Speaker 1: Welcome to tex Stuff production from my Heart Radio. Hey there,
Speaker 1: and welcome to tech Stuff. I'm your host, Jonathan Strickland.
Speaker 1: I'm an executive producer with I Heart Radio and how
Speaker 1: the tech are Yet we are marching on down the
Speaker 1: timeline to talk about the really big tech news stories
Speaker 1: of the past year, and as this week has shown,
Speaker 1: there were a lot of those. I have done three
Speaker 1: full length episodes about important text stories that unfolded in
Speaker 1: two and I hadn't even really touched on the one
Speaker 1: that I probably talked about the most in our tech
Speaker 1: news episodes, at least in the second half of this year,
Speaker 1: which is all about Twitter. So we're gonna do that
Speaker 1: one today. But before I get into that, I also
Speaker 1: want to mention a different story, and this one won't
Speaker 1: take too long. So our first story is an update
Speaker 1: on Pharaonis. So this was the medical tech company founded
Speaker 1: way back in two thousand three by Elizabeth Holmes, and
Speaker 1: it aimed to create a blood analysis device that could
Speaker 1: run more than a hundred medical tests on a micro
Speaker 1: drop of blood. And the pitch was that you would
Speaker 1: be able to run such tests in a device that
Speaker 1: was about the size of a desktop printer and that
Speaker 1: in fact, in the future, maybe you know, your average
Speaker 1: person would have one of these and they could run
Speaker 1: a blood test at a moment's notice and get reliable
Speaker 1: results and be able to practice better preventable care and
Speaker 1: that kind of thing. There was only one real problem.
Speaker 1: The tech didn't work, at least not to the extent
Speaker 1: that it needed to work, and the company, the anis Obvius,
Speaker 1: skated that by using various shady tactics to keep investors
Speaker 1: hoodwinked and you know, invested. And that all started to
Speaker 1: fall apart back in two thousand, two thousand sixteen. Now,
Speaker 1: at its height, the company was valued at more than
Speaker 1: nine billion dollars, and when it all came crashing down,
Speaker 1: the Justice Department wanted to hold some folks accountable for
Speaker 1: multiple reasons. Now, there were the obvious reasons that I
Speaker 1: can really get behind, like the fact that there were
Speaker 1: people who depended upon getting accurate blood test results and
Speaker 1: their health was potentially in danger because of the actions
Speaker 1: of this company. There was also the reason that you know,
Speaker 1: rich people lost money by pouring investments into this. I know,
Speaker 1: I'm a broken record that I complained so much that
Speaker 1: the US Justice seems to uh to favor matters that
Speaker 1: involve rich people losing money more than anything else. And
Speaker 1: I know that that's not necessarily the case all way
Speaker 1: across the board, but Holy cal twenty twenty two really
Speaker 1: brought that into sharp relief in many instances. So I'll
Speaker 1: take my cynical hat off, will just cover the story. So,
Speaker 1: Elizabeth Holmes and her ex boyfriend and ex Soronis president
Speaker 1: Ramesh Sunny bal Wannie both stood trial for multiple accounts
Speaker 1: of fraud and similar charges and both were found guilty.
Speaker 1: And this year, six years after Tharonis started to crumble,
Speaker 1: Holmes and bal Wannie finally received their sentences. Holmes has
Speaker 1: been sentenced to eleven years in federal prison and bal
Speaker 1: Wanni is looking at thirteen years. Now. There's a lot
Speaker 1: more to this story, obviously, but perhaps I'll do a
Speaker 1: follow up to my previous Saronis episode at some point. Now.
Speaker 1: The reason that I wanted to start off this episode
Speaker 1: with that story is that I have this kind of
Speaker 1: armchair psychology pet hypothesis when it comes to Elizabeth Holmes
Speaker 1: and Elon Musk, and we'll be talking a lot about
Speaker 1: Elon Musk in a moment, and that hypothesis is that
Speaker 1: these folks seem to be inclined to think that just
Speaker 1: because they want something to be possible, it must therefore
Speaker 1: be possible. So with Holmes, it seems like this idea
Speaker 1: that technology should be able to overcome these challenges is,
Speaker 1: you know, possible, because it sounds like it should be.
Speaker 1: That technology is so incredible with what it can do. Obviously,
Speaker 1: we should be able to run a hundred or more
Speaker 1: medical tests on a micro droplet of blood, and it
Speaker 1: ignores the actual physical obstacles that are in the way
Speaker 1: of allowing that to happen, even though there were mentors
Speaker 1: and experts who were warning Homes that this idea probably
Speaker 1: wasn't going to work. With Musk well, from the hyperloop
Speaker 1: to the apparent belief that Twitter could implement massive sweeping
Speaker 1: changes without negative consequences, seems to indicate that he doesn't
Speaker 1: have a real understanding of things. And again, this is
Speaker 1: sort of my personal hypothesis. I am aware I could
Speaker 1: easily be proven wrong. Maybe Holmes never worried about whether
Speaker 1: or not her tech would work. Maybe it was a
Speaker 1: scam from the beginning. I don't get that sense, But
Speaker 1: I don't know. Maybe Musk is playing some three D
Speaker 1: or four D or five D chess the way some
Speaker 1: people claim, But honestly, the feeling I get is that
Speaker 1: Checkers is really more his speed. All right, So let's
Speaker 1: talk Twitter. The social network company has been around since
Speaker 1: two thousand six, three years after Therainus had been founded,
Speaker 1: if you can believe it. Seven years later, in two
Speaker 1: thousand thirteen, Twitter held its initial public offering or i
Speaker 1: p O. That's when it transitioned from being a privately
Speaker 1: held company to a publicly traded company. It would take
Speaker 1: another five years in eighteen for Twitter to post its
Speaker 1: first annual profits. But that same year ten Twitter had
Speaker 1: this nagging problem. See in Twitter had around three hundred
Speaker 1: thirty million users. By the end of twenty eighteen, it's
Speaker 1: first profitable year, it was down to three hundred twenty
Speaker 1: one million users. That had lost nine million users in
Speaker 1: the year, so it was starting to make a profit,
Speaker 1: but it was losing millions of users. Twitter has been
Speaker 1: having issues for ages. It clearly was serving a useful purpose,
Speaker 1: particularly in the world of journalism. You had reporters and
Speaker 1: editors who were using Twitter to network with each other,
Speaker 1: also to make contact with important people. They landed interview
Speaker 1: opportunities through Twitter, so it was definitely serving an important purpose,
Speaker 1: but it was also a very useful network force, say
Speaker 1: malicious misinformation campaigns. And then of course there were the trolls.
