Twitter Inc. has officially merged with a newly established shell company named X Corp., marking the end of its status as an independent entity and igniting discussions regarding Elon Musk’s future plans for the platform.
A document submitted on April 4 in a California court for an ongoing lawsuit, filed last year against Twitter and former CEO Jack Dorsey by conservative activist Laura Loomer, indicates that Twitter “no longer exists” due to this merger.
The implications of this transition for the social media platform remain uncertain, given the significant changes implemented since Musk acquired Twitter for $44 billion (approximately Rs. 36,117,399 crores) last year. Musk has previously characterized his vision for Twitter as a catalyst in developing X, which he has referred to as an “everything app.” He tweeted simply “X” on Tuesday, hinting at this evolution.
Musk has expressed ambitions to create an entity similar to China’s WeChat, a multi-functional app owned by Tencent Holdings Ltd. that facilitates a variety of services, including payments, event ticketing, and messaging. However, details on how this will integrate with Musk’s extensive business interests, which include Tesla Inc. and SpaceX, have yet to be clarified. Additionally, Musk owns the domain “X.com,” the original name of the online payments firm he founded before its merger with PayPal.
In April 2022, Musk established a group of holding companies in Delaware under the “X Holdings” name as part of his Twitter acquisition strategy. X Corp. was created on March 9 in Nevada, based on state filings, with the merger submission occurring on March 15. Musk serves as president of both X Corp. and its parent company, X Holdings Corp., which was also established recently with an authorized capital of $2 million (around Rs. 16,415,000 crores). Slate was the first to report on these developments.
Ann Lipton, associate dean at Tulane University’s law school, pointed out that companies incorporated in Nevada tend to face fewer fiduciary responsibilities, making it more challenging for investors to hold company officers accountable for breaches of these obligations. Previously, Twitter was incorporated in Delaware, and Musk’s pursuit of the platform occurred in that state’s chancery court.
Twitter, which has dissolved its media relations team, did not respond to inquiries from Bloomberg News regarding this transition. The law firm representing Twitter in the ongoing litigation, Willkie Farr & Gallagher, also did not provide immediate comments.
The news prompted a flurry of speculation on Twitter, with Musk’s post garnering over 13 million views within mere hours. In Japan, the phrase “Twitter Gone” began trending as users humorously suggested that the new name might evoke that of a local rock band, X Japan.
Mandeep Singh, a Bloomberg Intelligence analyst, commented that Musk could create a parent company structure akin to Alphabet, which includes many of his businesses. However, he noted the challenges in integrating e-commerce or payment systems into Twitter, especially as other tech giants like Alphabet and Meta have struggled to achieve similar all-encompassing functionalities.
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