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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Elon Musk Agrees to Buy Twitter

Twitter, which went public in 2013, has also had a tumultuous corporate history. It has repeatedly dealt with board dysfunction and drama with its founders, and was courted by other interested buyers in the past, including Disney and Salesforce. In 2020, the activist investment firm Elliott Management took a stake in Twitter and called for Jack Dorsey, one of its founders, to resign as chief executive. Mr. Dorsey stepped down last year.

“This company is very much undermonetized, especially compared to other platforms and competitors like Facebook,” said Pinar Yildirim, a professor of marketing at the University of Pennsylvania Wharton School of Business. “If you look at it from a point of pure business value, there’s definitely room for improvement.”

In a statement, Bret Taylor, Twitter’s chairman, said that the board had “conducted a thoughtful and comprehensive process” on Mr. Musk’s bid and that the deal would “deliver a substantial cash premium” for shareholders.

Regulators are unlikely to seriously challenge the transaction, former antitrust officials said, since the government most commonly intervenes to stop a deal when a company is buying a competitor.

The deal came together in a matter of weeks. Mr. Musk, who also leads the electric carmaker Tesla and the rocket maker SpaceX, began buying shares of Twitter in January and disclosed this month that he had amassed a stake of more than 9 percent.

That immediately set off a guessing game over what Mr. Musk planned to do with the platform. Twitter’s executives initially welcomed him to the board of directors, but he reversed course within days and instead began a bid to buy the company outright.

Any agreement initially appeared unlikely because the entrepreneur did not say how he would finance the deal. Twitter’s executives appeared skeptical, too, given that it was difficult to discern how much Mr. Musk might be jesting. In 2018, for example, he tweeted that he planned to take Tesla private and inaccurately claimed that he had “funding secured” for such a deal.

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Twitter’s Board Is Said to Seriously Consider Elon Musk’s Bid

Twitter may be moving closer to a deal with Elon Musk.

The board of the social media service met on Sunday morning to discuss Mr. Musk’s unsolicited $46.5 billion bid to buy the company, after he began lining up financing for his offer last week, two people with knowledge of the situation said. The financing was a turning point for how Twitter’s board viewed Mr. Musk’s bid of $54.20 a share, enabling the company’s 11 board members to seriously consider his offer, the people said.

Twitter’s board planned to meet with Mr. Musk’s side later on Sunday to discuss other contours around a potential deal, said the people, who spoke on the condition of anonymity because they were not authorized to discuss confidential information. Those details include a timeline to close any potential deal and any fees that would be paid if an agreement was signed and then fell apart.

Any deal remains far from certain, but the willingness of Twitter’s board to engage with Mr. Musk, the world’s richest man, represents a step forward. Mr. Musk, who has more than 83 million followers on Twitter and began amassing shares in the company earlier this year, declared his intent to buy the company on April 14 and take it private. But his proposal was quickly dismissed by Wall Street because it was unclear if he could come up with the money to do the deal. Twitter also adopted a “poison pill,” a defensive maneuver that would prevent Mr. Musk from accumulating more of the company’s stock.

Mr. Musk updated his proposal last week, putting pressure on Twitter to more seriously consider his bid. In a securities filing that was made public on Thursday, Mr. Musk detailed how he had put together financing from the investment bank Morgan Stanley and a group of other lenders, which were offering $13 billion in debt financing, plus another $12.5 billion in loans against his stock in Tesla, the electric carmaker that he runs. He was expected to add about $21 billion in equity financing.

earlier reported Twitter’s increased receptivity to Mr. Musk’s bid.

Wall Street was likely to view the openness of Twitter’s board to Mr. Musk’s bid as “the beginning of the end for Twitter as a public company with Musk likely now on a path to acquire the company unless a second bidder comes into the mix,” Dan Ives, an analyst at Wedbush Securities, wrote in a note on Sunday.