Speaker 1: So Twitter has a bit of a dodgy reputation when
Speaker 1: it comes to handling abuse on its platform. In some cases,
Speaker 1: the company has acted swiftly, but in others the slow
Speaker 1: response or lack of response has meant that some people
Speaker 1: have suffered a lot more abuse while waiting for Twitter
Speaker 1: to do anything about it. The gamer Gate affair is
Speaker 1: a good example. People in the video games industry, primarily women,
Speaker 1: became the targets of persistent and extreme abuse, and many
Speaker 1: of them found it impossible to get any response from
Speaker 1: Twitter to to fix this or to act on it.
Speaker 1: In November, Jack Dorsey, one of the co founders of
Speaker 1: Twitter and two times CEO for the company, stepped down now.
Speaker 1: One reason for his departure was that Dorsey is also
Speaker 1: the CEO of a company called Block Incorporated. That's the
Speaker 1: company behind the popular Square payment processing app. There were
Speaker 1: also concerns among stakeholders that Dorsey's attention was too divided
Speaker 1: because he was having to provide leadership to two big
Speaker 1: companies at the same time. We should kind of remember
Speaker 1: that because that will very much be relevant later in
Speaker 1: this episode. So Dorsey would step down in November, and
Speaker 1: a man named Parague Agrival becomes CEO of Twitter. Now
Speaker 1: Agrival had joined Twitter way back in two thousand eleven,
Speaker 1: so before the company had even gone public. He initially
Speaker 1: worked as a software engineer, but by two thousand seventeen
Speaker 1: he had worked his way up to chief Technology officer
Speaker 1: of the whole company. So Agreval would end up serving
Speaker 1: as CEO beginning in November one, and he stayed in
Speaker 1: that position for not quite a full year. Okay, now
Speaker 1: we're moving up to the beginning of two thousand twenty two.
Speaker 1: At the star of the year, Twitter's stock was trading
Speaker 1: at just under forty dollars a share. This was down
Speaker 1: from the company's high of seventy seven dollars a share.
Speaker 1: It had hit that in early one and since then
Speaker 1: had not really enjoyed those same heights. In early April,
Speaker 1: news broke that Elon Musk, who at the time was
Speaker 1: the world's richest man and was known as the CEO
Speaker 1: of Tesla and SpaceX, had purchased nine point two percent
Speaker 1: of Twitter through stock purchases. That he had been doing
Speaker 1: this since January of this year, so earlier in the year,
Speaker 1: Musk had been complaining that Twitter was quote failing to
Speaker 1: adhere to free speech principles end quote, and that Twitter,
Speaker 1: as a sort of online public town square, was undermining
Speaker 1: democracy by suppressing freedom of speech. Never Mind that Twitter
Speaker 1: as a company, not a government, so the whole First
Speaker 1: Amendment argument does not apply because First Amendment protects citizens
Speaker 1: in the United States against the government from suppressing free speech.
Speaker 1: It does not protect them against a company enacting its policies.
Speaker 1: But never mind that must also entertain the notion of
Speaker 1: making his own social network platform, but that was something
Speaker 1: that was already being done in other platforms like parlor
Speaker 1: Gab and truth Social, all of which have had different
Speaker 1: challenges since their founding, and all of which position themselves
Speaker 1: as being more faithful to the concept of free speech.
Speaker 1: They also cater more towards the far right of the
Speaker 1: political spectrum. Now, y'all, the stuff Twitter cracked down on
Speaker 1: and would act on when it comes to speech usually
Speaker 1: falls into categories like abuse, misinformation, and things like calls
Speaker 1: for violence. And the high profile accounts that had been
Speaker 1: banned were very much connected to these kinds of violations.
Speaker 1: But Musk was repeating some of the talking points spread
Speaker 1: on the far right that Twitter was authoritatively deciding who
Speaker 1: would be allowed to speak and who wouldn't, And as
Speaker 1: he would learn the hard way later on, things aren't
Speaker 1: always so cut and dry. But you know, I don't
Speaker 1: want to get ahead of myself anyway. Musk's purchase of
Speaker 1: this massive amount of Twitter stock made him the largest
Speaker 1: single shareholder in Twitter, and the general belief was that
Speaker 1: he was going to use these shares to push for
Speaker 1: changes within the company. Musk even got an invitation to
Speaker 1: join Twitter's board of directors, which Bloomberg reported that he
Speaker 1: had accepted, and it looks like initially he did accept.
Speaker 1: But by doing so, Musk would forfeit any chance of
Speaker 1: taking over Twitter entirely, because if you were to become
Speaker 1: a member of Twitter's board of directors, that came with
Speaker 1: a kind of limit built in to it. No board
Speaker 1: member would be allowed to own more than fourteen point
Speaker 1: nine percent of the company while serving on the board
Speaker 1: of directors. So a few days later the New York
Speaker 1: Times clarified things Musk had chosen not to join the
Speaker 1: board of directors. He changed his mind, perhaps with the
Speaker 1: aim of making a move to take over Twitter entirely.
Speaker 1: So Musk was also slagging off on Twitter about Twitter.
Speaker 1: So he was saying things like maybe the company's HQ
Speaker 1: should be converted into a homeless shelter since it was
Speaker 1: so empty all the time. He said that, you know,
Speaker 1: his followers should let him know if Twitter itself was dying.
Speaker 1: He he loves to post Twitter polls. He has done
Speaker 1: this so many times, so he posted a poll asking
Speaker 1: is Twitter dying? I'd love to see him ask the
Speaker 1: same question now. But hey, you might ask why would
Speaker 1: you go and then by billions of dollars worth of
Speaker 1: stock in a company and then immediately start bad mouthing
Speaker 1: the company you invested in? Why would you invest in
Speaker 1: the company? And then you know, say the company is terrible?
