🗞 Twitter Takes Its Poison, Etsy's On Strike, & Crypto-Piracy
This Week: Twitter swallows a poison pill, Etsy is facing backlash from sellers, and North Korea is linked to a major crypto-hack. Plus, unfair dress codes, a sugar stop, and Russian war crimes.
Barely a week after Elon Musk offered Twitter $43 billion to buy the company and take it private, the board has responded with its own move: a poison pill. The tactic, which was created in the 1980s to thwart hostile takeovers, would see Twitter dilute Musk's shares if he reached a 15% ownership threshold. He currently owns slightly more than 9% of the company.
The plan would enable shareholders to purchase new shares at a discount if anyone (re: Musk) acquired 15% or more of the company without the board's approval. This structure was passed unanimously by the board and expires in April 2023.
According to CNBC, Musk said he has a "Plan B" to acquire the company if his initial offer is rejected. However, he did not clarify what the plan would entail.
Musk may be the richest person on Earth (well, unless Putin or Xi's net worths suddenly come to light), but he doesn't exactly have $43 billion in cash. By and large, Musk's wealth is tied up in Tesla stock, and Bloomberg estimates that he “currently has about $3 billion in cash or other somewhat liquid assets after spending $2.6 billion buying a 9.1% stake in Twitter.” The $43 billion price tag represents about a sixth of his net worth, so it remains unclear exactly what the centibillionaire's Plan A to purchase the company is, let alone his Plan B.
Musk’s offer has already opened the company up to additional offers, which the board may be more accepting of. Regardless, Musk is still leaving many scratching their heads over his reason for buying the company, his plan to secure the capital, and what his "Plan B" even is.
🎧 What We’re Listening To
It has been a while since we shared our best WFH hits. Here’s an album that’ll ignite your curiosity and drive deep work.
This week we’re listening to Saloli, a classically trained pianist and composer out of Portland, Oregon. She debuted her first EP, The Deep End, in 2018, and has just released her second record, The Island, this December. The Deep End is filled with simplistic notes incorporated with an analog synthesizer that unites into a cohesive melody that sounds like a step into the future, but also a step back to the past.
The labor movement continues to gain steam in the US, this time in the form of a sellers’ strike at the popular online marketplace Etsy. The platform recently announced that it would be charging sellers a higher transaction fee (from 5% to 6.5%) as it scales up efforts to compete with Amazon. According to MarketWatch, the company reported a 16% increase in fourth-quarter gross merchandise sales YoY, and Etsy's share price has skyrocketed nearly 250% since the start of the pandemic.
As the sellers' petition demands, the strike aims to achieve 5 goals including canceling the fee increase, cracking down on resellers, and allowing sellers to opt out of offsite ads.
An Etsy spokesperson told MarketWatch that the fee increases were in response to these demands, noting that “Sellers have consistently told us they want us to expand our efforts around marketing, customer support and removing listings that don’t meet our policies…our revised fee structure will enable us to increase our investments in each of these key areas so that we can better serve our community and keep Etsy a beloved, trusted, and thriving marketplace.”
Etsy CEO Josh Silverman recently told the Wall Street Journal that the company is acting in a way he believes will make the site's 5-plus million sellers more successful. As the e-commerce site sets its eyes on rival Amazon, he added that Etsy needs to invest in marketing “even if we need to raise fees to do that.” Etsy sellers have pushed back on this comment, noting that the company is placing the burden of these costs on sellers who never agreed to it. Silverman continued, however, that Etsy sellers may list on multiple platforms (including Amazon), but that “the majority of their sales come from Etsy.” The organizers of the strike petition respond that “Rather than rewarding the sellers whose hard work has enabled Etsy to become one of the most profitable tech companies in the world, Etsy gouges us, ignores us, and patronizes us.”
Can a group of sellers unionize? It’ll be interesting to see how this strike affects Etsy in the long run—why would you piss off the very sellers who gave you success in the first place—and if the strike gives sellers the concession they want. If so, will they go a step farther and unionize?
😅 Meme Of The Week
We’ve all been there…but we don’t have to stay there.
Join us for How to Build a High-Performing Legal team with Nili T. Moghaddam (GC, Bungalow), Shaun Sethna (DGC, Altisource), and moderated by our Head of Community, Matt Margolis. They’ll tackle what you need to know to avoid a catastrophe like this, so you can develop a legal team that functions like a well-oiled machine.
The hacker collective Lazarus has reemerged in the world of cybercrime—this time accused of stealing $620 million in cryptocurrency from a video game maker. The FBI announced that it believes Lazarus is tied to the North Korean government, and that the group's total loot from the last few years is around $1.75 billion.
Lazarus worked together with group APT38 appears to have stolen $620 million worth of Ethereum from a blockchain "bridge" (a network that allows cryptocurrency to transfer from one blockchain to another), that belongs to video game maker Axie Infinity.
“A hack of a cryptocurrency business, unlike a retailer, for example, is essentially bank robbery at the speed of the internet and funds North Korea’s destabilizing activity and weapons proliferation,” Ari Redbord, head of legal affairs at TRM Labs, told CNN. “As long as they are successful and profitable, they will not stop.”
(Crypto) Cash Cow
While the world is focused on Russia's increasing cyber attacks, the country mostly targets infrastructure and disrupts communication platforms. The Kremlin doesn't turn to hacking as a source of revenue. North Korea, however, which has long been isolated from the world, is increasingly reliant on crypto hacks to fund its government. Shane Huntley, who leads the Threat Analysis Group at Google, says that most state-backed crypto hacking is now being done by Pyongyang. “It seems to be an ongoing strategy for them to supplement and make money through this activity.”
North Korea has effectively established itself as a cyber-pirate state. Clearly, these hacks need to be stopped, but how do you prosecute Pyongyang for these crimes, while further punishing a country that is heavily sanctioned perpetually on the verge of collapse?
📤 What Else We're Forwarding
Sartorial Scrutiny: Female attorneys are calling out a double-standard in workplace attire scrutiny, notes Law. “Can we, as the next generation of lawyers, PLEASE stop policing women’s bodies and what they wear?” one woman tweeted on the subject.
Florida Man: The Leon County Sheriff's Department in Florida has been ordered to pay a man nearly $270,000 in damages for a wrongful arrest in 2018, says the Tallahassee Democrat. Miles Evoria was wrongfully arrested by deputies who believed he was in possession of crack cocaine, but lab tests revealed it was sugar.
Horrors Of War: The US Departments of State and Justice are actively supporting Ukrainian efforts to investigate war crimes perpetrated by Russian forces in their country, reports NPR. The State Department is funding efforts, while both the DoS and DoJ are sending experts to help collect evidence.
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