Speaker 1: From the heart of where innovation, money and power COLLI
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Emily Jay I'm Emily check in San Francisco, and this
Speaker 1: is Bloomberg Technology. Coming up in the next hour, it's official.
Speaker 1: Elon Musk has agreed to buy Twitter for forty four
Speaker 1: billion dollars. The world's richest man will soon be in
Speaker 1: charge of one of the most influential social networks in
Speaker 1: the world. We've got this developing story covered from all
Speaker 1: angles over the course of the hour, a new chapter
Speaker 1: in tech history. But at the same time that the
Speaker 1: Musk deal is going through, he tweets another insult at
Speaker 1: the SEC, calling those who run it shameless puppets over
Speaker 1: his ongoing Tesla feud. What all these jabs might mean
Speaker 1: when regulators get a look at this deal, And aside
Speaker 1: from all the money that's being spent on Twitter, the
Speaker 1: other big question, of course, is what happens to everyone
Speaker 1: who's been banned from it, including former President Trump. How
Speaker 1: exactly does Elon Musk defined free speech will wait into
Speaker 1: the thorniest part of this debate that has perplexed perplexed
Speaker 1: tech platforms for decades. We're gonna get to all of
Speaker 1: that in a moment, but first Elon Musk gets his way,
Speaker 1: agreeing to a deal to take Twitter private for forty
Speaker 1: four billion dollars. Each investor will receive fifty four dollars
Speaker 1: and twenty cents for every Twitter share they own. I
Speaker 1: want to stick with Twitter and bring in insider intelligence,
Speaker 1: principal analyst Jasmine Edinburgh, as well as Bloomberg's Michelle Davis.
Speaker 1: Michelle talked to us about the unknowns at this point.
Speaker 1: We've got Twitter earnings coming up, for example, in just
Speaker 1: a few days. Is there a chance Elon Musk could
Speaker 1: see those numbers and say, hey, now, thanks. So the
Speaker 1: unknowns that we have at this point are many, um,
Speaker 1: but it is official. There is a deal at What
Speaker 1: we don't know is this twenty one billion dollar equity
Speaker 1: check that we just talked about. How much of that
Speaker 1: will at the end of the day be officially from Musk,
Speaker 1: and how much of that will take the form of,
Speaker 1: you know, other equity partners coming in. It's our understanding
Speaker 1: that Musk is speaking with other potential equity partners, uh,
Speaker 1: and that it wasn't you know, necessary for them to
Speaker 1: have that lined up before they made the steel public
Speaker 1: and that things obviously materialized so quickly over the weekends
Speaker 1: that that could be part of why we don't see that. Yet.
Speaker 1: Another question that we have is, uh, what happens from
Speaker 1: a regulatory perspective. We've gotten lots of questions around you know,
Speaker 1: does the industry become more regulated if he if one
Speaker 1: of the equity partners is someone from outside of the
Speaker 1: United States, is that open this up to uh, you know,
Speaker 1: regulatory scrutiny from from regulators that are not based in
Speaker 1: the US. And then there's also the question of, uh,
Speaker 1: do Twitter shareholders approve this steal? At this point, we
Speaker 1: saw from the press release that Twitter's entire board unanimously
Speaker 1: approved the deal, but it is subject to a shareholder vote,
Speaker 1: and so we're going to be hearing more from shareholders
Speaker 1: in the coming days to see to see what their
Speaker 1: views are. Now. Twitter has said it's not going to
Speaker 1: have an earnings call this week, but will report its
Speaker 1: latest numbers as planned Jasmine. One of the many opens
Speaker 1: questions here is what kind of business model does e
Speaker 1: La Musk think Twitter should have. He sort of hinted
Speaker 1: he wants to move away from an ad revenue business model,
Speaker 1: and if so, what does that mean? Does that mean
Speaker 1: subscription and will that really be a profitable engine? Yeah? Absolutely,
Speaker 1: Speaking of unknowns, one really big unknown is, of course,
Speaker 1: what happens to Twitter's AD business UM as a result
Speaker 1: of this deal. As you said, Musk is a proponent
Speaker 1: of making Twitter a subscription based service rather than an
Speaker 1: ad supportive one. But the problem here is that there's
Speaker 1: plenty of research that shows that consumers still prefer to
Speaker 1: view free content and exchange for ads and subscribe to
Speaker 1: a service, and making Twitter a subscription service would radically
Speaker 1: change its business model. It's worth noting that this isn't
Speaker 1: something that would happen overnight. There's some talk that Musk
Speaker 1: would need Twitter's AD revenues in order to keep it
Speaker 1: afloat as the transition UM continues. And it's also worth
Speaker 1: noting that this is happening at a time that Twitter
Speaker 1: has really seen a rebound in AD growth. UM. We'll
Speaker 1: have to wait until Thursday to see if that continued
Speaker 1: in Q one, but at least UM for one, it
Speaker 1: reported growth in its AD revenues and an insider intelligence
Speaker 1: UM in our latest forecast that was made before this announcement,
Speaker 1: we were expecting Twitter's AD revenues to grow by another
Speaker 1: twenty five percent this year. What are you expecting this
Speaker 1: deal to How do you expect this deal to impact
Speaker 1: user growth? Well? Twitter has already been struggling and bringing
Speaker 1: in new users, And I think one part of this
Speaker 1: whole Musk saga that has been so interesting is that
Speaker 1: Twitter is a platform that really thrives on news and
Speaker 1: uncertainty and even controversy. So there's a chance that all
Speaker 1: of this playing out really could have helped Twitter's engagement.
