California: Twitter has ceased to be an independent company after merging with a newly formed shell firm called X Corp., driving speculation about what Elon Musk intends for the social media platform.
Twitter “no longer exists” after being merged with X Corp., according to an April 4 document submitted in a California court for a lawsuit filed against the company and its former CEO, Jack Dorsey, last year by conservative activist Laura Loomer.
It’s unclear what the change means for Twitter, which has seen a sweeping overhaul since Musk bought the company for $44 billion last year. The billionaire owner has in the past suggested that buying Twitter would be an “accelerant” for creating X “- which he dubbed an “everything app.” Musk tweeted about the move Tuesday with the single character “X.”
The world’s second-richest man has professed his desire to make X similar to China’s WeChat, a super-app owned by Tencent Holdings used for everything from payments and booking event tickets to messaging. But he’s been vague about how it will fit in with his sprawling business empire, ranging from the electric car giant Tesla to Space Exploration Technologies. Musk also owns the domain “X.com” - the name of the online payments company he started and eventually merged with PayPal.
Musk first set up a trio of holding companies in Delaware with a variation of the name “X Holdings” in April last year as part of his takeover bid for Twitter. But X Corp. was established on March 9 in Nevada, according to records filed in the state. Its merger with Twitter was submitted on March 15. Musk is president of the firm and its parent, X Holdings, which was also created last month and has an authorized capital of $2 million, filings show. The recent changes were first reported by Slate.
“It is understood in the corporate world that incorporating in Nevada is what you do if you want to have fewer fiduciary obligations,” said Ann Lipton, associate dean at Tulane University’s law school. “It’s just harder to sue officers and directors of Nevada companies for breach of fiduciary obligations if you’re an investor.” Twitter was previously incorporated in Delaware, and Musk’s battle over acquiring the company took place in its chancery court.
Twitter, which no longer has a team handling media queries, did not respond to questions sent by Bloomberg News. Lawyers for the law firm representing Twitter in the case, Willkie Farr & Gallagher, also did not immediately respond to a request for comment.
Musk said during a Twitter Spaces interview with the BBC late Tuesday at the company’s San Francisco headquarters that he had plans for the new holding company X, reaffirming that Twitter was “an accelerant” toward his vision of an everything app. But he declined to elaborate, saying observers will just have to “stay tuned to find out.”