Musk challenges Twitter CEO to debate—Twitter will stick to its lawsuit instead

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Elon Musk, unsatisfied with the ongoing court case over his attempt to break a $44 billion merger contract, has challenged Twitter CEO Parag Agrawal to a public debate.

“I hereby challenge @paraga to a public debate about the Twitter bot percentage,” Musk wrote in a tweet on Saturday. “Let him prove to the public that Twitter has <5% fake or spam daily users!”

Of course, a Musk/Agrawal debate is unlikely to happen, and Musk’s proposed debate would not be likely to prove any facts about Twitter spam that couldn’t be proven at trial. Musk, Agrawal, or both could also choose to testify at the upcoming trial in the Delaware Court of Chancery. CNBC reported, unsurprisingly, that a “source close to the company says a debate is not going to happen outside of a pending trial.”

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Twitter says Musk’s spam analysis used tool that called his own account a bot

Illustration of three bots with Elon Musk's face.

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Twitter yesterday slammed Elon Musk’s response to the company’s lawsuit in a 127-page filing in the Delaware Court of Chancery that says Musk’s claims are “contradicted by the evidence and common sense.” Twitter’s court filing also said Musk’s spam analysis relied on a tool that once called his own Twitter account a likely bot.

“According to Musk, he—the billionaire founder of multiple companies, advised by Wall Street bankers and lawyers—was hoodwinked by Twitter into signing a $44 billion merger agreement,” Twitter wrote. “This story is as implausible and contrary to fact as it sounds. And it is just that—a story, imagined in an effort to escape a merger agreement that Musk no longer found attractive once the stock market—and along with it, his massive personal wealth—declined in value.”

Twitter’s filing was in response to Musk’s defense and counterclaims, which were submitted last week but not made public immediately because Twitter was given time to request redactions. Twitter apparently chose not to make any redactions.

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Twitter subpoenas emails, texts from Tesla bigwigs and Musk’s BFFs

Twitter subpoenas emails, texts from Tesla bigwigs and Musk’s BFFs

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Are spam accounts really the reason behind Tesla CEO Elon Musk’s decision to back out of his cursed Twitter deal?

This week, Twitter sent a bunch of subpoenas to find out, pulling Musk’s close circle of friends and business associates into the chaotic trial. One subpoena includes more than two dozen document and communications requests for Tesla. The documents that Twitter seeks from Musk’s friends, advisors, banks, legal team, and investors include emails, text messages, and Twitter DMs.

It’s possible that just one email out of all the subpoenaed material could give Twitter enough information to convince the Delaware Chancery Court to force Musk to cough up $44 billion and actually buy the social network. By crawling documents from Musk’s inner circle, Twitter hopes to reveal what was happening behind Musk’s tweets through the negotiation. In their lawsuit, Twitter claims that Musk violated their merger agreement, and the subpoenas could help prove that he possibly never planned to follow through on the purchase.

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Twitter has one more task before Musk trial: Get shareholder approval

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Twitter is moving ahead with a shareholder vote on the merger with Elon Musk a few weeks before its lawsuit against Musk goes to trial. Twitter yesterday sent a letter to shareholders inviting them to a September 13 special meeting where they will be asked to approve the merger agreement that Musk is now trying to get out of.

“We are committed to closing the merger on the price and terms agreed upon with Mr. Musk,” Twitter CEO Parag Agrawal and Board Chairman Bret Taylor wrote. “Your vote at the special meeting is critical to our ability to complete the merger. Twitter’s Board of Directors unanimously recommends that you vote ‘FOR’ each of the proposals at the special meeting.”

Noting that a five-day court trial is set to begin in October, the letter said, “Adoption of the merger agreement by our stockholders is the only remaining approval or regulatory condition to completing the merger under the merger agreement.” While Musk sent a “notice purporting to terminate the merger agreement,” the Twitter letter said the company “believes that Mr. Musk’s purported termination is invalid and wrongful, and the merger agreement remains in effect.”

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Musk loses attempt to delay Twitter trial until 2023 as judge expedites case

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Elon Musk has lost his attempt to delay the Twitter trial until next year. Delaware Court of Chancery Judge Kathaleen McCormick scheduled a five-day trial for October, rejecting Musk’s request for a trial in February 2023.

McCormick’s ruling came far closer to Twitter’s preferred timeline than to Musk’s. Twitter, which is suing Musk to force him to complete their agreed-upon merger, was seeking a four-day trial in September 2022.

“The reality is delay threatens irreparable harm to the sellers,” McCormick said today, as reported by Reuters. “Those concerns are on full display in the present case,” she also said, according to The Wall Street Journal. “Typically, the longer the merger transaction remains in limbo, the larger the cloud of uncertainty cast over the company and the greater the risk of irreparable harm to the sellers.”

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Musk wants Twitter trial pushed to 2023 so he has time to analyze spam data

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Elon Musk urged the Delaware Court of Chancery to reject Twitter’s motion for an expedited trial, saying he needs extensive time to analyze Twitter’s spam-account data. While Twitter’s motion sought a four-day trial to be completed in September 2022, Musk’s court filing on Friday said the trial should begin on or after February 13, 2023.

“Twitter has engaged in tactical delay for two months by resisting Defendants’ information requests… Twitter’s sudden request for warp speed after two months of foot-dragging and obfuscation is its latest tactic to shroud the truth about spam accounts long enough to railroad Defendants into closing,” Musk’s motion said. Musk’s legal team argued that the “core dispute over false and spam accounts is fundamental to Twitter’s value,” and that resolving “these issues will require complex, technical discovery—including the forensic review and analysis of large swaths of data.”

Twitter sued Musk on July 12, demanding that he complete the $44 billion purchase he agreed to in April. Twitter’s motion for a September 2022 trial cited the contract’s “presumptive drop-dead date of October 24, 2022 for completion of the merger.”

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Judge in Musk/Twitter case forced a company to complete a merger last year

Five judges sit at a table and four judges stand behind them while posing for a picture in front of the Delaware Court of Chancery crest.