Speaker 1: Of course that's not something that we we'll see in
Speaker 1: the earnings call on Thursday. Is that um happened after
Speaker 1: Q one? But UM, it's possible that Twitter is still struggling.
Speaker 1: It's actually likely that Twitter is still struggling. I'm not
Speaker 1: expecting to see massive user growth considering the user growth
Speaker 1: that it reported last quarter UM in monetizeable daily active users. Michelle,
Speaker 1: can you walk us through the next steps? You know
Speaker 1: this deal isn't done. Um, it'll happen sometime this year, Uh,
Speaker 1: as far as they've told us. But is there anything
Speaker 1: between now and clothes that could take this deal off
Speaker 1: the rails? So a bunch of things could happen between
Speaker 1: now and let's say the end of the year. Next
Speaker 1: steps for I guess the Elon Musk Twitter deal that
Speaker 1: we have on the table right now is uh. If
Speaker 1: Elon Musk wants to he can take out the equity
Speaker 1: commitment that he has for twenty one billion dollars and
Speaker 1: replace it with commitments from other people or you know,
Speaker 1: actual equity from other people. The deal also needs to
Speaker 1: get regulatory approval, It needs to get approved by shareholders. Um.
Speaker 1: And then there is always the possible pity that another
Speaker 1: bidder comes in. Now, it's our interesstanding that there is
Speaker 1: a reverse breakup in the scale, which means basically Elon
Speaker 1: Musk has to pay a certain amount of money if
Speaker 1: he decides to walk away from the dealer if it
Speaker 1: falls apart for certain reasons. Uh. And so if another
Speaker 1: bidder were to come in, he wouldn't owe that. But
Speaker 1: there is you know, there is the possibility that another
Speaker 1: bidder could still come in here. Uh. So yeah, we'll
Speaker 1: be watching that interesting now, Jasmine, I'm curious what you
Speaker 1: make of Elon Musk's stance on free speech and how
Speaker 1: you expect that to impact users and add revenues. If
Speaker 1: he evolves the service to be you know, more liberal
Speaker 1: when it comes to moderation. Not in a political sense,
Speaker 1: but you know what I mean. Um, you know what
Speaker 1: does that mean for advertisers specifically? Yeah? Absolutely, I mean.
Speaker 1: Musk has said that he wants to make Twitter into
Speaker 1: a free speech haven, which would likely reverse a lot
Speaker 1: of the guardrails that Twitter has instituted in order to
Speaker 1: check the health of its platform, its users, and the
Speaker 1: brands that advertise their Um, you know, doing so might
Speaker 1: make a lot of risk advert risk adverse advertisers really
Speaker 1: wary about advertising on Twitter. There's always the chance of
Speaker 1: misinformation and disinformation spreading when content is less moderated. Um. So,
Speaker 1: you know, if they are to keep this ad business. Um,
Speaker 1: it is something that Musk will have to do to
Speaker 1: figure out how to balance this idea of less content
Speaker 1: moderation with creating a brand safe environment for advertisers. So
Speaker 1: many questions that need answers, which will only come over time.
Speaker 1: Jasmine Enberg of Insider Intelligence Bloomberg's Michelle Davis, who's covering
Speaker 1: the deal all angles of it for us, Thank you both.
Speaker 1: Coming up Musk taking Twitter private almost a decade to
Speaker 1: the day after Twitter became a public company, Does this
Speaker 1: raise any regulatory concerns? Given Musks run ins with the
Speaker 1: sec or policymakers in the US and beyond paying attention
Speaker 1: well to have that discussion next this Bloomberg while here
Speaker 1: we are the offers accepted. Ultimately, no one thought that
Speaker 1: they would settle on that price. The biggest criticism of
Speaker 1: Twitter over the balance of the last decade or so
Speaker 1: the company has had as a public company has been that, frankly,
Speaker 1: they haven't innovated very much and the platform is essentially
Speaker 1: the same as it was. I think the biggest question
Speaker 1: is just how did the Twitter board buy into this?
Speaker 1: Ultimately they had no backup. This tells you how weak
Speaker 1: the company was. I'm more interested in knowing who's going
Speaker 1: to run the company, what are the priorities going to be,
Speaker 1: where are they going to be investing, and how the
Speaker 1: platform is going to change. And I'm excited to see
Speaker 1: what he's going to do with the company when it
Speaker 1: is private. Um, he is a visionary and uh and
Speaker 1: I'm excited to see how it plays out. Back to
Speaker 1: the story of the day, shares a Twitter up almost
Speaker 1: six percent, What does it really mean for share holders?
Speaker 1: And will just raise the eyebrows of lawmakers and policymakers.
Speaker 1: I want to bring in Natasha Lamb of our DNA
Speaker 1: Capital now to discuss an activist investor. Of course, Natasha,
Speaker 1: if you're a shareholder today, what does this really mean
Speaker 1: for you? What's going through your head? Well, I mean,
Speaker 1: one question is whether the Twitter's board is leaving money
Speaker 1: on the table. Um the stock was over, you know,
Speaker 1: seventy dollars last July sixty six in October um, so
Speaker 1: that's a big question. But you know, I think the bigger,
Speaker 1: the bigger concern for us, Our main concern is the
Speaker 1: consolidation of Musk's power. Um. That's not to say anything
Speaker 1: about who he is as a person, but the simple
Speaker 1: fat that you've got the world's richest man in charge
Speaker 1: of the world's biggest megaphone. We don't know what his
Speaker 1: intentions are other than a blanket statement to uphold free speech. Uh.
