Tag: Social media industry

This 29-year-old from one of London’s poorest neighborhoods became a millionaire after selling his influencer marketing firm

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Timothy Armoo, co-founder and former CEO of Fanbytes.

Timothy Armoo

Timothy Armoo is a 29-year-old millionaire who became rich by selling his influencer marketing firm for eight-figures, but the young, Black entrepreneur had to beat the odds to find success.

Armoo, the co-founder and former CEO of Fanbytes, hails from what was one of the most impoverished areas in south London and as a teenager lived with his dad on a fourth floor council estate — public housing — on Old Kent Road in the borough of Southwark.

“It was the poorest place,” Armoo told CNBC Make It in an interview. “It was at the peak of when Peckham, Brixton and Old Kent Road were having their beef [British slang for conflict] so it was in the middle of the gang warfare. Between 2005 and 2012 was the peak of the South London gangs.”

Trust for London names Southwark as one of 19 boroughs that have “significantly” higher levels of poverty compared to England as a whole.

Armoo knew he was poor, but he had a keen entrepreneurial spirit and managed to cobble together some money by starting his own tutoring business at 14-years-old.

He taught fellow students math and as more students approached him for help with other subjects, he started connecting them with tutors he knew and took a cut of the fee.

“I remember very specifically the first time I connected these two people,” he said. “Jane needed some help with chemistry, and I connected her to Harry, and Harry helped her, and I got £5 (around $6.6) in commission for connecting them, because [the business] charged £15 an hour.”

It was only when Armoo received a scholarship to go to a private boarding school when he was just 16-years-old to complete his A-Levels — equivalent to the Advanced Placement program in the U.S. — that his entire view of wealth changed.

“I remember one day this kid got picked up in a helicopter,” he recalled. “It opened up my eyes that there is a way to build wealth and you don’t have to be Richard Branson. There’s a whole world of people in between there.”

He started to realize that “money was a tool” to change his life and the fastest way to escape poverty was to start his own business.

“When I was growing up on that fourth floor council estate, I would always say to myself ‘This is temporary. This is temporary. This is temporary,’” he said. “I didn’t get to choose the circumstances I was in at 10 years old … but at least I got to decide what ends up happening.”

Here’s how Armoo went from living in a council estate to starting his own business and then becoming a millionaire before the age of 30.

Your first business doesn’t need to be a ‘billion dollar idea’

Armoo was 17-years-old and still completing his A-Levels when he sold his first business, an online blog called Entrepreneur Express, for £110,000, after only 11 months of running it.

“Everyone’s aspiration was to go to Oxbridge [The Universities of Oxford and Cambridge] and mine was just ‘I want to make money and I want to get out of my s—ty situation,’” Armoo said.

The 29-year-old interviewed high-profile figures for Entrepreneur Express from the likes of Virgin Group co-founder Richard Branson, the face of the British TV show “The Apprentice” Alan Sugar and actor James Caan, but making the blog profitable was a challenge.

Initially he had a print version of the blog ready to be taken in by university society groups but as the deadline drew closer, he realized he didn’t have enough advertising to sustain the print publication.

The young entrepreneur then turned his attention to placing advertisements on the online blog. “This is where I had my success,” he said.

He said his “hack” was the distribution of content from the blog via viral social media accounts on Instagram and Facebook such as meme pages and feel-good quote pages.

Armoo would package the articles into social media posts with a hook like “10 quotes to…” and this would drive people from the post to his site.

“The way that we made money was by two things: one was programmatic advertising — so just banner ads, but I would also then sell sponsored slots to tax firms, law firms, and accountancy firms so they could get a direct ROI [return on investment.]”

Armoo said your first business doesn’t need to be “a billion dollar idea.” Instead “your first business should just get you on the first money ladder.”

He echoed the advice of the late investment guru Charlie Munger who said that making the first $100,000 is the hardest “but you gotta do it.”

Armoo agreed saying: “If you optimize for that first £100,000 … you slog, and you go crazy for it, life just becomes easier, because then you know a bit of the playbook… now, at the very least, you have a financial cushion to make choices which are not as risky.”

“You build wealth by selling the business”

Armoo co-founded Fanbytes with Ambrose Cooke and Mitchell Fasanya in 2017.

Tim Armoo

Armoo considers himself an early pioneer in the burgeoning creator economy industry because he co-founded the influencer marketing firm Fanbytes in 2017 with Ambrose Cooke and Mitchell Fasanya.

Fanbytes’ goal was to connect brands with influencers to create advertising campaigns — a popular marketing strategy at the time as companies transitioned from traditional advertising to using influencers on social media to sell products.

Their strategy worked as Fanbytes amassed a notable roster of clients from Nike, Samsung, Amazon and ITV, Armoo said.

One 2016 study by TapInfluence found that social media influencer marketing was 11 times more effective than banner ads on a website, which is why brands were flocking to influencers, according to CNBC reporting.

“I saw the rise of influencer marketing in the U.S.,” Armoo said and he decided to replicate the idea in the U.K.

You don’t always need to invent something new as an entrepreneur, instead you can “service existing demand,” Armoo advised.

The company was “raising dribs and drabs,” across different stages before ultimately raising £2 million in funding.

“First ever bit of investment was like 15 grand, then 40 grand, and then 120 grand, and then 300 grand, and then 600 grand,” Armoo said.

His work with Fanbytes landed him on the Forbes 30 Under 30 list in 2021, and soon after in October that year, offers started rolling in from people wanting to purchase Fanbytes.

He then appointed a bank to coordinate deals for the company which went on to find six companies interested in acquiring Fanbytes.

Armoo, who was 27-years-old at the time, and his co-founders sold Fanbytes to Brainlabs, a global digital marketing agency, in an eight-figure deal in May 2022, which made them all multi-millionaires.

“The aim was always to build something that could be sold,” Armoo said. “I spoke to this guy once when I was pretty early on in my journey, and he said that you can make money while running a business, but you build wealth by selling the business.”

Armoo always knew that he didn’t want to run Fanbytes for the rest of his life.

“Fanbytes could have been selling shoelaces to frogs and I still would have been passionate if I thought this is a business we are building and it has the end goal of being something that can achieve financial security,” he said.

‘I never saw myself as a Black entrepreneur’

Armoo and his co-founders sold Fanbytes to Brainlabs in May 2022.

Timothy Armoo

Black founders often struggle to raise capital. In fact, Black-founded startups in the U.S. only raised 0.48% of all venture dollars allocated in 2023, per Crunchbase data previously reported by CNBC.

This follows a decline in funding being given to Black-owned businesses since 2020, after the murder of George Floyd and the social justice movement that followed his death.

Meanwhile, 87% of non-white founders said they faced more barriers to fundraising compared with 79% of white founders, according to Atomico’s State of European Tech Report 2023.

