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Musk of the Spheres
Elon’s doomed-to-succeed Twitter buy
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Elon Musk’s extended siege of Twitter seems doomed to succeed, perhaps against Musk’s own wishes. In May, the world’s richest troll questioned Twitter’s reporting on spambot numbers and generally poo-pooed his potential investment, declaring that his takeover of the company was “temporarily on hold.” Whether he wants to scrap the deal entirely, which would cost him a $1 billion breakup fee, or negotiate a lower purchase price remains unclear, but he might get neither. Twitter’s executive leadership has vowed to stay firm on the original agreement, which was seemingly made under corporate duress.

A Musk-led takeover of the platform would be a triumph for a group of reactionary right-wing techno-capitalists that has become increasingly vocal about its perceived victimhood in the face of abruptly shifting social mores. (Sexual harassment and transphobia have fallen out of fashion, see.) It’s also an opportunistic power grab for companies like Binance—the world’s largest cryptocurrency exchange—which doled out $500 million to support Musk’s bid for a site ridden with crypto fraudsters. While a shift in ownership is glazed in a populist message of restoring free speech to a censorious platform, it’s really a familiar assertion of influence by would-be profiteers who smell opportunity. No matter who owns Twitter after it survives this current storm, it will either be a public company controlled by a shifting cast of unaccountable CEOs, billionaire board members, investment firms, and shadowy major shareholders, or it will be a private company controlled by one unaccountable billionaire and his pliant supporting cast. That could be Elon Musk or a less influential figure like Marc Andreessen—whose venture capital firm scraped together $400 million for the deal—but it doesn’t matter much. The values and corporate politicking are basically the same.

Viewed in context, concerns provoked by Musk’s Twitter-grab shouldn’t be considered novel. Taxonomize what’s going on here and you’ll recognize some familiar elements: a multi-billionaire makes an aggressive play for an important but slightly tarnished media asset that he happens to be personally obsessed with. In the process, he mobilizes a potent tranche of public opinion, drawing on the culture-warring right, along with his usual power base of innovation-happy customers, obsequious tech-mogul allies, and worshipful true believers. This particular media platform has already been an effective force in burnishing the very cult of personality that’s boosted the stock price of Musk’s prized company. It’s also where he’s clashed with regulators for writing posts that may have had similar market-manipulating effects. Taking over the entire platform is a no-brainer, at almost any price.

There’s more nuance to be had, of course, including the relevant cautionary note that Tesla’s faltering stock price and Musk’s potentially overleveraged fortune—however immense—could cause the deal to unravel. The stakes are high, even if the protagonist is a lascivious, attention-desperate clown. Much to the self-loathing of some of its devoted users, Twitter has long been an essential newswire, a conduit for information operations conducted by everyone from spy agencies to surveillance-happy ad networks to crypto scammers, and it’s at the forefront of whatever we might clumsily call the “digital commons.” We can’t afford to look away.

I Spy

Twitter is also an unsafe place for many of its users, the happy hunting grounds of intelligence operations employed by authoritarian regimes. An associate of Saudi Arabia’s Crown Prince Mohammed bin Salman ran a spy ring that operated in Twitter’s San Francisco headquarters and helped yield information on pseudonymous dissidents. According to Canadian-based Saudi dissident Omar Abdulaziz, himself a victim of this spying, some of these users were later arrested or disappeared. When the Federal Bureau of Investigation warned Twitter in 2016 that it had a mole problem, the company’s leadership ignored the FBI’s recommendation and confronted one of the spies directly. Following his browbeating by Twitter executives, the spy contacted his handler and absconded to Saudi Arabia, where it’s been reported that he now works for MBS’s personal foundation, MiSK. (He still has a Twitter account.) The other spy was arrested, but Twitter has never offered a full accounting of its role in this debacle, including why then-CEO Jack Dorsey met with MBS in New York only six months later. In the meantime, billionaire Saudi Prince Alwaleed bin Talal remains one of Twitter’s largest outside shareholders—though the shares may now be controlled by MBS, who once imprisoned Prince Alwaleed as part of a mass asset-seizure effort.

