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‘Love me tender’: how Musk wooed Twitter, only to leave it at the altar | Elon Musk

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It was late January and Elon Musk had just announced a change of gear at Tesla, the world’s largest electric car company. In the teeth of a global supply chain crisis, the firm would not be releasing any new models until at least 2023. But America’s $230bn (£194bn) tech tycoon had found another focus for his attention. Within days, he had begun investing large sums in Twitter shares, to build a stake that eventually reached more than 9%.

On 26 March, Musk held a conversation with his old friend Jack Dorsey. But this wasn’t an informal catch-up: Dorsey, who co-founded Twitter, had retained a seat on its board and the two men, along with another board member, discussed whether Musk should also become a director.

The other topic of conversation was the future of social media.

It is a future that now, at least for Twitter, hangs in the balance. The platform last week launched a multibillion-dollar lawsuit against Musk after the entrepreneur walked away from a $44bn agreement to buy the company. In a filing outlining its claim, Twitter’s legal team has given a blow-by-blow account of the events that led to the collapse of the deal.

The Twitter logo on a screen on the New York Stock Exchange this month.
The Twitter logo on a screen on the New York Stock Exchange this month. Photograph: Brendan McDermid/Reuters

Twitter is asking a court in Delaware to compel Musk to complete the takeover he agreed to in April at $54.20 per share. In the legal jargon, it is seeking “specific performance” – a requirement that he complete the deal as agreed – and a consensus is forming that Twitter has a strong case. It is pushing for a quick hearing in September, with the hope that a verdict will come before a deadline to complete the deal on 24 October. On Friday, Musk filed a motion opposing Twitter’s request to fast-track a trial and is instead seeking a date in February next year.

Twitter’s lawyers have not minced their words. Their scathing account of events offers an inside view of how an unlikely corporate dalliance between a tweet-from-the-hip multibillionaire and the platform he probably spends too much time on descended into vicious acrimony. The first paragraph of their lawsuit states: “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.”

The document details how, at least from Twitter’s perspective, the relationship was tricky from the start. After the Dorsey conversation, Musk let Twitter know he was minded to either join the board, buy the company or take it private. Musk then discussed joining the board with Twitter’s chief executive, Parag Agrawal, its chairman, Bret Taylor, and a board member – Martha Lane Fox, the British co-founder of Lastminute.com.

Musk was offered a position and accepted in early April. But just days later, he told Twitter he would not be joining the board. Instead, he wanted to buy the company. Agrawal revealed the about-turn on 11 April.

On 13 April, Musk outlined his offer to the board and announced it publicly a day later. In a sign Twitter was not entirely happy about this, it adopted a “poison pill” defence, designed to stop an unwanted suitor from accumulating a significant stake.

It is at this point in the lawsuit’s account of events that Musk’s tweets start to appear. This string of messages to his 100 million-plus followers is unlikely to help his case. The document refers to repeated hints from Musk that a “tender offer” – or hostile bid – for the company is imminent, including a tweet that states “Love Me Tender”.

After more back-and-forth, a deal agreement was drawn up and the board recommended the offer to shareholders despite, as the lawsuit states, misgivings: “Twitter had been buffeted by Musk’s reversals before.” There were more side-winds to come.

Musk began to get cold feet, the lawsuit claims, as the markets turned against tech stocks. Their offer of losses now but high returns in the future began looking less attractive as the global economy wobbled and interest rates rose. The resulting selloff drove down share prices, affecting the value of not just Twitter but Tesla, whose stock was a key source of deal financing for Musk.

At this time, Musk began asking questions about the number of spam accounts on Twitter, which the company has always insisted represent less than 5% of a daily active user base that stands at 229 million people.

In the lawsuit, Twitter claims that the tanking markets dovetail with the sudden emergence of a stumbling block on Musk’s side in early May. “As the market (and Tesla’s stock price) declined, Musk’s advisers began to demand detailed information about Twitter’s methods of calculating mDAU [monetisable daily active users] and estimating the prevalence of false or spam accounts.” Not long after, on 13 May, Musk tweeted that the deal was “temporarily on hold” over the spam issue, and his willingness to complete the transaction nosedived after that.

Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of usershttps://t.co/Y2t0QMuuyn

— Elon Musk (@elonmusk) May 13, 2022

Twitter says it was surprised by Musk’s declaration the deal was temporarily on hold but had an inkling in the days running up to it when his bankers at Morgan Stanley had circulated an agenda for a meeting with Twitter that included the question: “How do you estimate that fewer than 5% of mDAU are false or spam accounts?”