Enlarge / Chancellor Kathaleen McCormick of the Delaware Court of Chancery, seated in the middle and surrounded by the court’s vice chancellors and masters in chancery. (credit: Delaware Court of Chancery )

Elon Musk has reason to worry about the Delaware Court of Chancery judge handling Twitter’s lawsuit against him. Kathaleen McCormick, the court’s chancellor, or chief judge, “has a no-nonsense reputation as well as the distinction of being one of the few jurists who has ever ordered a reluctant buyer to close a US corporate merger,” Reuters wrote today.

Specifically, McCormick last year “order[ed] an affiliate of private equity firm Kohlberg & Co LLC to close its $550 million purchase of DecoPac Holding Inc, which makes cake decorating products,” Reuters wrote.

McCormick’s April 2021 ruling in that case, available on the court’s website, centered on a specific performance clause in the purchase contract—similar to the clause that Twitter is citing in its attempt to force Musk to complete his $44 billion purchase. “Chalking up a victory for deal certainty, this post-trial decision resolves all issues in favor of the seller and orders the buyers to close on the purchase agreement,” McCormick wrote in the ruling.

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Twitter sues Elon Musk, says he can’t “trash the company… and walk away”

In this photo illustration, Elon Musk's official Twitter profile seen on a computer screen through a magnifying glass.

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Twitter filed its expected lawsuit against Elon Musk today, demanding that he complete the $44 billion purchase of the social network.

“Musk refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests,” the lawsuit said. “Having mounted a public spectacle to put Twitter in play, and having proposed and then signed a seller-friendly merger agreement, Musk apparently believes that he—unlike every other party subject to Delaware contract law—is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away.”

The suit accused Musk of “a long list of material contractual breaches by Musk that have cast a pall over Twitter and its business” and asks the court to “compel consummation of the merger upon satisfaction of the few outstanding conditions.”

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Twitter tells Musk his “purported termination” of merger deal is invalid

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Twitter told Elon Musk in a letter that his “purported termination” of their merger deal “is invalid and wrongful,” and that his commitment to fund the purchase remains in effect.

The letter, sent to Musk’s lawyers on Sunday and made public Monday in a regulatory filing, is a prelude to the lawsuit that Twitter intends to file against Musk this week. The letter said:

Mr. Musk’s and the other Musk Parties’ purported termination is invalid and wrongful, and it constitutes a repudiation of their obligations under the Agreement. Contrary to the assertions in your letter, Twitter has breached none of its obligations under the Agreement, and Twitter has not suffered and is not likely to suffer a Company Material Adverse Effect. The purported termination is invalid for the independent reason that Mr. Musk and the other Musk Parties have knowingly, intentionally, willfully, and materially breached the Agreement, including but not limited to Sections 6.3, 6.8, and 6.10 thereof.

The cited sections include various commitments to close and finance the deal. Twitter’s letter further said the Twitter/Musk “Agreement is not terminated, the Bank Debt Commitment Letter and the Equity Commitment Letter remain in effect, and Twitter demands that Mr. Musk and the other Musk Parties comply with their obligations under the Agreement.” In the Equity Commitment Letter dated April 20, Musk committed to provide an estimated $21 billion in equity financing toward the $44 billion purchase.

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Twitter gets ready to sue Elon Musk, hires elite merger law firm

Twitter gets ready to sue Elon Musk, hires elite merger law firm

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Twitter has hired an elite law firm to handle its forthcoming lawsuit against Elon Musk, which could be filed any day now.

After Musk pulled out of his deal to buy Twitter for $44 billion on Friday, Twitter Board Chairman Bret Taylor said the company will sue Musk to enforce the merger contract and force him to complete “the transaction on the price and terms agreed upon.” Twitter then hired the “merger law heavyweight” Wachtell, Lipton, Rosen & Katz to work on a lawsuit it expects to file early this week in the Delaware Court of Chancery, Bloomberg reported.

“Wachtell Lipton has perhaps the leading litigation practice in Delaware, where the majority of US public companies are incorporated,” the Financial Times wrote. “It defends companies in lawsuits over breach of fiduciary duty and broken merger agreements in the state.”

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Musk expected to take “drastic action” to break Twitter deal, report says

In this photo illustration, Elon Musk's official Twitter profile seen on a computer screen through a magnifying glass.

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Elon Musk is expected to take “drastic action” to get out of his $44 billion deal to buy Twitter, The Washington Post wrote yesterday in an article citing “three people familiar with the matter.”

The anonymous sources seem to be from Musk’s camp. “Musk’s team has concluded it cannot verify Twitter’s figures on spam accounts,” and the Musk side’s “doubts about the spam figures signal they believe they do not have enough information to evaluate Twitter’s prospects as a business,” the Post wrote. Musk’s people have also reportedly “stopped engaging in certain discussions around funding for the $44 billion deal, including with a party named as a likely backer.”

According to the Post, one of its sources said Musk’s team is now “expected to take potentially drastic action. The person said it was likely a change in direction from Musk’s team would come soon, though they did not say exactly what they thought that change would be.”

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Lawsuit: Tesla broke US law by not providing 60-day notice before mass layoff

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Enlarge / Cars parked at the Tesla Fremont Factory in Fremont, California, on February 10, 2022. (credit: Getty Images | Josh Edelson)

A lawsuit filed by laid-off Tesla workers accused the company of violating federal law by failing to provide notice before the layoffs and said the former employees are entitled to 60 days of pay and benefits. Tesla’s actions violated the Worker Adjustment and Retraining Notification (WARN) Act, claimed the lawsuit filed Sunday in US District Court for the Western District of Texas.

“Pursuant to the WARN Act, Tesla is required to provide Plaintiffs and Class Members with the required sixty (60) days advance written notice of a mass layoff,” the lawsuit said. “However, in connection with the recent mass layoffs… Tesla has failed to give Plaintiffs and the Class Members any advance written notice of their terminations.”

“Instead, Tesla has simply notified the employees that their terminations would be effective immediately,” the lawsuit continued.

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SpaceX fires employees who wrote letter slamming Musk’s “embarrassing” behavior

A SpaceX logo seen on the outside of its headquarters building.

Enlarge / SpaceX headquarters in Hawthorne, California, on April 19, 2022. (credit: Getty Images | Bloomberg)

SpaceX has reportedly fired at least five employees who circulated a letter that urged company executives to condemn CEO Elon Musk’s public behavior.