Mr. Musk’s offer for Twitter is a 54 percent premium over the share price the day before he began investing in the company in late January. But Twitter’s shares traded higher than Mr. Musk’s bid for much of last year.

when the company announced goals to double its revenue, but has since fallen to around $48 as investors have questioned its ability to meet those targets.

Mr. Musk, 50, has made clear that he sees many deficiencies in Twitter as a social media service. He has said that he wants to “transform” the company as a “platform for free speech around the globe” and that it requires vast improvements in its product and policies.

Mr. Musk has tried to negotiate with Twitter using the service itself, threatening in several tweets that he might take his bid directly to the company’s shareholders in what is called a “tender offer.” A tender offer is a hostile maneuver in which an outside party circumvents a company’s board by asking shareholders to sell their shares directly to them.

He has also acted erratically on the platform, raising concerns over how he might manage the service should he be in charge of it. On Saturday, Mr. Musk took aim at the billionaire Bill Gates, saying that Mr. Gates had taken a “short” position on the stock of Tesla, which meant that Mr. Gates was betting the carmaker’s shares would fall. On Sunday, Mr. Musk tweeted that he was “moving on” from making fun of Mr. Gates.

Even so, Mr. Musk maintains amicable ties with some high-ranking members of Twitter. Over the weekend, Mr. Musk traded friendly tweets with Jack Dorsey, the company’s co-founder and a board member. Mr. Dorsey stepped down as Twitter’s chief executive in November and soon will be leaving its board.

Both men share similar views on cryptocurrencies and on promoting more free speech online. When Mr. Musk briefly flirted with joining Twitter’s board this month, Mr. Dorsey tweeted, “I’m really happy Elon is joining the Twitter board! He cares deeply about our world and Twitter’s role in it.”

technoking.

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Elon Musk Makes Offer to Buy Twitter

Credit…Laura Morton for The New York Times

Twitter’s board is considering a defensive move known as a poison pill that would severely limit Elon Musk’s ability to acquire the social media giant, two people with knowledge of the situation said.

The board met on Thursday to discuss Mr. Musk’s offer to buy the company, according to one of the people, who wasn’t authorized to speak publicly. The directors are weighing whether to move ahead with the poison pill — formally called a shareholder rights plan — that would limit the ability of a single shareholder, like Mr. Musk, to acquire a critical mass of shares in the open market and force the company into a sale.

The poison pill defense is a common tactic used by companies that want to fend off unwelcome takeover offers. It essentially lets the company flood the market with new shares or allow existing shareholders other than the potential acquirer to buy shares at a discount. This dilutes the bidder’s stake and makes buying shares more expensive.

The Wall Street Journal earlier reported that Twitter was weighing a poison pill.

If Twitter’s board rejects Mr. Musk’s bid, he could put his offer directly to shareholders, rather than the board, by launching a so-called tender offer. If Twitter’s other shareholders like Mr. Musk’s offer, which is currently at $54.20 a share, they could sell their stock directly to the billionaire, allowing him to gain control of the company.

“It would be utterly indefensible not to put this offer to a shareholder vote,” Mr. Musk said in a Twitter post on Thursday. “They own the company, not the board of directors.”

But Twitter’s investors on Thursday seemed underwhelmed with Mr. Musk’s bid, potentially over concerns as to how he would finance it. While shares of companies typically rise when there is takeover speculation, Twitter’s were down almost 2 percent on Thursday.

Prince Al Waleed bin Talal of Saudi Arabia, who described himself as one of Twitter’s largest and most long-term shareholders, said that Twitter should reject Mr. Musk’s because the offer was not high enough to reflect “intrinsic value” of the company.

Twitter’s other top shareholders, according to FactSet, include the Vanguard Group, the company’s largest shareholder, with a 10.3 percent stake; Morgan Stanley Investment Management, with a 8 percent stake; and BlackRock Fund Advisors, with a 4.6 percent stake. Vanguard and Morgan Stanley Investment Management declined to comment on Mr. Musk’s bid. BlackRock did not immediately respond to requests for comment.

