X Corp. Explained

X Corp.
Type:Subsidiary
Industry:
Predecessor:Twitter, Inc.
Founder:Elon Musk
Hq Location Country:California, United States
Area Served:Worldwide
Services:X (formerly Twitter)
Parent:X Holdings Corp.
Subsid:X Payments LLC[1]
Num Employees: (August 2023)[2]

X Corp. is an American technology company established by Elon Musk in 2023 as the successor to Twitter, Inc. It is a wholly owned subsidiary of X Holdings Corp., which is itself mostly owned by Musk. The company owns the social networking service X (formerly Twitter), and has announced plans to use it as a base for other offerings. While the official name of the platform is now X, many users and media outlets continue to refer to it as Twitter.[3] [4] [5]

History

Conceptualization and planning (2022–2023)

See also: Acquisition of Twitter by Elon Musk. In April 2022, filings submitted to the Securities and Exchange Commission (SEC) revealed Musk had formed three corporate entities in Delaware, all under the name of X Holdings. According to the filings, one of the entities was to merge with Twitter, Inc., while another was to serve as the parent company of the newly merged company. A third entity would then help take on a billion loan provided by various large banks to acquire Twitter.[6]

The name "X" dates back to X.com, an online bank co-founded by Musk in 1999. In March 2000, X.com merged with competitor Confinity to create PayPal. Musk considered forming a holding company named "X" for Tesla, Inc. and SpaceX in August 2012.[7] In July 2017, Musk reacquired the domain X.com, for an undisclosed amount, from PayPal.[8] Musk reaffirmed his support for the name "X" in December 2020, replying to a Twitter user who renewed calls for Musk to form a new holding company under that name, although he dismissed the idea of X acquiring his businesses.[9]

The concept for X solidified in October 2022, when Musk tweeted that acquiring Twitter is "an accelerant to creating X, the everything app". According to Musk, Twitter would accelerate the creation of X by "3 to 5 years". Musk expressed interest in creating an app similar to WeChat—a Chinese instant messaging, social media, and mobile payment app—on a podcast in May 2022.[10] In June, Musk told Twitter employees that Twitter is a "digital town square" that should be all-encompassing, like WeChat.[11] In a Morgan Stanley conference in March 2023, Musk touted X once again as the potentially "biggest financial institution in the world".[12] On October 27, 2022, Musk acquired Twitter for $44 billion, and subsequently became its CEO.[13]

Formation (2023–present)

On March 9, 2023, Musk registered X Corp. in Nevada. On the same day, Musk registered the artificial intelligence (AI) company X.AI Corp.[14] Later that month, Musk applied to merge X Holdings I with X Holdings Corp. and Twitter, Inc. with X Corp. In the filing, Musk revealed that X Holdings Corp. had $2 million in capital, but X Holdings Corp. would serve as the parent company for X Corp.[15] In a company-wide email that month, Musk announced that Twitter employees would receive stock in X Corp.[16]

In an April 2023 court filing for an ongoing lawsuit filed by political activist Laura Loomer against Twitter and its former CEO Jack Dorsey, Twitter, Inc. notified the court that it had been consolidated into X Corp., a Nevada corporation based in Carson City. A similar filing was made in the U.S. District Court for the Southern District of Florida.[17]

On May 11, 2023, Musk tweeted that he had found his replacement as Twitter and X Corp.'s CEO. The next day, on May 12, 2023, he named Linda Yaccarino as the new CEO, adding that she "will focus primarily on business operations, while I focus on product design & new technology".[18] Musk said he would transition his role to executive chairman and chief technology officer.[19] Yaccarino succeeded Musk on June 5, 2023.[20]

At the end of May 2023, Fidelity Investments estimated the company's value at $15 billion.[21] This was later increased to a value of $27 billion by July,[22] [23] and up to about $28.5 billion by the end of August.[24] [25]

The company erected a giant illuminated "X" on the roof of its San Francisco headquarters in July 2023 without obtaining required permits. 24 complaints were filed by neighbors concerned about the bright flashing light and structural integrity. Inspectors were twice denied roof access, and the city cited the company for a building code violation. X removed the sign after a few days.[26] [27]

