WEBVTT - Elon Musk Buys Twitter 0:00:02.320 --> 0:00:05.600 From the heart of where innovation, money and power COLLI 0:00:06.440 --> 0:00:10.959 in Silicon Valley and beyond. This is Bloomberg Technology with 0:00:11.039 --> 0:00:27.600 Emily Jay I'm Emily check in San Francisco, and this 0:00:27.680 --> 0:00:31.160 is Bloomberg Technology. Coming up in the next hour, it's official. 0:00:31.280 --> 0:00:34.680 Elon Musk has agreed to buy Twitter for forty four 0:00:35.000 --> 0:00:39.120 billion dollars. The world's richest man will soon be in 0:00:39.200 --> 0:00:42.879 charge of one of the most influential social networks in 0:00:42.920 --> 0:00:46.240 the world. We've got this developing story covered from all 0:00:46.280 --> 0:00:49.280 angles over the course of the hour, a new chapter 0:00:49.920 --> 0:00:53.680 in tech history. But at the same time that the 0:00:53.760 --> 0:00:56.720 Musk deal is going through, he tweets another insult at 0:00:56.720 --> 0:01:00.160 the SEC, calling those who run it shameless puppets over 0:01:00.200 --> 0:01:03.600 his ongoing Tesla feud. What all these jabs might mean 0:01:03.920 --> 0:01:07.360 when regulators get a look at this deal, And aside 0:01:07.360 --> 0:01:09.360 from all the money that's being spent on Twitter, the 0:01:09.360 --> 0:01:11.680 other big question, of course, is what happens to everyone 0:01:11.880 --> 0:01:15.040 who's been banned from it, including former President Trump. How 0:01:15.080 --> 0:01:18.440 exactly does Elon Musk defined free speech will wait into 0:01:18.440 --> 0:01:22.160 the thorniest part of this debate that has perplexed perplexed 0:01:22.280 --> 0:01:25.360 tech platforms for decades. We're gonna get to all of 0:01:25.360 --> 0:01:27.880 that in a moment, but first Elon Musk gets his way, 0:01:28.000 --> 0:01:30.840 agreeing to a deal to take Twitter private for forty 0:01:30.880 --> 0:01:34.760 four billion dollars. Each investor will receive fifty four dollars 0:01:34.760 --> 0:01:38.080 and twenty cents for every Twitter share they own. I 0:01:38.240 --> 0:01:40.600 want to stick with Twitter and bring in insider intelligence, 0:01:40.680 --> 0:01:45.440 principal analyst Jasmine Edinburgh, as well as Bloomberg's Michelle Davis. 0:01:45.480 --> 0:01:49.320 Michelle talked to us about the unknowns at this point. 0:01:49.320 --> 0:01:52.040 We've got Twitter earnings coming up, for example, in just 0:01:52.160 --> 0:01:54.440 a few days. Is there a chance Elon Musk could 0:01:54.440 --> 0:01:58.200 see those numbers and say, hey, now, thanks. So the 0:01:58.280 --> 0:02:01.080 unknowns that we have at this point are many, um, 0:02:01.120 --> 0:02:03.600 but it is official. There is a deal at What 0:02:03.640 --> 0:02:05.800 we don't know is this twenty one billion dollar equity 0:02:05.880 --> 0:02:08.320 check that we just talked about. How much of that 0:02:08.400 --> 0:02:10.800 will at the end of the day be officially from Musk, 0:02:10.800 --> 0:02:12.640 and how much of that will take the form of, 0:02:12.639 --> 0:02:15.160 you know, other equity partners coming in. It's our understanding 0:02:15.200 --> 0:02:18.520 that Musk is speaking with other potential equity partners, uh, 0:02:18.560 --> 0:02:21.160 and that it wasn't you know, necessary for them to 0:02:21.200 --> 0:02:23.400 have that lined up before they made the steel public 0:02:23.680 --> 0:02:26.440 and that things obviously materialized so quickly over the weekends 0:02:26.480 --> 0:02:28.640 that that could be part of why we don't see that. Yet. 0:02:28.680 --> 0:02:31.760 Another question that we have is, uh, what happens from 0:02:31.760 --> 0:02:34.720 a regulatory perspective. We've gotten lots of questions around you know, 0:02:34.880 --> 0:02:37.280 does the industry become more regulated if he if one 0:02:37.280 --> 0:02:39.840 of the equity partners is someone from outside of the 0:02:39.880 --> 0:02:42.800 United States, is that open this up to uh, you know, 0:02:42.840 --> 0:02:45.560 regulatory scrutiny from from regulators that are not based in 0:02:45.600 --> 0:02:48.079 the US. And then there's also the question of, uh, 0:02:48.320 --> 0:02:51.520 do Twitter shareholders approve this