Dan GillmorDec 19, 2022

If Musk "steps down" as Twitter CEO, per his latest bogus "poll", some things to remember:

1) He'll still be in control. The owner sets the policy the CEO carries out. The owner decides in the end.

2) He lies incessantly. Nothing he says can be trusted, ever.

3) Big Journalism will breathlessly cover the charade as if it meant something, and will continue to support a man who loathes honest reporting and has contempt for genuine freedom of expression.

Show threadKarl AuerbachDec 19, 2022
@dangillmor - Well, there is, in theory, some friction between majority shareholder and CEO. There's the board of directors (largely named by major shareholder). But we know how the Chicago economics nutz trained boards to kow-tow to large shareholders in the name of very short term "shareholder value".
Show threadBarry Schwartz 🫖
@karlauerbach @dangillmor It's a privately owned company. Musk can operate it as he likes.
Dec 19, 2022 at 3:38amWeb
Show threadKarl AuerbachDec 19, 2022

@chemoelectric @dangillmor - If and when he brings in other shareholders than it won't be private any longer.

But moreover, as long as it is a "corporation" the legal separation between shareholders, directors, and officers remains. The IRS and state would be extremely interested if it were operated as a sole proprietorship. That's often called "piercing the corporate veil".

Show threadBarry Schwartz 🫖Dec 19, 2022
@karlauerbach @dangillmor Yeah, but you know, that's paperwork. Other people do it for him. :)
Show threadKarl AuerbachDec 19, 2022

@chemoelectric @dangillmor I do wonder whether Twitter is at risk of having its corporate structure invalidated and being treated as a sole proprietorship?

If Twit** collapses there will be enough outstanding debt to induce a lot of people to ask that question and try to reach Musk's other assets (such as Space-X & Tesla.)

#law #twitter #corporations

Show threadBarry Schwartz 🫖Dec 19, 2022

@karlauerbach @dangillmor Which brings up for me that Musk is treated by the media as a serious space guy, and they haven't even noticed he was silent about the Artemis 1 mission.

Musk doesn't give a darn about space, and SpaceX employees probably really answer only to NASA and other gov't agencies, not Musk. Otherwise the rockets wouldn't work.

Show threadAmbigram ArtDec 19, 2022

@chemoelectric @karlauerbach @dangillmor

http://spacekaren.sucks/4ywhw

Ambigram Art (@[email protected])

1.42K Posts, 369 Following, 377 Followers · Sheffield artist , former teacher of English/Drama in Kuwait, Dubai, France and UK Acrylics, watercolours, collage, money art, Street art. Altered road signs. Once grappled with Robert de Nero in the film 'Ronin'. Former Business Manager for an arts charity. Bid/Grant writer extraordinaire (Freelance) Theatre Maker. All artwork for sale. Just message me. Just created the #Withnail bot : @[email protected]

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Show threadDan GillmorDec 19, 2022
@karlauerbach I haven't noticed the SEC caring much about his completely autocratic behavior at his other companies, which are publicly owned. No reason to suspect they'll care about this one, is there? @chemoelectric
Show threadKarl AuerbachDec 19, 2022
@dangillmor @chemoelectric - There is a tendency of money owed but not paid that brings out questions about whether a corporate structure is real or a facade that can be penetrated to reach the pockets of those who would normally be protected.
Show threadBarry Schwartz 🫖Dec 19, 2022
@karlauerbach @dangillmor The recent WaPo article says he disbanded the board.
Show threadBriank65Dec 19, 2022
@karlauerbach @chemoelectric @dangillmor not necessarily. A private company can have more than one shareholder.
Show threadBarry Schwartz 🫖Dec 19, 2022
@briank65 @karlauerbach @dangillmor Sure, I used to work for a privately held company and they tried to pay us in shares when short of cash. Who wants shares in a company that can’t even make payroll? :)
Show threadBarry Schwartz 🫖Dec 19, 2022
@briank65 @karlauerbach @dangillmor There was also a snitch who listened through the door to board meetings. When I was let go, I became privy to knowledge of when they were planning to liquidate the place shortly after.
Show threadBarry Schwartz 🫖Dec 19, 2022
@briank65 @karlauerbach @dangillmor (I was let go earlier because I was thoroughly disabled and just wouldn’t admit it to myself. They did me a favor.)
Show threadKarl AuerbachDec 19, 2022
@chemoelectric @briank65 @dangillmor - If I remember correctly California has some rather strong laws about companies, especially non-publicly traded ones, who try to pay salaries with stock (options or certificates.)
Show threadBarry Schwartz 🫖Dec 19, 2022
@karlauerbach @briank65 @dangillmor I am in Minnesota, and it was over 20 yrs ago. California law means nothing here. :)
Show threadKarl AuerbachDec 19, 2022
@briank65 @chemoelectric @dangillmor - Yes, you are right. The term usually applied to a corporation that is not publicly traded with only a few shareholders is "closely held".
Show threadSir J MastodonDec 19, 2022
@chemoelectric @karlauerbach @dangillmor subject to the terms and conditions placed upon him by his lenders..
Show threadKarl AuerbachDec 19, 2022
@sir_j @chemoelectric @dangillmor Yes indeed, Twitter creditors have a say in things - but mostly only when and if the debt comes due and is unpaid. However, as I understand it Twitter itself is the security for several of the loans. Thus Musk may be at risk for destroying the value of that security. The agreements may (and probably do) allow creditors to act when the security for the loans is being damaged.
Show threadSir J MastodonDec 19, 2022
@karlauerbach @chemoelectric @dangillmor indeed, as it’s the security, I imagine every time he lops enough value away from it, that they call more and more shots, and I’m sure when they unilaterally decided to thumb nose at EU competition law with their “wall”, was the last straw for the investors!
Show threadBarry Schwartz 🫖Dec 19, 2022
@karlauerbach @sir_j @dangillmor Those are margin loans, right?
Show threadKarl AuerbachDec 19, 2022

@chemoelectric @sir_j @dangillmor - They could be, but if I were making a big loan I'd want the corporate assets, not the stock shares, to be the security for the loan.

It's the difference between buying a car in which the car is the sole security for the loan and buying a car in which the car *and* your other assets server as recourse to secure the debt. As a borrower you want the first, as a loan maker you want the second.

Show threadSir J MastodonDec 19, 2022
@chemoelectric @karlauerbach @dangillmor there’s margin loans over TLSA as well as Twitter is the collateral. Either way, will have been an extreme week that may explain selling Billions more TLSA shares unannounced all of a sudden..
Show threadBarry Schwartz 🫖Dec 19, 2022
@sir_j @karlauerbach @dangillmor The guy is a whopping moron.
Show threadSir J MastodonDec 19, 2022
@chemoelectric @karlauerbach @dangillmor yes!!!