It’s hard to say what Musk’s concerns about free speech on Twitter—repeated frequently but rarely elaborated upon—actually mean.

The Saudi issue is perhaps the most prominent, if unacknowledged, foreign entanglement for Twitter. It’s a reminder that the company’s problems are not confined to the cable-news-driven standards of free speech and wokeness in the United States. Its issues and influence are global, and the result of its corporate intrigue is felt accordingly. While Dorsey spent much of the Trump administration preaching the Bitcoin gospel, Twitter devolved into a spam-ridden information warfare zone, with its overlapping currents of government influence operations, low-grade right-wing propaganda, viral junk, and other bilge still poorly charted. Perhaps the company doesn’t want to know: Twitter has twice as many offices in Germany—two—as it does in Africa and the Middle East combined, despite having huge user bases in those regions. (A new office in Ghana was announced in April 2021 but has yet to open.) It’s hard to think the company has a handle on its global impact—or that its operations would be improved by the leadership of an immature, self-serving captain of industry.

That’s the unfortunate framework surrounding the pricey meet-cute between Twitter’s nervous investors and Tesla’s self-designated “technoking.” Twitter’s weak financials only matter insofar as they represent another cudgel Musk can wield to drive down the acquisition price. While Dorsey followed the typical Silicon Valley dogma of breakneck growth, the company’s increased revenues still barely outpaced expenses in 2020, with net income amounting to $27 million. That 1 percent operating margin, combined with, well, everything else going on, has caused Twitter’s stock to tumble. The Musk deal was priced at $54.20 per share; as of early July, Twitter shares were trading at less than $40. So this is still about money, especially as Musk, in his avariciousness amid a bearish market, may be financially stretched. Yet really, it’s about ego, power, and Musk’s ability to win on his own terms. To control Twitter would be to conquer the supposedly censorious, emotionally fragile political left that stands in the way of—what exactly? No one’s quite sure, but it’s been a useful front of the culture wars to draft from, as Musk makes common cause with Fox News hosts and transphobic posters. Succeeding on those terms would get a lot of likes and maybe sell some cars.

Beyond that victory, to control Twitter would be to sit astride a powerful node in the information wars and have access to events as they happen, as well as Twitter’s massive store of sentiment data and its private messages exchanged between influential people. By acquiring Twitter, Musk would have at his disposal what amounts to a vast intelligence operation, which he can bend to his benefit, manipulating stock prices, boosting preferred crypto tokens, demonizing his enemies before a limitless audience, and casting doubt on the very rule of law. That powerful brand of insouciance may not be enough to skirt the ire of the Securities and Exchange Commission, but America’s premier financial regulator seems reluctant to do more than slap Musk on the wrist, even though he almost certainly committed securities fraud by ignoring reporting requirements when he built up his initial stake in Twitter and filed the required paperwork eleven days late.

One might wish to ignore the political importance of Donald Trump’s suspended Twitter account, but it will be a major chip for Musk to play. Given his vague paeans to free speech and the upside of courting both Trump and his MAGA followers, it seems almost certain that Musk will eventually let Trump back on the platform if the deal goes through. Who knows how or on what terms, but Musk would be a fool not to extract some concession beyond Trump’s insincere brand of gratitude (the man never pays his bills). After regaining his beloved posting abilities, Trump might not like being beholden to Musk, who has replaced Trump as the daily main character on Twitter and in the media, with every ridiculous utterance dissected for meaning, the bloody entrails amounting mostly to a garbled form of: I do and say what I want.

For now, Trump is more useful to Musk as the ultimate victim of woke capital’s oppression of speech it doesn’t like. Quarreling over the details—Was there some sort of assault on a government building? Who can remember that many memes ago?—is unnecessary. What matters is Musk’s appeal as Trump’s stand-in and as the former president’s potential defender. From his gravitational pull on the public’s attention to his sexual harassment allegations, Musk slots easily into the hole left by Trump’s forced retreat from the social media scene. He is the new repository for the shallow grievances of the culturally alienated posting masses. In their collective imagination, Musk is both smarter than they could ever be and just as dumb and petty in his appetites. He will troll who they troll, but with an army at his back, he will win.

