Get to work!Credit…Dado Ruvic/Reuters
“Hard core” Twitter in disarray
No, Twitter is not dead this morning, despite #RIPTwitter trending on the social network last night. But its future looks more turbulent than at any point since Elon Musk took over three weeks ago, as a huge number of workers decided to quit rather than agree to the billionaire’s loyalty pledge, which involved committing to a “hard core” work routine to grow the platform.
The newly shrunken Twitter now faces numerous questions, including about its ability to maintain mission-critical systems, police content on its platform, remain in compliance with regulatory agreements and, frankly, stay afloat while laboring under a huge amount of debt.
Hundreds of employees have resigned, some even before Musk’s 5 p.m. Eastern pledge deadline took effect. The apparent feeling: better to take three months’ severance pay than to work under a leader who has demanded long hours and fired dozens of employees who had criticized him, some publicly. A poll of nearly 250 employees conducted on Blind, an anonymized social network for tech workers, suggested that nearly three-quarters favored leaving Twitter.
As the company did when it laid off half its work force, Twitter locked its offices and disabled employee badge access until Monday.
Mr. Musk appears to have underestimated how many people would leave. Though he may have viewed his ultimatum as a way to weed out disaffected workers and cut costs, Twitter’s leadership instead spent time on Thursday trying to convince “critical” employees that they should stay.
Mr. Musk also backtracked on a ban on remote work, at least somewhat. He told employees on Thursday that they could work remotely, so long as their managers certified they were making “an excellent contribution.” But he also warned said managers not to lie about that, or risk being “exited from the company.” (The edict came after a former employee sued the company over Musk’s remote-working ban, arguing it was discriminatory against those with disabilities.)
The resignations haven’t dimmed Musk’s joking on Twitter. He tweeted, “We just hit another all-time high in Twitter usage lol” and posted several memes about the chaos.
But many of Twitter’s problems aren’t laughing matters. Among those who have left were members of the trust and public safety teams and critical engineering teams. “Every mistake in code and operations is now deadly,” a former engineer told The Washington Post. Meanwhile, seven Democratic senators on Thursday urged the F.T.C. to investigate whether Twitter had remained in compliance with a 2011 consumer privacy settlement.
None of this chaos is likely to reassure either the scores of advertisers who have paused campaigns on the platform since Musk took over, or the banks who extended $13 billion in loans to help finance his takeover and are counting on him to pay $1 billion in interest each year.
HERE’S WHAT’S HAPPENING
Nancy Pelosi steps aside. The California representative, the first woman to serve as House speaker and a dominant force in Democratic politics for more than two decades, said on Thursday that she would not pursue a leadership role in the new Congress, when Republicans take control of the chamber. Her likely successor as Democratic leader is Representative Hakeem Jeffries of New York.
Changes at Elon Musk’s Twitter
A swift overhaul. Elon Musk has moved quickly to revamp Twitter since he completed his $44 billion buyout of the social media company in October, warning of a bleak financial picture and a need for new products. Here’s a look at some of the changes so far:
Going private. As part of Mr. Musk’s acquisition of Twitter, he is delisting the company’s stock and taking it out of the hands of public shareholders. Making Twitter a private company gives Mr. Musk some advantages, including not having to make quarterly financial disclosures. Private companies are also subject to less regulatory scrutiny.
Layoffs. Just over a week after closing the deal, Mr. Musk eliminated nearly half of Twitter’s work force, or about 3,700 jobs. The layoffs hit many divisions across the company, including the engineering and machine learning units, the teams that manage content moderation, and the sales and advertising departments.
Verification subscriptions. Twitter began charging customers $7.99 a month to receive a coveted verification check mark on their profiles. But the subscription service was paused after some users exploited it to create havoc on the platform by pretending to be high-profile brands and sending disruptive tweets.
Content moderation. Shortly after closing the deal to buy Twitter, Mr. Musk said that the company would form a content moderation council to decide what kinds of posts to keep up and what to take down. But advertisers have paused their spending on Twitter over fears that Mr. Musk will loosen content rules on the platform.
Other possible changes. As Mr. Musk and his advisers look for ways to generate more revenue at the company, they are said to have discussed adding paid direct messages, which would let users send private messages to high-profile users. The company has also filed registration paperwork to pave the way for it to process payments.