After the surprise tweet went up, there was a legal scramble: Twitter’s deal counsel called Musk’s deal counsel. Two hours later, Musk belatedly tweeted that he was still “committed” to the deal. But he couldn’t help himself. Days later he tweeted a poo emoji at Agrawal in response to a long Twitter thread by the chief executive explaining the spam issue. The tweet inevitably appears in the lawsuit as part of Twitter’s argument that Musk himself breached the agreement by repeatedly disparaging the company and its employees.

From there it seemed inevitable that on 8 July, Musk’s lawyers would write to Twitter declaring that he was terminating the deal. In the lawsuit, Twitter details “multiple” attempts to meet Musk and clear up the spam issue. A meeting never occurred.

Twitter founder Jack Dorsey
Twitter founder Jack Dorsey said he would depart the company after Musk’s takeover. Photograph: Alamy

Howard Fischer, a partner at New York law firm Moses & Singer, says Twitter’s case has a strong chance of succeeding, in part because of Musk’s behaviour. “While courts are generally reluctant to order specific performance in these contexts, this might be one of the rare instances to justify that remedy.”

In the termination letter, Musk put forward three broad arguments: that Twitter had breached the agreement by failing to provide enough information on spam accounts; that it had misrepresented the number of spam accounts in its disclosures to the US financial watchdog; and that it had breached the agreement by failing to consult with him when firing senior employees recently.

The lawsuit rebuts these one by one, arguing that Twitter “bent over backwards” to respond to all information requests; that there is no proof it has misstated spam numbers; and that it contacted Musk’s lawyers about the firings, which were in the normal run of business anyway and received no objection.

Anat Alon-Beck, a law professor at Case Western Reserve University in Ohio, says Delaware case law indicates Twitter has a strong hand. She says one of Musk’s key arguments, that Twitter’s spam issue represents a “company material adverse effect” that substantially alters the company’s value, will be hard to substantiate. “I think that Twitter has the upper hand here, according to Delaware case law,” says Alon-Beck.

Twitter’s shares rose 9% last week to $37.74, reflecting investors’ belief that it has a good case. But it still leaves the prospect of a company forcing a suitor it does not like to buy a company he does not want.

Timeline

Elon Musk’s bid for Twitter

Show

Key dates in the Tesla billionaire’s campaign to gain control of the social media giant

Stake-building

Elon Musk starts buying shares in Twitter

Preliminary talks

Musk discusses joining the Twitter board with two directors, including co-founder Jack Dorsey

The stake revealed

 Musk discloses a stake of more than 9% in Twitter

Engagement with the board

 Twitter says Musk will join the company’s board

First signs of a bid

Twitter says Musk will not be joining its board, as the Tesla boss prepares a takeover

The bid

Musk offers $54.20 a share for Twitter, a 38% premium to Twitter’s 1 April closing price

‘Poison pill’

Twitter adopts a “poison pill” defence, which prevents a suitor from building up a significant shareholding, to protect the company from an unsolicited takeover 

Funding

Musk announces he has lined up $46.5bn in financing for the deal 

Acceptance

The Twitter board accepts Musk’s offer 

Tesla assets

 Musk sells Tesla shares worth more than $8bn to finance the takeover

Backers join the bid

Musk discloses that he has secured $7.1bn in funding for the bid from a group of investors, including the tech tycoon Larry Ellison

Dorsey mulls stepping down

 Dorsey says he will not return as chief executive after the takeover

Deal on hold

The slide towards termination begins. Musk says the Twitter deal is on hold pending review of spam and fake accounts. He later tweets that he remains committed to the deal.

Boardroom tension

 Twitter investors vote against re-electing a Musk ally to the board

Twitter investors get angry

Musk is sued by Twitter investors for stock ‘manipulation’ 

Musk alleges ‘material breach’

Musk threatens to walk away from the deal if Twitter fails to provide data on spam and fake accounts, accusing the company of a ‘material breach’ of the deal agreement

Deal is off

 Musk says he is terminating the deal 

Twitter sues

Twitter sues Musk over his termination of the deal and asks a court to enforce the transaction

Musk objects to trial date

Musk files a motion in Delaware opposing Twitter’s request to fast-track a trial over his termination move

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According to one observer, Twitter’s board is being compelled by its duty to shareholders and the fact that it is unlikely to find a better offer elsewhere. Drew Pascarella, a senior lecturer on finance at Cornell University, says: “Twitter shareholders, as with any owner of any company, are entitled to receive the maximum value for their shares. The deal with Elon was for $54.20, which is, in July of 2022, an outrageous price.”

The US financial watchdog is also looking at the situation. Last week Musk’s lawyers revealed that the Securities and Exchange Commission (SEC), which has already asked questions about how Musk disclosed his Twitter shareholding, has come back with further questions about his disclosures related to the deal.

