WEBVTT - The Big Tech Stories of 2022: Twitter Descends into Chaos 0:00:04.440 --> 0:00:12.320 Welcome to tex Stuff production from my Heart Radio. Hey there, 0:00:12.360 --> 0:00:16.360 and welcome to tech Stuff. I'm your host, Jonathan Strickland. 0:00:16.520 --> 0:00:19.280 I'm an executive producer with I Heart Radio and how 0:00:19.440 --> 0:00:24.279 the tech are Yet we are marching on down the 0:00:24.400 --> 0:00:27.880 timeline to talk about the really big tech news stories 0:00:28.080 --> 0:00:31.360 of the past year, and as this week has shown, 0:00:31.640 --> 0:00:34.600 there were a lot of those. I have done three 0:00:35.000 --> 0:00:39.040 full length episodes about important text stories that unfolded in 0:00:39.080 --> 0:00:43.200 two and I hadn't even really touched on the one 0:00:43.840 --> 0:00:46.760 that I probably talked about the most in our tech 0:00:46.920 --> 0:00:49.239 news episodes, at least in the second half of this year, 0:00:49.320 --> 0:00:52.559 which is all about Twitter. So we're gonna do that 0:00:52.600 --> 0:00:54.800 one today. But before I get into that, I also 0:00:54.840 --> 0:00:58.200 want to mention a different story, and this one won't 0:00:58.200 --> 0:01:03.440 take too long. So our first story is an update 0:01:03.560 --> 0:01:07.800 on Pharaonis. So this was the medical tech company founded 0:01:07.920 --> 0:01:12.080 way back in two thousand three by Elizabeth Holmes, and 0:01:12.400 --> 0:01:15.759 it aimed to create a blood analysis device that could 0:01:15.800 --> 0:01:19.520 run more than a hundred medical tests on a micro 0:01:19.840 --> 0:01:22.720 drop of blood. And the pitch was that you would 0:01:22.760 --> 0:01:25.240 be able to run such tests in a device that 0:01:25.280 --> 0:01:28.080 was about the size of a desktop printer and that 0:01:28.160 --> 0:01:31.920 in fact, in the future, maybe you know, your average 0:01:32.000 --> 0:01:34.640 person would have one of these and they could run 0:01:34.840 --> 0:01:38.200 a blood test at a moment's notice and get reliable 0:01:38.240 --> 0:01:42.360 results and be able to practice better preventable care and 0:01:42.400 --> 0:01:46.160 that kind of thing. There was only one real problem. 0:01:46.200 --> 0:01:49.200 The tech didn't work, at least not to the extent 0:01:49.600 --> 0:01:53.840 that it needed to work, and the company, the anis Obvius, 0:01:53.840 --> 0:01:58.080 skated that by using various shady tactics to keep investors 0:01:58.120 --> 0:02:01.880 hoodwinked and you know, invested. And that all started to 0:02:01.880 --> 0:02:05.960 fall apart back in two thousand, two thousand sixteen. Now, 0:02:06.160 --> 0:02:08.880 at its height, the company was valued at more than 0:02:09.000 --> 0:02:12.720 nine billion dollars, and when it all came crashing down, 0:02:12.840 --> 0:02:16.240 the Justice Department wanted to hold some folks accountable for 0:02:16.320 --> 0:02:20.480 multiple reasons. Now, there were the obvious reasons that I 0:02:20.480 --> 0:02:23.400 can really get behind, like the fact that there were 0:02:23.480 --> 0:02:28.440 people who depended upon getting accurate blood test results and 0:02:28.480 --> 0:02:31.760 their health was potentially in danger because of the actions 0:02:31.960 --> 0:02:37.480 of this company. There was also the reason that you know, 0:02:38.560 --> 0:02:43.760 rich people lost money by pouring investments into this. I know, 0:02:43.840 --> 0:02:46.720 I'm a broken record that I complained so much that 0:02:47.320 --> 0:02:53.160 the US Justice seems to uh to favor matters that 0:02:53.360 --> 0:02:56.960 involve rich people losing money more than anything else. And 0:02:57.080 --> 0:03:00.280 I know that that's not necessarily the case all way 0:03:00.320 --> 0:03:03.400 across the board, but Holy cal twenty twenty two really 0:03:03.960 --> 0:03:07.840 brought that into sharp relief in many instances. So I'll 0:03:07.880 --> 0:03:11.720 take my cynical hat off, will just cover the story. So, 0:03:11.800 --> 0:03:17.160 Elizabeth Holmes and her ex boyfriend and ex Soronis president 0:03:17.680 --> 0:03:22.720 Ramesh Sunny bal Wannie both stood trial for multiple accounts 0:03:22.800 --> 0:03:27.440 of fraud and similar charges and both were found guilty. 