Speaker 1: Like how does that make sense? Isn't that a pretty
Speaker 1: dumb way to invest your money? And the answer to
Speaker 1: that is yes, unless maybe you're planning on trying to
Speaker 1: buy the dang thing outright and in the process you're
Speaker 1: hoping to maybe drive the price down a little bit.
Speaker 1: That could potentially be a thing. On April twenty two,
Speaker 1: Elon Musk did in fact offer to buy Twitter. The
Speaker 1: price he was looking at was at a fifty four
Speaker 1: dollars and twenty cents per share of stock, and at
Speaker 1: the time the stock was trading it around forty five
Speaker 1: dollars per share. So saying that we'll pay fifty four
Speaker 1: twenty when you would otherwise get forty five, that's a premium, right,
Speaker 1: that's a good boost over the going price of the stock.
Speaker 1: And thus shareholders would be incentivized to agree to this deal.
Speaker 1: So the deal in total would cost around forty four
Speaker 1: billion dollars. And Musk said that Twitter needed to be
Speaker 1: transformed and it could only go through this transformation if
Speaker 1: it were a private company, so it didn't have to
Speaker 1: answer to, you know, a board of directors and shareholders. Now,
Speaker 1: initially the board of directors resisted Musk's move. The method
Speaker 1: they used is called a poison pill. Now, if you're
Speaker 1: like me and you're not super big in the investment world,
Speaker 1: a poison pill might be a new term to you.
Speaker 1: And a poison pill is when a company does its
Speaker 1: best to make it more difficult for an outside entity
Speaker 1: to execute a hostile takeover. And there's a couple of
Speaker 1: different ways companies can do this. In Twitter's case, the
Speaker 1: approach was to give Twitter's stockholders, with the exception of
Speaker 1: Elon Musk, a chance to purchase additional shares of Twitter
Speaker 1: and a discounted price. Now, adding more shares means that
Speaker 1: Musk's nine percent ownership would end up getting diluted. So,
Speaker 1: in other words, like if you had a hundred apples
Speaker 1: and one person bought nine apples from you, and an
Speaker 1: apple represents voting power, and you're like, oh, I don't
Speaker 1: want this person to have nine of the vote. Maybe
Speaker 1: you add another hundred apples and you don't let this
Speaker 1: person buy any and thus you dilute their ownership of
Speaker 1: your stock of apples. That's kind of the idea that
Speaker 1: was going on here, But as it would turn out,
Speaker 1: things would go in a different direction. I'll explain more
Speaker 1: after we come back from this break. Okay, we're now
Speaker 1: up to April two. This is a week after Elon
Speaker 1: Musk first announced his intention to buy Twitter. Then he
Speaker 1: said that he had secured more than forty six billion
Speaker 1: dollars financing that would be needed for him to purchase
Speaker 1: the company. A few days later, in April twenty, Twitter's
Speaker 1: board of directors reversed its position. Remember they had previously
Speaker 1: resisted this acquisition and had administered the poison pill. So
Speaker 1: they change course and they agree to the original terms
Speaker 1: of a forty four billion dollar acquisition deal. And Elon
Speaker 1: Musk agrees to this. Then Elon Musk goes and sells
Speaker 1: some of his Testlas stock to apparently helped fund this acquisition. Uh,
Speaker 1: this was enough to amount to around eight and a
Speaker 1: half billion dollars worth of stock. That is a jaw
Speaker 1: dropping amount of money. And you might wonder how that
Speaker 1: all works out. I mean, you wouldn't be the only one.
Speaker 1: Some analysts have long said that, you know, Testlas stock
Speaker 1: is is drastically overvalued and has been for ages. Like
Speaker 1: there are a lot of analysts who say that Tesla
Speaker 1: is valued much, much, much higher than established automotive companies
Speaker 1: that produce way more vehicles per year than Tesla manages
Speaker 1: to do, and that, uh, it's just a matter of
Speaker 1: time before Tesla stock ends up being go undergoing what
Speaker 1: would be considered a market correction. And you could argue
Speaker 1: that that's what's happening right now, because back in April,
Speaker 1: Teslas stock was trading it more than three hundred dollars
Speaker 1: per share. Today, as I record this, Tesla stock is
Speaker 1: trading at around a hundred thirty one dollars a share.
Speaker 1: That is a huge drop. It's been a bad week
Speaker 1: because earlier this week it was up to a hundred
Speaker 1: fifty and now it's down to around a hundred thirty.
Speaker 1: So things are not going well for Tesla stock. But
Speaker 1: that's another story which I was hoping I might be
Speaker 1: able to touch on a little bit at the end
Speaker 1: of this episode, but as you will hear, I just
Speaker 1: don't have the time because Twitter takes up too much
Speaker 1: of it anyway. So Musk owns a lot of shares
Speaker 1: of teslent put it lightly, and at the time they
Speaker 1: were worth a ton of money. So while he sold
Speaker 1: off a decent chunk to make eight and a half billion,
Speaker 1: that just represents a part of his ownership of Tesla
Speaker 1: and a a part of his fortune. In early May,
Speaker 1: Musk secured another seven billion dollars from various investors, which
Speaker 1: included Larry Ellison, the co founder of Oracle, and also
Speaker 1: a chunk of change dedicated from Finance, the cryptocurrency exchange
Speaker 1: that I talked about a bit in the Crypto Winter
Speaker 1: episode I did. This week, The New York Times reported
Speaker 1: that Musk had met with investors and promised them that
Speaker 1: by twenty twenty eight, he would quintuple the company's revenue.
Speaker 1: He would increase it by five times, is what he said.
Speaker 1: That would be quite the achievement all by itself, let
Speaker 1: alone an achievement after you consider the company's revenue right now.
Speaker 1: So again, spoil or alert. Things are not going well
Speaker 1: for Twitter on the revenue front, but I am getting
Speaker 1: ahead of myself again. He also stirred the pot by
Speaker 1: announcing that he planned to reverse Twitter's ban on Donald Trump,
Speaker 1: who had received a lifetime ban for violations of Twitter's policies.
Speaker 1: So he was, you know, Elon Musk really likes to
Speaker 1: be ah. I can't say the word on this show,
Speaker 1: a beep stir. I'll say, we'll just use the word beep.
