[HN Gopher] Notice of termination of Twitter merger agreement
___________________________________________________________________
Notice of termination of Twitter merger agreement
Author : coloneltcb
Score : 350 points
Date : 2022-07-08 21:24 UTC (1 hours ago)
(HTM) web link (www.sec.gov)
(TXT) w3m dump (www.sec.gov)
| bandrami wrote:
| He spent _a billion dollars_ to troll hand-wringing Twitter users
| legitster wrote:
| Oh boy. The real circus is about to begin. Everything before this
| was just a warm up.
| codeulike wrote:
| I stand by my theory that the whole thing was a displacement
| activity that caught his attention instead of something else more
| arduous that he was supposed to do that month.
|
| Like when I suddenly develop an interest in Columbo trivia when
| actually I'm supposed to be doing my accounts.
| nemo44x wrote:
| Why would he spend $44B on a company worth $28B today? I'd make a
| new offer of $35B. They'd probably accept.
| compiler-guy wrote:
| Because he signed a contract to that effect, without any
| contingencies if the stock went down. He doesn't really have a
| choice except to go through an extended legal process that
| likely will end up going against him.
| manquer wrote:
| They can't accept anything like that , twitter board would get
| sued by their shareholders for any price renegotiation.
|
| Shareholders would sue them as most legal theory says twitter
| would win in court and enforce the deal, so there is no reason
| for the board to renegotiate instead of going to court, the
| board has fiduciary responsibilities.
| minimaxir wrote:
| Elon waived his right to due diligence when he first made the
| offer to buy Twitter, so backing out of the deal by arguing a
| lack of due diligence is very funny.
| tazjin wrote:
| They write
|
| > Despite public speculation on this point, Mr. Musk did not
| waive his right to review Twitter's data and information simply
| because he chose not to seek this data and information before
| entering into the Merger Agreement. In fact, he negotiated
| access and information rights within the Merger Agreement
| precisely so that he could review data and information that is
| important to Twitter's business before financing and completing
| the transaction.
|
| Is the merger agreement public?
| riazrizvi wrote:
| He was specifically looking for
|
| > 1. Information related to Twitter's process for auditing
| the inclusion of spam and fake accounts in mDAU.
|
| > 2. Information related to Twitter's process for identifying
| and suspending spam and fake accounts.
|
| His principle activity is influencing. The main sticking
| point of the proposed merger is information on how Twitter
| polices fake accounts. Nothing suspicious about this at all.
| Reminds me of the time a wolf was interested in buying my
| farm, and mainly wanted to know when my dog was chained up
| and how long the chain was exactly.
| jcranmer wrote:
| First result on Google cropped up this:
|
| https://www.sec.gov/Archives/edgar/data/1418091/000119312522.
| ..
| rahimnathwani wrote:
| Section 6.4
| floxy wrote:
| >Section 6.4 Access to Information; Confidentiality. Upon
| reasonable notice, the Company shall (and shall cause
| each of its Subsidiaries to) afford to the
| representatives, officers, directors, employees, agents,
| attorneys, accountants and financial advisors
| ("Representatives") of Parent reasonable access (at
| Parent's sole cost and expense), in a manner not
| disruptive in any material respect to the operations of
| the business of the Company and its Subsidiaries, during
| normal business hours and upon reasonable written notice
| throughout the period commencing on the date of this
| Agreement until the earlier of the Effective Time and the
| termination of this Agreement pursuant to Article VIII,
| to the properties, books and records of the Company and
| its Subsidiaries and, during such period, shall (and
| shall cause each of its Subsidiaries to) furnish promptly
| to such Representatives all information concerning the
| business, properties and personnel of the Company and its
| Subsidiaries as may reasonably be requested in writing,
| in each case, for any reasonable business purpose related
| to the consummation of the transactions contemplated by
| this Agreement; provided, however, that nothing herein
| shall require the Company or any of its Subsidiaries to
| disclose any information to Parent or Acquisition Sub if
| such disclosure would, in the reasonable judgment of the
| Company, (i) cause significant competitive harm to the
| Company or its Subsidiaries if the transactions
| contemplated by this Agreement are not consummated, (ii)
| violate applicable Law or the provisions of any agreement
| to which the Company or any of its Subsidiaries is a
| party, or (iii) jeopardize any attorney-client or other
| legal privilege. No investigation or access permitted
| pursuant to this Section 6.4 shall affect or be deemed to
| modify any representation or warranty made by the Company
| hereunder. Each of Parent and Acquisition Sub agrees that
| it will not, and will cause its Representatives not to,
| use any information obtained pursuant to this Section 6.4
| (or otherwise pursuant to this Agreement) for any
| competitive or other purpose unrelated to the
| consummation of the transactions contemplated by this
| Agreement. Parent will use its reasonable best efforts to
| minimize any disruption to the respective business of the
| Company and its Subsidiaries that may result from
| requests for access under this Section 6.4 and,
| notwithstanding anything to the contrary herein, the
| Company may satisfy its obligations set forth above by
| electronic means if physical access is not reasonably
| feasible or would not be permitted under applicable Law
| as a result of COVID-19 or any COVID-19 Measures. Prior
| to any disclosure, the Company and Parent shall enter
| into a customary confidentiality agreement with respect
| to any information obtained pursuant to this Section 6.4
| (or otherwise pursuant to this Agreement).
| [deleted]
| AlphaSite wrote:
| I suspect Musk violated these terms himself: > Parent
| will use its reasonable best efforts to minimize any
| disruption to the respective business of the Company and
| its Subsidiaries that may result from requests for access
| under this Section 6.4 and, notwithstanding anything to
| the contrary herein When he made a public m spectacle of
| the requests for users, etc and publicised data.
| rvz wrote:
| So the fraudsters at Twitter knew, and Twitter is in fact
| a spam bot utopia, hence why they didn't want to provide
| all the data that Musk requested.
|
| Either way, I am laughing at all of them. (Yes. Elon also
| played the fraudster role as well)
| at-fates-hands wrote:
| This is probably the document more people will be
| interested in.
|
| It outlines the fraud allegations:
|
| https://www.sec.gov/Archives/edgar/data/1418091/00011046592
| 2...
| tptacek wrote:
| This argument is a sleight of hand. Nobody has claimed that
| Musk waived his right to information from Twitter. What he
| waived was his right to diligence, which is the right to
| information _along with the discretionary right to terminate
| the deal based on it_. What he waived was the ability to do
| anything with the information absent an (impossible to
| obtain) MAE discovery.
|
| The obvious legalese thing to do in Musk's buyers-remorse
| situation is to use the information rights to make demands so
| unreasonable no acquiree can reasonably honor them, which is
| exactly what he seems to have done here.
| that_guy_iain wrote:
| They're not claiming a lack of sue diligence, they're claiming
| fraud. Which is different. They're saying they're lying about
| the numbers. Which would be fraud.
| zimpenfish wrote:
| > They're saying they're lying about the numbers. Which would
| be fraud.
|
| But they've been sending the SEC these same numbers
| calculated using the same methodology since 2013, right? If
| they were materially adverse circumstances, you'd imagine
| that someone would have caught this in the last 9 years...
| teej wrote:
| This flavor of "fraud" is something I'd expect an activist
| investor or short-seller to address, not the SEC.
| dragonwriter wrote:
| The SEC isn't being asked to address anything, it's being
| informed that Musk is moving to drop the merger which was
| something SEC had to be informed about the same way that
| it had to be informed of the merger plans, as I
| understand it.
| camjohnson26 wrote:
| Also, Musk routinely knowingly confuses DAUs and normal
| users. Twitter claims 5% of daily active users are bots,
| but Musk complains about how many of his followers are
| bots, when clearly many of those wouldn't be DAUs.
|
| Twitter's CEO has addressed this. Musk responded with a
| poop emoji: https://twitter.com/paraga/status/1526237578843
| 672576?s=20&t...
| la64710 wrote:
| Which only shows Musk is shit himself,
| woevdbz wrote:
| Not only that, but _monetizable_ DAUs, which is basically
| an advertising metric consisting primarily of folks whose
| only actions on a given day might just be "checking my
| feed, liking a couple posts", and from which fake users
| are likely already removed without there being a strong
| reason to shut down their accounts. Whatever ad
| impressions those users get don't get billed to
| advertisers, and there's no strong motive to shutting
| them down if they haven't published anything contravening
| Twitter's policies...
| [deleted]
| delaaxe wrote:
| They who and they who?
| timmytokyo wrote:
| They'd have to prove it in court. Good luck with that.
| electic wrote:
| It is quite easy to prove twitter is mostly full of bots.
| You do not even need a firehose to come to that conclusion.
| not2b wrote:
| Right, but Twitter's method of counting the number of
| daily active users, meaning the number who are seeing
| ads, which is what the SEC report refers to, was
| allegedly designed to exclude most bots. Perhaps it's
| wrong, but they never said 5% of _accounts_ are bots (far
| more are).
| Johnny555 wrote:
| If you have proof that twitter is > 50% bots, you should
| give that evidence to Musk. Or, give it to an attorney
| that's eager to see Twitter's board go to jail for
| putting false data in SEC filings.
| WhyNotHugo wrote:
| If he's claiming fraud, doesn't he have to prove it?
| xadhominemx wrote:
| Fraud is not enough. It has to be fraud bad enough to cause a
| materially adverse effect, which means it would have to
| seriously impair the value of the business.
| [deleted]
| tptacek wrote:
| Which is why it's not fraud --- Delaware has effectively
| never finds MAEs. The premise of him walking away is his
| (utterly specious, but perhaps practically effective) claim
| that Twitter breached the acquisition contract by refusing
| to live up to its information covenants.
| dkjaudyeqooe wrote:
| Which is nonsense, since the numbers in question are not
| verifiable.
|
| How can you identify a "spam account"? It's not possible to
| definitively determine the intent of someone opening or using
| a new account.
|
| So the numbers are arguable either way. Musk is using this
| fact to try to wriggle out of a disastrous impulse buy.
| dragonwriter wrote:
| There aren't claiming fraud, there are claiming breach of
| contract. Including, among other things, by failing to
| maintain operations in the regular course of business because
| of, I kid you not, _allowing some senior officials to
| resign_.
|
| (It's true some of the many other things that are claimed to
| be breaches relate to alleged failure to fulfill obligations
| to provide information that Musk supposedly wanted to
| determine if other claims that has been made were fraudulent,
| but that's different than alleging fraud.)
| that_guy_iain wrote:
| It says in the first paragraph about making misleading
| representations. That is lawyer talk for lying. Lying in
| this context is fraud.
|
| Secondly, the ceo was firing aka asking for resignations
| from key people, no? That is not maintaining the business,
| that seems like sabotage.
| epgui wrote:
| Misrepresentation is a necessary but insufficient
| component for a finding of fraud.
| that_guy_iain wrote:
| That's why there not outright claiming fraud just lying.
| That way they avoid illegal issues but if they were to
| seek damages it would be a fraud case.
| dragonwriter wrote:
| They aren't claiming lying either.
|
| They are claiming breach of contract, and that it _looks
| to them_ like lying which, if it did happen, might be
| fraud, but they can 't tell, in part because part of the
| alleged breaches is Twitter not giving them information
| that might clarify whether the other claims were true or
| not.
| tptacek wrote:
| Lawyer-talk for fraud is "fraud".
| that_guy_iain wrote:
| Not sure what your point is. I said misrepresentations is
| lawyer talk for lying...
| dragonwriter wrote:
| And "appears to have" is lawyer talk for "we don't know
| that this occurred and can't prove it and absolutely want
| to make clear that we will not be accountable for
| claiming it actually happened."
| tptacek wrote:
| You said "in this context lying is fraud", and that's not
| the case, which is why lawyer talk for "fraud" is
| "fraud", not "lying".
| dragonwriter wrote:
| > It says in the first paragraph about making misleading
| representations.
|
| It says that after, and modified by, the phrase "appears
| to have".
|
| Musk's lawyers are saying that Twitter _actually_
| breached the agreement. They are saying it _looks like_
| Twitter may have done other bad things, too, but that 's
| not the same as claiming that Twitter actually did the
| other things.
|
| > Secondly, the ceo was firing aka asking for
| resignations from key people, no?
|
| The separately call out people being forced out and
| people resigning. Absent something not in the letter, the
| former is a much more reasonable, on its face, complaint.
| [deleted]
| Covzire wrote:
| Musk himself has addressed this, saying that the waiver is null
| and void if the data supplied to the SEC by Twitter is
| fraudulent. I can only assume he believes that is the case.