Armoo says it was all about perspective and believed that being Black didn’t hold him back.

“Everyone remembered the bearded Black guy in a room full of white people. Everyone remembers that and so for me, it increases how memorable you are,” he said about his experience of going to events to meet investors.

He explained that you can either walk into a room and feel insecure because there aren’t that many people that look like you, or you can believe that that factor will help you standout.

“I never saw myself as a Black entrepreneur. I always just saw myself as an entrepreneur,” he said.

“I think maybe I’m too logical for my own good. I was like ‘investors want to make money. This business is going to make them money. I’m going to show them how it makes them money.’ That’s it. I didn’t really think they cared if it was coming from the mouth of a white guy or a Black guy.”

Now, as a 29-year-old millionaire, Armoo is confident that this world view has “served him well.”

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August 30, 2024
Twitter survival at stake, Musk warns as remote work ends

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Elon Musk is warning Twitter employees to brace for “difficult times ahead” that might end with the collapse of the social media platform if they can’t find new ways of making money.

Workers who survived last week’s mass layoffs are facing harsher work conditions and growing uncertainty about their ability to keep Twitter running safely as it continues to lose high-level leaders responsible for data privacy, cybersecurity and complying with regulations.

Musk’s first companywide message to employees came by email late Wednesday night and ordered them to stop working from home and show up in the office Thursday morning. He followed that with his first “all-hands” meeting Thursday answering workers’ concerns. Before that, many were relying on the billionaire Tesla CEO’s public tweets for clues about Twitter’s future.

“Sorry that this is my first email to the whole company, but there is no way to sugarcoat the message,” wrote Musk, before he described a dire economic climate for businesses like Twitter that rely almost entirely on advertising to make money.

“Without significant subscription revenue, there is a good chance Twitter will not survive the upcoming economic downturn,” Musk said. “We need roughly half of our revenue to be subscription.”

At the staff meeting Thursday afternoon, Musk said some “exceptional” employees could seek an exemption from his return-to-work order but that others who didn’t like it could quit, according to an employee at the meeting who spoke on condition of anonymity out of a concern for job security.

The employee also said Musk appeared to downplay employee concerns about how a pared-back Twitter workforce was handling its obligations to maintain privacy and data security standards, saying as CEO of Tesla he knew how that worked.

Musk’s memo and staff meeting echoed a livestreamed conversation trying to assuage major advertisers Wednesday, his most expansive public comments about Twitter’s direction since he closed a $44 billion deal to buy the social media platform late last month and dismissed its top executives. A number of well-known brands have paused advertising on Twitter as they wait to see how Musk’s proposals to relax content rules against hate and misinformation affect the tenor of the platform.

Musk told employees the “priority over the past 10 days” was to develop and launch Twitter’s new subscription service for $7.99 a month that includes a blue check mark next to the name of paid members — the mark was previously only for verified accounts. Musk’s project has had a rocky rollout with an onslaught of newly bought fake accounts this week impersonating high-profile figures such as basketball star LeBron James, former U.S. President George W. Bush and the drug company Eli Lilly to post false information or offensive jokes.

In a second email to employees, Musk said the “absolute top priority” over the coming days is to suspend “bots/trolls/spam” exploiting the verified accounts. But Twitter now employs far fewer people to help him do that.

An executive last week said Twitter was cutting roughly 50% of its workforce, which numbered 7,500 earlier this year.

Musk had previously expressed distaste for Twitter’s pandemic-era remote work policies that enabled team leaders to decide if employees had to show up in the office.

Musk told employees in the email that “remote work is no longer allowed” and the road ahead is “arduous and will require intense work to succeed” and they will need to be in the office at least 40 hours per week. He said he would personally review any request for an exception.

Twitter hasn’t disclosed the total number of layoffs across its global workforce but told local and state officials in the U.S. that it was cutting 784 workers at its San Francisco headquarters, about 200 elsewhere in California, more than 400 in New York City, more than 200 in Seattle and about 80 in Atlanta.

The exodus at Twitter is ongoing, including the company’s chief privacy officer, Damien Kieran, and chief information security officer Lea Kissner, who tweeted Thursday that “I’ve made the hard decision to leave Twitter.”

Cybersecurity expert Alex Stamos, a former Facebook security chief, tweeted Thursday that there is a “serious risk of a breach with drastically reduced staff” that could also put Twitter at odds with a 2011 order from the Federal Trade Commission that required it to address serious data security lapses.

“Twitter made huge strides towards a more rational internal security model and backsliding will put them in trouble with the FTC” and other regulators in the U.S. and Europe, Stamos said.

The FTC said in a statement Thursday that it is “tracking recent developments at Twitter with deep concern.”

“No CEO or company is above the law, and companies must follow our consent decrees,” said the agency’s statement. “Our revised consent order gives us new tools to ensure compliance, and we are prepared to use them.”

The FTC would not say whether it was investigating Twitter for potential violations. If it were, it is empowered to demand documents and depose employees.

Twitter paid a $150 million penalty in May for violating the 2011 consent order and its updated version established new procedures requiring the company to implement an enhanced privacy protection program as well as beefing up info security.

Those new procedures include an exhaustive list of disclosures Twitter must make to the FTC when introducing new products and services — particularly when they affect personal data collected on users.

Musk is, of course, fundamentally overhauling platform offerings, and it’s not known if he is telling the FTC about it. Twitter, which gutted its communications department, didn’t respond to a request for comment Thursday.

Musk has a history of tangling with regulators. “I do not respect the SEC,” Musk declared in a 2018 tweet.

The Securities and Exchange Commission recently examined for possible tardiness his disclosures to the agency of his purchases of Twitter stock to amass a major stake. In 2018, Musk and Tesla each agreed to pay $20 million in fines over Musk’s allegedly misleading tweets saying he’d secured the funding to take the electric car maker private for $420 a share. Musk has fought the SEC in court over compliance with the agreement.

The consequences for not meeting FTC’s requirements can be severe — such as when Facebook had to pay $5 billion for privacy violations.

“If Twitter so much as sneezes, it has to do a privacy review beforehand,” tweeted Riana Pfefferkorn, a Stanford University researcher who said she previously provided Twitter outside legal counsel. “There are periodic outside audits, and the FTC can monitor compliance.”

Twitter was fined in May for the alleged commercial exploit of customers data — phone numbers and email addresses — that it had claimed it needed for security purposes, such as enabling multi-factor authentication.

—-

AP reporters Frank Bajak and Marcy Gordon contributed to this report.

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November 10, 2022
Facebook parent Meta cuts 11,000 jobs, 13% of workforce

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Facebook parent Meta is laying off 11,000 people, about 13% of its workforce, as it contends with faltering revenue and broader tech industry woes, CEO Mark Zuckerberg said in a letter to employees Wednesday.

