Twitter is working toward ‘closing the transaction process’ with Elon Musk

If attendees at Twitter’s annual shareholder meeting were hoping to clear up confusion surrounding Elon Musk’s acquisition of the company, they likely left disappointed. Despite numerous questions about the future of Twitter, the company’s executives had little to say about Musk, who did not attend the meeting.

“We’re working through the transaction process,” CEO Parag Agrawal said during the meeting. The status of the deal has been somewhat unclear since Musk announced it was “on hold,” due to his concerns about bots on the platform. Twitter executives have maintained they are moving forward with their plans.

“Even as we work towards closing this transaction, our teams and I remain focused on the important work we do every day to serve the public conversation,” Agrawal said.

Twitter had said ahead of the meeting that it wouldn’t answer questions related to Musk’s acquisition of the company, which will need to be formally approved by Twitter stockholders at a later date. Even so, shareholders tried to get Twitter executives to address the issue. The very first question in the Q&A portion of the meeting asked what will happen to Twitter shareholders’ stock if “someone” buys the company and takes it private. “We aren’t able to address these questions today,” Sean Edgett, Twitter’s General Counsel, said, directing people to the company’s previous SEC filings.

Shareholders also raised questions about the future of the company’s content moderation policies. Agrawal said the company remains “focused” on existing its current policies and “decreasing our reliance on user reports.” Though he didn’t directly address comments Musk has made about loosening its rules, he said that “silencing political commentary is antithetical to our commitment to free speech.”

The meeting also marks the end of co-founder Jack Dorsey’s tenure with Twitter. He had stepped aside as CEO in November, but remained on the board of directors until the meeting. As with much of Twitter’s future, it was unclear who will succeed him.

Take-Two’s $12.7 billion purchase of Zynga is complete

One of the biggest takeovers in the history of the gaming industry is complete — Take-Two now owns Zynga. The companies announced the $12.7 billion acquisition in January. The two sides have cut through all the red tape and, after shareholders gave the thumbs up last week, the deal is done.

Zynga has joined the likes of Rockstar Games and 2K under Take-Two’s umbrella. As s result of the deal, Take-Two now has a bigger stable of well-known mobile and casual gaming franchises, including Words with Friends and Farmville. Among the games Zynga is working on is Star Wars: Hunters, a free-to-play arena shooter for mobile and Nintendo Switch that’s supposed to arrive this year.

“As we bring together our exceptional talent, exciting pipelines of games, and industry-leading technologies and capabilities, we believe that we can take our portfolio to another level of creativity, innovation, and quality,” Take-Two chairman and CEO Strauss Zelnick said in a statement. “Each of our teams has a strong history of operational execution, and together, we expect that we will enhance our financial profile through greater scale and profitability, paving the way for us to deliver strong shareholder value.”

Take-Two’s buyout of Zynga is part of a major wave of consolidation across the gaming industry. In January, Sony announced it was buying Destiny 2 studio Bungie for $3.6 billion. That news came just days after Microsoft said it planned to buy Activision Blizzard for $68.7 billion. Both takeovers are pending regulatory approval. Activision Blizzard shareholders voted in favor of the Microsoft deal last month.

Hyundai will invest $5 billion toward US manufacturing and innovation

Hyundai will allocate an additional $5 billion toward investments in the US, the automaker announced on Sunday. The funds will support the company’s work in electric vehicles, robotics, air taxis, self-driving cars and artificial intelligence. The anno…

EA is reportedly seeking a sale or a merger

Electronic Arts is actively (and persistently) looking for a buyer or another company willing to merge with it, according to Puck. The video game company reportedly held talks with a number of potential buyers or partners, including Disney, Apple and Amazon. It’s unclear which were interested in fully purchasing EA and which were looking to merge, but in case of a merger, Puck said EA is seeking a deal that would allow Andrew Wilson to remain chief executive of the combined company.

EA approached Disney in March in an attempt to forge “a more meaningful relationship” that would go beyond licensing deals, according to the source. However, Disney decided not to push forward, perhaps because it’s currently focused on its nascent streaming service. The publication said the idea of a merger between EA and ESPN, which Disney partly owns, is being floated around in the industry.