|
| >>First, although Twitter has consistently represented in
| securities filings that "fewer than 5%" of its mDAU are false
| or spam accounts, based on the information provided by Twitter
| to date, it appears that Twitter is dramatically understating
| the proportion of spam and false accounts represented in its
| mDAU count. Preliminary analysis by Mr. Musk's advisors of the
| information provided by Twitter to date causes Mr. Musk to
| strongly believe that the proportion of false and spam accounts
| included in the reported mDAU count is wildly higher than 5%.
| camjohnson26 wrote:
| Musk has released nothing that would indicate that the
| numbers are fraudulent.
| Covzire wrote:
| Read the SEC filing?
| bindle8932 wrote:
| They have to be not only fraudulent but fraudulent to the
| point of having a "materially adverse effect" on the
| value of the company. Delaware courts rarely (almost
| never) find this to be the case.
| camjohnson26 wrote:
| I read it, it contains no data, none. But I think you
| know that and are purposely deflecting.
| mzs wrote:
| >i know i am screaming into a well here but a very bad thing is
| people going around saying that elon musk "waived due
| diligence" and so can't bring up the bots thing.
|
| ...
|
| >the reason that elon musk can't get out of the deal over the
| bots thing is not that he "waived due diligence." it's that he
| SIGNED A BINDING AGREEMENT TO BUY TWITTER, and that agreement
| does not have any outs for "i think there are too many bots."
|
| - Matt Levine esq of Bloomberg
|
| https://twitter.com/matt_levine/status/1545152302142689281
| bryananderson wrote:
| As Matt Levine explained [0] the "waiving due diligence"
| doesn't really mean anything now. What does mean something is
| that he signed a binding agreement to buy Twitter, giving
| Twitter the right to compel him to close the deal, and there's
| no "too many bots" exception, nor a "you were wrong (or even
| lied) about something you said" exception. He has to prove that
| it's a "material adverse effect" which I understand is nearly
| impossible (he'd have to convince a Delaware judge that the
| company is worth at least 40% less than stated because of this,
| and in practice it seems these suits almost never succeed).
|
| [0] https://twitter.com/matt_levine/status/1545151445057536001
| dylan604 wrote:
| I absolutely love that fact that this tweet happy individual
| might actually get slapped for just tossing out tweets. Not
| sure if $1B would make him squirm or not, but even for
| billionaires, $1B is an expensive twitter rant.
| swores wrote:
| If he gets punished it won't be for "just tossing out
| tweets" it will be for negotiating and signing a legally
| binding contract and then breaking it.
|
| It would be possible to enter into a contract through
| tweets alone. That didn't remotely happen here, though.
| dylan604 wrote:
| But he only signed that agreement because his ego
| wouldn't let him back away from those tweets
| somenewaccount1 wrote:
| idk. the fact that the price had already sunk nearly 40% from
| his price over this period could clearly indicate that his
| assumption isn't without merit.
| ceejayoz wrote:
| Only if you don't bother to take a look at the rest of the
| market.
| donarb wrote:
| But for Musk's machinations, said stock price would not be
| down 40%. He caused the stock to drop.
| smcl wrote:
| The due-diligence-waive thing isn't really relevant according
| to Matt Levine, who has been pretty consistent about this for
| months (see the thread @
| https://twitter.com/matt_levine/status/1545151445057536001). A
| couple of choice tweets here:
|
| """ the reason that elon musk can't get out of the deal over
| the bots thing is not that he "waived due diligence." it's that
| he SIGNED A BINDING AGREEMENT TO BUY TWITTER, and that
| agreement does not have any outs for "i think there are too
| many bots. """
|
| ... and ...
|
| """ yes i know that this is a small petty thing. but part of my
| point is that even if he had demanded extensive due diligence,
| and done it, and then signed the agreement, we'd be in the same
| place. the waiver or not of due diligence doesn't matter; what
| matters is we're past that. """
| camjohnson26 wrote:
| Matt Levine has a take down of the supposed bot problem.
| Basically Elon not only waved due diligence, he signed a
| binding agreement to buy Twitter, and the bot talk is
| irrelevant. Even if there's a problem, Musk should have
| addressed it before signing an agreement to buy the company.
|
| https://twitter.com/matt_levine/status/1545151445057536001?s...
| dragonwriter wrote:
| The letter doesn't cite the bot problem directly, but instead
| Twitter allegedly failing to live up to it's obligation to
| give Musk info, which he wanted regarding the bot problem.
| (And a bunch of other alleged breaches.)
| wollsmoth wrote:
| Can twitter agree to release him from the agreement? For a
| fee? I know he has a $1B penalty but I didn't think that
| covered this current situation. Perhaps Twitter would be
| willing to forget the whole thing for $1.5B
| TheCoelacanth wrote:
| Yes, but they could potentially get sued by their own
| shareholders if they let him off too easily.
| collegeburner wrote:
| Tbh i haven't read the agreement and i'm not going to but
| representations and warranties is generally grounds to
| terminate.
| sureglymop wrote:
| Read this a few weeks ago when the newsletter arrived. Money
| Stuff by Matt Levine is very worth subscribing to!
| pclmulqdq wrote:
| I'm ready for the fireworks. Odds are he will be forced to go
| through with it, but he will negotiate a lower price.
|
| Edit: This is over the mDAU thing still? It's been explained to
| him very slowly that all the bots that post tweets all day are
| often not seeing ads, right? That the "monetizable" is a key part
| of that phrase?
| zimpenfish wrote:
| > but he will negotiate a lower price
|
| How? As best I understand things, he has zero wiggle room - he
| either buys Twitter for the agreed price or he stumps up the
| $1B termination fee.
|
| And if Twitter's board did go mad and decide to negotiate a
| lower price, their shareholders would almost certainly block it
| and/or sue the board, no?
| streetcat1 wrote:
| I do not think that he can pay the termination fee. I.e. the
| termination fee itself has rules. Otherwise, he would have
| payed it (the fee is equal to the daily move of his TESLA
| shares).
| cbtacy wrote:
| Pretty much. I think it's more likely he's trying to set
| things up to make the claim that Twitter wasn't co-operative
| and forthcoming with the information and then try to reduce
| the break fee in court.
| epberry wrote:
| Agree. And likewise it seems Twitter is going to court to
| collect the breakup fee rather than complete the deal.
| lotsofpulp wrote:
| Twitter's Chairman disagrees:
|
| https://twitter.com/btaylor/status/1545526087089696768
| jacquesm wrote:
| They'd be nuts to do so.
| adgjlsfhk1 wrote:
| A 1B termination fee is relatively small given that Twitter's
| market cap is down 10B since the beginning of April.
| tptacek wrote:
| Which is why Twitter has the right to force execution, not
| just claim the break-up fee.
| jacquesm wrote:
| Exactly, this is the point that seems to be missed over
| and over again: you can't back out of a deal that you've
| inked because you regret it.
| Johnny555 wrote:
| _he stumps up the $1B termination fee_
|
| I don't think that's even an option -- that $1B breakup fee
| was just if the deal was not allowed to go through due to
| reasons outside of his control (like if it was blocked due to
| regulatory reasons). Otherwise, I think he's legally
| obligated to go through with it -- and Twitter's board has
| fiduciary responsibility to hold him to it.
| ozim wrote:
| No because he bid above twitter current stock valuation so he
| can still go down and people might not be happy but they will
| not be able to sue anyone.
| tick_tock_tick wrote:
| He has tons of wiggle room. Mostly in this will takes years
| to resolve, Twitter will be forced to disclose nearly every
| internal document that will 100% have some email or chat of
| employees stating, if only as hyperbole, that the bot rate
| they report to the public is bullshit.
| tptacek wrote:
| That will get him nowhere in the trial, because incorrect
| information is only a valid reason to break off the deal if
| it uncovers a material adverse effect, and it is virtually
| impossible to get Delaware courts to find an MAE. Matt
| Levine's shorthand for Delaware MAE is "40% decrease in
| profitability". Not stock price; a 40% decrease in the
| fundamentals. It's not happening.
| KerrAvon wrote:
| Stipulate for the sake of argument that courts will accept
| the bot argument -- don't you think discovery would be
| problematic for Elon?
|
| https://www.latimes.com/business/story/2022-04-12/musk-is-
| of...
| minimaxir wrote:
| His team apparently had a tough time verifying the data due to
| API rate limits.
|
| > While Twitter has provided some information, that information
| has come with strings attached, use limitations or other
| artificial formatting features, which has rendered some of the
| information minimally useful to Mr. Musk and his advisors. For
| example, when Twitter finally provided access to the eight
| developer "APIs" first explicitly requested by Mr. Musk in the
| May 25 Letter, those APIs contained a rate limit lower than
| what Twitter provides to its largest enterprise customers.
| Twitter only offered to provide Mr. Musk with the same level of
| access as some of its customers after we explained that
| throttling the rate limit prevented Mr. Musk and his advisors
| from performing the analysis that he wished to conduct in any
| reasonable period of time.
|
| > Additionally, those APIs contained an artificial "cap" on the
| number of queries that Mr. Musk and his team can run regardless
| of the rate limit--an issue that initially prevented Mr. Musk
| and his advisors from completing an analysis of the data in any
| reasonable period of time. Mr. Musk raised this issue as soon
| as he became aware of it, in the first paragraph of the June 29
| Letter: "we have just been informed by our data experts that
| Twitter has placed an artificial cap on the number of searches
| our experts can perform with this data, which is now preventing
| Mr. Musk and his team from doing their analysis." That cap was
| not removed until July 6, after Mr. Musk demanded its removal
| for a second time.
| fooey wrote:
| the contract says they can't make any demands that have
| materially adverse effect on the company
|
| if he was hitting up against rate limits, it's easy for
| Twitter to call his requests adverse
| erichocean wrote:
| They gave higher rate limits to existing enterprise
| customers.
|
| Pretty hard to argue that is was "adverse" in that case.
| mft_ wrote:
| How would it be adverse? Are you suggesting his data
| scientists are querying the API so much that they are
| DDoSing Twitter?
| outside1234 wrote:
| They had firehose access - there was no limiting
| ben_jones wrote:
| A lot of these rate limits would have been designed off the
| rubble of the Cambridge Analytica scandals, and would've been
| designed to prevent a lot of analysis.
|
| I still find it dubious that they couldn't long poll
| sufficient samples. I'd love to see the raw feedback of
| Musk's "Data Experts" versus whatever awful telephone game it
| became through several layers of Executives and Lawyers. I
| wonder if Musk just has a nepotistic data team next to him.
| paxys wrote:
| If this goes to the courts then the only two options are he
| gets to back out entirely or he pays the originally agreed
| price. There's a chance of a settlement where Twitter agrees to
| sell for significantly less than that, but (1) there's zero
| incentive for them to do so and (2) they will definitely not
| get shareholder approval for that.
|
| One thing for sure though is that a lot of lawyers are about to
| make a lot of money.
| mikkergp wrote:
| > a lot of lawyers are about to make a lot of money.
|
| The one thing written in this thread that I am 100% confident
| is true.
| petilon wrote:
| This is good for Twitter, and good for the world. Musk's
| misguided approach to free speech, which says anything that is
| not explicitly illegal is allowed, would have made Twitter an
| open forum for spreading lies and hate.
|
| My guess is Musk never intended to buy Twitter. He needed an
| excuse for dumping billions of dollars' worth of TSLA at its peak
| (while at the same time faulting Bill Gates for shorting TSLA),
| and his proposal to buy Twitter provided a convenient cover.
| rappatic wrote:
| > Musk's misguided approach to free speech, which says anything
| that is not explicitly illegal is allowed
|
| That's what free speech _is_ , whether or not you agree that
| such a policy of unrestricted free speech is constructive or
| beneficial.
| petilon wrote:
| Disagree, there is no _absolute_ freedom of speech, for
| example you can 't yell "fire" in a crowded theater.
|
| Also disagree that such unrestricted free speech is
| constructive or beneficial. Sacha Baron Cohen explains it
| best: https://www.youtube.com/watch?v=ymaWq5yZIYM
| h2odragon wrote:
| > Musk's misguided approach to free speech, which says anything
| that is not explicitly illegal is allowed, would have made
| Twitter an open forum for spreading lies and hate.
|
| Twitter is of course currently known as a source of Truth and
| Harmony.
|
| "anything not illegal is allowed" sounds decent to me; if you
| want stuff illegal, make it illegal. If you want unwritten laws
| dreamt up by anonymous elites and enforced for random reason,
| go talk to Tipper Gore and the PMRC.
