Twitter shareholders approve Musk's $44 billion takeover bid

The vote was largely a formality, particularly given Musk's efforts to nullify the deal, although it does clear a legal hurdle to closing the sale.
Elon Musk
Elon Musk
Written by:

Twitter shareholders on Tuesday, September 13 voted to approve Tesla CEO Elon Musk's $44 billion takeover bid. The vote came as Musk's lead team is in a court battle to get out of the deal. Twitter confirmed that a preliminary count shows it has enough votes to approve the deal, reports The Verge. The vote was largely a formality, particularly given Musk's efforts to nullify the deal, although it does clear a legal hurdle to closing the sale.

Twitter has sued Musk for allegedly breaching the deal agreement. The vote lets Twitter continue with a lawsuit intended to make Musk close the acquisition. The legal battle is expected to start in mid-October. The approval means that Musk and Twitter will proceed to an October trial in the Delaware Court of Chancery. "Twitter will push to close the deal regardless, alleging that Musk's complaints are merely a pretext for backing out," the report mentioned.

The vote comes as Twitter whistleblower Peiter Mudge Zatko testified at a US Senate committee. The former security chief at Twitter told Congress that the social media platform is plagued by weak cyber defences that make it vulnerable to exploitation by teenagers, thieves and spies and puts the privacy of its users at risk. Zatko, a respected cybersecurity expert, appeared before the Senate Judiciary Committee to lay out his allegations Tuesday.

“I am here today because Twitter leadership is misleading the public, lawmakers, regulators and even its own board of directors," Zatko said as he began his sworn testimony. They don't know what data they have, where it lives and where it came from and so, unsurprisingly, they can't protect it, Zatko said. “It doesn't matter who has keys if there are no locks." Zatko said the Twitter leadership ignored its engineers, in part because their executive incentives led them to prioritise profit over security. 

One issue that didn't come up in the hearing was the question of whether Twitter is accurately counting its active users, an important metric for its advertisers. Tesla CEO Elon Musk, who is trying to get out of a 44 billion deal to buy Twitter, has argued without evidence that many of Twitter's roughly 238 million daily users are fake or malicious accounts, i.e. spam bots. The Delaware judge overseeing the case ruled last week that Musk can include new evidence related to Zatko's allegations in the high-stakes trial, which is set to start October 17.

Zatko was the head of security for the influential platform until he was fired early this year. He filed a whistleblower complaint in July with Congress, the Justice Department, the Federal Trade Commission and the Securities and Exchange Commission. Among his most serious accusations is that Twitter violated the terms of a 2011 FTC settlement by falsely claiming that it had put stronger measures in place to protect the security and privacy of its users.

Many of Zatko's claims are uncorroborated and appear to have little documentary support. Twitter has called Zatko's description of events a false narrative, riddled with inconsistencies and inaccuracies and lacking important context.

Among the assertions from Zatko that drew attention from lawmakers Tuesday was that Twitter knowingly allowed the government of India to place its agents on the company payroll, where they had access to highly sensitive data on users. Twitter's lack of ability to log how employees accessed user accounts made it hard for the company to detect when employees were abusing their access, Zatko said.

Zatko said he spoke with high confidence about a foreign agent that the government of India placed at Twitter to understand the negotiations between India's ruling party and Twitter about new social media restrictions and how well those negotiations were going.

Zatko also revealed Tuesday that he was told about a week before his firing that at least one agent from the Chinese intelligence service MSS, or the Ministry of State Security, was on the payroll at Twitter.

He said he was similarly surprised and shocked by an exchange with current Twitter CEO Parag Agrawal about Russia in which Twitter's current CEO, who was chief technology officer at the time, asked if it would be possible to punt content moderation and surveillance to the Russian government, since Twitter doesn't really have the ability and tools to do things correctly. 

In his complaint, Zatko accused Agrawal as well as other senior executives and board members of numerous violations, including making false and misleading statements to users and the FTC about the Twitter platform's security, privacy and integrity. 

Musk has said that the testimony of Twitter whistleblower justifies his termination of the $44 billion deal to buy the micro-blogging platform.

Related Stories

No stories found.
The News Minute