steal? At this point, we 0:02:51.560 --> 0:02:55.040 saw from the press release that Twitter's entire board unanimously 0:02:55.120 --> 0:02:58.120 approved the deal, but it is subject to a shareholder vote, 0:02:58.120 --> 0:03:00.519 and so we're going to be hearing more from shareholders 0:03:00.560 --> 0:03:02.880 in the coming days to see to see what their 0:03:02.919 --> 0:03:05.959 views are. Now. Twitter has said it's not going to 0:03:06.040 --> 0:03:08.839 have an earnings call this week, but will report its 0:03:08.919 --> 0:03:13.440 latest numbers as planned Jasmine. One of the many opens 0:03:13.560 --> 0:03:16.280 questions here is what kind of business model does e 0:03:16.400 --> 0:03:19.160 La Musk think Twitter should have. He sort of hinted 0:03:19.400 --> 0:03:22.840 he wants to move away from an ad revenue business model, 0:03:22.960 --> 0:03:24.799 and if so, what does that mean? Does that mean 0:03:24.880 --> 0:03:31.600 subscription and will that really be a profitable engine? Yeah? Absolutely, 0:03:31.639 --> 0:03:34.880 Speaking of unknowns, one really big unknown is, of course, 0:03:34.920 --> 0:03:38.080 what happens to Twitter's AD business UM as a result 0:03:38.120 --> 0:03:40.760 of this deal. As you said, Musk is a proponent 0:03:40.800 --> 0:03:43.480 of making Twitter a subscription based service rather than an 0:03:43.520 --> 0:03:46.960 ad supportive one. But the problem here is that there's 0:03:47.000 --> 0:03:50.240 plenty of research that shows that consumers still prefer to 0:03:50.320 --> 0:03:53.040 view free content and exchange for ads and subscribe to 0:03:53.080 --> 0:03:57.120 a service, and making Twitter a subscription service would radically 0:03:57.200 --> 0:04:00.480 change its business model. It's worth noting that this isn't 0:04:00.520 --> 0:04:03.800 something that would happen overnight. There's some talk that Musk 0:04:03.840 --> 0:04:06.000 would need Twitter's AD revenues in order to keep it 0:04:06.080 --> 0:04:10.400 afloat as the transition UM continues. And it's also worth 0:04:10.440 --> 0:04:12.520 noting that this is happening at a time that Twitter 0:04:12.560 --> 0:04:15.720 has really seen a rebound in AD growth. UM. We'll 0:04:15.720 --> 0:04:17.960 have to wait until Thursday to see if that continued 0:04:18.040 --> 0:04:21.279 in Q one, but at least UM for one, it 0:04:21.360 --> 0:04:26.240 reported growth in its AD revenues and an insider intelligence 0:04:26.400 --> 0:04:29.160 UM in our latest forecast that was made before this announcement, 0:04:29.360 --> 0:04:31.880 we were expecting Twitter's AD revenues to grow by another 0:04:31.920 --> 0:04:35.520 twenty five percent this year. What are you expecting this 0:04:35.600 --> 0:04:37.480 deal to How do you expect this deal to impact 0:04:37.560 --> 0:04:42.240 user growth? Well? Twitter has already been struggling and bringing 0:04:42.240 --> 0:04:45.240 in new users, And I think one part of this 0:04:45.279 --> 0:04:47.800 whole Musk saga that has been so interesting is that 0:04:47.839 --> 0:04:50.800 Twitter is a platform that really thrives on news and 0:04:50.920 --> 0:04:54.640 uncertainty and even controversy. So there's a chance that all 0:04:54.680 --> 0:04:58.720 of this playing out really could have helped Twitter's engagement. 0:04:58.760 --> 0:05:00.479 Of course that's not something that we we'll see in 0:05:00.520 --> 0:05:03.640 the earnings call on Thursday. Is that um happened after 0:05:03.800 --> 0:05:07.719 Q one? But UM, it's possible that Twitter is still struggling. 0:05:07.720 --> 0:05:10.080 It's actually likely that Twitter is still struggling. I'm not 0:05:10.160 --> 0:05:13.800 expecting to see massive user growth considering the user growth 0:05:13.800 --> 0:05:19.279 that it reported last quarter UM in monetizeable daily active users. Michelle, 0:05:19.279 --> 0:05:21.880 can you walk us through the next steps? You know 0:05:22.200 --> 0:05:27.360 this deal isn't done. Um, it'll happen sometime this year, Uh, 0:05:27.760 --> 0:05:30.159 as far as they've told us. But is there anything 0:05:30.200 --> 0:05:33.760 between now and clothes that could take this deal off 0:05:33.760 --> 0:05:37.480 the