It’s hard to say what Musk’s concerns about free speech on Twitter—repeated frequently but rarely elaborated upon—actually mean. The new fleet of militant free speech advocates describes companies like Twitter, Facebook, and Google as infiltrated by overly sensitive lefties who throw down shadow bans at will and proscribe material they don’t like. Anyone who disputes this assessment risks seeming like a shill for powerful tech interests that are invariably aligned with the Democratic Party, intelligence agencies, cable news (but not Fox!), and various liberal power centers.

The truth is naturally more complex.

Moderation in All Things

As any casual reader of tech news over the last decade might know, platforms like Twitter are deluged with spam and ghastly material depicting every manner of crime and abuse. Even supposedly sophisticated automated systems can’t catch everything, so poorly paid human moderators, laboring under great mental stress and a veil of corporate secrecy, have to sit in front of screens all day parsing hate speech and flagging pictures of animal abuse. It’s a terrible situation that even the most well-resourced tech companies have failed, or been unwilling, to solve. (This is also why it’s inexcusable that a company like Twitter has few or no offices in many of the countries in which it provides its service.)

The effects of content moderation and related policy disputes have been heavily debated in academic literature, on Twitter by tech critics, and in the occasional mainstream news article. (One scholar who wrote a book about the complexities of content moderation now works at Twitter.) To Elon Musk, or to his demagogic allies on the political right, none of this matters; it probably doesn’t even occur to them. Like any tech mogul, every thought that Elon Musk offers is considered new and fresh and singular, emerging straight from Zeus’s forehead. A person like him, gazing beyond the technological horizon, is in the vanguard of preserving free speech online by default.

In reality, the burned-out content moderator, in an Accenture office park in Austin or a no-name contractor’s digital sweatshop in Manila, is on the front lines. The policies they enforce may be broken or poorly conceived, but these workers at least have the nominal role of suppressing material that harms others, that impinges on the public’s speech rights by creating an environment hostile to speech itself. Perhaps Musk’s more hardcore partisans think that they can look past videos of child abuse and dead bodies to enjoy tossed-off tweets from their friends. But for most halfway-sentient people, an unmoderated feed—again, one that, thanks to the endless number of bad actors online, would be filled with the worst shit you could imagine—is a terrible environment in which to exercise any speech rights. This doesn’t seem to occur to Twitter’s free speech warriors, who similarly downplay online harassment. They are never offended; indeed, they’re only mad that you’re mad, because for them the stakes aren’t real, and they are standing up for universal principles.

For any person from a marginalized group subject to violence—including people living in non-democracies—the threats are real. And for many, so is the very censorship fretted over by right-wing Twitter tough guys. Twitter is simply not some abstract separate place, hived off from the world. In occupied Palestine, or Modi’s India, or in a dozen other authoritarian regimes, stories abound of activists doxxed and banned through the very tech tools supposed to liberate them. Similarly, many tech companies maintain uncomfortably chummy relationships with less-than-democratic politicians abroad. In those countries, tweeting carries a political price, and it’s not a phone call from the SEC.

The discourse around all this continues to be a mess, beholden to the brain farts of an impossibly wealthy guy with one hundred million followers (many of them are thought to be bots), a shallow ego, and a mortal fear of taxes. Perhaps, after the rubble settles, there will be some belated recognition that many of our rights are interconnected, even the right to say what we want, and that being an adult in the world means understanding these externalities. But the let-me-get-mine libertarian underpinnings of tech’s dominant ideology has, in its most reactionary strain, found common cause with MAGA-style resentment. To take one recently reported example, Oracle cofounder Larry Ellison, the eighth richest person in the world, participated in strategy calls with Trump operatives to discuss how to overturn the results of the 2020 presidential election. Ellison has also chipped in $1 billion for Musk’s purchase of Twitter. Leading Trump supporter Peter Thiel blazed a trail to antidemocratic, right-wing power centers that is now being followed by fellow tech billionaires.

