Notice of termination of Twitter merger agreement(sec.gov)
sec.gov
Notice of termination of Twitter merger agreement
https://www.sec.gov/Archives/edgar/data/1418091/000110465922078413/tm2220599d1_ex99-p.htm
1,511 comments
I agree with your analysis. This has always seemed a situation driven by ego rather than rational thought and I expect ego will prevail and we will see futile legal + PR trench warfare for a while. However, my understanding of M&A law[1] is it's not enough for him to say that the numbers are missing or even wrong. He has to say that there was a material breach caused by the fact that the numbers were missing or wrong.
So if you say "I went into this deal thinking twitter had no bots and OMFGBBQ there are bots" then twitter are going to say "look at our numerous filings on bots and why not actually go on twitter at all you can see there are bots" and therefore no material breach. He has to show somehow that the failure to provide him with complete and accurate information somehow makes the deal materially worse than he could reasonably have thought going in. And that's pretty hard to prove. I believe Delaware has been very reluctant to find material breach in these sorts of circumstances. (eg even if he was to somehow prove that the bot problem was 100x worse than twitter's public statements I'm not sure that would be sufficient to prove an actual material breach given the difference in ad revenue between "lots of bots" and "hella bots all over the place" is probably not material and he knew the revenue number going in).
My expectation is he wants to make it painful enough for them in court and on social media to drop the breakup fee but they have seen for ages that he was likely to attempt this and would be sued to hell and back by other shareholders if they drop the fee and therefore will strap themselves in for a fight.
[1] I'm definitely not a lawyer but I have been involved in a few M&A situations and have been advised on this kind of thing by pretty good lawyers a couple of times.
So if you say "I went into this deal thinking twitter had no bots and OMFGBBQ there are bots" then twitter are going to say "look at our numerous filings on bots and why not actually go on twitter at all you can see there are bots" and therefore no material breach. He has to show somehow that the failure to provide him with complete and accurate information somehow makes the deal materially worse than he could reasonably have thought going in. And that's pretty hard to prove. I believe Delaware has been very reluctant to find material breach in these sorts of circumstances. (eg even if he was to somehow prove that the bot problem was 100x worse than twitter's public statements I'm not sure that would be sufficient to prove an actual material breach given the difference in ad revenue between "lots of bots" and "hella bots all over the place" is probably not material and he knew the revenue number going in).
My expectation is he wants to make it painful enough for them in court and on social media to drop the breakup fee but they have seen for ages that he was likely to attempt this and would be sued to hell and back by other shareholders if they drop the fee and therefore will strap themselves in for a fight.
[1] I'm definitely not a lawyer but I have been involved in a few M&A situations and have been advised on this kind of thing by pretty good lawyers a couple of times.
The podcast Opening Arguments had two great episodes about the legal details of this deal (note the first episode doubting this deal would go through was from 2 months ago):
July 4th: https://openargs.com/oa610-elons-twitter-deal-was-a-complete...
May 12: https://openargs.com/oa595-shareholders-sue-twitter-alleged-...
July 4th: https://openargs.com/oa610-elons-twitter-deal-was-a-complete...
May 12: https://openargs.com/oa595-shareholders-sue-twitter-alleged-...
Thanks for these. I listened to the July 4th one. For others who may be interested, the first 20 mins are unrelated and you may want to skip ahead to the 45 minute mark or so for their conclusions.
Here is the brunt of why they think the deal won't go through: because it is difficult to prove extent of damages and because innocent third parties (the banks partnering with Musk) would be adversely affected, the courts will be disinclined to trigger the historically rare 'specific performance' to compel the merger. They believe a more likely outcome is Musk will instead be compelled to pay the $1 billion but a decade-long legal battle will ensue over it.
While it is an interesting listen, I wish they provided more substance for their conclusions especially since they're running counter to most other debate I'm seeing. Third parties aside, I fail to understand how legally the courts cannot pursue Musk's personal assets for the full amount. But I'm not a lawyer and haven't read the purchase agreement in detail.
Here is the brunt of why they think the deal won't go through: because it is difficult to prove extent of damages and because innocent third parties (the banks partnering with Musk) would be adversely affected, the courts will be disinclined to trigger the historically rare 'specific performance' to compel the merger. They believe a more likely outcome is Musk will instead be compelled to pay the $1 billion but a decade-long legal battle will ensue over it.
While it is an interesting listen, I wish they provided more substance for their conclusions especially since they're running counter to most other debate I'm seeing. Third parties aside, I fail to understand how legally the courts cannot pursue Musk's personal assets for the full amount. But I'm not a lawyer and haven't read the purchase agreement in detail.
I don't think the issue is that the courts don't have the power, it's that it would take forever to come to a conclusion in the court given the resources each side can pour into the fight, how complicated the legal details are, and how poor the legal system is at deciding these kinds of massive corporate legal issues (according to one of the podcast hosts).
Since it would take forever, it's much more likely the two sides settle or give up before they run out of legal tricks.
Since it would take forever, it's much more likely the two sides settle or give up before they run out of legal tricks.
Thanks for these. Everyone else seems to be theory-crafting what will and could happen, but this is a practical, more grounded take.
So basically it’s like buying a house and finding faults with it that the seller had hidden?
Very much like that...except you're also in a legal system where the courts have ruled that the only "faults" that actually are major enough to count are things like "seller said it was 3br house; it's a one room shack" or "seller neglected to mention it had burnt to the ground last year and hasn't been rebuilt".
Something like "Twitter lied, actually 15% of active users are bots, not < 5%" would never count. But "Twitter lied, 85% of active users are bots, the advertisers found out, they stopped buying ads, and now Twitter has been faking revenue numbers to cover it up" would count.
It's hard to stress enough just how far Musk is from showing a Material Adverse Event, even if his wildest suspicions about the number of bots on Twitter are true (...not that it seems likely they are, mind you).
Something like "Twitter lied, actually 15% of active users are bots, not < 5%" would never count. But "Twitter lied, 85% of active users are bots, the advertisers found out, they stopped buying ads, and now Twitter has been faking revenue numbers to cover it up" would count.
It's hard to stress enough just how far Musk is from showing a Material Adverse Event, even if his wildest suspicions about the number of bots on Twitter are true (...not that it seems likely they are, mind you).
If Twitter has nothing to hide, then why not give him the complete access he wants? Why should Musk just take Twitter's word?
Musk never intended to buy Twitter. The objective was to expose Twitter as the propaganda machine it is.
Musk never intended to buy Twitter. The objective was to expose Twitter as the propaganda machine it is.
And so it’s likely he owns Twitter at the end of this. Gonna be a field day at the courts then!
Actually no, it's more likely he'll look for the cheapest way to chicken out of this, as long as Twitter allows him to
Depending on the development of the stock market former Twitter shareholders might end up owning Tesla and / or SpaceX, at least partially. A field day in deed.
Edit: Typos.
Edit: Typos.
Don't rule out another possibility.
The true magnitude of the bot problem is exposed in court. Twitter is exposed for not only lying to Musk, they're also now in trouble for lying to the SEC (for years) and by that same token, lying to investors and advertisers.
Twitter stock crashes to an unthinkable low, DWAC buys it all up.
The true magnitude of the bot problem is exposed in court. Twitter is exposed for not only lying to Musk, they're also now in trouble for lying to the SEC (for years) and by that same token, lying to investors and advertisers.
Twitter stock crashes to an unthinkable low, DWAC buys it all up.
No - the seller has reported the faults for years, and is known to spend vast quantities of money every year dealing with the resulting problems.
It’s like buying a house after famously visiting it every day for several years running, seeing all the faults with your own eyes, telling everyone you were going to fix the faults, and even trying to humiliate the sellers for not having built the house to your standards in the first place.
Edit: typos
It’s like buying a house after famously visiting it every day for several years running, seeing all the faults with your own eyes, telling everyone you were going to fix the faults, and even trying to humiliate the sellers for not having built the house to your standards in the first place.
Edit: typos
No, I don't think that simplification would apply here.
The number of bots on Twitter has always seemed like a boon of an issue to me. Twitter wants to keep it's user/engagement numbers up and bots do help them. I can 100% understand why they've taken a soft approach to it, even if I find it ethically questionable.
I'm going to go out on a limb and say that anyone who's engaged with Twitter, or knows a reasonable amount about it has known about this problem for many years. I find it hard to believe that Elon wouldn't have been well aware of this upfront.
---
The part of your simplification that I take issue with is, "[...] that the seller had hidden." IMO - everyone in town knows that house has building code issues, but, no one really knows the exact extent. Unfortunately, these same building code issues are likely keeping the building standing.
The seller has a gray-area "issue" that is on the fence between "feature" and "bug," and the buyer is using it as leverage to pull out of a deal they're on the hook for.
The number of bots on Twitter has always seemed like a boon of an issue to me. Twitter wants to keep it's user/engagement numbers up and bots do help them. I can 100% understand why they've taken a soft approach to it, even if I find it ethically questionable.
I'm going to go out on a limb and say that anyone who's engaged with Twitter, or knows a reasonable amount about it has known about this problem for many years. I find it hard to believe that Elon wouldn't have been well aware of this upfront.
---
The part of your simplification that I take issue with is, "[...] that the seller had hidden." IMO - everyone in town knows that house has building code issues, but, no one really knows the exact extent. Unfortunately, these same building code issues are likely keeping the building standing.
The seller has a gray-area "issue" that is on the fence between "feature" and "bug," and the buyer is using it as leverage to pull out of a deal they're on the hook for.
OK I know this is a massive tangent but I have to ...
OMFGBBQ ?
Oh My F&&&&ing God Bar-B-Q ?
OMFGBBQ ?
Oh My F&&&&ing God Bar-B-Q ?
A modification of a decades old meme popularized on the defunct SomethingAwful.com forums
https://www.urbandictionary.com/define.php?term=omgwtfbbq%21
https://www.urbandictionary.com/define.php?term=omgwtfbbq%21
Very much not defunct. I've been posting there for more than 16 years :)
> 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.
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.
Musk already secured financing, and most of the recent financial engineering he was doing was in the service of minimizing his own exposure (ie, the amount of TSLA he'd need to sell to cover his end of the deal). His lenders couldn't "independently verify" the mDAU, because he waived diligence --- he was entitled to information as a contractual technicality, but he was not entitled to condition the deal based on anything contained in that information, short of a "material adverse effect", which is in practice an impossible bar to clear.
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.
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.
Twitter is demanding "specific performance" (i.e. complete the transaction) which is unrealistic given those financing provisions. No court can force all the other parties to close. No financing, no transaction.
He has the financing. He secured ~1/3rd of the funds based on committed LBO debt, ~1/3rd in margin loans against TSLA, and ~1/3rd in personal equity. Since then, he's been working to minimize the his personal exposure, but he can't just pretend not to own the TSLA stock he's borrowing against and selling to close the deal.
I believe the agreement would require him to finance the deal directly
From the proxy agreement
> cause the Equity Investor [Musk] to fund the Equity Financing, or to enforce the Equity Investor's obligation to fund the Equity Financing directly, and to consummate the Closing.
From the proxy agreement
> cause the Equity Investor [Musk] to fund the Equity Financing, or to enforce the Equity Investor's obligation to fund the Equity Financing directly, and to consummate the Closing.
I'm less certain of that, because the structure of the financing was worked into the deal, as I remember (or at least remember reading about).
Financing has strings. I’m sure his partners want to make sure the mDAU is accurate as well. The entire value of Twitter depends on it.
They can't want that, because it was a term Musk explicitly waived, publicly and notoriously, before he attempted to finance the deal. It was newsworthy, and well covered, that Musk secured the 13Bn of LBO debt in the first place.
What the media says (including musk) and what the term sheet says are two different things. If he mentioned mDAU could be fraudulent to anyone involved, they would be interested to hear what he had to say about it. I believe though that this is a move to reduce the risk and monies he has to pay to try to get a better deal ($30b perhaps?)
> If he mentioned mDAU could be fraudulent to anyone involved
One problem for Musk is he's been casting doubt on the bot numbers publicly, even before the deal. One of he's stated reasons for the deal was to deal with spam bots. Twitter has also reported basically the same 5% number in it's filings for years. If it really was a sticking point for Musk he should've done his due diligence before committing to to buy Twitter.
One problem for Musk is he's been casting doubt on the bot numbers publicly, even before the deal. One of he's stated reasons for the deal was to deal with spam bots. Twitter has also reported basically the same 5% number in it's filings for years. If it really was a sticking point for Musk he should've done his due diligence before committing to to buy Twitter.
Well twitter is a cesspool of bots, mostly international actors, so I don't see how material facts are a problem.
> they would be interested to hear what he had to say about it.
They can be interested all they want, doesn't mean they can back out of a deal unless they can demonstrate fraud or gross negligence on behalf of Twitter.
They can be interested all they want, doesn't mean they can back out of a deal unless they can demonstrate fraud or gross negligence on behalf of Twitter.
So the financiers do back out, then what? Twitter sues them for the full amount, and both parties end up settling for X% of the full amount?
X=100
They can't just demonstrate "fraud" or "gross negligence". They have to demonstrate a "material adverse effect", which, as Matt Levine shorthands it, is something on the order of a 40% drop in profitability --- not the stock price, but the fundamentals of the company. Not happening.
What if 40% of the percentage of users that twitter proposes are real people are actually bots? Wouldn't that qualify as material adverse effect?
> Wouldn't that qualify as material adverse effect?
Probably not. There has been one MAC finding in the history of MACs. It was a trifecta of fraud, management throwing in the towel the moment the merger was agreed and a massive revenue drop.
Musk’s only hope is to get his banks to pull financing. That’s going to be tough.
Probably not. There has been one MAC finding in the history of MACs. It was a trifecta of fraud, management throwing in the towel the moment the merger was agreed and a massive revenue drop.
Musk’s only hope is to get his banks to pull financing. That’s going to be tough.
Propably not if those users can, and are, monetized.
dvt(2)
No, it doesn’t. The entire value of Twitter depends on their entire monetization. That comes from revenue per mDAU, not just mDAU.
Why should a disinterested, objective financier care if $1 billion dollars of revenue came with a real figure of 20% spambots rather than the estimated 5%? That just means true revenue per mDAU is something like 18% better than estimated.
If the real number is 50%, then true revenue per user is about double. If the real number is actually 99%, true revenue per user is about 20x. There would also probably be some very quick wins for improving the quality of the service.
There may be an argument for needing accurate mDAU figures - but Musk isn’t making one, the financiers didn’t ask for them, the market has NEVER had accurate figures for social media anyway, and there’s no legal standard for it.
Why should a disinterested, objective financier care if $1 billion dollars of revenue came with a real figure of 20% spambots rather than the estimated 5%? That just means true revenue per mDAU is something like 18% better than estimated.
If the real number is 50%, then true revenue per user is about double. If the real number is actually 99%, true revenue per user is about 20x. There would also probably be some very quick wins for improving the quality of the service.
There may be an argument for needing accurate mDAU figures - but Musk isn’t making one, the financiers didn’t ask for them, the market has NEVER had accurate figures for social media anyway, and there’s no legal standard for it.
It’s not a good thing to have more bots at the same revenue because you aren’t just buying a companies past performance but their future performance. If advertisers thought they were buying 1M real person impressions and it turned out to be half bits, next time they pay you money they would only want to pay half as much.
> If advertisers thought they were buying 1M real person impressions and it turned out to be half bits, next time they pay you money they would only want to pay half as much.
That’s if you assume that advertisers have no idea what the result of ad impressions are. (Which is an argument I’m sympathetic to, but isn’t flattering to the ad industry.) If they do have an idea of the results of ad impressions, it would mean that their ads are actually proportionally more effective than they thought, since their revenue brought in by ads has stayed the same but with fewer impressions.
That’s if you assume that advertisers have no idea what the result of ad impressions are. (Which is an argument I’m sympathetic to, but isn’t flattering to the ad industry.) If they do have an idea of the results of ad impressions, it would mean that their ads are actually proportionally more effective than they thought, since their revenue brought in by ads has stayed the same but with fewer impressions.
Specific performance would apply to Musk as purchaser, not hypothetical lenders that aren’t party to the agreement. If he can’t find debt, then he would presumably have to liquidate more Tesla stock to pay the full price.
He's already found the debt. His banks agreed to margin and twitter leveraged loans before the deal was even signed.
So if Twitter wins Musk has to go through with his margin loans on Tesla stock. Ehich, at the current state of things, exposes to quite some risk of loosing tge ability to back up the loans with Tesla stock if share prices drop under a certain level. Maybe he just realized that risk and that's why he wants out.
Musk doesn't have to use his Tesla margin loan, and he's already claimed he wasn't going to.
He has to get the money somehow, but he could just sell enough SpaceX if he felt like it.
He has to get the money somehow, but he could just sell enough SpaceX if he felt like it.
I think 6.10f leaves him in trouble. No financing, yes transaction.
I think Twitter is working their way towards suing for damages.
Sure you probably can't force the transaction to complete but you can sue for it and when the other parry demonstartes that they're not willing to complete a transaction they committed then you start suing for damages.
Sure you probably can't force the transaction to complete but you can sue for it and when the other parry demonstartes that they're not willing to complete a transaction they committed then you start suing for damages.
> 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.
Be very surprised, they capped the firehouse. From the filing:
> 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.
Be very surprised, they capped the firehouse. From the filing:
> 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.
It would be extremely hard to prove that Elon Musk, the richest man in the world who secured financing for the largest LBO ever in a week, was unable to secure financing because of a technicality in user data which played a key role in his stated rationale for the purchase. Unfortunately for Musk (lmao) and every Twitter employee (my heart actually goes out to them, with the current job market they’re in hell right now), I don’t think there’s any way out of this deal, especially when you look at past precedent like the LVMH-Tiffany’s and Simon-Taubman deals.
I would be surprised if not all lenders / investors did not ask for such data. Especially, after the first tweets from Musk.
Musk did go around knocking on lots of doors to get money and I am not sure if he actually managed to get enough funds; I don't think personally it is a good deal without some internal fundamental data to prove otherwise.
Of course, I am puzzled also that Twitter gave him a smidge of a way out.
Musk did go around knocking on lots of doors to get money and I am not sure if he actually managed to get enough funds; I don't think personally it is a good deal without some internal fundamental data to prove otherwise.
Of course, I am puzzled also that Twitter gave him a smidge of a way out.
> Twitter is supposedly not providing the data
Not really. Reading the letter it sounds more like Musk has started to make more specific requests, likely in the hopes of them not being able to service them. For example, he claims in the letter that he requested daily mDAU numbers for the previous 8 quarters (i.e. 2 years) and they only gave him rolled-up numbers.