Among all the potential partners, however, it was perhaps Comcast who got the closest to a deal. Comcast CEO Brian Roberts reportedly approached Wilson with an offer to merge NBCUniversal with EA. Under the deal, Roberts would take majority control of the merged company, but Wilson would remain chief executive. The people involved didn’t agree over the price of the sale and the structure of the combined entity, though, and the agreement fell through within the last month. 

EA remains a company of its own for now, but Puck said it has become more emboldened in its quest to find a sale or a merger since Microsoft announced that it’s snapping up Activision Blizzard for $68.7 billion, so that might not be be the case for long. It’s worth noting that Sony also revealed that it’s buying Destiny studio Bungie for $3.6 billion shortly after Microsoft announced the acquisition.

EA spokesperson John Reseburg told Puck that the company would not comment “on rumors and speculation relating to [mergers and acquisitions].” Reseburg added: “We are proud to be operating from a position of strength and growth, with a portfolio of amazing games, built around powerful IP, made by incredibly talented teams, and a network of more than half a billion players. We see a very bright future ahead.”

Coinbase reportedly pauses hiring amid plummeting crypto market

In the wake of the cryptocurrency market crashing, Coinbase said this week it was joining a number of tech companies by slowing down its hiring plans for this year. More details have emerged about Coinbase’s efforts to cut costs after The Information obtained emails that were sent to employees.

The company is said to have frozen hiring for two weeks (though it will honor offers that have already been sent) and put new projects on hold. It is also reportedly trying to reduce how much it spends on hosting services.

Along with not hiring as many people as it previously expected to this year, Coinbase is looking to minimize employee attrition. According to the report, the company is giving workers more shares. Coinbase’s stock has dropped by over 75 percent in the last six months.

Coinbase is said to have paused some projects, such as a business banking initiative, while it focuses on increasing revenue from core products, including retail and institutional trading. It’s reportedly planning to offer retail customers more cryptocurrencies and to expand operations outside of the US.

When asked for comment, a Coinbase spokesperson directed Engadget to a tweet thread from chief product officer Surojit Chatterjee. While the company is renewing focus on its “high-impact products” and trying to “improve efficiencies by seeking improvements in developer productivity,” Chatterjee noted that Coinbase doesn’t plan to stop investing in strategic and venture projects. “We believe the down market is a great time to build for the longer term,” Chatterjee wrote.

The company revealed in its first-quarter earnings report last week that, at $1.16 billion, net revenue fell by 27 percent year-over-year and by over half from the previous quarter. Trading volume also dropped. Amid a hiring spree (it’s said to have brought in more than 1,200 new employees this year), operating expenses increased by nine percent from the previous quarter to $1.7 billion. Coinbase had a net loss of $430 million in Q1. All of that was before the cryptocurrency market nosedived earlier this month.

Stablecoin TerraUSD (which is supposed to be pegged to the value of the US dollar) and sister token Luna effectively collapsed, causing a ripple effect to other cryptocurrency prices. Though it has since rebounded a bit, the price of bitcoin also dipped below $26,000 for the first time in 16 months last week amid a sell off that saw over $200 billion wiped from the crypto market in one day.

Coinbase’s shift in hiring strategy reflects a broader trend among prominent tech companies. Meta and Uber are among the major businesses that are cutting costs and slowing down recruitment plans. Meanwhile, Netflix laid off around 150 staff in the US this week and canceled some animated projects. The company’s stock plummeted after it reported its first-ever quarterly drop in subscriber numbers last month.

The ‘villain’ in Reddit’s GameStop investor saga is shutting down

Reddit’s war over GameStop stock has claimed a major casualty. Bloomberg and The New York Times report Melvin Capital, the hedge fund considered the nemesis of the meme stock affair, is shutting down. Fund owner Gabe Plotkin told investors that the “appropriate next step” after steep losses was to liquidate assets and return cash to investors, and that it was time to “step away” from managing others’ capital. At least half of the cash will transfer by May 31st, with the rest coming by June 30th.

