Despite Lawsuit and Whistleblower, Twitter’s Board Approves Musk Deal
Musk’s takeover deal has been approved before a decision has been made in their pending lawsuit.
Elon Musk may not be on board with his announced deal to purchase Twitter, but Twitter now officially is. The company’s shareholders voted Tuesday to formally approve the deal for Musk to buy the company and take it private, leaving next month’s scheduled trial the only remaining hurdle for the deal’s completion. It is, however, quite a hurdle. In October, the Delaware Chancery Court will hear the arguments.
The shareholders’ vote of approval comes after the company’s board recommended in June that the shareholders approve the deal
The approval came the same day that Peiter “Mudge” Zatko, Twitter’s former head of security who has since filed a whistleblower complaint, testified in the Senate.
“I’m here today because Twitter leadership is misleading the public, lawmakers, regulators, and even its own board of directors,” Zatko told the Senate Judiciary Committee. “The company’s cybersecurity failures make it vulnerable to exploitation, causing real harm to real people.”
Musk has sought to expand his legal claims to take Zatko’s claims into account, although Zatko’s attorneys said last month that they had not been in contact with Musk’s team.
However, a Financial Times analysis found that the whistleblower complaint is unlikely to have much of an effect on the fate of Musk’s lawsuit.
Furthermore, questions have been raised about whether Zatko’s claims strengthen Musk’s.
“The first and most important thing to remember is that, even as Musk insists otherwise, the Twitter lawsuit is not about spam. It just is not. I’m not going to repeat everything in that earlier story explaining why not, so if you haven’t read that yet, please do. But the core of it is that Musk needed an escape hatch from the deal he didn’t want to consummate and the best his lawyers could come up with was to claim that Twitter was being misleading in its SEC reporting regarding spam,” Mike Masnick wrote for Techdirt about the whistleblower claim.
Twitter, meanwhile, has sought to soft-pedal or outright the claims made in the whistleblower complaint.
Twitter CEO Parag Agrawal said last month that while the company is reviewing the complaint, saying that “from what we’ve seen so far this is a false narrative that is riddled with inconsistencies and inaccuracies, and presented without important context.”
“Given the spotlight on Twitter at the moment, we can assume that we will continue to see more headlines in the coming days—this will only make our work harder,” he said. “I know that all of you take a lot of pride in the work we do together and in the values that guide us. We will pursue all paths to defend our integrity as a company and set the record straight.”
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.