0:03:27.480 --> 0:03:31.720 And this year, six years after Tharonis started to crumble, 0:03:32.080 --> 0:03:36.680 Holmes and bal Wannie finally received their sentences. Holmes has 0:03:36.720 --> 0:03:40.280 been sentenced to eleven years in federal prison and bal 0:03:40.360 --> 0:03:43.200 Wanni is looking at thirteen years. Now. There's a lot 0:03:43.200 --> 0:03:45.800 more to this story, obviously, but perhaps I'll do a 0:03:45.920 --> 0:03:50.440 follow up to my previous Saronis episode at some point. Now. 0:03:50.480 --> 0:03:53.880 The reason that I wanted to start off this episode 0:03:53.880 --> 0:03:56.400 with that story is that I have this kind of 0:03:56.520 --> 0:04:01.280 armchair psychology pet hypothesis when it comes to Elizabeth Holmes 0:04:01.320 --> 0:04:04.200 and Elon Musk, and we'll be talking a lot about 0:04:04.240 --> 0:04:08.440 Elon Musk in a moment, and that hypothesis is that 0:04:08.680 --> 0:04:12.320 these folks seem to be inclined to think that just 0:04:12.440 --> 0:04:16.760 because they want something to be possible, it must therefore 0:04:16.839 --> 0:04:21.440 be possible. So with Holmes, it seems like this idea 0:04:21.560 --> 0:04:26.840 that technology should be able to overcome these challenges is, 0:04:27.720 --> 0:04:30.599 you know, possible, because it sounds like it should be. 0:04:31.400 --> 0:04:34.839 That technology is so incredible with what it can do. Obviously, 0:04:35.240 --> 0:04:37.800 we should be able to run a hundred or more 0:04:37.960 --> 0:04:41.320 medical tests on a micro droplet of blood, and it 0:04:41.440 --> 0:04:46.719 ignores the actual physical obstacles that are in the way 0:04:46.800 --> 0:04:50.840 of allowing that to happen, even though there were mentors 0:04:51.120 --> 0:04:55.680 and experts who were warning Homes that this idea probably 0:04:55.800 --> 0:05:00.000 wasn't going to work. With Musk well, from the hyperloop 0:05:00.480 --> 0:05:04.200 to the apparent belief that Twitter could implement massive sweeping 0:05:04.279 --> 0:05:08.560 changes without negative consequences, seems to indicate that he doesn't 0:05:08.560 --> 0:05:12.520 have a real understanding of things. And again, this is 0:05:12.560 --> 0:05:16.400 sort of my personal hypothesis. I am aware I could 0:05:16.440 --> 0:05:20.760 easily be proven wrong. Maybe Holmes never worried about whether 0:05:20.880 --> 0:05:22.919 or not her tech would work. Maybe it was a 0:05:22.960 --> 0:05:26.159 scam from the beginning. I don't get that sense, But 0:05:26.279 --> 0:05:29.960 I don't know. Maybe Musk is playing some three D 0:05:30.120 --> 0:05:32.560 or four D or five D chess the way some 0:05:32.600 --> 0:05:35.720 people claim, But honestly, the feeling I get is that 0:05:35.839 --> 0:05:39.479 Checkers is really more his speed. All right, So let's 0:05:39.520 --> 0:05:43.600 talk Twitter. The social network company has been around since 0:05:43.760 --> 0:05:47.840 two thousand six, three years after Therainus had been founded, 0:05:47.880 --> 0:05:51.000 if you can believe it. Seven years later, in two 0:05:51.000 --> 0:05:54.760 thousand thirteen, Twitter held its initial public offering or i 0:05:54.880 --> 0:05:57.719 p O. That's when it transitioned from being a privately 0:05:57.760 --> 0:06:02.120 held company to a publicly traded company. It would take 0:06:02.120 --> 0:06:06.320 another five years in eighteen for Twitter to post its 0:06:06.400 --> 0:06:11.440 first annual profits. But that same year ten Twitter had 0:06:11.520 --> 0:06:16.159 this nagging problem. See in Twitter had around three hundred 0:06:16.200 --> 0:06:19.480 thirty million users. By the end of twenty eighteen, it's 0:06:19.520 --> 0:06:22.719 first profitable year, it was down to three hundred twenty 0:06:22.720 --> 0:06:26.359 one million users. That had lost nine million users in 0:06:26.400 --> 0:06:29.640 the year, so it was starting to make a profit, 0:06:30.520 --> 0:06:34.480 but it was losing millions of users. Twitter has been 0:06:34.520 --> 0:06:39.760 having issues for ages. It clearly was serving a useful purpose, 0:06:39.839 --> 0:06:43.000 particularly in the world of journalism. You had reporters and 0:06:43.160 --> 0:06:46.120 editors who were using Twitter to network with each other, 0:06:46.440 --> 0:06:50.160 also to make contact with important people. They landed interview 0:06:50.160 --> 0:06:55.960 opportunities through Twitter, so it was definitely serving an important purpose, 0:06:56.120 --> 0:07:00.000 but it was also a very useful network force, say 0:07:00.080 --> 0:07:05.240 malicious misinformation campaigns. And then of course there were the trolls. 