Speaker 1: And you know, we've often been critical of companies that
Speaker 1: have the same person as see EO and chairman right,
Speaker 1: because it creates an echo chamber of fact where divergent
Speaker 1: perspectives aren't considered. But this is even worse. It's akin
Speaker 1: to a kid packing up his toys, going home to
Speaker 1: play by himself. Um. And unfortunately, the consequences of this
Speaker 1: game are much greater than elon Musk. So what are
Speaker 1: the potential consequences here? Do you think this will raise
Speaker 1: the attention of regulators, specifically the SEC, potentially other regulatory
Speaker 1: bodies here in the United States, and what about regulators
Speaker 1: around the world. I think I think that it will,
Speaker 1: I mean in some in some ways, um, with the
Speaker 1: company going private and in a big concern you know
Speaker 1: for us, is that it will be shielded from regulatory scrutiny. Um,
Speaker 1: it will be shielded from the impact of investors like
Speaker 1: Argena Capital that you know, we lend perspective on e
Speaker 1: s G or environmental, social and governance practices that the
Speaker 1: company may otherwise ignore. Um. The problem is that the
Speaker 1: impact of Twitter, it's not limited to Musk's winds. Um.
Speaker 1: It can have severe consequences on our society and our democracy. Um.
Speaker 1: You know, the insurrection on the capital that's just one example.
Speaker 1: And so I think that there will be regulatory um consequences,
Speaker 1: but they're not going to play out the same way
Speaker 1: that they have right rolling out the carpet um bringing Uh,
Speaker 1: you know, Twitter's CEO in front of Congress, not that
Speaker 1: kind of regulation. The space probably needs some regulation, but
Speaker 1: you know, the complexity of these issues is so profound,
Speaker 1: and you know, we've really been pushing for human and
Speaker 1: civil rights expertise to be built into the board, to
Speaker 1: be built into business strategies, so that the company itself
Speaker 1: is taking on these issues, not waiting for regulators regulators
Speaker 1: to do it um and we had that proposed at
Speaker 1: the company's annual meeting for this ing, although that conversation
Speaker 1: now appears to move well, and now Elon Musk will
Speaker 1: be taking on the complexity of those issues with no
Speaker 1: shareholders to answer to Twitter as a private company making
Speaker 1: these very complex, consequential decisions that impact public discourse. What's
Speaker 1: your sense of how he will take on that challenge.
Speaker 1: I mean, I think it's a big question mark. But
Speaker 1: you know, if you go back to when Dorsey was
Speaker 1: running the company, of big criticism is that he was distracted.
Speaker 1: He was distracted by being the CEO at Square now
Speaker 1: block Um and Musk is running multiple companies. He's got Tesla,
Speaker 1: he's got SpaceX, the boring company which is drilling holes
Speaker 1: under l A. He's got neuralalink, which is linking you know,
Speaker 1: the human brain to computers. Um. And honestly, how many
Speaker 1: hours this must have to spend on this um you know,
Speaker 1: in in my opinion, Twitter is too important to be
Speaker 1: a hobby and really choirs um, the full time attention
Speaker 1: of who whomever is meeting it. Right. Jack Dorsey just
Speaker 1: left the company, you know, potentially barred because he had
Speaker 1: to really big jobs. I want to go back to
Speaker 1: this question for shareholders. Do you really think they're getting
Speaker 1: a potentially a bad deal here and leaving money on
Speaker 1: the table. I mean, Twitter shares haven't been at seventy
Speaker 1: dollars for some time, and and and longtime investors have
Speaker 1: been waiting a while for any kind of momentum to
Speaker 1: pick up in the price. I mean, I I hear
Speaker 1: you there, um, you know, but I mean the company
Speaker 1: was at the stop was at sixty six in October. Um.
Speaker 1: And you know, as as you heard from a previous analyst,
Speaker 1: Twitter has been growing out revenue. The name of the
Speaker 1: game for Twitter was to grow subscribers. Um. I'm very
Speaker 1: interested to see, you know what Musk does with this,
Speaker 1: if if he does indeed bring it to a subscription model.
Speaker 1: You know, that's obviously can limit user growth. UM and
Speaker 1: and you know, and UM, ways, from a social perspective,
Speaker 1: if we're thinking about Twitter as the de facto town square,
Speaker 1: it could further isolate users because, UM, who wants to
Speaker 1: pay for an increasingly toxic platform. What do you think this?
Speaker 1: You know, I know you're you've got your longtime activist investor,
Speaker 1: including in Facebook. What do you think Elon Musk buying
Speaker 1: Twitter means for Facebook? UM? I think that it is.
Speaker 1: I think that it's it's sad to see um sort
Speaker 1: of the the Emperor's of social media, if you will. UM,
Speaker 1: we've had a you know, law for a long time,
Speaker 1: have been critical UM of Mark Zuckerberg's position and power,
Speaker 1: given his you know, fourteen percent ownership in Facebook, but
Speaker 1: also his role as CEO and chairman. And here you
Speaker 1: have Elon Musk potentially owning, um the entire company and
Speaker 1: being able to do whatever he wants with it. I mean,
Speaker 1: there is a history of billionaires buying media companies, and
Speaker 1: you have to ask why, UM, you know, going back
Speaker 1: to hearsts and UM, look at Bezos buying the Washington Post.