I find it completely believable that they may not have a daily breakdown for 8 quarters, and so they can't provide the information requested.
Not really. Reading the letter it sounds more like Musk has started to make more specific requests, likely in the hopes of them not being able to service them. For example, he claims in the letter that he requested daily mDAU numbers for the previous 8 quarters (i.e. 2 years) and they only gave him rolled-up numbers.
I find it completely believable that they may not have a daily breakdown for 8 quarters, and so they can't provide the information requested.
If you've ever run analytics at even a mid-sized company (let alone large, where it's even more critical to keep this stuff), getting daily mDAU is trivial and you'd have to have a grossly irresponsible data policy to be unable to pull that.
Nobody worth their wage drops data that aggressively unless they are compelled by law.
Nobody worth their wage drops data that aggressively unless they are compelled by law.
I dont have enough experience in analytics to know what data points would be full fidelity vs rollup. I'm just stating that theres no guarantee they even have the data to service his requests, and I dont believe they were under any existing obligation to maintain it before Musk got involved.
Stats get increasingly expensive and useless to store, but one would think mDAU would be one tagged for high precision long retention storage.
I mean, no? Why on earth would I want Thursday the twenty thirds mDAU from a year and a half ago? If it's not bringing value, it's costing money, and it's unlikely to provide value, so why keep it?
Because there’s no such thing as a regular Thursday at Twitter scale. Any number of things could have happened that Thursday or around it, major world event, Thanksgiving, last day of Ramadan or whatever. And you might have a valid data question regarding these events.
Heck, not only “what happens on Twitter each day of the week” is a very valid data question, but even by the hour.
Heck, not only “what happens on Twitter each day of the week” is a very valid data question, but even by the hour.
Your right twitter might just be incompetent and not keep that data, but this would be one of the most basic forms of data you need for analysis when your entire revenue model relies on that statistic.
When I was in mobile gaming we stored that data for way longer.... Do you really think twitter is throwing away user activity data?
Depends on whether there was UII in the underlying dataset. It's probable that Twitter kept the mDAU numbers and probably shared them, and Elon's people asked for underlying data that aggregates up to that metric, so they can scrutinize the methodology.
However, saving user identifiable information > 90d is a challenge these days - you have to anonymize it, which defeats Musk's purported goal. (And it might be illegal to share that data w/ a 3rd party.)
However, saving user identifiable information > 90d is a challenge these days - you have to anonymize it, which defeats Musk's purported goal. (And it might be illegal to share that data w/ a 3rd party.)
I find it very hard to believe that they don't have this information graphed on a dashboard somewhere.
Because sometimes it costs more money to discard some data than it does to simply keep it.
When your enterprise value is predicated on user activity stats, you keep your user activity stats.
[deleted]
"For any reasonable business purpose" is different from 'any information you think is reasonable'. I would presume (guess) that Musk kept asking for more info until he found a point where Twitter stopped responding just so he could argue this clause was broken.
> I have little doubt anyone lending that kind of money would require the buyer to independently verify the mDAU.
Nope. Musk's financing is not conditional on that.
Nope. Musk's financing is not conditional on that.
> Twitter is supposedly not providing the data
Didn't he get access to the firehose, which is, AFAIK, -ALL- the data? (not the 50GB he tweeted about but supposedly a 2TB/day stream?)
Didn't he get access to the firehose, which is, AFAIK, -ALL- the data? (not the 50GB he tweeted about but supposedly a 2TB/day stream?)
The firehose is all the posts.
It's not all the views. And 'daily active users' are mainly viewing, not posting.
Which makes me wonder why the argument about 'the firehose' and 'bots' matters.
It's not all the views. And 'daily active users' are mainly viewing, not posting.
Which makes me wonder why the argument about 'the firehose' and 'bots' matters.
Perhaps because it's not actually about the bots, it's about buyer's remorse and trying to get out of the transaction via some excuse.
But why would the analysis care about bots that are viewing? They aren't creating disinformation by viewing (maybe by "liking" though). Bots-as-followers are benign. The "bot problem" is bots being used to post disinfo at scale to cram the entire space with propaganda, that is: to quote Steve Banon "flood the zone with shit". Which is what bots and troll farms have done successfully over the past 7 years.
Engagement signals are what drive ‘the algorithm’.
Bots that create fake engagement signals (fake clicks, fake media views, fake DM engagement, as well as fake replies and likes) can manipulate what content gets promoted onto real users’ feeds.
From a business point of view, the problem is that if people can manipulate and promote messages on Twitter by using fake engagement, they are not paying Twitter to promote tweets. As well, I guess, as undermining regular users’ confidence that the things that show up in ‘trending topics’ really are ‘trending’.
But bots posting propaganda - if they’re any good at it - might, weirdly be a good thing for Twitter’s numbers, because they create controversial posts that drive engagement into which Twitter can sell advertising.
Looking at the firehose tells you very little about any of that though. There could be a million bots who post lorem ipsum tweets at a rate of hundreds a second and they would all show up in the firehose, but if twitter’s algorithm means none of those tweets are ever shown to a human, does it matter?
Musk’s whole schtick with the bot numbers has just been a thorough demonstration that he has barely even thought about Twitter’s business or what a social network even is.
Bots that create fake engagement signals (fake clicks, fake media views, fake DM engagement, as well as fake replies and likes) can manipulate what content gets promoted onto real users’ feeds.
From a business point of view, the problem is that if people can manipulate and promote messages on Twitter by using fake engagement, they are not paying Twitter to promote tweets. As well, I guess, as undermining regular users’ confidence that the things that show up in ‘trending topics’ really are ‘trending’.
But bots posting propaganda - if they’re any good at it - might, weirdly be a good thing for Twitter’s numbers, because they create controversial posts that drive engagement into which Twitter can sell advertising.
Looking at the firehose tells you very little about any of that though. There could be a million bots who post lorem ipsum tweets at a rate of hundreds a second and they would all show up in the firehose, but if twitter’s algorithm means none of those tweets are ever shown to a human, does it matter?
Musk’s whole schtick with the bot numbers has just been a thorough demonstration that he has barely even thought about Twitter’s business or what a social network even is.
> But why would the analysis care about bots that are viewing?
Because the business issue is about advertising reach. Bots aren't real advertising targets.
Because the business issue is about advertising reach. Bots aren't real advertising targets.
IIRC "the firehose" is around 10%
No, you're thinking of the "decahose." The "Firehose" is the whole thing.
https://developer.twitter.com/en/docs/twitter-api/enterprise...
> The Decahose delivers a 10% random sample of the realtime Twitter Firehose through a streaming connection.
https://developer.twitter.com/en/docs/twitter-api/enterprise...
> The Decahose delivers a 10% random sample of the realtime Twitter Firehose through a streaming connection.
Shouldn’t it be called the Decihose, then? The name is confusing.
[deleted]
It does have something to do with accuracy, because further down the page the letter explicitly calls out the SEC filings and the 5% number and the fact that it was a rep and that there is an MAE.
The letter is throwing several pieces of shit against the wall and seeing which will stick.
The letter is throwing several pieces of shit against the wall and seeing which will stick.
[deleted]
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.
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.
> You can't tell me that a lender would not want some independent assessment of Twitter's claims before lending.
The lenders have already agreed to the deal, where any such verification was waived.
The lenders have already agreed to the deal, where any such verification was waived.
That's just you making something up. Elon waived his due diligence but that doesn't have anything to do with the lender. The lender can back out unless they also have some type of clause in which they are lending it without any concern at all, which of course they don't.
Even if that is the case, it is between Musk and the lender(s). None of twitter's business, not twitter's problem (directly).
If one or more of the lenders did back out it might not look good for then as a reliable partner for future deals (not just with musk) - would they take that reputational risk? Especially right now when Musk is taking any flack as someone who doesn't keep their word.
If one or more of the lenders did back out it might not look good for then as a reliable partner for future deals (not just with musk) - would they take that reputational risk? Especially right now when Musk is taking any flack as someone who doesn't keep their word.
The lenders agreement is with Musk, not Twitter
it seems he was given access to the Firehose, AKA all the data, but curiously failed to mention that in his filing (I guess it was enough, and he had no complaints?), instead complaining about rate limiting on more specific APIs (the standard Twitter API), which seem extraneous given the Firehose
also, said rate limits were lifted
also, said rate limits were lifted
The firehose is not all the data.
Twitter’s value depends heavily on human views of tweets (not part of the firehose), not on the tweets’ content (the firehose).
Twitter’s value depends heavily on human views of tweets (not part of the firehose), not on the tweets’ content (the firehose).
waiving diligence does not mean that twitter can misrepresent things though. I do not know what the true amount of bot participants are, but IF it is above 5%, that would not be something "due diligence" had to discover, twitter says <=5%, and it had better be that then.
Given that this is the numbers and methodology that Twitter has used for many years in SEC filings, Musk is implying that Twitter has been deceptive to its own investors and to the SEC for years. This isn't impossible, but it might require a little more than a page or two of vague accusations.
This is absolutely pure speculation, but perhaps that is Musk's motive for this whole charade. He is erratic enough that it certainly seems possible that he did this whole acquisition agreement with no intention of following through simply to unveil information to discredit Twitter. It certainly doesn't appear from the outside that Musk had any ideas for making money on this by materially improving Twitter as a business from anything I've read. The justifications about free speech seem to taint this deal with Musk having an ideological bent to the whole transaction, so it seems possible that he thought he could use the buyout to access damaging information (like potentially lying on SEC filings) and then back out without spending the full amount.
Honestly, waiving due-diligence is so sketchy that it has made me wonder from the start what his true endgame was. If he did want to buy the company, what did he gain by waiving his due-diligence rights?
Honestly, waiving due-diligence is so sketchy that it has made me wonder from the start what his true endgame was. If he did want to buy the company, what did he gain by waiving his due-diligence rights?
bingo. if you want to assume bad faith why not go whole hog - Musk never intended to buy Twitter because he never believed they have what they claim to have, it's all a big scam involving inauthentic accounts and now the world knows it too
it probably couldn't technically be due diligence without the lawyers deadlocking on how to prove the authenticity of a twitter account
it probably couldn't technically be due diligence without the lawyers deadlocking on how to prove the authenticity of a twitter account
So, what, he spent several billion dollars on ten percent of Twitter as part of his plan to tank the company?
Which will obviously not even tank the company because clearly everyone sees what the product is and they see what the ad output is (pretty abysmal). So the big reveal is… nothing revelatory.
This theory doesn’t really make sense and is really covering for Musk’s incompetence or a deeper nefariousness: he needed a very public excuse to offload $8B of his TSLA stock without spooking the market, and he’s happy to pay a $1B+ fee to have been able to do that
This theory doesn’t really make sense and is really covering for Musk’s incompetence or a deeper nefariousness: he needed a very public excuse to offload $8B of his TSLA stock without spooking the market, and he’s happy to pay a $1B+ fee to have been able to do that
It's been stated multiple times in this thread that he can't walk away just by paying $1B.
If he wanted to only offload $8B TSLA stock and not buy the company, why put that possibility way more out of reach by waiving due dilligence and accepting the special performance clause?
Are we also to assume that he has managed to assemble the most abjectly incompetent team of lawyers in the world as well?
If he wanted to only offload $8B TSLA stock and not buy the company, why put that possibility way more out of reach by waiving due dilligence and accepting the special performance clause?
Are we also to assume that he has managed to assemble the most abjectly incompetent team of lawyers in the world as well?
If I want to buy a house, I can make my offer more compelling by raising the bid, by waiving inspections, or by waiving a finance contingency.
I suppose it's something that would be extensively argued in court if Twiiter decides to sue.
I guess its a good thing they very specifically didn't claim its <=5%, but instead claim "5% is a guess that we made with some specific asssumptions, but we also applied human judgement to classify bots and so it possibly is higher".
But they have to knowingly misrepresent something (tough to prove) and what they misrepresent has to be material to the deal. Twitter never ever said "we guarantee bots are 5%" they just said that was their estimate and they particularly said in their 10ks that they weren't sure.
Elon said he was going to "fix the bot problem" so claiming he was mislead about this is not going to be very convincing.
Elon said he was going to "fix the bot problem" so claiming he was mislead about this is not going to be very convincing.
I can't imagine it NOT being above 5%. I'd bet it's over 25%. But I am hoping real numbers come out of this.
Twitter doesn't ever claim its bot numbers are 5%. Only Musk says Twitter says that. Twitter says its mDAU (critically important distinction and definition, check SEC filing for what it means) is under 5% bots which is a different number entirely than what you might think of as "bot count". Musk is knowingly and intentionally confusing the two to get people to think Twitter is lying about their numbers. If 50% of the accounts on twitter were bots it would not matter to what Twitter's actually saying in their SEC filings, which is that the users logging in daily using hard clients that display ads is <5% fraudulent.
this makes very little sense? in what way would a bot ever be monetizable and "view" ads?
That's exactly it, a bot using headless client or something would "view" the ad (trigger download of the ad, etc.) but not be a real person (no eyeballs on the ad). Hence, that instance of the ad display was fake/fraud/bot. Customers of twitter (i.e. people paying twitter to show their ads) are interested in this number. Also, investors are interested in that number. Twitter says <5% of its ad-showings are fraudulent - this lets investors say "Twitter's revenue is mostly genuine". That is why the metric is reported - it's for financial/investing purposes, not a claim about how full of bots their system is.
In concrete numbers, twitter is saying there are 1 billion twitter accounts, but most of those are bots or inactive accounts or API accounts or people posting through Tweetdeck (no ads) or joke/duplicate accounts or developer test accounts or... but 230 million of the users per day use a client that shows ads. And of that subset, less than 5% are generating those ad views fraudulently.
If twitter's been lying about that (i.e. their revenue) all along to the SEC that would be a problem for twitter, though not a big enough problem for Musk's claims in his Notice yesterday to work out in his favour.
In concrete numbers, twitter is saying there are 1 billion twitter accounts, but most of those are bots or inactive accounts or API accounts or people posting through Tweetdeck (no ads) or joke/duplicate accounts or developer test accounts or... but 230 million of the users per day use a client that shows ads. And of that subset, less than 5% are generating those ad views fraudulently.
If twitter's been lying about that (i.e. their revenue) all along to the SEC that would be a problem for twitter, though not a big enough problem for Musk's claims in his Notice yesterday to work out in his favour.
for example, if they are using twitter via a script-controlled headless (or even non-headless) browser
How can any judgement in Twitter’s favor be enforced?
Mail a bill for $1B or more and somehow collect the debt?
Maybe the bank could choose to execute the purchase agreement but why would they since they (ironically) can’t force him physically show up and run Twitter.
I doubt SEC has any measures they can take through Tesla which would be weird.
He didn’t agree to “specific performance” expecting that to matter to him.
Mail a bill for $1B or more and somehow collect the debt?
Maybe the bank could choose to execute the purchase agreement but why would they since they (ironically) can’t force him physically show up and run Twitter.
I doubt SEC has any measures they can take through Tesla which would be weird.
He didn’t agree to “specific performance” expecting that to matter to him.
Twitter has already said they'll sue for specific performance: https://twitter.com/btaylor/status/1545526087089696768
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.
> 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?
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?
Is his “financing secured”? It just seems like an incredible (and incredibly risky) long shot to me: a judge actually ordering a sale to an unwilling buyer (and Musk, of all buyers!) is a long shot and the big banks going through with funding such a big deal to an _unwilling_ owner is a long shot. But _even_if_ both of those two unlikely things happen what happens when the judge orders specific performance and Musk just... doesn’t? (Not usually a risk you have to factor in but with Musk I think this is absolutely a real possibility. Maybe even the most likely possibility.) Will they issue a warrant for his arrest? A daily fine for contempt? That would be the deal of the century for Musk.
I don’t know the right answer when you’re dealing with a megalomaniac like Musk but I really don’t think specific performance is it.
I am cautiously optimistic that whatever it is Musk is up to will eventually give rise to some cool new federal securities laws. Maybe even some new federal crimes! (Who am I kidding, a crime that only the wealthiest of the wealth would even be able to commit? Not in a million years!)
I don’t know the right answer when you’re dealing with a megalomaniac like Musk but I really don’t think specific performance is it.
I am cautiously optimistic that whatever it is Musk is up to will eventually give rise to some cool new federal securities laws. Maybe even some new federal crimes! (Who am I kidding, a crime that only the wealthiest of the wealth would even be able to commit? Not in a million years!)
Not a lawyer, but I expect that given a verdict a judge can and will attach assets to force compliance. The court could order Musk to sell Tesla shares to raise the necessary funds, and seize the shares to do so itself even if he won't.
I’m not a lawyer, and I suspect this gets into old and bizarre traditions of equity.
But the damages for failure to perform may conceptually straightforward: the difference between TWTR’s market cap and the deal price * number of outstanding shares. Which is over $10bn.
But the damages for failure to perform may conceptually straightforward: the difference between TWTR’s market cap and the deal price * number of outstanding shares. Which is over $10bn.
But TWTR’s market cap is and will be influenced by Musk’s series of actions and announcements. Both parties would have to come up with a hypothetical number for how much TWTR is worth if Musk walks away without paying anything, and there’s no way their estimates would come close.
That’s Musk’s fault. The market cap will be calculated the way it would in any other scenario. You’ve just made up some weird rule that doesn’t exist.
> A daily fine for contempt?
Probably a large one.
But if Tesla shares tank, and the other investors bail out, perhaps he just doesn't mechanically have the funds to do so.
Probably a large one.
But if Tesla shares tank, and the other investors bail out, perhaps he just doesn't mechanically have the funds to do so.
When normal people agree to spend more than they have that normally ends up in bankruptcy and liquidating most assets other than a few exceptions. Obviously that won’t happen here because the rich have a different set of laws but on the surface he either has the assets to pay it off or would have to sell everything he had and start over
What specifically would prevent this?
De jure? Nothing, as written the law applies equally to all.
De facto? Just observe how often the rich are convicted for their crimes. Even in the rare cases that they are jailed, the severity of the sentence is usually much lower than the common man. Look at Musk himself, he already agreed to not tweet about tesla without the boards approval in an agreement with the SEC to avoid punishment, then routinely ignored it and just fought them in court until he won. Our system allows for anyone with enough money to run out the clock until they either win, the other side gives up, or the situation no longer matters and the case is dropped.