Robert Frenchman, a partner at New York law firm Mukasey Frenchman, says pressure from a more aggressive SEC is clearly building.

“The SEC has been looking at this since Musk started accumulating his position and didn’t do everything right. They have their toehold and I think they will continue to look at whether his regulatory disclosures are consistent with the public statements he has been making about Twitter,” he says.

He adds that a fine is the most likely punishment if Musk is found to have made errors in filing and amending his 13D – a form that an investor is required to file when they take a shareholding of more than 5% in a listed business – or is found to have violated other SEC regulations.

But, as Frenchman says: “I don’t think Elon Musk lies awake at night worrying about SEC fines.”



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Linux 6.0 debuts, missing some Rusty bits • The Register

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Emperor Penguin Linus Torvalds has released the first release candidate for Linux 6.0, but doesn’t mind what you call it.

“After I had already decided to call this kernel 6.0, a few Chinese developers piped up and pointed out that ‘5.20’ is a more wholesome version of the Western ‘4.20’ internet-famous number,” he wrote in his announcement that Linux 6.0 rc1 has been released.

“4.20” is a reference to a day on which some celebrate marijuana, while “5.20” does likewise for magic mushrooms.

“So if you want to call this ‘Linux 5.20’, go right ahead,” Torvalds wrote.

“Because the kernel version numbers really are entirely made up and have no intrinsic meaning.”

That this week’s release has the 6.0 label is still nice to know, as discussion on the Linux kernel mailing list in recent weeks used 5.20 and 6.0 interchangeably.

As The Register has already reported, the release does not make major changes to the kernel but does include many useful updates – such as more RISC-V support, code to drive Intel’s Gaudi accelerators, and improved ACPI handling.

Torvalds lamented some Rust-enabling code didn’t make it into the release.

“I actually was hoping that we’d get some of the first rust infrastructure, and the multi-gen LRU VM, but neither of them happened this time around,” he mused, before observing “There’s always more releases.”

“This is one of those releases where you should not look at the diffstat too closely, because more than half of it is yet another AMD GPU register dump,” he added, noting that Intel’s Gaudi2 Ai processors are also likely to produce plenty of similar kernel additions.

“The CPU people also show up in the JSON files that describe the perf events, but they look absolutely tiny compared to the ‘asic_reg’ auto-generated GPU and AI hardware definitions,” he added.

The release includes 13,099 changed files, 1,280,295 insertions and 341,210 deletions. Torvalds calculated those numbers “just because I was curious and looked.”

He wants you to be curious too – or at least curious enough to test the kernel, because that’s what release candidates are for and this one contains at least one active bug. ®

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Tinder is the most hated app in Ireland

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Ireland is one of 19 countries worldwide that strongly dislikes Tinder. One in five Tweets by Irish people about all apps are negative.

According to Electronics Hub’s analysis of the most hated apps in the world, Tinder is the most loathed app in Ireland.

Irish people are not alone in their hatred for the dating app. Tinder was the most hated app in 19 countries in total, with Canadians, Americans, Nigerians, Kenyans and our neighbours in the UK also singling it out as their least favourite.

Electronics Hub determined the most hated apps in each country by analysing Twitter data. It processed more than 3m geotagged tweets related to 87 social media, dating, mobile games, entertainment, cryptocurrency and money transfer apps.

Researchers calculated the percentage of tweets about each app that were negative using a sentiment analysis tool which identifies whether a tweet has positive, negative or neutral sentiment.

Infographic of the most hated apps in the world by country.

Click to enlarge and see the most hated apps in the world by country. Infographic: Electronics Hub

Ireland was found to be one of the most negative countries when it came to attitudes towards apps. One in five Tweets posted by Irish people about apps were negative, Electronics Hub found.

Despite Irish people’s professed loathing for Tinder, the dating platform tried to play a role in keeping daters safe in the pandemic. It hooked up with the HSE to promote vaccines by adding badges to users’ profiles.

Tinder was only the second-most hated app in the world, with Roblox taking first place. More than 20 countries said the child-targeted gaming app was their most hated app. Other unpopular apps include Snapchat, Disney and Reddit.

Neighbouring countries tend to dislike similar apps, with the Scandinavians professing a dislike for Reddit and South Americans hating e-commerce apps.

Dating apps, meanwhile, are disliked the world over. In Iraq, 71.4pc of all tweets about Tinder are negative, which is the highest out of any country. A state-by-state breakdown of the most hated apps in North America also found Tinder took the top spot in 21 states.

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‘A sweatshop in the UK’: how the cost of living crisis triggered walkouts at Amazon | Industrial action

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Amazon workers say they are working in a “sweatshop” as safety concerns and worries about the cost of living crisis have triggered walkouts at warehouses around the country.