SpaceX President Gwynne Shotwell explained the firings in an email to staff, according to a New York Times article. “The letter, solicitations and general process made employees feel uncomfortable, intimidated and bullied, and/or angry because the letter pressured them to sign onto something that did not reflect their views,” Shotwell wrote, according to the NYT. “We have too much critical work to accomplish and no need for this kind of overreaching activism.”

Shotwell’s email to staff also said, “Blanketing thousands of people across the company with repeated unsolicited emails and asking them to sign letters and fill out unsponsored surveys during the work day is not acceptable.” Shotwell urged employees to “stay focused on the SpaceX mission, and use your time to do your best work. This is how we will get to Mars.”

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Musk tells Twitter staff that “exceptional” employees can work remotely

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Although Elon Musk recently banned remote work at both Tesla and SpaceX, he told Twitter employees today that he won’t necessarily impose the same policy at the social network. “If someone can only work remotely, and they’re exceptional, it wouldn’t make sense to fire them,” Musk said in a virtual town hall with Twitter staff, according to The Wall Street Journal.

Musk also pointed out that the work at Twitter is different from the work at Tesla. “Tesla makes cars, and you can’t make cars remotely,” he said, according to CNBC.

While his comments may be promising for those who want to keep working remotely, Musk reportedly did not provide specifics on how he’d handle remote work at Twitter if he completes the $44 billion acquisition. His reference to letting “exceptional” employees work remotely suggests that a Musk-led Twitter might reduce remote work options even if they aren’t banned completely.

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SpaceX employee letter: Musk’s behavior is “frequent source of embarrassment”

Elon Musk wearing a tuxedo as he arrives at the 2022 Met Gala.

Enlarge / Elon Musk arrives for the 2022 Met Gala at the Metropolitan Museum of Art on May 2, 2022, in New York. (credit: Getty Images | Angela Weiss)

SpaceX employees are circulating a letter that urges company executives to condemn CEO Elon Musk’s public behavior. The letter was reported today and published in full by The Verge, which said it was shared Wednesday “in an internal SpaceX Microsoft Teams channel with more than 2,600 employees.”

The letter says executives should “publicly address and condemn Elon’s harmful Twitter behavior.”

“SpaceX must swiftly and explicitly separate itself from Elon’s personal brand,” the letter says. The letter is the result of a collaboration between “employees across the spectra of gender, ethnicity, seniority, and technical roles,” it says. The letter also asks for an in-person meeting with executives to discuss the employees’ requests.

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Twitter reportedly will give Musk the full “firehose” of user data he demanded

Illustration of Elon Musk juggling three birds in the shape of Twitter's logo.

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Twitter now plans to comply with Elon Musk’s demand for user data that he says is needed to determine whether the company’s spam estimates are accurate, The Washington Post reported Wednesday.

“After a weeks-long impasse, Twitter’s board plans to comply with Elon Musk’s demands for internal data by offering access to its full ‘firehose,’ the massive stream of data comprising more than 500 million tweets posted each day, according to a person familiar with the company’s thinking, who spoke on the condition of anonymity to describe the state of negotiations,” the Post wrote.

Twitter declined comment on the Post report when contacted by Ars today but pointed to its statement from Monday that “Twitter has and will continue to cooperatively share information with Mr. Musk to consummate the transaction in accordance with the terms of the merger agreement.”

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Texas AG enters Musk/Twitter fight by ordering Twitter to provide spam data

Texas Attorney General Ken Paxton standing in front of the US Supreme Court building.

Enlarge / Texas Attorney General Ken Paxton speaks to reporters in front of the US Supreme Court in Washington, DC, on April 26, 2022. (credit: Getty Images | Stefani Reynolds)

Texas Attorney General Ken Paxton on Monday stepped into the Elon Musk/Twitter battle by launching an investigation into whether Twitter is hiding the extent of its spam-account problem. Paxton announced the investigation in a press release that echoes Musk’s claims and sent Twitter a letter demanding the same types of data on fake accounts that Musk hasn’t been able to get.

“Twitter has received intense scrutiny in recent weeks over claiming in its financial regulatory filings that fewer than 5 percent of all users are bots, when they may in fact comprise as much as 20 percent or more,” Paxton’s announcement said. Paxton’s press release says that an inaccurate estimate of bot accounts may “inflate the value of the company and the costs of doing business with it, thus directly harming Texas consumers and businesses.”

Though Paxton’s press release didn’t mention Musk, the “intense scrutiny” has been driven by Musk claiming that Twitter’s spam-account estimate is wrong. Additionally, Paxton’s concern that incorrect spam data would “inflate the value” of Twitter comes amid Musk’s attempts to get out of or renegotiate his $44 billion deal to buy Twitter—Musk agreed to pay $54.20 per share, and Twitter’s stock price was $39.59 at market close on Monday.

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Musk seeks a way out, claims Twitter violated deal by not providing spam data

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Elon Musk today threatened to pull out of his $44 billion deal to buy Twitter in a letter that claimed the company violated the merger agreement by refusing to provide the data behind its spam estimates. Musk needs the data to obtain financing and prepare for the ownership transition, according to the letter sent to Twitter Chief Legal Officer Vijaya Gadde.

“Based on Twitter’s behavior to date, and the company’s latest correspondence in particular, Mr. Musk believes the company is actively resisting and thwarting his information rights (and the company’s corresponding obligations) under the merger agreement,” Musk’s legal team wrote in the letter to Twitter on Monday. “This is a clear material breach of Twitter’s obligations under the merger agreement, and Mr. Musk reserves all rights resulting therefrom, including his right not to consummate the transaction and his right to terminate the merger agreement.”

As we’ve previously written, Musk’s offer to buy Twitter waived “business due diligence,” and the Twitter board relied on that commitment when it approved the transaction and recommended that shareholders vote for it. A Twitter proxy statement told shareholders that one reason to approve the agreement is “the likelihood that other potential acquirers would require substantial due diligence, creating a delay and risk to reaching the signing of such a potential transaction.”

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After remote-work ultimatum, Musk reveals plan to cut 10% of Tesla jobs

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Enlarge / Tesla charging station at the Chesapeake House Travel Plaza off I-95 in Maryland on March 11, 2022. (credit: Getty Images | Tom Williams )

Tesla CEO Elon Musk wants to cut 10 percent of jobs at the electric carmaker because he has a “super bad feeling” about the economy, he wrote in an email to executives, according to Reuters.