De facto? Just observe how often the rich are convicted for their crimes. Even in the rare cases that they are jailed, the severity of the sentence is usually much lower than the common man. Look at Musk himself, he already agreed to not tweet about tesla without the boards approval in an agreement with the SEC to avoid punishment, then routinely ignored it and just fought them in court until he won. Our system allows for anyone with enough money to run out the clock until they either win, the other side gives up, or the situation no longer matters and the case is dropped.
Money lets you put weight on the scale to tip it in your favor, but it doesn't let you fully control the outcome. Especially because in this case Musk screwed over other rich people.
I’m being a little bit flippant here and I apologize in advance if it comes off as abrasive, but I think this image shows a good example of the difference between how regular people interact with the law, how the upper class interact with the law, and how the Uber wealthy like musk interact with the law[1].
If you have what is effectively infinite money as far as the system is concerned, you can break through any barrier
[1] https://qph.fs.quoracdn.net/main-qimg-954cf5204ca388a11909bb...
If you have what is effectively infinite money as far as the system is concerned, you can break through any barrier
[1] https://qph.fs.quoracdn.net/main-qimg-954cf5204ca388a11909bb...
> until he won
He won. He prevailed. In court. Whatever you think he did that violated the SEC's order, is not correct, at least in the eyes of the judge or the jury who heard all the evidence and decided the case.
Rich people do have the benefit of hiring excellent lawyers and affording every available opportunity to appeal. But that is not being "above the law," that is the law. At the end of the day, if Musk won even on the 10th appeal or whatever, then you can't say that he committed a crime.
He won. He prevailed. In court. Whatever you think he did that violated the SEC's order, is not correct, at least in the eyes of the judge or the jury who heard all the evidence and decided the case.
Rich people do have the benefit of hiring excellent lawyers and affording every available opportunity to appeal. But that is not being "above the law," that is the law. At the end of the day, if Musk won even on the 10th appeal or whatever, then you can't say that he committed a crime.
Is there are some sort of stats to observe? Genuinely curious
If you are requesting stats to observe this then I believe you either need to start looking around more in how your society runs or you are sealioning[1] me.
This is like asking for proof that the sky is blue. Perfectly acceptable in an academic context where the laws of physics are being defined at an extremely technical level. However if you’re asking a question like this in the context of every day life, it’s difficult to believe that you are asking in good faith.
[1] https://en.m.wikipedia.org/wiki/Sealioning
This is like asking for proof that the sky is blue. Perfectly acceptable in an academic context where the laws of physics are being defined at an extremely technical level. However if you’re asking a question like this in the context of every day life, it’s difficult to believe that you are asking in good faith.
[1] https://en.m.wikipedia.org/wiki/Sealioning
I'm asking in good faith, of course. You wrote "just observe how often", and "how often“ is measurable. So there must be a record. I don't observe much crimes at all in my everyday life. Likely my life is not a good sample, but it just to point out to the obvious fact that what you belive to be an obvious fact may not be an obvious fact, but a political bias instead
No it isn’t like asking for proof that the sky is blue. You are making an objectively false claim, that people toss it around all the time and/or you truly believe does not change that.
The rich don’t have a different set of laws they just have better lawyers.
Any law that carries a fixed fine and no jailtime is a law that rich people can break with abandon, yet would ruin a poor person. A $50 parking ticket is a major burden for a person making minimum wage (essentially a day of their life to recoup that); whereas for a rich person their money makes that amount for them in less time than it took me to write this post.
Or, from another perspective: “The law, in its majestic equality, forbids rich and poor alike to sleep under bridges, to beg in the streets, and to steal their bread.”
Or, from another perspective: “The law, in its majestic equality, forbids rich and poor alike to sleep under bridges, to beg in the streets, and to steal their bread.”
And what provides for the rich to acquire better lawyers that can produce a better outcome but the laws? Why is everyone not provided a state defender rather than letting the rich purchase the best talent?
Worst case Musks tantrum over some tweet will tank Tesla, ruin himself and maybe even impact his other ventures. Basically he might just bring over himself what every shortseller predicted years ago would happen.
I believe I have seen exponentially growing daily fines for contempt.
Besides, you can jail people for contempt.
Besides, you can jail people for contempt.
Probably instead of arresting Musk they just sieze assets to cover the damages. His assets are mostly on paper anyways.
Twitter has a binding agreement to get its shareholders cash at a price that’s nearly 50% higher than todays closing price, a value that the board concluded was superior to their standalone prospects and other alternatives. Why wouldn’t they enforce the agreement and close the deal?
Because it will takes years to enforce and in the meantime Twitter will have bad headlines and huge operational challenges? At best, they are likely to get the break-up clause which would not offset the damage such legal proceedings would cause over the duration of XX months.
Running Twitter into the ground for 50 a share sounds like a great deal for shareholders. Heck, given the cesspool that Twitter is, it might even be good for society.
It would suck for Musk and his financers, but they have a simple alternative: stick to the agreement they signed. It's not like the risks of merger agreements are unknown. And the waiving of due diligence wasn't a minor, easy to miss, point either.
Musk wants to back out because of price. He cannot, and he is throwing the equivalent of a tantrum.
I do hope this doesn't end up with Musk losing control of spaceX. Some actual quality is comming out of there.
It would suck for Musk and his financers, but they have a simple alternative: stick to the agreement they signed. It's not like the risks of merger agreements are unknown. And the waiving of due diligence wasn't a minor, easy to miss, point either.
Musk wants to back out because of price. He cannot, and he is throwing the equivalent of a tantrum.
I do hope this doesn't end up with Musk losing control of spaceX. Some actual quality is comming out of there.
He's not going to have to buy twitter, it's that simple. He has multiple avenues of getting out of it.
The contract does not give many avenues. It is either a 'materially adverse effect', 'breaking a covenant', or not being able to get the loans he wanted lined up.
-Materially adverse effects are not within play here. The threshold for that is really high.
-The loans are committed. Banks have signed for the loan, and they can't get out of it.
- That leaves the covenants. That is the main approach Musk is trying, but it is a stretch.
The only other avenues to get out are:
- Get Twitter to amend the contract - Ignore the contract
Threatening to try the second (which would really suck for twitter, even if it almost certainly won't work) might be a way to get twitter to do the first. But I get the sense that the board feels they have a strong position. Moreover the board is likely getting a lot of pressure from shareholders to not give in to Musk.
-Materially adverse effects are not within play here. The threshold for that is really high.
-The loans are committed. Banks have signed for the loan, and they can't get out of it.
- That leaves the covenants. That is the main approach Musk is trying, but it is a stretch.
The only other avenues to get out are:
- Get Twitter to amend the contract - Ignore the contract
Threatening to try the second (which would really suck for twitter, even if it almost certainly won't work) might be a way to get twitter to do the first. But I get the sense that the board feels they have a strong position. Moreover the board is likely getting a lot of pressure from shareholders to not give in to Musk.
Such as?
Twitter will sue for specific performance because (a) they're entitled to it and (b) it's worth substantially more than the reverse breakup fee.
It’s not a penalty for backing out of the deal, it’s compensation if his financing falls through. Musk doesn’t have a discretionary out here.
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.
They are absolutely suing to compel performance at the accepted price.
[deleted]
It will eventually settle. If they sue and win Musk's financing will have long backed out so they aren't going to end up with enough to close the deal.
I suppose they could force him into bankruptcy which would end up with his ownership stakes in Tesla and SpaceX sold off. Given how much of a loose cannon he's become that would probably be better for other shareholders but who knows.
I suppose they could force him into bankruptcy which would end up with his ownership stakes in Tesla and SpaceX sold off. Given how much of a loose cannon he's become that would probably be better for other shareholders but who knows.
> I suppose they could force him into bankruptcy which would end up with his ownership stakes in Tesla and SpaceX sold off.
I wouldn't mind watching Twitter do this to him out of spite.
I wouldn't mind watching Twitter do this to him out of spite.
From what we've seen so far, I doubt the Twitter board would do that. I guess they are suing because that's what the shareholders are pushing for.
And those shareholder's wouldn't like to get a piece of Tesla and / or SpaceX in exchange for Twitter? At, what, 40 billion evaluation of Twitter? Sure as hell I would push the board of Twitter to sue for that if I were a Twitter share holder.
> I suppose they could force him into bankruptcy which would end up with his ownership stakes in Tesla and SpaceX sold off.
I don't think they'd need to force him into bankruptcy. If a judge awards Twitter (say) $10 billion in damages, there are many avenues to seize enough of Musk's assets to pay without making him bankrupt.
I don't think they'd need to force him into bankruptcy. If a judge awards Twitter (say) $10 billion in damages, there are many avenues to seize enough of Musk's assets to pay without making him bankrupt.
Well the best case for Twitter isn't $10bn in damages, it's forcing him to go through with the the entire original $44bn deal.
Elon's net worth has already fallen by $65bn in the past few months - I'd imagine the valuation of his assets will fall quite a lot more once it becomes known he's going to have to offload $44bn worth of Tesla and/or SpaceX to finance a bad deal.
Elon won't be bankrupt in the colloquial sense of financially ruined, but if he's forced to go through with deal and is unable to finance it he will have to liquidate an enormous amount of assets - and many of his assets are already collateral for existing loans.
Elon's net worth has already fallen by $65bn in the past few months - I'd imagine the valuation of his assets will fall quite a lot more once it becomes known he's going to have to offload $44bn worth of Tesla and/or SpaceX to finance a bad deal.
Elon won't be bankrupt in the colloquial sense of financially ruined, but if he's forced to go through with deal and is unable to finance it he will have to liquidate an enormous amount of assets - and many of his assets are already collateral for existing loans.
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."
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."
> Complaining Twitter rate-limited his API access (which would be very foolish on their part)
I have recently built a Twitter application with the new V2 API. They do have undocumented API rate limits[1] while the developer documentation says something else[2].
And if you see the discussions at Twitter developer forum, It takes a while for the Twitter representative to find that the issue is because of the undocumented rate limit because it's somewhere deeply integrated into their system(But still wouldn't update the official docs). Besides the Twitter rate limit covers every Twitter application used by the user incl. their official Twitter clients.
So I wouldn't be surprised if they gave Musk a privileged API token but forgot to whitelist it against their hidden, obscure rate limits; Of course this could have been noticed early on Musk's side and it's possible that they chose to attribute it to malice.
[1] https://twittercommunity.com/t/undocumented-twitter-list-rat...
[2] https://developer.twitter.com/en/docs/twitter-api/rate-limit...
I have recently built a Twitter application with the new V2 API. They do have undocumented API rate limits[1] while the developer documentation says something else[2].
And if you see the discussions at Twitter developer forum, It takes a while for the Twitter representative to find that the issue is because of the undocumented rate limit because it's somewhere deeply integrated into their system(But still wouldn't update the official docs). Besides the Twitter rate limit covers every Twitter application used by the user incl. their official Twitter clients.
So I wouldn't be surprised if they gave Musk a privileged API token but forgot to whitelist it against their hidden, obscure rate limits; Of course this could have been noticed early on Musk's side and it's possible that they chose to attribute it to malice.
[1] https://twittercommunity.com/t/undocumented-twitter-list-rat...
[2] https://developer.twitter.com/en/docs/twitter-api/rate-limit...
Then they could have simply communicated that fact the first time they ran into the limits and they certainly would have been lifted. This happens to me during DD all the time and it has never caused a problem or an investor/acquirer to back out of the deal.
Hence I mentioned sighting rate limit seems like they wanted something as scape goat from the start.
Besides, I don't think it's even possible to have something at Twitter scale without some immutable rate limits for security & reliability.
I mean Musk shouldn't go all
Besides, I don't think it's even possible to have something at Twitter scale without some immutable rate limits for security & reliability.
I mean Musk shouldn't go all
SELECT * FROM users;Out of coriousity, would Musk's legal team have to proof Twitter restricted his bandwidth out of malice? And wouldn't that be hard if they never conplaibed about to Twitter?
It’s so crazy to me that the purchase price was determined by a weed joke and people are surprised that in the cold sober light of our recent correction, Musk is trying to get out of this.
His whole M.O. is degrading the power of the SEC and DoJ by pointing out they have very little enforcement power. This is just another example in his long journey of “what are they going to do if I just don’t follow the rules?”
Weird way for the richest man in history to live his life, but that’s probably just sour grapes on my part.
His whole M.O. is degrading the power of the SEC and DoJ by pointing out they have very little enforcement power. This is just another example in his long journey of “what are they going to do if I just don’t follow the rules?”
Weird way for the richest man in history to live his life, but that’s probably just sour grapes on my part.
Musk is no different from your average "small government conservative", which basically means being anti-civilization. They won the birth lottery, and the society and the government are stopping them from going from rich to filthy rich quickly.
The only thing here is that Musk happens to be fascinated with electric cars and space travel (ever since he was a teenager). We just got lucky - he could as well have gotten into opioids or coal mining, and his desire to dismantle the laws and norms would have burned even brighter.
The only thing here is that Musk happens to be fascinated with electric cars and space travel (ever since he was a teenager). We just got lucky - he could as well have gotten into opioids or coal mining, and his desire to dismantle the laws and norms would have burned even brighter.
> people are surprised that in the cold sober light of our recent correction, Musk is trying to get out of this
People are not surprised. People were expecting this. As evidenced by the discussion then and now. Also as evidenced by the contract which was drafted at the time between him and twitter.
People are not surprised. People were expecting this. As evidenced by the discussion then and now. Also as evidenced by the contract which was drafted at the time between him and twitter.
> People are not surprised.
Markets moved on this new. Somebody was surprised.
Markets moved on this new. Somebody was surprised.
> The last paragraph, complaining about firings and hiring freezes and departures, seems positively desperate.
This one comes across as particularly specious.
So Musk is complaining that Twitter has been failing its obligation to “conduct its business in the ordinary course” by firing some people and slowing hiring.
But there's a global slowdown going on! If Twitter hadn't taken these actions, he would be complaining about the opposite: that by not cutting costs, Twitter would be failing to conduct its business in the ordinary course in the current circumstances.
There's a reason why US courts have a very high bar for M&A buyers' cold feet. They don't want to be arbitrating this kind of ridiculous arguments.
This one comes across as particularly specious.
So Musk is complaining that Twitter has been failing its obligation to “conduct its business in the ordinary course” by firing some people and slowing hiring.
But there's a global slowdown going on! If Twitter hadn't taken these actions, he would be complaining about the opposite: that by not cutting costs, Twitter would be failing to conduct its business in the ordinary course in the current circumstances.
There's a reason why US courts have a very high bar for M&A buyers' cold feet. They don't want to be arbitrating this kind of ridiculous arguments.
> I have enormous respect for his engineering
He has never demonstrated engineering skills. He has always been a business manager. But with all of the business comedy he has performed this year, I am beginning to doubt his business skills too. Perhaps it's the VPs under him who managed the business well, while Elon remained the PR front person and primary investor. Much like SpaceX.
He has never demonstrated engineering skills. He has always been a business manager. But with all of the business comedy he has performed this year, I am beginning to doubt his business skills too. Perhaps it's the VPs under him who managed the business well, while Elon remained the PR front person and primary investor. Much like SpaceX.
Elon Musk is literally the Chief Engineer at SpaceX. His technical proficiency is validated by other senior engineers who work there, as well as senior engineers at NASA. There are also countless hours of unedited footage of him demonstrating his deep technical understanding of rocket engineering.
https://www.reddit.com/r/SpaceXLounge/comments/k1e0ta/eviden...
https://www.youtube.com/watch?v=hIPLmZK3C1Y
https://www.reddit.com/r/SpaceXLounge/comments/k1e0ta/eviden...
https://www.youtube.com/watch?v=hIPLmZK3C1Y
You seem to think he doesn't know the facts, but I suspect that he does. He just doesn't care about facts or truth. He is the sort of person who likes to win debates and get hits on people he dislikes. So trying to correct him on these points is a waste of your time. I say this from experience with him.
I've tried talking to him before. I shared about something I find so very fascinating - that approximation via abstraction is provably better than perfection in many learning situations because of its relationship with computational complexity. He asked for proof; I provided it. I won't repeat the proof here, but know that this isn't an obscure and unknown result - here is Peter Norvig in Artificial Intelligence: A Modern Approach discussing related ideas:
> Page 172. "One way to deal with this huge number is with abstraction: i.e. by treating similar hands as identical. For example, it is very important which aces and kings are in a hand, but whether hand has a 4 or a 5 is not as important, and can be abstracted away." > Page 173. "Because calculating optimal decisions in complex games is intractable, all algorithms must make some assumptions and approximations."
I earnestly engaged with random314 on this topic. He ultimately concluded that he had won the argument, taught me something, and condescended that I ought to have known better than to have talked with him. Along the way he compared me with people he found foolish, claimed I was incoherent in order to avoid addressing my points, gaslit with regard to the thread topic, accused me of jargon, and even made the absurdist point that when I said that not all numbers were computable that because some numbers were computable it followed that I didn't understand what computable numbers are.
One might suspect that he merely misunderstood the point I was making. The thing is - I have strong reason to reject the notion that he did not understand. Initially, I think he didn't. He entered into the conversation under the presumption of my idiocy because my point was counterintuitive - it tricked him into thinking I was wrong. How he handled himself afterward showed me that he knew I wasn't. When I thought deeply about his choice to make the absurdist argument with regard to computable numbers it occurred to me to be the sort of thing one would only choose to do if they understood that not all numbers were computable - understood the thrust of the proof - and wanted to deny it rather than to accept the obvious truth. It was an attempt at sophistry. By making my point with regard to not all numbers being computable seem in error, he hoped to obscure that I was correct.
Simon, I strongly suspect that the reason he doesn't seem to know pertinent facts is not because he doesn't know those facts, but rather because he finds them inconvenient and because the rhetorical appeal of fanboyism is better setup by being wrong, but in a popular way.
I've tried talking to him before. I shared about something I find so very fascinating - that approximation via abstraction is provably better than perfection in many learning situations because of its relationship with computational complexity. He asked for proof; I provided it. I won't repeat the proof here, but know that this isn't an obscure and unknown result - here is Peter Norvig in Artificial Intelligence: A Modern Approach discussing related ideas:
> Page 172. "One way to deal with this huge number is with abstraction: i.e. by treating similar hands as identical. For example, it is very important which aces and kings are in a hand, but whether hand has a 4 or a 5 is not as important, and can be abstracted away." > Page 173. "Because calculating optimal decisions in complex games is intractable, all algorithms must make some assumptions and approximations."
I earnestly engaged with random314 on this topic. He ultimately concluded that he had won the argument, taught me something, and condescended that I ought to have known better than to have talked with him. Along the way he compared me with people he found foolish, claimed I was incoherent in order to avoid addressing my points, gaslit with regard to the thread topic, accused me of jargon, and even made the absurdist point that when I said that not all numbers were computable that because some numbers were computable it followed that I didn't understand what computable numbers are.