In August 2023, CEO Linda Yaccarino stated that she has "operational autonomy" under owner Elon Musk to run the business, and that she is involved in everything that goes into running the company.[28] [29] Yaccarino also opened up on the reasoning behind Twitter's "controversial" name change to X,[30] wherein she stated that the rebranding was essentially a "liberation" from Twitter. Yaccarino also went on to say that if users had stayed with Twitter, then changes would only be "incremental" and that with X, they think about "what's possible".[31]

In October 2023, the marketing agency X Social Media filed a lawsuit against X Corp. alleging a violation of its trademark of the letter X.[32]

On July 16, 2024, Elon Musk posted that X Corp. would move its headquarters from San Francisco to Austin, Texas after posting that SpaceX would move its headquarters from Hawthorne, California to Starbase, Texas.[33] This was a direct response to California Governor Gavin Newsom signing a law that bans schools in the state from notifying parents of a child's gender identification change.[34]

On August 17, 2024, X Corp. ceased operations in Brazil, the X platform will continue to operate there.[35]

Controversies

Center for Countering Digital Hate

On June 1, 2023, the Center for Countering Digital Hate (CCDH) reported that X, formerly named Twitter, had "failed to act" on 99% of hate posted by Twitter Blue subscribers. The CCDH then described several tweets containing such hateful messages that allegedly contained "racist, homophobic, neo-Nazi, antisemitic or conspiracy content".[36] [37]

In response, X Corp. mentioned that the platform encouraged diversity and free speech, stating that "more than 99.99% of post impressions are healthy" in a blog post.[38] The post further mentioned that the CCDH was spreading "false and misleading claims" that might have negative financial repercussions as it encouraged advertisers to halt investment on X.[39] The blog also further described the CCDH as a "scare campaign" working continuously to prevent "public dialogue", alleging that the CCDH's research utilized metrics that were purposely put "out of context to make unsubstantiated assertions about X".[40] X then filed a legal claim against CCDH and the European Climate Foundation, which it alleged was providing the information used in CCDH's research, and that X denied all claims stated by the CCDH.[41] [42] [43] [44]

On March 25, 2024, District Judge Charles Breyer determined the case was a strategic lawsuit against public participation and granted CCDH's special motion to strike X Corp.'s suit, writing that "This case is about punishing the Defendants for their speech".[45] [46]

Antisemitism

On November 16, 2023, Media Matters for America, a left-leaning watchdog group, published a report stating that X was placing ads for various companies including Apple, IBM, and Oracle, alongside pro-Nazi content.[47] Published following Musk's endorsement of an antisemitic conspiracy theory, major advertisers like Microsoft and Apple fled the platform, leading to an estimated loss of around $75 million by the end of 2023.[48] This led to a lawsuit by X Corp. against Media Matters, alleging that they had "exploited" the platform into making the ads appear the way they did as a result of excessive scrolling and curating its feed with "fringe" content.[49] [50]

Litigation

In August 2024, Omid Kordestani, former executive chairman of Twitter (now X Corp.), filed a lawsuit against X Corp. in California Superior Court. Kordestani alleges that Elon Musk is refusing to cash out more than $20 million worth of shares owed to him as compensation for his service. This suit follows a March 2024 lawsuit by four former Twitter executives, who claim Musk withheld over $128 million in severance payments after their dismissal.[51]