Musk sent the message on Thursday with the subject line “pause all hiring worldwide,” according to the report. Musk “did not elaborate on the reasons for his ‘super bad feeling’ about the economic outlook in the brief email seen by Reuters,” the news organization wrote.

Tesla stock was down more than 8 percent during Friday’s trading as of this writing and down more than 40 percent in 2022.

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Musk to Tesla and SpaceX workers: Be in the office 40 hours a week or quit

Tesla CEO Elon Musk holds a microphone and speaks at an event at a factory in China.

Enlarge / Tesla CEO Elon Musk at the company’s manufacturing facility in Shanghai, China, on Monday, Jan. 7, 2019. (credit: Getty Images | Bloomberg)

Elon Musk has ordered Tesla and SpaceX employees to work in the office full-time or quit their jobs.

On Tuesday, Musk sent two memos telling Tesla employees they must be in the office at least 40 hours per week or leave the company. “Anyone who wishes to do remote work must be in the office for a minimum (and I mean *minimum*) of 40 hours per week or depart Tesla. This is less than we ask of factory workers,” Musk wrote in a new memo circulating on Twitter, apparently first shared by Tesla stockholder and Full Self-Driving beta tester Sam Nissim. The email’s subject line was “Remote work is no longer acceptble [sic].”

Musk seemed to confirm the emailed memo’s authenticity. When asked to provide “any additional comment to people who think coming into work is an antiquated concept,” Musk tweeted, “They should pretend to work somewhere else.”

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Lawsuit: Musk manipulated Twitter stock price in attempt to renegotiate sale

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Elon Musk was sued by a Twitter investor who alleges that he broke the law in a scheme to drive down Twitter’s stock price.

The lawsuit was filed Wednesday against Musk and Twitter in US District Court for the Northern District of California. It recounts much of Musk’s behavior since he began investing in Twitter and since he agreed to buy the company for $44 billion.

The lawsuit noted that “Tesla’s stock is worth much less now than when Musk agreed to buy Twitter” as “Tesla’s shares have declined by over 37 percent since the announcement of the Buyout.” Musk, the CEO of Tesla, “pledged his Tesla stock as collateral for a $12.5 billion loan to finance the buyout of Twitter” and is thus “at risk of a margin call or a requirement to put up more cash,” it says.

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Judge: Tesla can’t force alleged sexual harassment victim into arbitration

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Enlarge / Tesla cars in a lot at the company’s factory in Fremont, California. (credit: Getty Images | Justin Sullivan)

Tesla can’t force a woman who sued the company over sexual harassment into arbitration, a judge ruled on Monday.

Jessica Barraza sued Tesla in November 2021 in Alameda County Superior Court in California, alleging that she and other women working in the carmaker’s Fremont factory were subjected to “nightmarish conditions of rampant sexual harassment.” The Tesla factory “resembles a crude, archaic construction site or frat house,” with women enduring sexual comments, propositions, and inappropriate touching, the lawsuit said.

Barraza also alleged Tesla retaliated against her after she complained about sexual harassment and that she was “denied certain privileges and benefits that were afforded to women who did not object to supervisors’ sexual advances and flirtations.” Many more details are in our coverage of the lawsuit.

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Twitter board tells Elon Musk: We will not alter the deal

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Enlarge / The Twitter logo is seen at the company’s headquarters on April 26, 2022, in downtown San Francisco, California. (credit: Getty Images | Amy Osborne)

With Elon Musk waffling on his commitment to buy Twitter for $44 billion, Twitter’s board of directors yesterday said it intends to enforce the merger agreement at the original price.

“The Board and Mr. Musk agreed to a transaction at $54.20 per share. We believe this agreement is in the best interest of all shareholders. We intend to close the transaction and enforce the merger agreement,” the Twitter board said in a statement reported by CNN and other media outlets. Twitter on Tuesday also released a preliminary proxy statement laying out reasons shareholders should approve the deal.

“Twitter is committed to completing the transaction on the agreed price and terms as promptly as practicable,” the company said in a press release announcing the proxy statement.

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Musk says Twitter must show data behind spam estimate or he’ll kill the deal

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Elon Musk has cast more doubt on his willingness to buy Twitter, criticizing the company’s CEO and saying the “deal cannot move forward” until Twitter provides data behind its estimate of spam accounts. Musk also said this week that renegotiating the deal at a lower price is “not out of the question.”

Musk says he thinks at least 20 percent of Twitter accounts are fake or spam, while Twitter said in a Securities and Exchange Commission filing that fewer than 5 percent of monetizable daily active users (mDAUs) are spam or fake. Those numbers are not incompatible, as Musk seems to be talking about all accounts, while Twitter’s 5 percent stat refers to accounts that are logged in and can see ads each day.

But Musk has insisted that Twitter’s data is wrong, and he demanded to see proof and ratcheted up his claims in a tweet on Tuesday:

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Musk says Twitter deal “on hold” over concern about number of spam accounts

In this photo illustration, Elon Musk's twitter account is displayed on a smartphone in front of a background with the twitter logo.

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Elon Musk today said his deal to purchase Twitter is “temporarily on hold” while he awaits details on the number of spam and fake accounts on the site, but he later added that he remains “committed” to the acquisition.

“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5 percent of users,” Musk wrote in a tweet Monday morning. In a follow-up tweet two hours later, he wrote, “Still committed to acquisition.”

The first tweet saying that the deal is “on hold” included a link to a May 2 Reuters article noting that Twitter had “estimated in a filing… that false or spam accounts represented fewer than 5 percent of its monetizable daily active users during the first quarter.”

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Musk’s Twitter deal could face national security probe into foreign investors

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Elon Musk’s $44 billion purchase of Twitter could face a probe into potential national security risks posed by Musk’s foreign investors, according to a Reuters report on Friday. The foreign investment could invite “the kind of regulatory scrutiny over US national security that social media peer TikTok faced,” the report said.

Musk’s investors include Qatar’s sovereign wealth fund and Saudi Arabia’s Prince Al Waleed bin Talal al Saud. The Saudi Kingdom Holding Company already owns 5.2 percent of Twitter stock and plans to roll that $1.9 billion stake into Musk’s privatized Twitter. The Qatar investment is for $375 million.