Speaker 1: But you probably could figure out what I mean anyway.
Speaker 1: A couple of leaders at Twitter then left, and the
Speaker 1: company also announced that it was holding a hiring freeze
Speaker 1: in anticipation of Musk's acquisition of Twitter. Then we get
Speaker 1: to mayt So at this point, where about a month
Speaker 1: out from when Musk initially announced his plan to acquire Twitter.
Speaker 1: That's when Musk tweets out that the deal is on whole.
Speaker 1: Why well, Musk claims it's because he's worried about the
Speaker 1: number of bots that are on Twitter, or specifically that
Speaker 1: there were way more bots on Twitter than the company
Speaker 1: had previously indicated. And now, for some Jonathan commentary, now,
Speaker 1: I think that at best, Musk's excuse about bots was disingenuous.
Speaker 1: One of the things that Musk was complaining about leading
Speaker 1: up to his announcement of his plan to acquire the
Speaker 1: company in the first place was his perception that there
Speaker 1: were too many bots on Twitter, which, you know, seems
Speaker 1: to indicate that he was aware there was this bot
Speaker 1: issue that one of his priorities when taking ownership of
Speaker 1: the company was going to be to reduce the number
Speaker 1: or even potentially eliminate bots on the platform. So, in
Speaker 1: other words, the picture he was presenting was that he
Speaker 1: viewed bots as already being an issue on the platform
Speaker 1: before the whole acquisition thing got started, and that one
Speaker 1: of the reasons he wanted to buy Twitter was that
Speaker 1: he saw Twitter as being a valuable tool, but it
Speaker 1: needed to be cleared, it had to be a clean house.
Speaker 1: But now he's saying, Hey, whoa, there's boats on this platform.
Speaker 1: You didn't say anything about bots, which again seems disingenuous
Speaker 1: at best. Complicating matters is that Musk had waived due
Speaker 1: diligence when agreeing to buy Twitter. Now, if any of
Speaker 1: you all out there have ever been in the market
Speaker 1: to buy a house, you know due diligence is really important.
Speaker 1: So during this process you might find out that the
Speaker 1: house you're looking at has some serious issues. Now, maybe
Speaker 1: those issues are serious enough to make you rethink purchasing
Speaker 1: the house and you can back out of the deal
Speaker 1: and then continue your search elsewhere. But Musk waived that
Speaker 1: right with Twitter, so that would mean that even if
Speaker 1: something did pop up, that was a massive problem. He
Speaker 1: had already agreed to purchase the company, and it's a
Speaker 1: binding agreement, but Musk seemed to want out, and there
Speaker 1: were a lot of theories as to why he was
Speaker 1: having second thoughts. So one was that the overall economy
Speaker 1: was starting to have problems and that could potentially threaten
Speaker 1: the financing for the deal and cost Musk a lot
Speaker 1: more of his own wealth um and also his wealth
Speaker 1: was potentially going to take a hit anyway. Because as
Speaker 1: the stock market declines, well, chances are that the the
Speaker 1: stocks that Musk owns will be part of that, including
Speaker 1: stock and things like Tesla. That you know, it's usual
Speaker 1: that when you have an overall decline in the market,
Speaker 1: the various companies will also be in decline. Uh. It's
Speaker 1: rare that you have like outliers that are doing really
Speaker 1: well despite the rest of the stock market. So maybe
Speaker 1: that was part of it. Also, potentially part of it
Speaker 1: is that Twitter's revenue depends upon add money. Uh primarily,
Speaker 1: that's like the chief source of revenue for Twitter, and
Speaker 1: as we know, during economic hardship, companies cut way back
Speaker 1: on things like advertising budgets, so Twitter would be directly
Speaker 1: affected by that. Uh. There were also theories that perhaps
Speaker 1: some of Tesla's investors were getting worried that Musk was
Speaker 1: too distracted to handle things that needed to be handled
Speaker 1: at Tesla. That's a concern that would grow over the
Speaker 1: last half of this year anyway. Whatever the reason, Musk
Speaker 1: at the time claimed he was still committed to the deal,
Speaker 1: but he wanted to hold off on closing the deal
Speaker 1: until he got more definitive answers about the number of
Speaker 1: bots on the platform. On May, some Twitter shareholders would
Speaker 1: file a class action lawsuit against Musk, arguing that he
Speaker 1: had engaged in stock manipulation and that his behavior was
Speaker 1: hurting Twitter investors. And in early June, Musk escalated things
Speaker 1: by saying he would pull out of the Twitter deal
Speaker 1: if Twitter could not provide sufficient information about those gosh
Speaker 1: darned bots, and almost immediately after he announced his intention
Speaker 1: to pull out of the deal, he tried to pull
Speaker 1: out of the deal. At this point, both sides were
Speaker 1: accusing each other of breaching the agreement in different ways.
Speaker 1: Musk was saying that Twitter's failure to sufficiently prove that
Speaker 1: bots were not absolutely infesting the platform amounted to misrepresenting
Speaker 1: the company's value and that this would be one of
Speaker 1: the few nullifying terms in the agreement that would let
Speaker 1: Musk back out of it, and Twitter was saying, no,
Speaker 1: nothing we have done has invalidated anything, So you're beholden
Speaker 1: to seeing this acquisition through. Sorry, you don't want us anymore,
Speaker 1: but you have to take us because them's the rules.
Speaker 1: Then we sat on this for about a month. In July,
Speaker 1: Twitter sued Musk in Delaware in an effort to force
Speaker 1: him to go through with this acquisition. This was wild,
Speaker 1: right because you here you had this board of directors
Speaker 1: who initially resisted Elon Musk's move to acquire the company,
Speaker 1: then they came around to agreeing to it. All of
Speaker 1: this was done for the shareholders ever had a chance
Speaker 1: to actually vote on the matter. By the way, now
Speaker 1: you get to a point where the board of directors
Speaker 1: is suing Elon Musk to force him to go through
Speaker 1: with a deal that originally the board of directors didn't
Speaker 1: want in the first place. It was crazy. So even
Speaker 1: if Musk were to successfully argue that he should be
Speaker 1: released from the deal, he would be on the hook
Speaker 1: to pay a billion dollars just to walk away. Yea, Zoe,
Speaker 1: the steal is getting worse all the time, as Lando
Speaker 1: Calrosian would say. Now, both Twitter and Musk made arguments
Speaker 1: for when the trial to decide this matter should happen.
