Good morning. David Meyer here in Berlin, filling in for Alan.
Tesla investors are getting antsy about CEO Elon Musk and the rest of the board being “missing in action”—the words of shareholder Leo KoGuan—at a crucial time for the automaker. The share price has almost halved this year. Demand in China is softening. In the U.S., Tesla’s share of the growing electric vehicle market is falling; it was 79% in 2020, 65% in the third quarter of this year, and S&P reckons it will be less than 20% by 2025. But Musk is very much preoccupied with Twitter.
There, Musk is dealing with other crises. Some are pre-existing conditions, such as the fact that Twitter hasn’t turned a profit in three years, but Musk himself lit many of the fires he is now fighting. He wouldn’t need to be offering advertisers major financial incentives to come back if he hadn’t first scared them off by amplifying conspiracy theories, empowering impersonators with a half-baked user verification scheme, and presiding over a sharp rise in hate speech on the service. Musk’s gross overpayment for Twitter saddled the company with $13 billion in high-interest debt that his bankers are struggling to sell.
And this is only the start. Assuming Twitter doesn’t go bankrupt in the short term, it faces a cluster of regulatory headaches.
The European Commission keeps growling in Musk’s direction about how Twitter needs to abide by the Digital Services Act, a new law governing content moderation that will apply to Big Tech starting Feb. 17. A couple of EU decisions this week could indicate future complications for Twitter: in a Meta case, the bloc’s privacy regulators reportedly decided that people should be able to opt out of their data being used for targeted advertising, and the EU’s top court made it easier for people to demand that Google delist incorrect information about them. Trouble also looms back in the U.S., where the government may probe Musk’s Twitter takeover due to potential national security issues stemming from his other business interests.
Meanwhile, Musk has taken the risky decision to give journalists Matt Taibbi and Bari Weiss access to historical internal Twitter communications so they can expose how the company previously handled content moderation and penalties for rule-breaking users. So far, the resulting “Twitter Files” revelations are more damp squibs than smoking guns. Taibbi admitted there’s no evidence that the firm unduly colluded with Joe Biden’s team in 2020 to suppress a story about Hunter Biden’s laptop—as Musk believes happened—and Twitter publicly revealed four years ago the methods it used to suppress certain accounts’ tweets, which Weiss is now touting as a system of “secret blacklists.”
There’s more heat than light here, and some of the heat may now get turned on Twitter. Bloomberg reports that experts believe giving the reporters access to internal data may violate a security-related FTC consent decree imposed on Twitter earlier this year. Musk may now be Chief Twit, but the company still has to abide by its previous obligations.
This is not to say that everything Musk is doing at Twitter is bad or a waste of time. For example, he’s just tweeted that Twitter will give its users more transparency about the way their content is moderated, and tell them how they can appeal moderation decisions—that’s a good thing, and pretty aligned with the EU’s new Digital Services Act. But Musk can’t stop finding new cans of worms to open. That kind of micromanagement would be more justifiable if being Twitter CEO was his only job, but it isn’t, and he is not superhuman.
Musk is clearly a man on a mission. Those who would like him to pay more attention to his other missions may be forgiven for their concern.
More news below.
David Meyer
@superglaze
david.meyer@fortune.com
