“From a corporate good-governance perspective, Tesla has a lot of red flags,” Andrew Poreda, a senior analyst who specializes in socially responsible investing at Sage Advisory Services, an investment firm in Austin, told The Times last month. “There are almost no checks and balances.”

Mr. Musk’s management style and success — he is listed as the world’s richest man by Bloomberg and Forbes — have earned him admirers but have made him a lightning rod. Tesla has lost a number of top executives in recent years, many of whom have gone on to top jobs at other automakers, tech companies and battery makers.

Recently, Mr. Musk praised the work ethic in China, where labor conditions can be harsh or even abusive, suggesting that workers in the United States were lazy. “They won’t just be burning the midnight oil. They’ll be burning the 3 a.m. oil,” he said about Chinese workers in an interview with The Financial Times. “So they won’t even leave the factory type of thing. Whereas in America, people are trying to avoid going to work at all.”

Still, some analysts remain bullish about Tesla’s prospects. “In our view, Tesla likely does not need to hire any more employees to maintain its growth, and we think the plan to reduce the work force likely shows that Tesla over hired last year,” Seth Goldstein, a senior equity analyst at Morningstar, said in a note on Friday.

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U.S. SEC looking into Musk’s Twitter stake purchase

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WASHINGTON, May 27 (Reuters) – The U.S. Securities and Exchange Commission (SEC) is looking into Tesla Chief Executive Officer Elon Musk’s disclosure of his stake in Twitter Inc (TWTR.N) in early April, according to a letter the agency sent to him that month.

In the letter, now made public by the SEC, the regulator asks Musk why it appears he did not file required paperwork within 10 days of the acquisition, and also questions why, when Musk did disclose his stake, he used a form meant for passive investors while he was openly questioning Twitter’s policies around free speech.

Specifically, the SEC asked Musk to explain why he opted to initially file a “13G” disclosure form, which is meant for investors who plan to hold their shares passively instead of a “13D” form, which is for activist investors who intend influence management and policies of the company. He later amended the filing. Musk was offered a board seat shortly after his initial disclosure and has since gone on to attempt to buy the company outright in a $44 billion deal to take it private.

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Spokespeople for Musk did not immediately respond to a request for comment. An SEC spokesperson declined to comment.

Separately, Twitter said in a filing Friday it was not accepting the resignation of Egon Durban, a Musk ally, from its board. Two days earlier, Twitter shareholders had blocked his re-election, but the company said he brought “unparalleled operational knowledge of the industry” and instead he would reduce his board roles elsewhere. read more

Outside experts had previously said Musk’s late filing and apparently improper paperwork could attract the attention of the SEC, which has sparred with Musk in the past. read more

But the financial consequences for the world’s richest man could be limited, as fines for such a misstep would likely rise to a few hundred thousand dollars, according to outside experts. And others were skeptical it could endanger Musk’s efforts to acquire Twitter.

“I think from that investigation standpoint, the SEC is going to have a pretty strong case that he’s violated securities laws,” said Josh White, a finance professor at Vanderbilt University who previously worked at the SEC as a financial economist. However, he added it “would be disastrous if [the SEC] said, well, this Twitter deal is on hold because Musk filed the wrong form.”

“Twitter stock price would instantly drop … I don’t think that the Commission has an interest in necessarily standing in the way of the deal.”

The SEC’s letter is dated the same day Musk disclosed a 9.2% stake in Twitter. The billionaire has been sued by investors claiming he manipulated the company’s stock price downward and profited by not disclosing his investment on time. read more

The Tesla Inc (TSLA.O) chief executive officer has landed in trouble with the SEC before, when the agency sued him in 2018 after he tweeted he had “funding secured” to potentially take the electric car company private at $420 per share. In reality, a buyout was not close.

However, Reuters has reported that the SEC has previously been reluctant to take Musk to court over perceived violations of the resulting settlement out of concern they might lose the case, and instead has opted to simply urge him to comply. read more

Shares of Tesla were up 5.75% in midday trading, while Twitter shares were up 2.2%.

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Reporting by Nivedita Balu and Sweta Singh in Bengaluru, Svea Herbst-Bayliss and Pete Schroeder in Washington
Editing by Shinjini Ganguli and Mark Potter

Our Standards: The Thomson Reuters Trust Principles.

