2024-08-23
한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina
Key Points
Tencent Technology News, August 23, according to foreign media reports, in a lawsuit filed by a former employee, a US judge ordered Elon Musk's social media company X (formerly Twitter) to publish a complete list of shareholders so that the public can understand who controls X. The documents submitted by X listed nearly 100 shareholding entities, but did not specify the shareholding ratio. These shareholders include many of Silicon Valley's most famous venture capital firms, investment tycoons and entrepreneurs, as well as funds related to American rapper Sean "Diddy" Combs. The court believes that it is in the public interest to disclose shareholder information, although X said such information should be kept confidential.
In October 2022, Musk, with the support of multiple funds, spent $44 billion to complete the acquisition of Twitter. Previously disclosed information showed that as of October last year, Musk held 75% of the shares of X's parent company, while no other investor held more than 10%.
X used to keep its investor list highly confidential, but recently it has attracted attention due to legal proceedings by former Twitter employees. These employees accused Musk of violating the arbitration agreement by failing to fulfill his payment obligations after the acquisition. During this process, independent technology journalist Jacob Silverman filed a motion in July to disclose the investor list through lawyers from the nonprofit Reporters Committee for Freedom of the Press. They emphasized that since X is a key discussion platform, public information is essential to safeguarding the public interest.
In response, Musk and X's legal team argued that "according to normal practice and policy, X's parent company will not release or disclose information about its owners and shareholders and will treat such information as confidential." However, the judge did not adopt this position, pointing out that the defendant lacked substantive evidence to support its confidentiality claims. The judge wrote: "The defendant has provided little evidence to support its position other than speculation. The disclosure statement does not contain any scandalous information or trade secrets, and no factual basis to support confidentiality has been found in the court record."
On Tuesday, U.S. District Judge Susan Illston ruled in favor of Silverman's motion, ordering the unsealing of the documents and requiring X to submit unaltered copies to the docket.
Katie Townsend, legal director of the Reporters Committee for Freedom of the Press, said in a statement that the ruling defends "the public's interest in knowing who owns X." In a blog post after filing the motion, Silverman stressed that "the public has a right to know who is the company that plays such a critical role in influencing and shaping the public discourse in the United States and around the world."
X's representatives opposed the motion, stating in court documents that "individuals and entities that invest in and hold interests in private companies such as X Holdings expect such information to remain private." The legal team also worried that disclosure of information could undermine X's competitive advantage and give its potential competitors an unfair advantage.
Documents filed by X reveal nearly 100 entities and individuals that hold its shares, including many well-known Silicon Valley venture capital firms, venture capitalists and entrepreneurs, although many of these entities appear to be different funds controlled by the same company or individual.
Among them, well-known investors such as Fidelity are on the list. It is worth noting that although its records show that X's valuation has shrunk by 72% since Musk took over, the latest documents show that Fidelity still supports the platform, and nearly 30 independent entities associated with Fidelity hold shares in X.
The documents also reveal lower-profile stakeholders such as the Pershing Square Foundation, which is tied to Pershing Square Holdings, the company Bill Ackman founded 20 years ago. Although the foundation is run by a separate top management team, Ackman and his wife, Neri Oxman, serve as co-trustees.
Oracle founder Larry Ellison also appears on the list of shareholders, and his shares in X are held by the Lawrence J. Ellison Revocable Trust. According to a 2008 report by the U.S. Securities and Exchange Commission (SEC), the trust is mainly responsible for managing "Ellison's assets and estate" and claims to have no direct interest in Oracle. Unlike Ackman, Ellison is not an active user of X. Despite having more than 130,000 followers, his Twitter account has only posted three tweets, and the first one dates back to 2012.
Another notable shareholder is Sean Combs Capital, which is closely linked to the famous American rapper P. Diddy (real name Sean Combs), although the name is not directly associated with it in the SEC filing. P. Diddy founded several brands under his real name, including the Sean Combs Foundation, Combs Investments, and Combs Global, which serves as a platform for integrating his business assets.