Speaker 1: This isn't this isn't something new, UM, but again it
Speaker 1: really brings up those concerns of the consolidation of power um,
Speaker 1: especially when there's such a huge impact on our public discourse,
Speaker 1: our democracy, human and civil rights and fruit speech right
Speaker 1: and Bezos famously said he was gonna be hands off
Speaker 1: at the Washington Post. Here Elon Musk is buying this
Speaker 1: huge media asset, saying basically the opposite, He's going to
Speaker 1: be very involved. Natasha lamb Are the Capital managing partner,
Speaker 1: thank you as always for joining us in the process
Speaker 1: of sealing a deal to buy Twitter. Elon Musk also
Speaker 1: chose to use the platform to once again complain about
Speaker 1: the SEC, specifically the San Francisco office over taking Tessa Private,
Speaker 1: calling them quote shameless puppets of Wall Street short seller sharks,
Speaker 1: and adding once again that's why he's lost all respect
Speaker 1: for them. Let's talk about the SEC and what will
Speaker 1: it will play in this Twitter deal with Blue Brigs.
Speaker 1: Lydia Bud who joins us now from Washington, Just so
Speaker 1: curious what folks inside the SEC are thinking right now?
Speaker 1: Does the SEC actually have a jurisdiction over this deal?
Speaker 1: Lydia To a degree, the SEC's role is really one
Speaker 1: of disclosures so when the transaction proxy is filed, they'll
Speaker 1: get a chance to really push Twitter for um clarifying
Speaker 1: a lot of the terms of this transaction. So what
Speaker 1: exactly what kind of information could the SEC request here
Speaker 1: and how could it influence the deal? So they'll be looking,
Speaker 1: they'll be really scrutinizing the terms of the transaction. That
Speaker 1: could be everything from the financing to how sort of
Speaker 1: the deal came together, but also any unusual provisions such
Speaker 1: as the reverse termination fee. Whatever the SEC feels like
Speaker 1: needs more disclosure, more transparency for Twitter shareholders to be
Speaker 1: fully informed ahead of their vote later this year. So
Speaker 1: let's talk about potentially broader questions here. You know, potentially
Speaker 1: the SEC has some sway. You also have Elon Musk,
Speaker 1: a single person, uh, you know, being in charge of
Speaker 1: influencing so many different now critical parts of US infrastructure,
Speaker 1: whether it is electric cars or space or now potentially
Speaker 1: social media. Even though these aren't necessarily overlapping areas, could
Speaker 1: the power he has over so many different important parts
Speaker 1: of business in the world economy make a difference. You know, Emily,
Speaker 1: I think you're right and everyone else is too. To
Speaker 1: really focus on the power that this acquisition could bring
Speaker 1: to the world's which is man to have control over this,
Speaker 1: you know, very powerful communications platform in d C. I
Speaker 1: think that that's going to translate into a renewed debate
Speaker 1: on social media's role as you know, this public forum
Speaker 1: that Musk is talking about, and whether or not there's
Speaker 1: need for more liability uh and what role content uh
Speaker 1: moderation plays in kind of this the free speech ecosystem, Lydia,
Speaker 1: You've been coming in the SEC for a long time.
Speaker 1: How how do you think that the history between Musk
Speaker 1: and the SEC is going to play out here? Tweets
Speaker 1: like the one we saw today, which is not unusual.
Speaker 1: You know, it would be interesting to see how Musk
Speaker 1: comments or does not as this deal makes its way
Speaker 1: through the regulatory process. But beyond that, I don't want
Speaker 1: to speculate too much. And can you remind us where
Speaker 1: the SEC is right now on the Tesla going private dispute?
Speaker 1: There is you know, another lawsuit ongoing dragging back up
Speaker 1: this tweet from still lives on. Uh. That that's right.
Speaker 1: I've heard various uh, you know, I've read the same
Speaker 1: news that some of our my colleagues have reported here
Speaker 1: about whether the SEC kind of cracks that wide open again,
Speaker 1: or maybe looks to bring some new cases there. So
Speaker 1: we'll we'll see what the future holds for that. Alright,
Speaker 1: lady Abu Bloomberg News who covers the sec for us?
Speaker 1: Thank you coming up. Musk says he hopes even his
Speaker 1: worst critics remain on Twitter because that's what free speech means.
Speaker 1: Will explore what Elon Musk's version of moderation might actually
Speaker 1: mean for the service and public discourse. This is Bloomberg
Speaker 1: Welcome back to Bloomberg Technology and Eamily chang in San Francisco.
Speaker 1: On April fourteen, Elon Musk offered to purchase Twitter for
Speaker 1: forty three billion dollars. Eleven days later, he's made that
Speaker 1: deal a reality. Here's what he had to say the
Speaker 1: day he made that original offer about how he views
Speaker 1: the platform. M I think it's very important for that
Speaker 1: will be an inclusive arena for free speech where oh yeah,
Speaker 1: so yeah, um Twitter has become kind of the de
Speaker 1: facto town square. Um so uh, it's just really important
Speaker 1: that people have the both the reality and the perception, uh,
Speaker 1: that they are able to speak freely within the bounds
Speaker 1: of the low. So what exactly is free speech? The
Speaker 1: Elon Muskway Bloomberg, Senior executive editor for Global Tech, Brad
Speaker 1: Stone with me, Now, this is the biggest open question.
Speaker 1: What exactly does he mean by free speech and how
Speaker 1: exactly does he plan and to allow that to flourish
Speaker 1: on a private service. That is the question, and it
Speaker 1: has to be viewed within the context of a larger
Speaker 1: debate about social media that has been happening for years.
Speaker 1: Conservatives tend to think that the big social media platforms Twitter, Facebook, etcetera.
