Twitter Inc. has ceased to be an independent company after merging with a newly formed shell firm called X Corp. This has sparked speculation about what Elon Musk intends for the social media platform.
Twitter “no longer exists” after being merged with X Corp., according to a California court document submitted in response to a lawsuit filed last year by conservative activist Laura Loomer against the company and its former CEO, Jack Dorsey.
There are still questions about the implications of the change for Twitter, which has had a sweeping overhaul since Musk bought it last year for $44 billion. The Billionaire owner Musk has previously said Twitter would be an “accelerator” for X — which he dubbed an “everything app.” a “one-stop shop for everything.” Musk tweeted about the move Tuesday with the single character “X.”
The Twitter Chief Tweet has previously professed his desire to make X similar to China’s WeChat, a super-app created by Tencent Holdings Ltd. that handles everything from payments to event tickets to messaging. Nonetheless, he’s been vague about how it will fit into his sprawling business empire, ranging from Tesla Inc. to Space Exploration Technologies Corp. Musk was also the founder of “X.com” — an online payments company he started before it was eventually merged with PayPal.
In April last year, Musk set up a trio of Delaware holding companies with the name “X Holdings” as part of his takeover bid for Twitter. However, according to state records, X Corp. was registered in Nevada on March 9. The merger with Twitter was submitted on March 15. This firm and its parent company, X Holdings Corp., were formed last month with $2 million in authorized capital, filings show. Musk is the company’s president. 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 immediately comment on 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.
The move sparked intense speculation on Twitter about what it meant, with Musk’s tweet attracting more than 13 million views within hours. In Japan, the topic “Twitter Gone” started trending, with users joking that Twitter’s new name will resemble that of a local rock band, X Japan. However, it is not clear whether Musk intends to change Twitter’s name.
“Musk could create a parent structure, similar to Alphabet, where he has all his companies,” said Mandeep Singh, an analyst for Bloomberg Intelligence. “I don’t see how he can layer e-commerce or payments in Twitter right when larger peers such as Alphabet and Meta have struggled to become an everything app on the consumer side.”