July 12, 2022

Today's Topics

Hi! It's a day earlier than our usually scheduled programming but we've got 3 charts for you today exploring:

  • To the Twitter end. Musk and Twitter are gearing up for a lengthy legal battle.
  • Lobbying. Big tech increasingly put pressure on governments — Uber is just the latest example.
  • Jailhouse drop. Inmates in US jails dropped 25% during the pandemic.

P.S. We'll back in your inboxes on Wednesday next week!

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Elon Musk is attempting to terminate his $44bn takeover of Twitter.

It's a move that probably won't have shocked anyone — Musk is once again citing Twitter's inability to provide him with details that dispel his concerns over fake users — but it was still enough to send Twitter's shares down another 11% yesterday.

That leaves us in the strangest of all timelines in which Twitter can sue Musk to try and force through a deal that he now doesn't want — and that Twitter management initially resisted themselves.

Many experts seem to believe that legally Musk is very likely on the hook for either $44bn (buying the whole pie) or $1bn (the breakup fee that was agreed), as his legal team are unlikely to be able to prove that Twitter has experienced a "material adverse effect" since Musk's offer was made. Legally that might be the right answer on paper, but forcing someone kicking and screaming to acquire a company with thousands of real employees and clients is an entirely different real-world exercise.

To the Twitter end

Bret Taylor, Twitter’s chair, shared that the company would pursue legal action to complete the deal  — with Twitter yesterday responding to a letter from Musk's lawyers. That suggests a long and messy legal battle is likely to ensue, with markets putting little faith in Musk actually paying the $54.20 per Twitter share considering you can currently pick one up for 40% less than that amount. This might just be the end of the beginning of this saga.

A recently-leaked trove of documents revealing Uber’s secretive lobbying tactics, including texts to Macron and meetings with Biden, illuminated a particularly murky area in which the worlds of big tech and policy-making convene.

Tip of the iceberg?

Lobbying firms, and companies who have in-house lobbying efforts, have to disclose in good faith an estimate of how much was spent on lobbying the US government.

That data has been collated by OpenSecrets.org, and it reveals just how much big tech are spending on trying to influence policy — some $70m last year among the selected companies in the chart above. That data is helpful context, but the measurement clearly isn't perfect or exhaustive, as the Uber leak shows. The documents contained evidence that Uber paid academics to publish helpful research and met with numerous world leaders, neither of which likely show up in the lobbying spend data.

Your big tech legislation is _ years away

Big tech is sensible to try and tip the balance of policy in their favor as legislators continue to put tech firmly in their sights. Two antitrust bills that aim to regulate the firms’ immense gatekeeping powers and their tendency to push their own adjacent products to consumers, for example, are currently winding their way through the legislative system.

Although we often bucket them all together, the issues facing big tech are often wildly different. Amazon and Uber might be more concerned about labor reform, Meta about privacy and data collection, while Alphabet, Microsoft and Apple have been criticized for anticompetitive practices.

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A report out this week from USAFacts explored how the US jail population changed during the pandemic — noting that the US jail population had fallen by 25% from 2019 to 2020.

Jailhouse drop

Jails differ from prisons in that they are usually reserved for those awaiting trials or serving sentences under a year for less serious crimes. The falling jail numbers, which followed a ten-year stretch of relative stability, were largely attributed to an increase in expedited releases and a fall in arrests, according to the Bureau of Justice Statistics. Much of the reduction took place at the beginning of the pandemic as authorities looked to ditch some jailhouse detainees to prevent overcrowding, bringing forward the release dates of around 28% of inmates.

The fall in inmates varied depending on charges, with less serious misdemeanor charges seeing the largest fall — 45% year-on-year — across the country.

More broadly the nation experienced an equally-dramatic drop in arrests, with total arrests dropping from 10.1m to 7.6m according to the FBI’s Uniform Crime report, which also contributed to a smaller jail population.

More Data

1) The labor market remains incredibly tight — and it's not helping the government's hiring problem.

2)  Buy Now, Pay Later company Klarna — which we wrote about at the end of May — has seen its valuation officially drop from $46bn to just $6.7bn.

3) This interesting animated visualization tracks the success and ascent of second-generation immigrants in the US.

4)Deal Closers: Need to get budget approval? Try this CFO Letter Template from Gong – all you have to do is fill in the blanks, and the rest takes care of itself.**

5) A group of Indian farmers tricked Russian punters into betting on their fake professional cricket matches, with 21 locals each paid ~$5 USD to impersonate players from well-known IPL teams.

6) NASA has unveiled the first full image of the universe taken by its powerful James Webb Space Telescope.

7) How can you catch the market bottom? Our friends at The Average Joe can help you out — it's a free newsletter read by 30,000+ investors, delivering unique market insights and trends. Try it out here.

8) The UN announced on World Population Day yesterday that Earth’s population could reach 8 billion by November 15th.

**This is sponsored content.

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