One might suspect that he merely misunderstood the point I was making. The thing is - I have strong reason to reject the notion that he did not understand. Initially, I think he didn't. He entered into the conversation under the presumption of my idiocy because my point was counterintuitive - it tricked him into thinking I was wrong. How he handled himself afterward showed me that he knew I wasn't. When I thought deeply about his choice to make the absurdist argument with regard to computable numbers it occurred to me to be the sort of thing one would only choose to do if they understood that not all numbers were computable - understood the thrust of the proof - and wanted to deny it rather than to accept the obvious truth. It was an attempt at sophistry. By making my point with regard to not all numbers being computable seem in error, he hoped to obscure that I was correct.
Simon, I strongly suspect that the reason he doesn't seem to know pertinent facts is not because he doesn't know those facts, but rather because he finds them inconvenient and because the rhetorical appeal of fanboyism is better setup by being wrong, but in a popular way.
My response wasn't provided with the aim of changing the mind of the individual who wrote the parent comment, nor was it to challenge them to an ad-hoc debate. I responded because I thought it would be of interest to the many passive readers of the discussion.
I agree with your analysis, but I also think the numbers are bogus. Just for fun I tried buying half a million followers from some Russian guy a 7 years ago. While that number declined a bit over the years as Twitter did some trimming, I still have half of them.
(Interesting some of the followers were "real" in that these were people who installed a program that ostensibly would tell them who recently followed or unfollowed them, but the program would also add followers they didn't know about. I saw many comments like "I opened twitter and for some reason I'm following 100 more people! WTF?") ... but about half of the paid followers seemed like bots.
(Interesting some of the followers were "real" in that these were people who installed a program that ostensibly would tell them who recently followed or unfollowed them, but the program would also add followers they didn't know about. I saw many comments like "I opened twitter and for some reason I'm following 100 more people! WTF?") ... but about half of the paid followers seemed like bots.
That's an interesting story, but irrelevant to this.
Twitter claims that < 5% of their "monetisable daily active users" (aka mDAU) zfd bots, where mDAU is a very specifically defined term, but broadly represents "people that Twitter thinks they can count when they sell advertising". Bots don't tend to buy things, so any bots counted in mDAU is a mistake that will piss off advertisers. (Which would be bad for Twitter, hence why the number matters.)
That there are a lot of bots on Twitter is well known, and clearly true. That Twitter happily leaves most of them alone to do their own thing as long as they don't abuse the service is also well known, and quite sensible.
The question is whether Twitter is good about flagging them as bots. You could have a million bots following you, but as long as Twitter has correctly noted them as bots and not counted them as mDAU, then exactly 0 count as part of the 5% bots.
Nobody outside of Twitter knows who they are counting as part of their mDAU, which means nobody can cross check their numbers.
Twitter claims that < 5% of their "monetisable daily active users" (aka mDAU) zfd bots, where mDAU is a very specifically defined term, but broadly represents "people that Twitter thinks they can count when they sell advertising". Bots don't tend to buy things, so any bots counted in mDAU is a mistake that will piss off advertisers. (Which would be bad for Twitter, hence why the number matters.)
That there are a lot of bots on Twitter is well known, and clearly true. That Twitter happily leaves most of them alone to do their own thing as long as they don't abuse the service is also well known, and quite sensible.
The question is whether Twitter is good about flagging them as bots. You could have a million bots following you, but as long as Twitter has correctly noted them as bots and not counted them as mDAU, then exactly 0 count as part of the 5% bots.
Nobody outside of Twitter knows who they are counting as part of their mDAU, which means nobody can cross check their numbers.
I’m reasonably sure that these fake user bots that were created for the “buy followers” industry aren’t picked up as bots by Twitter. There’s no reason to allow such users.
It's generally much easier to detect a bot than to detect the purpose an account was created for, so I wouldn't be so sure myself.
Also consider that there's also no reason not to allow such accounts. From a business point of view, Twitter exists to sell advertising. Accurately counting the eyeballs (aka mDAU) they have to sell to advertisers is important, but policing the site otherwise makes sense strictly to the extent that failing to do so may drive some of those eyeballs away.
Consider: No real human beings are likely to quit because of fake followers being left alone, but a few vain people might quit if their fake followers were removed. Further, an overly agressive ban wave targeting bots may well remove some bots people actually like which again, on the margin, may drive some real people away. Like any large company, Twitter will inevitably feel the pressure to play it safe, and in this context that means never banning an account that isn't clearly driving real users away - which means that very passive bots that don't do anything are unlikely to be banned.
Of course, none of that gives us any insight into how accurately (or not) Twitter is counting mDAUs.
Also consider that there's also no reason not to allow such accounts. From a business point of view, Twitter exists to sell advertising. Accurately counting the eyeballs (aka mDAU) they have to sell to advertisers is important, but policing the site otherwise makes sense strictly to the extent that failing to do so may drive some of those eyeballs away.
Consider: No real human beings are likely to quit because of fake followers being left alone, but a few vain people might quit if their fake followers were removed. Further, an overly agressive ban wave targeting bots may well remove some bots people actually like which again, on the margin, may drive some real people away. Like any large company, Twitter will inevitably feel the pressure to play it safe, and in this context that means never banning an account that isn't clearly driving real users away - which means that very passive bots that don't do anything are unlikely to be banned.
Of course, none of that gives us any insight into how accurately (or not) Twitter is counting mDAUs.
If these users are not causing any trouble, getting rid of them seems low value -- and any attempt to clear out a large set of boots will almost certainly got a bunch of non-bot users (unless they could actually get the exact set used by these user sellers)
he's mostly a fraudster who has used a cult of personality and litigation to dominate the businesses that he's involved in. check out the litigation against him for the solar city purchase by Tesla if you're interested in just how much the man is willing to defraud shareholders to personally enrich himself and his family.
I think many of you guys are missing the forrest from the trees here. He tanked his Tesla shares to do this deal & to no small part due to Bill Gates. I am sure this express more of his nervousness on just how much more expensive this deal was becoming as it was costing him a lot more than the list price due to him not taking into account how his other investors in his other companies would take the news.
He's a smart idiot to put it kindly and a very lucky one at that despite all of his sincere and actual efforts.
He's a smart idiot to put it kindly and a very lucky one at that despite all of his sincere and actual efforts.
I don't agree with the Bill gates part but you are fundamentally right.
Elon signed this deal before the biggest stock market crash for about 15 years. The deal is extremely expensive for him right now in terms of tesla shares.
He is just buying time and hoping tesla shares increase in the meantime.
He KNOWS he HAS to complete this deal legally.
That's it. It's not complicated.
Elon signed this deal before the biggest stock market crash for about 15 years. The deal is extremely expensive for him right now in terms of tesla shares.
He is just buying time and hoping tesla shares increase in the meantime.
He KNOWS he HAS to complete this deal legally.
That's it. It's not complicated.
What you are saying doesn't even make any sense. He tanked his Tesla shares and it's partly because of Bill Gates? Makes no sense.
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Or maybe, and bear with me... the entire merger was in bad faith since day 1.
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> have enormous respect for his engineering and business skills
I don’t
I don’t
He's a great deal maker. But his ego, need for attention and celebrity, legitimate Twitter addiction undermines him.
During a merger, discovery is absolutely a right the purchasing side has. The target company should open its books, your assumption about them not disclosing is incorrect.
The problem for Musk is that he filed an offer letter, which is normally what you do after due-dil, and there’s nothing in that offer that gives him a way out without pulling the MAE card, which is a pretty weak reed to rely on (though his most recent filing gamely works as many angles as possible, as you’d expect from Skadden).
The buyout offer was a ridiculous move that feels like it was predicated on hurt feelings over the board debacle, but it’s not the Chancery Court’s job to protect billionaires from themselves, and Musk is generally the sort of manager that the court casts as the bad guy in the little morality plays they make of cases. Doesn’t mean they’ll compel specific performance (I’m skeptical that an equity court is going to see that as the best option, not least because it’s not clear to me Musk would have enough cash to operate the company if the sale went through under current market conditions), but I suspect that, after protracted negotiations and litigation, either the board will accept a modest haircut on the offer (again, due to market conditions), or the court will award liquidated damages ($1bn) plus possibly some additional damages if Twitter wants to argue that Musk violated the confidentiality and nondisparagement provisions of the deal. (If the former, I suspect that we’ll see a bunch of strike suits from aggrieved shareholders land in court anyway, so buckle up for a lot of litigation regardless.)
The buyout offer was a ridiculous move that feels like it was predicated on hurt feelings over the board debacle, but it’s not the Chancery Court’s job to protect billionaires from themselves, and Musk is generally the sort of manager that the court casts as the bad guy in the little morality plays they make of cases. Doesn’t mean they’ll compel specific performance (I’m skeptical that an equity court is going to see that as the best option, not least because it’s not clear to me Musk would have enough cash to operate the company if the sale went through under current market conditions), but I suspect that, after protracted negotiations and litigation, either the board will accept a modest haircut on the offer (again, due to market conditions), or the court will award liquidated damages ($1bn) plus possibly some additional damages if Twitter wants to argue that Musk violated the confidentiality and nondisparagement provisions of the deal. (If the former, I suspect that we’ll see a bunch of strike suits from aggrieved shareholders land in court anyway, so buckle up for a lot of litigation regardless.)
No it’s not. See e.g. https://twitter.com/matt_levine/status/1545152093501227009, https://twitter.com/MorganRicks1/status/1545404990457536512. In what meaning are you even using the term?
You guys are right, I completely missed that he waived his rights on this term. My apologies, I made an assumption (which was wrong) that Musk was acting reasonably.
Chancery courts will compel performance of this transaction absent a showing of an material adverse advent. Very, very high bar. The buyer is a highly sophisticated investor and the grounds that he is alleging form the basis of the breach of contract were and are public information that has not materially changed nor been alleged to have materially changed since the signing of the merger agreement. Moreover, and most critically, it is not being alleged that spam accounts have any substantial impact on the earnings of Twitter. Thus, the courts will obligate Musk to buy the business as he agreed to in April.
I actually have experience with this type of stuff, some business tried to acquire mine and kept postponing, and ended up with some excuse that there wasn’t enough technical design documentation, which would be a real-breaker. It wasn’t super big money, but also not small (high 6-figures).
I ended up suing them, won on all counts, and the deal had to go through.
Unfortunately, this company simply refused to do that even after the judge ruled against them, and I had to renegotiate the terms set by the judge.
That was one hell of a ride.
Point being, if Musk really doesn’t want it, even if Twitter wins a lawsuit, Musk will probably find another way to postpone or renegotiate or whatever. In the meantime, Twitter is not in a good shape, and this whole thing is probably hurting them so much more than that they could possibly benefit from.
I ended up suing them, won on all counts, and the deal had to go through.
Unfortunately, this company simply refused to do that even after the judge ruled against them, and I had to renegotiate the terms set by the judge.
That was one hell of a ride.
Point being, if Musk really doesn’t want it, even if Twitter wins a lawsuit, Musk will probably find another way to postpone or renegotiate or whatever. In the meantime, Twitter is not in a good shape, and this whole thing is probably hurting them so much more than that they could possibly benefit from.
Sounds like a very unpleasant experience, sorry to hear. But I'm not sure it's a good precedent for this case, for two reasons:
a) You were happy to settle, which sounds understandable. But when the stakes are $44bn and most actors on Twitter's side are but agents for Twitter shareholders, their chief concern will be not breaking their fiduciary duties if they accept anything less than the maximum amount they could get. It's a bit hard to imagine how the legal bills for seeing this through could stack up to even .1% of the purchase price ($440m), and that's nowhere close to the discount that Musk will be looking for (with good reason imho, btw).
b) In your case the other party might have gotten away with dodging a court order to pay (or at least made it appear like that). That's pretty much unfathomable if you are literally the richest man on earth and live in the US.
a) You were happy to settle, which sounds understandable. But when the stakes are $44bn and most actors on Twitter's side are but agents for Twitter shareholders, their chief concern will be not breaking their fiduciary duties if they accept anything less than the maximum amount they could get. It's a bit hard to imagine how the legal bills for seeing this through could stack up to even .1% of the purchase price ($440m), and that's nowhere close to the discount that Musk will be looking for (with good reason imho, btw).
b) In your case the other party might have gotten away with dodging a court order to pay (or at least made it appear like that). That's pretty much unfathomable if you are literally the richest man on earth and live in the US.
> chief concern will be not breaking their fiduciary duties
Let’s not forget the all the blather from Twitter board and leadership how their fiduciary duty was to not sell to Musk at this price.
Cramer even claimed the board would be personally liable for accepting the deal.
https://www.cnbc.com/2022/04/14/cramer-twitters-board-has-no...
Let’s not forget the all the blather from Twitter board and leadership how their fiduciary duty was to not sell to Musk at this price.
Cramer even claimed the board would be personally liable for accepting the deal.
https://www.cnbc.com/2022/04/14/cramer-twitters-board-has-no...
Cramer's advice is a decent guide if you always take the opposite opinion.
The Anti Cramer portfolio is not a sufficient contrarian approach, because the Cramer portfolio also underperforms similar to a random walk. Put another way, the opposite of a random walk is another random walk.
Might be able to make an argument based on Regression Towards the Mean and the fact Cramer picks are "extremes".
Yes, following that guy it is understandable why he would never be a hedge fund manager for a long time. When it comes to investing he is stupid as a brick.
Hedge Fund Managers are also not the brightest flowers:
"The SP 500 Index Out-performed Hedge Funds over the Last 10 Years. And It Wasn’t Even Close": https://www.aei.org/carpe-diem/the-sp-500-index-out-performe...
"How Smart Are the Smart Guys? A Unique View from Hedge Fund Stock Holdings" [PDF]: https://jgriffin.info/wp-content/uploads/2016/10/smart.pdf
"...Hedge funds exhibit no ability to time sectors or pick better stock styles. Surprisingly, we find only weak evidence of differential ability between hedge funds. Overall, our study raises serious questions about the perceived superior skill of hedge fund managers..."
"The SP 500 Index Out-performed Hedge Funds over the Last 10 Years. And It Wasn’t Even Close": https://www.aei.org/carpe-diem/the-sp-500-index-out-performe...
"How Smart Are the Smart Guys? A Unique View from Hedge Fund Stock Holdings" [PDF]: https://jgriffin.info/wp-content/uploads/2016/10/smart.pdf
"...Hedge funds exhibit no ability to time sectors or pick better stock styles. Surprisingly, we find only weak evidence of differential ability between hedge funds. Overall, our study raises serious questions about the perceived superior skill of hedge fund managers..."
The hedge funds themselves get rich through fees. The investors get robbed. Not sure why anyone still believes in hedge funds.
But that’s not the benefit of putting your money in a hedge fund at all, the benefit is hedging against losses, so that you don’t have to worry about losing money when everyone else is.
It's literally called a hedge fund, not sure why people would assume they are after the highest & riskiest returns.
Historically, hedging was the reason when the first such funds launched that allowed them to use a specific regulatory loophole. The name has stuck around much more so than the strategy, though, nowadays there are entire classes of hedge funds that don't necessarily work like that anymore (eg long-only, special situations arbitrage, global macro,...). Nowadays it pretty much just means a specific legal structure, if it means anything at all, since it's become such a widely used term.
he was a really good hedge fund manager though
> Let’s not forget the all the blather from Twitter board and leadership how their fiduciary duty was to not sell to Musk at this price.
Is there a source for this? I certainly didn't see it. They considered rejecting the offer, and quickly passed a poison pill provision, but that was about preventing buying the company on the open market instead of making a deal like this. The offer was initially only a very short note, and Twitter decided to sell within 3 days of financing being lined up.
https://www.sec.gov/Archives/edgar/data/0001418091/000119312...
Is there a source for this? I certainly didn't see it. They considered rejecting the offer, and quickly passed a poison pill provision, but that was about preventing buying the company on the open market instead of making a deal like this. The offer was initially only a very short note, and Twitter decided to sell within 3 days of financing being lined up.
https://www.sec.gov/Archives/edgar/data/0001418091/000119312...
> dodging a court order to pay
I'm pretty surprised musk seems to have put himself personally on the line, rather than putting 'musk acquisition project llc' as the party making the offer.
If it was the latter, then everything could be arranged so there was no money in that company to pay for any lawsuits. As the worlds richest man, dividing up your liability like that into many LLC's would seem like a very important thing to do.
I'm pretty surprised musk seems to have put himself personally on the line, rather than putting 'musk acquisition project llc' as the party making the offer.
If it was the latter, then everything could be arranged so there was no money in that company to pay for any lawsuits. As the worlds richest man, dividing up your liability like that into many LLC's would seem like a very important thing to do.
> As the worlds richest man, dividing up your liability like that into many LLC's would seem like a very important thing to do
Unfortunately for Musk, when an LLC is used as a proxy for the single member without real separation, the LL part stops working as anything but (on a matter this size) a small additional speedbump rather than a shield, at the same time, it's even nominal separation makes it harder to make deals than if your hoards of assets were behind them.
Unfortunately for Musk, when an LLC is used as a proxy for the single member without real separation, the LL part stops working as anything but (on a matter this size) a small additional speedbump rather than a shield, at the same time, it's even nominal separation makes it harder to make deals than if your hoards of assets were behind them.
> In your case the other party might have gotten away with dodging a court order to pay (or at least made it appear like that). That's pretty much unfathomable if you are literally the richest man on earth and live in the US.
It is other way around. It is way easier for rich person to get away from dodging courts then poor one. Just the fact that rich person can pay fights and layers longer, and fact that rich has it easier to retaliate so everyone is more careful not to step on their toes or do mistake.
It is other way around. It is way easier for rich person to get away from dodging courts then poor one. Just the fact that rich person can pay fights and layers longer, and fact that rich has it easier to retaliate so everyone is more careful not to step on their toes or do mistake.
How could they refuse after being compelled by a court ruling? Did they appeal / sue you back? Can't see how they could simply say... "no".
The judge ruled that the payment had to be made immediately; they could sue back, but they would have to pay first. In their words, it was a “BS ruling”, and they simply didn’t pay.
I’ll tell you that I didn’t know you could just say “no”, but they did. My lawyers were at the point that they would send a (legally backed) letter to all their customers, that their payments should be redirected to some court. It would have caused a massive hellfire, though.
I had the choice of going through with all this, but the outcome would still be uncertain, legal fees would increase, and take a long time regardless. It was a fully bootstrapped business, I was relatively young and in debt, and I decided to renegotiate.