Musk also has a $500 million investment from Binance, a major cryptocurrency exchange that has faced its own government scrutiny. Binance was founded in China in 2017 but quickly left the country when China’s government restricted cryptocurrency trading; it now operates without an official headquarters. Binance’s founder is Changpeng Zhao, who was born in China but reportedly moved to Canada with his family when he was 12 years old.

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Larry Ellison chips in a cool billion toward Musk’s Twitter takeover

Oracle Corporation CEO Larry Ellison looks on after Oracle Team USA skippered by James Spithill lost race 1 of the America's Cup Finals on June 17, 2017, in Hamilton, Bermuda.

Enlarge / Oracle Corporation CEO Larry Ellison looks on after Oracle Team USA skippered by James Spithill lost race 1 of the America’s Cup Finals on June 17, 2017, in Hamilton, Bermuda. (credit: Xaume Olleros | Getty Images)

Elon Musk has raised $7.14 billion of funding for his $44 billion buyout of Twitter from investors including Oracle co-founder Larry Ellison, crypto exchange Binance, and asset management firms Fidelity, Brookfield, and Sequoia Capital.

With the new financing commitments, Musk will cut the margin loan he has taken with a group of lenders by half to $6.25 billion and increase the equity portion to $27.25 billion. The remainder of the purchase price will be paid with debt raised from global banks.

The Tesla chief has been in a whirlwind effort to secure outside backing to join his audacious bid for the social media platform, even as traditional private equity firms involved in leveraged buyouts have largely eschewed the transaction.

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Twitter warns of possible employee exodus before Musk completes purchase

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Twitter warned that it may lose key employees and have difficulty hiring during the period before it closes its $44 billion sale to Elon Musk. Twitter also warned that it could have trouble keeping advertisers on board.

“During the period prior to the closing of the merger, our business is exposed to certain inherent risks and certain restrictions on our business under the terms of the Merger Agreement that could harm our business relationships, financial condition, operating results, cash flows, and business,” Twitter said in a Securities and Exchange Commission filing on Monday.

Twitter’s stated list of risks includes “whether advertisers continue their spending on our platform” and “our inability to attract and retain key personnel and recruit prospective employees, and the possibility that our current employees could be distracted, and their productivity decline as a result, due to uncertainty regarding the merger.”

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FCC Republican backs Musk’s Twitter purchase, slams “restrictions on speech”

FCC Commissioner Nathan Simington sitting in front of a microphone at a Congressional hearing.

Enlarge / FCC Commissioner Nathan Simington testifies during a House committee hearing on March 31, 2022 in Washington, DC.

Federal Communications Commission member Nathan Simington says the FCC should “applaud” Elon Musk for buying Twitter, arguing that Musk’s “stated intention to ease Twitter’s restrictions on speech… would almost certainly enhance competition and better serve those Americans, the majority, who value free speech.”

“The FCC cannot, and should not, block this sale,” Simington, one of two Republican commissioners on the FCC, said in a statement issued Monday. “We should instead applaud Mr. Musk for doing something about a serious problem that government has so far failed to address.” Simington was nominated to the FCC by then-President Donald Trump in 2020 to replace a Republican commissioner who objected to Trump’s demand that the FCC crack down on social media “censorship.”

There’s not much reason to think the FCC would try to block Musk’s pending $44 billion purchase of Twitter, as the commission’s authority over mergers and acquisitions is centered on transactions that involve FCC licenses. Chairwoman Jessica Rosenworcel, a Democrat, hasn’t issued any statements on the Twitter sale. However, a group called the Open Markets Institute last week claimed that the FCC, Department of Justice, and Federal Trade Commission all have “ample authority” to block the sale.

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Elon Musk sold $8.5B in Tesla stock after agreeing to $44B Twitter deal

SpaceX CEO Elon Musk standing with his arms crossed.

Enlarge / CEO Elon Musk at SpaceX Headquarters in Hawthorne, California, on October 10, 2019. (credit: Getty Images | NurPhoto)

Elon Musk has raised $8.5 billion from selling part of his stake in Tesla, boosting his cash position ahead of his planned purchase of Twitter.

The sales were made between Tuesday and Thursday, after Twitter’s board agreed to Musk’s $44 billion all-cash takeover approach.

The electric car maker’s share price slumped in the wake of news of the deal, with the drop blamed on concerns about potential share sales by Musk to finance the acquisition, though it also came amid a sharp fall in the wider stock market.

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Judge rejects Musk’s claim that limits on his tweets violate First Amendment

Elon Musk speaking to reporters while he walks away from a courthouse.

Enlarge / Elon Musk talks to members of the media while leaving federal court in New York on Thursday, April 4, 2019.

A federal judge has rejected Tesla CEO Elon Musk’s attempt to get out of a settlement with the Securities and Exchange Commission that requires Tesla to impose limits on Musk’s social media statements.

The judge also rejected Musk’s request to quash portions of an SEC subpoena that seeks documents related to whether he got pre-approval before posting a recent tweet about Tesla stock sales. The ruling against Musk was issued Wednesday by Judge Lewis Liman in US District Court for the Southern District of New York.

“Musk was not forced to enter into the consent decree” with the SEC, and he “cannot now seek to retract the agreement he knowingly and willingly entered by simply bemoaning that he felt like he had to agree to it at the time but now—once the specter of the litigation is a distant memory and his company has become, in his estimation, all but invincible—wishes that he had not,” Liman wrote. The judge also called Musk’s claim that the SEC is harassing him “meritless.”

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Musk has “huge responsibility” to fight health misinfo on Twitter, WHO says

Tesla and SpaceX CEO Elon Musk presents a vaccine production device during a meeting September 2, 2020 in Berlin, Germany. Musk met with vaccine maker CureVac, with which Tesla has a cooperation to build devices for producing RNA vaccines.

Enlarge / Tesla and SpaceX CEO Elon Musk presents a vaccine production device during a meeting September 2, 2020 in Berlin, Germany. Musk met with vaccine maker CureVac, with which Tesla has a cooperation to build devices for producing RNA vaccines. (credit: Getty | Filip Singer)

Elon Musk has a “huge responsibility” to combat dangerous, potentially life-threatening health misinformation on Twitter, the World Health Organization said Tuesday.