Speaker 1: Have too many rules, the algorithms are too opaque, bands
Speaker 1: of users are too draconian, while liberals those on the
Speaker 1: left tend to think that the social platforms aren't doing
Speaker 1: enough to fight hate speech and disinformation, etcetera. With what
Speaker 1: Elon will you just heard from Elon sounds right, like,
Speaker 1: you know, very very positive, very straightforward. But I think
Speaker 1: part of the reason why this acquisition is so polarizing
Speaker 1: is it does seem to it does It does seem
Speaker 1: like he is siding with the conservatives and saying he
Speaker 1: wants to be more permissive of speech and perhaps even
Speaker 1: the kinds of misinformation that have made Twitter such a
Speaker 1: difficult form. But even in the town Square there are
Speaker 1: consequences if you there are laws, right, there's enforcement of
Speaker 1: those laws. How will Elon Musk? What are the rules?
Speaker 1: Elon Musk's way, And that's exactly the question, right. He
Speaker 1: hasn't provided any specificity to to the to the otherwise
Speaker 1: sort of laudable statements. And so what I wrote about
Speaker 1: this morning was the status of at Donald Trump with
Speaker 1: almost nine million Twitter followers, what is he going to do?
Speaker 1: He has expressed some kind of skepticism of a permanent band,
Speaker 1: and so I think we're likely to see Donald Trump
Speaker 1: if he if he wants to be told Fox News
Speaker 1: he doesn't want to go back to Twitter today. I
Speaker 1: find that hard to believe. If he comes back to
Speaker 1: the service, you know what, what kind of reaction will
Speaker 1: that get? What are the limits even for a public
Speaker 1: figure that's that's trodden over them in the past. You
Speaker 1: point out that Jeff Bezos, when he bought the Washington
Speaker 1: Post famously said he's hands off, He's not going to
Speaker 1: have any sway over editorial decision. Elon Musk is basically
Speaker 1: saying the opposite here. He's going to be very involved,
Speaker 1: especially if you look at how involved he is at
Speaker 1: Tesla and that's base x um. You know, what does
Speaker 1: it mean for a single person to have such sway
Speaker 1: over a platform that is so influential over public discourse.
Speaker 1: The comparison what what the Washington Post is interesting and
Speaker 1: that was a two million dollar deal pennies in comparison
Speaker 1: back into thus in thirteen, Bezos said he wouldn't get involved.
Speaker 1: He he largely hasn't in the editorial direction of the Post.
Speaker 1: I liken this not just to a financial takeover of Twitter,
Speaker 1: but to a political takeover. He's coming in with a
Speaker 1: very uh specific ideology and saying he's going to operated differently.
Speaker 1: Is it more like a Murdoch moment? Yeah? I think
Speaker 1: I I compared it to to Murdock's takeover the posts
Speaker 1: in the Wall Street Journal, where he's bringing some some
Speaker 1: politics in and promising a departure from the current way
Speaker 1: that the company and the platform is administered. All right,
Speaker 1: red Stone, thank you. As always, I want to continue
Speaker 1: this conversation with Teconomy founder Javier Kirkpatrick and Chamber of
Speaker 1: Progress founder and CEO Adam Kovakova. David, I want to
Speaker 1: start with you. Since we've been talking about this now,
Speaker 1: it feels like almost every day since April fourteen. Now
Speaker 1: it's official. Um, what about Twitter is going to change
Speaker 1: under ELM Musk. Well, you know, actually I thought what
Speaker 1: Brad just said was very interesting. And if you really
Speaker 1: ask yourself, is this a financial takeover or a political
Speaker 1: takeover or both? If it's both, I am not as
Speaker 1: worried about the free speech issues, um, because obviously the
Speaker 1: business will require significant moderation. It's not just a matter
Speaker 1: of obeying law. Users expect a more or less safe
Speaker 1: environment in which to function. But you know, in my
Speaker 1: macro response to the whole deal is that it's probably
Speaker 1: a good thing, cautious optimism because interestingly, regarding Facebook, which
Speaker 1: as you know, I think about a lot, I've said
Speaker 1: for a long time that the best thing for Facebook
Speaker 1: would be if Suckerberg found a way to take at
Speaker 1: private so he could make the difficult changes, which he
Speaker 1: doesn't even seem to want to make, sadly, But taking
Speaker 1: Twitter private, taking any company private, as Michael Dell proof,
Speaker 1: is a way to really do difficult things to the
Speaker 1: market might not let you do. And I I think
Speaker 1: some of the suggestions he has and most notably authenticating
Speaker 1: all humans, which we could talk about in a minute,
Speaker 1: more detail if you want, uh, could be very positive changes.
Speaker 1: We'll get to that in a second. Adam, I want
Speaker 1: to know how you would answer that question. Do you
Speaker 1: believe Elon Musk has the public's best interest as heart
Speaker 1: Twitter users interests at heart or Elon Musk's interests at heart? Well,
Speaker 1: I think we'll see it. It's an open question. I
Speaker 1: think he every platform, Twitter included starts off with a
Speaker 1: bent towards free expression. That's what he's stated pretty clearly.
Speaker 1: The problem is that one percent of users who make
Speaker 1: a mess of the place right with spam, harassment, hate speech,
Speaker 1: what some people call lawful but awful speech. And the
Speaker 1: problem is that if you don't do any thinking about
Speaker 1: that kind of speech, you drive away you're happy, productive,
Speaker 1: responsible users, and you turn off your advertisers who really
Speaker 1: don't want their ads appearing next to hateful or harassing content.