In the end I got the money I needed to pay off my debts, legal fees + then some, a huge learning experience, and took a 1 year sabbatical. I just wanted this whole thing to be over.
I’ll tell you that I didn’t know you could just say “no”, but they did. My lawyers were at the point that they would send a (legally backed) letter to all their customers, that their payments should be redirected to some court. It would have caused a massive hellfire, though.
I had the choice of going through with all this, but the outcome would still be uncertain, legal fees would increase, and take a long time regardless. It was a fully bootstrapped business, I was relatively young and in debt, and I decided to renegotiate.
In the end I got the money I needed to pay off my debts, legal fees + then some, a huge learning experience, and took a 1 year sabbatical. I just wanted this whole thing to be over.
Seems like a really complex system to get your money. Here in Finland you would just start bankruptcy procedures by filing a claim in the court and with the court order saying they owe you it would go through in a day or two giving the other party 2 weeks time to pay or the court would take over all their assets and get you your money (and sell those assets if they don’t have it in cash)
A single verified unpaid bill is grounds for starting the bankruptcy procedure here so it is actually good tool to force big companies to pay. Though you can say goodbye to any future business relations with them if you do that.
A single verified unpaid bill is grounds for starting the bankruptcy procedure here so it is actually good tool to force big companies to pay. Though you can say goodbye to any future business relations with them if you do that.
It's the same in the UK:
https://www.gov.uk/wind-up-a-company-that-owes-you-money
"To wind up a company you must:
* be owed £750 or more * be able to prove that the company cannot pay you "
That's it.
https://www.gov.uk/wind-up-a-company-that-owes-you-money
"To wind up a company you must:
* be owed £750 or more * be able to prove that the company cannot pay you "
That's it.
How do you prove they cannot pay you - show an unpaid invoice?
I only ever threatened it once so didn't go to the expense of filing.
In practice, yes an unpaid invoice, plus proof of delivery /service. Alternatively, a judgment from a court ordering them to pay.
In practice, yes an unpaid invoice, plus proof of delivery /service. Alternatively, a judgment from a court ordering them to pay.
The trouble is the actual collection, which as far as I know is still left as an exercise for the person owed.
Nope, when a company is struck off (directors given 2 months notice etc) its assets are frozen and passed to The Crown, who appoints an Official Receiver. They liquidate the assets, pay any creditors (pay themselves) and keep anything remaining.
So it's an absolutely nuclear debt collection option, and not fast. But the threat is real if the debtor can't argue the debt away.
So it's an absolutely nuclear debt collection option, and not fast. But the threat is real if the debtor can't argue the debt away.
Japan is similar. I keep marveling at the stories about the US system and wonder how it is supposed to be considered friendly for businesses...
Does the example not make it obvious? Imagine your business doesn’t want to pay a bill from some douchebag business you hate.
I think the parent means that a system in which anyone can delay the payment of otherwise legitimate financial claims through an extremely protracted legal process is generally not very business-friendly. Of course, it is friendly to businesses that do not want to pay their liabilities, but on the cost of all the others. What good is a legal system if a company cannot enforce its rights in practice?
The same way any human system works: people mostly want to do the right thing, so they do.
It’s not a case of a simple disagreement though. In this situation there’s a court order requiring you to pay the bill. Not wanting to doesn’t cut it.
You’d be amazed how long someone can go in open defiance of a court order before something concrete actually happens.
It usually requires going back to court for the concrete thing to actually happen too; and it’s rarely all that catastrophic.
Judges are surprisingly willing to give folks more rope to hang themselves with later.
It usually requires going back to court for the concrete thing to actually happen too; and it’s rarely all that catastrophic.
Judges are surprisingly willing to give folks more rope to hang themselves with later.
In Sweden you can actually do that before you’ve won the court case. If a lower court rules that you have a legal right to payment, then you can collect on that even if the other party appeals to a higher court. (They can then of course do the same to you if they win the appeal.)
But this is taking it a bit far IMHO. It’s confusing to me at least that a court order is not final (“has not yet won legal power” as we say in Sweden), but can still be used to force payment through the authorities (Kronofogdemyndigheten).
But this is taking it a bit far IMHO. It’s confusing to me at least that a court order is not final (“has not yet won legal power” as we say in Sweden), but can still be used to force payment through the authorities (Kronofogdemyndigheten).
Getting though it however, and actually getting paid is a long and arduous process. That’s what the poster was up against.
It’s not THAT uncommon for some folks to just say ‘oh yeah, make me’, and while there are (usually) methods of doing it without their co-operation, it’s never easy.
It’s not THAT uncommon for some folks to just say ‘oh yeah, make me’, and while there are (usually) methods of doing it without their co-operation, it’s never easy.
If you are the only debtor and they have the money (no need to sell anything) then it is actually really fast. The court just takes over the bank accounts and sends you the money.
The real slowness of the process kicks in when there are multiple parties claiming their money and there isn’t enough assets to pay everyone.
The real slowness of the process kicks in when there are multiple parties claiming their money and there isn’t enough assets to pay everyone.
By ‘really fast’, I’d wager 6 months to a year, no?
You’d have to show all that was the case for instance, which if they ignored you and generally were unco-operative would take awhile.
You’d have to show all that was the case for instance, which if they ignored you and generally were unco-operative would take awhile.
Took me 17 days last time. A couple days for the claim to go trough the court and 14 days of time for them to pay. After that as they did not during the next bank day the court took control of their bank account and wired me the money. This was for unpaid wages but the same applies to any unpaid bill.
As I said it really only gets slow if the party does not have the money (as in they are bankrupt for real instead of just refusing to pay) and there are multiple parties claiming it. At that point it slows down to figure out how to split the assets.
There really isn’t any way to avoid this outside shutting down the company and moving the money out of the accounts but that will just dig the hole deeper as now they are not only contempt of court (not paying as ordered to when they are capable of) but they are also actively stealing/hiding someone else’s money.
As I said it really only gets slow if the party does not have the money (as in they are bankrupt for real instead of just refusing to pay) and there are multiple parties claiming it. At that point it slows down to figure out how to split the assets.
There really isn’t any way to avoid this outside shutting down the company and moving the money out of the accounts but that will just dig the hole deeper as now they are not only contempt of court (not paying as ordered to when they are capable of) but they are also actively stealing/hiding someone else’s money.
Which jurisdiction?
Unpaid wages are usually treated very different from most claims, at least here, and do get handled in a very expeditious manner (labor commissioner in some places with literally raid workplaces sometimes).
Secured debt (pay me or I get this property - in the contract), can often get similar expedited treatment here in CA.
unpaid improvements (mechanics liens) on real or personal can get handled in a month or two here, but actually getting liquidated damages out of it can take a long time.
Other claims (general vendor bills, liquidated settlements), often meh.
Unpaid wages are usually treated very different from most claims, at least here, and do get handled in a very expeditious manner (labor commissioner in some places with literally raid workplaces sometimes).
Secured debt (pay me or I get this property - in the contract), can often get similar expedited treatment here in CA.
unpaid improvements (mechanics liens) on real or personal can get handled in a month or two here, but actually getting liquidated damages out of it can take a long time.
Other claims (general vendor bills, liquidated settlements), often meh.
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Stories like this remind me why I hate seeing advice on forums that often boil down to…”and if that doesn’t work, just sue them.“ It’s a massive, risky, expensive, physically and emotionally draining experience.
So, basically, if you rich enough in the US, you can simply ignore the courts?
At least for a long time, yes. The example that comes to mind...
https://www.washingtonpost.com/technology/2020/01/08/califor...
https://www.washingtonpost.com/technology/2020/01/08/califor...
Yes and it doesn’t have to do with rich/poor. Until someone either takes an action on your behalf or physically forces you to take an action you can ignore their requests all you want.
> I had the choice of going through with all this, but the outcome would still be uncertain, legal fees would increase, and take a long time regardless.
So it’s just you deciding not to go with this… for some reason.
I’m pretty sure if you enforced the ruling, you’d have gotten a quick response from them. It might seem like a dick move but they moved first.
At $44bn, I highly doubt the dudes of Twitter will take the same stance you took.
So it’s just you deciding not to go with this… for some reason.
I’m pretty sure if you enforced the ruling, you’d have gotten a quick response from them. It might seem like a dick move but they moved first.
At $44bn, I highly doubt the dudes of Twitter will take the same stance you took.
> I’m pretty sure if you enforced the ruling, you’d have gotten a quick response from them.
don't tell someone that you know more about a situation that they were in and you were not. A) it's freaking rude as hell, and B) you absolutely DO NOT have more awareness about this situation than the person who lived it.
don't tell someone that you know more about a situation that they were in and you were not. A) it's freaking rude as hell, and B) you absolutely DO NOT have more awareness about this situation than the person who lived it.
Thank you for saying this. While I do agree with the parent that in the the end it was my decision to go this route, the situation was much more complicated, and I absolutely wouldn’t get a quick response from them.
Having said that, I wasn’t insulted by the parent, and they made a good point: my decision was based on pragmatism, and in the case of Twitter, this was much less likely to be the case. Since I decided to share my story in light of this whole Twitter debacle, the parent was right to point out that the comparison isn’t entirely correct, even more so when it’s about dozens of billions. The rules of the games are different there.
Having said that, I wasn’t insulted by the parent, and they made a good point: my decision was based on pragmatism, and in the case of Twitter, this was much less likely to be the case. Since I decided to share my story in light of this whole Twitter debacle, the parent was right to point out that the comparison isn’t entirely correct, even more so when it’s about dozens of billions. The rules of the games are different there.
Commercial litigation is entirely about pragmatism.
If twitter won and was in the position to compel performance, is that even in the best interest of the company? To force it upon an unwilling owner would be the best way to destroy it in very short order as they desperately attempt to recoup their costs.
Far more sensible, with an enforceable order in hand, to come up with a negotiated settlement. Far easier, as well, with a nuclear option.
If twitter won and was in the position to compel performance, is that even in the best interest of the company? To force it upon an unwilling owner would be the best way to destroy it in very short order as they desperately attempt to recoup their costs.
Far more sensible, with an enforceable order in hand, to come up with a negotiated settlement. Far easier, as well, with a nuclear option.
It doesn't need to be in the best interests of the company, it needs to be in n the best interests of the shareholders. If the company dies once Elon owns it, it sucks for the employees and Elon, but not the all important shareholders.
Indeed, if the point of the sale was to put Twitter in hands capable of steering the ship, they wouldn’t have sold to Musk in the first place.
In this point, it is the interest of the CEO, board and shareholders to collect a fat check and let Mr Musk burn down with Twitter. It’s Musk’s problem what to do with an unwilling owner issues.
What fat check is the CEO and board getting? They own virtually no shares, so it wouldn't be from Musk. And if a reluctant owner takes charge, they aren't writing a fat check or shaking on a golden parachute. The lot of them can only expect to be immediately terminated, but knowing Musk, he would likely take legal action against them and do his best to make them unhirable... so they would likely bail during legal proceedings.
I don't get this mentality. I don't get why people think living through an experience makes them such an expert that any outside opinion is immediately offensive.
An outsider can always offer a new perspective and they could be more knowledgeable than the person who went through the experience.
An outsider can always offer a new perspective and they could be more knowledgeable than the person who went through the experience.
It's a Chesterton's Fence situation.
An outsider is just as likely to be an arrogant fool, and an arrogant fool is more likely to find skepticism offensive than a normal person. There are plenty of people, even on Hacker News, who assume that they are by default more knowledgeable than anybody else, and therefore are obliged to look at any given situation, opine, and set the record straight. Other people don't matter, and certainly their 'experiences' won't count. So, it's not surprising or offensive to run into the 'water squirt bottle of correction', where kitty gets unexpectedly hit with the message 'opining on experience you've never experienced disqualifies you as a first class advice giver'.
Chesterton's Fence is of course the idea that, if you encounter a fence and you don't know what it's for, you don't take it down until you do know what the fence was for. People tend to get worked up about the things they see that, to them, seem to be there for no reason, and advocate all the more vigorously for removing such things when to them, the existence of the thing is obvious nonsense with no possible justification… they would rather think that a thing was done by a total fool who's so inferior to them as to be hopelessly incapable, than consider the idea that their superiority might be questionable.
An outsider is just as likely to be an arrogant fool, and an arrogant fool is more likely to find skepticism offensive than a normal person. There are plenty of people, even on Hacker News, who assume that they are by default more knowledgeable than anybody else, and therefore are obliged to look at any given situation, opine, and set the record straight. Other people don't matter, and certainly their 'experiences' won't count. So, it's not surprising or offensive to run into the 'water squirt bottle of correction', where kitty gets unexpectedly hit with the message 'opining on experience you've never experienced disqualifies you as a first class advice giver'.
Chesterton's Fence is of course the idea that, if you encounter a fence and you don't know what it's for, you don't take it down until you do know what the fence was for. People tend to get worked up about the things they see that, to them, seem to be there for no reason, and advocate all the more vigorously for removing such things when to them, the existence of the thing is obvious nonsense with no possible justification… they would rather think that a thing was done by a total fool who's so inferior to them as to be hopelessly incapable, than consider the idea that their superiority might be questionable.
It's nice to learn there is a name for something that took me a few years to discover. If something doesn't make sense to me, it's probably because I'm not realising the whole scenario.
I've learnt not to critique other peoples designs without a full understanding. The designer probably would have changed a few things if they had a second attempt. Unknown and usually silly requirements can play a big part in design that you as an outsider are unaware of. I've learnt to assume competence rather than incompetence. At the time, there was likely a very good reason for such a decision.
I've learnt not to critique other peoples designs without a full understanding. The designer probably would have changed a few things if they had a second attempt. Unknown and usually silly requirements can play a big part in design that you as an outsider are unaware of. I've learnt to assume competence rather than incompetence. At the time, there was likely a very good reason for such a decision.
And sometimes the requirements that a thing was built on aren’t meant to make the best possible product, e.g. budget, repairability / maintainability, compromise due to integration with other systems, etc etc
In the same vein as “never attribute to malice that which is adequately explained by stupidity”, “never attribute to engineering that which is adequately explained by finance” :)
In the same vein as “never attribute to malice that which is adequately explained by stupidity”, “never attribute to engineering that which is adequately explained by finance” :)
Great comment, feel like this puts into words what I see in interactions on here sometimes that puts me off. I might say that especially on Hacker News there are people who assume they're by default more knowledgeable than others.
Well this isn't exactly a currently-standing fence, so the metaphor falls down.
It's more like someone coming upon their neighbor complaining about a mutual neighbor and their fence and offering them advice for the next confrontation with the neighbor.
It's more like someone coming upon their neighbor complaining about a mutual neighbor and their fence and offering them advice for the next confrontation with the neighbor.
It’s not offensive. It just makes the replier looks like an idiot.
Who do you think had the best perspective on the situation? The person who went through the litigation, had lawyers, knew all the details of the case and made the decision of the poster sending a canned five lines reply based on a paragraph?
It does take much awareness to realise that sending an abrasive reply when you are in no position to do so might be ill received by the community (well at least the quickly diminishing part who wants to have an interesting discussion).
Who do you think had the best perspective on the situation? The person who went through the litigation, had lawyers, knew all the details of the case and made the decision of the poster sending a canned five lines reply based on a paragraph?
It does take much awareness to realise that sending an abrasive reply when you are in no position to do so might be ill received by the community (well at least the quickly diminishing part who wants to have an interesting discussion).
It wasn’t my intention to claim to be an expert on the situation, as much as it was mostly to share a story and point out that there’s a large grey area here.
The parent definitely was factual and correct, but the tone made it sound a bit as if they thought my reasons for doing so were incorrect. That would be a bit of a stretch, and I think that’s what was bothering @naikrovek
The parent definitely was factual and correct, but the tone made it sound a bit as if they thought my reasons for doing so were incorrect. That would be a bit of a stretch, and I think that’s what was bothering @naikrovek
Didn't mean to imply that was how you felt. My response was aimed at the mentality @naikrovek was stating, which is definitely a wider held belief in some communities.
> An outsider ... could be more knowledgeable than the person who went through the experience
If the outsider is making general claims about similar sorts of situations, then sure. If they're predicting the behavior of someone unknown to them, but well known to the OP, then not so much.
If the outsider is making general claims about similar sorts of situations, then sure. If they're predicting the behavior of someone unknown to them, but well known to the OP, then not so much.
So doctors know less about a situation than the patient experiencing the pain?
A good coach has zero impact on their players that actually experience the game?
A good coach has zero impact on their players that actually experience the game?
A doctor certainly knows less about what the patient is feeling than the patient themselves. It's a known phenomenon with women's health, where we have medical professionals literally gaslighting us about our own physical and mental health.
I have a friend who got screwed by a major (top 5) US bank, won the court case against them, and they then refused to pay the settlement.
He went through the paperwork, and 6 months later they wrote him a cashiers check right then and there when he showed up with the Sheriff to take possession of one of their prized historic artifacts from the lobby of their corporate headquarters during business hours.
Not very many people are able and willing to deal with the shittiness of all the paperwork required, and a lot of bad actors count on that.
He went through the paperwork, and 6 months later they wrote him a cashiers check right then and there when he showed up with the Sheriff to take possession of one of their prized historic artifacts from the lobby of their corporate headquarters during business hours.
Not very many people are able and willing to deal with the shittiness of all the paperwork required, and a lot of bad actors count on that.
Should have taken the artifact. Magic items are always better
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wtf. which jurisdiction is this? so strange you can't take the final ruling and go to a collections agency and get your money :o
You can. But the story would imply that all that money is in receivables; it's hard to seize a big pile of debt, I assume even in Europe.
not really as far as I know.
either the company pays up (in whole or in installments, etc) or the enter into bankruptcy proceedings and the courts appoint someone. if the company is profitable, then as above it'll eventually pay up, if not, then it'll be sold off and the liabilities will be covered up to by the income of the sale.
either the company pays up (in whole or in installments, etc) or the enter into bankruptcy proceedings and the courts appoint someone. if the company is profitable, then as above it'll eventually pay up, if not, then it'll be sold off and the liabilities will be covered up to by the income of the sale.
You can. In my very very limited experience you can sell it to collections for something like 80% of the value in a case where they have a perfected security interest. They will send a UCC letter to payors, who are legally obligated (from what my attorney tells me) to pay the creditor, absent some proof that they don't need to.
Do some thought experiments in your head, and you can see how quickly things break down.
Like: The courts say pay, and the company says no. So you...
- ...send police (not really the jurisdiction of the police, but let’s pretend they go). The police show up and say “Give us the money you owe” and the business says no. Now what? They can’t go on to private property without permission or warrant. Dead end.
