Elon Musk Tweaks the Terms of Twitter Purchase

May 26, 2022 Topic: Elon Musk Blog Brand: The Buzz Tags: TwitterElon MuskTechnologyTeslaFTC

Elon Musk Tweaks the Terms of Twitter Purchase

In other news for Twitter, the company was sued by the federal government on Thursday.

After Elon Musk declared last week that his deal to buy Twitter was “on hold,” and Twitter’s board vowed to hold him to the agreed-upon price in their deal, the world saw an uneventful few days in the ongoing Twitter/Musk saga.

That changed in a big way on Wednesday.

According to a filing, as reported by the Daily Beast, Musk has adjusted how the funding will work for the deal. Musk has committed an additional $6.25 billion in personal financing and will no longer utilize funds backed by his Tesla stock. Per CNBC, Musk has now personally committed $33.5 billion out of the $44 billion purchase price.

The news caused Twitter’s stock to jump 5 percent in after-hours trading, CNBC said.

Meanwhile, according to Puck, the filling also shares some background of how the Musk/Twitter deal happened. It includes a phone call Musk made to Jack Dorsey, the co-founder and former CEO of Twitter, in which the two men discussed the “future direction of social media, including the benefits of open social protocols.”

Dorsey announced Thursday that he was stepping down from Twitter’s board. It was consistent with the timing of Dorsey’s plan when he stepped down as CEO of the company last year. It wasn’t the only change on Twitter’s board during this week’s shareholder meeting. The company ousted Egon Durban of Silver Lake, who was described in media accounts as a Musk ally.

In other news for Twitter, the company was sued by the federal government on Thursday.

The Federal Trade Commission announced that it had charged the company with “deceptively using account security data to sell targeted ads.” The FTC, along with the Department of Justice, announced that it had ordered the company to pay a $150 penalty for violating an FTC order from 2011.

“Twitter asked users to give their phone numbers and email addresses to protect their accounts,” the FTC announcement said. “The firm then profited by allowing advertisers to use this data to target specific users. Twitter’s deception violates a 2011 FTC order that explicitly prohibited the company from misrepresenting its privacy and security practices.”

The practices allegedly took place between 2013 and 2019.

The move was made by FTC Chair Lina M. Khan, someone known for being tough on big tech. 

“As the complaint notes, Twitter obtained data from users on the pretext of harnessing it for security purposes but then ended up also using the data to target users with ads," Khan said in a statement. "This practice affected more than 140 million Twitter users while boosting Twitter’s primary source of revenue.”

It’s not clear if the agreement will have any effect on the planned sale of the company, which is set to close this year.

Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.

Image: Reuters.