| anigbrowl wrote:
| _" anything not illegal is allowed" sounds decent to me_
|
| And there are numerous forums where that standard is applied;
| Twitter just happens not to be one of them because they like
| money.
| plokiju wrote:
| That includes spam though
| oska wrote:
| And he had another strategy for dealing with spam
| (verification of accounts). So I don't see your point.
| MallocVoidstar wrote:
| >"anything not illegal is allowed" sounds decent to me; if
| you want stuff illegal, make it illegal.
|
| Twitter is based in the US, the 1st Amendment protects hate
| speech such as explicit support for genocide. I don't
| consider a social network full of genocide promotion to be a
| good thing.
| petilon wrote:
| Nope, 1st Amendment only means the _government_ can 't
| restrict your speech. Private companies can.
| mft_ wrote:
| > Musk's misguided approach to free speech, which says anything
| that is not explicitly illegal is allowed
|
| Genuinely interested, and not just trying to argue: how _would_
| you otherwise define free speech? It sounds like you think free
| speech should have defined limits - which surely means it 's
| not free speech any more?
| petilon wrote:
| I am going to let Sacha Baron Cohen, of all people, answer
| your question [1]:
|
| _Voltaire was right when he said "Those who can make you
| believe absurdities can make you commit atrocities." And
| social media lets authoritarians push absurdities to millions
| of people. President Trump using Twitter has spread
| conspiracy theories more than 1700 times to his 67 million
| followers._
|
| _Freedom of speech is not freedom of reach. Sadly There will
| always be racists, misogynists, anti-Semites, and child
| abusers. We should not be giving bigots and pedophiles a free
| platform to amplify their views and target their victims._
|
| _Zuckerberg says people should decide what 's credible, not
| tech companies. When 2/3rds of millennials have not heard of
| Auschwitz how are they supposed to know what's true? There is
| such a thing as objective truth. Facts do exist._
|
| [1] https://www.youtube.com/watch?v=ymaWq5yZIYM
| mft_ wrote:
| Unless I'm misunderstanding the quote, that's very much not
| answering my question: it discusses limiting _reach_ (i.e.
| ability to disseminate one 's views widely and easily) and
| explicitly not free _speech_ itself?
| petilon wrote:
| Free speech doesn't have a single meaning. Freedom is
| relative. There is no right to _absolute_ free speech
| anywhere. For example, you can 't yell "fire" in a
| crowded theater. On social media owned by private
| corporations, "fire" isn't the only thing you aren't
| allowed to yell. Subverting democracy, inciting violence,
| propaganda from foreign governments pretending to be
| grassroots movement inside the US, etc., are all banned,
| and yet I would consider Twitter a free platform, albeit
| with sensible limits. But you're right, that's not
| _absolute freedom_.
| drexlspivey wrote:
| Why does he need a cover to sell his stock? He sold $10B+ last
| year without the twitter excuse. Also TSLA stock in March was
| at least 40% below it's peak
| petilon wrote:
| > _Why does he need a cover to sell his stock?_
|
| Wouldn't he look to be a hypocrite otherwise? [1]
|
| [1] https://nypost.com/2022/05/31/elon-musk-calls-out-bill-
| gates...
| Hamuko wrote:
| > _This is good for Twitter_
|
| Well, especially with that billion dollar termination fee
| (well, if they get it since Musk is probably gonna lawyer up
| now).
| tick_tock_tick wrote:
| > Musk's misguided approach to free speech, which says anything
| that is not explicitly illegal is allowed
|
| What is free speech but that.....
|
| > would have made Twitter an open forum for spreading lies and
| hate.
|
| Like it isn't now. Twitter lets pretty much anything and
| everything except hate against specific subgroups they've
| decided are "protected". It really doesn't help there choices
| are entirely arbitrary with no internal consistency.
| Banana699 wrote:
| >spreading lies and hate
|
| It's very funny how those things came to be known as code words
| for the *true* offenses, which we all know very well.
|
| What a waste of perfectly good words that used to have meaning.
| tinktank wrote:
| Oopsie. Stonks do bite back sometimes.
| anewpersonality wrote:
| hunterb123 wrote:
| ITT:
|
| - Elon is stupid, haha he will lose money.
|
| - Elon is evil, he's trying to pull a fast one on this
| corporation!
|
| - Elon waived his rights, he shouldn't have agreed to their fake
| numbers!
|
| - Twitter is allowed to claim whatever % of spam bots they want
| for the deal.
|
| - Twitter's censorship is _actually_ a good thing, here 's why...
| gsibble wrote:
| Well put.
|
| Also:
|
| - I'd hate it if Elon bought Twitter
|
| Same person:
|
| - What? This is bullshit! Elon should be forced to buy Twitter!
| thirdvect0r wrote:
| With age, you will look back on your infantile attitude to this
| situation and realise that you were simply a rube.
| notahacker wrote:
| ITT
|
| - Elon is a genius, he doesn't make mistakes
|
| - Elon's Twitter purchase offer isn't an ego trip or a
| distraction, he actually has a plan to make Twitter earn its
| keep
|
| - People keep saying that spending money on an overvalued asset
| that has zero fit with his engineering experience and ambitions
| will make Musk poorer, not richer, but none of those people are
| as smart as Elon Musk
|
| - Elon's decision to waive due diligence and enter a binding
| contract shows he knows what he's buying and isn't messing
| around
|
| - Elon deploying gagging clauses and/or financially ruining
| people for criticising him or his companies is actually more an
| indication of the important role he's playing in defending free
| speech, not his narcissism, here's why...
|
| [a month or two later]
|
| - Can't believe Twitter deceived poor little lamb Elon Musk
| into being the only user of their website unaware of the
| proliferation of bots on it. This changes everything!
| [deleted]
| qaq wrote:
| An alternative theory all the people who have being really upset
| about him buying Twitter are now actually cheering for him to be
| forced to buy it. So he got to shift the sentiment for free :)
| gsibble wrote:
| There's something really messed up and confusing about all the
| people complaining about him buying twitter now complaining
| he's backing out of the deal. Most of the people in these
| comments are hypocrites.
| TAForObvReasons wrote:
| It's not hypocritical to complain that:
|
| 1) Elon Musk, as owner of Twitter, would prioritize profits
| over free speech and other concerns.
|
| 2) Elon Musk, as a participant in a binding legal agreement,
| should not be allowed to break it on a whim.
| daemoens wrote:
| That's not how hypocrisy works.
| crmd wrote:
| Temporary rate limiting on Elon's firehouse API account[0] does
| not sound like a material breach of contract.
|
| [0] - page 5
| https://www.sec.gov/Archives/edgar/data/1418091/000110465922...
| 734129837261 wrote:
| Out of touch billionaire realises that he has to sell quite a lot
| of stocks in his companies in order to buy a dying social media
| platform that's mostly gamed by PR firms, bots, and the
| occasional actual user who wonders: "Why am I here again?"
| geoffmunn wrote:
| I always thought this was a weird purchase. All his other
| businesses have been industry disrupters where he can make all
| sorts of bombastic claims and promises of new products, but
| Twitter was an established company in a stable(ish) industry.
|
| It was really hard to see how he would apply his usual tricks,
| and I always figured he was going to wiggle out.
| TedShiller wrote:
| He achieved something good though: he exposed Twitter as a
| corrupt, biased company full of spam bots.
|
| Thank you Elon
| daemoens wrote:
| Everyone knew about the spam bots. They're spam bots so they're
| extremely visible.
| bindle8932 wrote:
| He didn't though
| hartator wrote:
| Everyone is saying Musk waived is due diligence rights. Where can
| I read that?
| vitaflo wrote:
| He didn't wave them he simply didn't do them. The time for due
| diligence is before you sign a binding contract. Once you sign
| no amount of "extra" diligence maters because you already made
| a binding decision. Elon signed without doing enough due
| diligence and now wants to get out because of it but that's not
| how binding contracts work.
| kringo wrote:
| I like him for his entrepreneurship and big bold bets.
|
| However related to Twitter, looking what's happening since his
| first tweet, this was the plan all along. Come up with an excuse
| to get out of the deal. Just he was trying to cash in all the
| marketing he can like always.
|
| I don't think its going to work the way he thinks in this case,
| its atleast going to cost him $1b
| hwers wrote:
| Surely 1bn could have afforded a lot more and better
| marketing..
| lemondice wrote:
| throwaway5959 wrote:
| legitster wrote:
| It's not like Twitter doesn't also have money and lawyers.
| frollo wrote:
| Exactly, I think we are going to see some funny headlines in
| the coming days.
| throwaway5959 wrote:
| Twitter isn't the one breaking the agreement for no reason. I
| read the letter, it's full of nonsense.
| legitster wrote:
| But he hasn't circumnavigated anything. Twitter has full
| rights and ability to go after him.
| [deleted]
| adoxyz wrote:
| The Twitter deal always felt like a cover to sell a bunch of
| Tesla stock at the peak and cash out. Looks like it worked out
| for him.
| MBCook wrote:
| Depends on how big the fine he ends up with is.
| mzs wrote:
| >The Twitter Board is committed to closing the transaction on the
| price and terms agreed upon with Mr. Musk and plans to pursue
| legal action to enforce the merger agreement. We are confident we
| will prevail in the Delaware Court of Chancery.
|
| Bret Taylor, Twitter board chair - 4:51 PM Chicago time * Jul 8,
| 2022
|
| https://twitter.com/btaylor/status/1545526087089696768
| DonHopkins wrote:
| Hit it, Frank:
|
| https://www.youtube.com/watch?v=K_WgCGOWae4
|
| We must watch the stuff you make.
|
| You have let us eat the cake.
|
| While your accountants tell you, "Yes, yes, yes!"
|
| You make expensive ugliness, how do you do it? Let me guess...
| ramacastro wrote:
| The amount of envy people here have for Elon is crazy. The man is
| succeeding at making us a multi-planetary species, arguably the
| single most important achievement in the history of life itself,
| and your little damaged egos can't handle it. So sad.
| vecter wrote:
| This ad hominem has nothing to do with Elon's legal standing
| with regards to whether or not he can back out of the deal
| without paying a large breakup fee.
|
| Yes Elon has done great work for humankind, but that doesn't
| absolve him of responsibility for bad behavior.
| ramacastro wrote:
| Sure, he won't mind paying that I believe. And he will likely
| create a new social media and crush twitter. I was talking
| about people attacking him just for being rich and accusing
| him of having an "inflated ego" which I totally disagree.
| vecter wrote:
| > Sure, he won't mind paying that I believe.
|
| I strongly beg to differ. The purported damage may be in
| the low tens of billions. It doesn't mean that Twitter will
| get that much, but they'll certainly sue for that much.
|
| > And he will likely create a new social media and crush
| twitter.
|
| What makes you believe that that is likely? I don't see any
| evidence for it whatsoever. Twitter has an incredible moat.
| Just because Musk is going to start a twitter competitor
| (which I doubt he'd bother doing since he's already so
| busy) doesn't mean it will be successful, if it even ever
| gets off the ground. Most likely it will be a small niche
| community.
|
| > I was talking about people attacking him just for being
| rich and accusing him of having an "inflated ego"
|
| Clearly the man has an inflated ego if he thinks he can
| pull nonsense like this and get away with it. You could
| make a reasonable argument that he's "earned" that ego, but
| that's different from whether or not he has one.
| ElijahLynn wrote:
| So was the whole goal all along to try and figure out how much of
| Twitter was fake spam accounts? That would be one way of doing
| it.
| riffic wrote:
| If there's a valid combination of username and password, the
| account is in no way "fake". I wish there was better
| terminology here.
|
| It can in certain be a spam account though.
| andrewclunn wrote:
| So then it looks like the "right wing" / anti-establishment tech
| pantheon is then set:
|
| Rumble, Brave, Truth Social, Subscribe Star
|
| Locals and Bitchute gave it a shot (and aren't dead yet). And an
| Elon owned Twitter might have been interesting, but at this point
| that's who the players are.
| daemoens wrote:
| All of them are incredibly small though. Most conservatives
| still use regular social media.
| rvz wrote:
| All of them are still bigger than Mastodon. After 6 years,
| Mastodon failed to show itself to be a proper alternative
| even during the so-called 'exodus' from Twitter. Given that
| it is smaller than those social networks, I regard that as a
| catastrophic failure.