rails? So a bunch of things could happen between 0:05:37.480 --> 0:05:39.400 now and let's say the end of the year. Next 0:05:39.400 --> 0:05:42.359 steps for I guess the Elon Musk Twitter deal that 0:05:42.400 --> 0:05:44.760 we have on the table right now is uh. If 0:05:44.760 --> 0:05:47.800 Elon Musk wants to he can take out the equity 0:05:47.839 --> 0:05:49.720 commitment that he has for twenty one billion dollars and 0:05:49.760 --> 0:05:51.520 replace it with commitments from other people or you know, 0:05:51.560 --> 0:05:54.200 actual equity from other people. The deal also needs to 0:05:54.200 --> 0:05:58.200 get regulatory approval, It needs to get approved by shareholders. Um. 0:05:58.320 --> 0:06:01.200 And then there is always the possible pity that another 0:06:01.440 --> 0:06:04.880 bidder comes in. Now, it's our interesstanding that there is 0:06:04.920 --> 0:06:08.760 a reverse breakup in the scale, which means basically Elon 0:06:08.839 --> 0:06:11.840 Musk has to pay a certain amount of money if 0:06:11.839 --> 0:06:14.000 he decides to walk away from the dealer if it 0:06:14.040 --> 0:06:18.119 falls apart for certain reasons. Uh. And so if another 0:06:18.120 --> 0:06:20.080 bidder were to come in, he wouldn't owe that. But 0:06:20.160 --> 0:06:22.480 there is you know, there is the possibility that another 0:06:22.520 --> 0:06:25.520 bidder could still come in here. Uh. So yeah, we'll 0:06:25.560 --> 0:06:30.159 be watching that interesting now, Jasmine, I'm curious what you 0:06:30.200 --> 0:06:33.080 make of Elon Musk's stance on free speech and how 0:06:33.160 --> 0:06:37.320 you expect that to impact users and add revenues. If 0:06:37.360 --> 0:06:40.320 he evolves the service to be you know, more liberal 0:06:40.360 --> 0:06:43.680 when it comes to moderation. Not in a political sense, 0:06:43.680 --> 0:06:45.200 but you know what I mean. Um, you know what 0:06:45.240 --> 0:06:51.080 does that mean for advertisers specifically? Yeah? Absolutely, I mean. 0:06:51.720 --> 0:06:53.919 Musk has said that he wants to make Twitter into 0:06:54.000 --> 0:06:56.960 a free speech haven, which would likely reverse a lot 0:06:57.000 --> 0:06:59.720 of the guardrails that Twitter has instituted in order to 0:07:00.040 --> 0:07:02.880 check the health of its platform, its users, and the 0:07:02.920 --> 0:07:07.160 brands that advertise their Um, you know, doing so might 0:07:07.240 --> 0:07:10.480 make a lot of risk advert risk adverse advertisers really 0:07:10.520 --> 0:07:14.080 wary about advertising on Twitter. There's always the chance of 0:07:14.160 --> 0:07:19.200 misinformation and disinformation spreading when content is less moderated. Um. So, 0:07:19.320 --> 0:07:21.960 you know, if they are to keep this ad business. Um, 0:07:21.960 --> 0:07:23.960 it is something that Musk will have to do to 0:07:24.040 --> 0:07:26.840 figure out how to balance this idea of less content 0:07:26.880 --> 0:07:31.760 moderation with creating a brand safe environment for advertisers. So 0:07:31.840 --> 0:07:35.400 many questions that need answers, which will only come over time. 0:07:35.480 --> 0:07:39.640 Jasmine Enberg of Insider Intelligence Bloomberg's Michelle Davis, who's covering 0:07:39.640 --> 0:07:42.800 the deal all angles of it for us, Thank you both. 0:07:43.400 --> 0:07:46.080 Coming up Musk taking Twitter private almost a decade to 0:07:46.120 --> 0:07:49.560 the day after Twitter became a public company, Does this 0:07:49.760 --> 0:07:53.320 raise any regulatory concerns? Given Musks run ins with the 0:07:53.440 --> 0:07:57.440 sec or policymakers in the US and beyond paying attention 0:07:57.920 --> 0:08:10.800 well to have that discussion next this Bloomberg while here 0:08:10.840 --> 0:08:13.880 we are the offers accepted. Ultimately, no one thought that 0:08:13.960 --> 0:08:17.200 they would settle on that price. The biggest criticism of 0:08:17.240 --> 0:08:20.480 Twitter over the balance of the last decade or so 0:08:20.560 --> 0:08:23.880 the company has had as a public company has been that, frankly, 0:08:24.160 --> 0:08:27.200 they haven't innovated very much and the platform is essentially 0:08:27.200 --> 0:08:29.600 the same as