The World Cup is set to begin with a U-turn on beer. Theauthorities in Qatar, the host country, said on Friday that they would allow only nonalcoholic drinks at the tournament, just two days before competition starts. The move complicates FIFA’s $75 million sponsorship deal with Budweiser and is the latest controversy to hit the event, after criticism of Qatar’s human-rights record.
COP27 may end with a whimper. The two-week gathering of nations to discuss climate change solutions is likely to end on Friday with little agreement on matters like compensating poorer countries for climate disasters and the phasing out of fossil fuels. António Gutteres, the U.N. secretary general, cited a “breakdown of trust.”
Elizabeth Holmes will be sentenced on Friday. The Theranos founder faces up to 20 years in prison after being convicted of defrauding investors. Holmes has asked for 18 months of house arrest instead; court filings also note that she is pregnant with her second child.
Masa Son owes nearly $5 billion to SoftBank. The tech mogul now owes $4.7 billion to the investment giant he founded, as the plunging value of tech companies has left him underwater on loans SoftBank extended him to invest in its funds, The Financial Times reports. Son isn’t obligated to repay those loans anytime soon.
The tiny Bahamas looms large in the future of FTX
A turf war between the United States and Bahamas could make it harder for a parade of international creditors to claw back the billions owed to them following the collapse of the crypto exchange FTX. The tiny island nation, where FTX is headquartered, believes it has the upper hand over how the firm will be wound down after the Securities Commission of the Bahamas took control of much of its digital assets and questioned the legitimacy of bankruptcy proceedings in the U.S.
The jurisdictional tug of war emerged after John Jay Ray III, FTX’s new C.E.O. who is pushing for the company to be wound down in U.S. Bankruptcy Court in Delaware, slammed the company’s management (which happened to raise $1.9 billion from the giants of Silicon Valley and Wall Street). Mr. Ray, whose résumé includes overseeing the $23 billion Enron bankruptcy, said he had never seen “such a complete failure of corporate control.” The lowlights: Expenses approved by emoji and billions of dollars in losses, but no paper trail. Where were the auditors? The blame game has already begun.
In Thursday’s bankruptcy filing, Mr. Ray grumbled that Bahmanian authorities had gained “unauthorized access” to FTX assets, in an effort “to undermine” the Chapter 11 proceedings. He also suggested that Sam Bankman-Fried, the firm’s founder, who is known as S.B.F., helped them.
S.B.F. was (unusually) quiet on Thursday. The 30-year-old, who is under investigation by the Justice Department and S.E.C. for, among other things, lending customer money to his trading unit, Alameda Research, stayed off Twitter. The silence followed a series of tweets and a bizarrely candid interview with Vox this week, in which S.B.F. took a shot at regulators for “making everything worse,” and admitted to “messy accounting.” One big development: S.B.F. has a new legal team, Semafor reports, that includes David Wills, who teaches at Stanford Law School — Mr. Bankman-Fried’s parents are also Stanford professors.
The list of FTX’s 50 biggest creditors is scheduled to come out on Friday. Meanwhile, contagion fears are growing.Following a run on customer deposits, FTX closed last week and S.B.F. resigned, triggering a broad sell-off in digital assets in recent days. The volatility has struck the likes of Genesis, a cryptocurrency lender, which, according to The Wall Street Journal, sought a $1 billion emergency loan before suspending withdrawals. And Multicoin, a crypto venture fund that has funds tied up in FTX, warned investors that “many trading firms will be wiped out and shut down” following the collapse of FTX and Alameda.
Swifties versus Ticketmaster
Today was supposed to be when the general public could start buying tickets for Taylor Swift’s first tour in five years. But Ticketmaster called off the sale on Thursday, citing “extraordinarily high demands on ticketing systems and insufficient remaining ticket inventory to meet that demand.”
It was an extraordinary admission — and made the live-event giant an antihero to Swift fans and regulators alike.
“It’s a function of Taylor Swift,” Greg Maffei, the chairman of Ticketmaster’s parent company, told CNBC on Thursday. What happened: Ticketmaster’s systems crashed on Tuesday, when it opened up presales through its Verified Fan program, which is meant to weed out bots and speculators. (It received 3.5 billion requests.) “The site was supposed to open up for 1.5 million verified Taylor Swift fans. We had 14 million people hit the site, including bots, which are not supposed to be there.”