|
| 6 years is not early days and Mastodon failed has still
| failed to attract users from Twitter 2 months ago. No chance
| of a significant amount of serious users from other social
| networks migrating over.
| timsneath wrote:
| It seems apparent to this observer that he developed cold feet
| pretty fast after an impetuous decision, and has been looking for
| any reason to back out of it since then. The spam accounts angle
| seems like a convenient scapegoat, rather than a real surprise to
| him.
|
| He's clearly eccentric in his approach to decision making: I
| don't think any Harvard Business School course will teach "the
| Musk Principles". But it's unclear to me what he initially
| thought he was getting out of this. In the original news, he
| said, "Twitter has tremendous potential - I look forward to
| working with the company and the community of users to unlock
| it." Either he was breathlessly arrogant or astonishingly
| careless in the first instance. And I say this as someone who has
| huge respect for his accomplishments in other industries.
| christkv wrote:
| Termination fee is like 1 billion I think so it will still be
| cheaper for him to back out and then buy it when its stock
| price crumples over the next couple of quarters.
| UncleOxidant wrote:
| > Either he was breathlessly arrogant or astonishingly careless
|
| Why not both? Arrogance tends to lead to carelessness.
| ben_jones wrote:
| Seems like a manic episode enabled by yes-men.
| recuter wrote:
| > The spam accounts angle seems like a convenient scapegoat,
| rather than a real surprise to him.
|
| It seems apparent to this observer that the spam accounts thing
| and other metrics were always super inflated and perhaps now
| there will be a reckoning.
|
| I also think it is very funny how there was much gnashing of
| teeth and literal tears at the prospect of him owning twitter
| but now they might end up chasing him and try to force him to
| buy them, thus further alienating the woke mob and sowing chaos
| internally. Look how the turn tables have turn tabled.
|
| If they are greedy enough to go to court over it the question
| of just how _fake_ this company is will stay in the news for
| the duration of the trial and the stock will tank. If they don
| 't they might have to, you know, actually function like a real
| company.
|
| This story is far from over.
| initplus wrote:
| No kidding Twitter has spam/fake accounts, isn't that part of
| why Musk wanted to buy Twitter in the first place?
|
| He publicly stated that he wanted to buy Twitter to clear up
| the fake account issue, he knew about the issue before
| entering the deal, when signing he waived due diligence that
| could have given him the opportunity to investigate the issue
| before signing...
|
| Musk's own tweets will work against him if he tries to use
| the fake accounts issue to back out.
| hwers wrote:
| This is such a terrible look for Elon. I've really liked him up
| until now but this just feels like playing with our emotions.
| Honestly starting to question how much hope there is for mars
| to happen at all.
| plankers wrote:
| >Honestly starting to question how much hope there is for
| mars to happen at all.
|
| i spat out my drink reading this
| TillE wrote:
| I suspect the initial decision was something like "hey I could
| actually just buy Twitter, that would be funny". It's less
| clear to me why he almost immediately started trying to back
| out. It's probably a waste of a significant chunk of money, but
| is that all?
| idiotsecant wrote:
| It makes more sense if you assume that Elon Musk is both a
| sometimes successful businessman and also suffering from
| unmanaged bipolar disorder.
| crmd wrote:
| Agree 100%. I've never met Elon but his online behavior in
| the run up to and immediately after the Twitter deal sure
| seemed hypomanic to me.
| soganess wrote:
| Can we not jump to blaming a person's bad choices on the
| first medical condition that fits? I know Musk has said he
| has bipolar disorder, and I'm not trying to discount that.
|
| I'm just saying what if... gasp... he simply did something
| foolish? The blame-it-on-the-bipolar out reinforces the
| narrative of an infallible person who only make mistakes
| because of a medical condition. Take that line of thinking
| one step further and you are now fully onboard the bipolar
| stigma train.
| appletrotter wrote:
| Do you have any experience with bipolar?
| stingrae wrote:
| It also hit at a point when Tesla's stock price started a
| rapid decent. The Twitter deal is becoming a larger and
| larger percentage of his net worth.
| 988747 wrote:
| >> It's less clear to me why he almost immediately started
| trying to back out.
|
| That's what you do when you sober up and realize what a mess
| you've made.
| jacquesm wrote:
| This seems to happen with some regularity in Musk's
| timeline.
| cowtools wrote:
| Well, if the purpose of buying twitter was to improve the
| user experience of internet users and advance the doctrine
| of free speech, then why not just spend that same amount of
| money building your own twitter (mastodon instance or
| something) and use your publicity to attract users?
| Slartie wrote:
| "Musk Social"?
| cowtools wrote:
| The difference would be that musk's following is more
| moderate, and they might respect peering agreements
| unlike Gab or Truth Social.
| Vespasian wrote:
| Well maybe he realised that in the best case he would
| govern over Twitter 2.0 with extra toxicity and in the
| worst case be the proud owner of another cesspool of
| assholes, pedophiles and people with violent ideas.
|
| I don't believe for a second that Elon Musk really cares
| about free speech for anyone but himself and he is right
| now probably not limited by twitter's policy but by other
| externalities
| cowtools wrote:
| Pedophiles? I'm pretty sure they would be forced to take
| down child porn. I mean, it's a public forum. If you are
| publicly announcing that you are pedophile or terrorist,
| that sounds like bad news for you.
|
| In any case, does twitter not already have a lot of
| "assholes" and people with "violent ideas"?
| dburflzz wrote:
| ChildOfChaos wrote:
| because that doesn't work.
| CoryAlexMartin wrote:
| An established social media platform's most valuable
| asset is the size of its userbase. Even with the reach of
| Musk, I think it would be hard to attract a large enough
| userbase to make the product more compelling than
| Twitter.
| TheOtherHobbes wrote:
| An established platform's most valuable asset is the
| _data_ of the userbase.
|
| Twitter can leverage a huge amount of data about personal
| preferences, interests, relationship status, political
| leanings, income, usage profiles, message habits and
| content, social graph, and location.
|
| If you specifically wanted to clamp down on certain
| demographics, it would be an excellent way to locate
| them.
| labster wrote:
| Stocks went down almost immediately after the deal across the
| tech sector. Financing got harder, he would have sell off a
| lot of TSLA at a discount to complete the deal.
| towaway15463 wrote:
| Did everyone forget about the massive hit the stock market
| took right after the deal was announced? Maybe that has
| something to do with it.
| alasdair_ wrote:
| The market went to shit almost right after the point where he
| made his offer. Tesla took a dive at the same time. A lot of
| the loan he took out is against his tesla stock.
| mikkergp wrote:
| I think about Jack Dorsey's endorsement early on:
|
| https://www.cnbc.com/2022/04/26/jack-dorsey-elon-musk-is-the...
|
| This most of all makes me think he was really into it and then
| fucked it all up. Or Jack was just trying to get back at the
| board.
| atlasunshrugged wrote:
| There's another belief floated by Josh Wolfe (an investor with
| Lux Capital) who claimed it was a ruse to liquidate Tesla stock
| en masse without Tesla hodlers getting suspicious and tanking
| the inflated stock price.
|
| https://twitter.com/wolfejosh/status/1545387947578597376
| marricks wrote:
| That's immensely believable, I wonder how he got someone
| people onboard to be help him fund it though. It's even more
| of a stretch but maybe the rest of them wanted more liquidity
| too?
| slg wrote:
| But Tesla stock did drop after the announcement of the deal.
| I think that is the real reasoning behind him quickly getting
| cold feet. He probably thought Twitter would be a fun side
| project, but the backlash from people in regards to Tesla,
| SpaceX, and just the general public meant it would be more
| costly both to his reputation and financially beyond just the
| sticker price. That took the fun out of it so he has been
| looking for ways to escape the deal ever since.
| thereare5lights wrote:
| > but the backlash from people in regards to Tesla, SpaceX,
| and just the general public
|
| There's no way he didn't foresee this.
|
| It would be shocking if he is lacking in self-awareness to
| that extent.
| jacquesm wrote:
| The question isn't really whether it dropped or not but
| whether the perception was that it would have dropped more
| without that fig leaf.
| slg wrote:
| This isn't the first time he has sold Tesla shares. He
| sold billions of dollars worth last year too. I'm not
| sure the exact dates to do the math, but did those sales
| cause a immediate drop of over 10% like the Twitter
| announcement?
| jacquesm wrote:
| That's not the right question, the question is the
| _perception_ of the difference between selling $44B of
| stock outright or selling it with the goal of buying
| Twitter.
|
| What actually happened isn't relevant. What is relevant
| is whether he may have thought it would work better.
| Tricky to prove.
| slg wrote:
| We agree that he didn't suspect the backlash from buying
| Twitter. I think our disagreement is just that you think
| he expected a large backlash from selling Tesla shares
| and I'm not sure history really suggests that was
| something to be concerned about.
| robbiep wrote:
| he wasn't (or isn't) aiming to sell the stock, he was/is
| aiming to finance the purchase using his Tesla stock as
| security. So this line of argument... Doesn't really make
| sense?
|
| This is all publicly available. Due to leverage, he faced
| ruin if Tesla fell below X (whatever X is) if he funded
| it all himself. So he opened his side of the deal up to
| other people, and allowed other large shareholders to
| come inside his tent - which reduced his exposure. Then
| the market dropped 15%.
|
| Matt Levine has an excellent series of newsletters
| covering it.
| mensetmanusman wrote:
| But he has been saying Tesla was way over valued for over a
| year...
| openthc wrote:
| More than one financial analysit/money manager has floated
| this idea in our circle. It seems reasonalble; an pointing to
| the last time he sold a bunch (11B?) and told everyone it was
| to pay his taxes. They seem to think it was to just convert
| some high-risk (TSLA) to low risk (Cash, etc).
| the_biot wrote:
| That sounds reasonably logical, but by what measure of
| logic is overpaying for Twitter, of all assets, a good
| deal? There are surely better companies to do this sort of
| thing with, _and_ end up with an actually valuable asset at
| the end of it.
| spfzero wrote:
| I agree with you. If the object was to convert overvalued
| stock, you would not just convert it to another
| overvalued stock, right?
| openthc wrote:
| To over simplify: it's the trick of a illusionist; look
| over there! Something interesting (now switch the rabbit
| for the dove or whatever). So while GenPop is looking at
| this noisy deal; he's able to shuffle around money in
| three(?) ways -- where the net result is to reduce the
| TSLA holdings w/o too much penalty (or somethign). I'm
| not smart or rich enough to fully understand. The logic
| is distraction to execute a big dollar amount shift in
| equity positions.
| fisherjeff wrote:
| Sure but then why skip diligence? That would be the ideal
| time to sell lots of Tesla stock and eventually say "You know
| what? Nah" without any sticky legal issues.
| pryce wrote:
| If someone's stock is as incredibly overinflated as Tesla has
| been for so long, choosing the most effective way to
| liquidate stock without triggering a run becomes a social
| engineering problem with the incentive of a multi-billion
| dollar payoff.
|
| Honestly I think other people trying to read this situation
| in some way that ignores a _multi billion dollar incentive
| just sitting there_ is utterly naive.
| spfzero wrote:
| I think the incentive you mean is to move out of a stock
| you think is overvalued (I agree about that). But that
| works with any purchase, not just Twitter. And with that
| motive in mind, Twitter would be a really unwise company to
| buy, when there are so many companies available with actual
| asset value around. Wouldn't you rather buy something with
| your over-inflated stock that had some value-preservation
| attributes? For example, you could buy a mining stock, or a
| railroad. With Twitter, you're going from the frying pan
| into the fire.
| throwaway09223 wrote:
| According to the above theory, a value move (diversifying
| from TSLA to something else) is precisely what must be
| avoided.
|
| The move would _have_ to be perceived as financially
| irrational for it to be operable.
| halukakin wrote:
| This would have been switching from an overinflated stock
| to a much more overinflated stock.
| rmbyrro wrote:
| The theory presumes he never intended to actually buy
| Twitter stocks, just keep the cash.
| behnamoh wrote:
| But why would he need cash? To buy another company, or
| start one of his own?
| Sporktacular wrote:
| Minus 1 billion for a termination fee. Why would he have
| agreed to that if it was his plan all along?
| mzs wrote:
| You say _social engineering,_ I say _criminal fraud._
| FerociousTimes wrote:
| More precisely, securities fraud.
| behnamoh wrote:
| Is there any hope that this time he will pay for his
| shenanigans?
| Dylan16807 wrote:
| Though it's weird to me that it's fine to sell stock just
| because you want to, but pretending you didn't want to
| could qualify as securities fraud.
