Elon Musk reached an agreement to buy Twitter for roughly US$44 billion on Monday, promising a more lenient touch to policing content on the platform where he promotes his interests, attacks critics and opines on social and economic issues to more than 83 million followers.
The outspoken Tesla CEO, who is also the world’s wealthiest person, has said he wanted to own and privatize Twitter because he thinks it’s not living up to its potential as a platform for free speech.
Musk said in a joint statement with Twitter that he wants to make the service “better than ever” with new features, such as getting rid of automated “spam bots” and making its algorithms open to the public to increase trust.
“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,” Musk said, adding hearts, stars and rocket emojis in a tweet that highlighted the statement.
A more hands-off approach to content moderation has many people concerned the platform will become more of a haven for disinformation and hate speech, something it has worked hard on in recent years to mitigate.
The deal was cemented roughly two weeks after the billionaire first revealed a 9 percent stake in the platform. Musk said last week that he had lined up US$46.5 billion in financing to buy Twitter, putting pressure on the company’s board to negotiate a deal.
Twitter said the transaction was unanimously approved by its board of directors and is expected to close in 2022.
Shares of Twitter Inc. rose 6 per cent Monday to US$52 per share. On April 14, Musk announced an offer to buy the social media platform for US$54.20 per share. While the stock is up sharply since Musk made his offer, it is well below the high of US$77 per share it reached in February 2021.
Musk has described himself as a “free-speech absolutist” but is also known for blocking or disparaging other Twitter users who question or disagree with him.
In recent weeks, he has voiced a number of proposed changes for the company, from relaxing its content restrictions — such as the rules that suspended former President Donald Trump’s account — to ridding the platform of fake and automated accounts, and shifting away from its advertising-based revenue model. Musk believes he can increase revenue through subscriptions that give paying customers a better experience, perhaps even an ad-free version of Twitter.
Asked during a recent TED talk if there are any limits to his notion of “free speech,” Musk said Twitter or any forum is “obviously bound by the laws of the country that it operates in. So obviously there are some limitations on free speech in the US, and, of course, Twitter would have to abide by those rules.”
Beyond that, though, he said he’d be “very reluctant” to delete things and in general be cautious about permanent bans.
It won’t be perfect, Musk added, “but I think we want it to really have the perception and reality that speech is as free as reasonably possible.”
After the deal was announced, the NAACP released a statement that urged Musk not to allow former President Trump, the 45th president, back onto the platform.
“Disinformation, misinformation and hate speech have NO PLACE on Twitter,” the civil rights organization said in a statement. “Do not allow 45 to return to the platform. Do not allow Twitter to become a petri dish for hate speech, or falsehoods that subvert our democracy.”
Efforts to “deregulate” Twitter could thwart the company’s current commitment to making the platform as safe as possible for all users, said Brooke Erin Duffy, professor of communication at Cornell University and an expert on social media. “
“Marginalized communities of users are especially vulnerable to the forms of hate and harassment that so often circulate in unregulated online spaces,” she said.
Some users said Monday that they were planning to quit the platform if Musk took it over. To which he responded on Twitter: “I hope that even my worst critics remain on Twitter, because that is what free speech means.”
Musk has battled with the Securities and Exchange Commission on multiple occasions, as he has used Twitter to taunt the regulators.
The SEC has been investigating Musk’s August 2018 tweets in which he asserted that he’d secured funding to take Tesla private for US$420 a share, though he had not. Musk is fighting an SEC subpoena in the case in federal court. More recently, Musk appeared to have violated SEC rules by failing to disclose at the point he reached a 5 per cent stake in Twitter, waiting until he had more than 9 per cent.
Noteworthy as they are, the SEC matters have no bearing on Musk’s fitness to buy a company, according to St. John’s University business professor Anthony Sabino, making it unlikely that they would represent roadblocks to the takeover.
With initial concerns of its own about the deal, Twitter had enacted an anti-takeover measure known as a poison pill that could make a takeover attempt prohibitively expensive. But the board decided to negotiate after Musk updated his proposal last week to show he had secured financing, according to The Wall Street Journal.
While Twitter’s user base of more than 200 million remains much smaller than those of rivals such as Facebook and TikTok, the service is popular with celebrities, world leaders, journalists and intellectuals. Musk himself is a prolific tweeter with a following that rivals several pop stars in the ranks of the most popular accounts.
Last week, he said in documents filed with U.S. securities regulators that the money would come from Morgan Stanley and other banks, some of it secured by his huge stake in Tesla.
Musk is the world’s wealthiest person, according to Forbes, with a nearly US$279 billion fortune. But much of his money is tied up in Tesla stock — he owns about 17 per cent of the electric car company, according to FactSet, which is valued at more than US$1 trillion — and SpaceX, his privately held space company. It’s unclear how much cash Musk has.
Musk began making his fortune in 1999 when he sold Zip2, an online mapping and business directory, to Compaq for US$307 million. He used his share to create what would become PayPal, an internet service that bypassed banks and allowed consumers to pay businesses directly. It was sold to eBay for US$1.5 billion in 2002.
That same year, Musk founded Space Exploration Technologies, or SpaceX, after finding that cost constraints were limiting NASA’s interplanetary travel. The company eventually developed cost-effective reusable rockets.
In 2004, Musk was courted to invest in Tesla, then a startup trying to build an electric car. Eventually he became CEO and led the company to astronomical success as the world’s most valuable automaker and largest seller of electric vehicles.
Musk’s pledge to make Twitter a haven for free speech could dim the appeal of Donald Trump’s troubled Truth Social app, which the former president has touted as a competitor to Twitter that would cater to conservatives. Truth Social is part of Trump’s new media company, which has agreed to be taken public by Digital World Acquisition Corp. Shares of DWAC dropped 16.2 per cent Monday and are down 46 per cent since Musk revealed his stake in Twitter.
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Krisher reported from Detroit. O’Brien reported from Providence, R.I. AP Business Writer Kelvin Chan reported from London.
HALIFAX – Ottawa is negotiating a $500-million bailout for Nova Scotia’s privately owned electric utility, saying the money will be used to prevent a big spike in electricity rates.
Federal Natural Resources Minister Jonathan Wilkinson made the announcement today in Halifax, saying Nova Scotia Power Inc. needs the money to cover higher costs resulting from the delayed delivery of electricity from the Muskrat Falls hydroelectric plant in Labrador.
Wilkinson says that without the money, the subsidiary of Emera Inc. would have had to increase rates by 19 per cent over “the short term.”
Nova Scotia Power CEO Peter Gregg says the deal, once approved by the province’s energy regulator, will keep rate increases limited “to be around the rate of inflation,” as costs are spread over a number of years.
The utility helped pay for construction of an underwater transmission link between Newfoundland and Nova Scotia, but the Muskrat Falls project has not been consistent in delivering electricity over the past five years.
Those delays forced Nova Scotia Power to spend more on generating its own electricity.
This report by The Canadian Press was first published Sept. 16, 2024.
TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.
The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.
“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.
The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.
But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.
Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.
“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.
“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”
Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.
The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.
In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.
Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.
The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.
The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.
Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.
Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.
It will also re-evaluate its design ranks.
Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.
Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.
No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.
About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.
Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.
Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.
A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”
This report by The Canadian Press was first published Sept. 12, 2024.