The job cuts come just a week after widespread layoffs at Twitter under its new owner, billionaire Elon Musk. There have been numerous job cuts at other tech companies that hired rapidly during the pandemic.

Zuckerberg said that he had made the decision to hire aggressively, anticipating rapid growth even after the pandemic lockdowns ended.

“Unfortunately, this did not play out the way I expected,” Zuckerberg said in a statement. “Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I’d expected. I got this wrong, and I take responsibility for that.”

Meta, like other social media companies, enjoyed a financial boost during the pandemic lockdown era because more people stayed home and scrolled on their phones and computers. But as the lockdowns ended and people started going outside again, revenue growth began to falter.

Of particular concern to investors, Meta poured over $10 billion a year into the “metaverse” as it shifts its focus away from social media. Zuckerberg predicts the metaverse, an immersive digital universe, will eventually replace smartphones as the primary way people use technology.

Spooked investors have sent company shares tumbling more than 71% since the beginning of the year and the stock now trades at levels last seen in 2015.

An economic slowdown and a grim outlook for online advertising — by far Meta’s biggest revenue source — have contributed to Meta’s woes as well. This summer, the company posted its first quarterly revenue decline in history, followed by another, bigger decline in the fall.

Some of the pain is company-specific, while some is tied to broader economic and technological forces.

Last week, Twitter laid off about half of its 7,500 employees, part of a chaotic overhaul as Musk took the helm. He tweeted that there was no choice but to cut the jobs “when the company is losing over $4M/day,” though did not provide details about the losses. Snap, the owner of Snapchat, also recently laid off 1,000 workers and online real estate broker Redfin said Wednesday it is cutting 862 employees.

Meta and its advertisers are bracing for a potential recession. There’s also the challenge of Apple’s privacy tools, which make it more difficult for social media platforms like Facebook, Instagram and Snap to track people without their consent and target ads to them.

Although Meta has been hurt by broader economic trends that have curtailed spending on digital ads, the company’s challenges have been compounded by the rise of TikTok at the same time Zuckerberg is pouring billions into a metaverse that so far seems like a distant mirage, said Forrester Research analyst J.P. Gownder.

“They are making a big bet on something that may not happen for another five to 10 years,” Gownder said. “What they need to be doing is trying to solve some of their fundamental business problems. This (mass layoff) is only a stopgap.”

Zuckerberg said Meta is cutting costs across its business, but he added that this alone won’t big costs in line with its revenue growth.

In addition to the layoffs, a hiring freeze at the company will be extended through the first quarter of 2023, Zuckerberg said. The company has also slashed its real estate footprint and he said that with so many employees working outside of the office, the company will transition to desk sharing for those that remain.

More cost cuts at Meta will be rolled out in coming months, Zuckerberg said.

Zuckerberg told employees Wednesday that they will receive an email letting them know if they are among those being let go. Access to most company systems will be cut off for people losing their jobs, he said, due to the sensitive nature of that information.

“We’re keeping email addresses active throughout the day so everyone can say farewell,” Zuckerberg said.

Former employees will receive 16 weeks of base pay, plus two additional weeks for every year with the company, Zuckerberg said. Health insurance for those employees and their families will continue for six months.

Even with Wednesday’s reductions, Meta still has more than 75,000 workers around the globe. In fact, the company had 71,970 workers at the end of 2021, and less than 59,000 at the end of 2020.

Brad Gerstner, the CEO of Meta shareholder Altimeter Capital, wrote an open letter to Zuckerberg last month urging him to tighten Meta’s belt.

“Meta has drifted into the land of excess — too many people, too many ideas, too little urgency,” Gerstner wrote. “This lack of focus and fitness is obscured when growth is easy but deadly when growth slows and technology changes.”

Gerstner urged Zuckerberg to streamline costs and focus the company in an open letter posted on Medium. His suggestions include cutting 20% of the company’s workforce — which still would only set Meta back to 2021 levels of staffing, backing Gerstner’s point that the company has become bigger than it needs to be.

Meta’s Wednesday layoffs, while historic for the company, breaks no tech industry records. Hewlett Packard let go about 2/3 of its workforce between 2010 and 2021, going from 324,600 employees to 111,000 as of Oct. 31, 2021 for HP Inc. and HP Enterprises, which had been one company back in 2010.

And its peak in 1986, IBM had about 400,000 employees worldwide. At the end of last year, IBM had about 282,000 full-time workers.

It’s not yet clear if Meta — and the social media economy — is on a similar trajectory. A decade ago, Facebook successfully pivoted its business from running a website on desktop computers to an app — then multiple apps — on smartphones. While it is possible that it will be able to make the switch again to a new communications platform in the metaverse, the world — and the company — have changed tremendously.

“Meta has three huge problems to overcome: It is no longer an innovative groundbreaker; its grip on market domination is dwindling; and the promise of the metaverse, the centerpiece of Zuckerberg’s vision for the future of his company, has been diminished by a combination of consumer apathy, business skepticism, and the realities of a sinking worldwide economy,” Gerstner wrote.

Shares of Meta Platforms Inc. added $5, or 5.2% to close at $101.47 on Wednesday.

—

AP Technology Writer Michael Liedtke in San Francisco and AP Business Writer Haleluya Hadero in New York contributed to this story.

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November 9, 2022
Facebook parent Meta cuts 11,000 jobs, 13% of workforce

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Facebook parent Meta is laying off 11,000 people, about 13% of its workforce, as it contends with faltering revenue and broader tech industry woes, CEO Mark Zuckerberg said in a letter to employees Wednesday.

The job cuts come just a week after widespread layoffs at Twitter under its new owner, billionaire Elon Musk. There have been numerous job cuts at other tech companies that hired rapidly during the pandemic.

Zuckerberg said that he had made the decision to hire aggressively, anticipating rapid growth even after the pandemic lockdowns ended.

“Unfortunately, this did not play out the way I expected,” Zuckerberg said in a statement. “Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I’d expected. I got this wrong, and I take responsibility for that.”

Meta, like other social media companies, enjoyed a financial boost during the pandemic lockdown era because more people stayed home and scrolled on their phones and computers. But as the lockdowns ended and people started going outside again, revenue growth began to falter.

Of particular concern to investors, Meta poured over $10 billion a year into the “metaverse” as it shifts its focus away from social media. Zuckerberg predicts the metaverse, an immersive digital universe, will eventually replace smartphones as the primary way people use technology.

Spooked investors have sent company shares tumbling more than 71% since the beginning of the year and the stock now trades at levels last seen in 2015.

An economic slowdown and a grim outlook for online advertising — by far Meta’s biggest revenue source — have contributed to Meta’s woes as well. This summer, the company posted its first quarterly revenue decline in history, followed by another, bigger decline in the fall.