The United Nation’s health agency commented on Monday’s news that the tech billionaire has struck a deal to purchase Twitter for $44 billion. WHO officials stressed how damaging misinformation and disinformation could be when it’s widely spread in digital spaces like Twitter.

“In cases like this pandemic, good information is life-saving,” Mike Ryan, executive director of the WHO’s Health Emergencies Programme, said. “In some cases, [it’s] more life-saving than having a vaccine in the sense that bad information sends you to some very, very bad places.”

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Elon Musk, Twitter’s next owner, provides his definition of “free speech”

Illustration of Elon Musk juggling three birds in the shape of Twitter's logo.

Enlarge (credit: Aurich Lawson | Photo by Jim Watson/AFP via Getty Images)

Elon Musk has claimed he is buying Twitter in order to protect free speech. But what does Musk mean by “free speech”? Musk provided a somewhat vague answer in a tweet on Tuesday, one day after striking a deal to buy Twitter for $44 billion. (The sale to Musk is pending and needs shareholder approval to be completed.)

Musk’s statement, which he made the pinned tweet on his Twitter profile, said the following:

By “free speech”, I simply mean that which matches the law. I am against censorship that goes far beyond the law.

If people want less free speech, they will ask government to pass laws to that effect. Therefore, going beyond the law is contrary to the will of the people.

Twitter has First Amendment right to moderate tweets

There are multiple ways to interpret Musk’s statement as it relates to United States law, particularly the First Amendment. One interpretation is that Musk doesn’t need to change Twitter at all to prevent “censorship that goes far beyond the law.”

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EU warns Elon Musk over Twitter moderation plans

EU warns Elon Musk over Twitter moderation plans

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Brussels has warned Elon Musk that Twitter must comply with the EU’s new digital rules under his ownership, or risk hefty fines or even a ban, setting the stage for a global regulatory battle over the future of the social media platform.

Thierry Breton, the EU’s commissioner for the internal market, told the Financial Times that Elon Musk must follow rules on moderating illegal and harmful content online after Twitter accepted the billionaire’s $44bn takeover offer.

Breton said: “We welcome everyone. We are open but on our conditions. At least we know what to tell him: ‘Elon, there are rules. You are welcome but these are our rules. It’s not your rules which will apply here.’”

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Twitter announces deal to sell company to Elon Musk for $44 billion

Elon Musk standing and gesturing with his hands while he speaks at a press conference.

Enlarge / Elon Musk at a press conference at SpaceX’s Starbase facility in Texas on February 10, 2022. (credit: Getty Images | Jim Watson)

Twitter’s board of directors has agreed to sell the company to Elon Musk for $44 billion, the company announced today.

“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,” Musk said in the purchase announcement.

The deal, which is pending shareholder approval and expected to close later this year, comes just 10 days after the Twitter board approved a poison pill to prevent a hostile takeover in response to Musk’s attempt to buy the company. Board members started taking Musk’s offer more seriously after he lined up $46.5 billion in financing. The sale agreement was announced hours after reports that a deal between Twitter and Musk was close.

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Twitter reportedly “set to accept” Elon Musk’s offer to buy the company

Elon Musk's Twitter profile displayed on a computer screen juxtaposed next to a Twitter logo displayed on a phone screen

Enlarge (credit: Getty Images | NurPhoto)

Twitter’s board of directors is reportedly on the verge of accepting Elon Musk’s offer to buy the company, according to news reports.

“Twitter is poised to agree a sale to Elon Musk for around $43 billion in cash” and “may announce the $54.20-per-share deal later on Monday once its board has met to recommend the transaction to Twitter shareholders,” Reuters wrote in a story with the headline, “Twitter set to accept Musk’s original $43 billion offer.” Reuters cited “people familiar with the matter.”

The Wall Street Journal reported that “Twitter is in advanced discussions to sell itself to Elon Musk and could finalize a deal Monday,” after “the two sides worked through the night to hash out a deal.” Bloomberg similarly wrote that Twitter and Musk are “in the final stretch of negotiations… and could reach an agreement as soon as Monday if negotiations go smoothly.”

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Twitter board in a bind as Elon Musk makes his move

Cartoon image of Twitter-logo birds flying out of empty wallet.

Enlarge (credit: Aurich Lawson / Getty Images)

If Twitter’s board initially thought Elon Musk’s offer to buy the social media company for $43 billion was just a stunt, it has now found itself on the defensive on multiple fronts.

After the world’s richest man revealed on Thursday how he plans to fund his takeover bid, Twitter’s directors are under pressure to come to the negotiating table with him or find alternatives, such as a “white knight” bidder to come to their rescue, as the company nears a make-or-break moment.

For some, Musk’s bid has stoked hopes that Twitter will be taken private in order to address its perceived failure to innovate and find new revenue streams, even if many do not see Musk as the man for the job. It has also shined a spotlight on Twitter’s checkered history of sluggish innovation, technical shortcomings and leadership infighting.

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Judge in Musk trial will tell jury that “Funding secured” tweets were false

True and false written on a chalkboard with a check mark next to false.

Enlarge

Tesla CEO Elon Musk won’t be subject to a gag order in the court case over his infamous “Funding secured” tweets, but a federal judge confirmed that the jury will be told Musk’s tweets were false. District Judge Edward Chen denied the gag order requested by lead plaintiff Glen Littleton in a ruling issued Wednesday, in part because of the instructions Chen plans to issue to the jury.

“[T]hough ‘jury instructions are often an ineffective remedy,’ the Court finds that unlikely to be true for the instant case where the jury will be told that the Court has already found that the August 2018 tweets were false and made with the requisite scienter [knowledge of wrongdoing],” Chen wrote.

Musk and Tesla face a class action lawsuit in US District Court for the Northern District of California over Musk’s August 2018 claim that he had secured funding to take Tesla private. Musk made the claim over several tweets, starting with one that said, “Am considering taking Tesla private at $420. Funding secured.”

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Elon Musk still wants Twitter—and he now has $46.5 billion in financing

A photoshopped image of Elon Musk emerging from an enormous pile of money.