References

Bibliography

Notes and References

  1. Web site: Capoot . Ashley . January 9, 2024 . Elon Musk's X to launch peer-to-peer payments this year . live . https://web.archive.org/web/20240111204648/https://www.cnbc.com/2024/01/09/elon-musks-x-to-launch-peer-to-peer-payments-this-year-.html . January 11, 2024 . February 15, 2024 . CNBC . en.
  2. News: August 10, 2023 . Twitter-turned-X CEO Linda Yaccarino focuses on winning back big brands on Elon Musk's platform . live . https://web.archive.org/web/20231008165105/https://apnews.com/article/twitter-x-corp-ceo-linda-yaccarino-elon-musk-0131c61ac296955d424fd057f6b0196d . October 8, 2023 . August 13, 2023 . Associated Press.
  3. News: Brown . Ryan . April 13, 2023 . Twitter partners with eToro to let users trade stocks, crypto as Musk pushes app into finance . live . https://web.archive.org/web/20230413082513/https://www.cnbc.com/2023/04/13/twitter-to-let-users-access-stocks-crypto-via-etoro-in-finance-push.html . April 13, 2023 . April 13, 2023 . CNBC.
  4. Web site: Capoot . Ashley . July 29, 2023 . X logo officially replaces Twitter's famous bird on mobile app, building headquarters . live . https://web.archive.org/web/20230731224836/https://www.cnbc.com/2023/07/29/x-logo-officially-replaces-twitters-famous-bird-on-mobile-app-.html . July 31, 2023 . August 1, 2023 . CNBC . en.
  5. Web site: Mueller . Saira . 2024-02-23 . Why can’t we stop calling it Twitter? Experts and insiders weigh in CNN Business . 2024-08-04 . CNN . en.
  6. Web site: Pahwa . Nitish . Joseph Stern . Mark . April 10, 2023 . Twitter Isn't a Company Anymore . live . https://web.archive.org/web/20230418023557/https://slate.com/technology/2023/04/twitter-inc-x-corp-elon-musk-x-nevada.html . April 18, 2023 . April 11, 2023 . Slate.
  7. Web site: August 31, 2012 . Musk says may form holding company for Tesla, SpaceX . live . https://web.archive.org/web/20230412033240/https://www.reuters.com/article/us-tesla-spacex/musk-says-may-form-holding-company-for-tesla-spacex-idUSBRE87U0KR20120831 . April 12, 2023 . April 11, 2023 . Reuters.
  8. Web site: Huang . Echo . July 11, 2017 . Elon Musk bought a web domain worth millions with 'sentimental value' to him . live . https://web.archive.org/web/20230412033241/https://qz.com/1026167/elon-musk-just-bought-x-com-the-domain-he-once-owned-from-paypal . April 12, 2023 . April 11, 2023 . Quartz.
  9. Web site: O'Kane . Sean . April 21, 2022 . Musk Forms 'X Holdings' After Hints at a Parent Company for Tesla, SpaceX . live . https://web.archive.org/web/20230416071316/https://www.bloomberg.com/news/articles/2022-04-21/musk-forms-x-holdings-after-hints-at-parent-for-tesla-spacex . April 16, 2023 . April 11, 2023 . Bloomberg News.
  10. Web site: Huang . Kalley . October 6, 2022 . What Does X Mean to Elon Musk? . live . https://web.archive.org/web/20230410133325/https://www.nytimes.com/2022/10/06/technology/elon-musk-x.html . April 10, 2023 . April 11, 2023 . The New York Times.
  11. Web site: Isaac . Mike . June 16, 2022 . Elon Musk tells Twitter's employees he wants the service to 'contribute to a better, long-lasting civilization.' . live . https://web.archive.org/web/20230114225902/https://www.nytimes.com/2022/06/16/technology/elon-musk-twitter-employees-meeting.html . January 14, 2023 . April 11, 2023 . The New York Times.
  12. Web site: Saul . Derek . March 7, 2023 . Musk's New Twitter Dream: Become 'Biggest Financial Institution In The World' . live . https://web.archive.org/web/20230412040417/https://www.forbes.com/sites/dereksaul/2023/03/07/musks-new-twitter-dream-become-biggest-financial-institution-in-the-world/ . April 12, 2023 . April 11, 2023 . Forbes.