Some of the pain is company-specific, while some is tied to broader economic and technological forces.

Last week, Twitter laid off about half of its 7,500 employees, part of a chaotic overhaul as Musk took the helm. He tweeted that there was no choice but to cut the jobs “when the company is losing over $4M/day,” though did not provide details about the losses. Snap, the owner of Snapchat, also recently laid off 1,000 workers and online real estate broker Redfin said Wednesday it is cutting 862 employees.

Meta and its advertisers are bracing for a potential recession. There’s also the challenge of Apple’s privacy tools, which make it more difficult for social media platforms like Facebook, Instagram and Snap to track people without their consent and target ads to them.

Although Meta has been hurt by broader economic trends that have curtailed spending on digital ads, the company’s challenges have been compounded by the rise of TikTok at the same time Zuckerberg is pouring billions into a metaverse that so far seems like a distant mirage, said Forrester Research analyst J.P. Gownder.

“They are making a big bet on something that may not happen for another five to 10 years,” Gownder said. “What they need to be doing is trying to solve some of their fundamental business problems. This (mass layoff) is only a stopgap.”

Zuckerberg said Meta is cutting costs across its business, but he added that this alone won’t big costs in line with its revenue growth.

In addition to the layoffs, a hiring freeze at the company will be extended through the first quarter of 2023, Zuckerberg said. The company has also slashed its real estate footprint and he said that with so many employees working outside of the office, the company will transition to desk sharing for those that remain.

More cost cuts at Meta will be rolled out in coming months, Zuckerberg said.

Zuckerberg told employees Wednesday that they will receive an email letting them know if they are among those being let go. Access to most company systems will be cut off for people losing their jobs, he said, due to the sensitive nature of that information.

“We’re keeping email addresses active throughout the day so everyone can say farewell,” Zuckerberg said.

Former employees will receive 16 weeks of base pay, plus two additional weeks for every year with the company, Zuckerberg said. Health insurance for those employees and their families will continue for six months.

Even with Wednesday’s reductions, Meta still has more than 75,000 workers around the globe. In fact, the company had 71,970 workers at the end of 2021, and less than 59,000 at the end of 2020.

Brad Gerstner, the CEO of Meta shareholder Altimeter Capital, wrote an open letter to Zuckerberg last month urging him to tighten Meta’s belt.

“Meta has drifted into the land of excess — too many people, too many ideas, too little urgency,” Gerstner wrote. “This lack of focus and fitness is obscured when growth is easy but deadly when growth slows and technology changes.”

Gerstner urged Zuckerberg to streamline costs and focus the company in an open letter posted on Medium. His suggestions include cutting 20% of the company’s workforce — which still would only set Meta back to 2021 levels of staffing, backing Gerstner’s point that the company has become bigger than it needs to be.

Meta’s Wednesday layoffs, while historic for the company, breaks no tech industry records. Hewlett Packard let go about 2/3 of its workforce between 2010 and 2021, going from 324,600 employees to 111,000 as of Oct. 31, 2021 for HP Inc. and HP Enterprises, which had been one company back in 2010.

And its peak in 1986, IBM had about 400,000 employees worldwide. At the end of last year, IBM had about 282,000 full-time workers.

It’s not yet clear if Meta — and the social media economy — is on a similar trajectory. A decade ago, Facebook successfully pivoted its business from running a website on desktop computers to an app — then multiple apps — on smartphones. While it is possible that it will be able to make the switch again to a new communications platform in the metaverse, the world — and the company — have changed tremendously.

“Meta has three huge problems to overcome: It is no longer an innovative groundbreaker; its grip on market domination is dwindling; and the promise of the metaverse, the centerpiece of Zuckerberg’s vision for the future of his company, has been diminished by a combination of consumer apathy, business skepticism, and the realities of a sinking worldwide economy,” Gerstner wrote.

Shares of Meta Platforms Inc. added $5, or 5.2% to close at $101.47 on Wednesday.

—

AP Technology Writer Michael Liedtke in San Francisco and AP Business Writer Haleluya Hadero in New York contributed to this story.

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November 9, 2022
Facebook parent company Meta laying off 13% of employees

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Facebook parent Meta is laying off 11,000 people, about 13% of its workforce, as it contends with faltering revenue and broader tech industry woes, CEO Mark Zuckerberg said in a letter to employees Wednesday.

The move that comes just a week after widespread layoffs at Twitter under its new owner, billionaire Elon Musk.

Meta, like other social media companies, enjoyed a financial boost during the pandemic lockdown era because more people stayed home and scrolled on their phones and computers. But as the lockdowns ended and people started going outside again, revenue growth began to falter.

An economic slowdown and a grim outlook for online advertising — by far Meta’s biggest revenue source — have contributed to Meta’s woes. This summer, Meta posted its first quarterly revenue decline in history, followed by another, bigger decline in the fall.

Some of the pain is company-specific, while some is tied to broader economic and technological forces.

Last week, Twitter laid off about half of its 7,500 employees, part of a chaotic overhaul as Musk took the helm. He tweeted that there was no choice but to cut the jobs “when the company is losing over $4M/day,” though did not provide details about the losses.

Meta has worried investors by pouring over $10 billion a year into the “metaverse” as it shifts its focus away from social media. CEO Mark Zuckerberg predicts the metaverse, an immersive digital universe, will eventually replace smartphones as the primary way people use technology.

Meta and its advertisers are bracing for a potential recession. There’s also the challenge of Apple’s privacy tools, which make it more difficult for social media platforms like Facebook, Instagram and Snap to track people without their consent and target ads to them.

Competition from TikTok is also an a growing threat as younger people flock to the video sharing app over Instagram, which Meta also owns.

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November 9, 2022
Musk takes over Twitter and faces social media crash course

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Twitter’s newly minted owner, the self-described “free speech absolutist” Elon Musk, is about to get a crash course on global content moderation.

Among his first moves after completing his $44 billion takeover Thursday was to fire the social media platform’s top executives, including the woman in charge of trust and safety at the platform, Vijaya Gadde.

He also posted a conciliatory note to wary advertisers, assuring them he won’t allow Twitter to devolve into a “free-for-all hellscape.”

The problem is, not even the world’s richest man can have it both ways.

Lightly moderated “free speech” sites such as Gab and Parler serve as cautionary tales of what can happen when the guardrails are lowered. These small, niche sites are popular with conservatives and libertarians fed up with what they see as censorship of their viewpoints on mainstream platforms like Facebook. They are also full of Nazi imagery, racist slurs and other extreme content, including calls to violence.

Some conservative personalities jumped on Twitter Friday after Musk’s takeover to recirculate long-debunked conspiracy theories in an apparent attempt to see if the site’s policies on misinformation were still being enforced.