Enlarge (credit: Aurich Lawson / Duncan Hull / Getty)

Elon Musk is continuing his pursuit of Twitter. In an SEC filing [PDF] Thursday, Musk revealed that he has $46.5 billion in financing lined up to close the deal. The Tesla and SpaceX founder would cover $21 billion of the purchase price himself. A consortium of banks will loan him $12.5 billion against his shares of Tesla along with an additional $13 billion in financing.

Musk surprised just about everyone last week with an unsolicited offer of $43 billion for Twitter. The move came after he quietly purchased 9.2 percent of outstanding Twitter shares. He then rejected an offer to sit on the company’s board in order to be able to buy even more shares.

Musk’s vision for the social media site appears to be one largely unencumbered by moderation. “I invested in Twitter as I believe in its potential to be the platform for free speech around the globe,” Musk wrote to Twitter Chairman Bret Taylor last week. “I believe free speech is a societal imperative for a functioning democracy.”

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Musk tells judge that gag order would “trample” on his First Amendment rights

Tesla CEO Elon Musk on stage, holding a microphone in one hand while both of his arms are lifted up into the air.

Enlarge / Tesla CEO Elon Musk speaks at gigafactory opening party in Austin, Texas, on April 7, 2022. (credit: Getty Images | Suzanne Cordeiro)

On Wednesday, Tesla CEO Elon Musk urged a judge to reject a request for a gag order that would prevent him from continuing to publicly claim that his infamous “Funding secured” tweet was accurate.

The motion for a temporary restraining order “asks this Court to trample on Elon Musk’s First Amendment rights by barring him from publicly discussing this case or its underlying facts. Plaintiff’s motion cannot be reconciled with the Constitution’s guarantee of free speech and should be denied,” Musk’s lawyer wrote in a court filing Wednesday.

Musk and Tesla face a class action lawsuit in US District Court for the Northern District of California over Musk’s August 2018 claim that he had secured funding to take Tesla private. Musk and Tesla previously agreed to pay $20 million each in penalties and impose controls on Musk’s social media statements to settle a lawsuit filed by the Securities and Exchange Commission, which said that “Musk’s misleading tweets” about taking Tesla private caused the stock price to jump “and led to significant market disruption.”

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Musk keeps falsely claiming “Funding secured” tweet was accurate, judge is told

Elon Musk's Twitter profile displayed on a computer screen juxtaposed next to a Twitter logo displayed on a phone screen

Enlarge (credit: Getty Images | NurPhoto)

The shareholder who sued Elon Musk and Tesla over Musk’s infamous “Funding secured” tweet is seeking a temporary restraining order to prevent Musk from continuing to claim publicly that the 2018 tweet was accurate. The lead plaintiff representing a class of Tesla shareholders says a federal judge has already ruled that Musk’s tweet was false—although that ruling has not yet been unsealed.

“As this Court has determined in its recent order granting Plaintiff’s motion for partial summary judgment, these statements by Musk were false and misleading and that Musk made these false statements recklessly and with full awareness of the facts that he misrepresented in his tweets,” said the filing on Friday in the class action lawsuit in US District Court for the Northern District of California.

The order was issued under seal, according to another court filing.

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Twitter board fights Musk takeover with unanimous adoption of poison pill

A pill with a skull and crossbones printed on it in an illustration of a poison pill.

Enlarge (credit: Getty Images | Peter Dazeley)

Twitter’s board of directors approved a poison pill to prevent a hostile takeover in response to Elon Musk’s offer to buy the firm. “The company on Friday adopted a so-called poison pill that makes it difficult for him to increase his stake beyond 15 percent,” The Wall Street Journal wrote.

In a press release, Twitter said its board unanimously “adopted the Rights Plan following an unsolicited, non-binding proposal to acquire Twitter.”

“The Rights Plan will reduce the likelihood that any entity, person or group gains control of Twitter through open market accumulation without paying all shareholders an appropriate control premium or without providing the Board sufficient time to make informed judgments and take actions that are in the best interests of shareholders,” the announcement said.

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Elon Musk offers to “buy 100% of Twitter” for $43 billion

Elon Musk offers to “buy 100% of Twitter” for $43 billion

Enlarge (credit: JIM WATSON / AFP) (Photo by JIM WATSON/AFP via Getty Images)

Elon Musk on Wednesday offered to personally acquire Twitter in an all-cash deal valued at $43 billion. Musk laid out the terms of the proposal in a letter to Twitter Chairman Bret Taylor that was reproduced in an SEC filing.

Twitter confirmed receipt of the offer in a Thursday morning press release. “The Twitter Board of Directors will carefully review the proposal to determine the course of action that it believes is in the best interest of the Company and all Twitter stockholders,” the company wrote.

Musk has been accumulating shares in Twitter since January. Last week, he revealed that he had accumulated 9.2 percent of outstanding Twitter shares, making him the company’s largest shareholder.

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Lawsuit: Musk saved $143 million by illegally waiting to disclose Twitter stake

A man's hand holding a pen and filling out a lawsuit form.

(credit: Getty Images | eccolo74)

Elon Musk is facing a shareholder lawsuit over his failure to reveal his investment in Twitter until 11 days after a deadline set by federal law.

Musk started buying Twitter stock in January and acquired more than 5 percent of all shares by March 14, the lawsuit said. Under US law, “Musk was required to file a Schedule 13 with the SEC within 10 days of passing the 5 percent ownership threshold in Twitter, or March 24, 2022,” said the complaint filed yesterday in US District Court for the Southern District of New York.

Twitter’s stock rose 27 percent on April 4 when Musk revealed his 9.2 percent stake. This means that investors who sold before April 4 missed out on the gains and that Musk was able to keep buying shares at artificially low prices, the class-action complaint said:

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Elon Musk won’t join Twitter board, can thus exceed 14.9% ownership cap

Elon Musk's Twitter profile displayed on a computer screen juxtaposed next to a Twitter logo displayed on a phone screen

Enlarge (credit: Getty Images | NurPhoto)

Elon Musk will not be joining Twitter’s board of directors, dropping out of a deal that would have prohibited him from buying more than 14.9 percent of the company’s stock. Musk had agreed to join the board after purchasing 9.2 percent of Twitter’s stock, but Twitter CEO Parag Agrawal last night announced that Musk pulled out of the pending agreement.