Mr. Musk turned down a seat on Twitter’s board over the weekend, leaving directors who had recently welcomed him to their ranks to weigh a proposal in which Mr. Musk said he had no confidence in their management of the company.

The board is made up of Twitter insiders, including Jack Dorsey, a co-founder, and its chief executive, Parag Agrawal, in addition to independent directors.

Bret Taylor, the co-chief executive of the business technology company Salesforce, chairs the board. Mr. Musk texted Mr. Taylor on Wednesday evening, making his intent to buy Twitter known, according to a regulatory filing. “After the past several days of thinking this over, I have decided I want to acquire the company and take it private,” Mr. Musk wrote.

Salesforce considered purchasing Twitter in 2016, but the deal never materialized. Mr. Taylor, who has been on Twitter’s board since 2016, joined Salesforce a year later after it acquired his own company, Quip.

Another key player on the board is Egon Durban, the co-chief of Silver Lake, a private investment firm. Mr. Durban joined Twitter’s board in 2020 as part of a deal the company struck with another activist investor who wanted to shake up Twitter’s management.

At the time, Silver Lake invested in Twitter and helped steady its management, preventing the immediate ouster of Mr. Dorsey. Because Silver Lake has helped Twitter out of a difficult situation in the past, Mr. Durban could face questions about whether his firm can double down and help fend off Mr. Musk.

Mr. Dorsey could also influence the decision. He is friendly with Mr. Musk and initially celebrated Mr. Musk’s investment in the company and decision to join the board. But Mr. Dorsey has often delegated major decisions to his team, preferring to rely on their expertise. And Mr. Dorsey is also set to leave the Twitter board next month, which could give him another reason to recuse himself.

His allies on the board are Mr. Agrawal, who was named as his successor late last year, and Patrick Pichette, a general partner at the venture capital firm Inovia Capital and the former chief financial officer at Google.

Mr. Agrawal and Mr. Dorsey have been closely aligned on a vision to make Twitter’s technology more decentralized, and Mr. Pichette has been a close confidant of Mr. Dorsey in discussions about the long-term plan for Twitter. Mr. Pichette may also have experience negotiating with Mr. Musk — he was at Google in 2013 when it considered buying Tesla.

Mike Isaac contributed reporting.

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Twitter Grapples With an Elon Musk Problem

SAN FRANCISCO — Bright and early on Monday, Elon Musk sent the government a surprising new document.

In it, the world’s wealthiest man laid out his possible intentions toward Twitter, in which he has amassed a 9.2 percent stake, underlining how drastically his position had changed from a week ago.

Mr. Musk could, if he chose, buy more shares of Twitter and increase his ownership of the company, according to the document, which was filed with the Securities and Exchange Commission. He could freely express his views about Twitter on social media or other channels, the document noted. And he reserved the right to “change his plans at any time, as he deems appropriate.”

It was a promise — or perhaps it was a threat. Either way, the filing encapsulated the treacherous situation that Twitter now finds itself in. Mr. Musk, 50, Twitter’s largest shareholder and one of its highest-profile users, could very well use the social media platform against itself and even buy enough shares to take over the company.

“Twitter has always suffered more than its fair share of dysfunction,” said Jason Goldman, who was on Twitter’s founding team and served on its board of directors in the past. “But at least we weren’t being actively trolled by prospective board members using the product we created.”

Twitter’s 11-person board and agreed to not own more than 14.9 percent of the company or take it over. Then on Sunday, Twitter abruptly said all of those bets were off and that Mr. Musk would not become a director.

What exactly went on between Mr. Musk, who has more than 81 million followers on Twitter, and the company’s executives and board members is unclear. But it leaves Twitter — which has survived founder infighting, boardroom revolts and outside shareholder ire — with an activist investor unlike any other.

Mr. Musk, who also leads the electric carmaker Tesla and the rocket company SpaceX, is known for being unpredictable and outspoken, often using Twitter to criticize, insult and troll others. By no longer joining the board, he liberated himself from corporate governance rules that would have required him to act in the best interests of the company and its shareholders.