Meanwhile, fans complained that tickets were appearing on secondary markets like StubHub at much higher prices. (Top-tier tickets for a show in the New York City area were going for nearly $5,000 this morning.)
More on Elon Musk’s Twitter Takeover
- Targeting Critics: After laying off nearly half the company, Elon Musk has continued cutting Twitter’s work force by firing employees who had criticized him.
- Musk’s Tweeting Spree: Under tremendous scrutiny since buying Twitter, Mr. Musk is using the platform to push back, spar and justify his actions.
- Users’ Confessions: Sensing that Twitter’s days might be numbered, users are disclosing long-ago indiscretions, making pleas for money and revealing silly quirks.
- ‘Hard Fork’: In an episode of The Times’s tech podcast, two Twitter employees described the atmosphere inside the company.
It adds gasoline to antitrust criticisms of Ticketmaster. Bad blood between the company and regulators has been around since it merged with Live Nation in 2010. Attorneys general in North Carolina and Tennessee are investigating the presale troubles, while Senator Amy Klobuchar, the Democratic chairwoman of the Senate antitrust subcommittee, questioned whether Ticketmaster “continues to abuse its market positions.”
“The previous owners were not good stewards for the business, and obviously it presented risks in terms of information.”
— George Arison, the C.E.O. of the dating app Grindr, which goes public on Friday, speaking to DealBook on Thursday. Two years ago, U.S. regulators forced Grindr’s Chinese owners to sell the company over data privacy concerns.
S.E.C.’s Gensler talks climate disclosure
The value of assets labeled “E.S.G.” reached $35 trillion in 2020, and will grow to $41 trillion by the end of this year, according to Deutsche Bank. But company reporting on environmental, social and governance issues varies widely, and rating agencies apply different standards, making it difficult to compare data and draw meaningful conclusions. In March, the Securities and Exchange Commission proposed a rule to standardize climate-related disclosures made by public companies. DealBook talked with S.E.C. chairman Gary Gensler about the proposed changes. The interview has been edited.
Your predecessor, Jay Clayton, recently said that the S.E.C. should not be engineering the world’s carbon transition. Is that what the climate rule aims to do?
Literally, hundreds and hundreds of companies are currently making disclosures around climate risk. And investors are using that information to make investment decisions. So it’s about how to bring some consistency and comparability to it. How to guard against misleading disclosures or greenwashing.
It’s been reported that the agency may cut Scope 3 monitoring requirements — which address emissions that businesses don’t directly control further along their supply chain. Is that right?
On Scope 3, we have heard from commenters across [many sectors]. There are letters from the agricultural community about how they sell their produce, and how that might affect them. That is not what we’re trying to do here. This is about disclosure for public companies.
I can’t prejudge where it all will lead. I do think that we have a real role here.
Is there a timeline to finalize the rule?
We now have approaching 15,000 comments. We’ve never had so many comments on any rule in the history of the Securities and Exchange Commission. And when the staff’s ready to serve something up, we’ll try to address it.
THE SPEED READ
Wall Street banks are now holding onto $43 billion worth of leveraged buyout loans that they can’t sell into turbulent debt markets. (Bloomberg)
BHP raised its takeover bid for OZ Mining to $6.3 billion to gain more access to copper and nickel used for electric vehicles and other uses. (WSJ)
Allen Weisselberg, the Trump Organization’s C.F.O., laid bare in testimony the workings of what prosecutors say was a decades-long tax fraud scheme. (NYT)
The Biden administration said that Crown Prince Mohammed bin Salman, Saudi Arabia’s de facto ruler, should be granted legal immunity in a trial over the murder of the dissident Jamal Khashoggi. (NYT)
Best of the rest
Amazon’s layoffs will continue into 2023, the company’s C.E.O., Andy Jassy, told workers on Thursday. (CNBC)
Facebook’s parent company, Meta, said it had fired or disciplined over two dozen workers for hijacking user accounts — in some cases for money. (WSJ)
Starbucks workers at dozens of unionized locations went on strike yesterday in what they called the “Red Cup Rebellion.” (NYT)
Alfred Kelly will retire as Visa’s C.E.O. after six years in the role; he’ll be succeeded by the company’s longtime president, Ryan McInerney. (WSJ)
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