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Elon Musk Outlines Final Steps Required to Consummate Twitter Deal

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Twitter Announces Major Staffing Changes as Musk Deal Continues to Take Shape

Time for a quick check in on the Elon Musk Twitter takeover – so how close are we to Elon becoming Tweeter–in-Chief?

Musk addressed the topic in an interview for the Qatar Economic Forum earlier today, in which Musk explained that there are three key issues that need to be resolved before he will proceed with his Twitter takeover bid.

Those three elements are:

  • Fake profiles – Musk has repeatedly said that the deal cannot progress unless Twitter is able to provide evidence to support its claim that fake accounts only make up 5% of its user base. Twitter has since provided Musk’s team with its ‘full firehose’ of tweets to conduct its own assessment, but there’s no word as yet as to whether this will satisfy their demands on this aspect.
  • Debt financing – Despite being the richest man in the world (arguably), Musk also needs to secure final funding for his $44 billion Twitter offer. Musk has committed to paying $33.5 billion in cash, with an additional $7.1 billion in equity financing commitments from investors. That leaves $3.4 billion which will come via bank loans, though the full details of how this will work have not been finalized.
  • Shareholder approval – Lastly, Twitter shareholders actually have to accept Musk’s proposed deal, which Twitter’s board has recommended that they do. This is likely a formality, but it’s another step that needs to be taken for the deal to be confirmed – and with some Twitter shareholders suing Musk over the deal already, there is a chance it could get blocked at this step.

According to Musk, the deal will not be able to progress until these final details are clarified, but for Twitter’s part, it’s pushing ahead with the particulars either way, filing a new proxy statement with the SEC which once again states that it’s ‘committed to completing the transaction at the agreed price’.

Twitter Board chair Bret Taylor recently echoed the same, which suggests that Twitter will look to press Elon to consummate the deal as soon as possible, as opposed to letting him walk away on a technicality, or re-negotiate for a lower price.

Market speculation suggests that the latter is where Elon is aiming, looking to reduce his $44 billion outlay on the basis of fake profiles being a more significant element of the app than had been publicly communicated.

Though the prospects of this being a viable pathway are not great, with the SEC accepting Twitter’s past assessments of fake accounts in its official updates, which may mean that Elon has to pay up, even if he does find that there are more fakes than he expected.

Either way, that’s currently where we’re at, and we won’t know what comes next until Elon’s team comes back with their own assessment of Twitter’s data, and looks to frame that as they choose.

And Elon and Co. also have various other issues to contend with, including staff cuts at Tesla, legal action from staff, labor disputes and more.

Adding even more staffing drama into that mix doesn’t seem immediately appealing (Musk has said that he will cut Twitter staff too), but the Twitter deal is progressing at its own pace, and we should have some more insights from Musk and his team shortly.

We’ll keep you updated on any progress.



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Walmart says it has stopped advertising on Elon Musk’s X platform

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Walmart says it has stopped advertising on Elon Musk's X platform

Walmart said Friday that it is scaling back its advertising on X, the social media company formerly known as Twitter, because “we’ve found some other platforms better for reaching our customers.”

Walmart’s decision has been in the works for a while, according to a person familiar with the move. Yet it comes as X faces an advertiser exodus following billionaire owner Elon Musk’s support for an antisemitic post on the platform. 

The retailer spends about $2.7 billion on advertising each year, according to MarketingDive. In an email to CBS MoneyWatch, X’s head of operations, Joe Benarroch, said Walmart still has a large presence on X. He added that the company stopped advertising on X in October, “so this is not a recent pausing.”

“Walmart has a wonderful community of more than a million people on X, and with a half a billion people on X, every year the platform experiences 15 billion impressions about the holidays alone with more than 50% of X users doing most or all of their shopping online,” Benarroch said.

Musk struck a defiant pose earlier this week at the New York Times’ Dealbook Summit, where he cursed out advertisers that had distanced themselves from X, telling them to “go f— yourself.” He also complained that companies are trying to “blackmail me with advertising” by cutting off their spending with the platform, and cautioned that the loss of big advertisers could “kill” X.

“And the whole world will know that those advertisers killed the company,” Musk added.


Elon Musk faces backlash from lawmakers, companies over endorsement of antisemitic X post

02:23

Dozens of advertisers — including players such as Apple, Coca Cola and Disney — have bailed on X since Musk tweeted that a post on the platform that claimed Jews fomented hatred against White people, echoing antisemitic stereotypes, was “the actual truth.”

Advertisers generally shy away from placing their brands and marketing messages next to controversial material, for fear that their image with consumers could get tarnished by incendiary content. 