|
| And that seems to be what the concern boils down to? The
| issue of whether he defrauded _twitter_ is a separate
| thing. (Though I 'm inclined to say no, because twitter
| came at this in a very skeptical and careful way, and
| normal fraud requires fooling someone into material
| loss.)
| drc500free wrote:
| Intent is the core issue of most white collar fraud.
| MichaelCollins wrote:
| > _a ruse to liquidate Tesla stock en masse without Tesla
| hodlers getting suspicious and tanking the inflated stock
| price._
|
| Couldn't he just have said _" SpaceX needs more cash"_ or
| something like that?
| [deleted]
| napier wrote:
| Neither of these hypotheses precludes the other.
| caminante wrote:
| No? "Cold feet" is impulsive. Whereas a disguised
| liquidation is calculated.
|
| Regardless, the fall in share price likely drove the
| outcome.
| entropicgravity wrote:
| The Go masters insist that every stone must have at least two
| reasons for its placement.
| [deleted]
| qaq wrote:
| Wolfe has being on anti Musk crusade for a long time.
| jacquesm wrote:
| But is it true?
| qaq wrote:
| I would imagine there are cheaper ways to accomplish the
| same goal
| jacquesm wrote:
| That still does not answer the question.
| qaq wrote:
| How would you find a definitive answer?
| jacquesm wrote:
| That is a very good question, monitor the SEC for clues,
| if they bring some kind of action (which should either
| happen soon now that he has made it official he wants to
| back out or not at all).
| ImPostingOnHN wrote:
| given the SEC's regular lack of enforcement, their
| inaction would not be evidence of lack of wrongdoing
| jacquesm wrote:
| With counterparties like Musk it doesn't pay to try to go
| for some minor infraction, they will just lawyer their
| way out of it or stretch it forever, but if it is solid
| enough (and $44B might just do it) then it may well wake
| up the dragon. To be fair, someone would likely have to
| ask them nicely to do so because they feel that they have
| lost a lot of money due to Musk's actions.
| throwaway29812 wrote:
| That's a strange way of saying he was right.
| qaq wrote:
| I have no clue if he is right or not
| ChildOfChaos wrote:
| There is zero evidence that he is right.
|
| All we know are the facts, he agreed to buy twitter and
| now he is trying to walk away from the deal.
|
| There could be multiple reasons for that, including what
| he is saying on face value or a dozen other scenarios.
|
| He could still be wanting to buy twitter and use this as
| a bargaining tool to lower the price.
|
| You can say he was right, once we know the full facts
| which will be once this plays out and since it doesn't
| really affect any of us, speculating right now is simply
| taking part in silly gossip.
| ShamelessC wrote:
| bandyaboot wrote:
| Musk wanted to be warrior king of the internet edge lords. He
| was not playing chess.
| Mo3 wrote:
| I mean, it didn't necessarily take Josh Wolfe to see this as
| a viable possibility.
| avalys wrote:
| The deal includes a "specific performance" clause, which
| allows Twitter to force Musk to carry out the deal. He can't
| simply pay $1 billion and walk away, he's in for a very messy
| legal fight. This pretext about bots is incredibly weak and
| he's in no way guaranteed to win.
|
| If this really were part of some grand master plan, I think
| he would have left himself an easier out.
| at-fates-hands wrote:
| His legal team maintains Twitter is in material breach of
| multiple provisions of the Agreement and appears to have
| made false and misleading representations.
|
| https://www.sec.gov/Archives/edgar/data/1418091/00011046592
| 2...
| ceejayoz wrote:
| Sure, but that's bullshit. Twitter carefully couched each
| of this sort of statement in "we might be wrong"
| disclaimers.
|
| It's not like he came up with the "they're all bots"
| theory after committing.
| eropple wrote:
| His legal team can maintain that the sky is a vibrant
| chartreuse, but that doesn't mean it's true.
| [deleted]
| kelnos wrote:
| It also depends on what the Twitter board and shareholders
| want. Will they want to get bought out and owned by someone
| who clearly doesn't want to own the company, and may run it
| into the ground out of spite? Certainly some shareholders
| will just want to take the money and run (the agreed-upon
| buyout price is quite a premium over the current stock
| price), but others will be more interested in protecting
| the future of Twitter as a company and platform.
|
| Agree that there will be a massive legal fight, but my
| guess is that it will be over how much extra Musk has to
| pay to get out of the deal (beyond the $1B breakup fee),
| than over making him perform. But who knows; only time will
| tell.
| themitigating wrote:
| He's constantly racked the company and founders through
| the mud. The drop dropped 7% once he called it off.
|
| I'd sued and settle for a few billion instead of taking
| the one billion backout
|
| He uses his wealth as a weapon against companies he
| doesn't like, just the mere threat he may get involved
| causes massive changes in the stock price and in turn
| causes investors to suffer financial lose.
| behnamoh wrote:
| > He uses his wealth as a weapon against companies he
| doesn't like, just the mere threat he may get involved
| causes massive changes in the stock price and in turn
| causes investors to suffer financial lose.
|
| Reminds me of Bitcoin "whales". It's a shame that this
| guy is the figure that will take humanity to Mars.
| runarberg wrote:
| Never underestimate the incompetence of the average human.
| Doubly so if they are rich and powerful. In fact if a
| master plan has several fatal flaws on closer inspection,
| then that's just evidence that the perpetrator just didn't
| think it all through before executing.
|
| If you watch an amateur chess game you'll find that most
| players actually have some master plan, but don't have the
| skills to see the flaws, or even if the plan is perfect,
| they don't have the skills to play it through either.
|
| My sniff test for any conspiracy theory actually involves
| incompetence. The more competent the plan and execution
| need to be, the less likely it is to be a conspiracy.
| aetherson wrote:
| What is a theory you have dismissed because it seems too
| competent?
| mikkergp wrote:
| Couldn't he have sold Tesla as part of an offer that still
| had due diligence and was in negotiations rather than waiving
| due diligence and committing to a deal?
| pid-1 wrote:
| He made risky bets his entire life and was mostly lucky up to
| this point.
|
| Most folks who subscribe to the "Musk Principles" aren't nearly
| as lucky and go bust much earlier.
| nixass wrote:
| >But it's unclear to me what he initially thought he was
| getting out of this
|
| Answer: some sort of stock manipulation whether it be Tesla's
| or Twitter's
| oneoff786 wrote:
| The market crash makes it impossible to evaluate. It was a
| stupid price.
| [deleted]
| whynotkeithberg wrote:
| 'eccentric in his approach'
|
| by that you mean straight up lying, attempting fraud etc...
| jessaustin wrote:
| _Either he was breathlessly arrogant or astonishingly careless
| in the first instance._
|
| Perhaps he didn't expect the Nasdaq composite to drop 2000 over
| the next several months? That could have been careless,
| depending on the sort of agreement he signed. I guess he can
| afford a $1B penalty, but good luck finding another buyer after
| that. It's not as though Twitter are overflowing with ideas for
| profit...
| hourago wrote:
| > He's clearly eccentric in his approach to decision making
|
| Being called Eccentric is the luxury of the rich. If he was
| poor one will say "irresponsible" or even "crazy".
| ithinkso wrote:
| It is irresponsible to do something eccentric if you cannot
| afford it
| kennywinker wrote:
| It's irresponsible to do something eccentric when poor
| people bear the brunt of the consequences because you can
| afford to lose a billion here and there while people pay
| for that with their jobs, homes, lives.
| towaway15463 wrote:
| Are you saying that poor people would lose their
| livelihoods due to Tesla and Twitter stock price changes?
| You might need to reevaluate your definition of poor if
| so.
| cratermoon wrote:
| To quote the great Crash Davis, speaking to minor league
| pitching phenom Ebby Calvin 'Nuke' LaLoosh, "Your shower
| shoes have fungus on them. You'll never make it to the bigs
| with fungus on your shower shoes. Think classy, you'll be
| classy. If you win 20 in the show, you can let the fungus
| grow back and the press'll think you're colorful. Until you
| win 20 in the show, however, it means you are a slob."
| la64710 wrote:
| Musk is a brown bag of shit.
|
| He sent his selfie in a tweet response to Parag's tweet
| explanation.
|
| https://www.forbes.com/sites/abrambrown/2022/05/16/twitter-b...
| duxup wrote:
| > But it's unclear to me what he initially thought he was
| getting out of this.
|
| The more it goes on it feels like "I don't like how twitter
| works, I'll show them! <insert some less developed ideas of
| free speech on the internet>"
|
| Later:
|
| "Oh noes if I do what I want here the result might be bad..."
|
| It just feels like a YOLO business deal that wasn't thought out
| the more this goes on.
| toiletfuneral wrote:
| tempsy wrote:
| This assumes he was serious about it at some point, instead of
| just cover to sell more Tesla shares and free marketing for
| himself.
| labster wrote:
| Gosh, I hope he was serious at the point he signed a contract
| with a $1B penalty, or else he's the world's worst
| businessman.
| shakow wrote:
| > or else he's the world's worst businessman.
|
| According to this hypothesis, he would still walk out with
| 7.5B in hard cash instead of 8.5B in Tesla share. I'm not
| in his boots, but I see how it can be seen as worth it.
| ImPostingOnHN wrote:
| assuming he can come up with a convincing case that
| twitter made material lies, otherwise he walks out owning
| twitter for the cost specified in the contract
| atlasunshrugged wrote:
| Unless he thought he could be a big enough pain in the ass
| that Twitter folks would rather walk away from the deal and
| let him skate with a few million penalty while he
| liquidates Tesla stock with little repercussion to the
| share price (unfortunately for him, the market tanked in
| the interim and now his deal is an absolutely amazing one
| for Twitter shareholders so no way they let him walk away,
| $1B penalty isn't even an option as this was about outside
| interference)
| jiggawatts wrote:
| If you want to move $40B, this is just a two percent
| transaction fee to avoid losing $200B by spooking the
| public investors.
|
| That's smart.
| Hamuko wrote:
| I was under the assumption that he was not financing that
| $40B with just Tesla stock?
| chx wrote:
| He was funding it with loans leveraged against his stock
| if I understand this correctly.
| shuckles wrote:
| If that was his intent, it's fraud and has (in theory)
| criminal penalties.
| Hamuko wrote:
| Judging by his dealings with the SEC, I don't feel like
| he respects the law all that much.
| jacquesm wrote:
| I don't think the SEC cares very much what Elon respects
| or not, if they can nail him they will.
| ShamelessC wrote:
| He's been skirting regulators and manipulating
| shareholders for a while now. If they "can nail him they
| will" was true they would have acted by now.
| camjohnson26 wrote:
| I think they've clearly shown that's not true ever since
| they tried to take him back to court for clearly not
| having his tweets pre approved, despite the settlement
| over the "funding secured" tweet.
|
| The man literally tweeted "Tesla stock is too high right
| now, imo" and nothing happened.
| jacquesm wrote:
| I see some difference between tweeting stuff and signing
| binding agreements for purchase and using stock as
| collateral at a particular valuation.
| jazzyjackson wrote:
| the man has plot armor, he can do what he likes knowing
| that the Department of Defense is counting on him and his
| launch platform for the next generation of space warfare
| [0] - any efforts to reel him in will be met with a phone
| call like Alexander Acosta, "above your pay grade",
| "leave it alone"
|
| [0] you didn't think Starlink's purpose is to let
| fisherman watch YouTube did you?
|
| </tinfoil>
| jacquesm wrote:
| No reason why Elon has to own it for that to be so, in
| fact there is probably a long line of parties who could
| not wait to be take it off his hands.
| rndgermandude wrote:
| The "if they can nail him" seems like a big if to me.
|
| If it is a scheme and he had no intention of ever
| actually buying twitter, the government would still have
| to prove beyond a reasonable doubt that he did it for
| this fraudulent reason. Or at least collect enough
| evidence to make him accept a plea deal for fear he could
| lose in court.
|
| It would seem to me that him backing out now has a bunch
| of other very plausible explanations beyond "it was fraud
| all along", including the one this document states, that
| twitter breached their agreement by not providing the
| data he wanted to assess the prevalence of fake account
| himself. Or even that buying some "media company" is just
| what billionaires do[1], but him being "eccentric" he
| went in too hard and fast and is now backing out that he
| has seen the backslash and/or has done some actual due
| diligence, which would make him stupid and/or
| irresponsible but not criminal. All that to me seems like
| good ways for lawyers to claim there is "reasonable
| doubt" should he ever get charged with fraud, unless the
| government would happen to find some "smoking gun" piece
| of evidence.