Advertisers don’t want to promote their products next to disturbing, racist and hateful posts — and most people don’t want to spend time on chaotic online spaces where they are barraged by racist and sexist trolls.

On Friday, GM announced it would be pausing advertising on Twitter while it figures out the direction of the platform under Musk. But Lou Paskalis, former head of media for Bank of America, said Twitter’s most loyal advertisers, many Fortune 100 companies, believe in the platform and probably won’t leave unless “some really untoward things” happen.

But it’s not just ads and jokes that are at stake.

Eddie Perez, a former Twitter civic integrity team leader, said Musk seems to consider Twitter a digital public square where everyone has equal voice. It’s a “quaint idea of the modern-day version of the town square,” Perez said.

But that’s not how the major social media platforms work. They have instead become powerful tools of asymmetric warfare, and many of their users don’t realize they are being manipulated with disinformation by nation states and bad domestic actors — many with significant resources.

“The danger here is that in the name of ‘free speech,’ Musk will turn back the clock and make Twitter into a more potent engine of hatred, divisiveness, and misinformation about elections, public health policy, and international affairs,” said Paul Barrett, deputy director of the NYU Stern Center for Business and Human Rights.

Though he’d been expected to reinstate banned accounts — ranging from conspiracy theorist Alex Jones to Rep. Marjorie Taylor Greene — Musk said on Friday that no decisions on content or reinstatements will be made until a “content moderation council” is put in place. The council, he wrote, would have “diverse viewpoints,” but he gave no further details.

Musk may be starting from scratch, but Twitter has spent years building up its content moderation system, which is still far from perfect. As such, experts have expressed grave concern’s about Musk’s efforts — after all, the Tesla CEO has little experience navigating the temperamental and geopolitical world of social media, even if he is a constant and wildly popular user of the site he just bought.

“I am most concerned about Musk’s decision to summarily fire Vijaya Gadde, Twitter’s head of legal policy, trust, and safety — a senior executive who was trying, however imperfectly, to keep the platform from spreading even more harmful content than it does,” Barrett said.

Many are looking to see if he will welcome back a number of influential conservative figures banned for violating Twitter’s rules — speculation that is only heightened by upcoming elections in Brazil, the U.S. and elsewhere.

“I will be digging in more today,” Musk tweeted early Friday, in response to a conservative political podcaster who has complained that the platform favors liberals and secretively downgrades conservative voices.

Former President Donald Trump, an avid tweeter before he was banned, said Friday he was “very happy that Twitter is now in sane hands” but promoted his own social media site, Truth Social, that he launched after being blocked from the more widely used platform.

Trump was banned two days after the Jan. 6 attacks for a pair of tweets that the company said continued to cast doubts on the legitimacy of the presidential election and raised risks for the presidential inauguration that Trump said he would not be attending.

Another task for Musk: delivering on his promise to clean up the fake profiles, or “spam bots” that have preoccupied him and bedeviled Twitter since long before he expressed interest in acquiring it.

The bot count matters because advertisers — Twitter’s chief revenue source — want to know roughly how many real humans they are reaching when they buy ads. It’s also important in the effort to stop bad actors from amassing an army of accounts to amplify misinformation or harass political adversaries.

———

Associated Press writers Frank Bajak, Jill Colvin and Mae Anderson contributed to this story. Follow AP’s coverage of Elon Musk: https://apnews.com/hub/elon-musk

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October 28, 2022
Elon Musk takes over Twitter but where will he go from here?

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Elon Musk has taken control of Twitter after a protracted legal battle and months of uncertainty. The question now is what the billionaire Tesla CEO will actually do with the social media platform.

The $44 billion takeover means Twitter is becoming a private company that everyday investors will no longer be able to buy shares in. The New York Stock Exchange suspended trading in the company’s stock on Friday, and the shares will be delisted on Nov. 8, according to a filing with securities regulators.

Major personnel shakeups are widely expected — and Musk ousted three top Twitter executives on Thursday, according to two people familiar with the deal. But the tech guru and self-proclaimed “Chief Twit” has otherwise made contradictory statements about his vision for the company — and shared few concrete plans for how he will run it.

That has left Twitter’s users, advertisers and employees to parse his every move in an effort to guess where he might take the company. Many are looking to see if he will welcome back a number of influential conservative figures banned for violating Twitter’s rules — speculation that is only heightened by upcoming elections in Brazil, the U.S. and elsewhere.

“I will be digging in more today,” he tweeted early Friday, in response to a conservative political podcaster who has complained that the platform favors liberals and secretively downgrades conservative voices.

Former President Donald Trump, an avid tweeter before he was banned, said Friday he was “very happy that Twitter is now in sane hands” but promoted his own social media site, Truth Social, that he launched after being blocked from the more widely used platform.

Trump was banned two days after the Jan. 6 attacks for a pair of tweets that the company said continued to cast doubts on the legitimacy of the presidential election and raised risks for the presidential inauguration that Trump said he would not be attending.

Trump has repeatedly said that he will not return to Twitter even if his account is reinstated, though some allies wonder if he’ll be able to resist as he moves closer to announcing another expected presidential campaign. His Twitter account remained suspended Friday.

Meanwhile, conservative personalities on the site began recirculating long-debunked conspiracy theories, including about COVID-19 and the 2020 election, in a tongue-in-cheek attempt to “test” whether Twitter’s policies on misinformation were still being enforced.

The mercurial Musk has not made it easy to anticipate him.

He has criticized Twitter’s dependence on advertisers, but made a statement Thursday that seemed aimed at soothing their fears. He has complained about restrictions on speech on the platform — but then vowed he wouldn’t let it become a “hellscape.” And for months it wasn’t even clear if he wanted to control the company at all.

After Musk signed a deal to acquire Twitter in April, he tried to back out of it, leading the company to sue him to force him to go through with the acquisition. A Delaware judge had ordered that the deal be finalized by Friday.

Wedbush analyst Dan Ives estimated that Musk and his investors overpaid. Even Musk has said the $44 billion price tag for Twitter was too high but that the company had great potential.

The payment “will go down as one of the most overpaid tech acquisitions in the history of M&A deals on the Street, in our opinion,” Ives wrote in a note to investors. “With fair value that we would peg at roughly $25 billion, Musk buying Twitter remains a major head scratcher that ultimately he could not get out of once the Delaware Courts got involved.”

After months of uncertainty, a series of moves by Musk this week signaled that the deal would in fact go through.

On Wednesday, he strolled into the company’s San Francisco headquarters carrying a porcelain sink and tweeted “Entering Twitter HQ — let that sink in!” Then on Thursday, he tweeted, “the bird is freed,” a reference to Twitter’s logo.

That same day, the people familiar with the deal said Musk had fired CEO Parag Agrawal, CFO Ned Segal and Chief Legal Counsel Vijaya Gadde. Both people insisted on anonymity because of the sensitive nature of the deal. Segal confirmed his departure in a series of tweets Friday.