it was. I think the biggest question 0:08:29.760 --> 0:08:32.120 is just how did the Twitter board buy into this? 0:08:33.360 --> 0:08:36.840 Ultimately they had no backup. This tells you how weak 0:08:36.880 --> 0:08:39.880 the company was. I'm more interested in knowing who's going 0:08:39.920 --> 0:08:42.040 to run the company, what are the priorities going to be, 0:08:42.080 --> 0:08:43.880 where are they going to be investing, and how the 0:08:43.960 --> 0:08:46.560 platform is going to change. And I'm excited to see 0:08:46.559 --> 0:08:48.079 what he's going to do with the company when it 0:08:48.200 --> 0:08:51.160 is private. Um, he is a visionary and uh and 0:08:51.160 --> 0:08:55.360 I'm excited to see how it plays out. Back to 0:08:55.400 --> 0:08:57.400 the story of the day, shares a Twitter up almost 0:08:57.400 --> 0:09:00.480 six percent, What does it really mean for share holders? 0:09:00.480 --> 0:09:03.360 And will just raise the eyebrows of lawmakers and policymakers. 0:09:03.400 --> 0:09:05.200 I want to bring in Natasha Lamb of our DNA 0:09:05.240 --> 0:09:09.520 Capital now to discuss an activist investor. Of course, Natasha, 0:09:09.679 --> 0:09:11.719 if you're a shareholder today, what does this really mean 0:09:11.760 --> 0:09:15.120 for you? What's going through your head? Well, I mean, 0:09:15.160 --> 0:09:19.240 one question is whether the Twitter's board is leaving money 0:09:19.280 --> 0:09:21.920 on the table. Um the stock was over, you know, 0:09:22.000 --> 0:09:26.480 seventy dollars last July sixty six in October um, so 0:09:26.559 --> 0:09:30.079 that's a big question. But you know, I think the bigger, 0:09:31.120 --> 0:09:34.640 the bigger concern for us, Our main concern is the 0:09:34.679 --> 0:09:39.319 consolidation of Musk's power. Um. That's not to say anything 0:09:39.360 --> 0:09:42.439 about who he is as a person, but the simple 0:09:42.559 --> 0:09:46.120 fat that you've got the world's richest man in charge 0:09:46.160 --> 0:09:49.640 of the world's biggest megaphone. We don't know what his 0:09:49.720 --> 0:09:54.640 intentions are other than a blanket statement to uphold free speech. Uh. 0:09:54.720 --> 0:09:58.440 And you know, we've often been critical of companies that 0:09:58.559 --> 0:10:01.400 have the same person as see EO and chairman right, 0:10:02.320 --> 0:10:05.559 because it creates an echo chamber of fact where divergent 0:10:05.640 --> 0:10:09.319 perspectives aren't considered. But this is even worse. It's akin 0:10:09.400 --> 0:10:13.120 to a kid packing up his toys, going home to 0:10:13.160 --> 0:10:16.760 play by himself. Um. And unfortunately, the consequences of this 0:10:16.880 --> 0:10:21.280 game are much greater than elon Musk. So what are 0:10:21.320 --> 0:10:24.120 the potential consequences here? Do you think this will raise 0:10:24.200 --> 0:10:29.559 the attention of regulators, specifically the SEC, potentially other regulatory 0:10:29.600 --> 0:10:33.000 bodies here in the United States, and what about regulators 0:10:33.040 --> 0:10:37.360 around the world. I think I think that it will, 0:10:37.400 --> 0:10:41.120 I mean in some in some ways, um, with the 0:10:41.120 --> 0:10:44.480 company going private and in a big concern you know 0:10:44.600 --> 0:10:49.640 for us, is that it will be shielded from regulatory scrutiny. Um, 0:10:49.679 --> 0:10:52.280 it will be shielded from the impact of investors like 0:10:52.440 --> 0:10:55.760 Argena Capital that you know, we lend perspective on e 0:10:55.960 --> 0:10:59.280 s G or environmental, social and governance practices that the 0:10:59.280 --> 0:11:03.240 company may otherwise ignore. Um. The problem is that the 0:11:03.240 --> 0:11:08.080 impact of Twitter, it's not limited to Musk's winds. Um. 0:11:08.160 --> 0:11:12.600 It can have severe consequences on our society and our democracy. Um. 0:11:12.640 --> 0:11:15.800 You know, the insurrection on the capital that's just one example. 