Musk's achievements have also attracted the attention of royal family members, and Saudi Prince Alwaleed bin Talal bin Abdulaziz Al Saud has also become a shareholder of X. According to Forbes estimates, the prince has a net worth of nearly $19 billion and has invested extensively in luxury hotels and technology companies such as ride-sharing company Lyft.
In addition, despite questions about Musk's leadership, Twitter co-founder and former CEO Jack Dorsey appears to still maintain his stake in X through Jack Dorsey Remainder. Dorsey once supported Musk's acquisition, but then changed his position and admitted on the Bluesky platform that "everything is not as expected."
X's shareholder list includes many lesser-known but powerful companies and individuals, such as Danilo Kawasaki and Ross Gerber, who not only hold shares personally but also invest through Gerber Kawasaki, a wealth management and investment management company they co-lead.
Silicon Valley venture capital firms such as 8VC (co-founded by Joe Lonsdale, co-founder of intelligence contractor and data analysis platform Palantir), Andreessen Horowitz and Sequoia Capital are also among them, and they are optimistic about the future of X. Musk himself holds X shares through the Elon Musk Revocable Trust.
After the judge approved his motion on August 20, Jacob Silverman said he decided to intervene in the case because he wanted the public to "know who owns the platform, who may influence its governance, and who Musk owes debts to. These are all important. He emphasized: "This is about transparency, disclosure and free speech, representing the interests of the public and X users."
He also wrote a special article to explain this:
On July 3, I shared updates on my legal efforts to pierce the veil on the X shareholder list. With the strong support of the Reporters Committee for Freedom of the Press (RCFP), I filed a motion to release the X shareholder list that had been kept secret in the wake of Elon Musk’s private Twitter acquisition. We subsequently reiterated this claim in a separate Twitter/X/Musk civil lawsuit.
It is exciting that Judge Susan Illston of the U.S. District Court for the Northern District of California has approved our motion in Anoke v. Twitter, overruling the objections of X's lawyers and finding that disclosure of information is in the public interest. Based on this ruling, X must submit a "Company Disclosure Supplement" containing a complete list of shareholders by September 4, 2024, while reserving the right to appeal.
I am deeply honored that RCFP's outstanding team of lawyers provided us with valuable legal assistance free of charge with their professionalism and sense of justice. I would also like to express my sincere gratitude to those anonymous people who provided key clues. I hope that this shareholder list will be helpful to the media, activists, researchers, regulators and politicians concerned about corporate responsibility.
As one of the most successful entrepreneurs in recent history, Musk quickly attracted the attention of investors large and small after announcing the acquisition of X. However, recent signs show that under Musk's leadership, X's business is facing challenges, and investors are worried that the value of their holdings may shrink. X's financial transparency has also been questioned.
Musk has taken a series of radical measures, including the launch of subscription services, artificial intelligence chatbots, as well as large-scale layoffs and adjustments to content rules. Although these changes are innovative, experts point out that the new rules have led to more controversial content on the X platform, which may cause dissatisfaction among users and advertisers, and advertising revenue is precisely the core pillar of X.
To cope with the difficulties, Musk plans to transform X into a universal application, covering a diversified ecosystem from high-quality video content to payment services. However, whether this move will be successful remains to be seen.
This month, X filed a lawsuit against the advertising industry organization World Federation of Advertisers (WFA), accusing its "Global Alliance for Responsible Media" initiative of cybersecurity recommendations, which indirectly led advertisers to reduce their investment in X, thereby damaging X's economic interests. The initiative subsequently announced that it would be phased out, while still refuting X's allegations.
Fidelity disclosed in its annual report that its mutual fund's valuation of X stock has been significantly reduced from nearly $20 million in 2022 to the current $5.6 million. At the same time, although banks usually sell loan debts provided for acquisitions, the seven banks that provided Musk with a $13 billion loan for Twitter have not made any sales moves so far. Financial data company PitchBook pointed out that the debt "suspended" for a long time, far exceeding similar transactions after the 2008 financial crisis.
In recent weeks, Musk has used the presidential election to try to attract new users and claimed that the number of downloads of the X app has reached a record high. (Compiled by Jinlu)
Collect and organize the latest news information and make it available for free for everyone to read