  13. Web site: Conger . Kate . Hirsch . Lauren . October 27, 2022 . Elon Musk Completes $44 Billion Deal to Own Twitter . live . https://web.archive.org/web/20221029090805/https://www.nytimes.com/2022/10/27/technology/elon-musk-twitter-deal-complete.html . October 29, 2022 . April 11, 2023 . The New York Times.
  14. Web site: Peters . Jay . Roth . Emma . April 14, 2023 . Elon Musk founds new AI company called X.AI . live . https://web.archive.org/web/20230414223834/https://www.theverge.com/2023/4/14/23684005/elon-musk-new-ai-company-x . April 14, 2023 . April 14, 2023 . The Verge.
  15. News: Feeley . Jef . Twitter becomes X Corporation as Musk advances 'everything app' hopes . live . https://web.archive.org/web/20240320125638/https://www.irishtimes.com/technology/2023/04/11/ex-twitter-chief-executive-parag-agrawal-reveals-doj-probe-in-pursuit-of-legal-fees-repayment/ . March 20, 2024 . April 11, 2023 . The Irish Times.
  16. Web site: Conger . Kate . Mac . Ryan . March 26, 2023 . Elon Musk Values Twitter at $20 Billion . live . https://web.archive.org/web/20230411034427/https://www.nytimes.com/2023/03/26/technology/elon-musk-twitter-value.html . April 11, 2023 . April 11, 2023 . The New York Times.
  17. Web site: Gaus . Annie . April 11, 2023 . Twitter Is Now Called X Corp and 'No Longer Exists' . live . https://web.archive.org/web/20230411211347/https://sfstandard.com/business/twitter-is-now-called-x-corp-and-no-longer-exists/ . April 11, 2023 . April 11, 2023 . The San Francisco Standard.
  18. Web site: Roth . Emma . May 12, 2023 . Twitter's new CEO is Linda Yaccarino, a longtime ad exec for NBCU . live . https://web.archive.org/web/20230512160254/https://www.theverge.com/2023/5/12/23721107/twitter-ceo-linda-yaccarino-elon-musk-nbc . May 12, 2023 . May 12, 2023 . The Verge.
  19. Web site: Spangler . Todd . May 12, 2023 . Elon Musk Confirms Linda Yaccarino as Twitter's New CEO, Focused on Business Operations . live . https://web.archive.org/web/20230728161719/https://variety.com/2023/digital/news/linda-yaccarino-twitter-ceo-musk-confirms-1235611144/ . July 28, 2023 . June 6, 2023 . Variety.
  20. News: Frier . Sarah . June 5, 2023 . Twitter's New CEO Linda Yaccarino Has First Day in the Role . live . https://web.archive.org/web/20230626134649/https://www.bloomberg.com/news/articles/2023-06-06/twitter-s-new-ceo-yaccarino-has-first-day-in-the-role . June 26, 2023 . June 6, 2023 . Bloomberg News.
  21. News: Ryan Mac . Tiffany Hsu . June 5, 2023 . Twitter's U.S. Ad Sales Plunge 59% as Woes Continue . live . https://web.archive.org/web/20231019232412/https://www.nytimes.com/2023/06/05/technology/twitter-ad-sales-musk.html . October 19, 2023 . June 5, 2023 . The New York Times.
  22. Web site: Katje . Chris . August 1, 2023 . Fidelity Increases Valuation On X After Twitter Name Change: Here's How Much The Social Media Platform Is Worth . live . https://web.archive.org/web/20231014181334/https://www.benzinga.com/markets/mutual-funds/23/08/33501596/fidelity-increases-valuation-on-x-after-twitter-name-change-heres-how-much-the-social-media- . October 14, 2023 . August 31, 2023 . Benzinga.
  23. Web site: Primack . Dan . July 31, 2023 . Fidelity marks up its Twitter/X shares for second straight month . live . https://web.archive.org/web/20230901031813/https://www.axios.com/2023/07/31/fidelity-marks-up-its-twitterx-shares-for-second-straight-month . September 1, 2023 . August 31, 2023 . Axios.
  24. Web site: Alvarez . Simon . August 23, 2023 . Elon Musk shares optimistic outlook for X: $1T market cap "not out of the question" . dead . https://web.archive.org/web/20230903174756/https://www.teslarati.com/elon-musk-x-1-trillion-market-cap-not-out-of-the-question/ . September 3, 2023 . August 31, 2023 . Teslarati.
  25. Web site: Primack . Dan . August 30, 2023 . Elon Musk's X is gaining value, Fidelity says . live . https://web.archive.org/web/20230922164935/https://www.axios.com/2023/08/30/elon-musks-x-value-fidelity . September 22, 2023 . August 31, 2023 . Axios.