Agrawal posted a note he sent to Twitter employees, which said:

We announced on Tuesday that Elon would be appointed to the Board contingent on a background check and formal acceptance. Elon’s appointment to the board was to become officially effective 4/9, but Elon shared that same morning that he will no longer be joining the board. I believe this is for the best. We have and will always value input from our shareholders whether they are on our Board or not. Elon is our biggest shareholder and we will remain open to his input.

Musk revealed a week ago that he had purchased nearly 73.5 million Twitter shares, which are now worth over $3 billion. If the SpaceX and Tesla CEO had followed through on the agreement to join Twitter’s board, he would have had to abide by a stock-purchasing limit detailed in a Securities and Exchange Commission filing.

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Elon Musk says Cybertruck will happen in 2023 at Texas plant opening

Tesla's Cybertruck at its 2019 unveiling in California.

Enlarge / Tesla’s Cybertruck at its 2019 unveiling in California. (credit: FREDERIC J. BROWN/AFP via Getty Images)

Tesla opened its massive new factory in Texas on Thursday night. The event was suitably supersized for a building “as large as three Pentagons,” with 15,000 fans on site to see Tesla CEO Elon Musk hold a “Cyber Rodeo,” a theme evident in the sheer number of cowboy hats visible on the livestream.

Musk’s biggest news of the night was that the long-delayed Cybertruck will go on sale in 2023. First shown in 2019, the angular stainless-steel pickup was supposed to go into production in 2021. With previous vehicles, Tesla has mostly been conquering fresh territory—there was no serious competition for the Model S for many years, nor the Model 3, and the Model X remains the only EV with six or seven seats.

But now there’s the buzzy upstart Rivian, with its very well-reviewed R1T adventure truck. The Hummer EV just made its comeback as an electric super truck. And next month you’ll read first drives of the Ford F-150 Lightning, arguably the most important new vehicle of the year.

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Musk joins Twitter board in deal that prevents him from buying majority stake

Elon Musk standing and gesturing with his hands while he speaks at a press conference.

Enlarge / Elon Musk at a press conference at SpaceX’s Starbase facility in Texas on February 10, 2022. (credit: Getty Images | Jim Watson)

Elon Musk is joining Twitter’s board of directors in a deal that prohibits him from buying more than 14.9 percent of the company’s stock, Twitter announced today. The news of Musk joining the board comes one day after the Tesla and SpaceX CEO revealed that he had purchased 9.2 percent of Twitter shares.

Musk said he’s looking forward to helping Twitter make “significant improvements” and asked Twitter users in a poll if they want an edit button. After about 3.4 million votes, 73.4 percent of respondents had voted yes—or rather, they voted “yse” instead of “on” because Musk misspelled both options.

Twitter CEO Parag Agrawal suggested that Musk’s poll on an edit button might influence Twitter policy. “The consequences of this poll will be important. Please vote carefully,” Agrawal wrote in a retweet of the poll.

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Elon Musk tries to get out of settlement with SEC, says he was “forced” into it

Elon Musk standing and gesturing with his hands while he speaks at a press conference.

Enlarge / Elon Musk at a press conference at SpaceX’s Starbase facility in Texas on February 10, 2022. (credit: Getty Images | Jim Watson)

Tesla CEO Elon Musk today asked a federal judge to terminate a 2018 settlement with the Securities and Exchange Commission, saying he’s tired of the SEC using the consent decree to “micro-manage” his Twitter activity and that he was “forced” into signing the deal. Musk also wants the court to quash an SEC subpoena that seeks documents related to whether he got pre-approval before posting a recent tweet about Tesla stock sales.

“Unlike other consent decrees, the SEC interprets the agreement in this case to permit it to micro-manage Mr. Musk’s Twitter activity,” according to Musk’s memorandum of law supporting his motion to quash the subpoena and terminate the consent decree. “Indeed, the SEC believes it may police speech that falls outside the bounds of Section 10(b) of the Securities Exchange Act of 1934, which prohibits fraud in the purchase or sale of securities and statements or omissions of material fact.”

The 2018 settlement required Tesla to impose controls on Musk’s social media statements. The settlement was reached to resolve the SEC’s complaint that “Musk’s misleading tweets” about taking Tesla private caused the stock price to jump “and led to significant market disruption.” Musk and Tesla also each agreed to pay $20 million in penalties.

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Elon Musk: “High” probability of Russian attacks on Starlink in Ukraine

Boxes of Starlink terminals in the back of a truck in Ukraine.

Enlarge / Boxes of Starlink terminals in Ukraine seen in a picture posted by Vice Prime Minister Mykhailo Fedorov. (credit: Mykhailo Fedorov)

SpaceX CEO Elon Musk yesterday warned that Starlink user terminals in Ukraine could be targeted by Russia and advised users to take precautions. “Important warning: Starlink is the only non-Russian communications system still working in some parts of Ukraine, so probability of being targeted is high. Please use with caution,” Musk tweeted.

When asked for specific advice, Musk said people in Ukraine should turn Starlink on only when it’s needed, place the antenna “as far away from people as possible,” and “place light camouflage over [the] antenna to avoid visual detection.” A thin layer of spray paint would work if there are no metal particles in the paint, he wrote.

One Twitter used asked Musk if Starlink could face a cyberattack from Russia similar to the one that affected Viasat satellite service. Musk responded, “Almost all Viasat Ukraine user terminals were rendered permanently unusable by a Russian cyberattack on day of invasion, so… yes.”

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Elon Musk and brother, a Tesla director, face insider-trading investigation

Kimbal Musk on stage at a conference, wearing a cowboy hat.

Enlarge / Kimbal Musk at the ETHDenver conference in Denver, Colorado, on Friday, Feb. 18, 2022. (credit: Getty Images | Bloomberg)

The Securities and Exchange Commission is investigating whether Tesla CEO Elon Musk and his brother, Kimbal Musk, violated insider-trading rules with recent stock sales, The Wall Street Journal reported yesterday.

“The SEC’s investigation began last year after Kimbal Musk sold shares of Tesla valued at $108 million, one day before the Tesla chief polled Twitter users asking whether he should unload 10 percent of his stake in the electric-car maker and pledging to abide by the vote’s results,” the Journal wrote.

Separately, a US judge yesterday denied Tesla and Musk’s various requests related to their claim that the SEC is “harassing” the company and its CEO. (More on that later in this article.)

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