Lessons from the Twitter takeover

Steven Moe

The many-months-long saga involving the world’s richest person who bought a media company in the name of free speech has been bizarre to watch.

After an initial offer in April 2022 and months of legal wrangling, the sale was finally completed – almost on the courtroom steps - with a valuation of US$44 billion at the end of October 2022. On that day, Elon Musk walked into Twitter’s headquarters with a sink (and a tweet “Entering Twitter HQ – let that sink in”). Musk promptly sacked the board and started laying off staff, claiming the business was losing US$4 million a day.

Apart from its entertainment value, does the takeover throw up any principles from a law and technology perspective? Or any issues that might signal future trends?

Free speech vs ill-informed opinion

This is the big issue. No one knew at the time but Musk had already bought almost 10% of Twitter when he tweeted on 25 March 2022, “Free speech is essential to a functioning democracy. Do you believe Twitter rigorously adheres to this principle?”

The acquisition has been driven by his stated desire to save free speech. When announcing the completion of the deal, Musk announced, “the bird has been freed”.

But does that mean (or should it mean) that all speech is now okay? There is a danger that hate speech with ill-informed opinions will become defensible as free speech.

Musk himself recently tweeted from a right-wing site to his 112 million followers. It was an untrue story – a conspiracy claim about an attack on Paul Pelosi, the husband of former Speaker of the House Nancy Pelosi. He then deleted it.

The point is that an “anything goes” approach is probably falling too far towards allowing hate speech and untruths rather than championing free speech. It makes you suspicious about who is actually out there tweeting and what their identities are, which leads to our second point.

Paying to prove your identity: Twitter Blue

So, who is on Twitter anyway? We know there are many fake accounts and one solution – and a way to generate revenue –was a new US$8 monthly charge to get a “blue tick” verification. But to get that status, all you needed to do was pay the money.

The Washington Post described the situation as “…the equivalent of paying someone to paint a sign on your car that says, ‘I’m a really cool dude’.”

The blue tick is basically worthless as a verification tool which may be why Twitter suspended the offering, then brought it back later in a different format. Verification now has two forms, the ‘legacy’ and the ‘new’. But even having read the explanation here, I remain confused about how it all works. Musk himself tweeted recently, “Please note that Twitter will do lots of dumb things in coming months.”

A social media platform is incredibly difficult to monitor and control, especially when you’re trying to make money from it and one way of monetising the system is by allowing people to prove who they are by paying money to gain a status.

Simple language is best?

Let’s be honest, sometimes lawyers use an excessive number of words. How often do we draft long and convoluted documents when a short form might work better?

The offer for Twitter was a model of simplicity. This is what Musk filed with the SEC:

Bret Taylor Chairman of the Board, I invested in Twitter as I believe in its potential to be the platform for free speech around the globe and I believe free speech is a societal imperative for a functioning democracy. However, since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company.

As a result, I am offering to buy 100% of Twitter for $54.20 per share in cash, a 54% premium over the day before I began investing in Twitter and a 38% premium over the day before my investment was publicly announced. My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder.

Twitter has extraordinary potential. I will unlock it.

Could we learn something from the offer and its bare-bones language and format?

No doubt other implications will emerge from such a highprofile takeover as this. Has the bid become a major distraction for Musk at the expense of his other business interests? Maybe. Is Twitter a dying technology platform? Maybe.

But change doesn’t happen by continuing with the status quo and Elon Musk seems to be a catalyst for doing things differently. What he does next and how Twitter develops will be one to keep watching. ■

Steven Moe is a partner at Parry Field Lawyers and a member of the ADLS Technology & Law committee ■