|
| And of course it assumes there is actually political will
| to nail him.
|
| [1] https://www.investopedia.com/billionaires-who-bought-
| publish...
| micromacrofoot wrote:
| that's smaller than a Venmo transaction fee (3%)
| jacquesm wrote:
| Not necessarily. That all depends on what he gained in
| return. Unless of course he ends up going to jail for
| fraud. It took a lot less for Martha Stewart.
| ClumsyPilot wrote:
| I would like the consequences of his actions to catch up with
| him.
|
| A Joe Boggs acting in this fgashion would have been taken to
| the cleaners long ago.
| [deleted]
| scotty79 wrote:
| > Either he was breathlessly arrogant
|
| Isn't that like more than half of his MO?
| thethought wrote:
| What my school teacher used to say about
|
| - cold feet - impetous - eccentric - breathlessly arrogant -
| astonishingly careless
|
| pupils
| taurath wrote:
| He is a man who owns and can raise massive amounts of money and
| promise smart people the ability to build something they want
| to build. That he gets so much credit for his ventures is a
| very strange thing to me given how many he has vs how few hours
| in the day he must have to actually pay any attention to them.
| burrows wrote:
| So you think he would be more deserving of credit if he only
| did SpaceX? instead of SpaceX, Tesla, NeuraLink, etc?
| hartator wrote:
| And Paypal.
| parentheses wrote:
| He relies heavily on his average decision-making ability being
| way above average. By being this volatile he basically captures
| surprisingly many good risky decisions. At the same time he
| ends up with things like this.
| drivingmenuts wrote:
| Market manipulation disguised as free speech advocacy. Pure and
| simple.
| __john wrote:
| I think there is a 1A aspect to his involvement with Twitter.
| redact207 wrote:
| My guess is he's hit that obscene level of wealth and realizes
| he is now beyond the controls of the system, and can therefore
| game it to his advantage.
|
| When you can afford the best legal team money can buy and
| payoff the rest of the gatekeepers, then the game is simply to
| transfer wealth into your own pocket in bigger chunks.
| godelski wrote:
| Honestly, so what if he's out $60 bn. I don't think this
| would affect his lifestyle in any way whatsoever. But it
| would affect his high score. I'm guessing at one point he
| realized the former but later realized the latter and cared
| more about that. Though he's still got a 88bn lead on second
| place so I'm not sure why he cares.
| atlasunshrugged wrote:
| No matter what it won't be him fronting all the money, he
| had institutional investors that were ponying up a huge
| amount of the dough alongside him.
| cormacrelf wrote:
| You can't bribe the judges in Delaware. They can force him to
| go through with the deal at the agreed price, now at a
| significant premium on market value, and it's reasonably
| likely they will. This was not a genius move.
| tzs wrote:
| It should be noted that this is largely because Musk agreed
| to it.
|
| The normal remedy for breach of contract is for the
| breaching party to have to pay the other party monetary
| damages sufficient to put the other party in the monetary
| position they would have been in had the contract not been
| breached. Court generally will only order someone to
| actually go through with the contract (which is called
| specific performance) if monetary damages won't work for
| some reason.
|
| For example if we have a contract for me to sell you a
| million microcontrollers at $1 each, which you are going to
| use to make a million units of some gadget that you are
| going to sell for a profit of $0.10 each, and I find
| someone who will give me $2 each for the microcontrollers
| and so let you know I'm going to breach the contract and
| sell my microcontrollers to them, a court is very unlikely
| to order me to honor the contract. They will order me to
| pay you $100k, the profit you were anticipating making from
| our deal (and probably attorney fees, and other costs you'd
| incur dealing with the breach).
|
| But, according to this blog [1] at Findlaw:
|
| > If Musk tries to abandon the deal, Twitter could sue him
| and ask for specific performance. This remedy is usually
| hard to get, but Musk agreed to a powerful specific
| performance clause in the merger agreement. In fact, he
| didn't just agree that Twitter could get specific
| performance. He promised that he wouldn't argue it couldn't
| (forgive the double-negative).
|
| I'm unable to think of any good reason one would agree to
| that.
|
| [1] https://www.findlaw.com/legalblogs/courtside/is-elon-
| musk-go...
| elliekelly wrote:
| I think it's far more likely he'd be on the hook for
| damages. It would be unusual for a judge to force a sale to
| a now unwilling buyer. Everyone--Twitter, Twitter
| shareholders, Musk--would be worse off with that result.
| ImPostingOnHN wrote:
| twitter share price is currently lower than what he bid,
| so twitter shareholders would be materially better off
| quickthrowman wrote:
| Twitter shareholders would be worse off.. how?
| bediger4000 wrote:
| I'm no expert, so what makes Delaware judges specially
| incorruptible?
| D13Fd wrote:
| Delaware sets the gold standard on corporate law, and has
| a special courts of law and equity (the CCLD division and
| the Court of Chancery) that are set up to handle high-
| value corporate matters.
|
| I don't think most American judges are susceptible to any
| kind of bribery (other than jurisdictions where elected
| judges may expect campaign donations from litigants), but
| Delaware has to be among the absolute least likely to
| have that issue.
| atlasunshrugged wrote:
| I mean, besides the fact that generally I don't think
| overt corruption is that much of a problem in the U.S.,
| the fact that anyone involved with this case will be
| under a massive microscope and that Delaware as the
| general standard place to do business deals with many
| large transactions so this one may not be all that
| impressive to local judges
| cormacrelf wrote:
| Their reputation and their being paid very well to handle
| a huge proportion of corporate law in America efficiently
| and fairly. They're a huge part of the reason everyone
| domiciles their companies there.
| bediger4000 wrote:
| Ok. I had understood corporations chose Delaware merely
| because of the anti-consumer bias in Delaware's laws, but
| it's good to hear otherwise.
| dwater wrote:
| That may have been part of the original reasoning, but
| now Delaware has built up the world's most reliable
| corporate legal system, and companies like a reliable
| legal system very much.
| grey-area wrote:
| Let's see what happens. I doubt very much the scenario you
| outline will come to pass. Nobody wants this deal any more
| and he can drag all their dirty laundry into it (bots, fake
| daus etc).
|
| This will just slowly fade from memory as the lawyers argue
| and at some point they'll settle.
| joshuamorton wrote:
| > Let's see what happens. I doubt very much the scenario
| you outline will come to pass. Nobody wants this deal any
| more and he can drag all their dirty laundry into it
| (bots, fake daus etc).
|
| Twitter shareholders do. If I hold $1m in TWTR today,
| this deal going through is worth around 500K to me,
| possibly more if we assume the share value now prices in
| the buyout potential and will drop otherwise.
| VectorLock wrote:
| >But it's unclear to me what he initially thought he was
| getting out of this.
|
| The best hypothesis I've heard is that he was trying to secure
| the raw materials that Tesla's stock price is made out of.
| bredren wrote:
| This is perhaps meant to be tongue in cheek but Twitter is
| not just influential to Musk's concerns.
|
| Twitter is influential to the concerns of Musk's competitors
| and potential regulators who might stand in his way.
|
| Regardless of its deflated value, (all assets were way puffed
| up) Twitter is still extremely valuable.
|
| Arguably, it is still positioned to be worth more than
| Facebook.
| NelsonMinar wrote:
| What a blow to his already tarnished reputation. Imagine the
| conversation next time he tries to acquire a company.
| ivraatiems wrote:
| The best thing that could come out of this would be Twitter
| forcing Elon to make the purchase, then Elon closing the company
| down out of spite.
|
| In that case, everybody I don't like loses, which is pretty close
| to me winning, I think.
| riffic wrote:
| Federated social networking based on W3C ActivityPub or a
| successor protocol will eclipse Twitter on a slow, but finite
| timeframe.
|
| Twitter could even build a business model around that - They can
| manage hosting and the sales of Twitter services as a SaaS on
| your own domain name like Office 365, Google Workspace.
|
| Or someone could snatch this market right now with their own
| first-mover advantage (I can see Mastodon gGmbH positioned to do
| so). I'd do it myself if I had the time and energy.
| sizzzzlerz wrote:
| One senses there are hoards of lawyers out there gleefully
| rubbing their hands together and salivating over the feasting to
| come.
| fffox wrote:
| Most people seem to be giving him the benefit of the doubt that
| he has cold feet. Personally, I think this was sabotage, he had
| no intention of buying Twitter in the first place and this was
| just a ploy to fuck with Twitter.
| TillE wrote:
| Doesn't really add up, because he's going to be forced to go
| through with the deal anyway. I haven't heard a single lawyer
| with relevant expertise suggest otherwise.
|
| Since that's where we're going to end up, it would be much
| simpler for him to just cleanly buy Twitter, for whatever
| purpose he intends.
| naveen99 wrote:
| So is there a court that can enforce the merger agreement ?
| What's the worst Delaware can do ?
| r3trohack3r wrote:
| I have very little context here. It seems the general sentiment
| in the comments is that this attempt to get out of the merger
| agreement will fail and that Musk will be forced to follow
| through with the purchase of Twitter. At the current rate Twitter
| is trading at, Musk will be paying roughly 150% over market value
| to acquire the company.
|
| So a question: if you believe Musk will still purchase Twitter at
| an inflated price, are there any good reasons for not purchasing
| Twitter stock? In other words, Musk has offered to give you
| $54.20 per share, and you can purchase those shares for $36.81 at
| the time of this comment. If folks are confident that this trade
| will go through, isn't it a quick way (relative to 8% YoY) to
| 1.5x your investment?
| ceejayoz wrote:
| There's a chance Twitter accepts 5-10B in exchange for dropping
| their objections to the end of the merger.
| somenewaccount1 wrote:
| I really don't understand why you all think Elon is going to pay
| anythying.
|
| The 6.4 provision is pretty standard, and often the reason for
| deal to fall through, in that enough of the requested information
| was not provided. You really don't know what was asked, what was
| ignored, and what garbage data was sent back. You think Twitter
| is all innocent? Pfffftt. Don't be evil, oops, i mean naive.
|
| He doesn't have to prove fraud, or malice, or that it wasn't
| worth it....all he has to show is that requests were ignored,
| rebuffed even though they are reasonable, and responded to with
| bad data. That's not really a hard case to win.
| MBCook wrote:
| I don't believe his purchase was contingent on anything. I
| don't think he's allowed to back out.
|
| Also that billion dollar number was not a get out of jail free
| card. He can't just decide to pay it and walk away. It only
| works under certain circumstances.
|
| I don't believe your analysis is correct. At least it doesn't
| match what the legal experts at CNBC seem to think.
|
| https://www.cnbc.com/2022/05/13/elon-musk-cant-just-walk-awa...
| gsibble wrote:
| Seems to me he makes a pretty sound argument here to back out.
| hansword wrote:
| Are you a lawyer? Because 5days ago, you wrote "I am a
| developer..."
|
| If you are not, where does the "all he has to show...." part
| come from? Do you have a source?
| gamache wrote:
| He knows how to pull out after all!
| kzrdude wrote:
| He's late
| Invictus0 wrote:
| Pulling out doesn't help after you've already spilled the ink
| legitster wrote:
| Did they wait for Matt Levine's article to drop today before they
| submitted this?
| Smilliam wrote:
| No Money Stuff today :( Monday is going to be very juicy,
| though I'm hoping for a special Saturday edition to talk about
| how this is all so very stupid.
| chrisbolt wrote:
| No, Matt Levine is taking today off (as mentioned in
| yesterday's article).
| strangeloops85 wrote:
| This is going to Delaware Chancery court, and if his ridiculous
| claims hold it does turn upside down long-held general principles
| of mergers and acquisitions that would affect.. everyone. I don't
| think the court will side with him on this. In the past, they
| have forced mergers to go through..
| hwers wrote:
| So embarrassing if he ends up being forced to own it and
| everyone knows he tried to back out.
| metadat wrote:
| Embarrassment is the least of his problems at this point.
| metadat wrote:
| How much foot dragging does the Delaware Chancery Court usually
| tolerate in these sorts of situations?
|
| Asking for a friend xD
| jimnotgym wrote:
| I don't trust any man that thinks a car doesn't work better for
| the driver with an analogue speedo in front of the driver, rather
| than a tablet to the side
| electric_mayhem wrote:
| I'm looking forward to the day he gets held accountable for
| market manipulation.
|
| Bet he (and his friends, if he has any) made a mint off this
| farce.
|
| Not that I have any faith it will happen.