Mr. Musk leaned into that freedom after his decision was communicated to the company on Saturday morning. He proclaimed on Twitter that he was in “goblin mode” and suggested changes such as removing the “w” from the company’s name to make it more vulgar and opening its San Francisco headquarters to shelter the homeless. He later deleted some of the posts.

“This is not typical activism or, frankly, anything like activism that we’ve seen before,” said Ele Klein, co-chair of the global Shareholder Activism Group at the law firm Schulte Roth & Zabel. “Elon Musk doesn’t do things that people have seen before.”

a post on Sunday. Twitter, which published a biography of Mr. Musk as a member of its board that was still visible late Sunday, declined to comment on Monday.

Credit…via Twitter

Mr. Musk has long shown significant disrespect for corporate governance rules. In 2018, he faced securities fraud charges after inaccurately tweeting that he had secured funding to take Tesla private. Mr. Musk later agreed to pay a $20 million fine to the S.E.C. and step aside as Tesla chairman for three years.

He also agreed to allow Tesla to review his public statements about the company. But in 2019, the S.E.C. asked a judge to hold him in contempt for violating the settlement terms by continuing to errantly tweet about Tesla.

Inside Twitter on Monday, employees were dismayed and concerned by Mr. Musk’s antics, according to half a dozen current and former workers, who were not authorized to speak publicly. After the billionaire suggested over the weekend that Twitter convert its headquarters into a homeless shelter because “no one shows up anyway,” employees questioned how Mr. Musk would know that given that he hadn’t visited the building in some time. They also pointed out that Mr. Musk, whose net worth has been pegged at more than $270 billion, could easily afford to help San Francisco’s homeless himself.

Elliott Management accumulated a 4 percent stake and used its position to press for changes, including an ouster of Jack Dorsey as chief executive and more aggressive financial growth. Mr. Dorsey stepped down in November.

Elliott’s approach followed the typical formula for activist investors: Acquire a significant stake in a company and then press for governance and strategy changes to drive up the stock price.

“Normally an activist is very clear in their intentions,” said Rich Greenfield, an analyst at LightShed Ventures, a venture capital investment fund. But “we don’t know what Elon Musk’s true motivation is. Is this Elon having fun? Is this Elon trying to effect change? Is this Elon trying to drive the stock higher?”

Twitter is particularly susceptible to activists, analysts said, because its founders did not structure the company’s shares in a way that gave themselves more control. The founders of Google and Facebook have maintained voting power over the shares, providing them with an outsize grip over the direction of their companies.

Natasha Lamb, a managing partner at Arjuna Capital, an activist investment firm that owns some Twitter stock, said Mr. Musk was taking a more casual approach than other activist investors.

“Musk is using Twitter to have his opinions heard, but it’s not a core activity,” she said. “It appears to be what he does for fun.”

What is fun for Mr. Musk may turn out to be less so for Twitter. The relief among Twitter employees that he was no longer joining the board was short-lived, the current and former employees said, when they realized that he was no longer bound by an agreement to not buy more stock or take over the company.

Mr. Musk could continue toying with Twitter, the current and former employees said they had realized. Several added that they were afraid of what might come next.

Lauren Hirsch contributed reporting.

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Elon Musk’s arrival stirs fears among some Twitter employees, article with image

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  • Concerns center around Twitter’s ability to moderate content
  • Fear Musk’s views on moderation may allow trolling to flourish
  • Twitter management, employees make daily decisions -spokesperson

April 7 (Reuters) – News of Tesla (TSLA.O) Chief Executive Elon Musk taking a board seat at Twitter (TWTR.N) has some Twitter employees panicking over the future of the social media firm’s ability to moderate content, company insiders told Reuters.

Within hours of the surprise disclosure this week that Musk, a self-described “free speech absolutist,” acquired enough shares to become the top Twitter shareholder, political conservatives began flooding social media with calls for the return of Donald Trump. The former U.S. president was banned from Facebook and Twitter after the Jan 6. Capitol riot over concerns around incitement of violence.