0:07:05.800 --> 0:07:09.440 So Twitter has a bit of a dodgy reputation when 0:07:09.440 --> 0:07:14.679 it comes to handling abuse on its platform. In some cases, 0:07:14.720 --> 0:07:18.200 the company has acted swiftly, but in others the slow 0:07:18.240 --> 0:07:21.480 response or lack of response has meant that some people 0:07:21.480 --> 0:07:24.600 have suffered a lot more abuse while waiting for Twitter 0:07:24.680 --> 0:07:28.800 to do anything about it. The gamer Gate affair is 0:07:28.800 --> 0:07:32.360 a good example. People in the video games industry, primarily women, 0:07:32.760 --> 0:07:36.440 became the targets of persistent and extreme abuse, and many 0:07:36.520 --> 0:07:40.960 of them found it impossible to get any response from 0:07:41.000 --> 0:07:44.280 Twitter to to fix this or to act on it. 0:07:45.320 --> 0:07:49.760 In November, Jack Dorsey, one of the co founders of 0:07:49.760 --> 0:07:55.360 Twitter and two times CEO for the company, stepped down now. 0:07:55.400 --> 0:07:58.560 One reason for his departure was that Dorsey is also 0:07:58.680 --> 0:08:01.920 the CEO of a company called Block Incorporated. That's the 0:08:01.920 --> 0:08:06.200 company behind the popular Square payment processing app. There were 0:08:06.240 --> 0:08:10.520 also concerns among stakeholders that Dorsey's attention was too divided 0:08:10.640 --> 0:08:13.600 because he was having to provide leadership to two big 0:08:13.600 --> 0:08:16.600 companies at the same time. We should kind of remember 0:08:16.640 --> 0:08:19.120 that because that will very much be relevant later in 0:08:19.120 --> 0:08:24.960 this episode. So Dorsey would step down in November, and 0:08:25.040 --> 0:08:29.760 a man named Parague Agrival becomes CEO of Twitter. Now 0:08:29.800 --> 0:08:32.800 Agrival had joined Twitter way back in two thousand eleven, 0:08:33.000 --> 0:08:36.320 so before the company had even gone public. He initially 0:08:36.360 --> 0:08:39.640 worked as a software engineer, but by two thousand seventeen 0:08:39.679 --> 0:08:42.520 he had worked his way up to chief Technology officer 0:08:42.600 --> 0:08:46.360 of the whole company. So Agreval would end up serving 0:08:46.400 --> 0:08:50.000 as CEO beginning in November one, and he stayed in 0:08:50.040 --> 0:08:55.079 that position for not quite a full year. Okay, now 0:08:55.080 --> 0:08:58.800 we're moving up to the beginning of two thousand twenty two. 0:08:59.000 --> 0:09:02.160 At the star of the year, Twitter's stock was trading 0:09:02.200 --> 0:09:06.040 at just under forty dollars a share. This was down 0:09:06.120 --> 0:09:09.040 from the company's high of seventy seven dollars a share. 0:09:09.240 --> 0:09:12.240 It had hit that in early one and since then 0:09:12.760 --> 0:09:17.000 had not really enjoyed those same heights. In early April, 0:09:18.720 --> 0:09:22.080 news broke that Elon Musk, who at the time was 0:09:22.160 --> 0:09:25.760 the world's richest man and was known as the CEO 0:09:26.000 --> 0:09:31.360 of Tesla and SpaceX, had purchased nine point two percent 0:09:31.640 --> 0:09:35.840 of Twitter through stock purchases. That he had been doing 0:09:35.880 --> 0:09:40.120 this since January of this year, so earlier in the year, 0:09:40.240 --> 0:09:43.400 Musk had been complaining that Twitter was quote failing to 0:09:43.520 --> 0:09:47.600 adhere to free speech principles end quote, and that Twitter, 0:09:48.240 --> 0:09:52.840 as a sort of online public town square, was undermining 0:09:52.880 --> 0:09:59.280 democracy by suppressing freedom of speech. Never Mind that Twitter 0:09:59.360 --> 0:10:02.600 as a company, not a government, so the whole First 0:10:02.640 --> 0:10:09.240 Amendment argument does not apply because First Amendment protects citizens 0:10:09.240 --> 0:10:12.720 in the United States against the government from suppressing free speech. 