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Twitter Pressed About Content Moderation as Musk Deal Looms

Elon Musk's Twitter account on a mobile phone
Elon Musk struck a deal with Twitter to purchase the company for $44 billion. 
James Martin/CNET

What's happening

Twitter executives answered questions from investors on Wednesday but noted they couldn't comment about the deal struck with Elon Musk. Shareholders also voted on nine proposals during the meeting.

Why it matters

A lot of questions still remain about whether Musk will back out of purchasing Twitter for $44 billion.

What's next

Twitter's board has urged shareholders to approve the deal at a special meeting. The date of the meeting hasn't been determined yet.

Twitter investors pressed executives about content moderation at the company's shareholder meeting on Wednesday, an event that was overshadowed by Elon Musk's looming bid to buy the influential social network.

The meeting also marked the end of co-founder Jack Dorsey's formal role with the company, a departure that Twitter disclosed when he stepped down as chief executive in November.

Investors hoping for more clarity on Musk's high-profile bid to buy the company likely were disappointed by the board's responses to questions about the $44 billion deal. CEO Parag Agrawal kicked off the Q&A portion of the meeting with a disclaimer that he couldn't comment on the agreement. 

"We're working through the transaction process," Agrawal told shareholders about the deal, which has been thrown into question after Musk indicated that it was paused. "For regulatory and other reasons, we cannot discuss the transaction today."

Executives used the roughly hour-long meeting to address the company's approach to content moderation, a prickly topic that arouses ire in both progressives and conservatives. Agrawal told shareholders that Twitter tries to limit harm from misinformation, a response that echoes earlier statements by the company Later, he said that silencing political commentary is "antithetical" to Twitter's "commitment to free speech." 

Free speech has been a central theme in Musk's argument for why he should buy Twitter, which he has suggested he'll take private if the deal is successful. Musk, who runs Tesla and SpaceX, has accused the social network of failing to adhere to the principles of free speech. 

Free speech is covered by the First Amendment to the US Constitution. However, it describes the relationship between the government and citizens. Private companies, such as Twitter, can set their own rules for what content is allowed or prohibited on their platforms. 

Twitter has rules about civic integrity and misinformation and only in "rare instances" will the company take down content or ban individuals, Agrawal said. Instead, he said, Twitter tries to limit the reach of harmful content and give people more information to provide context around certain tweets.

Agrawal's remarks come as speculation swirls around whether Musk, who runs Tesla and SpaceX, will back out of purchasing Twitter. Musk has said the deal is temporarily "on hold" because he wants more details about the number of spam bots and fake accounts on the social network. He's asked Twitter to provide proof that less than 5% of its users are spam or fake accounts and has indicated that a lower sales price isn't out of the question. 

Twitter executives have reportedly told employees that the deal is moving forward and that they don't plan to renegotiate the price. Under the deal, Musk would likely have to pay Twitter $1 billion if he walks away from the acquisition. 

In a filing, Musk indicated a renewed commitment to the deal, raising the amount of his equity financing to $33.5 billion. He had initially pledged $21 billion in equity. 

During Wednesday's meeting, shareholders voted on nine proposals. Shareholders approved the reelection of Patrick Pichette, general partner at the Canadian venture capital firm Inovia Capital, but rejected the election of Egon Durban, co-CEO of private equity firm Silver Lake, according to preliminary votes. Durban is reportedly close to Musk, who didn't make an appearance at the meeting.

In an unusual vote, shareholders rejected management's advice and approved a proposal to provide a public report about nondisclosure and nondisparagement agreements in cases of harassment, discrimination and other acts. They also voted in favor of a proposal for the company to publish a report about electoral spending. 

Wednesday was also Dorsey's last day as a member of the company's board of directors. In November, Twitter indicated he would leave the company at the time of its 2022 shareholder meeting.

Twitter's board is urging shareholders to vote in favor of Musk's bid to buy the company, according to a filing with the US Securities and Exchange Commission. A shareholder vote on the deal is expected to take place during a special meeting, but Twitter hasn't determined the date yet.