Speaker 1: Like every community wants both a generally free environment um
Speaker 1: but also police force to enforce the rules, and that
Speaker 1: that's what most people want on social media. That comes
Speaker 1: through in pulling. People want more transparency for expression, but
Speaker 1: they also want clear content moderation, and they don't want
Speaker 1: to see junk. And I think he'll he'll see that. Well,
Speaker 1: uh renee to rest uh put this. I believe you
Speaker 1: know very eloquently where she said, Elon Musk is equal
Speaker 1: parts innovator, equal parts potentially ConTroll even though I think
Speaker 1: we can all agree Elon Musk is incredibly innovative. Is
Speaker 1: he innovative enough to figure out free speech in a
Speaker 1: way that works for everyone when so many people, so
Speaker 1: many massive companies that have come before, have not been
Speaker 1: able to Adam Well, I think you're absolutely right. I mean, frankly,
Speaker 1: one of the challenges about this is that Twitter is
Speaker 1: such an important service for policymakers, for newsmakers that whoever
Speaker 1: runs the company, whether it's Musk or whether it's Jack
Speaker 1: Dorsey or Dicoslo before them, have found that sort of
Speaker 1: politicians working the refs over content policies to be a
Speaker 1: huge headache. And I suspect once that initial enthusiasm passes,
Speaker 1: he may find that too. May be relatively easy to
Speaker 1: you know, to reinstate Trump as as Brad said, But
Speaker 1: what happens next time there's a January six type of man?
Speaker 1: What happens when Nancy Pelosi calls because she doesn't like
Speaker 1: a call they've made. So these are calls that no
Speaker 1: social media ceo relish is making. But unfortunately it's it's
Speaker 1: part of the job. Now. Elon Musk loves polls. If
Speaker 1: only he could do a poll saying do you want
Speaker 1: me to own Twitter? Yes or no, we would know
Speaker 1: how many Twitter users are actually in favor of this.
Speaker 1: Certainly there's a huge contingent of people that thinks, uh,
Speaker 1: and including the Twitter board, Uh, this is this is
Speaker 1: the right thing to do. Um. David, you mentioned the
Speaker 1: idea of authenticating users. What exactly would that accomplish. Well,
Speaker 1: let's remember Twitter has never required users to really be anything.
Speaker 1: You could call yourself anything, you could be anyone, and
Speaker 1: there was really a lot of opacity in terms of
Speaker 1: who was actually speaking. Of course, some people identified themselves
Speaker 1: clearly on their Twitter profile, etcetera, but that was not
Speaker 1: a requirement of the service. Facebook, on the other hand,
Speaker 1: has always had that um and even though it's been
Speaker 1: diverged from some degree, it really did to some extent
Speaker 1: maintain civility in the service relatively UM and I think
Speaker 1: that could be a more civil conversation just by making
Speaker 1: that change on Twitter in itself, where you always knew
Speaker 1: who was speaking, because anonymity is one of the real
Speaker 1: scourges of of disinformation and causes a way of successful disinformation.
Speaker 1: You don't know who's speaking, people can mask themselves, etcetera.
Speaker 1: Uh So, I think that's a very positive thing. But
Speaker 1: I want to just keep going back to this question,
Speaker 1: does sect does Does Must really want to make money
Speaker 1: from this deal or is he? Is he considering this
Speaker 1: a play thing? You'd think with this kind of expenditure,
Speaker 1: he's got to make a good business. If he really
Speaker 1: has to make a good business. I think these agonizing
Speaker 1: questions everybody's asking about moderation will be settled by the marketplace,
Speaker 1: and they will be just settled in the way that
Speaker 1: we were just hearing. He will have to moderate just
Speaker 1: like every other social media does because that is what
Speaker 1: users and the community wants. And maybe SpaceX is an
Speaker 1: interesting comparison there because he has kept that as a
Speaker 1: private company. But we don't know what the financials look like. Adam.
Speaker 1: I'm curious to hear from you, given you know you
Speaker 1: running in these Washington policy circles. Is this going to
Speaker 1: raise the eyebrows of policy makers? Do you foresee any
Speaker 1: potential regulatory issues down the line? I don't foresee any issues,
Speaker 1: particularly with Um with the sale in terms of a
Speaker 1: review or anything like that. I think we've already seen
Speaker 1: that Republicans and Democrats are viewing this a little bit differently.
Speaker 1: I think in the last couple of weeks you've seen
Speaker 1: Congressional Republicans cheering for must takeover of the company. Uh,
Speaker 1: perhaps because they think he's gonna allow Trump back on
Speaker 1: I think if you gave most Republicans and congress truth
Speaker 1: serum would probably say that Trump being on Twitter was
Speaker 1: better for Democrats and egg for Republicans. Um. But so
Speaker 1: I do think you'll see the continued working of the reps.
Speaker 1: That's always been true of social media. But I don't
Speaker 1: foresee significant regulatory issues. I do foresee that Muscle will
Speaker 1: continue to poke at regulators like the SEC. That's been
Speaker 1: part of his history. And Paragua, the CEO of Twitter,
Speaker 1: is actually in the middle of an all hands meeting
Speaker 1: with employees right now. He's just said that the company
Speaker 1: will continue to operate as usual until the deal closes.
Speaker 1: We're getting headlines from the meeting now that no layoffs
Speaker 1: are currently planned, that stock grants will continue to vest.
Speaker 1: But uh, there's gonna be a hiring freeze for now, David,
Speaker 1: you really curious how employees are taking this as I
Speaker 1: understand that there's been a huge contingent of people I'm
Speaker 1: not happy about this, and another contingentive paper people strongly
Speaker 1: in favor of Elon Musk. Also curious about Jack Dorsey
Speaker 1: and the role that he's played in this equation. We
Speaker 1: saw uh some uh you know, attention going back and
Speaker 1: forth between Jack and Elon Musk. Jack changing his his
Speaker 1: official title to Blockhead, Elon Musk complimating that since saying
Speaker 1: that that that title is on fire, Jack responding that
Speaker 1: Elon Musk is the techno king. What has been the
Speaker 1: influence do you think of Jack Dorsey on this deal
Speaker 1: having left the company. It's it's a good thing to
Speaker 1: speculate about. My guess is that Jack, like me, is
Speaker 1: cautiously optimistic about what this could mean. But nobody can
Speaker 1: look at Elon Musk and not worry that something could
Speaker 1: spin out of control in an unpredictable direction. And I'm
Speaker 1: sure Jack, who feels very deeply attached to a proprietary
Speaker 1: about Twitter, uh, wants to see his baby kept healthy.