  26. Web site: Lynch . Jamiel . July 31, 2023 . A flashing 'X' was installed atop the San Francisco headquarters following Twitter's rebrand. A city complaint says the sign went up without a permit . live . https://web.archive.org/web/20230810034845/https://www.cnn.com/2023/07/30/tech/san-francisco-investigates-twitter-x-sign/index.html . August 10, 2023 . August 11, 2023 . CNN.
  27. Web site: July 31, 2023 . Brightly flashing 'X' sign removed from the San Francisco building that was Twitter's headquarters . live . https://web.archive.org/web/20230909122615/https://abcnews.go.com/US/wireStory/brightly-flashing-sign-removed-former-twitters-san-francisco-101884217 . September 9, 2023 . August 11, 2023 . . Associated Press.
  28. Web site: Goswami . Rohan . August 10, 2023 . X CEO Linda Yaccarino explains reason for getting rid of Twitter name . live . https://web.archive.org/web/20231014122421/https://www.cnbc.com/2023/08/10/x-corp-ceo-linda-yaccarino-says-she-has-autonomy-under-elon-musk.html . October 14, 2023 . August 11, 2023 . CNBC.
  29. Web site: Wile . Rob . August 10, 2023 . Linda Yaccarino, CEO of X, says she has autonomy from Elon Musk to run the business . live . https://web.archive.org/web/20231018085032/https://www.nbcnews.com/business/business-news/twitter-x-ceo-linda-yaccarino-automony-from-elon-musk-run-business-rcna99202 . October 18, 2023 . August 11, 2023 . NBC News.
  30. Web site: Conger . Kate . August 3, 2023 . So What Do We Call Twitter Now Anyway? . live . https://web.archive.org/web/20231012220459/https://www.nytimes.com/2023/08/03/technology/twitter-x-tweets-elon-musk.html . October 12, 2023 . August 11, 2023 . The New York Times.
  31. Web site: Barr . Kyle . August 11, 2023 . Twitter's CEO Makes New Excuses for Musk's Dumb 'X' Rebranding . live . https://web.archive.org/web/20231018155649/https://gizmodo.com/linda-yaccarino-twitter-elon-musk-justify-x-rebrand-1850726989 . October 18, 2023 . August 11, 2023 . Gizmodo.
  32. Web site: Elon Musk's X hit with trademark lawsuit from marketing agency . live . https://web.archive.org/web/20231007192445/https://www.reuters.com/technology/elon-musks-x-hit-with-trademark-lawsuit-marketing-agency-2023-10-02/ . October 7, 2023 . October 7, 2023 . Reuters.
  33. News: Turner . Nick . 16 July 2024 . Elon Musk Says X Will Be Moving Its Headquarters to Austin . 16 July 2024 . Bloomberg News.
  34. Web site: Kolodny . Lora . 2024-07-16 . Elon Musk says SpaceX and X headquarters moving to Texas, blames California trans student privacy law . 2024-07-17 . CNBC . en.
  35. Web site: 2024-08-17 . X suspends business in Brazil over censorship row . 2024-08-18 . BBC News . en-GB.
  36. Web site: Milmo . Dan . July 31, 2023 . Anti-hate speech group accuses Elon Musk's X Corp of intimidation over legal threat . live . https://web.archive.org/web/20231016213008/https://www.theguardian.com/technology/2023/jul/31/anti-hate-speech-group-accuses-elon-musk-x-corp-intimidation . October 16, 2023 . August 23, 2023 . The Guardian.
  37. Web site: Field . Hayden . Twitter, now called X, sues researchers who showed rise in hate speech on platform after Musk takeover . live . https://web.archive.org/web/20230906133857/https://www.cnbc.com/2023/08/01/x-sues-ccdh-for-showing-hate-speech-rise-on-twitter-after-musk-deal.html . September 6, 2023 . September 9, 2023 . CNBC.
  38. Web site: Kan . Michael . July 19, 2023 . Twitter Claims 99% of Its Content Is Healthy, Internet Rolls Eyes . live . https://web.archive.org/web/20230824000141/https://www.pcmag.com/news/twitter-claims-99-of-its-content-is-healthy-internet-rolls-eyes . August 24, 2023 . August 23, 2023 . PC Magazine.