- ... become your own collections company. You call them as much as you are legally allowed, and ask them for the money. Each time they say no. You call their family (you might not be allowed to do this) and they say “not my problem” so they are dead ends. You call their vendors and clients but all you are doing is informing them that company X owes you money. They don’t have any obligation to give you that money.
- ... sell the debt to a collections company. That company gives you pennies on the dollar (20% if you’re lucky).
- ... work through the courts to garnish wages. You have no idea what this company pays their staff for wages, nor who to target (the exec who said no?), but you push forward anyway and end up getting that garnishment. You now get 30% of everything that person makes. Let’s call that 30k/yr at the time of the garnishment. Then, that person quits or takes a “lower-paying job” and you’re down to 10k/yr. It will take decades to get what’s owed to you and in the mean time this person is actively battling you in court because they hate losing 30% of what they make every month.
- ... pursue action that gives you a percentage of the company’s net revenue. If you get it, you can only celebrate for what feels like a moment because they could have a “sudden increase in expenses” or choose to close the business and start a new one with a different name. You can try to get the agreement shifted to that new company, but that’s a whole new challenge and the whole time the founders are saying “No.” “Not our responsibility.” and so on.
It’s really very hard to get cash in hand from anyone, whether there is a court ruling or not.
Like: The courts say pay, and the company says no. So you...
- ...send police (not really the jurisdiction of the police, but let’s pretend they go). The police show up and say “Give us the money you owe” and the business says no. Now what? They can’t go on to private property without permission or warrant. Dead end.
- ... become your own collections company. You call them as much as you are legally allowed, and ask them for the money. Each time they say no. You call their family (you might not be allowed to do this) and they say “not my problem” so they are dead ends. You call their vendors and clients but all you are doing is informing them that company X owes you money. They don’t have any obligation to give you that money.
- ... sell the debt to a collections company. That company gives you pennies on the dollar (20% if you’re lucky).
- ... work through the courts to garnish wages. You have no idea what this company pays their staff for wages, nor who to target (the exec who said no?), but you push forward anyway and end up getting that garnishment. You now get 30% of everything that person makes. Let’s call that 30k/yr at the time of the garnishment. Then, that person quits or takes a “lower-paying job” and you’re down to 10k/yr. It will take decades to get what’s owed to you and in the mean time this person is actively battling you in court because they hate losing 30% of what they make every month.
- ... pursue action that gives you a percentage of the company’s net revenue. If you get it, you can only celebrate for what feels like a moment because they could have a “sudden increase in expenses” or choose to close the business and start a new one with a different name. You can try to get the agreement shifted to that new company, but that’s a whole new challenge and the whole time the founders are saying “No.” “Not our responsibility.” and so on.
It’s really very hard to get cash in hand from anyone, whether there is a court ruling or not.
it's not that hard here (Hungary)
yes using a collections company is the fastest way, but here the cost is less than 10%.
and it's not that hard in case of mortgage defaults in the US either (foreclosure is completely routine). oh and there was a story of a dude who won some claims against some bank, the branch was either clueless or forgot to pay, so eventually the dude went to the branch office and packed up some of their furniture. (which is of course less routine)
the way it works here is that if the company doesn't pay upon the court order they automatically enter into bankruptcy and the court appoints someone to manage the company during. so they can't just suddenly "increase expenses"
yes using a collections company is the fastest way, but here the cost is less than 10%.
and it's not that hard in case of mortgage defaults in the US either (foreclosure is completely routine). oh and there was a story of a dude who won some claims against some bank, the branch was either clueless or forgot to pay, so eventually the dude went to the branch office and packed up some of their furniture. (which is of course less routine)
the way it works here is that if the company doesn't pay upon the court order they automatically enter into bankruptcy and the court appoints someone to manage the company during. so they can't just suddenly "increase expenses"
I'm betting that for the money Musk is in for they will go with that option though, and considering all the side effects that would probably happen if Musk just said 'No' - he would have to be a level of stubborn that borders on mental instability.
When you have a judgement you can send it to collections, but often people just don't pay these things. It's really hard to collect for even small things like evictions.
> send it to collections
When my now-adult son was in high school, he had a summer job working as a moving man for a friend's dad's company. The company had a contract with the local constable's office. One of my son's and his friend's assignments was to drive a truck around to the offices of a very-big shopping mall and to meet a constable to collect a seven-figure court judgment that hadn't been paid. The constable, my son, and his friend walked into the management office; the constable presented the writ of execution of the judgment, and my son and his friend started unplugging and loading up office equipment and furniture to be hauled off and sold at auction. The manager said "Wait, wait"; a hour later, a cashier's check arrived for the amount of the judgment.
When my now-adult son was in high school, he had a summer job working as a moving man for a friend's dad's company. The company had a contract with the local constable's office. One of my son's and his friend's assignments was to drive a truck around to the offices of a very-big shopping mall and to meet a constable to collect a seven-figure court judgment that hadn't been paid. The constable, my son, and his friend walked into the management office; the constable presented the writ of execution of the judgment, and my son and his friend started unplugging and loading up office equipment and furniture to be hauled off and sold at auction. The manager said "Wait, wait"; a hour later, a cashier's check arrived for the amount of the judgment.
> The constable, my son, and his friend walked into the management office; the constable presented the writ of execution of the judgment, and my son and his friend started unplugging and loading up office equipment and furniture to be hauled off and sold at auction.
yeah, that’s like totally reasonable. I’ve done similar back in the ‘80s, using a similar process seized bank accounts when the former employer ignored an order to pay a judgement over unpaid expenses. Notably they didn’t bother to appear in court in the first place; they never responded to service even though I paid extra to have the Sheriff’s Deputy serve it. Then they ignored my calls and letters for several weeks. I knew all the bank account numbers already, so: back to the judge for an order to seize the accounts. Showed up at the bank an hour later with the deputy in tow and walked out with a bank check for roughly $45k 30 minutes later.
Nowadays a bank makes you wait some days for a payout but they will freeze the funds immediately.
These days I prefer lawyering up, but in the late ‘70s I called on a supplier to deliver promised equipment that was being delayed because well, I was a teen-ager and even though I had paid they felt like I wasn’t a serious customer. So I paid a local motorcycle club $500 to escort me to the meeting, as well as sit there in the parking lot revving engines and scratching off whilst I met with the vendor. The MC got a hefty tip because: members helped load the product, and the MC president encouraged a 50% refund made out to me personally to ensure I would never have to be a customer again...
yeah, that’s like totally reasonable. I’ve done similar back in the ‘80s, using a similar process seized bank accounts when the former employer ignored an order to pay a judgement over unpaid expenses. Notably they didn’t bother to appear in court in the first place; they never responded to service even though I paid extra to have the Sheriff’s Deputy serve it. Then they ignored my calls and letters for several weeks. I knew all the bank account numbers already, so: back to the judge for an order to seize the accounts. Showed up at the bank an hour later with the deputy in tow and walked out with a bank check for roughly $45k 30 minutes later.
Nowadays a bank makes you wait some days for a payout but they will freeze the funds immediately.
These days I prefer lawyering up, but in the late ‘70s I called on a supplier to deliver promised equipment that was being delayed because well, I was a teen-ager and even though I had paid they felt like I wasn’t a serious customer. So I paid a local motorcycle club $500 to escort me to the meeting, as well as sit there in the parking lot revving engines and scratching off whilst I met with the vendor. The MC got a hefty tip because: members helped load the product, and the MC president encouraged a 50% refund made out to me personally to ensure I would never have to be a customer again...
Video of a similar story:
https://youtu.be/3ctLEGrOmf4
https://youtu.be/3ctLEGrOmf4
You can also get an order to liquidate and literally start taking assets like real estate, bank accounts, etc.
Not to mention, could the officers of the company be held in contempt of court?
It is possible, but typically the remedy is a writ of garnishment.
If a party is intent on being a bad actor it is extremely difficult to enforce judgments where the sum is too small to warrant extraordinary effort.
Difference being, Twitter has deep pockets and are highly motivated to see this through.
Not as deep as Elon Musk.
When it comes to court battles, relative depth matters.
When it comes to court battles, relative depth matters.
Only to certain point. At that point you can't spend more than other party. There is only so much legal work that can be done for one case.
Not that bar isn't very high, we are possibly talking about millions or tens of millions in billings, but either side have that and it will make sense for both to spend it in every case.
Not that bar isn't very high, we are possibly talking about millions or tens of millions in billings, but either side have that and it will make sense for both to spend it in every case.
It really doesn't here IMO. They can both afford top-tier legal teams.
Delaware courts are known for dealing with these sorts of cases rapidly - there isn't likely to be any opportunity for dragging it out for years.
Delaware courts are known for dealing with these sorts of cases rapidly - there isn't likely to be any opportunity for dragging it out for years.
Is it clear that Elon is more liquid than Twitter? Twitter has several billion in cash. Musk is reported to have only 3b cash. Tesla and SpaceX may need his capital to survive the downturn. They both have an arsenal of options to raise further cash.
I realise Elon is a bigger fish but he is a highly leveraged and constrained one…if anyone has more insight into this dynamic I’d interested to hear it
I realise Elon is a bigger fish but he is a highly leveraged and constrained one…if anyone has more insight into this dynamic I’d interested to hear it
Twitter cash on hand for the quarter ending March 31, 2022 was $6B
https://www.macrotrends.net/stocks/charts/TWTR/twitter/cash-...
https://www.macrotrends.net/stocks/charts/TWTR/twitter/cash-...
How is twitter getting so much cash ? Are the ads on twitter earning them that much ?? Or is it cash they got from raising funds ?
You can see Elon sold something like $8-$12 billion in TSLA stock in the past few months. Assuming it didn't get spent on SpaceX or somewhere else (it was supposed to be used for the Twitter buyout) he has more cash than Twitter. But that doesn't really matter, at a certain point the amount they spend in legal services will reach such diminishing returns that it's not worth it.
Re twitter: What a waste of life time and resources that could be otherwise have been used. All for what? For the ego of a madman?
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< Twitter is not in a good shape
It appears they will make around $6B in annual revenues, I think their financial performance is better than most social media platforms, save FB. In what way, Twitter is not in good shape?
It appears they will make around $6B in annual revenues, I think their financial performance is better than most social media platforms, save FB. In what way, Twitter is not in good shape?
The CEO has a massive parachute. Its in his best interest to just settle on a lower price rather than get tied up in courts for years with Musk. If the markets continue to decline, a lower offer is going to look more and more attractive to shareholders. Just my 2 cents.
Why would you force someone to buy something they don't want, whatever the reason is ?
If they decided not to proceed to the deal it means it was a bad deal from their perspective or that it would put them in a worse situation. Essentially you are taking advantage of them by forcing them.
It's like if you sell a very expensive "brown ice cream", the buyer tells you he wants to buy it, and then when the buyer has it in hands they realize it's not chocolate and you say: "but it's brown ice cream, you are forced to buy it now"
From the seller’s perspective? Because they own a thing which is worth less to them than the buyer promised for it. Therefore they can profit greatly from the deal.
This is not the story of some happless kid swindled by a brown ice cream vendor. This is a sophisticated business person who has, prior to signing a legally enforceable contract to buy the brown icecream as-is, talked publicly about how the ice cream is just brown and not chocolate.
Why did the buyer made that contract to be written and then signed it? The potential buyer of the brown ice cream was not taken seriously initially. Everyone, including the seller, assumed that he is going to flake out and not go through with the transaction. The buyer has seen that he is not taken seriously, but he really really wanted to own the brown ice cream at that time. So the two parties willingly went into a written agreement that the buyer is going to pay a lot of money for the brown ice cream. Since the seller had concerns about the flakyness of the buyer, they both instructed their lawyers to write the contract as ironclad as possible. And what gives teeth to contracts like that, is that they can be enforced through the court system.
This is not the story of some happless kid swindled by a brown ice cream vendor. This is a sophisticated business person who has, prior to signing a legally enforceable contract to buy the brown icecream as-is, talked publicly about how the ice cream is just brown and not chocolate.
Why did the buyer made that contract to be written and then signed it? The potential buyer of the brown ice cream was not taken seriously initially. Everyone, including the seller, assumed that he is going to flake out and not go through with the transaction. The buyer has seen that he is not taken seriously, but he really really wanted to own the brown ice cream at that time. So the two parties willingly went into a written agreement that the buyer is going to pay a lot of money for the brown ice cream. Since the seller had concerns about the flakyness of the buyer, they both instructed their lawyers to write the contract as ironclad as possible. And what gives teeth to contracts like that, is that they can be enforced through the court system.
Well, this probably doesn't come up very often in general, but one reason for Twitter to want to proceed might be if someone had signed a legally binding agreement to pay 15 billion dollars more than the market rate.
> Why would you force someone to buy something they don't want, whatever the reason is ?
Because they agreed to buy it? And because you stand to make a lot of money. Doesn't seem that complicated to me.
Because they agreed to buy it? And because you stand to make a lot of money. Doesn't seem that complicated to me.
Yep. It's basically "why wouldn't you accept half your wages if the company really didn't want to pay you the full amount?" or "if you lend somebody something and they decide to keep it, why would you try to get it back?"
rvnx(4)
If he didn’t want to buy it, he shouldn’t have signed a contract saying they are going to buy it with a huge amount of fanfare, several lawyers, and initially against the desire of the company. He knew, well in advance, what he was buying, and he explicitly waived the right to due diligence.
"It turns out I don't want to do that" isn't something that should be supported in regards to written and signed contracts. Selling a company is a large enough thing that there's downstream effects when the contract is signed and both parties are committed, and there's a real cost to the counterparty saying "on second thought, nah".
To get their money, presumably. If Twitter stocks fall due to this situation then all the more interest in getting the previously set deal to go through.
It being a bad deal for them likely makes it a very good deal for you.
Also, letting them renege on the deal they agreed to would likely put you in a worse situation than had they not offered the (bad, for them) deal in the first place, making it harder to feel bad for them.
Ultimately, if a business made a binding agreement, letting them out of it to be nice is nice, but neither required nor financially sensible.
Also, letting them renege on the deal they agreed to would likely put you in a worse situation than had they not offered the (bad, for them) deal in the first place, making it harder to feel bad for them.
Ultimately, if a business made a binding agreement, letting them out of it to be nice is nice, but neither required nor financially sensible.
The due diligence was done already, and this being a public company adds a layer of regulation on top
A feature of modern finance is the blockbuster leveraged buyout signed right before the market crashes: RJR Nabisco in 1989, Hilton and Harrah's in 2006. Now Twitter, in 2022.
Porsche and VW in 2008 if memory serves well. Almost ruined Porsche. Or Schaeffler and Conti, which almost ruined Schaeffler, a private company at the time.
It's almost like these things happen pretty regularly, so it's easy to find examples that correlate...
There is a documented negative effect on returns with private equity deal size. Record-setting leverage really only happens after prolonged low volatility twinned to easy money.
I like to post that picture of a python that tried to eat an alligator when Schaeffler's ill-timed purchase of Conti comes up. Always good for a laugh.
Schaeffler survived, but barely, and had Kurzarbeit not been a thing, it probably would have been a lot uglier. Kurzarbeit is a lot of why Germany came out of 2008/2009 in reasonably good shape. Better for pretty much everyone in an industry to be working 80% of the time in their current positions and getting 90% of their pay than for 20% of them to be out of work and struggling to make ends meet on unemployment - better for the workers, and better for their employers, who can turn around much more quickly when things get better.
Schaeffler survived, but barely, and had Kurzarbeit not been a thing, it probably would have been a lot uglier. Kurzarbeit is a lot of why Germany came out of 2008/2009 in reasonably good shape. Better for pretty much everyone in an industry to be working 80% of the time in their current positions and getting 90% of their pay than for 20% of them to be out of work and struggling to make ends meet on unemployment - better for the workers, and better for their employers, who can turn around much more quickly when things get better.
The Porsche/VW thing was complicated by a short squeeze, not the financial crisis.
The short squeeze was an effect of two things (too lazy to look up the details now): Porsche having funding issues and tye complicated share structure of VW, the short squeeze affected the class B(?, those with limited voting power) of VW. Without the financial crisis, Porsche could have easily financed the take over.
It was incredibly risky so. And the attemot was partially driven by a feud between the Porsche and Piech branches of the Porsche family tree, with the latter "represebting" VW. All that does is show us that high stakes decisions should never be taken based on "personal" issues.
It was incredibly risky so. And the attemot was partially driven by a feud between the Porsche and Piech branches of the Porsche family tree, with the latter "represebting" VW. All that does is show us that high stakes decisions should never be taken based on "personal" issues.
This seems like a great example of selection bias if there are blockbuster acquisitions every year.
I don't think there was any implication that the big buyouts before a crash are unusual - calling them "a feature of modern finance" seemed to be implying that they're inevitable.
Acquisitions become crazier and crazier as the market gets hotter and hotter, with ever increasing purchase prices - someone inevitably gets left holding the bag when the market comes crashing back down to earth, and it's often the greedier players who take bigger risks.
The blockbuster acquisitions that happen in the middle of the bull market also often seem insane in the moment, but if the market continues on the up after the fact then they're remembered as sound business decisions rather than as a symptom of mania.
Acquisitions become crazier and crazier as the market gets hotter and hotter, with ever increasing purchase prices - someone inevitably gets left holding the bag when the market comes crashing back down to earth, and it's often the greedier players who take bigger risks.
The blockbuster acquisitions that happen in the middle of the bull market also often seem insane in the moment, but if the market continues on the up after the fact then they're remembered as sound business decisions rather than as a symptom of mania.
> if there are blockbuster acquisitions every year
There aren’t. They cluster to varying degrees depending on the thresholds one chooses. But the likelihoods are far from uniform.
There aren’t. They cluster to varying degrees depending on the thresholds one chooses. But the likelihoods are far from uniform.
I don't think Elon is trying to get out of it, he's got 2 goals:
1. Buy more time until stock market (i.e. Tesla shares) recover 2. Renegotiate the price
Either one will probably mean he goes through with the deal. If he is under litigation for a year so be it, once the stock market recovers he's sacrificing a lot less of tesla to buy it.
It's a big IF though. If the US recession gets really bad and the Fed stops interest rate hikes, the market could recover very quickly. But equally if Powell wants to go the Volcker route, Elon is fucked probably, the market won't recover for years.
And in the meantime Elon's reputation I think is taking a massive hit. And I think a lot of his new political allies on the free speech side will be extremely disappointed. He might end up with no friends on either side.
So he is taking a big risk here.