Speaker 1: Twitter obviously wanted it as early as possible. Musk's lawyers
Speaker 1: wanted to delay the trial until the court would arrange
Speaker 1: a date in October, which was a little later than
Speaker 1: what Twitter wanted, but way earlier than what Musk's team wanted,
Speaker 1: and despite Musk's lawyers asking pretty please with sugar on top.
Speaker 1: That date was etched in stone. Then we get some
Speaker 1: more drama when a guy named Peter Zako, Twitter's former
Speaker 1: head of security, came forward with accusations that Twitter had
Speaker 1: massive lapses and information security. Meanwhile, Twitter was like, dude,
Speaker 1: that was your job, That's why we fired you, or
Speaker 1: words to that effect. You should know. I'm massively paraphrasing
Speaker 1: for comedic purposes here. And while it seemed like this
Speaker 1: was gonna be a big deal, it never turned into
Speaker 1: the giant bombshell that folks initially thought it would be,
Speaker 1: and it really didn't have much of an effect on
Speaker 1: the acquisition drama in general. Then we get up to October.
Speaker 1: Despite multiple efforts to push off the court date, things
Speaker 1: stuck and then Musk suddenly announces on October four that
Speaker 1: you know what, I Am going to go through with
Speaker 1: this deal after all, and that it would be at
Speaker 1: the previously agreed upon price of fifty four dollars and
Speaker 1: twenty cents per share. Then there were a few more
Speaker 1: attempts to try and get that price knocked down a bit.
Speaker 1: This is the crazy thing about this as well, is
Speaker 1: that there would be agreed upon terms and then like
Speaker 1: a day or two later, it was like Elon Musk
Speaker 1: woked up and said, why did I agree to No,
Speaker 1: let's see if we can get that knocked down a bit.
Speaker 1: It did not work. Musk had to go through with
Speaker 1: the whole process of resecuring financing, and ultimately the deal
Speaker 1: went through before the matter would actually go to chancery
Speaker 1: court in Delaware. That was probably a good thing for
Speaker 1: Musk because the general feeling in the text space was
Speaker 1: that he didn't have a legal leg to stand on
Speaker 1: and he would have been forced to go through the
Speaker 1: deal anyway, so perhaps moving to acquire it ahead of
Speaker 1: a mandate would help him save face a little bit.
Speaker 1: So the deal closed in late October. Musk arrived at
Speaker 1: Twitter's headquarters holding a sink. He was carrying a sink
Speaker 1: into Twitter HQ, and I guess he thought this was
Speaker 1: a brilliant piece of commentary, but most folks I know
Speaker 1: just kind of rolled their eyes at it. And immediately
Speaker 1: we started to see some massive changes. For one thing,
Speaker 1: Musk fired the top leadership at the company, so Paragua agrival.
Speaker 1: The CEO was sent packing, as were the chief financial officer,
Speaker 1: the chief legal officer, and the general counsel for Twitter.
Speaker 1: The board of directors was also dissolved. Not unusual. Actually,
Speaker 1: when a public company then goes private, this sort of
Speaker 1: thing does happen. Uh, the companies have different corporate structures
Speaker 1: if they're public versus private. So while some people, including
Speaker 1: myself immediately had a reaction of oh my gosh, it
Speaker 1: really wasn't that unusual, but this would just be the
Speaker 1: beginning of Twitter getting rid of leadership within the company,
Speaker 1: and over the next two months we would see massive
Speaker 1: departures that I imagine have really had a negative impact
Speaker 1: on the knowledge held at Twitter at this point. Now
Speaker 1: early on, even this early on, some brands began to
Speaker 1: pause advertising spending on Twitter. A major concern was Musk's
Speaker 1: plans to unbanned very accounts that had been associated with
Speaker 1: different kinds of abuse and violations of Twitter's former policies,
Speaker 1: and a lot of companies aren't super keen on being
Speaker 1: associated with that kind of stuff, so, for example, General
Speaker 1: Motors chose to suspend ads on Twitter as early as
Speaker 1: octobery In early November, Twitter began to hold massive layoffs,
Speaker 1: essentially cutting the head count in half. So Twitter went
Speaker 1: from seven thousand, five hundred employees to somewhere around three thousand,
Speaker 1: seven hundred range. Among the cuts appeared to be the
Speaker 1: entire public relations team within Twitter. It was not the
Speaker 1: only department to be seriously depleted in the wake of layoffs,
Speaker 1: and we were just getting started. Must claim that the
Speaker 1: layoffs were necessary as Twitter was losing quote over four
Speaker 1: million dollars a day end quote and all that financingment
Speaker 1: that Twitter was also on the hook for paying off
Speaker 1: massive loan interest, like a billion dollars a year type stuff,
Speaker 1: and there were other problems as well. The economic downturn
Speaker 1: obviously meant that companies were starting to scale back on
Speaker 1: advertising budgets already anyway, and since Twitter gets most of
Speaker 1: its revenue from advertising and only a small amount from
Speaker 1: stuff like subscription services, that was bad news and that
Speaker 1: would only get worse. Okay, before we dive into the
Speaker 1: even worse part, let's take another quick break. Okay, November eight, Man,
Speaker 1: it's hard to believe that that's like a month and
Speaker 1: a half ago, but November eight, Elon Must sold off
Speaker 1: more Tesla stock, nearly four billion dollars worth of it,
Speaker 1: and that would mean that at that point, over the
Speaker 1: course of two Must would have sold off around thirty
Speaker 1: six billion dollars worth of Tesla stock. That is impossible
Speaker 1: for me to imagine. It's way too much money for
Speaker 1: me to even get my mind wrapped around it. Moreover,
Speaker 1: it gave Tesla shareholders more reasons to be worried, because
Speaker 1: whenever a leader sells off some of their own stock,
Speaker 1: it sometimes sends a message to investors that maybe things