0:11:16.360 --> 0:11:22.400 And so I think that there will be regulatory um consequences, 0:11:22.440 --> 0:11:24.560 but they're not going to play out the same way 0:11:24.640 --> 0:11:29.080 that they have right rolling out the carpet um bringing Uh, 0:11:29.200 --> 0:11:32.719 you know, Twitter's CEO in front of Congress, not that 0:11:32.800 --> 0:11:38.520 kind of regulation. The space probably needs some regulation, but 0:11:38.960 --> 0:11:42.320 you know, the complexity of these issues is so profound, 0:11:42.679 --> 0:11:44.880 and you know, we've really been pushing for human and 0:11:44.920 --> 0:11:48.240 civil rights expertise to be built into the board, to 0:11:48.320 --> 0:11:51.640 be built into business strategies, so that the company itself 0:11:52.040 --> 0:11:55.439 is taking on these issues, not waiting for regulators regulators 0:11:55.480 --> 0:11:58.079 to do it um and we had that proposed at 0:11:58.120 --> 0:12:02.000 the company's annual meeting for this ing, although that conversation 0:12:02.440 --> 0:12:05.560 now appears to move well, and now Elon Musk will 0:12:05.600 --> 0:12:08.240 be taking on the complexity of those issues with no 0:12:08.400 --> 0:12:12.840 shareholders to answer to Twitter as a private company making 0:12:12.880 --> 0:12:19.439 these very complex, consequential decisions that impact public discourse. What's 0:12:19.440 --> 0:12:23.000 your sense of how he will take on that challenge. 0:12:23.480 --> 0:12:25.800 I mean, I think it's a big question mark. But 0:12:26.000 --> 0:12:28.319 you know, if you go back to when Dorsey was 0:12:28.400 --> 0:12:32.280 running the company, of big criticism is that he was distracted. 0:12:32.360 --> 0:12:35.040 He was distracted by being the CEO at Square now 0:12:35.120 --> 0:12:40.440 block Um and Musk is running multiple companies. He's got Tesla, 0:12:40.520 --> 0:12:44.520 he's got SpaceX, the boring company which is drilling holes 0:12:44.600 --> 0:12:47.680 under l A. He's got neuralalink, which is linking you know, 0:12:47.760 --> 0:12:51.480 the human brain to computers. Um. And honestly, how many 0:12:51.480 --> 0:12:55.440 hours this must have to spend on this um you know, 0:12:55.480 --> 0:12:58.200 in in my opinion, Twitter is too important to be 0:12:58.240 --> 0:13:03.640 a hobby and really choirs um, the full time attention 0:13:04.760 --> 0:13:08.160 of who whomever is meeting it. Right. Jack Dorsey just 0:13:08.240 --> 0:13:10.640 left the company, you know, potentially barred because he had 0:13:10.640 --> 0:13:13.440 to really big jobs. I want to go back to 0:13:13.440 --> 0:13:16.400 this question for shareholders. Do you really think they're getting 0:13:16.400 --> 0:13:18.760 a potentially a bad deal here and leaving money on 0:13:18.800 --> 0:13:20.640 the table. I mean, Twitter shares haven't been at seventy 0:13:20.679 --> 0:13:25.480 dollars for some time, and and and longtime investors have 0:13:25.520 --> 0:13:28.680 been waiting a while for any kind of momentum to 0:13:28.720 --> 0:13:31.720 pick up in the price. I mean, I I hear 0:13:31.800 --> 0:13:34.520 you there, um, you know, but I mean the company 0:13:34.600 --> 0:13:38.720 was at the stop was at sixty six in October. Um. 0:13:38.840 --> 0:13:41.959 And you know, as as you heard from a previous analyst, 0:13:42.240 --> 0:13:45.200 Twitter has been growing out revenue. The name of the 0:13:45.240 --> 0:13:48.800 game for Twitter was to grow subscribers. Um. I'm very 0:13:48.880 --> 0:13:51.920 interested to see, you know what Musk does with this, 0:13:52.160 --> 0:13:54.880 if if he does indeed bring it to a subscription model. 0:13:55.280 --> 0:13:59.199 You know, that's obviously can limit user growth. UM and 0:13:59.200 --> 0:14:02.560 and you know, and UM, ways, from a social perspective, 0:14:03.400 --> 0:14:07.199 if we're thinking about Twitter as the de facto town square, 0:14:07.280 --> 0:14:11.400 it could further isolate users because, UM, who wants to 0:14:11.440 --> 0:14:16.880 pay for an increasingly toxic platform. What do you think this? 0:14:17.040 --> 0:14:19.720 You know, I know you're you've got your longtime activist investor, 0:14:19.800 --> 0:14:23.280 including in Facebook. What do you think Elon Musk buying 0:14:23.320 --> 0:14:28.600 Twitter means for Facebook? UM? I think that it is. 0:14:30.040 --> 0:14:33.320 I think that it's it's sad to see um sort 0:14:33.360 --> 0:14:37.640 of the the Emperor's