Melvin Capital had been a successful fund, starting 2021 with over $12 billion. However, its public bet against GameStop and other struggling companies made it one of the largest victims of a GameStop-centric investing spree by people coordinating across Reddit and social networks. Plotkin’s fund reported a 53 percent loss in January 2021, and it took a $2.75 billion cash infusion to soften the blow and keep losses down to 39 percent for the year.

The GameStop saga wasn’t the only factor involved, however. While a recovery appeared possible, Melvin posted a 23 percent loss through April that was partly linked to poor stock positions. The fund was clearly in peril after the Reddit battle — it’s just that some miscalculations finished the company once and for all.

Reddit speculators shifted their attention to BlackBerry and other companies in the aftermath of the GameStop drama, and there hasn’t been fallout on par with Melvin’s in the months since. Still, the shutdown illustrates the power of coordinated internet investors — they can demolish conventional stock managers in the right circumstances.

Elon Musk faces a federal probe over late disclosure of his initial Twitter stake

The US Securities and Exchange Commission (SEC) is investigating Elon Musk’s belated disclosure of his purchase of more than 5 percent of Twitter’s share, The Wall Street Journal reports. The lag allowed him to purchase more stock without alerting other shareholders, something that may have saved him a significant amount of money. Musk is also facing a lawsuit from Twitter shareholders and a separate FTC probe over the same matter. 

Musk disclosed his purchase of the shares on April 4th, 10 days later than the law requires. According to the WSJ‘s expert, he likely saved over $143 million by not reporting the trade, as the share price may have been higher had the market known about his stake. He eventually acquired 9.2 percent of Twitter, which made him the company’s largest shareholder. 

In his initial filing, Musk said he was a passive shareholder, but the following day he filed a form that showed more involvement, including an offer to join the board of directors. A week later, he submitted an offer to buy Twitter for $44 billion, which has been approved by Twitter’s board. Musk has said that he’ll unlock the “extraordinary potential” of the site and that the deal will be good for free speech. 

Musk has butted heads frequently with the SEC over the past few years. In February, he asked a judge to overturn his agreement with the SEC that required him to get approval for tweets, accusing the Commission of conducting a “harassment campaign.” That request was denied, as was Musk’s request to block an SEC subpoena related to possible insider trading. 

Musk was also hit with a class-action lawsuit over his Twitter investment. The SEC appears to have a good case against Musk for the late disclosure, but it’s not yet clear what it plans to do. However, the lawsuit is unlikely to stop Musk’s purchase of Twitter, according to the WSJ. 

EV maker Canoo is in danger of going out of business

Electric vehicle maker Canoo has warned investors it’s running low on funds as it works toward bringing its products to market. It said that, due to the timing of the announced funding and some other factors, it has “substantial doubt about the company’s ability to continue as a going concern.”

“We have been clear about our philosophy of raising capital judiciously and will continue with this disciplined approach,” CEO Tony Aquila said in a statement. “We have more than $600 million in accessible capital to support Start of Production (SOP). As operators and investors, we have significant experience raising capital in challenging markets — and the best way to raise capital is to achieve your goals. We will continue to raise when needed, bridge to milestones and be in a position to take advantage of improving market conditions. We are focused on long term value creation for our customers and shareholders.”

Canoo reported a $125.4 million net loss in its first-quarter earnings (compared with $15.2 million in Q1 2021). It burned through $120.3 million in the first three months of the year, up from $53.9 million a year earlier. That left it with cash and cash equivalents of $104.9 million as of the end of March.

The company projects operating expenses of between $95 million and $115 million this quarter, as well as $85 million to $105 million in capital expenditures. As it stands, Canoo is not generating revenue.

The EV maker says it had built 39 Gamma lifestyle vans as of the end of March, with 17 of those now on the road. According to Reuters, company leaders said in an earnings call that it’s making up to just 12 vehicles a week and is focusing on fleet customers for the time being. Canoo claims it has received more than 17,500 pre-orders with a projected value of $750 million, and added that it secured a deal with NASA to provide Artemis ground crew transportation vehicles.

The company has had a turbulent history, as TechCrunch notes. It’s been the subject of an SEC investigation into factors such as the departure of certain executives and the SPAC merger with Hennessy Capital Acquisition Corp that took it public. Canoo has also been beset by production delays.