The loss of major advertisers could deprive X of up to $75 million in revenue, according to a New York Times report

Musk said Wednesday his support of the antisemitic post was “one of the most foolish” he’d ever posted on X. 

“I am quite sorry,” he said, adding “I should in retrospect not have replied to that particular post.”

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US Judge Blocks Montana’s Effort to Ban TikTok

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U.S. Judge Blocks Montana’s Effort to Ban TikTok in the State

TikTok has won another reprieve in the U.S., with a district judge blocking Montana’s effort to ban the app for all users in the state.

Back in May, Montana Governor Greg Gianforte signed legislation to ban TikTok outright from operating in the state, in order to protect residents from alleged intelligence gathering by China. There’s no definitive evidence that TikTok is, or has participated in such, but Gianforte opted to move to a full ban, going further than the government device bans issued in other regions.

As explained by Gianforte at the time:

The Chinese Communist Party using TikTok to spy on Americans, violate their privacy, and collect their personal, private, and sensitive information is well-documented. Today, Montana takes the most decisive action of any state to protect Montanans’ private data and sensitive personal information from being harvested by the Chinese Communist Party.”

In response, a collection of TikTok users challenged the proposed ban, arguing that it violated their first amendment rights, which led to this latest court challenge, and District Court Judge Donald Molloy’s decision to stop Montana’s ban effort.

Montana’s TikTok ban had been set to go into effect on Jan. 1, 2024.

In issuing a preliminary injunction to stop Montana from imposing a full ban on the app, Molloy said that Montana’s legislation does indeed violate the Constitution and “oversteps state power.”

Molloy’s judgment is primarily centered on the fact that Montana has essentially sought to exercise foreign policy authority in enacting a TikTok ban, which is only enforceable by federal authorities. Molloy also noted that there was apervasive undertone of anti-Chinese sentiment” within Montana’s proposed legislation.

TikTok has welcomed the ruling, issuing a brief statement in response:

Montana attorney general, meanwhile, has said that it’s considering next steps to advance its proposed TikTok ban.

The news is a win for TikTok, though the Biden Administration is still weighing a full TikTok ban in the U.S., which may still happen, even though the process has been delayed by legal and legislative challenges.

As I’ve noted previously, my sense here would be that TikTok won’t be banned in the U.S. unless there’s a significant shift in U.S.-China relations, and that relationship is always somewhat tense, and volatile to a degree.

If the U.S. government has new reason to be concerned, it may well move to ban the app. But doing so would be a significant step, and would prompt further response from the C.C.P.

Which is why I suspect that the U.S. government won’t act, unless it feels that it has to. And right now, there’s no clear impetus to implement a ban, and stop a Chinese-owned company from operating in the region, purely because of its origin.

Which is the real crux of the issue here. A TikTok ban is not just banning a social media company, it’s blocking cross-border commerce, because the company is owned by China, which will remain the logic unless clear evidence arises that TikTok has been used as a vector for gathering information on U.S. citizens.

Banning a Chinese-owned app because it is Chinese-owned is a statement, beyond concerns about a social app, and the U.S. is right to tread carefully in considering how such a move might impact other industries.

So right now, TikTok is not going to be banned, in Montana, or anywhere else in the U.S. But that could still change, very quickly.



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EU wants to know how Meta tackles child sex abuse

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The investigation is the first step in procedures launched under the EU's new online content law known as the Digital Services Act

The investigation is the first step in procedures launched under the EU’s new online content law known as the Digital Services Act – Copyright AFP Kirill KUDRYAVTSEV

The EU on Friday demanded Instagram-owner Meta provide more information about measures taken by the company to address child sexual abuse online.

The request for information focuses on Meta’s risk assessment and mitigation measures “linked to the protection of minors, including regarding the circulation of self-generated child sexual abuse material (SG-CSAM) on Instagram”, the European Commission said.

Meta must also give information about “Instagram’s recommender system and amplification of potentially harmful content”, it added.

The investigation is the first step in procedures launched under the EU’s Digital Services Act (DSA), but does not itself constitute an indication of legal violations or a move towards punishment.

Meta must respond by December 22.

A report by Stanford University and the Wall Street Journal in June this year said Instagram is the main platform used by paedophile networks to promote and sell content showing child sexual abuse.

Meta at the time said it worked “aggressively” to fight child exploitation.

The commission has already started a series of investigations against large digital platforms seeking information about how they are complying with the DSA.

It has sought more information from Meta in October about the spread of disinformation as well as a request for information last month about how the company protects children online.

The DSA is part of the European Union’s powerful regulatory armoury to bring big tech to heel, and requires digital giants take more aggressive action to counter the spread of illegal and harmful content as well as disinformation.

Platforms face fines that can go up to six percent of global turnover for violations.

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