of social media, if you will. UM, 0:14:37.680 --> 0:14:40.280 we've had a you know, law for a long time, 0:14:40.320 --> 0:14:44.840 have been critical UM of Mark Zuckerberg's position and power, 0:14:45.320 --> 0:14:49.280 given his you know, fourteen percent ownership in Facebook, but 0:14:49.360 --> 0:14:52.880 also his role as CEO and chairman. And here you 0:14:53.000 --> 0:14:57.880 have Elon Musk potentially owning, um the entire company and 0:14:58.000 --> 0:15:01.120 being able to do whatever he wants with it. I mean, 0:15:01.160 --> 0:15:05.760 there is a history of billionaires buying media companies, and 0:15:05.800 --> 0:15:09.200 you have to ask why, UM, you know, going back 0:15:09.240 --> 0:15:14.040 to hearsts and UM, look at Bezos buying the Washington Post. 0:15:14.120 --> 0:15:17.680 This isn't this isn't something new, UM, but again it 0:15:17.760 --> 0:15:22.840 really brings up those concerns of the consolidation of power um, 0:15:23.120 --> 0:15:28.000 especially when there's such a huge impact on our public discourse, 0:15:28.280 --> 0:15:33.480 our democracy, human and civil rights and fruit speech right 0:15:33.600 --> 0:15:36.360 and Bezos famously said he was gonna be hands off 0:15:36.360 --> 0:15:38.840 at the Washington Post. Here Elon Musk is buying this 0:15:38.960 --> 0:15:42.400 huge media asset, saying basically the opposite, He's going to 0:15:42.480 --> 0:15:45.920 be very involved. Natasha lamb Are the Capital managing partner, 0:15:46.000 --> 0:15:56.800 thank you as always for joining us in the process 0:15:56.800 --> 0:15:59.240 of sealing a deal to buy Twitter. Elon Musk also 0:15:59.400 --> 0:16:02.880 chose to use the platform to once again complain about 0:16:02.880 --> 0:16:07.600 the SEC, specifically the San Francisco office over taking Tessa Private, 0:16:07.640 --> 0:16:12.000 calling them quote shameless puppets of Wall Street short seller sharks, 0:16:12.040 --> 0:16:14.880 and adding once again that's why he's lost all respect 0:16:14.920 --> 0:16:16.600 for them. Let's talk about the SEC and what will 0:16:16.720 --> 0:16:19.320 it will play in this Twitter deal with Blue Brigs. 0:16:19.400 --> 0:16:23.440 Lydia Bud who joins us now from Washington, Just so 0:16:23.520 --> 0:16:27.360 curious what folks inside the SEC are thinking right now? 0:16:27.440 --> 0:16:31.400 Does the SEC actually have a jurisdiction over this deal? 0:16:31.560 --> 0:16:35.160 Lydia To a degree, the SEC's role is really one 0:16:35.200 --> 0:16:39.640 of disclosures so when the transaction proxy is filed, they'll 0:16:39.640 --> 0:16:43.480 get a chance to really push Twitter for um clarifying 0:16:43.480 --> 0:16:47.520 a lot of the terms of this transaction. So what 0:16:47.680 --> 0:16:52.760 exactly what kind of information could the SEC request here 0:16:52.920 --> 0:16:58.040 and how could it influence the deal? So they'll be looking, 0:16:58.080 --> 0:17:01.400 they'll be really scrutinizing the terms of the transaction. That 0:17:01.440 --> 0:17:03.880 could be everything from the financing to how sort of 0:17:03.920 --> 0:17:07.440 the deal came together, but also any unusual provisions such 0:17:07.480 --> 0:17:11.080 as the reverse termination fee. Whatever the SEC feels like 0:17:11.160 --> 0:17:15.359 needs more disclosure, more transparency for Twitter shareholders to be 0:17:15.400 --> 0:17:18.920 fully informed ahead of their vote later this year. So 0:17:19.000 --> 0:17:22.720 let's talk about potentially broader questions here. You know, potentially 0:17:22.800 --> 0:17:26.800 the SEC has some sway. You also have Elon Musk, 0:17:27.000 --> 0:17:30.719 a single person, uh, you know, being in charge of 0:17:30.840 --> 0:17:34.919 influencing so many different now critical parts of US infrastructure, 0:17:34.920 --> 0:17:38.880 whether it is electric cars or space or now potentially 0:17:38.920 --> 0:17:44.240 social media. Even though these aren't necessarily overlapping areas, could 0:17:44.320 --> 0:17:48.400 the power he has over so many different important parts 0:17:49.000 --> 0:17:53.560 of business in the world economy make a difference. You know, Emily, 0:17:53.600 --> 0:17:55.359 I think you're right