Speaker 1: And but I also think he knows that there have
Speaker 1: been important changes that they have been prevented from making
Speaker 1: because it would potentially cause short term profit implications or
Speaker 1: or or revenue implications. And that is all going to
Speaker 1: go away once the company's private. But can I just
Speaker 1: ask Adam a question though, because I wonder about the SEC.
Speaker 1: They still have to approve this transaction. Here's a guy
Speaker 1: who was accused and settled with them for securities fraud
Speaker 1: regarding tesla Um and didn't necessarily abide by the terms
Speaker 1: of the settlement um, And what is the possibility, as
Speaker 1: a Washington guru that maybe the SEC might think of
Speaker 1: him as potentially unsuitable unless certain conditions are put on
Speaker 1: this transaction. It's not an anti trust issue, but they
Speaker 1: have the right to do whatever they want. Sure, it's
Speaker 1: not out of the question. And certainly SEC chair Gary
Speaker 1: Gensler has been not been shy about using his authority
Speaker 1: when it comes to, for example, the whole crypto industry.
Speaker 1: They haven't yet done this kind of thing, but I
Speaker 1: think it's very possible and and certainly to the extent
Speaker 1: that he could say, look, this is kind of my
Speaker 1: moment to extract Um some kind of conditions or concessions
Speaker 1: I think that's I think that's very possible. And of
Speaker 1: course that's not the end of it, right because even
Speaker 1: in um in must Roll, as had Tesla, he's constantly
Speaker 1: tail tangling with regulators around safety and all these other questions,
Speaker 1: and there there's some important questions. So I don't think
Speaker 1: even the acquisition is even probably the end of of
Speaker 1: must Uh interaction with regulators around the around Twitter. Alright, well,
Speaker 1: let's just run about the end of anything. We're gonna
Speaker 1: have to leave it there, David, and this is the
Speaker 1: beginning but something, if it's anything. Adam Govakovitch, thank you
Speaker 1: as well as David Kirkpatrick. We could debate this for hours.
Speaker 1: Appreciate you both joining us to Day to Way in
Speaker 1: time for our crypto report now, and I want to
Speaker 1: get back to elon Musk buying Twitter. He said he's
Speaker 1: wants to open source the algorithm. Could Twitter's future then
Speaker 1: be decentralized and if so, what does that mean. Jack Maller,
Speaker 1: CEO of the digital payments platform Strike, and our crypto
Speaker 1: Contributortionally bostick with us now to discuss. Jack. I'm sure
Speaker 1: you have opinions about this as a Twitter user, but
Speaker 1: also as a business Twitter, I know is one of
Speaker 1: your customers. What's been your reaction to Elon Musk sealing
Speaker 1: the deal here making it official today? Ladies, Hello, Happy Monday.
Speaker 1: Thanks for having me. Um No, I'm very excited. I'm
Speaker 1: very excited. I look up to Elon as an entrepreneur,
Speaker 1: as a businessman, and as someone that makes the world
Speaker 1: a better place. In my opinion, his existence has be
Speaker 1: net positive. And uh, I think I've always thought that
Speaker 1: an open payment standard that allows for natively digital physical settlement.
Speaker 1: That sounds crazy, but it's a cheaper, better, faster, more inclusive,
Speaker 1: inherently innovative payment standard. Uh. Suits Internet business is tremendously well.
Speaker 1: It allows natively digital companies to enable native, natively digital payments.
Speaker 1: And I don't think we've ever seen a social network
Speaker 1: really exercise that muscle. And it seems like Elon has
Speaker 1: been hinting at it and I'm very, very, very very
Speaker 1: excited to see it come into reality hopefully Fingers crossed. Jack.
Speaker 1: You know, so many people don't realize that there's already
Speaker 1: a relationship between Strike and Twitter. Twitter said last year
Speaker 1: that tipping with bitcoin would be made available over the
Speaker 1: Lightning network with you Guys, how far has that gone
Speaker 1: so far? And where else could it go? Now? Yeah,
Speaker 1: I think that over the last twelve months there's been
Speaker 1: a lot of belief and interest in this concept of
Speaker 1: creator economy. Is more and more of the creator world
Speaker 1: lives now on the web. I kind of want to
Speaker 1: take a step back for a second, though, and revisit
Speaker 1: payments as a whole, payments as we know them today.
Speaker 1: How do you digitally move a piece of paper? How
Speaker 1: do you digitally move a rock? How do you digitally
Speaker 1: move a bar of gold? Trick question? You can't. And
Speaker 1: so all of the payments that are predicated on older
Speaker 1: assets are promises of future settlement. And that's where you
Speaker 1: get intomediaries like banks and card networks that facilitate these payments.
Speaker 1: They make them really expensive, they make them really slow.
Speaker 1: They inhibit other people in the world that they don't
Speaker 1: serve from participating. For the first time ever, Guys, we
Speaker 1: have an asset, a physical, physical bear instrument that's digital.