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Twitter keeps Musk ally Durban on board, rejects resignation

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May 27 (Reuters) – Twitter Inc (TWTR.N) said in a filing on Friday it will not accept Egon Durban’s resignation from the board, two days after shareholders blocked his re-election at an annual meeting.

Durban is an ally of Elon Musk, who has offered to take Twitter private in a $44 billion deal. read more

Twitter said Durban failed to receive the support of a majority of the votes in the re-election held earlier this week due to “voting policies of certain institutional investors regarding board service limitations”.

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Durban, who serves on the boards of six other companies, has agreed to reduce his board service commitments to no more than five public company boards by May 25, 2023, Twitter said.

The social media company added that Durban was an “effective member” of the board and brings “an unparalleled operational knowledge of the industry”.

The vote on Wednesday against the re-election could indicate skepticism among shareholders of Musk’s plan or his willingness to pay what he offered, but investors are expected to overwhelmingly approve the deal at another meeting yet to be scheduled.

Silver Lake Partners, where Durban is co-CEO, helped put together Musk’s $44 billion acquisition of Twitter. In 2018, Silver Lake offered to help finance Musk’s contemplated $72 billion bid to take electric-car maker Tesla Inc (TSLA.O) private.

Musk tweeted on May 13 that the Twitter deal was “temporarily on hold” while he sought more information about the proportion of fake accounts on Twitter.

Separately, the U.S. Securities and Exchange Commission said on Friday it was looking into Musk’s disclosure of his Twitter stake in April. read more

Shares of Tesla Inc (TSLA.O), where Musk serves as the chief executive officer, were up nearly 5%, while Twitter rose marginally in early trading.

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Reporting by Nivedita Balu and Akash Sriram in Bengaluru; Editing by Krishna Chandra Eluri and Shounak Dasgupta

Our Standards: The Thomson Reuters Trust Principles.

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How Jack Welch’s Reign at G.E. Gave Us Elon Musk’s Twitter Feed

When Jack Welch died on March 1, 2020, tributes poured in for the longtime chief executive of General Electric, whom many revered as the greatest chief executive of all time.

David Zaslav, the C.E.O. of Warner Bros. Discovery and a Welch disciple, remembered him as an almost godlike figure. “Jack set the path. He saw the whole world. He was above the whole world,” Mr. Zaslav said. “What he created at G.E. became the way companies now operate.”

Mr. Zaslav’s words were meant as unequivocal praise. During Mr. Welch’s two decades in power — from 1981 to 2001 — he turned G.E. into the most valuable company in the world, groomed a flock of protégés who went on to run major companies of their own, and set the standard by which other C.E.O.s were measured.

Yet a closer examination of the Welch legacy reveals that he was not simply the “Manager of the Century,” as Fortune magazine crowned him upon his retirement.

broken up for good.

the fateful decision to redesign the 737 — a plane introduced in the 1960s — once more, rather than lose out on a crucial order with American Airlines. That decision set in motion the flawed development of the 737 Max, which crashed twice in five months, killing 346 people. And while a number of factors contributed to those tragedies, they were ultimately the product of a corporate culture that cut corners in pursuit of short-term financial gains.

Even today Boeing is run by a Welch disciple. Dave Calhoun, the current C.E.O., was a dark horse candidate to succeed Mr. Welch in 2001, and he was on the Boeing board during the rollout of the Max and the botched response to the crashes.

When Mr. Calhoun took over the company in 2020, he set up his office not in Seattle (Boeing’s spiritual home) or Chicago (its official headquarters), but outside St. Louis at the Boeing Leadership Center, an internal training center explicitly built in the image of Crotonville. He said he hoped to channel Mr. Welch, whom he called his “forever mentor.”

The “Manager of the Century” was unbowed in retirement, barreling through the twilight of his life with the same bombast that defined his tenure as C.E.O.

He refashioned himself as a management guru and created a $50,000 online M.B.A. in an effort to instill his tough-nosed tactics in a new generation of business leaders. (The school boasts that “more than two out of three students receive a raise or promotion while enrolled.”) He cheered on the political rise of Mr. Trump, then advised him when he won the White House.

In his waning days, Mr. Welch emerged as a trafficker of conspiracy theories. He called climate change “mass neurosis” and “the attack on capitalism that socialism couldn’t bring.” He called for President Trump to appoint Rudy Giuliani attorney general and investigate his political enemies.