and everyone else is too. To 0:17:55.359 --> 0:17:58.080 really focus on the power that this acquisition could bring 0:17:58.200 --> 0:18:01.840 to the world's which is man to have control over this, 0:18:02.000 --> 0:18:05.119 you know, very powerful communications platform in d C. I 0:18:05.160 --> 0:18:07.960 think that that's going to translate into a renewed debate 0:18:08.440 --> 0:18:11.840 on social media's role as you know, this public forum 0:18:11.920 --> 0:18:14.680 that Musk is talking about, and whether or not there's 0:18:14.720 --> 0:18:18.280 need for more liability uh and what role content uh 0:18:18.560 --> 0:18:24.760 moderation plays in kind of this the free speech ecosystem, Lydia, 0:18:24.800 --> 0:18:26.360 You've been coming in the SEC for a long time. 0:18:26.600 --> 0:18:28.800 How how do you think that the history between Musk 0:18:28.840 --> 0:18:31.160 and the SEC is going to play out here? Tweets 0:18:31.280 --> 0:18:34.560 like the one we saw today, which is not unusual. 0:18:35.920 --> 0:18:39.400 You know, it would be interesting to see how Musk 0:18:39.440 --> 0:18:42.600 comments or does not as this deal makes its way 0:18:42.640 --> 0:18:45.719 through the regulatory process. But beyond that, I don't want 0:18:45.760 --> 0:18:48.840 to speculate too much. And can you remind us where 0:18:49.080 --> 0:18:54.359 the SEC is right now on the Tesla going private dispute? 0:18:54.480 --> 0:19:00.560 There is you know, another lawsuit ongoing dragging back up 0:19:00.640 --> 0:19:06.080 this tweet from still lives on. Uh. That that's right. 0:19:06.160 --> 0:19:08.720 I've heard various uh, you know, I've read the same 0:19:08.720 --> 0:19:11.280 news that some of our my colleagues have reported here 0:19:11.320 --> 0:19:14.960 about whether the SEC kind of cracks that wide open again, 0:19:15.040 --> 0:19:18.000 or maybe looks to bring some new cases there. So 0:19:18.040 --> 0:19:20.719 we'll we'll see what the future holds for that. Alright, 0:19:20.840 --> 0:19:23.800 lady Abu Bloomberg News who covers the sec for us? 0:19:23.800 --> 0:19:28.359 Thank you coming up. Musk says he hopes even his 0:19:28.480 --> 0:19:33.480 worst critics remain on Twitter because that's what free speech means. 0:19:33.880 --> 0:19:36.840 Will explore what Elon Musk's version of moderation might actually 0:19:36.960 --> 0:19:41.280 mean for the service and public discourse. This is Bloomberg 0:19:53.280 --> 0:19:56.080 Welcome back to Bloomberg Technology and Eamily chang in San Francisco. 0:19:56.440 --> 0:20:00.520 On April fourteen, Elon Musk offered to purchase Twitter for 0:20:00.520 --> 0:20:04.040 forty three billion dollars. Eleven days later, he's made that 0:20:04.080 --> 0:20:05.800 deal a reality. Here's what he had to say the 0:20:05.880 --> 0:20:08.840 day he made that original offer about how he views 0:20:08.960 --> 0:20:14.960 the platform. M I think it's very important for that 0:20:15.000 --> 0:20:22.520 will be an inclusive arena for free speech where oh yeah, 0:20:22.600 --> 0:20:28.040 so yeah, um Twitter has become kind of the de 0:20:28.119 --> 0:20:34.359 facto town square. Um so uh, it's just really important 0:20:34.400 --> 0:20:39.720 that people have the both the reality and the perception, uh, 0:20:39.760 --> 0:20:42.960 that they are able to speak freely within the bounds 0:20:42.960 --> 0:20:47.080 of the low. So what exactly is free speech? The 0:20:47.160 --> 0:20:50.840 Elon Muskway Bloomberg, Senior executive editor for Global Tech, Brad 0:20:50.880 --> 0:20:54.560 Stone with me, Now, this is the biggest open question. 0:20:55.280 --> 0:20:58.399 What exactly does he mean by free speech and how 0:20:58.720 --> 0:21:02.160 exactly does he plan and to allow that to flourish 0:21:03.320 --> 0:21:05.919 on a private service. That is the question, and it 0:21:06.000 --> 0:21:08.280 has to be viewed within the context of a larger 0:21:08.359 --> 0:21:11.200 debate about social media that has been happening for years. 0:21:11.720 --> 0:21:17.360 Conservatives tend to think that the big social media platforms Twitter, Facebook, etcetera. 