At the same time, Musk sought to assuage advertisers — Twitter’s chief source of revenue — that he didn’t want the platform to become a “free-for-all hellscape.” His letter was an attempt to address concerns that his plans to promote free speech by cutting back on moderating content will open the floodgates to more online toxicity and drive away users.

Musk has previously expressed distaste for advertising and Twitter’s dependence on it, suggesting more emphasis on other business models such as paid subscriptions that won’t allow big corporations to dictate policy on how social media operates. But on Thursday, he assured advertisers he wants Twitter to be “the most respected advertising platform in the world.”

As concerns rise about the direction of Twitter’s content moderation, European Union Internal Market Commissioner Thierry Breton tweeted to Musk on Friday that “In Europe, the bird will fly by our rules.”

Breton and Musk met in May and appeared in a video together in which Musk said he agreed with the 27-nation bloc’s strict new online regulations. Its Digital Services Act threatens big tech companies with billions in fines if they don’t police their platforms more strictly for illegal or harmful content such as hate speech and disinformation.

Musk has also spent months deriding Twitter’s “spam bots” and making sometimes conflicting pronouncements about Twitter’s problems and how to fix them.

Thursday’s note to advertisers shows a newfound emphasis on advertising revenue, especially a need for Twitter to provide more “relevant ads” — which typically means targeted ads that rely on collecting and analyzing users’ personal information.

Musk is expected to speak to Twitter employees directly Friday, according to an internal memo cited in several media outlets, amid internal confusion and low morale tied to fears of layoffs or a dismantling of the company’s culture and operations.

———

This story has been updated to correct the language in the tweet by Musk to “the bird is freed,” not “the bird has been freed.”

———

Associated Press writer Jill Colvin contributed to this story from New York. Follow AP’s coverage of Elon Musk: https://apnews.com/hub/elon-musk

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October 28, 2022
AP sources: Musk in control of Twitter, ousts top executives

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Elon Musk has taken control of Twitter and ousted the CEO, chief financial officer and the company’s top lawyer, two people familiar with the deal said Thursday night.

The people wouldn’t say if all the paperwork for the deal, originally valued at $44 billion, had been signed or if the deal has closed. But they said Musk is in charge of the social media platform and has fired CEO Parag Agrawal, CFO Ned Segal and Chief Legal Counsel Vijaya Gadde. Neither person wanted to be identified because of the sensitive nature of the deal.

A few hours later, Musk tweeted, “the bird has been freed,” a reference to Twitter’s logo.

The departures came just hours before a deadline set by a Delaware judge to finalize the deal on Friday. She threatened to schedule a trial if no agreement was reached.

Although they came quickly, the major personnel moves had been widely expected and almost certainly are the first of many major changes the mercurial Tesla CEO will make.

Musk privately clashed with Agrawal in April, immediately before deciding to make a bid for the company, according to text messages later revealed in court filings.

About the same time, he used Twitter to criticize Gadde, the company’s top lawyer. His tweets were followed by a wave of harassment of Gadde from other Twitter accounts. For Gadde, an 11-year Twitter employee who also heads public policy and safety, the harassment included racist and misogynistic attacks, in addition to calls for Musk to fire her. On Thursday, after she was fired, the harassing tweets lit up once again.

Musk’s changes will be aimed at increasing Twitter’s subscriber base and revenue.

In his first big move earlier on Thursday, Musk tried to soothe leery Twitter advertisers saying that he is buying the platform to help humanity and doesn’t want it to become a “free-for-all hellscape.”

The message appeared to be aimed at addressing concerns among advertisers — Twitter’s chief source of revenue — that Musk’s plans to promote free speech by cutting back on moderating content will open the floodgates to more online toxicity and drive away users.

“The reason I acquired Twitter is because it is important to the future of civilization to have a common digital town square, where a wide range of beliefs can be debated in a healthy manner, without resorting to violence,” Musk wrote in an uncharacteristically long message for the Tesla CEO, who typically projects his thoughts in one-line tweets.

He continued: “There is currently great danger that social media will splinter into far right wing and far left wing echo chambers that generate more hate and divide our society.”

Musk has previously expressed distaste for advertising and Twitter’s dependence on it, suggesting more emphasis on other business models such as paid subscriptions that won’t allow big corporations to dictate policy on how social media operates. But on Thursday, he assured advertisers he wants Twitter to be “the most respected advertising platform in the world.”

The note is a shift from Musk’s position that Twitter is unfairly infringing on free speech rights by blocking misinformation or graphic content, said Pinar Yildirim, associate professor of marketing at the University of Pennsylvania’s Wharton School.

But it’s also a realization that having no content moderation is bad for business, putting Twitter at risk of losing advertisers and subscribers, she said.

“You do not want a place where consumers just simply are bombarded with things they do not want to hear about, and the platform takes no responsibility,” Yildirim said.

Musk said Twitter should be “warm and welcoming to all” and enable users to choose the experience they want to have.

Friday’s deadline to close the deal was ordered by the Delaware Chancery Court in early October. It is the latest step in a battle that began in April with Musk signing a deal to acquire Twitter, then tried to back out of it, leading Twitter to sue the Tesla CEO to force him to go through with the acquisition. If the two sides don’t meet Friday’s deadline, the next step could be a November trial that could lead to a judge forcing Musk to complete the deal.

But Musk has been signaling that the deal is going through. He strolled into the company’s San Francisco headquarters Wednesday carrying a porcelain sink, changed his Twitter profile to “Chief Twit,” and tweeted “Entering Twitter HQ — let that sink in!”

And overnight the New York Stock Exchange notified investors that it will suspend trading in shares of Twitter before the opening bell Friday in anticipation of the company going private under Musk.

Musk is expected to speak to Twitter employees directly Friday if the deal is finalized, according to an internal memo cited in several media outlets. Despite internal confusion and low morale tied to fears of layoffs or a dismantling of the company’s culture and operations, Twitter leaders this week have at least outwardly welcomed Musk’s arrival and messaging.

Top sales executive Sarah Personette, the company’s chief customer officer, said she had a “great discussion” with Musk on Wednesday and appeared to endorse his Thursday message to advertisers.

“Our continued commitment to brand safety for advertisers remains unchanged,” Personette tweeted Thursday. “Looking forward to the future!”

Musk’s apparent enthusiasm about visiting Twitter headquarters this week stood in sharp contrast to one of his earlier suggestions: The building should be turned into a homeless shelter because so few employees actually worked there.

The Washington Post reported last week that Musk told prospective investors that he plans to cut three quarters of Twitter’s 7,500 workers when he becomes owner of the company. The newspaper cited documents and unnamed sources familiar with the deliberation.