The Observer has spoken to four staff involved in the walkouts, who work at three Amazon warehouses, including Tilbury in Essex, where protests began on 4 August. All say they will struggle to survive this winter with pay rise offers between 35p and 50p an hour – far less than the rate of inflation, which is currently at 9.4%.

The workers, who spoke anonymously for fear of reprisals from Amazon, said they were speaking out to highlight how the firm’s ultra-cheap, ultra-convenient, super-fast delivery model works.

Amazon employs more than 70,000 people in the UK, adding 25,000 staff in 2021 alone. Many work at the company’s 21 fulfilment centres, where some workers say they are asked to carry out long, physical shifts, with difficult targets, for low pay.

Starting pay in Amazon warehouses will shortly be increasing to between £10.50 and £11.45 per hour, depending on location. An Amazon spokesperson said this was a 29% increase in the minimum hourly wage paid to staff since 2018. They said it is also augmented by a comprehensive benefits package worth thousands of pounds a year, and a company pension plan.

But staff say it is too low for the type of work being done and given the current economic crisis, especially at a company that just posted $121bn (£100bn) in revenues in the second quarter of 2022 alone.

“When we heard the news, it was shocking,” said one worker at Amazon’s warehouse in Tilbury. “It’s ridiculous. Inflation is [forecast to reach] 13%, and our salary increases barely 3%.” The worker rents a house with her husband for £1,350 a month without bills. “My salary is £1,600. … I’m lucky I’m married, otherwise I’d be homeless.”

Some staff are seeking a pay rise of £2 an hour from the tech giant.

Hundreds of Amazon employees stop working over disputed pay rise – video

Another worker at Amazon’s warehouse in Tilbury said they were “petrified” about how they would survive this winter. “We had a scenario recently where someone was living in [an] Amazon [warehouse],” he said. “If I’m honest, I can probably see that happening again.

“I can see people staying in the canteen all the time because they can’t afford to go home.”

The worker is protesting against the poor pay offer, as well as conditions that lock staff in cages for entire shifts at the warehouses, from where they pick items to be delivered to customers. (Amazon says the workstations are to protect workers from moving robotics.)

“It’s a Chinese sweatshop in the UK,” said the second worker at Tilbury. “It’s how they set up their model.”

The worker has struggled with his mental health while working for the company. “I’ve realised how bad Amazon is for my mental health,” he said. “The anxiety of going into work, knowing you’ve got to do the same stuff day in, day out, is horrible.”

That concern is echoed by a worker at an Amazon facility near Bristol, who has worked there with his wife for three years. “It was good initially,” the worker said. “There was a lot of safety consciousness, and the targets were pretty reasonable. But now they’re just pushing it higher and higher, and exploiting people.”

Around 100 Amazon staff at Bristol staged a sit-in at the company canteen on 10 August – action for which they say they were docked pay by management at the site. “The vast majority of people went back to work at that point, because at the end of the day, as much as they want to fight for it, they have to think about themselves financially.”

The Bristol warehouse worker says that managers used to stop employees from lifting heavy items from bins on high shelves in the warehouse without a ladder. “If you overstretched yourself for 10 hours, you’d end up with a bad neck and a bad back,” he said.

That has subsequently changed as staff said they felt pressured to meet ever-escalating demand. Staff pushing carts around the warehouse used to be limited to using one cart at a time for safety reasons; now it is claimed managers turn a blind eye to staff pulling two carts at once. “They don’t say nothing because all they care about is getting the work done as fast as possible,” he said. “Safety just goes out the window.”

He says he has personally lifted items weighing up to 25kg by himself, despite rules saying anything heavier than 15kg should be lifted by two people.

A worker at an Amazon facility in the north-west of England said that managers at his warehouse similarly ignored rules around not running on site and lifting down heavy items from high areas in an attempt to meet targets, which at his site require two items to be picked every minute.

Amazon declined to respond to specific claims.

Martha Dark, director at Foxglove, a non-profit organisation working to highlight issues within tech companies that supports Amazon workers, said: “None of the workers we’re supporting wanted to protest.

“They’re desperate and can’t survive on these wages. Meanwhile, Amazon threatens to dock pay and send workers to HR for revealing the truth about life in the warehouse.”

She added: “Amazon needs to respect workers’ rights to organise, stop penalising people who are fighting to survive and provide a real pay rise now.”

Two workers said they plan to leave the company because of the conditions and pay. However, some hope to stay put – to change things.

“If a lot of us who are experienced leave Amazon at this point they’ll get a new group of people in who they can mould into this depressing way of work,” said the Bristol worker. “That’s the problem.”

This article was amended on 14 August 2022. Inflation is at 9.4%, not 13% as stated in an earlier version; the latter is a forecast rate.

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