The most telling example of Mr. Welch’s foray into political commentary, and the beliefs it revealed, came in 2012. That’s when he took to Twitter and accused the Obama administration of fabricating the monthly jobs report numbers for political gain. The accusation was rich with irony. After decades during which G.E. massaged its own earnings reports, Mr. Welch was effectively accusing the White House of doing the same thing.

While Mr. Welch’s claim was baseless, conservative pundits picked up on the conspiracy theory and amplified it on cable news and Twitter. Even Mr. Trump, then merely a reality television star, joined the chorus, calling Mr. Welch’s bogus accusation “100 percent correct” and accusing the Obama administration of “monkeying around” with the numbers. It was one of the first lies to go viral on social media, and it had come from one of the most revered figures in the history of business.

When Mr. Welch died, few of his eulogists paused to consider the entirety of his legacy. They didn’t dwell on the downsizing, the manipulated earnings, the Twitter antics.

And there was no consideration of the ways in which the economy had been shaped by Mr. Welch over the previous 40 years, creating a world where manufacturing jobs have evaporated as C.E.O. pay soars, where buybacks and dividends are plentiful as corporate tax rates plunge.

By glossing over this reality, his allies helped perpetuate the myth of his sainthood, adding their own spin on one of the most enduring bits of disinformation of all: the notion that Jack Welch was the greatest C.E.O. of all time.

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Analysis: Why Twitter has ignored Elon Musk’s ‘trolling’

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Elon Musk twitter account is seen through Twitter logo in this illustration taken, April 25, 2022. REUTERS/Dado Ruvic/Illustration

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May 17 (Reuters) – A unilateral pronouncement that the acquisition of Twitter Inc (TWTR.N) is “on hold”. Fierce criticism of the social media company’s handling of spam accounts. A “poop emoji” directed at Twitter’s chief executive, Parag Agrawal.

These are just some of Elon Musk’s tweets in the last four days, culminating in a suggestion by the Tesla Inc (TSLA.O) chief executive at a conference in Miami on Monday that his $44 billion deal could be renegotiated at a lower price. read more

Twitter believes Musk’s comments have been in breach of the non-disparagement terms of his agreement to buy Twitter, according to people familiar with the matter.

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Yet the San Francisco-based company has not taken any legal action against Musk over what it sees as his “trolling” of the deal, and plans to do so only if he does not carry out the tasks needed to complete the transaction, the sources said.

One of the sources involved in the deal added that Twitter was trying to “block out the noise”.

Musk’s representatives have continued to collaborate with Twitter, according to the sources. They have been preparing information for submission to regulators, the sources said.

Twitter’s proxy statement on Tuesday, which outlined for its shareholders everything they need to know to vote on the transaction, made no mention of Musk’s comments about the deal being on hold or that it could be done at a lower price.

At the same time, some Twitter executives and advisers are concerned that Musk may be laying the groundwork for renegotiating the agreement and are preparing to defend the deal in court, according to the sources. They pointed to Musk’s comments about the deal becoming increasingly negative.

“My offer was based on Twitter’s SEC filings being accurate. Yesterday, Twitter’s CEO publicly refused to show proof… This deal cannot move forward until he does,” Musk tweeted on Tuesday morning.

The sources requested not to be identified because they were discussing confidential deal planning. Representatives for Twitter and Musk did not respond to requests for comment.

Some of Twitter’s leaders have not been indifferent to Musk’s comments. Agrawal took to Twitter on Monday to defend the company’s methodology for accounting for spam accounts, while Twitter chairman Bret Taylor tweeted on Friday that “we remain committed to our agreement”.

Twitter shares ended trading on Monday at $37.39, 5% lower than where they traded before Musk revealed on April 4 he had amassed a stake in the company, and 31% lower than the $54.20 per share deal price. This indicates that investors deem it highly likely that Musk will walk away or renegotiate the deal at a lower price.

Twitter is continuing to provide Musk with information on spam accounts, the sources said. Musk is entitled to this data as part of his planning to own Twitter under the terms of his agreement with the company.

Musk has questioned the accuracy of Twitter’s public disclosures in which the company has said that these accounts make up “well under 5%” of its user base. Twitter has cautioned that this is an estimate.