0:10:13.000 --> 0:10:17.239 It does not protect them against a company enacting its policies. 0:10:17.360 --> 0:10:21.360 But never mind that must also entertain the notion of 0:10:21.480 --> 0:10:24.560 making his own social network platform, but that was something 0:10:24.600 --> 0:10:28.120 that was already being done in other platforms like parlor 0:10:28.400 --> 0:10:32.480 Gab and truth Social, all of which have had different 0:10:33.120 --> 0:10:36.959 challenges since their founding, and all of which position themselves 0:10:37.000 --> 0:10:40.679 as being more faithful to the concept of free speech. 0:10:40.960 --> 0:10:43.800 They also cater more towards the far right of the 0:10:43.840 --> 0:10:49.120 political spectrum. Now, y'all, the stuff Twitter cracked down on 0:10:49.720 --> 0:10:53.360 and would act on when it comes to speech usually 0:10:53.400 --> 0:10:58.080 falls into categories like abuse, misinformation, and things like calls 0:10:58.120 --> 0:11:01.439 for violence. And the high profile accounts that had been 0:11:01.480 --> 0:11:04.800 banned were very much connected to these kinds of violations. 0:11:05.280 --> 0:11:08.520 But Musk was repeating some of the talking points spread 0:11:08.720 --> 0:11:12.720 on the far right that Twitter was authoritatively deciding who 0:11:12.760 --> 0:11:15.720 would be allowed to speak and who wouldn't, And as 0:11:15.800 --> 0:11:18.079 he would learn the hard way later on, things aren't 0:11:18.120 --> 0:11:21.079 always so cut and dry. But you know, I don't 0:11:21.120 --> 0:11:25.600 want to get ahead of myself anyway. Musk's purchase of 0:11:25.640 --> 0:11:28.840 this massive amount of Twitter stock made him the largest 0:11:28.920 --> 0:11:33.080 single shareholder in Twitter, and the general belief was that 0:11:33.120 --> 0:11:35.360 he was going to use these shares to push for 0:11:35.480 --> 0:11:38.960 changes within the company. Musk even got an invitation to 0:11:39.040 --> 0:11:43.360 join Twitter's board of directors, which Bloomberg reported that he 0:11:43.480 --> 0:11:47.320 had accepted, and it looks like initially he did accept. 0:11:48.000 --> 0:11:51.240 But by doing so, Musk would forfeit any chance of 0:11:51.280 --> 0:11:55.240 taking over Twitter entirely, because if you were to become 0:11:55.320 --> 0:11:57.800 a member of Twitter's board of directors, that came with 0:11:58.480 --> 0:12:00.880 a kind of limit built in to it. No board 0:12:00.920 --> 0:12:04.000 member would be allowed to own more than fourteen point 0:12:04.080 --> 0:12:07.080 nine percent of the company while serving on the board 0:12:07.080 --> 0:12:11.360 of directors. So a few days later the New York 0:12:11.400 --> 0:12:15.320 Times clarified things Musk had chosen not to join the 0:12:15.360 --> 0:12:18.240 board of directors. He changed his mind, perhaps with the 0:12:18.280 --> 0:12:21.880 aim of making a move to take over Twitter entirely. 0:12:22.360 --> 0:12:26.680 So Musk was also slagging off on Twitter about Twitter. 0:12:27.480 --> 0:12:31.400 So he was saying things like maybe the company's HQ 0:12:31.679 --> 0:12:34.800 should be converted into a homeless shelter since it was 0:12:35.280 --> 0:12:38.880 so empty all the time. He said that, you know, 0:12:39.120 --> 0:12:42.800 his followers should let him know if Twitter itself was dying. 0:12:42.880 --> 0:12:45.800 He he loves to post Twitter polls. He has done 0:12:45.800 --> 0:12:48.960 this so many times, so he posted a poll asking 0:12:49.200 --> 0:12:52.040 is Twitter dying? I'd love to see him ask the 0:12:52.080 --> 0:12:57.080 same question now. But hey, you might ask why would 0:12:57.160 --> 0:13:01.120 you go and then by billions of dollars worth of 0:13:01.240 --> 0:13:06.240 stock in a company and then immediately start bad mouthing 0:13:06.400 --> 0:13:09.640 the company you invested in? Why would you invest in 0:13:09.640 --> 0:13:13.400 the company? And then you know, say the company is terrible? 