There is only so much a man can take, even if he’s the world’s richest. This week in Twitter v. Musk may have been the worst so far for Elon Musk in his attempt to get out of the $44 billion deal to take the company over. On Thursday, the Delaware Chancery Court released texts showing the supposed mastermind is impetuous, does not do well with light criticism, and is surrounded by an embarrassing group of Silicon Valley simps. The next day, the court followed up on a hearing from earlier this week that, too, was bad news for the Tesla techno-king, denying him a cache of documents and hinting at a rapidly draining well of patience in dealing with the sprawling case. And so, after all this, reports have surfaced that there very well may be a deal on the table to avert a trial, which would start in just 17 days.
Here’s what we learned:
Elon’s texts are embarrassing for everybody
The question that Elon Musk wants this trial to be about is: Does Twitter lie about spambots? The question that the court is going to consider is a subtly different one, something like: Was Elon Musk misled about the number of spambots and/or the level of fraud inside the company such that it would have made a significant difference in the price he agreed to pay? At the heart of that is due diligence, the process of figuring out whether the company’s internal metrics make sense. Remember, though: Musk waived due diligence because he wanted to do the deal quickly. Now, thanks to the court’s releasing texts relevant to the trial, we are getting a peek into the process that propelled him along last spring.
Musk has a reputation as someone who takes his own counsel, but these texts show that he is actually surrounded by people who push him toward his own worst impulses if they see it as an opportunity to enrich themselves. Jack Dorsey (saved in the phone as “jackjack”) butters him up by telling Musk he’d earlier secretly wanted to install him on the board and how great of a job he’d do turning the company around. Early on, after Musk tweets about free speech —this was in response to Russia Today being banned on Twitter — venture capitalist Antonio Gracias texts him: “I am 100% with you Elon. To the fucking mattresses no matter what ….this is a principle we need to fucking defend with our lives or we are lost to the darkness.” Then there’s Jason Calacanis, the Silicon Valley angel investor and podcaster: “Put me in the game coach! Twitter CEO is my dream job,” he wrote. Later, when Calacanis gets caught shopping around an investment vehicle for relatively small-time investors, Musk tells him to knock it off, that it’s irking Morgan Stanley bankers and his own personal financial adviser and makes it seem as though Calacanis were using him. Calacanis immediately backtracks and does what he’s asked. “You know I’m ride or die brother — I’d jump on a grande for you,” the grown man texted to Musk, presumably meaning “grenade.” Of course, the internet ran with it.
The inter-celebrity messaging going on behind the scenes takes all kinds of weird forms. Joe Rogan cheers him on; Gayle King calls the deal “gangsta” — to which Musk responds by floating the idea of putting Oprah on the board. There’s Sam Bankman-Fried, the zhlubby FTX CEO, who pops up through a mutual friend to offer a few billion as a co-investor. (Musk seemed to end the discussions after a few weeks by texting Bankman-Fried on May 5, “Sorry, who is sending this message?”) The CEO of Axel Springer, the parent company of Politico, wants Elon to let him run it. Someone — the names are all redacted — discusses reinstating “the boss,” presumably meaning Donald Trump, on the platform. Ron DeSantis calls another VC to express some thoughts about making Twitter better. And then there’s Kimbal, Elon’s little brother, who keeps hounding him about turning Twitter into some kind of Web3 platform — which is ironic given how much Elon complained about crypto bots on Twitter.
It’s tough to tell from the texts how much real thought was put into the deal. There are references to calls and in-person meetings, and of course there are the missing Signal chats that were discussed at length earlier this week. But what seems apparent here is that personal animosity toward Agarwal might have played a key part in wanting to take Twitter over. Remember, early negotiations were for Musk to join the Twitter board, after it was revealed that he owned about 9 percent of the company. When Musk tweeted out “Is Twitter Dying?” on April 9, CEO Agrawal lightly chastised him. “What did you get done this week? I’m not joining the board. This is a waste of time. Will make an offer to take Twitter private,” Musk replied in three texts, all within a minute of each other. Two weeks later, he actually did it.
The judge’s orders are bad news for Musk
If you are a defendant in a case with $44 billion on the line, as Musk is, and your strategy is to keep pushing the other side of the case to release more information — all in the hopes of finding something that’s damaging for them — then four words you would really like to avoid hearing from the judge are “plaintiff has done enough.”
But those are exactly the four words that punctuated an order from Chancellor Kathaleen McCormick on Friday in response to Team Musk’s demands for more data. (Twitter has already said that it provided the information it said it would, and McCormick agrees.)
The orders today do not answer everything that Twitter and Musk brought up earlier this week during the omnibus hearing, but the two orders from McCormick show that, with just over two weeks to go, her tolerance for anything beyond the narrow scope of Twitter’s lawsuit is wearing out. To handle some of the more complex discovery issues, McCormick has appointed a special master — essentially saying she no longer wants to deal with them. It’s not good for anybody, but it’s especially bad for Musk.
A settlement may be coming
After all this, Musk may have had enough. After McCormick’s orders came down, Bloomberg reporter Ed Hammond broke the news that Ari Emanuel — the inspiration for Jeremy Piven’s character on Entourage — may be brokering a deal to settle this whole thing. Naturally, he did it with a perfect tweet:
It’s not clear whom Emanuel is working for, and who knows if this will work? (CNBC has subsequently reported that “no serious settlement talks appear to be underway.”) But if a pretrial deal is reached, the real injustice will be denying us more of the great details that have come to light about our tech overlords and their slavering hangers-on.