Just as it was practiced by Trump, Musk’s populism is a false one, but plenty of people like an arrogant rich guy who claims to speak for them, especially when his reputation is gilded with claims of genius. In his acquisition of Twitter, Musk is exercising real political power that will put him more overtly in alignment with the political right. It’s almost reductive to call his latest project cynical or selfish; that is the billionaire’s typical affect. But Musk is no longer a carnival barker-like industrialist profiting off of hyped-up public enthusiasm and government largesse. Instead, he’s emerged as a dangerous kind of power broker—impossibly rich, amoral, full of empty technophilic promises, promising lawfare against his enemies, and able to manipulate asset prices and headlines in a tweet. Yes, his takeover of Twitter has probably been far more turbulent than he would have hoped. But under Musk’s prosperity gospel, he’s already won.

 


 

Postscript: On July 12—the day after this issue went to press—a fascinating lawsuit was filed in the Court of Chancery of the State of Delaware, the antiquely named forum where the state’s innumerable corporations settle legal disputes. Twitter sued Elon Musk, castigating the startlingly fertile tech mogul as incompetent and untrustworthy while also demanding that he buy the company, as he had previously agreed. In the eyes of Twitter’s corporate leadership, Musk is both a legal foe who has done real material damage to the company and its reputation—and he is also precisely the person who should assume the mantle of leadership.

Accusing Musk of a breach of contract, Twitter’s lawyers wrote, “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.” Pretty sick burn for lawlerly prose, but the document gets more blistering from there, accusing Musk of hypocrisy, bad faith, deceit, and securities law violations. Essentially, the complaint goes, Musk developed an extravagant, and rather petulant, case of buyer’s remorse. The recent stock market downturn—which began around the time Musk agreed to buy Twitter at $54.20 per share, amounting to a solid 38 percent premium over the share price—caused Musk’s fortune to plummet. He’s still impossibly rich, but Twitter no longer seems like a solid deal. As the lawsuit plainly states: “The structure of Musk’s financing meant that the merger could become significantly more expensive for him if Tesla’s stock price were to decline.”

Cue the freakout. Musk has engaged in an amateurish, very public campaign to denigrate Twitter—often focusing on its bot problem—in order to wiggle out of this agreement. Much of this has played out on Twitter itself, and the legal complaint is loaded with screenshots of Musk’s juvenile tweets. It’s still possible that by this time next year Musk will be happily ensconced as Twitter’s owner, and the posting masses will continue blithely laboring under their new brat-king. It’s also possible the two sides will reach some other agreement, perhaps one that accounts for the damage to Twitter’s stock price. The company lost billions in market cap in part thanks to the platform’s most voluble user talking constant shit, portraying Twitter as a censorious, bot-infested mess overseen by failed woke leadership. There may be small grains of truth somewhere in there, but mostly, Musk has been hyperbolizing for his own desperate gain.

This kind of legal dispute isn’t unprecedented. In September 2020, Tiffany & Co. sued LVMH, the French luxury-goods conglomerate, arguing that LVMH had an obligation to follow-through on a purchase agreement. The two sides settled a little over a month later, and the merger went through, albeit at a substantial discount. According to the Washington Post, last year, Delaware’s Chancery Court “forced private equity firm Kohlberg & Co. to go through with a deal to buy cake-decorating supply company DecoPac after the firm tried to get out of the deal.” A similar process played out in 2001 when Tyson Foods tried to back out of an agreement to buy another meat-packing company. Billion-dollar courtships between multinationals, with their pesky fiduciary duties and warring boards, don’t always go as planned.

Twitter’s lawsuit accuses Musk of being “increasingly invasive and unreasonable,” as well as “erratic.” The sixty-two-page complaint is convincing—and even entertaining, by legal standards—providing careful documentation of Musk’s brazen, chaotic behavior, both in private conversations and public tweets. The accumulated incriminating material probably won’t matter to Musk’s hordes of online sycophants, who think everything that he does is epic, but there are real vulnerabilities appearing in his highly leveraged empire. The greatest one, of course, is Musk himself.