Independent researchers have projected that 9% to 15% of the millions of Twitter profiles are bots. Musk said on Monday that he suspects they make up at least 20% of Twitter’s users. read more

One concern weighing on Twitter as it shares information with Musk is that he may violate his non-disclosure agreement with the company and share confidential information about its platform and users, one of the sources said. Musk has argued that Twitter needs to make more information public about how its platform operates.

WAIVED DUE DILIGENCE

Musk, the world’s richest person, waived due diligence when he agreed to buy Twitter on April 25, in an effort to get the San Francisco-based company to accept his “best and final offer.”

Since then, technology stocks have plunged amid investor concerns over inflation and an economic slowdown.

Musk is contractually obligated to pay Twitter a $1 billion break-up fee if he does not complete the deal. But the contract also contains a “specific performance” clause that a judge can cite to force Musk to complete the deal.

In practice, acquirers who lose a specific performance case are almost never forced to complete an acquisition and typically negotiate a monetary settlement with their targets. read more

Wedbush Securities called Musk’s citing of the spam accounts as grounds to put the deal on hold a “dog-ate-the-homework excuse” given that the company was making the same disclosure on the matter since it went public in 2013.

“The stark reality for Twitter is that no other strategic/financial bidder will come near this deal and Musk knows that,” the Wedbush analysts wrote.

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Reporting by Greg Roumeliotis and Krystal Hu in New York. Editing by Gerry Doyle and Louise Heavens

Our Standards: The Thomson Reuters Trust Principles.

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How Elon Musk Winged It With Twitter, and Everything Else

Kimbal Musk and Mr. Gracias, who left Tesla’s board last year and serves as a SpaceX director, declined to comment for this article.

Today, Mr. Musk oversees or is associated with at least a dozen companies, including public ones, private ones and holding companies such as Wyoming Steel, which he uses to manage real estate. His net worth stands at about $250 billion.

As Mr. Musk established more companies, he collected associates he could deploy across many of the endeavors.

One was Mary Beth Brown, who was hired in 2002 to essentially be Mr. Musk’s executive assistant. Known as M.B., she soon became a kind of chief of staff, handling media requests and some financial matters for SpaceX and Tesla, as well as helping to manage Mr. Musk’s personal life, said Ashlee Vance, the author of “Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future.”

That same year, Mr. Musk hired Gwynne Shotwell as SpaceX’s seventh employee. As the rocket maker’s president and chief operating officer, Ms. Shotwell has overseen the company’s growth, becoming one of Mr. Musk’s longest-lasting employees.

At a conference in 2018, Ms. Shotwell explained how she managed Mr. Musk.

Credit…Patrick T. Fallon/Bloomberg

“When Elon says something, you have to pause and not immediately blurt out, ‘Well, that’s impossible,’ or, ‘There’s no way we’re going to do that. I don’t know how,’” she said. “So you zip it, and you think about it. And you find ways to get that done.”

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Can Elon Musk Make Twitter’s Numbers Work?

Still, the interest rates on the loans reflect the risk that they might not get paid back. The banks don’t hold on to the loans but sell them to other investors in the market, so if Twitter can’t pay its debts, Mr. Musk will either have to pay those investors, perhaps by selling more Tesla stock, or he could cede some part of his ownership of Twitter, diluting his stake.

Tesla had a market value of $902 billion as of Friday, but its shares have fallen by nearly 20 percent since Mr. Musk first revealed, in early April, that he had bought a big stake in Twitter. If Twitter’s finances go south, forcing Mr. Musk to sell more Tesla stock to pay Twitter’s debts or pledge more shares as collateral for his personal loans, it could put further pressure on Tesla’s stock price. Mr. Musk doesn’t take a salary from Tesla but is paid in stock that is released based on performance milestones that include the company’s share price.

Since Mr. Musk first disclosed his stake, the tech-heavy Nasdaq index has fallen more than 10 percent, making his offer appear even more generous. “It’s a high price and your shareholders will love it,” Mr. Musk said in a letter to Twitter’s board. Although the social media company’s stock had traded higher than Mr. Musk’s offer just six months ago, it slumped far below that price early this year and looked unlikely to return to those highs any time soon.

