse Effect (as that term is defined in the Merger Agreement).”

Musk’s team says that, despite repeated requests for qualifying information, Twitter had failed to provide them with the data required to make an accurate and true assessment of the number of fake accounts on its platform.

“While Section 6.4 of the Merger Agreement requires Twitter to provide Mr. Musk and his advisors all data and information that Mr. Musk requests “for any reasonable business purpose related to the consummation of the transaction,” Twitter has not complied with its contractual obligations.”

Musk’s team says that it has been seeking more information from Twitter for nearly two months, with Twitter only providing limited access to the required data, in violation of the terms.

“Sometimes Twitter has ignored Mr. Musk’s requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information.”

In total, Musk’s team says that Twitter has failed to provide them with information on:

  • Information related to Twitter’s process for auditing the inclusion of spam and fake accounts in mDAU
  • Information related to Twitter’s process for identifying and suspending spam and fake accounts
  • Daily measures of mDAU for the past eight (8) quarters
  • Board materials related to Twitter’s mDAU calculations
  • Materials related to Twitter’s financial condition

Because Twitter has failed to comply with these requests within a reasonable time period, that, Musk’s team says, is a violation of the deal’s terms, and is therefore reason enough to cancel the agreement.

The letter also notes that Musk’s team is still unconvinced of Twitter’s metrics, with its own analysis of Twitter’s expanded usage data, which it provided last month, showing that fake accounts are more prevalent in the app than Twitter claims:

Preliminary analysis by Mr. Musk’s advisors of the information provided by Twitter to date causes Mr. Musk to strongly believe that the proportion of false and spam accounts included in the reported mDAU count is wildly higher than 5%.”

Musk’s team also says that, based on its discussions with company execs, its understanding is that Twitter includes accounts that have been suspended within its active user metrics, which it says would see Twitter still including known fake and spam accounts within its publicly reported figures. Musk’s team also says Twitter’s process for determining the percentage of fake accounts ‘appears to be arbitrary and ad hoc’, further clouding their metrics.

Based on these ongoing questions, and Twitter’s failure to provide adequate justifications for such, Musk and Co. want to pull out, which will now put the onus on the SEC and/or the courts to decide whether the reasoning here is justified, and how it moves forward, or not, with the merger.

Which could be a disaster for Twitter, which has already cut executive jobs and shifted its entire business approach, in preparation for a pending Musk takeover.

Indeed, this week, reports suggested that Twitter CEO Parag Agrawal is ‘willing to go to war’ in order to make Elon Musk follow through with his takeover bid, even if Musk looks to back out of the process. Agrawal would personally be in for a big payday if the Musk deal were to go through – but more than that, the deal falling apart now would raise significant questions over Twitter’s future, and its capacity, as a business, to become a more viable, valuable proposition.

The overriding consensus thus far has been that Musk will eventually have to go through with his Twitter takeover push either way, because Musk waived various due diligence measures in his initial offer, in order to expedite the transaction,

But in today’s letter, Musk’s team has also provided a note of clarity on this point:

Despite public speculation on this point, Mr. Musk did not waive his right to review Twitter’s data and information simply because he chose not to seek this data and information before entering into the Merger Agreement. In fact, he negotiated access and information rights within the Merger Agreement precisely so that he could review data and information that is important to Twitter’s business before financing and completing the transaction.”

It seems, then, that a stand-off is coming, with Musk now making the move that many had expected, which will force Twitter to respond and provide a detailed explanation of such to the SEC.

Twitter board Chairman Bret Taylor was quick to respond to the news:

Will Musk be able to get out of the deal, or will Twitter indeed be able to force Musk to pay up, based on the terms of the agreement?

It looks like things are about to get really ugly, which can only be bad for Twitter as a business.



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Adobe Highlights Rising Visual Trends in 2024 Creative Trends Report

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Adobe Highlights Rising Visual Trends in 2024 Creative Trends Report

Looking for creative inspiration for your 2024 strategic planning?

This will help. Today, Adobe has published its annual Creative Trends Report, which incorporates insights from Adobe’s 30 million+ Creative Cloud users, in order to determine rising visual styles of interest, which look set to resonate with audiences in the new year.