Speaker 1: are not going as well as they could be. So
Speaker 1: then we get to November nine, Twitter pushed out a
Speaker 1: new version of its subscription service, Twitter Blue. Now, this
Speaker 1: was one of those things that Elon Musk was really
Speaker 1: hoping would help counter balance the issues with advertising revenue,
Speaker 1: that maybe Twitter could make more money with subscription services,
Speaker 1: and the service gives users access to features that your
Speaker 1: average Twitter user doesn't have access to, like an edit
Speaker 1: tweet option, which is something that Twitter users had been
Speaker 1: asking about for years. But this new version of Twitter
Speaker 1: Blue gave users something even more coveted, the legendary verification tick,
Speaker 1: the little check mark that serves as a sort of
Speaker 1: status symbol on Twitter. Now, to be clear, the original
Speaker 1: intent for that check mark was to designate accounts as
Speaker 1: being legitimate, and it was meant for accounts that are
Speaker 1: claiming to represent notable figures or organizations. So the idea was,
Speaker 1: if you jump on Twitter and you see an account
Speaker 1: that's claiming to represent say Neil Gaiman, the author, and
Speaker 1: you see that there's a check mark next to that
Speaker 1: handle name, well then you know that Twitter had verified
Speaker 1: that account and that, in fact, is Neil Gaiman behind
Speaker 1: that account, It's not just someone posing as the author. Likewise,
Speaker 1: if you jumped on Twitter you saw an account that
Speaker 1: claimed to belong to a celebrity, but there was no
Speaker 1: check mark, you would know to be skeptical about that
Speaker 1: account really belonging to that particular celebrity. Uh. And you
Speaker 1: know it was all sorts of notoriety that could get
Speaker 1: you a check mark. I had a check mark. I
Speaker 1: still do have a check mark on Twitter. Um. But
Speaker 1: it's not like I'm super notable. It's just that I
Speaker 1: remember applying for that when I was hosting the Forward
Speaker 1: Thinking Video series, and that was a big series that
Speaker 1: was sponsored by Toyota. And as such, Twitter said, you
Speaker 1: know what, this, this amounts to enough for us to
Speaker 1: verify that you are in fact Jonathan Strickland, and they did,
Speaker 1: and I got the little check mark. But now Twitter
Speaker 1: had check marks for sale at eight dollars a month
Speaker 1: a pop. And so, in a move that I think
Speaker 1: anyone besides Elon Musk could have predicted, people started creating
Speaker 1: spoof accounts claiming to represent celebrities, politicians, brands, and then
Speaker 1: they were paying to get that verification check. Then they
Speaker 1: started posting all sorts of nonsense and mischief. There were
Speaker 1: floods of impersonation accounts. Twitter then rolled out a quick fix,
Speaker 1: throwing out an official tag to designate the difference between
Speaker 1: a verified account and one that just had the little
Speaker 1: check mark on it. But he here's an interesting fact
Speaker 1: that again I think everyone besides Elon Musk already knew.
Speaker 1: If you give people the chance to impersonate others, complete
Speaker 1: with a check mark that makes them look like the
Speaker 1: real thing, and that Twitter has authorized this, well, then
Speaker 1: brands are suddenly going to be way less interested in
Speaker 1: advertising on your platform. I mean, if someone could pose
Speaker 1: as I don't know, Nintendo America and then post stuff
Speaker 1: like a picture of Mario flipping off everybody, and they
Speaker 1: have a little check mark next to their account name,
Speaker 1: that's likely to discourage the real Nintendo from spending money
Speaker 1: on that platform, So Musk's pushed to transform Twitter was
Speaker 1: really pushing it further away from being able to make money.
Speaker 1: At this point, the FTC announced that it was going
Speaker 1: to look into Twitter, with quote deep concern in the quote,
Speaker 1: suggesting that the US government was worried that maybe things
Speaker 1: weren't going so well all over there. I don't know
Speaker 1: what gave him that impression. Also, as this was going on,
Speaker 1: Musk was communicating to Twitter employees in his first actual
Speaker 1: meetings with them, and in these meetings he cheerfully informed
Speaker 1: employees that they would need to start putting in eighty
Speaker 1: hour work weeks. I mean, it's almost like if you
Speaker 1: cut half your staff, you double the work for everybody else.
Speaker 1: He also wanted everyone back in the office full time,
Speaker 1: which would reverse Twitter's remote work policy. Twitter had made
Speaker 1: this remote work policy and even indicated that this was
Speaker 1: going to be a permanent thing moving forward, back before
Speaker 1: Musk took over the company. So this was a huge
Speaker 1: blow to employees. It was one of the removal of
Speaker 1: one of the big benefits that they had been enjoying,
Speaker 1: So that was ugly. Then word got out that several
Speaker 1: more leaders at Twitter, including folks in charge of ensuring
Speaker 1: user privacy and safety had resigned uh. In fact, the
Speaker 1: head of trust and safety, a guy named Yoel Roth,
Speaker 1: had one day earlier been part of an official Q
Speaker 1: and A session within Twitter spaces, then the next day
Speaker 1: handed in his resignation and left the company. On November six,
Speaker 1: Musk appeared at a trial in Delaware Chancery Court. This
Speaker 1: one had to do not with Twitter, but with his
Speaker 1: compensation package at Tesla, valued at fifty five billion dollars.
Speaker 1: During that trial, Musk claimed he didn't want to be
Speaker 1: CEO of either Tesla or Twitter, and then his plan
Speaker 1: was to get Twitter to a stable place and then
Speaker 1: find a successor to serve as CEO. However, he has
Speaker 1: said similar things about Tesla for quite some time now,
Speaker 1: and has remained CEO of Tesla without there being much
Speaker 1: evidence that he seriously considered any kind of succession plan.