Mr. Musk has considered teaming up with investment firms in his bid to buy Twitter, which would reduce the amount of money he would personally have to invest. He could still partner with a firm or other investors like family offices to help raise cash, according to two people with knowledge of the discussions.

Thoma Bravo, a technology-focused buyout firm, has expressed willingness to provide some financing, but nothing has been decided yet. Apollo, an alternative asset manager, also looked at a possible deal where it would extend a loan on preferred terms.

If the deal math becomes unpalatable for Mr. Musk, he has an out: a breakup fee of $1 billion. For a man with an estimated fortune well over $200 billion, that’s a small price to pay.

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Inside Twitter, Fears That Musk’s Views Will Revisit Past Troubles

Elon Musk had a plan to buy Twitter and undo its content moderation policies. On Tuesday, just a day after reaching his $44 billion deal to buy the company, Mr. Musk was already at work on his agenda. He tweeted that past moderation decisions by a top Twitter lawyer were “obviously incredibly inappropriate.” Later, he shared a meme mocking the lawyer, sparking a torrent of attacks from other Twitter users.

Mr. Musk’s personal critique was a rough reminder of what faces employees who create and enforce Twitter’s complex content moderation policies. His vision for the company would take it right back to where it started, employees said, and force Twitter to relive the last decade.

Twitter executives who created the rules said they had once held views about online speech that were similar to Mr. Musk’s. They believed Twitter’s policies should be limited, mimicking local laws. But more than a decade of grappling with violence, harassment and election tampering changed their minds. Now, many executives at Twitter and other social media companies view their content moderation policies as essential safeguards to protect speech.

The question is whether Mr. Musk, too, will change his mind when confronted with the darkest corners of Twitter.

The tweets must flow. That meant Twitter did little to moderate the conversations on its platform.

Twitter’s founders took their cues from Blogger, the publishing platform, owned by Google, that several of them had helped build. They believed that any reprehensible content would be countered or drowned out by other users, said three employees who worked at Twitter during that time.

“There’s a certain amount of idealistic zeal that you have: ‘If people just embrace it as a platform of self-expression, amazing things will happen,’” said Jason Goldman, who was on Twitter’s founding team and served on its board of directors. “That mission is valuable, but it blinds you to think certain bad things that happen are bugs rather than equally weighted uses of the platform.”

The company typically removed content only if it contained spam, or violated American laws forbidding child exploitation and other criminal acts.

In 2008, Twitter hired Del Harvey, its 25th employee and the first person it assigned the challenge of moderating content full time. The Arab Spring protests started in 2010, and Twitter became a megaphone for activists, reinforcing many employees’ belief that good speech would win out online. But Twitter’s power as a tool for harassment became clear in 2014 when it became the epicenter of Gamergate, a mass harassment campaign that flooded women in the video game industry with death and rape threats.

2,700 fake Twitter profiles and used them to sow discord about the upcoming presidential election between Mr. Trump and Hillary Clinton.

The profiles went undiscovered for months, while complaints about harassment continued. In 2017, Jack Dorsey, the chief executive at the time, declared that policy enforcement would become the company’s top priority. Later that year, women boycotted Twitter during the #MeToo movement, and Mr. Dorsey acknowledged the company was “still not doing enough.”

He announced a list of content that the company would no longer tolerate: nude images shared without the consent of the person pictured, hate symbols and tweets that glorified violence.

Alex Jones from its service because they repeatedly violated policies.

The next year, Twitter rolled out new policies that were intended to prevent the spread of misinformation in future elections, banning tweets that could dissuade people from voting or mislead them about how to do so. Mr. Dorsey banned all forms of political advertising, but often left difficult moderation decisions to Ms. Gadde.

landmark legislation called the Digital Services Act, which requires social media platforms like Twitter to more aggressively police their services for hate speech, misinformation and illicit content.

The new law will require Twitter and other social media companies with more than 45 million users in the European Union to conduct annual risk assessments about the spread of harmful content on their platforms and outline plans to combat the problem. If they are not seen as doing enough, the companies can be fined up to 6 percent of their global revenue, or even be banned from the European Union for repeat offenses.

Inside Twitter, frustrations have mounted over Mr. Musk’s moderation plans, and some employees have wondered if he would really halt their work during such a critical moment, when they are set to begin moderating tweets about elections in Brazil and another national election in the United States.

Adam Satariano contributed reporting.

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