“Now that @ElonMusk is Twitter’s largest shareholder, it’s time to lift the political censorship. Oh… and BRING BACK TRUMP!,” tweeted Republican Congresswoman Lauren Boebert on Monday.

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Despite Twitter’s reiteration this week that the board does not make policy decisions, four Twitter employees who spoke with Reuters said they were concerned about Musk’s ability to influence the company’s policies on abusive users and harmful content.

With Musk on the board, the employees said his views on moderation could weaken years-long efforts to make Twitter a place of healthy discourse, and might allow trolling and mob attacks to flourish.

In the wake of Trump’s ban from Facebook and Twitter, the billionaire tweeted that many people would be unhappy with U.S. tech companies acting “as the de facto arbiter of free speech.”

MUSK’S INTENTIONS

Musk has not articulated what he wants to do as a new board member but he has telegraphed his intentions with his Twitter activity. A week before Musk disclosed a 9.1% stake in Twitter, he polled his 80 million followers on whether the site adhered to the principle of free speech, and the majority voted ‘no.’

The employees, who asked not to be named for fear of retribution, point to Musk’s history of using Twitter to attack critics. In 2018, Musk came under fire for accusing a British diver who had helped rescue children trapped in a cave in Thailand of being a pedophile.

Musk won a defamation case brought by the diver in 2019.

When asked for comment, a Twitter spokesperson repeated a statement from Tuesday that the board “plays an important advisory and feedback role across the entirety of our service,” but daily operations and decisions are made by Twitter’s management and employees.

“Twitter is committed to impartiality in the development and enforcement of its policies and rules,” the spokesperson said.

Some employees that Reuters spoke to were not so sure about the company’s commitment to this.

“I find it hard to believe (the board) doesn’t have influence,” said one employee. “If that’s the case, why would Elon want a board seat?”

But other employees Reuters spoke to said that Musk’s involvement could help quicken the pace of new feature and product launches, and provide a fresh perspective as an active user of Twitter.

Neither Tesla nor Musk responded to requests for comment.

Twitter’s board figures prominently in discussions within Twitter, more so than at other tech companies, one employee said. That is because unlike Meta Platforms Inc, where founder and CEO Mark Zuckerberg controls the company through a dual class share structure, Twitter only has a single class of shares, making it more vulnerable to activists like Musk. Teams within Twitter often consider how to communicate a strategy or decision to the board, for instance, the employee said.

On Thursday, Musk tweeted an image from 2018 of him smoking weed on the Joe Rogan podcast on Spotify, with the text: “Twitter’s next board meeting is going to be lit.”

TRUMP’S RETURN?

One employee familiar with the company’s operations said there were no current plans to reinstate Trump. A Twitter spokesperson said there were no plans to reverse any policy decisions.

But a veteran auto analyst who covers Musk’s operating style at Tesla said such a decision may only be a matter of time.

“If Donald Trump was actually rich, he would have liked to have done the same thing but he couldn’t afford it. So Elon is doing what Trump would have liked to have done,” said Guidehouse Insights analyst Sam Abuelsamid.

“I wouldn’t be surprised” if Twitter restores Trump’s account now that Elon owns nearly 10% of the company,” he said.

Longer term, employees said Musk’s involvement may change Twitter’s corporate culture, which they say currently values inclusivity. Musk has faced widespread criticism for posting memes that mocked transgender people and efforts to stem the spread of COVID-19, and for comparing some world leaders to Hitler.

Several employees were alarmed by the warm welcome Musk received from Twitter CEO Parag Agrawal and cofounder Jack Dorsey, which prompted them to hit the job market this week.

“Some people are dusting off their resumes,” one person said. “I don’t want to work for somebody (like Musk).”

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Reporting by Sheila Dang in Dallas; additional reporting by Hyunjoo Jin in San Francisco; Editing by Kenneth Li, Aurora Ellis and Bernadette Baum

Our Standards: The Thomson Reuters Trust Principles.

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