Speaker 1: It's a mind blowing concept. How do you move a
Speaker 1: physical bitcoin digitally? What do you mean? That's part of
Speaker 1: how it works. And so not only can we do
Speaker 1: creator payments, Twitter can do micro payments. Twitter can enable
Speaker 1: creators economy. Twitter could check out at a Starbucks if
Speaker 1: they're both on the Bitcoin Lightning Network. And so I
Speaker 1: think when you lower the barrier of entry, you to
Speaker 1: a physical bear instrument. You don't need to be issuing credit,
Speaker 1: you don't need to be promising debt, you don't need
Speaker 1: to be regulated to make payments and facilitate payments. So
Speaker 1: I think Twitter could do anything really now you work
Speaker 1: with the Lightning network that is very, very Bitcoin oriented.
Speaker 1: But we're seeing Bitcoin and dogecoin rise on the back
Speaker 1: of these announcements, So what do you think about the
Speaker 1: potential for Bitcoin other currencies? Dogecoin We are seeing them
Speaker 1: drop a bit now as well. But you know, we
Speaker 1: all we have seen them, you know, rise on the
Speaker 1: excitement of Elon Musk and Twitter. Yeah, you're seeing everything
Speaker 1: in the world rise on excitement because the Federal Reserve
Speaker 1: and other central banks are perverting risk haunts across all
Speaker 1: assets and it's scaring the dear life out of everybody.
Speaker 1: So everything is more appealing than holding dollars or just
Speaker 1: something that's going to bleed to death. And so I
Speaker 1: wouldn't take a lot of noteworthiness that Dogecoin is up,
Speaker 1: so is the couch in my living room over there?
Speaker 1: Who cares? Bitcoin is a known monetary policy. A fixed
Speaker 1: supplied is the best asset ever. It's better at being
Speaker 1: a central bank and central banks. It's also better at
Speaker 1: being east of the visa. It's also better at being
Speaker 1: Western Union and Western Union. It's also better at being
Speaker 1: chased and chase. Why do I need to focus my
Speaker 1: time on anything else. I think we have a lot
Speaker 1: of work to do on empowering the world with the
Speaker 1: greatest tool that will ever be invented, at least in
Speaker 1: my lifetime, And so I don't really get distracted by
Speaker 1: the noise. Whether my couch my living room is up
Speaker 1: a little bit or doge coin don't really matter to
Speaker 1: me because I don't know the dollars down. That's what
Speaker 1: that means. That must be some couch jack. Jack Baller
Speaker 1: is always going to have you here on the Show's
Speaker 1: CEO of Stripe and Strike and our crypto contributors, thank
Speaker 1: you both. Delon Musk seiling the deal to buy Twitter.
Speaker 1: Twitter CEO Paragua Wal has been talking to employees at
Speaker 1: a Twitter all hands meeting over the last our lot
Speaker 1: of questions there are at Ludlow has been getting some
Speaker 1: details on what paragu Agerwal has said and a lot
Speaker 1: of questions. Be kind of easy. Expect no layoffs currently
Speaker 1: land there will be a freeze on hiring, a lot
Speaker 1: of questions. There's been a lot of questions over the
Speaker 1: last ten days, from inside as I sponging to what
Speaker 1: happens to equity conversation R s us. A lot of
Speaker 1: Twitter workers want to know how does a private company
Speaker 1: actually work? And you know, the management team have said
Speaker 1: what you'd expect them to say in this set of circumstances.
Speaker 1: He says Twitter is going to continue to operate as
Speaker 1: normal until a deal is done, whatever normal is in
Speaker 1: this context. They've said that they want this deal to
Speaker 1: happen before the end of the year. Are expected to
Speaker 1: happen before the end of the year. How soon could
Speaker 1: it happen? How fast could could this steal get actually
Speaker 1: get done? It would take time to take a company private.
Speaker 1: There's not a lot of past precedent for a company
Speaker 1: at this scale. You know, the attention quickly turns to
Speaker 1: when does Elon must get to implement changes that he's proposed,
Speaker 1: or how does that work? Is he literally walking into
Speaker 1: Market Street, into the offices and saying, hey, guys, I'm here,
Speaker 1: I've got some ideas. Let's talk about it. You know,
Speaker 1: inside as I spoken to a lot of them are
Speaker 1: positive about it. I think you cover this in the show.
Speaker 1: They welcome his ideas. They just don't get the hierarchy.
Speaker 1: How does this company now work? Does Paragaga yll stay
Speaker 1: as CEO? Exactly? Well, we've seen Elon Musk's CEO of
Speaker 1: Twitter stay on CPEO of SpaceX have some management issues
Speaker 1: with topics X at his other companies, So what does
Speaker 1: that mean for current executives at Twitter? And finally, there
Speaker 1: are questions about whether that's twenty one billion dollars of
Speaker 1: exity financing, does he actually still bring partners in and
Speaker 1: who are those people? Are they kind of like minded
Speaker 1: activist investors that want to see the same changes because
Speaker 1: that could change the dynamic of the deal. What are
Speaker 1: the chances of steel falls through? Won't put a number
Speaker 1: on it, would say lots of people are confident there
Speaker 1: won't be any regulatory problems going forward based on the
Speaker 1: notes we've seen really in the last hour. Right, all right,
Speaker 1: so many unanswered questions, but thank you for answering what
Speaker 1: we do know. Bloomberg's at Ludlow. Thank you. That does
Speaker 1: it for this edition of Bloomberg Technology. We're gonna be
Speaker 1: back here tomorrow follow even more details, more angles on
Speaker 1: the steel, as well as tech earnings from the biggest giants,
Speaker 1: Alphabet and Myke. We're soft. Reporting will be across all
Speaker 1: of it tomorrow. I'm Emily Check in San Francisco. This
Speaker 1: is Bloomberg