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Twitter’s Legal Team Unleashes on Elon Musk, as it Moves to Force Musk to Complete Takeover Deal

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Elon Musk Launches Hostile Takeover Bid for Twitter

Well, this is certainly a pointed opening to Twitter’s legal case against Elon Musk, and his attempt to cancel his $44 billion acquisition of the app:

In April 2022, Elon Musk entered into a binding merger agreement with Twitter, promising to use his best efforts to get the deal done. Now, less than three months later, Musk refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests. Having mounted a public spectacle to put Twitter in play, and having proposed and then signed a seller-friendly merger agreement, Musk apparently believes that he – unlike every other party subject to Delaware contract law – is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away.”

Nothing being hidden behind legal jargon there, Twitter is pissed, and they’re now looking to make Elon pay for what he’s done to their stock, their company, their future prospects, etc.

In the latest development in the ongoing Twitter/Musk saga, Twitter has officially launched legal action to counter Musk’s effort to terminate the deal, due to, according to Musk, Twitter’s unwillingness to provide him and his team with adequate data to prove its usage claims, and other elements.

But Twitter says that Musk can’t exit the deal now, and it has a range of examples of bad faith actions and public disclosures on Musk’s part which it says are in violation of the original agreement.

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Specifically:

  • Twitter says that Musk has been acting against the proposed deal since the market started its recent downturn, and has breached the merger agreement repeatedly in the process
  • Twitter says that Musk has claimed to put the deal ‘on hold’ pending the satisfaction of ‘imaginary conditions’, and has breached his financing efforts obligations in the process
  • Musk has boasted publicly about violating his non-disclosure obligations under the original contract, both in relation to Twitter’s mDAU metric calculations and other internal data points
  • Musk has also repeatedly violated his non-disparagement obligation in the contract through public criticism of the company, and has misused confidential information in his public statements about fake accounts and Twitter’s processes.
  • Twitter says that one of the main reasons Musk cited for buying Twitter was to rid the platform of bots, which Musk is now using as a reason not to buy it. The two stances seem to conflict

In summary, Twitter says that Musk has leveled serious charges, both publicly and through lawyer letters, that Twitter has misled its investors and customers, which has materially damaged the company’s prospects, in violation of the agreed terms of the acquisition. Additionally, Twitter has outlined, in detail, how it’s worked to meet all of Musk’s information requests, beyond what it’s under obligation to do.

Yet, despite, this, Musk is now looking to exit the deal anyway – which, Twitter says, is actually the ultimate plan:

“From the outset, [the] defendants’ information requests were designed to try to tank the deal. Musk’s increasingly outlandish requests reflect not a genuine examination of Twitter’s processes but a litigation-driven campaign to try to create a record of non-cooperation on Twitter’s part. When Twitter nonetheless bent over backwards to address the increasingly burdensome requests, Musk resorted to false assertions that it had not.”

Twitter’s overview is a thorough and scathing assessment of Musk’s actions, which shows that Twitter has been taking notes, and has measured its legal case carefully. In some ways, the submission reads like a list of grievances that Twitter’s been just waiting to air out, and now, with Musk challenging the deal, it has an opportunity to do so.

Which is likely not good – either for Musk or ultimately Twitter itself.

Twitter also makes some interesting revelations about how the Musk push has impacted the company, including this note about employee retention.

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“Musk has unreasonably withheld consent to two employee retention programs designed to keep selected top talent during a period of intense uncertainty generated in large part by Musk’s erratic conduct and public disparagement of the company and its personnel […] Employee attrition, meanwhile, has been on the upswing since the signing of the merger agreement.”

Another reason stated by Musk’s team for seeking to exit the deal has been the loss of key executive staff at the company, which materially alters the make-up of the organization. Twitter not only says that this is not part of the original agreement – as it specifically ensured any such provision was left out – but also, as pointed out here, that it has tried to work with Musk to address exactly this either way.

Twitter has also included this description of Musk’s efforts to use its data API to scan for fake accounts:

“Twitter also explained that it had placed “no artificial throttling of rate limits” [on Musk’s access]. In follow-up correspondence, it became clear that the “limit” Musk had bumped up against was not the result of throttling but a default 100,000-per-month limit on the number of queries that could be conducted. With his undisclosed team of data reviewers working behind the scenes, Musk had hit that limit within about two weeks.”

What the heck are Musk and Co. doing there? 10k queries against the data, in two weeks? No idea how they’re trying to find fake and spam accounts, but that seems excessive (Twitter notes that it removed the query cap to enable Musk’s team to continue their analysis).

Overall, what Twitter’s saying here is that it believes Musk has acted in bad faith, and that he’s only seeking to get out of the deal now due to the market downturn, which has impacted his personal wealth, along with overall market performance.

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But letting Musk exit now would leave the company in a much worse state:

“Because of defendants’ breaches and the uncertainty they have generated, Twitter faces irreparable harm. Defendants stipulated in the merger agreement that “irreparable damage for which monetary damages, even if available, would not be an adequate remedy would occur in the event that the parties hereto do not perform the provisions of this Agreement (including failing to take such actions as are required of it hereunder to consummate this Agreement) in accordance with its specified terms or otherwise breach such provisions.”

There’s also this:

“For Musk, it would seem, Twitter, the interests of its stockholders, the transaction Musk agreed to, and the court process to enforce it all constitute an elaborate joke.”

Richest man in the world or not, Twitter’s sick of Musk’s antics, and it clearly has no intention of letting him off the $44 b hook.

Twitter also reiterates that there is no financing contingency and no diligence condition.

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“The deal is backed by airtight debt and equity commitments.”

‘Airtight’, which Twitter will be looking to enforce as it seeks to consummate the Musk deal, whether Elon likes it or not.

And again, the ultimate loser here will be Twitter, the company, which continues to lose staff due to uncertainty, and will eventually end up in the hands of someone who really doesn’t want to own it.

That doesn’t seem like the ideal foundation for future success, but that’s where we’re at.

Musk hasn’t provided any detailed response to Twitter’s counter claims as yet, though he did once again post a cryptic tweet following the release.

Whether Musk will actually be laughing at the end of this seems increasingly doubtful.

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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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