1. Buy more time until stock market (i.e. Tesla shares) recover 2. Renegotiate the price
Either one will probably mean he goes through with the deal. If he is under litigation for a year so be it, once the stock market recovers he's sacrificing a lot less of tesla to buy it.
It's a big IF though. If the US recession gets really bad and the Fed stops interest rate hikes, the market could recover very quickly. But equally if Powell wants to go the Volcker route, Elon is fucked probably, the market won't recover for years.
And in the meantime Elon's reputation I think is taking a massive hit. And I think a lot of his new political allies on the free speech side will be extremely disappointed. He might end up with no friends on either side.
So he is taking a big risk here.
> buy more time until Tesla shares recover
The problem is that Tesla is massively over-inflated and Musk knows it and many people believe that was actually the reason for the whole twitter thing (Musk converting overinflated Tesla shares to fair-market value Twitter shares). With Tesla very likely losing the 'biggest EV maker' title to Volkswagen by the end of the year, it here has to be some sleight-of-musk for TSLA to recover.
The problem is that Tesla is massively over-inflated and Musk knows it and many people believe that was actually the reason for the whole twitter thing (Musk converting overinflated Tesla shares to fair-market value Twitter shares). With Tesla very likely losing the 'biggest EV maker' title to Volkswagen by the end of the year, it here has to be some sleight-of-musk for TSLA to recover.
> With Tesla very likely losing the 'biggest EV maker' title
Since you mention it...
https://uk.pcmag.com/cars-auto/141332/tesla-is-no-longer-the...
Since you mention it...
https://uk.pcmag.com/cars-auto/141332/tesla-is-no-longer-the...
Yeah, but this is only half-true. BYD produces as much hybrids as full-EVs, so Tesla is still the biggest maker of full EVs.
What I was saying: If you extrapolate year-over-year sales of full EVs, Volkswagen will likely sell more full EVs than TSLA sometime this year.
What I was saying: If you extrapolate year-over-year sales of full EVs, Volkswagen will likely sell more full EVs than TSLA sometime this year.
Since it was shown in the last years that legacy car makers are perfectlh able to transition to EVs, regardless of market segment, I think we are approaching the point of realizing that both, EVs and ICEs and everything in between, are just cars. Meaning that purely EV makers should be compared to ICE makers. What that means for companies like Telsa is everyones guess, at the very least so it would just be fair to treat Tesla as a car maker and not some SV style tech company.
Except they are miles ahead in battery tech, autonomous driving, and supercharger rollout.
I wouldn’t write them off just yet, they’ve got a lot more innovation in their DNA than the old car makers
I wouldn’t write them off just yet, they’ve got a lot more innovation in their DNA than the old car makers
> autonomous driving
No they aren’t. Their sensor stack is handicapped and has literally murdered people. Sure they have “autonomous” cars in customer’s hands now, but that’s only because Musk is reckless, that doesn’t mean they are ahead. GM bought Cruise which I would say is definitely ahead of Tesla in their technology and ethics.
No they aren’t. Their sensor stack is handicapped and has literally murdered people. Sure they have “autonomous” cars in customer’s hands now, but that’s only because Musk is reckless, that doesn’t mean they are ahead. GM bought Cruise which I would say is definitely ahead of Tesla in their technology and ethics.
> Super charger rollout
US only, Europe those super chargers are available for everyone. In some asia countries they are behind https://paultan.org/2022/05/13/tesla-open-to-idea-of-establi...
> Battery tech
Yes, others are catching up or are competitive, differences are much smaller than expected improvement over next 10 years.
https://insideevs.com/news/528346/ev-weight-per-battery-capa...
> autonomous driving
roll out only, performance of the rolled out solution is not so impressive. This is also because they use fewer sensors.
US only, Europe those super chargers are available for everyone. In some asia countries they are behind https://paultan.org/2022/05/13/tesla-open-to-idea-of-establi...
> Battery tech
Yes, others are catching up or are competitive, differences are much smaller than expected improvement over next 10 years.
https://insideevs.com/news/528346/ev-weight-per-battery-capa...
> autonomous driving
roll out only, performance of the rolled out solution is not so impressive. This is also because they use fewer sensors.
I don't write them off, by no means, even if I was sceptical a couple of years ago. Tesla will remain a car maker for sure.
Battery tech, so, is mostly Panasonic. And other are catching up. Esentially, there are ICE makers that don't have the best engines. And lately I sae mucj more, relative, innovation and transformation cing from the likes of VW than from Tesla.
Battery tech, so, is mostly Panasonic. And other are catching up. Esentially, there are ICE makers that don't have the best engines. And lately I sae mucj more, relative, innovation and transformation cing from the likes of VW than from Tesla.
They are starting to dry roll batteries, technology which no one has achieved before. And many other production innovations. And that was over a year ago.
They are most certainly miles ahead by now.
They are most certainly miles ahead by now.
This is rubbish and proven wrong. Tesla claimed to be years ahead, European Regulators beg to differ
Apple sells less smart phones than Samsung. Yet Apple is the most valuable company in the world and Samsung isn’t even in the top ten.
So while I think what your claim matters little as it relates to the value of the company I also think your assertion that this or that company will sell more EV’s than Tesla any time soon is more likely that not wrong.
So while I think what your claim matters little as it relates to the value of the company I also think your assertion that this or that company will sell more EV’s than Tesla any time soon is more likely that not wrong.
Eh? VW is aiming for ~800k this year, whereas Tesla is going for roughly 2M? Am I misinterpreting?
@EricD: I took historic sales increase year-over-year and extrapolated from that, which led me to believe VW will narrowly pass TSLA by the end of the year.
You seem to have better or more recent information than me. If so, please share the source. Thanks.
You seem to have better or more recent information than me. If so, please share the source. Thanks.
Very misleading to include hybrids in “EV sales”.
Yeah especially with his filing saying he’s waiving BDD. That’s a tough one to escape. He’s claiming that Twitter has made a material misstatement on their public filings. I’m sure that disclosure has been heavily diligenced.
Worst case there are some wrong statements in Twitters fillings. Thise have to be incredibly severe to have an impact on Musk's obligation to purchase Twitter. A simple filing error or mistake is most likely not enough.
Do they always have the option of settling at any point in the process? Like if Musk said "$20 billion penalty but I don't buy the company", I assume they'd say yes? (Or substitute a bigger number if not.)
So are they just negotiating at this point if Musk has a penalty number he's willing to pay?
So are they just negotiating at this point if Musk has a penalty number he's willing to pay?
My bet is on this.
They will just negotiate. Nobody wants to go through a lengthy legal process.
I think the number will be at 5b. Because, at 5b, Twitter gets a 1y revenue for virtually no cost. Twitter doesn't want to sell to a buyer who doesn't actually want to buy. It's not good for anyone.
Imagine Musk buying Twitter and starting open up exec emails knowing about the bot numbers being inaccurate.
They will just negotiate. Nobody wants to go through a lengthy legal process.
I think the number will be at 5b. Because, at 5b, Twitter gets a 1y revenue for virtually no cost. Twitter doesn't want to sell to a buyer who doesn't actually want to buy. It's not good for anyone.
Imagine Musk buying Twitter and starting open up exec emails knowing about the bot numbers being inaccurate.
At $5bn Twitter & its board open themselves up to getting sued by the shareholders who were harmed for $16bn currently.
What Twitter as a company "wants" is kinda irrelevant. They have a fiduciary responsibility to their shareholders, and telling all those shareholders they just didn't feel like getting a $54.20/share deal because they didn't like the buyer and didn't want to be bought isn't really going to fly.
So any settlement will come with a requirement for Twitter to reasonable demonstrate to share holders that they haven't been harmed. And since all signs point to Twitter having the much stronger case, it's hard to imagine them just accepting much less than either the original purchase, or a penalty fee of closer to $16bn (the current gap between the share price & the purchase price)
What Twitter as a company "wants" is kinda irrelevant. They have a fiduciary responsibility to their shareholders, and telling all those shareholders they just didn't feel like getting a $54.20/share deal because they didn't like the buyer and didn't want to be bought isn't really going to fly.
So any settlement will come with a requirement for Twitter to reasonable demonstrate to share holders that they haven't been harmed. And since all signs point to Twitter having the much stronger case, it's hard to imagine them just accepting much less than either the original purchase, or a penalty fee of closer to $16bn (the current gap between the share price & the purchase price)
The state of Delaware has consistently given boards wide discretion to act as they see fit in their fiduciary duty. Unless stock holders can prove the board acted in bad faith it will be very hard to win a case against them.
>consistently given boards wide discretion to act as they see fit in their fiduciary duty
That discretion is highly limited in the context of an acquisition, where there's a high risk of conflicts of interest between the Board and Shareholders. Delaware courts have consistently limited the Business Judgement Rule in takeover situations.
That discretion is highly limited in the context of an acquisition, where there's a high risk of conflicts of interest between the Board and Shareholders. Delaware courts have consistently limited the Business Judgement Rule in takeover situations.
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> Twitter gets a 1y revenue for virtually no cost.
This is not between Twitter and Musk. This is between Twitter shareholders and Musk. Twitter board is just working on their behalf. Shareholders don't care about Twitter's future now when they have very tight agreement. There will be judgement against Musk almost certainly.
Musk made $44B deal. However this ends, Musk is in hook for tens of billions. Either he pays $44B and gets Twitter or he pays the difference between $44B and current valuation when the deal is made, say $20B and current owners keep Twitter.
Musk has no upper hand. He made a huge mistake.
This is not between Twitter and Musk. This is between Twitter shareholders and Musk. Twitter board is just working on their behalf. Shareholders don't care about Twitter's future now when they have very tight agreement. There will be judgement against Musk almost certainly.
Musk made $44B deal. However this ends, Musk is in hook for tens of billions. Either he pays $44B and gets Twitter or he pays the difference between $44B and current valuation when the deal is made, say $20B and current owners keep Twitter.
Musk has no upper hand. He made a huge mistake.
I think the best he can hope for here is settle the lawsuit that will follow for buying twitter at a slightly reduced price.
The amount he would pay to walk away is roughly equal to the current fair market value of Twitter. I wouldn't be happy to pay that and get nothing for it. Better to go through with the deal.
The amount he would pay to walk away is roughly equal to the current fair market value of Twitter. I wouldn't be happy to pay that and get nothing for it. Better to go through with the deal.
Not sure. Twitter board members have a fiduciary duty towards shareholders. If they accept a lot less than they could get by simply enforcing the rules (at a comparatively negligible cost) because they don't want to look mean, I reckon there's a very high probability that they will get sued by some hedge fund.
People keep throwing this word around... yet the board accepted the first offer from Elon with no negotiation. Nobody is suing twitter board for this.
Who does that? Even new grad negotiates their offer...
Who does that? Even new grad negotiates their offer...
People with no other options take their first offer. Negotiating is for people with alternatives.
My guess is that they floated the price to a lot of potential acquirers during the poison pill debacle, then they got nothing higher.
My guess is that they floated the price to a lot of potential acquirers during the poison pill debacle, then they got nothing higher.
New grad with no other offers still negotiate...
Not even negotiating once is just very odd.
Not even negotiating once is just very odd.
New grads with no offers still try, but their only alternative is "I say no and keep looking." Twitter's board's alternative is "I say no and get sued by shareholders." Negotiation only works if you can walk away, and it's not uncommon in business deals to accept the first offer if it is generous enough.
> Imagine Musk buying Twitter and starting open up exec emails knowing about the bot numbers being inaccurate.
There's different levels of knowing about inaccuracies.
There's knowing that your methods of determining bots are probably not optimal and the number is most likely undercounted, but it was a good faith albeit imperfect effort.
Then there's knowing that bots are actually some other specific number and suppressing that information.
I think the former is much, much more likely than the latter and wouldn't really be a huge controversy if it leaked.
There's different levels of knowing about inaccuracies.
There's knowing that your methods of determining bots are probably not optimal and the number is most likely undercounted, but it was a good faith albeit imperfect effort.
Then there's knowing that bots are actually some other specific number and suppressing that information.
I think the former is much, much more likely than the latter and wouldn't really be a huge controversy if it leaked.
Apart from that, out of 5000 employees, you can bet there is one employee disagreeing in email and that employee's opinion is discarded.
There is at least one person disagreeing on any topic.
It is a risky situation all around.
I reckon that good faith is not enough.
There is at least one person disagreeing on any topic.
It is a risky situation all around.
I reckon that good faith is not enough.
Twitter and Musk already agreed to a 1 billion dollar penalty. He’s trying to get out of it, even though he already waved due diligence.
The $1B scenario doesn’t apply here. He’s on the hook for $44B.
Do you have a simple and short explanation for why?
The $1bn is in case something else makes the closing impossible (a regulatory decision, for example).
Good explanation..
https://news.ycombinator.com/item?id=32027646
https://news.ycombinator.com/item?id=32027646
Because taking a corporation private is a pain in the ass.
Elon Musk signed a contract giving himself essentially no ability to back out, to force Twitter to consider his offer.
Elon Musk signed a contract giving himself essentially no ability to back out, to force Twitter to consider his offer.
[deleted]
Twitter even admitted to overcounting its users:
https://techcrunch.com/2022/04/28/twitter-says-it-overcounte...
By 1%, and they corrected it?
This whole article and their filings avoid using percentages, specifically because it’s misleading at their size. Absolute numbers make more sense.
Regardless, “this is not the first time Twitter reported erroneous metrics around users” is the problem with them.
Regardless, “this is not the first time Twitter reported erroneous metrics around users” is the problem with them.
Why you think absolute number make more sense ?
Well, even by percentage, 1 in 100 users at their scale is massive.
More context: https://dataschool.com/misrepresenting-data/relative-vs-abso...
More context: https://dataschool.com/misrepresenting-data/relative-vs-abso...
The article says to use both - not a preference for using absolute numbers at large scales.
[deleted]
Doesn’t matter, courts won’t rule that a materially adverse effect
What if they have willfully misrepresented the amount of bots on the platform and lied about it to shareholders for years. MAUs are a big part of any social networks valuation metrics.
It's a terrible contract: no due diligence, a specific performance clause. The only type of person who would ever sign a contract like that would be a dumb guy who got rich by accident.
Or someone whose ego is so inflated and actions are on a whim due to being vastly rich that he just had a wild hair up his ass and said he'd buy Twitter. Remember, the Twitter buyout bullshit was after he'd done some shenanigans failing to report buying Twitter shares. People complained (on Twitter no less) and he literally went "oh well I'll just buy Twitter then." Egg on face now that he's seen just how utterly insane his proposal was.
Musk really strikes me as bipolar or something, and that he agreed to buy Twitter in a manic episode and now the party's over.
Yes, but even if they take him to court, it's highly likely that Musk and his legal team drag this out. It's not going to be a simple case. No contract law case ever is. And at that point, Twitter's business might keep suffering, to the point that their fair market value plummets, and they enter a very difficult financial situation. Then Musk can swoop in with a much lower price offer and they will accept simply due to their financial position and not being able or willing to continue the case in the courts. I think Musk will end up buying Twitter but at a much lower price.
I believe the agreement between Twitter and Musk had a $1B acquisition cancellation clause built into in, so if Musk can't successfully argue for breach of contract he'll have to pay this $1B break-up fee, rather than be forced to complete the purchase.
The contract includes a specific performance clause, so it's not as simple as a $1B break up fee.
That’d be a nice infusion of capital for Twitter. And maybe that’s the best case scenario outcome that they’re actually hoping for.
You may be correct, but if you think Musk will actually buy Twitter at 54.20 now, I have a bridge to sell you. He can pay enough lawyers to hold up this transaction for years. "Time kills all deals", as they say.
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[deleted]
cryptica(2)
Musk stated that 50% of the users are bots and that Twitter is hiding this.
If true, he’s got an out.
If true, he’s got an out.
IIRC there’s just a $1B penalty in the acquisition clause for Musk if the transaction doesn’t go through.
You don’t remember correctly.
The breakup fee is if an outside influence prevents the deal from going through. It’s not just for cases of “uh-uh i don’t wanna.”
The breakup fee is if an outside influence prevents the deal from going through. It’s not just for cases of “uh-uh i don’t wanna.”
> Thus, the courts will obligate Musk to buy the business as he agreed to in April.
That last statement does not follow everything else before. Courts have no power to do that.
That last statement does not follow everything else before. Courts have no power to do that.
Yes they do, it's called specific performance. It's not the usual remedy for breach of contract, but in certain cases the court will grant it. I believe M&A agreements are one category of cases where US courts are inclined to grant specific performance, but I'm no expert.
Why wouldn't courts have the power to do that? If the court rules you have no grounds to terminate the contract then you will have to execute the contract as originally agreed upon.
Can they force all the banks that agreed to loan them money to go through with it?
How Musk gets the money in order to fulfill a contract he's entered into is immaterial unless he goes completely insolvent and still can't fulfill it, which will not be the case.
They can force Musk to sell his other assets to complete the deal.
As long as Musk has ~40 billion of Tesla stock and can get ~20 billion additional dollars in cash (can get, not just has already), yes.
They can force his banks to sell enough Tsla shares to buy it
The banks also signed contracts stating they’d loan the money using Tesla shares and Twitter equity as collateral. They can’t get out of that contract just because musk wants them too.
Well the court could obligate Musk to pay damages. One (simplistic) possibility might be to take the value Musk agreed to pay minus the current value of Twitter and force Musk to pay that. Then in theory Twitter would have received same value in the end.
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$.
The 1B$ 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$.
Having to spend $15B as the cost for making an impulsive decision (when you can afford it) is a first world problem.
Tesla and SpaceX success is depending on the public opinion of Musk. If he ends up paying 15 billion (or whatever the number is) over a botched take over, one that had a negative impact on Tesla shares, this opinion might just change. In which case Teslas future preception as a tech company might be at risk.
> Tesla and SpaceX success is depending on the public opinion of Musk
No it does not, SpaceX results speak for themselves, they have no competition. Same with Tesla, just check their vehicles sold charts.
No it does not, SpaceX results speak for themselves, they have no competition. Same with Tesla, just check their vehicles sold charts.
SpaceX competition: Arianne space and a bunch of upstarts, plus every other commercial launch service excluding the Russians at the moment.
Tesla's competition: every other car marker.
Tesla's competition: every other car marker.
The other space companies don't have the cost structure advantages of reusability.
An advantage that we cannot be sure exists to begin with since SpaceX isn't piblishing financials. And for some launches Arianne Space is already now competitive using the Arianne 5, by all means an out dated design, one that was initially intended to carry a European space shuttle into space.