Musk has spent months deriding Twitter’s “spam bots” and making sometimes contradictory pronouncements about Twitter’s problems and how to fix them. But he has shared few concrete details about his plans for the social media platform.

Thursday’s note to advertisers shows a newfound emphasis on advertising revenue, especially a need for Twitter to provide more “relevant ads” — which typically means targeted ads that rely on collecting and analyzing users’ personal information.

Yildirim said that, unlike Facebook, Twitter has not been good at targeting advertising to what users want to see. Musk’s message suggests he wants to fix that, she said.

Insider Intelligence principal analyst Jasmine Enberg said Musk has good reason to avoid a massive shakeup of Twitter’s ad business because Twitter’s revenues have taken a beating from the weakening economy, months of uncertainty surrounding Musk’s proposed takeover, changing consumer behaviors and the fact that “there’s no other revenue source waiting in the wings.”

“Even slightly loosening content moderation on the platform is sure to spook advertisers, many of whom already find Twitter’s brand safety tools to be lacking compared with other social platforms,” Enberg said.

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October 27, 2022
Musk doesn’t seek a ‘free-for-all hellscape’ for Twitter

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Elon Musk attempted to soothe leery Twitter advertisers Thursday, a day before a deadline to close out on his $44 billion acquisition of the social media platform, saying that he is buying the platform to help humanity and doesn’t want it to become a “free-for-all hellscape.”

The message appears aimed at addressing concerns among advertisers — Twitter’s chief source of revenue — that Musk’s plans to promote free speech by cutting back on moderating content will open the floodgates to more online toxicity and drive away users.

“The reason I acquired Twitter is because it is important to the future of civilization to have a common digital town square, where a wide range of beliefs can be debated in a healthy manner, without resorting to violence,” Musk wrote in an uncharacteristically long message for the Tesla CEO, who typically projects his thoughts in one-line tweets.

He continued: “There is currently great danger that social media will splinter into far right wing and far left wing echo chambers that generate more hate and divide our society.”

Musk has previously expressed distaste for advertising and Twitter’s dependence on it, suggesting more emphasis on other business models such as paid subscriptions that won’t allow big corporations to dictate policy on how social media operates. But on Thursday, he assured advertisers he wants Twitter to be “the most respected advertising platform in the world.”

The note is a shift from Musk’s position that Twitter is unfairly infringing on free speech rights by blocking misinformation or graphic content, said Pinar Yildirim, associate professor of marketing at the University of Pennsylvania’s Wharton School.

But it’s also a realization that having no content moderation is bad for business, putting Twitter at risk of losing advertisers and subscribers, she said.

“You do not want a place where consumers just simply are bombarded with things they do not want to hear about, and the platform takes no responsibility,” Yildirim said.

Musk said Twitter should be “warm and welcoming to all” and enable users to choose the experience they want to have.

“I didn’t do it to make money,” he said of the pending acquisition. “I did it to try to help humanity, whom I love. And I do so with humility, recognizing that failure in pursuing this goal, despite our best efforts, is a very real possibility.”

Friday’s deadline to close the deal was ordered by the Delaware Chancery Court in early October. It is the latest step in a battle that began in April with Musk signing a deal to acquire Twitter, then tried to back out of it, leading Twitter to sue the Tesla CEO to force him to go through with the acquisition. If the two sides don’t meet Friday’s deadline, the next step could be a November trial that could lead to a judge forcing Musk to complete the deal.

But Musk has been signaling that the deal is going through. He strolled into the company’s San Francisco headquarters Wednesday carrying a porcelain sink, changed his Twitter profile to “Chief Twit,” and tweeted “Entering Twitter HQ — let that sink in!”

And overnight the New York Stock Exchange notified investors that it will suspend trading in shares of Twitter before the opening bell Friday in anticipation of the company going private under Musk.

Musk is expected to speak to Twitter employees directly Friday if the deal is finalized, according to an internal memo cited in several media outlets. Despite internal confusion and low morale tied to fears of layoffs or a dismantling of the company’s culture and operations, Twitter leaders this week have at least outwardly welcomed Musk’s arrival and messaging.

Top sales executive Sarah Personette, the company’s chief customer officer, said she had a “great discussion” with Musk on Wednesday and appeared to endorse his Thursday message to advertisers.

“Our continued commitment to brand safety for advertisers remains unchanged,” Personette tweeted Thursday. “Looking forward to the future!”

Musk’s apparent enthusiasm about visiting Twitter headquarters this week stood in sharp contrast to one of his earlier suggestions: The building should be turned into a homeless shelter because so few employees actually worked there.

The Washington Post reported last week that Musk told prospective investors that he plans to cut three quarters of Twitter’s 7,500 workers when he becomes owner of the company. The newspaper cited documents and unnamed sources familiar with the deliberation.

Musk has spent months deriding Twitter’s “spam bots” and making sometimes contradictory pronouncements about Twitter’s problems and how to fix them. But he has shared few concrete details about his plans for the social media platform.

Thursday’s note to advertisers shows a newfound emphasis on advertising revenue, especially a need for Twitter to provide more “relevant ads” — which typically means targeted ads that rely on collecting and analyzing users’ personal information.

Yildirim said that, unlike Facebook, Twitter has not been good at targeting advertising to what users want to see. Musk’s message suggests he wants to fix that, she said.

Insider Intelligence principal analyst Jasmine Enberg said Musk has good reason to avoid a massive shakeup of Twitter’s ad business because Twitter’s revenues have taken a beating from the weakening economy, months of uncertainty surrounding Musk’s proposed takeover, changing consumer behaviors and the fact that “there’s no other revenue source waiting in the wings.”

“Even slightly loosening content moderation on the platform is sure to spook advertisers, many of whom already find Twitter’s brand safety tools to be lacking compared with other social platforms,” Enberg said.

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October 27, 2022
Social media stocks slip amid Musk, Snap news

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Shares of social media companies are tumbling before the market open on Friday after a slew of news in the sector that concerned investors, including a report that Elon Musk may cut almost 75% of Twitter‘s workforce and Snap’s muted fourth-quarter outlook.

Musk has told prospective investors in his Twitter purchase that he plans to cut nearly 75% of Twitter’s employee base of 7,500 workers, leaving the company with a skeleton crew, according to a Thursday report by The Washington Post.

Wedbush’s Dan Ives said in a client note that Twitter Inc. is due for some job cuts, but that the reported figure may not be the best approach.

“Musk cannot cut his way to growth with Twitter and a number in the 75% zip code would be way too aggressive in our opinion out of the gates,” he wrote.

A Delaware judge has given Musk and Twitter until Oct. 28 to work out details of the proposed $44 billion deal. Otherwise, there will be a trial in November.

Shares of Twitter dropped more than 4% in premarket trading.