0:21:17.560 --> 0:21:21.360 Have too many rules, the algorithms are too opaque, bands 0:21:21.400 --> 0:21:25.080 of users are too draconian, while liberals those on the 0:21:25.200 --> 0:21:29.160 left tend to think that the social platforms aren't doing 0:21:29.320 --> 0:21:34.240 enough to fight hate speech and disinformation, etcetera. With what 0:21:34.320 --> 0:21:36.679 Elon will you just heard from Elon sounds right, like, 0:21:37.160 --> 0:21:40.480 you know, very very positive, very straightforward. But I think 0:21:40.520 --> 0:21:43.119 part of the reason why this acquisition is so polarizing 0:21:43.240 --> 0:21:46.199 is it does seem to it does It does seem 0:21:46.320 --> 0:21:49.040 like he is siding with the conservatives and saying he 0:21:49.119 --> 0:21:53.520 wants to be more permissive of speech and perhaps even 0:21:53.720 --> 0:21:56.480 the kinds of misinformation that have made Twitter such a 0:21:56.520 --> 0:21:58.840 difficult form. But even in the town Square there are 0:21:58.960 --> 0:22:03.480 consequences if you there are laws, right, there's enforcement of 0:22:03.560 --> 0:22:06.600 those laws. How will Elon Musk? What are the rules? 0:22:07.359 --> 0:22:10.199 Elon Musk's way, And that's exactly the question, right. He 0:22:10.240 --> 0:22:14.320 hasn't provided any specificity to to the to the otherwise 0:22:14.320 --> 0:22:16.840 sort of laudable statements. And so what I wrote about 0:22:16.840 --> 0:22:20.800 this morning was the status of at Donald Trump with 0:22:20.920 --> 0:22:24.280 almost nine million Twitter followers, what is he going to do? 0:22:24.400 --> 0:22:28.040 He has expressed some kind of skepticism of a permanent band, 0:22:28.400 --> 0:22:30.320 and so I think we're likely to see Donald Trump 0:22:30.440 --> 0:22:32.160 if he if he wants to be told Fox News 0:22:32.200 --> 0:22:33.800 he doesn't want to go back to Twitter today. I 0:22:33.800 --> 0:22:35.760 find that hard to believe. If he comes back to 0:22:35.800 --> 0:22:38.560 the service, you know what, what kind of reaction will 0:22:38.560 --> 0:22:41.520 that get? What are the limits even for a public 0:22:41.560 --> 0:22:43.639 figure that's that's trodden over them in the past. You 0:22:43.680 --> 0:22:46.000 point out that Jeff Bezos, when he bought the Washington 0:22:46.040 --> 0:22:49.440 Post famously said he's hands off, He's not going to 0:22:49.520 --> 0:22:52.479 have any sway over editorial decision. Elon Musk is basically 0:22:52.520 --> 0:22:55.880 saying the opposite here. He's going to be very involved, 0:22:56.280 --> 0:22:58.600 especially if you look at how involved he is at 0:22:58.640 --> 0:23:01.920 Tesla and that's base x um. You know, what does 0:23:01.960 --> 0:23:06.360 it mean for a single person to have such sway 0:23:06.400 --> 0:23:10.960 over a platform that is so influential over public discourse. 0:23:11.119 --> 0:23:13.800 The comparison what what the Washington Post is interesting and 0:23:13.840 --> 0:23:17.880 that was a two million dollar deal pennies in comparison 0:23:18.280 --> 0:23:21.280 back into thus in thirteen, Bezos said he wouldn't get involved. 0:23:21.320 --> 0:23:24.119 He he largely hasn't in the editorial direction of the Post. 0:23:24.400 --> 0:23:27.240 I liken this not just to a financial takeover of Twitter, 0:23:27.400 --> 0:23:29.800 but to a political takeover. He's coming in with a 0:23:29.960 --> 0:23:35.080 very uh specific ideology and saying he's going to operated differently. 0:23:35.200 --> 0:23:37.560 Is it more like a Murdoch moment? Yeah? I think 0:23:37.600 --> 0:23:40.280 I I compared it to to Murdock's takeover the posts 0:23:40.320 --> 0:23:42.640 in the Wall Street Journal, where he's bringing some some 0:23:42.760 --> 0:23:46.600 politics in and promising a departure from the current way 0:23:46.640 --> 0:23:49.199 that the company and the platform is administered. All right, 0:23:49.400 --> 0:23:52.320 red Stone, thank you. As always, I want to continue 0:23:52.320 --> 0:23:56.240 this conversation with Teconomy founder Javier Kirkpatrick and Chamber of 0:23:56.320 --> 0:24:00.879 Progress founder and CEO Adam Kovakova. David, I want to 0:24:00.880 --> 0:24:03.360 start with you. Since we've been talking about this now, 0:24:03.359 --> 0:24:06.959