Speaker 1: Also on November six, Musk sent out a message to
Speaker 1: the remaining employees at Twitter telling them they needed to
Speaker 1: kind of sign almost like a loyalty oath. They had
Speaker 1: to sign a form that would say they were willing
Speaker 1: to work even harder at the very best of their
Speaker 1: ability and go into what he was calling hardcore mode
Speaker 1: or otherwise. They needed to hand in their resignation and
Speaker 1: then receive a severance package, and he tells them that
Speaker 1: their response will be due by the end of the
Speaker 1: next day, and a whole bunch of folks a Twitter
Speaker 1: chose to go the severance route. The reports were kind
Speaker 1: of kind of conflicting at first. There were something that
Speaker 1: were saying it was, you know, dozens, some hundreds, some
Speaker 1: as many as a thousand, and it's hard to get
Speaker 1: an accurate headcount of Twitter staff at this point, perhaps
Speaker 1: because maybe the folks who would have had the best
Speaker 1: idea of how many people were working for the company
Speaker 1: have already left the company. Generally, the thought is that
Speaker 1: Twitter is down to somewhere around two thousand, three hundred staff.
Speaker 1: Remember they started out at seven thousand, five hundred. They
Speaker 1: might have fewer than that, or there might be more.
Speaker 1: We just don't know. Apparently some of the people who
Speaker 1: left were people who were in charge of really important
Speaker 1: stuff like payroll, which is worrying. Musk had also fired
Speaker 1: more employees who had shown any sort of disagreement with him,
Speaker 1: including an engineer who contradicted Musk's explanation for how Twitter
Speaker 1: worked on a technical level, and the engineer said that
Speaker 1: he was just explained that Musk's own explanation was incorrect,
Speaker 1: and he got fired for his trouble. He wasn't the
Speaker 1: only one. Several other Twitter employees who expressed concern about
Speaker 1: Musk's leadership or otherwise criticized him found themselves out of
Speaker 1: a job, and Twitter employees began frantically scrubbing slack messages
Speaker 1: and emails of evidence that they had perhaps shown some
Speaker 1: concern about Elon Musk's leadership. On November, Twitter's office in
Speaker 1: Brussels closed. This is notable because that office was instrumental
Speaker 1: in making sure Twitter was in compliance with EU regulations,
Speaker 1: and so it's absence presents a danger that Twitter could
Speaker 1: go astray with regard to e use rules and regulations,
Speaker 1: and if that happens, then the company can start racking
Speaker 1: up some serious fines as a result, which I don't
Speaker 1: know if you know this, the company can't really afford
Speaker 1: right now. In fact, speaking of afford, other news stories
Speaker 1: broke that Twitter stopped paying its rent on its office space,
Speaker 1: you know, the same office space that Elon Musk was
Speaker 1: requiring people to go back to, to the point where
Speaker 1: some folks had even had beds put in and their
Speaker 1: office area so that they could catch some sleep there
Speaker 1: while putting in those hardcore office hours. So yeah, there's
Speaker 1: been a lot of bad stories coming out about, you know,
Speaker 1: Twitter just kind of not paying vendors because that seems
Speaker 1: like that's legit. There's also rumors that Twitter executives were
Speaker 1: in conversations about not paying severance packages and that they
Speaker 1: would just take on the legal fees that would come
Speaker 1: as a result of lawsuits brought against the company rather
Speaker 1: than paying out the severance packages if in fact they
Speaker 1: determined that the legal fees would be lower. So yeah,
Speaker 1: kind of shady stuff. Also around this time, Musk had
Speaker 1: a public tiff with Apple CEO Tim Cook. Musk even
Speaker 1: took to Twitter to reveal that Apple had this super
Speaker 1: secret iOS tax that app developers have to pay, and
Speaker 1: it's this one where Apple takes a percentage of every
Speaker 1: transaction made within an app on iOS, something that no
Speaker 1: one except you know, everybody knew about already. I mean,
Speaker 1: if you've been listening to tech stuff, you know about
Speaker 1: this because I talk about it a lot. Apple's actually
Speaker 1: been in trouble for this policy around the world, including
Speaker 1: here in the United States, but apparently it was news
Speaker 1: to Elon Musk and he was very unhappy about it.
Speaker 1: Musk and Cook were eventually able to patch things up,
Speaker 1: and the tempest mostly remained within the teapot. Then we
Speaker 1: got the so called Twitter files, which Musk treated as
Speaker 1: though they would be true bombshells, and I guess in
Speaker 1: some ways they were, because Busk shared some screenshots that
Speaker 1: ended up revealing private email addresses for certain people, and
Speaker 1: those certain people started getting things like death threats, so
Speaker 1: it was a bombshell for those people in particular. The
Speaker 1: revelations themselves ended up not being nearly as dramatic as
Speaker 1: Musk had indicated. They were mostly just internal discussions within
Speaker 1: Twitter on how to handle content moderation. He also seemed
Speaker 1: at one point to be blaming the Biden administration for
Speaker 1: decisions that were made in saying that, you know, the
Speaker 1: government was trying to censor companies messaging in case you're
Speaker 1: not aware, the Biden administration wasn't in power in twenty
Speaker 1: that was during Trump's time in office, but yeah, whatever.
Speaker 1: Then Twitter suspended its Content Moderation Council, which came after
Speaker 1: several members of that council had resigned. They were complaining
Speaker 1: that Musk and his team were not listening to the
Speaker 1: council at all. They were putting Twitter the company in danger,
Speaker 1: they were putting users in danger, they were endangering the
Speaker 1: careers of all the employees. And the response from Twitter
Speaker 1: was just to dissolve the council entirely, kind of like
Speaker 1: how Emperor Palpatine ends up dissolving the Senate and the
Speaker 1: prequels of the Star Wars movies. Anyway, then Musk sold
Speaker 1: off some more shares of Tesla as Tesla's stock price
Speaker 1: was in decline, so that brought up the total amount
Speaker 1: of shares that he had sold this year too close
Speaker 1: to forty billion dollars worth of Tesla stock. He also
Speaker 1: lost the title of richest man in the world around
Speaker 1: this time. I have a feeling he's still going to
Speaker 1: be able to make ends meet, so don't worry too
Speaker 1: much about him. On December six teenh just a few
Speaker 1: days ago now, Twitter suspended the accounts of several journalists.
Speaker 1: Musk was accusing these journalists of sharing his real time location,
Speaker 1: which he called quote basically assassination coordinates end quote. Some
Speaker 1: of them were involved in a Twitter spaces conversation. Not
Speaker 1: all of them had actually reported on Musk's location at
Speaker 1: any given time, but they got lumped in and were bumped.