| kylehotchkiss wrote:
| So glad HN got back online when the day got interesting
| bediger4000 wrote:
| I guess we'll never see how a free speech Twitter works. I think
| this is sad.
| gsibble wrote:
| You're being downvoted. Another sad day on HN when free speech
| is downvoted.
| madrox wrote:
| Everything about this deal strikes me as Elon trying to buy his
| way out of the fact he illegally acquired stock in a bid for a
| board seat. At the time, I'm sure he thought it was a clever way
| out of an immediate problem, and he certainly moved the
| conversation away from his stock buying shenanigans. I just don't
| know how he didn't see how the outcome would be...owning Twitter.
|
| So many people have gotten very close to buying Twitter...even
| Disney. The surface appeal is high but once you think about it
| for more than ten minutes it's clearly a problematic platform
| with few solutions that don't drastically lower its value. If
| Elon ends up not closing this deal with Twitter, I suspect that
| Twitter will go the way of Tumblr...eventually getting bought by
| a second tier tech company before being mismanaged into
| irrelevance.
| peter_retief wrote:
| I think he realises that it is worth a lot less than he offered,
| he will probably walk away from it and get sued.
|
| Any legal experts out there?
| camjohnson26 wrote:
| Look around in the thread. M&A experts have confirmed that Musk
| cannot walk away from the deal, even by paying the $1 billion,
| unless Twitter lets him.
| patrickaljord wrote:
| If he can just walk away and get sued that would probably be
| cheaper than spending all those billions on Twitter. I'm not a
| lawyer tho so no idea what's going to happen.
| gsibble wrote:
| Could you commenters please make up your minds over whether you
| want the deal to go through or not? You all seem to hate that
| Musk would make Twitter more conservative so you don't want the
| deal to go through, but also make fun of him and torment him for
| pulling out as if you do want the deal to go through. You can't
| have it both ways.
|
| Either you want the deal consummated or you don't. Stop being
| such hypocrites.
| daemoens wrote:
| They still don't want him to do it, it's just funny that he's
| being forced into doing it now. It's not hypocritical to laugh
| at him for that.
| gsibble wrote:
| HARD disagree. If you don't want him to own it, you should be
| happy he's walking away.
| daemoens wrote:
| We don't want him to own it, but if he's being forced to
| after making all the self-righteous fuss earlier this year,
| it's extremely funny.
| gsibble wrote:
| I'll find it extremely funny if he is forced to own it
| and make it a fantastic platform for free speech and
| fires all the woke idiots that work there.
| compiler-guy wrote:
| This may be hard to believe, but HN is made up of thousands of
| posters with a wide variety of opinions.
|
| The fact that some people want the deal to go through, and some
| don't, and that they post at different rates in different
| threads, doesn't mean that any individual person is a
| hypocrite. Nor that HN in general is.
| jeremyjh wrote:
| We definitely can have it both ways. We don't want him to buy
| Twitter - because he is an idiotic blowhard. Also we are happy
| he is backing out, because it demonstrates what an idiotic
| blowhard he is.
| gsibble wrote:
| That's fine, but then you can't celebrate that he may be
| forced into buying it which a ton of comments here are doing.
| minimaxir wrote:
| Elon Musk made the offer himself, he wasn't coerced into it
| or did it without sufficient public information.
|
| He's an adult.
| daemoens wrote:
| We're celebrating the forcing part, not the actual buying
| part.
| wyldfire wrote:
| Is he an idiot who realized he was in too deep / paid too much?
| Or was he trying to find a way to discredit their user numbers
| and wanted big headlines?
| nemothekid wrote:
| When Musk made the offer
|
| 1. TSLA was trading at ~$1,000 share
|
| 2. He offered $54/share
|
| Now?
|
| 1. TSLA is trading at $750/share (so if Elon musk was 100% in
| TSLA, he lost 25% of his wealth).
|
| 2. Twitter's comprable, Facebook, fell roughly 33% on revised
| revenue projections and slowing growth. TWTR roughly tracks
| Facebook, except for last quarter where the stock hasn't moved
| due to Musk's offer.
|
| So Musk became poorer, and TWTR, which probably should be
| trading in the high 20s, has an offer for $54/share; meaning
| Musk may be paying double what it is currently worth.
|
| I find it pretty amusing Musk has meme'd his way into a
| disastrous deal.
| dylan604 wrote:
| Do you really believe that the "if" in 1) is true? Really?
| Enough to make that comment?
| adgjlsfhk1 wrote:
| It's true enough. He isn't 100% tesla, but the vast
| majority of his wealth is in tesla and spacex, and only one
| of those is actually redeemable in the short to medium
| term.
| dathinab wrote:
| and there was money parked in bitcoin...
| nemothekid wrote:
| Of course it's not 100% true, the only thing you should
| take away is that by TSLA shares crashing, Elon lost a
| significant amount of wealth that would have been used to
| purchase Twitter.
| adamrezich wrote:
| lots of emotionally-charged comments here, which is pretty
| disappointing. if we look at this dispassionately, perhaps we can
| come to better conclusions than "elon big poopy head freeze peach
| bad". for example, one possibility is that Musk never intended to
| actually buy Twitter because he had reasonable suspicions that
| the <5% spam/bot figure provided by Twitter was intentionally
| incorrect (i.e. fraudulent), and he just wanted to get that out
| in the open and possibly even tank the company's stock as a
| result, either as a personal vendetta against the platform and
| company, or because he wants to develop a competitor. or maybe he
| wants to buy it up after the price falls even further. who knows?
| but it's more fun and interesting to speculate like this rather
| than just hurling loaded adjectives like "impetuous",
| "eccentric", "breathlessly arrogant", "astonishingly careless",
| and so on and so forth. I get that public opinion on the guy here
| has largely turned pretty sharply in the past couple years but do
| we really need to pretend like we're 2016 headline-writers
| writing about Donald Trump when we discuss him for some reason?
| that entire schtick is long-since played out.
| minimaxir wrote:
| > one possibility is that Musk never intended to actually buy
| Twitter
|
| Which was a common perspective when the idea was floated
| around, until he signed a legal agreement actually saying he
| was going to buy Twitter.
| crikeyjoe wrote:
| Lots of Twitter fraud here.
| [deleted]
| maxander wrote:
| I recommend Matt Levine's blog Money Stuff [0] for analysis of
| just how bizarre Musk's twitter saga is relative to usual day-to-
| day corporate acquisitions. I also recommend his twitter thread
| just now breaking down his reaction to today's news [1]
|
| [0]
| https://www.bloomberg.com/opinion/authors/ARbTQlRLRjE/matthe...
|
| [1]
| https://twitter.com/matt_levine/status/1545519476707319808?s...
| selimnairb wrote:
| Was really looking forward to watching him eat this shit sandwich
| he made for himself.
| camjohnson26 wrote:
| Twitter is responding with legal action:
|
| " Bret Taylor, chairman of Twitter's board of directors, tweeted
| Friday afternoon that the board plans to pursue legal action to
| enforce the deal at the price and terms originally agreed upon.
|
| We are confident we will prevail in the Delaware Court of
| Chancery," Mr. Taylor tweeted. Parag Agrawal, Twitter's chief
| executive, retweeted the message."
|
| https://www.wsj.com/articles/musk-says-he-is-terminating-twi...
| godmode2019 wrote:
| I can tell you Twitter took the not question seriously. I have
| only used twitter once when my company had a notice board you
| needed to tweet to, over 7 years ago.
|
| After musk started talking about bots, I started getting a
| ungodly amount of twitter emails asking me to sign in and see
| watt my friends are doing ect. Over 10 a day for the last month
| or so.
|
| My email is literally filled with twitter emails trying to
| activate my inactive account to temporary inflate their numbers.
|
| Musk didn't have buyers remorse, we entered a huge market crash
| in the middle of the deal, so twitter was not worth nearly as
| much. Likely worth around $15 USD per share.
|
| Everyone knows twitter is majority bots, gpt influence accounts.
| Musk was using that angle because they would never admit to it
| publicly as it would likely have stock or legal issues.
|
| He likely still wants to but twitter at the current market value,
| not yesterdays current value.
| Animats wrote:
| Tesla needs to focus. Two major assembly plants are down for line
| rework because the line runs too slowly. The battery factories
| are behind schedule. Solar roof installations are way under goal,
| despite high energy prices. "Self driving" is a flop. And
| whatever happened to the Cybertruck?
|
| Tesla is a car company. They need to focus on making cars.
| They're past the startup stage. To grow into that bloated market
| cap, they need to make a _lot_ more cars. Production. That dull
| and boring stuff Detroit and Toyota do well.
| cozzyd wrote:
| Wow, this is almost as embarrassing as the Las Vegas Tunnel...
| mandeepj wrote:
| I'm not sure why you guys have not noticed his patterns: he
| always jumps-on whatever the hottest current topic is - whether
| kids stuck in a cave in Thailand, Ukraine war (making fun of
| Putin by inviting him to a fist fight), Twitter ( was active due
| to leadership changes; in-general the app is popular). His idea
| is - by staying in news, he's driving PR for Tesla. He's acting
| as a brand machine for himself and his companies.
|
| Besides all his, he has no regard, empathy for his employees -
| the real people who made him, who he is. What an irony!
| jl6 wrote:
| What a ridiculous waste of time and energy for someone who should
| have better things to do. What part of his solar/EV/Mars vision
| was dependent on him owning Twitter? I hope he makes a swift and
| clean exit from this mess, but with enough bruises to teach him a
| lesson.
| sharken wrote:
| Seems like there is only one loose end left: will he or will he
| not avoid the 1B penalty for backing out.
|
| How that goes is anyone's guess.
| MBCook wrote:
| Not, plus additional penalties. See:
|
| https://www.cnbc.com/2022/05/13/elon-musk-cant-just-walk-awa...
| ilikeitdark wrote:
| The dude is funny, gotta give him at least that.
| paxys wrote:
| This was obvious from the moment he brought up the fake accounts
| problem.
|
| The stock market (especially tech) tanked, other investors
| started having cold feet, and he realized his purchase was a
| mistake.
|
| It is bizarre though that Twitter leadership/board continued to
| engage with him on the matter - even handing him internal data to
| analyze - expecting a good faith resolution. Nothing Musk has
| done in the last few months has been in good faith. You either
| lawyer up and force him to stick to the agreement, or take the
| loss and move on. Appeasement isn't going to work.
| PKop wrote:
| They wanted to cash out of a declining position as much as he
| wanted to renege on the deal... he was overpaying at that
| point, why wouldn't they want to sell?
| [deleted]
| camjohnson26 wrote:
| Bad faith has been Musk's MO since the beginning. He even
| deliberately crashed Martin Eberhard's roadster (allegedly,
| Tesla claims it was an accident.) https://jalopnik.com/tesla-
| co-founder-eberhard-sues-elon-mus...
| inerte wrote:
| They gave the data because if they didn't that's a valid reason
| for Musk to walk out of the deal. The bots are not.
| Inu wrote:
| >Nothing Musk has done in the last few months has been in good
| faith.
|
| Isn't this itself arguing in bad faith? It's fundamentally
| speculative to make claims about his intentions.
| bindle8932 wrote:
| Musk has lied repeatedly in public, so it's difficult to
| assume good faith from him.
| [deleted]
| cormacrelf wrote:
| It's because they want him to pay the agreed price. It is an
| extremely good deal for the shareholders now, so they are
| behaving perfectly rationally. And they can possibly force him
| to.
| paxys wrote:
| Yes but it was clear (to all outside observers, not the board
| apparently) that Musk never intended to pay the agreed price.
| He was just collecting enough material from them to justify
| his breach, and fake users was a smokescreen. Their response
| to any questions/statements about fake users should have been
| the equivalent of "you signed the agreement, now stick to it"
| not "let's work together and resolve your issues".
| philosopher1234 wrote:
| That's not how i remember the last HN discussion on this
| elliekelly wrote:
| I'm not terribly familiar with the specifics of the deal
| but IIRC there's a penalty clause that's dependent on _who_
| , ultimately, backs out of the deal. It seems like Musk is
| angling to get Twitter to pull out and Twitter is doing
| everything they can to engage with Musk's requests in "good
| faith" so he can't claim Twitter has constructively backed
| out-- a bit of M&A malicious compliance/a game of chicken,
| I believe.
| cormacrelf wrote:
| So? What does twitter care whether he intended to do it? He
| agreed to! And they can still force him to do it. So even
| if he drags out the litigation, they still have a strong
| position to negotiate a settlement for somewhere between 1
| and 40 billion. Free money for his stupidity.
