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‘Snapchatization’ has users declaring #RIPTwitter, but vulture capitalist takeover is what they should REALLY be worrying about

‘Snapchatization’ has users declaring #RIPTwitter, but vulture capitalist takeover is what they should REALLY be worrying about
A notorious hedge-funder who’s left a trail of broken companies (and countries) in his wake has set his sights on ousting Twitter’s Jack Dorsey. Users complaining about new features should know the platform may never be the same.

Elliott Management, euphemistically called an “activist investor” by timid media who fear its legendary founder Paul Singer, has reportedly snapped up a four percent ($1 billion) stake in Twitter, nominating four directors to its board as the start of a bid to oust Dorsey. The hedge fund supposedly resents the CEO dividing his attentions between Twitter, Square, and a six-month move to Africa, believing Twitter is capable of churning out bigger profits. Like any good hedge fund – so the narrative goes – they just want the value of the company to increase (stock jumped seven percent on the news). 

What this coverage leaves out – and what makes Twitter’s plight more than the usual business scrap – is Singer’s history. A major Republican donor and huge booster for Israel, he’s also a notoriously ruthless businessman who embodies “vulture capitalism,” leaving a trail of asset-stripped companies and even a few economically-ruined countries in his wake over his insanely profitable career. Media coverage of Singer’s interest in Twitter has gone to great lengths to present his interest in the platform as strictly business-related,” however, and some conservatives have even gotten excited by the thought that the neocon Singer will end the ideologically-motivated censorship they claim to experience on the platform – but nothing could be further from reality.

Here come the vultures

Fox News’ Tucker Carlson profiled Elliott Management’s strategy in December thus: “Buy a distressed company, outsource the jobs, liquidate the valuable assets, fire middle management, and once the smoke has cleared, dump what remains to the highest bidder, often in Asia.” Amid the financial crash of 2008, Elliott, with other hedge funds, acquired distressed US auto parts supplier Delphi, took billions in bailout money from the Obama government (a transaction the president’s “auto-czar” compared to “extortion”), then offloaded so many jobs overseas that 25 factories were forced to close, putting tens of thousands of union and white-collar workers out on the street, as well as slashing pensions. Elliott Management made over $1 billion from the deal.

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When Singer’s fund sinks its teeth into its prey, it does not let go, and most victims have learned to give up and hope for a quick death. When Elliott bought an 11 percent stake in outdoors retailer Cabela’s, it began pushing for a sale of what was then a profitable company. The management so feared Singer that it sold within a year, sending stock prices through the roof but putting almost 2,000 people out of their jobs, setting off a downward spiral that, Carlson says, “destroyed” Cabela’s hometown of Sidney, Nebraska, whose residents feared to even speak about the hedge funder on camera four years later. AT&T similarly ran for its life when Singer’s fund bit off a $3.2 billion stake of the company in September, acquiescing to several demands within a month (and there’s still time for the rest). 

Those who don’t acquiesce are guaranteed to suffer. After Elliott Management bought up a chunk of its debt, the country of Argentina defaulted, holding out for 15 years on Singer’s attempts to collect. A 13-year legal battle ensued, during which Singer’s fund seized an Argentine naval ship to prove they were serious about getting paid. Then-president Cristina Fernandez denounced the “Vulture Lord,” but her replacement, Mauricio Macri, finally agreed in 2016 to pay up – just in time for the threat of another debt default.

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Peru and Congo have similarly felt the sting of Elliott Management’s tactics, having their distressed debt snapped up and then weaponized against them in court. And even when Singer doesn’t win, his opponents lose. Korean electronics giant Samsung was able to fight off his takeover efforts when he tried to block a move by the Lee family to consolidate their holdings, but the bitter battle ended in a five-year prison sentence for company head Jay Y. Lee on bribery charges and the impeachment of South Korean president Park Geun-hye. 

…the ideologically-motivated vultures, that is

Singer’s corporate interests overseas don’t stop at outsourcing to cut costs, however. He founded an organization called Start-Up Nation Central to facilitate the transfer of huge chunks of the US tech industry to Israel. The initiative seeks to counter the Boycott, Divestment and Sanctions movement by making Israel essentially boycott-proof, and Singer has accordingly used his billions to push American tech firms into Israel – Microsoft, Google, Facebook, Amazon, and Apple all have research and development centers there as of 2016. If he gets control of Twitter, the company’s US employees may be surprised to find their replacements speaking Hebrew, not Chinese. 

As for the conservatives who think Singer will defend them from Twitter censorship? Singer was a hardcore anti-Trumper in 2015, backing Florida Senator Marco Rubio and funding the prototype of the notorious Steele dossier. Former Trump campaign strategist Steve Bannon declared war on the billionaire in 2017 upon learning of his involvement. While Singer financially backs Trump now, journalist Philip Weiss and others have suggested the hedge funder “cut a deal with Trump on Israel,” offering his support in exchange for Trump going all-in on “protecting” the Jewish State.

Singer is the second-largest donor to the bloodthirsty think tank Foundation for Defense of Democracies and also supports JINSA and the American Enterprise Institute – all dyed-in-the-wool neocon groups cheerleading for war with Iran as they did in Iraq. If Trump’s “America-first” base thinks Singer is going to fight for their free speech on Twitter, they’re about to get a rude awakening. Anti-war voices on both sides of the spectrum will likely find the censorship intensified to the point where they long for the days of mere shadow banning.

Battle of the billionaires

Dorsey is prepared to stand and fight – for now. He announced on Thursday he’d put his plans to live in Africa for six months on hold, supposedly due to the coronavirus epidemic. Meanwhile, Dorsey’s fellow tech tycoon Elon Musk has pledged to help him fight the takeover, tweeting his support on Monday, and Twitter employees pledged their support with the #webackjack hashtag.

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Twitter users complaining about the “Snapchatization” of their beloved platform should realize they’re looking at something quite a bit more serious than the rollout of an unpopular feature. Twitter, despite its numerous flaws, remains a vital communication channel for many. Whatever lies ahead for the platform – a stripped-down MySpace-esque husk, a megaphone for the never-Trump wing of the GOP, another addition to Israel’s Silicon Wadi – only one thing can be certain: it will be profitable for Elliott Management.

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