0:13:13.520 --> 0:13:16.360 Like how does that make sense? Isn't that a pretty 0:13:16.440 --> 0:13:18.800 dumb way to invest your money? And the answer to 0:13:18.840 --> 0:13:22.160 that is yes, unless maybe you're planning on trying to 0:13:22.280 --> 0:13:25.400 buy the dang thing outright and in the process you're 0:13:25.400 --> 0:13:27.640 hoping to maybe drive the price down a little bit. 0:13:28.000 --> 0:13:33.040 That could potentially be a thing. On April twenty two, 0:13:33.160 --> 0:13:37.079 Elon Musk did in fact offer to buy Twitter. The 0:13:37.120 --> 0:13:39.560 price he was looking at was at a fifty four 0:13:39.600 --> 0:13:43.400 dollars and twenty cents per share of stock, and at 0:13:43.440 --> 0:13:46.120 the time the stock was trading it around forty five 0:13:46.160 --> 0:13:50.679 dollars per share. So saying that we'll pay fifty four 0:13:50.800 --> 0:13:55.480 twenty when you would otherwise get forty five, that's a premium, right, 0:13:55.720 --> 0:13:59.840 that's a good boost over the going price of the stock. 0:14:00.600 --> 0:14:05.520 And thus shareholders would be incentivized to agree to this deal. 0:14:06.480 --> 0:14:09.560 So the deal in total would cost around forty four 0:14:09.600 --> 0:14:12.760 billion dollars. And Musk said that Twitter needed to be 0:14:12.840 --> 0:14:16.800 transformed and it could only go through this transformation if 0:14:16.800 --> 0:14:18.920 it were a private company, so it didn't have to 0:14:18.960 --> 0:14:22.520 answer to, you know, a board of directors and shareholders. Now, 0:14:22.560 --> 0:14:27.600 initially the board of directors resisted Musk's move. The method 0:14:27.640 --> 0:14:30.720 they used is called a poison pill. Now, if you're 0:14:30.760 --> 0:14:34.320 like me and you're not super big in the investment world, 0:14:34.680 --> 0:14:37.960 a poison pill might be a new term to you. 0:14:38.040 --> 0:14:40.120 And a poison pill is when a company does its 0:14:40.120 --> 0:14:43.720 best to make it more difficult for an outside entity 0:14:43.840 --> 0:14:46.440 to execute a hostile takeover. And there's a couple of 0:14:46.440 --> 0:14:50.160 different ways companies can do this. In Twitter's case, the 0:14:50.200 --> 0:14:53.800 approach was to give Twitter's stockholders, with the exception of 0:14:53.840 --> 0:14:57.800 Elon Musk, a chance to purchase additional shares of Twitter 0:14:58.080 --> 0:15:03.800 and a discounted price. Now, adding more shares means that 0:15:03.960 --> 0:15:07.920 Musk's nine percent ownership would end up getting diluted. So, 0:15:07.960 --> 0:15:09.880 in other words, like if you had a hundred apples 0:15:10.200 --> 0:15:13.520 and one person bought nine apples from you, and an 0:15:13.560 --> 0:15:17.560 apple represents voting power, and you're like, oh, I don't 0:15:17.600 --> 0:15:20.040 want this person to have nine of the vote. Maybe 0:15:20.040 --> 0:15:22.640 you add another hundred apples and you don't let this 0:15:22.680 --> 0:15:26.280 person buy any and thus you dilute their ownership of 0:15:26.600 --> 0:15:28.760 your stock of apples. That's kind of the idea that 0:15:28.840 --> 0:15:31.280 was going on here, But as it would turn out, 0:15:31.840 --> 0:15:34.800 things would go in a different direction. I'll explain more 0:15:35.160 --> 0:15:47.440 after we come back from this break. Okay, we're now 0:15:47.600 --> 0:15:52.160 up to April two. This is a week after Elon 0:15:52.240 --> 0:15:55.560 Musk first announced his intention to buy Twitter. Then he 0:15:55.640 --> 0:15:59.440 said that he had secured more than forty six billion 0:15:59.480 --> 0:16:02.840 dollars financing that would be needed for him to purchase 0:16:02.840 --> 0:16:06.400 the company. A few days later, in April twenty, Twitter's 0:16:06.400 --> 0:16:10.760 board of directors reversed its position. Remember they had previously 0:16:10.960 --> 0:16:16.040 resisted this acquisition and had administered the poison pill. So 0:16:16.240 --> 0:16:19.920 they change course and they agree to the original terms 0:16:20.040 --> 0:16:24.400 of a forty four billion dollar acquisition deal. And Elon 0:16:24.480 --> 0:16:29.280 Musk agrees to this. Then Elon Musk goes and sells 0:16:29.320 --> 0:16:35.080 some of his Testlas stock to apparently helped fund this acquisition. Uh, 0:16:35.120 --> 0:16:37.440 this was enough to amount to around eight and a 0:16:37.440 --> 0:16:41.560 half billion dollars worth of stock. That is a jaw 0:16:41.800 --> 0:16:45.040 dropping amount of money. And you might wonder how that 0:16:45.080 --> 0:16:48.320 all works out. I mean, you wouldn't be the only one. 0:16:48.400 --> 0:16:51.320 Some analysts have long said that, you know, Testlas stock 0:16:51.440 --> 0:16:56.120 is is drastically overvalued and has been for ages. Like 0:16:57.120 --> 0:17:00.560 there are a lot of analysts who say that Tesla 0:17:00.760 --> 0:17:05.720 is valued much, much, much higher than established automotive companies 0:17:05.760 --> 0:17:09.200 that produce way more vehicles per year than Tesla manages 0:17:09.280 --> 0:17:12.480 to do, and that, uh, it's just a matter of 0:17:12.520 --> 0:17:16.840 time before Tesla stock ends up being go undergoing what 0:17:16.920 --> 0:17:20.200 would be considered a market correction. And you could argue 0:17:20.200 --> 0:17:22.720 that that's what's happening right now, because back in April, 0:17:23.160 --> 0:17:25.680 Teslas stock was trading it more than three hundred dollars 0:17:25.720 --> 0:17:29.119 per share. Today, as I record this, Tesla stock is 0:17:29.119 --> 0:17:33.320 trading at around a hundred thirty one dollars a share. 0:17:34.200 --> 0:17:38.000 That is a huge drop. It's been a bad week 0:17:38.119 --> 0:17:40.240 because earlier this week it was up to a hundred 0:17:40.320 --> 0:17:42.480 fifty and now it's down to around a hundred thirty. 0:17:42.600 --> 0:17:45.560 So things are not going well for Tesla stock. But 0:17:45.600 --> 0:17:48.720 that's another story which I was hoping I might be 0:17:48.760 --> 0:17:50.240 able to touch on a little bit at the end 0:17:50.280 --> 0:17:52.960 of this episode, but as you will hear, I just 0:17:53.000 --> 0:17:55.640 don't have the time because Twitter takes up too much 0:17:55.640 --> 0:18:00.359 of it anyway. So Musk owns a lot of shares 0:18:00.359 --> 0:18:04.240 of teslent put it lightly, and at the time they 0:18:04.240 --> 0:18:06.639 were worth a ton of money. So while he sold 0:18:06.640 --> 0:18:09.760 off a decent chunk to make eight and a half billion, 0:18:10.080 --> 0:18:13.440 that just represents a part of his ownership of Tesla 0:18:13.560 --> 0:18:18.080 and a a part of his fortune. In early May, 0:18:18.200 --> 0:18:22.200 Musk secured another seven billion dollars from various investors, which 0:18:22.200 --> 0:18:26.639 included Larry Ellison, the co founder of Oracle, and also 0:18:26.680 --> 0:18:31.080 a chunk of change dedicated from Finance, the cryptocurrency exchange 0:18:31.080 --> 0:18:33.800 that I talked about a bit in the Crypto Winter 0:18:34.000 --> 0:18:37.400 episode I did. This week, The New York Times reported 0:18:37.400 --> 0:18:40.360 that Musk had met with investors and promised them that 0:18:40.680 --> 0:18:45.600 by twenty twenty eight, he would quintuple the company's revenue. 0:18:45.640 --> 0:18:49.200 He would increase it by five times, is what he said. 0:18:49.560 --> 0:18:52.480 That would be quite the achievement all by itself, let 0:18:52.520 --> 0:18:56.840 alone an achievement after you consider the company's revenue right now. 0:18:58.000 --> 0:19:01.600 So again, spoil or alert. Things are not going well 0:19:01.640 --> 0:19:03.760 for Twitter on the revenue front, but I am getting 0:19:03.760 --> 0:19:06.359 ahead of myself again. He also stirred the pot by 0:19:06.400 --> 0:19:09.840 announcing that he planned to reverse Twitter's ban on Donald Trump, 0:19:10.000 --> 0:19:13.480 who had received a lifetime ban for violations of Twitter's policies. 0:19:14.080 --> 0:19:17.679 So he was, you know, Elon Musk really likes to 0:19:17.760 --> 0:19:22.399 be ah. I can't say the word on this show, 0:19:23.040 --> 0:19:26.880 a beep stir. I'll say, we'll just use the word beep. 0:19:27.400 --> 0:19:30.560 But you probably could figure out what I mean anyway. 