| jiggyjace wrote:
| Have you read the termination letter? The letter was sent by
| Elon's lawyers working with Twitter's lawyers according to the
| merger terms they had all agreed to. Why shouldn't they have
| expected a "good faith resolution"? A termination can still be
| made in M&A under good faith.
| paxys wrote:
| Where did you get the "working with Twitter's lawyers" part?
| This letter is sent _to_ Twitter 's lawyers informing them
| that Musk is terminating the agreement.
| betwixthewires wrote:
| They helped craft the agreement, according to Musk, twitter
| is violating the agreement which is grounds for termination
| as per the agreement.
|
| I'm not going to pretend to know who's right or how this
| will play out legally, but Twitter's lawyers did
| participate in the creation of the agreement and therefore
| the current state of affairs.
| [deleted]
| Wowfunhappy wrote:
| Presumably, if Twitter goes out of their way to demonstrate
| good faith towards Musk, it will benefit any potential legal
| cases in the future.
| gkoberger wrote:
| This was always going to be how it ended.
|
| Elon got what he wanted. Everyone on his side now thinks he's a
| bastion of free speech, and he can forever say "If I owned
| Twitter, I would have...". And he gets the credit he wants
| without having to actually do anything.
|
| Twitter got what they wanted. They didn't want Elon to own the
| company, but they also couldn't ignore the offer. So they called
| his bluff. They would have ended up with a world of pain if they
| didn't accept the offer, but nobody at Twitter wanted it to
| close. And now they'll be able to sue Elon and get the upper
| hand.
|
| Both sides got what they wanted here. I just wish it didn't have
| to distract all of us so a few rich people could mutually level
| up.
| bogomipz wrote:
| >'Everyone on his side now thinks he's a bastion of free
| speech, and he can forever say "If I owned Twitter, I would
| have...".'
|
| Doesn't he kind of forfeit that bragging right if he tries to
| walk away from the deal though?
|
| >"Twitter got what they wanted. They didn't want Elon to own
| the company, but they also couldn't ignore the offer."
|
| What happens to their stock price after this though if this
| deal doesn't happen? Hasn't it basically been flat or trending
| down for some time before this current situation? Doesn't
| Twitter still have all the same problems they had before this
| current circus started?
|
| Also is there a possibility that if that deal doesn't happen
| there becomes a bigger spotlight on Twitter's future filings in
| regards to their quoted percentage of "fake or spam accounts on
| Twitter's platform"?
| mikkergp wrote:
| > Doesn't he kind of forfeit that bragging right if he tries
| to walk away from the deal though?
|
| I actually don't think so, he gets it more because "liberal
| big tech tried to screw him and he was smart enough to walk
| away"
| DoneWithAllThat wrote:
| Well that's certainly an editorialized title.
| minimaxir wrote:
| > and this is why nobody should be reporting it as "Elon Musk
| ends Twitter deal." Musk is TRYING to back out of the deal, but
| Twitter plans to try and enforce the merger agreement. The
| battle begins
|
| https://twitter.com/tomwarren/status/1545527519008509952
| adrr wrote:
| Twitter is going to be the downfall of Elon. I don't understand
| is fascination with it. It's a big distraction and he alienates a
| certain percentage of his customers for Tesla.
| DoneWithAllThat wrote:
| How exactly would it result in his downfall? Do you think the
| terminally online even buy Teslas, or use Starlink, or, you
| know, shoot rockets into space?
| dathinab wrote:
| yes, yes, no
| adrr wrote:
| His tweets are shared on the news. Like when he accused
| Thailand diver of being a pedophile.
| dkjaudyeqooe wrote:
| Elon is going to be the downfall of Elon.
|
| Trying to buy Twitter is just a symptom.
| dathinab wrote:
| Because a non small part of his success is based on portraying
| himself as a form of real world tony stark, mainly over
| twitter.
|
| Without that he wouldn't have gotten nearly anywhere close to
| where he ended up.
|
| Because for a lot of his ventures he used that image to collect
| way more money then the company would normally had gotten and
| the used the additional money to try to beat the completion
| enough so that the investors won't complain even through the
| company didn't reach to promised (and often outright absurd)
| goal anywhere close in time/at all.
| Flankk wrote:
| Tony Stark from the comic books was based on Howard Hughes.
| When they developed the character for film, they used Elon
| Musk as inspiration for the character. So you have it
| backwards, Elon was even in Iron Man 2. Most of his PR stunts
| make the news so I don't think Twitter makes much difference.
| eatsyourtacos wrote:
| >I don't understand is fascination with it
|
| I think it's simple.. he is insanely egotistical. He thinks he
| is some super genius. I'm not saying he's not a smart guy, but
| he was able to benefit from the early dot-com era mostly
| because of timing- he happen to be a smart guy at the right age
| of tech when it was much "easier". There are millions of people
| who are really smart and work in tech but it's not like they
| can just magically make an insane amount of money like early
| on.
|
| He thinks because he is the richest person in the world that he
| has also worked the most and is the smartest. Both are
| extremely far from reality- but you can't convince someone of
| him like that.
|
| Anyway- my point is he loves being able to just post a tweet
| and have however many people read it and talk about it. Similar
| to someone like Trump- they just love all the attention to an
| _insane_ amount, and unfortunately technology makes that
| possible these days.
| [deleted]
| tick_tock_tick wrote:
| I'm super excited for this to go to court. If nothing else we've
| known Twitter has massive internal issue on how it polices
| content, reports number, bans people, etc. The leaks out of this
| case are going to be so juicy.
|
| Hopefully they are bad enough we could get real legislation that
| if you want protection from user generated content you can't just
| ban whatever you feel like.
| chernevik wrote:
| The filed letter
| (https://www.sec.gov/Archives/edgar/data/1418091/000110465922...)
| isn't the knockdown argument I would be expecting.
|
| Musk is saying, you haven't demonstrated your numbers are
| accurate. But having signed the merger agreement and waived due
| diligence, I think he needs to demonstrate that they are _not_
| accurate. Complaining Twitter rate-limited his API access (which
| would be very foolish on their part) or that their bot
| measurement standards are "arbitrary" doesn't seem to get there.
|
| The letter complains that Musk asked for data allowing him to
| "independently verify Twitter's representations regarding the
| number of mDAU" -- but where does the agreement provide for that
| verification as a condition of the deal? Maybe Twitter didn't
| provide sufficient information for Musk to "independently verify"
| that number -- that means nothing without showing Twitter had a
| duty to provide that information, or that Musk had a right to his
| own verification. (Any lawyer agreeing to the other side's
| verification of such a thing probably isn't a very good lawyer.)
|
| The last paragraph, complaining about firings and hiring freezes
| and departures, seems positively desperate. Who seriously cares
| about this stuff?
|
| "I relied on your numbers but now they seem soft" is different
| than "I relied on your numbers but now they are clearly wrong".
|
| I have enormous respect for his engineering and business skills,
| he's accomplished some remarkable things. But he doesn't seem so
| great as a dealmaker. Perhaps he's badly advised, but hey, he
| chose his advisors.
|
| I would think Twitter will sue for specific performance, and they
| probably have a case. And Musk is liable for their full market
| cap, and any trial would depend on a legal team that has a hard
| time writing a clear letter. I think Musk is in trouble here.
| np1810 wrote:
| Well, here's the tweet from Bret Taylor (chair of the board at
| Twitter)...
|
| https://mobile.twitter.com/btaylor/status/154552608708969676...
|
| > "The Twitter Board is committed to closing the transaction on
| the price and terms agreed upon with Mr. Musk and plans to
| pursue legal action to enforce the merger agreement. We are
| confident we will prevail in the Delaware Court of Chancery."
| shuckles wrote:
| Twitter has already said they'll sue for specific performance:
| https://twitter.com/btaylor/status/1545526087089696768
| elliekelly wrote:
| My heart sank when I read your comment: why on earth would
| the board sue for specific performance!? But my reading of
| the statement in the tweet is that they plan to sue for
| enforcement of _the agreement_ which I believe means paying
| the agreed-upon penalty for backing out of the deal. I don't
| at all read that statement as a plan to seek specific
| performance.
| howinteresting wrote:
| The agreed-upon penalty is when both sides mutually back
| out of the deal. But right now Twitter's board thinks it
| can get a lot more out of Musk than just $1B, and my
| understanding is that the board is likely correct.
| agrajag wrote:
| > closing the transaction on the price and terms agreed
| upon
|
| They're definitely suing for specific performance, and I'm
| not sure they really have any other option at this point.
| It would be by far in their best financial interest if they
| can force closing the sale, and Musk's objections seem
| really thin. Doing anything less than that is complete
| capitulation
|
| I can see them reaching a settlement to agree to cancel the
| deal with Musk if he agrees to pay a significant penalty
| ($5B+), or maybe agree to reduce the purchase price some,
| but why not sue for specific performance if you think
| you'll win?
| georgeecollins wrote:
| Right- he waived diligence. Twitter has no obligation to prove
| anything to him. Twitter is obligated to give him documents if
| they are reasonable to request and helpful for him in financial
| planning. If the documents Twitter has on hand are flawed or
| not comprehensive, that doesn't give a pretext to leave the
| deal. I am sure his lawyers know this and it will all be
| negotiated.
| meragrin_ wrote:
| If Twitter fails to provide reasonable access to data
| necessary to secure debt to finance the purchase, it does
| indeed give a pretext to leave the deal. It is part of the
| merger agreement. You can't tell me that a lender would not
| want some independent assessment of Twitter's claims before
| lending.
| meragrin_ wrote:
| > Musk is saying, you haven't demonstrated your numbers are
| accurate.
|
| It has nothing to do with accuracy. Twitter is supposedly not
| providing the data: 'While Section 6.4 of the Merger Agreement
| requires Twitter to provide Mr. Musk and his advisors all data
| and information that Mr. Musk requests "for any reasonable
| business purpose related to the consummation of the
| transaction," Twitter has not complied with its contractual
| obligations.'
|
| > The letter complains that Musk asked for data allowing him to
| "independently verify Twitter's representations regarding the
| number of mDAU" -- but where does the agreement provide for
| that verification as a condition of the deal?
|
| Section 6.11, the part of the deal where Twitter needs to
| provide necessary information to secure debt: 'and under
| Section 6.11 of the Merger Agreement, to information
| "reasonably requested" in connection with his efforts to secure
| the debt financing necessary to consummate the transaction.'
|
| I have little doubt anyone lending that kind of money would
| require the buyer to independently verify the mDAU.
| chernevik wrote:
| I will be very surprised that Twitter's position was less
| than "you can have anything you want", precisely to avoid any
| complaint of non-cooperation.
|
| I do agree that the agreement's debt financing provisions may
| provide Musk an out -- "I wanted to close, but I couldn't get
| debt b/c you wouldn't cooperate".
|
| I'm a little surprised that Twitter agreed to any sort of
| financing provision, precisely because it seems to allow Musk
| to screw up his debt raising and then point to that as an
| out.
|
| But that is not a complaint in the letter, and becomes an
| argument about what lenders require for debt financing. Musk
| will have to show that lenders cared about this, and Twitter
| will have discovery to find evidence they didn't.
| DelaneyM wrote:
| For anyone thinking he can pay the 1B$ termination fee and walk
| away, it's not that simple.
|
| The 1B$ is a "reverse breakup" fee, and applies when an outside
| force (like SEC or financing) prevents the deal. That 1B$ has
| nothing to do with any choices on either side, and is unlikely to
| factor into this process.
|
| At this point they're clearly going to trial, and it's not
| unlikely that the cost to Elon will be somewhere in the
| neighborhood of the difference between the fair current market
| value (~20B$?) and the purchase price (~44B$).
|
| My guess is it'll end up being ~10-15B$.
| dylan604 wrote:
| ~10-15B$ is not inbetween the 2 numbers you posited it would be
| between though.
| jkrems wrote:
| What they said was:
|
| > in the neighborhood of the difference between the fair
| current market value (~20B$?) and the purchase price (~44B$).
|
| The difference is 24B$ which is implied to be the upper
| bound. 10-15 is in the range 0..24.
| samatman wrote:
| That's not what difference means.
| addandsubtract wrote:
| 44 - 20 = 22 != 10~15
| bindle8932 wrote:
| 44 - 20 = 24 != 22
| renewiltord wrote:
| Two plus two is four minus one that's three quick maths
| dylan604 wrote:
| wow. total brain fart caused me to completely skip the word
| difference
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