Whistleblower claims may not free Elon Musk from his Twitter hook
As the Twitter whistleblower Peiter Zatko was telling US lawmakers of “egregious” security failings at the company last Tuesday, shareholders in the social media platform overwhelmingly voted to hand those problems over to someone else: Elon Musk.
It is unlikely that the Tesla CEO, who owns more than 9% of Twitter and agreed to buy the company in April, was among the 99% of voting shareholders who backed that $44bn (£38.5bn) deal, given he is now determined to abandon it. A Delaware judge will decide at a trial beginning on 17 October whether Musk gets to walk away, or be forced to acquire the business on the terms that he had agreed upon.
Hedge funds, financial firms that like to take big bets on certain market outcomes, also appear to be on the side of (the majority of) Twitter shareholders.
David Einhorn, founder of the Greenlight Capital fund, bought a new stake in Twitter last month reflecting his view that the Delaware chancery court will “follow the law” and “apply it here” by forcing Musk to complete the deal at $54.20 (£47.46) a share. Pentwater Capital Management, a hedge fund that became a significant shareholder in Twitter this year, has also said it expects Twitter to prevail.
Zatko, nonetheless, has given Musk a chance in Delaware with a whistleblower complaint that alleges a wide range of security failings at the company. In his testimony, the former head of security at Twitter, who joined in November 2020 and was fired in January this year, said he had uncovered “extreme, egregious deficiencies by Twitter in every area of his mandate” including interference by foreign governments and poor control of employee access to user data.
Previously, Musk’s case had largely been relying on a claim that Twitter was
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