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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.

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“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%.”

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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:

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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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Snapchat Explores New Messaging Retention Feature: A Game-Changer or Risky Move?

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Snapchat Explores New Messaging Retention Feature: A Game-Changer or Risky Move?

In a recent announcement, Snapchat revealed a groundbreaking update that challenges its traditional design ethos. The platform is experimenting with an option that allows users to defy the 24-hour auto-delete rule, a feature synonymous with Snapchat’s ephemeral messaging model.

The proposed change aims to introduce a “Never delete” option in messaging retention settings, aligning Snapchat more closely with conventional messaging apps. While this move may blur Snapchat’s distinctive selling point, Snap appears convinced of its necessity.

According to Snap, the decision stems from user feedback and a commitment to innovation based on user needs. The company aims to provide greater flexibility and control over conversations, catering to the preferences of its community.

Currently undergoing trials in select markets, the new feature empowers users to adjust retention settings on a conversation-by-conversation basis. Flexibility remains paramount, with participants able to modify settings within chats and receive in-chat notifications to ensure transparency.

Snapchat underscores that the default auto-delete feature will persist, reinforcing its design philosophy centered on ephemerality. However, with the app gaining traction as a primary messaging platform, the option offers users a means to preserve longer chat histories.

The update marks a pivotal moment for Snapchat, renowned for its disappearing message premise, especially popular among younger demographics. Retaining this focus has been pivotal to Snapchat’s identity, but the shift suggests a broader strategy aimed at diversifying its user base.

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This strategy may appeal particularly to older demographics, potentially extending Snapchat’s relevance as users age. By emulating features of conventional messaging platforms, Snapchat seeks to enhance its appeal and broaden its reach.

Yet, the introduction of message retention poses questions about Snapchat’s uniqueness. While addressing user demands, the risk of diluting Snapchat’s distinctiveness looms large.

As Snapchat ventures into uncharted territory, the outcome of this experiment remains uncertain. Will message retention propel Snapchat to new heights, or will it compromise the platform’s uniqueness?

Only time will tell.

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Catering to specific audience boosts your business, says accountant turned coach

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Catering to specific audience boosts your business, says accountant turned coach

While it is tempting to try to appeal to a broad audience, the founder of alcohol-free coaching service Just the Tonic, Sandra Parker, believes the best thing you can do for your business is focus on your niche. Here’s how she did just that.

When running a business, reaching out to as many clients as possible can be tempting. But it also risks making your marketing “too generic,” warns Sandra Parker, the founder of Just The Tonic Coaching.

“From the very start of my business, I knew exactly who I could help and who I couldn’t,” Parker told My Biggest Lessons.

Parker struggled with alcohol dependence as a young professional. Today, her business targets high-achieving individuals who face challenges similar to those she had early in her career.

“I understand their frustrations, I understand their fears, and I understand their coping mechanisms and the stories they’re telling themselves,” Parker said. “Because of that, I’m able to market very effectively, to speak in a language that they understand, and am able to reach them.” 

“I believe that it’s really important that you know exactly who your customer or your client is, and you target them, and you resist the temptation to make your marketing too generic to try and reach everyone,” she explained.

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“If you speak specifically to your target clients, you will reach them, and I believe that’s the way that you’re going to be more successful.

Watch the video for more of Sandra Parker’s biggest lessons.

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Instagram Tests Live-Stream Games to Enhance Engagement

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Instagram Tests Live-Stream Games to Enhance Engagement

Instagram’s testing out some new options to help spice up your live-streams in the app, with some live broadcasters now able to select a game that they can play with viewers in-stream.

As you can see in these example screens, posted by Ahmed Ghanem, some creators now have the option to play either “This or That”, a question and answer prompt that you can share with your viewers, or “Trivia”, to generate more engagement within your IG live-streams.

That could be a simple way to spark more conversation and interaction, which could then lead into further engagement opportunities from your live audience.

Meta’s been exploring more ways to make live-streaming a bigger consideration for IG creators, with a view to live-streams potentially catching on with more users.

That includes the gradual expansion of its “Stars” live-stream donation program, giving more creators in more regions a means to accept donations from live-stream viewers, while back in December, Instagram also added some new options to make it easier to go live using third-party tools via desktop PCs.

Live streaming has been a major shift in China, where shopping live-streams, in particular, have led to massive opportunities for streaming platforms. They haven’t caught on in the same way in Western regions, but as TikTok and YouTube look to push live-stream adoption, there is still a chance that they will become a much bigger element in future.

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Which is why IG is also trying to stay in touch, and add more ways for its creators to engage via streams. Live-stream games is another element within this, which could make this a better community-building, and potentially sales-driving option.

We’ve asked Instagram for more information on this test, and we’ll update this post if/when we hear back.

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