0:19:30.600 --> 0:19:34.000 A couple of leaders at Twitter then left, and the 0:19:34.040 --> 0:19:36.879 company also announced that it was holding a hiring freeze 0:19:37.240 --> 0:19:41.760 in anticipation of Musk's acquisition of Twitter. Then we get 0:19:41.760 --> 0:19:45.640 to mayt So at this point, where about a month 0:19:45.800 --> 0:19:49.879 out from when Musk initially announced his plan to acquire Twitter. 0:19:50.840 --> 0:19:53.640 That's when Musk tweets out that the deal is on whole. 0:19:54.320 --> 0:19:58.240 Why well, Musk claims it's because he's worried about the 0:19:58.320 --> 0:20:00.840 number of bots that are on Twitter, or specifically that 0:20:00.880 --> 0:20:03.760 there were way more bots on Twitter than the company 0:20:03.840 --> 0:20:10.160 had previously indicated. And now, for some Jonathan commentary, now, 0:20:10.200 --> 0:20:15.440 I think that at best, Musk's excuse about bots was disingenuous. 0:20:16.400 --> 0:20:19.719 One of the things that Musk was complaining about leading 0:20:19.800 --> 0:20:22.159 up to his announcement of his plan to acquire the 0:20:22.160 --> 0:20:25.360 company in the first place was his perception that there 0:20:25.359 --> 0:20:28.480 were too many bots on Twitter, which, you know, seems 0:20:28.520 --> 0:20:31.119 to indicate that he was aware there was this bot 0:20:31.280 --> 0:20:34.760 issue that one of his priorities when taking ownership of 0:20:34.800 --> 0:20:37.359 the company was going to be to reduce the number 0:20:37.520 --> 0:20:42.480 or even potentially eliminate bots on the platform. So, in 0:20:42.520 --> 0:20:45.760 other words, the picture he was presenting was that he 0:20:45.880 --> 0:20:49.440 viewed bots as already being an issue on the platform 0:20:49.760 --> 0:20:53.680 before the whole acquisition thing got started, and that one 0:20:53.680 --> 0:20:56.520 of the reasons he wanted to buy Twitter was that 0:20:56.600 --> 0:20:58.760 he saw Twitter as being a valuable tool, but it 0:20:58.800 --> 0:21:02.479 needed to be cleared, it had to be a clean house. 0:21:03.080 --> 0:21:07.639 But now he's saying, Hey, whoa, there's boats on this platform. 0:21:07.680 --> 0:21:12.360 You didn't say anything about bots, which again seems disingenuous 0:21:12.400 --> 0:21:17.480 at best. Complicating matters is that Musk had waived due 0:21:17.480 --> 0:21:20.800 diligence when agreeing to buy Twitter. Now, if any of 0:21:20.840 --> 0:21:22.879 you all out there have ever been in the market 0:21:22.920 --> 0:21:27.600 to buy a house, you know due diligence is really important. 0:21:28.040 --> 0:21:30.639 So during this process you might find out that the 0:21:30.640 --> 0:21:34.960 house you're looking at has some serious issues. Now, maybe 0:21:35.000 --> 0:21:38.200 those issues are serious enough to make you rethink purchasing 0:21:38.200 --> 0:21:40.120 the house and you can back out of the deal 0:21:40.520 --> 0:21:44.800 and then continue your search elsewhere. But Musk waived that 0:21:44.880 --> 0:21:47.120 right with Twitter, so that would mean that even if 0:21:47.119 --> 0:21:50.879 something did pop up, that was a massive problem. He 0:21:50.960 --> 0:21:53.399 had already agreed to purchase the company, and it's a 0:21:53.520 --> 0:21:59.160 binding agreement, but Musk seemed to want out, and there 0:21:59.200 --> 0:22:01.119 were a lot of theories as to why he was 0:22:01.160 --> 0:22:04.560 having second thoughts. So one was that the overall economy 0:22:04.680 --> 0:22:08.119 was starting to have problems and that could potentially threaten 0:22:08.200 --> 0:22:10.840 the financing for the deal and cost Musk a lot 0:22:10.880 --> 0:22:14.320 more of his own wealth um and also his wealth 0:22:14.400 --> 0:22:17.440 was potentially going to take a hit anyway. Because as 0:22:17.480 --> 0:22:22.679 the stock market declines, well, chances are that the the 0:22:22.840 --> 0:22:25.760 stocks that Musk owns will be part of that, including 0:22:25.960 --> 0:22:30.000 stock and things like Tesla. That you know, it's usual 0:22:30.160 --> 0:22:32.359 that