Based on its research, the Adobe team has established four creative trends that are worthy of note:

  • Calming Rhythms – Fluid and flowing forms that soothe the senses and support emotional balance
  • Wonder and Joy – Visuals that inspire a sense of awe, joy, and enchantment
  • Dynamic Dimensions – Where all dimensions and types of content seamlessly merge
  • The New Nostalgia – Contemporary interpretations of vintage styles

Adobe’s 22-page report, which you can download here (with email sign-up), provides more insight into each of these trends, along with various examples, and data that explains why they’re set to gain more momentum.

There are handy notes and insights for each, which help to illustrate how to use them in your process.

Adobe 2024 Creative Trends Report

Interestingly, a lot of the images used by Adobe in the report look like they’ve been created by generative AI. I don’t know that they have, but it is worth noting the composition in this regard, as another potential means to tap into these trends.

Adobe 2024 Creative Trends Report

The report provides some interesting perspective on rising visual trends, which could help in your planning. Maybe one of these resonates especially well with your branding, or aligns with what your target audience has been sharing.

Either way, some additional, data-backed considerations, which could be helpful in your process.

You can download Adobe’s “2024 Creative Trends Report” here.

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Elon Musk’s X and Amazon discuss potential collaboration

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Elon Musk’s X and Amazon discuss potential collaboration

In a significant development in the social media industry, Elon Musk’s social media platform, X, is reportedly engaging in preliminary discussions …

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Threads Looks Set to be Made Available to European Users Next Week

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Threads Looks Set to be Made Available to European Users Next Week

Good news with EU social media fans, with Threads looking set for a December 14th launch in the region, just in time to capitalize on holiday engagement.

As reported by The Verge, EU Instagram users can now access a countdown timer at www.threads.net, which seemingly indicates the exact time for the upcoming EU launch. Meta hasn’t made any official announcement, but the countdown clock is only visible to European users, while EU users can also search ‘ticket’ in the Instagram app to find a digital invitation to Threads.

Which replicates the original Threads launch back in July, which included similar Easter eggs and indicators pointing to the launch date (like the above).

The EU launch of Threads has been delayed by evolving EU data privacy regulations, which, due to the timing of the implementation of these new rules, has put additional development burden on the Threads team to ensure compliance with the new parameters. Amid the initial Threads launch, Instagram (and Threads) chief Adam Mosseri said that it could take “many months” for Threads to reach EU users due to these additional complications.

But we have since seen indicators that Threads is coming.

Last month, The Wall Street Journal reported that Meta had an established plan to launch Threads to EU users in December, while app researchers have found various references to an upcoming “Threads EU Launch” in the app’s code.

Threads EU launch

Given the various strands of evidence, it does indeed seem likely that European users will get access to the app next week. And again, with social media usage increasing during the holiday break, that would also provide the best opportunity for Meta to capitalize on its opportunities.

Which are seemingly on the rise. As more people turn away from Elon Musk’s X project, largely due to Musk’s own divisive commentary, they’re seeking a real-time social alternative, and for many Threads is already filling that void.

That’s especially true for journalists, a common target of Musk’s attacks, who are now establishing new networks within the Threads ecosphere. And while live sports engagement remains high on X, Threads is also making a push to win over more sports communities, even placing ads courtside during the new NBA in-season tournament showcase in Las Vegas.

Threads NBA ad

That’s seemingly prompting more sports fans to post in the app, which will expand again with the arrival of potentially millions more users in the EU region.

So how many more users can Threads expect to gain as a result of its European expansion?

Based on Meta’s EU disclosure data on active users, Instagram currently serves some 259 million monthly active users in Europe.

Instagram’s total, official user count is 1 billion MAU, while Threads now has over 100 million monthly users. So presumably, around a tenth of active IG users are also signing up to the app, which would mean that, at a rough estimate, we’re set to see around 25.9 million new Threads users incoming, if/when Threads is launched in the EU region.

Which is probably not as many as you might expect, but this is based on rough estimates, as Instagram reportedly has more than a billion actives now, and we don’t know the exact, current user counts of either app.

But either way, it will expand the conversation in the app, and enable more people to take part, which has its own expanded benefits. And with around 60 million X users also in the region, that could see a number of them looking to make the switch.

Which is the real aim here. Meta has created Threads as the X alternative, aiming to scoop up former Twitter cast-offs who are unhappy with Elon’s changes at the app. In order to do that, Threads needs to be available in all regions where X users may be looking to jump ship, so its EU expansion is another critical step in this respect.

It’ll be interesting to see what Threads user numbers rise to over the holiday period, and whether it can indeed become a genuine rival for X in total active engagement.

We’ll keep you updated on any official announcement on the Threads EU launch.



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