(Photo by Theo Wargo/Getty Images for TIME)
Columbia Law School professor Eric Talley spoke with Yahoo Finance about Elon Musk’s takeover of Twitter, finalized last week. Of course, the most notable change for users has been the spike in hate speech since Musk took the reins. But Talley’s comments focused on the specific challenges Musk faces if he’s actually going to make this work
Well, he’s got a cash flow problem he eventually has to solve. His probably first challenge is sort of a big meet and greet. Remember, he spent six months being sort of an adversary to everyone at Twitter, sometimes scaring away employees. And a lot of the employees right now are pretty unsure whether they’re even going to have a job next week. So I think that’s probably the first mission of damage control or mitigation. But ultimately, he’s got to turn this company into a little bit more of a revenue generating entity.
5 Tips For Proving Your Legal Department’s Value
Join our expert panel on March 3rd at 1pm ET to explore actionable, emerging ways you can gather and proactively share the data that demonstrates the impact of your work.
Cue Musk’s plan to charge verified Twitter users $19.99 a month to keep that cute like blue check mark and let clout chasers pay for the status. Of course, that half-baked idea could easily starve the platform of its best content.
The idea of forcing people to pay for blue checks gets Twitter’s value proposition totally backward.
For Twitter to have value, it needs to provide valid information from legitimate sources. If anyone can pay for the appearance of validity, the site losses all value.
— Popular Front 2024 (@maxberger) October 31, 2022
I get emails every day from vanity business products offering to name me as “best lawyer” or some such nonsense if I pay them a fee. I don’t pay any of them. I will not pay Twitter for a blue badge either.
Elon can do what he wants. It’s his company. I don’t have to pay for it.
— Bradley P. Moss (@BradMossEsq) October 31, 2022
$20/mo to be an excrement magnet for trolling and antisemitism? No thanks. https://t.co/xigl5WcHQ1
— Kyle Clark (@KyleClark) October 31, 2022
Talley also chatted about another option for Musk to get the cash a-flowin’ — staff cuts. And while that may already be underway, it could prove challenging to just make mass cuts:
[T]he employees at Twitter, just like many of his senior executives, have some of their compensation in terms of stock and bonuses and options and so forth. There is that coming payment for many of the employees that’s coming next week. And some have speculated– and I’m relatively confident, at least it’s a conversation on the table, as to whether if there’s going to be a reduction in staff, it would predate the date of which that payment has to be made.
It’s a little perilous, however, because while the courts in California will let you let go of at-will employees, if you do so merely to avoid having to pay them compensation for services already rendered, that can be a problem. So there is a little bit of a legal sticking point here, as well as a morale sticking point. You don’t necessarily want to hand the pink slips to a bunch of your employees while simultaneously stiffing them. That’s not going to leave behind a lot of happy campers.
Making the social media giant truly profitable will be an uphill battle for Musk. Perhaps something he should have thought about a little harder before sinking $44 billion into the project.
Kathryn Rubino is a Senior Editor at Above the Law, host of The Jabot podcast, and co-host of Thinking Like A Lawyer. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).