Speaker 1: And we're talking like big name journalists, folks who worked
Speaker 1: for really important, uh news outlets. I was not bumped
Speaker 1: off Twitter because I'm not important. But I know that already,
Speaker 1: and I know you know that already. It's okay, I'm
Speaker 1: cool with it. But pushing out the press rarely has
Speaker 1: a positive outcome, and Musk became the center of both
Speaker 1: criticism and ridicule for doing this. Uh. Some of those
Speaker 1: decisions would be reversed fairly quickly. Some of them would
Speaker 1: kind of stand. He also, upon tweeting that he was
Speaker 1: at the World Cup, was called out for broadcasting his
Speaker 1: own quote unquote assassination coordinates, but he didn't get banned
Speaker 1: from Twitter for doing it. Now we're almost at the end.
Speaker 1: Musk then starts looking for some new investors, reportedly, and
Speaker 1: he's looking to keep Twitter going and essentially was asking
Speaker 1: for the same amount of money that he paid for
Speaker 1: the company before, you know, before he made all these
Speaker 1: changes that have drastically affected the value of the company negatively.
Speaker 1: At this stage, some news outlets report that add revenue
Speaker 1: at Twitter is down as much as ninety per cent.
Speaker 1: Then Twitter launches a new policy that if you promote
Speaker 1: other social media platforms, including ones like Mastodon, which folks
Speaker 1: were starting to to navigate to to migrate to, those
Speaker 1: tweets can be removed. They can be prevented, like if
Speaker 1: you were to put in a link, you might get
Speaker 1: a message saying the tweet you're trying to send violate
Speaker 1: Twitter policies, so we're not going allow it. Some accounts
Speaker 1: got banned for doing this kind of stuff. Twitter's official
Speaker 1: account tweeted, quote, we recognize that many of our users
Speaker 1: are active on other social media platforms. However, we will
Speaker 1: no longer allow free promotion of certain social media platforms
Speaker 1: on Twitter. End quote. Which, um, okay, I guess that
Speaker 1: freedom of speech thing has real tight limitations. Again, I
Speaker 1: said early on, Elon Musk was talking at the beginning
Speaker 1: of this year like freedom of speech is a very
Speaker 1: simple concept and it's very easy to do, and that
Speaker 1: if he were in charge, it would be a different story.
Speaker 1: And then he is in charge, and freedom of speech
Speaker 1: has an even narrower definition now because anything that Elon
Speaker 1: doesn't like is not free to be posted on Twitter,
Speaker 1: so people immediately pull up an old tweet from Elon Musk,
Speaker 1: where essentially he was saying that if a place has
Speaker 1: to put up a wall to try and prevent people
Speaker 1: from escaping, it a sign that it's the bad place,
Speaker 1: because there's always a tweet, right, There's always a tweet
Speaker 1: that will show that someone's actions are hypocritical compared to
Speaker 1: what they had previously claimed to believe in. Then Musk
Speaker 1: posts a poll on Twitter, again something he loves to do,
Speaker 1: and he asks should I step down as head of Twitter?
Speaker 1: More than fifty of the respondents voted yes, and must
Speaker 1: kind of went quiet for a little bit, like he
Speaker 1: didn't immediately address the results of that poll, which left
Speaker 1: people wondering what was going on now. On the one hand,
Speaker 1: Musk had already said in court that his intent was
Speaker 1: to step down as Twitter CEO at some point. But
Speaker 1: on the other hand, this had to be a big
Speaker 1: blow to his ego. I'm sure he was expecting well,
Speaker 1: not sure, but maybe he was expecting a huge number
Speaker 1: to say yes, not no. Then one of his followers argued,
Speaker 1: then maybe only the people who paid for Twitter Blue
Speaker 1: subscriptions should be allowed to vote in such polls because
Speaker 1: they have quote unquote skin in the game, and Ellen
Speaker 1: apparently or seems to agree with that. He actually said, like,
Speaker 1: that's that sounds good. Maybe we're going to change the
Speaker 1: way polls work in the future, suggesting that maybe there
Speaker 1: would be a big do over and he wouldn't pay
Speaker 1: attention to it. But then more recently, Musk has said
Speaker 1: he will step down as Twitter CEO as soon as
Speaker 1: he finds someone quote unquote foolish enough to take over Twitter. Now, again,
Speaker 1: that kind of wording does not raise much confidence. It
Speaker 1: doesn't sound like Elon Musk is really trying that hard.
Speaker 1: If he's essentially saying whomever takes over this company after
Speaker 1: me is an idiot, that that's not a real big
Speaker 1: selling feature. Right. Also, despite having earlier said that there
Speaker 1: were no plans to hold further layoffs at the company,
Speaker 1: last night Wednesday, so that would be December twenty one,
Speaker 1: he held more layoffs at the company. Reportedly, the public
Speaker 1: policy team is now gone. And again this is bad
Speaker 1: because this is the team that helps make sure that
Speaker 1: Twitter is in compliance with say regulations in the United States.
Speaker 1: So now it sounds like various teams that are are
Speaker 1: meant to keep Twitter in line so that it doesn't
Speaker 1: face massive regulation and finds and things of that nature.
Speaker 1: Those are all gone, so Twitters in a particularly vulnerable
Speaker 1: spot right now. There are a lot of questions about
Speaker 1: what will come next for Twitter. I am not going
Speaker 1: to make any predictions because at this point, I just
Speaker 1: don't know. It has been a chaotic year for Twitter. Uh.
Speaker 1: I'm sure I will cover some more stuff in a
Speaker 1: in a future episode about some of the other chaos
Speaker 1: that's been going on, specifically like a tesla. But for now,
Speaker 1: we're going to sign off because we're coming up on
Speaker 1: fifty minutes and I don't want to go over that amount.
Speaker 1: So I hope you are all well. We'll be back
Speaker 1: next week after Monday, because Monday our office will be
Speaker 1: taking a holiday, so I'll be running a rerun on Monday.
Speaker 1: But after Monday, we'll have a few more episodes about
Speaker 1: how twenty two unfolded, and then we'll look forward to
Speaker 1: I hope you're all well. I hope you have a
Speaker 1: wonderful holiday season, and I'll talk to you again really soon.
Speaker 1: Tech Stuff is an I Heart Radio production. For more
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