Elsewhere in the sector, Snap Inc.’ stock slid more than 28% after the company behind Snapchat gave a lackluster forecast for the fourth quarter and its third-quarter revenue missed Wall Street’s view.

Snap reported third-quarter revenue of $1.13 billion, below the $1.15 billion that analysts polled by Zacks Investment Research expected.

While the Santa Monica, California-based company said in a letter to investors that it wasn’t giving a formal fourth-quarter outlook, it did say that it’s highly likely that year-over-year revenue growth will slow during the period. Snap said its internal forecasts are for year-over-year revenue growth to be about flat.

A JPMorgan analyst note said that Snap is experiencing weaker demand due to macro pressures, platform policy changes and competition.

“We appreciate management’s efforts to control what they can—cutting costs & doubling down on more resilient performance-based ads—but trends remain choppy, and the macro backdrop is likely even tougher into 2023,” the note said.

Adding to the mix are concerns about the way social media platforms are being used as the mid-term elections near. While platforms like Twitter, TikTok, Facebook and YouTube say they’ve expanded their work to detect and stop harmful claims that could suppress the vote or even lead to violent confrontations, a review of some of the sites shows they’re still playing catchup with 2020, when then-President Donald Trump’s lies about the election he lost to Joe Biden helped fuel an insurrection at the U.S. Capitol.

Shares of Meta Platforms Inc., parent company of Facebook, declined 4.4% before the opening bell.

The flurry of news weighed on others in the sector as well, including Google parent Alphabet Inc., off 2%, and Pinterest Inc., down 8%.

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October 21, 2022
Meet the judge who tamed the Musk-Twitter trial

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DOVER, Del. — A lawyer for billionaire Elon Musk had barely begun speaking during a recent hearing when the Delaware judge presiding over Twitter’s lawsuit against Musk abruptly cut her off.

“Skip the rhetoric and go to the meat,” Chancellor Kathaleen St. Jude McCormick said bluntly.

The judge’s tone that day illuminates the no-nonsense approach she brings as the first woman to lead Delaware’s 230-year-old Court of Chancery. The court is America’s go-to venue for high-stakes disputes involving some of the world’s biggest companies, many of which call Delaware their legal home.

This court fight between the world’s richest man and the influential social platform could easily have become a circus, particularly given Musk’s penchant for chaos. That hasn’t happened largely thanks to McCormick, who’s been a judge for only four years. She has set firm deadlines, reined in over-the-top attorney requests and kept the case moving briskly.

Musk has been battling Twitter since he announced in July that he wanted to scuttle an agreement to acquire the social media giant for $44 billion. Twitter sued Musk, seeking a court order of “specific performance” directing him to consummate the deal.

McCormick recently ordered a temporary halt in the case after Musk indicated that he would go ahead with the transaction, but she also warned that she will schedule a November trial if Musk doesn’t close the deal by Oct. 28.

The judge, whose humble demeanor belies her professional confidence, does not like the spotlight. After joining the court, McCormick admitted that she didn’t fully appreciate how everything she wrote or said would receive intense scrutiny.

McCormick now seems unfazed that court observers and legal pundits are not only watching her every move, but sometimes pretending to know what she is going to do and why.

“The world will have to wait for the post-trial decision,” she wrote in a September ruling, indirectly acknowledging the public spotlight on the case.

From an early age, McCormick, 43, has demonstrated that she can adapt and persevere when faced with challenges.

She was born in Dover, Delaware’s capital city, and raised with her two older brothers a few miles north in the town of Smyrna. Her mother taught English; her father taught history and coached Smyrna High School’s football team.

“Katie” McCormick thought she, too, would become a teacher, even serving as president of the Delaware Future Educators of America, among other student organizations

McCormick also was a tough athlete who played fastpitch softball and ran track despite having extreme scoliosis, an abnormal curvature of the spine that was apparent from birth and which required her to wear a brace at times. In 1995, when she was 15, McCormick underwent spinal fusion surgery.

Two years later, as a 17-year-old senior, McCormick was the recipient of a scholarship awarded each year to a downstate athlete who had overcome a physical disability. A photograph from the awards banquet that night shows a smiling McCormick, in a white dress with paisley trim, standing between then-U.S. Sen. Joe Biden and former NFL quarterback Joe Theisman.

“Some days were just a little harder than others, but I had faith it would all work out for the best,” McCormick said at the time, noting that other children she would meet during her hospital trips faced more severe problems.

McCormick became the first Smyrna High student to attend Harvard University, where she majored in philosophy.

McCormick, with a deep and eclectic interest in music, played in an Irish folk band while at college. She also became involved in a student-run legal aid program that helps low-income people in the Boston area. That experience helped pique her interest in the law, leading her to the University of Notre Dame law school.

McCormick, who has long viewed the law as a path to serve others, spent her summers working in Northern Ireland for firms specializing in human rights work and international conflict resolution. After graduation, she looked homeward, taking a job with the Community Legal Aid Society, where she worked on housing issues.

“Her academic record stood out. She was a Delaware native,” said CLASI executive director Dan Atkins, who recruited McCormick. “That was not typical for us, so that was cool.”

After two years at CLASI, financial considerations involving the birth of her second child propelled McCormick into private practice. She later admitted that she felt “defeated” by the move because she had wanted to pursue a service-oriented path. Still, she developed a passion for business litigation, as well as for expedited proceedings like the fast-track schedule she ordered in the Twitter lawsuit.

“Her return to public service with the court makes sense. She’s come full circle,” said Atkins, who noted that, in addition to corporate litigation, the Court of Chancery also handles equally important matters such as trusts and estates, guardianships and real estate disputes.

“I bet you she gives those cases every bit of her attention that she gives the Twitter case,” he said. “I guarantee it.”

McCormick is no humorless legal robot, however. In the introduction to her article in a law school journal, she poked fun at the supposed “misspelling” of her first name, Kathaleen, which she shares with her mother and grandmother. She explained that the unusual spelling was attributable to her great-grandmother, not the journal’s staff.

On the Chancery Court, where judges sometimes cite historic, literary and even pop-culture references in their rulings, McCormick’s opinions tend to be comparatively prosaic and direct. Presented with the opportunity, however, she, too, can turn a phrase. A ruling last year in a lawsuit involving the cannabis industry opened with a reference to a Grateful Dead song.

In another ruling last year, McCormick noted that, “Julia Child is rumored to have once said: ‘A party without a cake is just a meeting.’” In that case, she ordered a private equity firm to acquire a cake decorating company even though the buyers had “lost their appetite” for the deal after signing it. Such an order of specific performance is the same type of relief sought by Twitter against Musk.

The icing on that particular cake? One week after that ruling, McCormick, who was appointed a vice chancellor in 2018 when the court expanded from five judges to seven, was promoted to chancellor.

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October 14, 2022