Is Elon Musk’s pal messing with Twitter to score bro points?

Is Elon Musk’s pal messing with Twitter to score bro points?

So the thing about Elon Musk is that he’s cliqued up — specifically with the so-called PayPal Mafia. If you haven’t heard of it before, it’s a group of influential men in Silicon Valley who all used to work at PayPal.

Today, I’d like to focus our attention on a member of the PayPal Mafia: David O. Sacks, the former COO of PayPal and current venture capitalist. Sacks’ battle with Twitter over a subpoena the company issued in its lawsuit against Musk is a direct demonstration of the downside of being a made man.

If you’re in a group with Musk, Peter Thiel, Reid Hoffman, Max Levchin, and the literal co-founders of YouTube and Yelp, you know, you’re in pretty rarified air. In fact, for a long time, it seemed the PayPal Mafia was one of the clearest examples of how networking benefits the ambitious.

These guys sometimes invest together or in each other’s ventures. Sacks is, for instance, an investor in Musk’s tunnel endeavor, The Boring Company. And even though Sacks, Thiel, and Levchin ran Musk out of PayPal in 2000, they all went in together as executive producers on Thank You For Smoking (2005), a darkly funny Aaron Eckhart vehicle about a disgraced tobacco lobbyist. The movie, based on a book by Christopher Buckley, is a libertarian-friendly fable about how, if you’re glib enough, you can get away with anything.

Here in reality, Sacks’ motion to quash Twitter’s subpoena is a bonanza for billable hours, and Twitter’s lawyers are, hilariously, alleging that he’s doing it for clout.

Sacks was subpoenaed by Twitter — as was everyone who’s anyone in Silicon Valley — because, according to Twitter, Sack was “a potential investor in the merger Musk seeks to escape.” In response, Sacks posted a Mad Magazine cover displaying a middle finger and a video of someone pissing on a subpoena.

This clip is from The Wolf of Wall Street, and the character pissing is based on a real-life guy who really went to jail for money laundering and securities fraud. A Freudian would have a field day!

In both Sacks’ and Twitter’s filings, there’s a petty back-and-forth about whether an August 10th phone call was a “meet and confer” or not. This kind of thing, funny as it is, does run up the billable hours. Twitter is asking Sacks to pay for their lawyers, and Sacks is asking Twitter to pay for his. Congratulations to the lawyers, who are the real winners here.

Twitter also says Sacks was lying about not being involved in the Twitter deal and that Sacks even signed a non-disclosure agreement with Musk to evaluate whether he should invest in Twitter. And then it gets to the matter of subpoenas in two states, California and Delaware.

Sacks’ lawyers complain he’s being served with duplicate subpoenas. Twitter says that’s only because Sacks is trying to give the company the runaround in California. What’s more, Twitter says the motion to quash is just saving face: Sacks announced on his podcast, All-In, that he was going to quash — and now he had to follow through. Savage stuff and pretty fun to read. I can’t speak to the legal merits of this dispute, but in terms of writing quality, Twitter wins by a wide mile.

Sacks’ objection to the subpoenas is that, essentially, complying is too onerous. Here’s what Sacks says on the podcast:

I have no involvement in this thing, but they sent me the broadest ever subpoena. It’s like, 30 pages of requests. And now I gotta hire a lawyer to go quash this thing. Because they basically want any of my communications with any of my friends over the last six months. It’s insane.

If I thought Sacks spent a lot of quality time hanging out with, let’s say, high school teachers, mechanics, poets, or social workers, I would agree it would be insane to subpoena all his friends. But it seems like Sacks’ nearest and dearest are serious Silicon Valley players.

Like: The All-In Summit got subpoenaed. That event was the site of some of Musk’s remarks about spam and bots in May. And part of the conceit of All-In is that the hosts are IRL friends. These “besties,” besides Sacks, include: Chamath Palihapitiya, the SPAC King of Silicon Valley; Jason Calacanis, a Silicon Valley fixture; and David Friedberg, a literal CEO at a holding company for startups.

In his motion to quash, Sacks admits he sent some emails to investment bankers but didn’t get involved in the Twitter deal. That doesn’t especially surprise me? Sacks should have looked at the deal! Signing an NDA makes sense, even if he’s only looking at the deal to make his pal Musk happy because that’s an important relationship!

One of the things that I hear ad nauseam about being successful in business is that it’s who you know. That’s part of why the PayPal Mafia is so famous. They are all rich and important, and they have an in on each other’s new investment opportunities, which can make them even richer.

The subpoenas are the downside to being mobbed up. Being close to Musk can be lucrative, but it also makes you vulnerable to getting dragged into his chaos. Twitter says Musk discussed the deal with just four people, and Sacks was one of them. Sacks says Twitter is misinterpreting Musk, which is weird — he doesn’t want to be known as one of Musk’s close confidants? Bit late for that, bestie.

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