  39. Web site: Sheera Frenkel, Ryan Mac . July 31, 2023 . Twitter Sues Nonprofit That Tracks Hate Speech . live . https://web.archive.org/web/20231016193843/https://www.nytimes.com/2023/07/31/technology/twitter-x-center-for-countering-digital-hate.html . October 16, 2023 . August 23, 2023 . The New York Times.
  40. Web site: Shah . Simmone . August 4, 2023 . Elon Musk's X Corp Is Suing an Anti-Hate-Speech Group. Here's What They Have to Say . live . https://web.archive.org/web/20231020104158/https://time.com/6301841/6301841/ . October 20, 2023 . August 23, 2023 . Time.
  41. Elliot . Vittoria . August 15, 2023 . How X Is Suing Its Way Out of Accountability . live . https://web.archive.org/web/20231011201615/https://www.wired.com/story/twitter-x-ccdh-lawsuit-data-crackdown/ . October 11, 2023 . August 23, 2023 . Wired.
  42. Web site: Field . Hayden . August 1, 2023 . Twitter, now called X, sues researchers who showed rise in hate speech on platform after Musk takeover . live . https://web.archive.org/web/20231010151436/https://www.cnbc.com/2023/08/01/x-sues-ccdh-for-showing-hate-speech-rise-on-twitter-after-musk-deal.html . October 10, 2023 . August 23, 2023 . CNBC.
  43. Web site: Judge skeptical of lawsuit brought by Elon Musk's X over hate speech research . live . https://web.archive.org/web/20240301005726/https://www.npr.org/2024/02/29/1234901186/judge-skeptical-of-lawsuit-brought-by-elon-musks-x-over-hate-speech-research . March 1, 2024 . March 1, 2024 . NPR.
  44. Web site: Elon Musk’s X Loses Lawsuit Against Research Group That Found Proliferation of Hate Speech, Racist Content on Social Network . Variety . March 25, 2024 . March 25, 2024 . https://web.archive.org/web/20240325164339/https://variety.com/2024/digital/news/elon-musk-x-loses-lawsuit-against-research-group-hate-speech-racist-content-1235951153/ . live .
  45. News: Allyn . Bobby . March 25, 2024 . Judge dismisses Elon Musk's suit against hate speech researchers . March 25, 2024 . NPR.
  46. News: Needham . Lisa . March 28, 2024 . Elon Musk gets SLAPPed . March 29, 2024 . Public Notice . en . March 29, 2024 . https://web.archive.org/web/20240329022758/https://www.publicnotice.co/p/elon-musk-ccdh-lawsuit-slapp-dismissed-explained . live .
  47. Web site: Hananoki . Eric . November 16, 2023 . As Musk endorses antisemitic conspiracy theory, X has been placing ads for Apple, Bravo, IBM, Oracle, and Xfinity next to pro-Nazi content . live . https://web.archive.org/web/20231127005158/https://www.mediamatters.org/twitter/musk-endorses-antisemitic-conspiracy-theory-x-has-been-placing-ads-apple-bravo-ibm-oracle . November 27, 2023 . November 27, 2023 . Media Matters for America.
  48. Web site: Ryan Mac and Kate Conger . November 24, 2023 . X May Lose Up to $75 Million in Revenue as More Advertisers Pull Out . live . https://web.archive.org/web/20231127000830/https://www.nytimes.com/2023/11/24/business/x-elon-musk-advertisers.html . November 27, 2023 . November 27, 2023 . The New York Times.
  49. Web site: Flynn . Kerry . November 20, 2023 . Elon Musk's X sues Media Matters for America . live . https://web.archive.org/web/20231127052738/https://www.axios.com/2023/11/21/x-elon-musk-sues-media-matters-antisemitic-ads . November 27, 2023 . November 27, 2023 . Axios.
  50. Web site: Orturay . Barbara . November 21, 2023 . Musk's X sues liberal advocacy group Media Matters over its report on ads next to hate groups' posts . live . https://web.archive.org/web/20231121094525/https://apnews.com/article/elon-musk-media-matters-lawsuit-advertising-neonazi-1fe499daa600f513af27ffa68d2e8b91 . November 21, 2023 . November 27, 2023 . Associated Press.
  51. News: 2024-08-10 . Ex-Twitter Chairman Sues Elon Musk’s X for $20 Million in Shares . 2024-08-11 . Bloomberg.com . en.

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