when you have an overall decline in the market, 0:22:32.840 --> 0:22:37.040 the various companies will also be in decline. Uh. It's 0:22:37.160 --> 0:22:40.200 rare that you have like outliers that are doing really 0:22:40.200 --> 0:22:44.720 well despite the rest of the stock market. So maybe 0:22:44.760 --> 0:22:47.479 that was part of it. Also, potentially part of it 0:22:47.560 --> 0:22:52.399 is that Twitter's revenue depends upon add money. Uh primarily, 0:22:52.480 --> 0:22:55.360 that's like the chief source of revenue for Twitter, and 0:22:55.400 --> 0:22:59.760 as we know, during economic hardship, companies cut way back 0:22:59.800 --> 0:23:03.000 on things like advertising budgets, so Twitter would be directly 0:23:03.000 --> 0:23:06.639 affected by that. Uh. There were also theories that perhaps 0:23:06.720 --> 0:23:10.000 some of Tesla's investors were getting worried that Musk was 0:23:10.560 --> 0:23:13.879 too distracted to handle things that needed to be handled 0:23:13.880 --> 0:23:16.679 at Tesla. That's a concern that would grow over the 0:23:16.760 --> 0:23:21.320 last half of this year anyway. Whatever the reason, Musk 0:23:21.400 --> 0:23:23.639 at the time claimed he was still committed to the deal, 0:23:24.200 --> 0:23:26.560 but he wanted to hold off on closing the deal 0:23:26.720 --> 0:23:29.159 until he got more definitive answers about the number of 0:23:29.200 --> 0:23:33.800 bots on the platform. On May, some Twitter shareholders would 0:23:33.800 --> 0:23:37.119 file a class action lawsuit against Musk, arguing that he 0:23:37.160 --> 0:23:40.720 had engaged in stock manipulation and that his behavior was 0:23:40.840 --> 0:23:45.800 hurting Twitter investors. And in early June, Musk escalated things 0:23:45.800 --> 0:23:48.760 by saying he would pull out of the Twitter deal 0:23:49.000 --> 0:23:52.840 if Twitter could not provide sufficient information about those gosh 0:23:52.920 --> 0:23:56.479 darned bots, and almost immediately after he announced his intention 0:23:56.520 --> 0:23:58.480 to pull out of the deal, he tried to pull 0:23:58.520 --> 0:24:01.800 out of the deal. At this point, both sides were 0:24:01.800 --> 0:24:05.800 accusing each other of breaching the agreement in different ways. 0:24:06.240 --> 0:24:09.800 Musk was saying that Twitter's failure to sufficiently prove that 0:24:09.880 --> 0:24:14.840 bots were not absolutely infesting the platform amounted to misrepresenting 0:24:14.880 --> 0:24:17.760 the company's value and that this would be one of 0:24:17.800 --> 0:24:21.639 the few nullifying terms in the agreement that would let 0:24:21.760 --> 0:24:24.760 Musk back out of it, and Twitter was saying, no, 0:24:25.480 --> 0:24:29.160 nothing we have done has invalidated anything, So you're beholden 0:24:29.240 --> 0:24:33.040 to seeing this acquisition through. Sorry, you don't want us anymore, 0:24:33.320 --> 0:24:35.920 but you have to take us because them's the rules. 0:24:37.160 --> 0:24:40.879 Then we sat on this for about a month. In July, 0:24:41.160 --> 0:24:44.920 Twitter sued Musk in Delaware in an effort to force 0:24:45.000 --> 0:24:48.479 him to go through with this acquisition. This was wild, 0:24:48.560 --> 0:24:50.760 right because you here you had this board of directors 0:24:50.800 --> 0:24:56.000 who initially resisted Elon Musk's move to acquire the company, 0:24:56.160 --> 0:24:59.359 then they came around to agreeing to it. All of 0:24:59.400 --> 0:25:01.760 this was done for the shareholders ever had a chance 0:25:01.760 --> 0:25:04.680 to actually vote on the matter. By the way, now 0:25:04.720 --> 0:25:07.200 you get to a point where the board of directors 0:25:07.320 --> 0:25:10.200 is suing Elon Musk to force him to go through 0:25:10.200 --> 0:25:13.240 with a deal that originally the board of directors didn't 0:25:13.240 --> 0:25:17.560 want in the first place. It was crazy. So even 0:25:17.600 --> 0:25:20.320 if Musk were to successfully argue that he should be 0:25:20.359 --> 0:25:22.400 released from the deal, he would be on the hook 0:25:22.440 --> 0:25:26.760 to pay a billion dollars just to walk away. Yea, Zoe, 0:25:27.320 --> 0:25:30.320