More generally so, I have no idea why people expect any company to own a market completely. Any market is usually big enough for one than one company to be successful.
More generally so, I have no idea why people expect any company to own a market completely. Any market is usually big enough for one than one company to be successful.
Spacex has literally no competition. No one else has reusable rockets and starship will soon be a rapid reusable heavy launch vehicle.
It might also be the kind of wake-up call that gets him to be less impulsive.
When does a decisions stop being impulsive? Probably at point when enough lawyers are hired to write a contract...
It probably depends on how much you need to think about it. If you have a minion to whom you can say "I'd like to buy Twitter, go figure it out, then let me know where to sign", there's a lot of room for being impulsive.
It's also a world first problem
When has there ever been a lawsuit of this sort that was anywhere near $15 billion? What do you base these numbers on?
As in my post, assuming this reaches a "negotiated" settlement there are going to be two important values: the original purchase price (OPP), and the fair market value (FMV).
If Twitter "wins", they get Elon to pay the full market value. Now, they don't actually want Elon to be involved, so if Elon pays the difference between FMV and OPP (~$24B) that's essentially the same as buying then divesting with fewer steps.
If Elon "wins", he gets out paying nothing.
So the range is 0 to $24B.
Elon has a terrible case here, so the best negotiating tactic he has is being a disruptive asshole so TWTR just wants it done with (this is playing to his strengths). I'm also making a big assumption about the FMV, which could easily rebound a bit by EOY. With those factors pulling it down from 24, I'm expecting in the 10-15 range, and if I had to guess I'd say $12.5B.
Pick your own inputs for your own estimate, but this is the deal structure.
If Twitter "wins", they get Elon to pay the full market value. Now, they don't actually want Elon to be involved, so if Elon pays the difference between FMV and OPP (~$24B) that's essentially the same as buying then divesting with fewer steps.
If Elon "wins", he gets out paying nothing.
So the range is 0 to $24B.
Elon has a terrible case here, so the best negotiating tactic he has is being a disruptive asshole so TWTR just wants it done with (this is playing to his strengths). I'm also making a big assumption about the FMV, which could easily rebound a bit by EOY. With those factors pulling it down from 24, I'm expecting in the 10-15 range, and if I had to guess I'd say $12.5B.
Pick your own inputs for your own estimate, but this is the deal structure.
> so the best negotiating tactic he has is being a disruptive asshole so TWTR
Been successful at that.
Been successful at that.
And so far this behaviour earned him a law suite.
which could easily rebound a bit by EOY.
By EOY we could be in recession.
By EOY we could be in recession.
Which actually makes Elon's position worse, since theoretically that reduces Twitter's stock price and increases the spread between the fixed offer and the current valuation. Plus, his financing tanks since it is predicated on Tespa's stock value.
We are very likely in a recession right now. Q1 real GDP growth was negative. Q2 advance estimate comes out in 3 weeks.
I'm curious what would happen if Twitter stock price goes above Musk's offer price of $54.20 during this legal battle.
For that to happen, the market would have to (1) believe there is a very very high probability that the deal won't happen, and (2) believe Twitter is suddenly going to grow significantly.
Neither of these seem very likely, especially in combination.
Neither of these seem very likely, especially in combination.
There's also a third irrational option, with another gamestop style buying spree lifting the share price up.
> Elon has a terrible case here, so the best negotiating tactic he has is being a disruptive asshole so TWTR just wants it done with (this is playing to his strengths).
Twitter isn't trying to stop him, probably because they don't use their product and may have forgotten they can just ban him.
Twitter isn't trying to stop him, probably because they don't use their product and may have forgotten they can just ban him.
Banning him at this stage would almost certainly expose Twitter to massive liability, especially as they have shown they will ignore rules for public figures. Twitter could only get away with banning Elon if he egregiously violated their policies, and Elon is too good of a troll to do anything that severe.
That doesn’t follow. The exceptionality of Elon is obvious to everyone. He’s the richest man on earth (by some measures), not an Everyman voicing a contrarian opinion. You couldn’t convince anyone you honestly thought “if they banned him, they could ban me” After all your latte art tweets aren’t significantly, materially damaging Twitter’s financial outlook
I'm saying that the formerly most famous tweeter (trump) fluted rules that would have gotten my account banned. Twitter didn't ban trump until after Jan 6th; so Twitter doesn't have any way to legally justify banning Elon unless he does something equally egregious. That's why Elon didn't get banned for the pedo claims or the multiple SEC violations. He is such a notable figure that Twitter can't ban him (without violating the terms of the acquisition) without stupendously egregious evidence that Elon violated their terms.
If Twitter banned Elon's account for a minor TOC violation now, they would likely expose themselves to legal retaliation. Sucks, but it seems we both agree that there are separate rules for the ultra-wealthy.
Edit: I can't swing any stocks with my tweets; whereas Musk can. That is the difference, is who has the platform.
If Twitter banned Elon's account for a minor TOC violation now, they would likely expose themselves to legal retaliation. Sucks, but it seems we both agree that there are separate rules for the ultra-wealthy.
Edit: I can't swing any stocks with my tweets; whereas Musk can. That is the difference, is who has the platform.
If he's calling off the deal (which isn't a thing but they can pretend he is), it doesn't seem like a violation if you agree it's off. He might then get bored and decide to make it on again.
They had good reasons for not banning Trump until then, namely that he literally would've gotten their employees killed.
They had good reasons for not banning Trump until then, namely that he literally would've gotten their employees killed.
[deleted]
If Elon wins his claim that they breached contract, he will be able to go after them for damages. It's pretty clear Twitter was lying and fudging fake user numbers, the question is how much and whether that was a breach of contract.
He won't, because 1) there was nothing in the contract about bot numbers and 2) Twitter probably isn't lying about mDAUs and bots.
1) The contract states they are obligated to provide information, Elon alleges such information was withheld or curtailed - a contract violation. There doesn't need to be a specific clause about a particular metric because the obligation to provide information is broad.
2) Facebook lied about video watch time for years, including in SEC filings and to advertisers (essentially fraud). Is this an appeal to the sanctity of SEC filings? I don't think Facebook is significantly more reputable than Twitter, they're both pretty shady.
Why should we just trust the company, as you imply? Companies routinely and regularly lie in SEC filings, including big tech -- and Twitter! They paid close to a billion in securities settlements for - wait for it - lying about user engagement!
Twitter admitted to lying about user engagement in 2015 and paid a hefty fine for it. [1]
Is your argument really "the company that has been proven to lie about user engagement wouldn't lie this time"? Seems flimsy.
[1] https://www.wsj.com/articles/twitter-to-pay-809-5-million-to...
2) Facebook lied about video watch time for years, including in SEC filings and to advertisers (essentially fraud). Is this an appeal to the sanctity of SEC filings? I don't think Facebook is significantly more reputable than Twitter, they're both pretty shady.
Why should we just trust the company, as you imply? Companies routinely and regularly lie in SEC filings, including big tech -- and Twitter! They paid close to a billion in securities settlements for - wait for it - lying about user engagement!
Twitter admitted to lying about user engagement in 2015 and paid a hefty fine for it. [1]
Is your argument really "the company that has been proven to lie about user engagement wouldn't lie this time"? Seems flimsy.
[1] https://www.wsj.com/articles/twitter-to-pay-809-5-million-to...
Contract violations are more complex than that. You can’t simply void a contract over a little technicality. Even if they had given him the data, he wouldn’t have been able to get out of the contract. So a judge is not going to look at that and say, “oh yeah, Musk was paying $44B for the company and the right to review its data, so unless he gets both he pays nothing.” The judge is going to go, “okay the company is worth nominally $44B and reviewing data is worth zilch in light of the rest of the contract, so these aren’t equal parts.”
1) They provided access to their firehose API, how is that not enough? The crap about rate limiting doesn't apply to the firehose, and decent engineers can get around rate limiting, so either way this doesn't hold up.
2) Twitter's CEO gave a pretty good explanation of how they combat bots and how they calculate their mDAUs, Elon Musk responded with a poop emoji. I get that his personal experience on Twitter is heavily bot-infested, a significant proportion of bots on Twitter engage with his account and use his image as a user profile. Twitter doesn't claim that the bots in Musk's feed are under 5% of users, or that the number of bots overall are under 5% of users, they claim that the number of monetizable daily active users is under 5%. Given the definition of a "daily active user", reduce to "monetizable", and consider the number of users who never post anything but read tweets and click on ads and promoted tweets, and this isn't hard to believe.
On the other side we have Elon Musk, notorious liar, claiming that he doesn't want to buy Twitter because Twitter is lying about the number of bots, despite the fact that before tech stocks crashed, he said he wanted to buy Twitter to solve the bot problem. This isn't hard. He has buyer's remorse and the bots thing is the best excuse he has to get out of a contract he signed. It's a shitty excuse and no one other than Musk fanboys have any reason to believe him, and it's not even an excuse in court.
2) Twitter's CEO gave a pretty good explanation of how they combat bots and how they calculate their mDAUs, Elon Musk responded with a poop emoji. I get that his personal experience on Twitter is heavily bot-infested, a significant proportion of bots on Twitter engage with his account and use his image as a user profile. Twitter doesn't claim that the bots in Musk's feed are under 5% of users, or that the number of bots overall are under 5% of users, they claim that the number of monetizable daily active users is under 5%. Given the definition of a "daily active user", reduce to "monetizable", and consider the number of users who never post anything but read tweets and click on ads and promoted tweets, and this isn't hard to believe.
On the other side we have Elon Musk, notorious liar, claiming that he doesn't want to buy Twitter because Twitter is lying about the number of bots, despite the fact that before tech stocks crashed, he said he wanted to buy Twitter to solve the bot problem. This isn't hard. He has buyer's remorse and the bots thing is the best excuse he has to get out of a contract he signed. It's a shitty excuse and no one other than Musk fanboys have any reason to believe him, and it's not even an excuse in court.
>Twitter's CEO gave a pretty good explanation of how they combat bots and how they calculate their mDAUs
Company that previously lied to investors about engagement and settled a massive billion-dollar lawsuit makes further unproven claims about engagement. You believe them why?
Should corporations which deliberately lie to investors be immediately trusted again, especially on the same topic they got caught lying about previously?
Your argument is an appeal to authority where no authority exists. They're liars. Not just liars in general, but liars about this exact topic. Do you trust BP's offshore drilling because the CEO now insists it's totally safe this time?
>Twitter doesn't claim that the bots in Musk's feed are under 5% of users
He never claimed this, this seems like a strawman. Did you read the complaint?
>this isn't hard to believe
Choosing to believe a company that has admitted to lying to investors is your prerogative, it doesn't make them trustworthy or correct -- and it absolutely doesn't make your argument based in any kind of reality (why should we take the liars at their word?). Why go to bat for a company with a billion in fines for misleading investors? Under what basis do you believe they've reformed and can be trusted?
I don't understand why you believe Elon can't be believed because of his history of lying while you ignore Twitter's sordid past of securities violations and lying to investors.
>Elon Musk, notorious liar
Why don't you label Twitter as notorious liars, given their billion in settlements for lying to investors?
Company that previously lied to investors about engagement and settled a massive billion-dollar lawsuit makes further unproven claims about engagement. You believe them why?
Should corporations which deliberately lie to investors be immediately trusted again, especially on the same topic they got caught lying about previously?
Your argument is an appeal to authority where no authority exists. They're liars. Not just liars in general, but liars about this exact topic. Do you trust BP's offshore drilling because the CEO now insists it's totally safe this time?
>Twitter doesn't claim that the bots in Musk's feed are under 5% of users
He never claimed this, this seems like a strawman. Did you read the complaint?
>this isn't hard to believe
Choosing to believe a company that has admitted to lying to investors is your prerogative, it doesn't make them trustworthy or correct -- and it absolutely doesn't make your argument based in any kind of reality (why should we take the liars at their word?). Why go to bat for a company with a billion in fines for misleading investors? Under what basis do you believe they've reformed and can be trusted?
I don't understand why you believe Elon can't be believed because of his history of lying while you ignore Twitter's sordid past of securities violations and lying to investors.
>Elon Musk, notorious liar
Why don't you label Twitter as notorious liars, given their billion in settlements for lying to investors?
> Choosing to believe a company that has admitted to lying to investors is your prerogative, it doesn't make them trustworthy or correct
More to the point, it's Musk's perogative, which he excercised when he signed a contract to buy the company based on their represenations while choosing not to do any due diligence to verify those representations.
I think Twitter is probably more believable here than you give them credit for, but Musk trusted them 100% for some reason.
More to the point, it's Musk's perogative, which he excercised when he signed a contract to buy the company based on their represenations while choosing not to do any due diligence to verify those representations.
I think Twitter is probably more believable here than you give them credit for, but Musk trusted them 100% for some reason.
> Should corporations which deliberately lie to investors be immediately trusted again, especially on the same topic they got caught lying about previously?
For lies known previously to Musk's offer, he had every opportunity to decide whether to trust Twitter or not, and he chose to by waiving due diligence.
If there's an allegation of an additional lie that's material to the deal, Musk hasn't provided evidence of that here.
For lies known previously to Musk's offer, he had every opportunity to decide whether to trust Twitter or not, and he chose to by waiving due diligence.
If there's an allegation of an additional lie that's material to the deal, Musk hasn't provided evidence of that here.
>If there's an allegation of an additional lie that's material to the deal, Musk hasn't provided evidence of that here.
Did you read the filing? He provided evidence of them violating their obligations under the agreement (refusing to provide adequate access to data to independently verify claims made about user engagement). Twitter agreed to these terms. Read the original agreement to see for yourself.
>he had every opportunity to decide whether to trust Twitter or not
How does that mean fraud is okay? If Twitter lied again, it would be a clear contract violation. You can't just lie about critical company metrics to acquirers, due diligence or not. It's fraud AND a contract violation.
Given we're talking about a disreputable company with a history of lying, I'm not inclined to believe them and I don't know why you immediately believe their claims. Perhaps you can enlighten me as to why you think they deserve trust in this matter.
Did you read the filing? He provided evidence of them violating their obligations under the agreement (refusing to provide adequate access to data to independently verify claims made about user engagement). Twitter agreed to these terms. Read the original agreement to see for yourself.
>he had every opportunity to decide whether to trust Twitter or not
How does that mean fraud is okay? If Twitter lied again, it would be a clear contract violation. You can't just lie about critical company metrics to acquirers, due diligence or not. It's fraud AND a contract violation.
Given we're talking about a disreputable company with a history of lying, I'm not inclined to believe them and I don't know why you immediately believe their claims. Perhaps you can enlighten me as to why you think they deserve trust in this matter.
So what damage has been done to Elon by him not buying Twitter?
Now if Elon wins might be able to claim costs, but they would be minimal by comparison to the original $44B deal.
Now if Elon wins might be able to claim costs, but they would be minimal by comparison to the original $44B deal.
No. You are claiming that the numbers that Twitter has been putting in their official government stock filings have been false for years.
Thats ridiculous.
Thats ridiculous.
I mean, I'm anti-musk, but I certainly would believe his claim they've been lying about the bit population. Both Twitter and Facebook have lied about this in the past, so the only part of musk's position I find believable is that Twitter underreported bot users. That being said, he waived his right to due-diligence, so lol. Truly a situation where both sides are dislikable.
But there is lying as in “not telling the truth in a technically correct way”* and there is lying as in “committing a fraud”.
Musk would need to show the latter, not only the former. And that carries rather stiff penalties. As opposed to reading the rules very precisely and only effectively lying. Which is what lawyers are for
* always remember that Bull Clinton technically didn’t lie. He in fact asked his lawyers before that hearing and was told that “no getting a BJ, according to the law, does not constitute a sexual relationship”. In didn’t end up mattering because him staying president is a _political_ decision. Unfortunately for Musk, public opinion does not matter here
Musk would need to show the latter, not only the former. And that carries rather stiff penalties. As opposed to reading the rules very precisely and only effectively lying. Which is what lawyers are for
* always remember that Bull Clinton technically didn’t lie. He in fact asked his lawyers before that hearing and was told that “no getting a BJ, according to the law, does not constitute a sexual relationship”. In didn’t end up mattering because him staying president is a _political_ decision. Unfortunately for Musk, public opinion does not matter here
Twitter admitted to lying about user engagement in 2015 and paid a hefty price for it. [1]
Your argument is absolutely ridiculous. They've done it before, and settled.
Seems you have absolutely no idea who you're defending, which is a company that has routinely misled investors on user engagement and paid settlements for that very fact.
"The company with a history of lying to investors about user engagement would never lie about user engagement!"
[1] https://www.wsj.com/articles/twitter-to-pay-809-5-million-to...
Your argument is absolutely ridiculous. They've done it before, and settled.
Seems you have absolutely no idea who you're defending, which is a company that has routinely misled investors on user engagement and paid settlements for that very fact.
"The company with a history of lying to investors about user engagement would never lie about user engagement!"
[1] https://www.wsj.com/articles/twitter-to-pay-809-5-million-to...
Be that as it may, it’s not relevant to Musk getting out of his merger agreement now, which is unconditional except for 1) material adverse effect (which is a way higher bar than the well known bot issue) and 2) Twitter fulfilling the covenants in the agreement, such as continuing to run their business and providing requested information within reason. Since there is no way he is getting out under 1, MAE, he is trying 2.
You claim that lying about user engagement could never qualify as a "material adverse effect". On what basis do you make this claim?
As a thought experiment, if 50% of Twitter's claimed MAUs were bots, it would absolutely be material.
Given Twitter has a history of lying about this exact metric, under what basis do you believe that the bot issue isn't material? Blind trust in the same company that lied about it before?
I'm trying to understand why people trust the company that was caught lying to investors about the very subject they were lying about. Where do you get this trust?
As a thought experiment, if 50% of Twitter's claimed MAUs were bots, it would absolutely be material.
Given Twitter has a history of lying about this exact metric, under what basis do you believe that the bot issue isn't material? Blind trust in the same company that lied about it before?
I'm trying to understand why people trust the company that was caught lying to investors about the very subject they were lying about. Where do you get this trust?
For it to be relevant, the "material adverse effect" needs to have been caused by an action by the company subsequent to the deal being signed. Like, for example, the corporate treasurer suddenly going to Vegas and losing the treasury on blackjack.
Twitter may well have been grossly lying all these years, but the time to figure that out is before you sign the deal. That's kinda the point of doing due diligence.
Twitter may well have been grossly lying all these years, but the time to figure that out is before you sign the deal. That's kinda the point of doing due diligence.
The merger agreement requires Twitter to provide adequate access to data requested, if they haven't done this then the merger agreement has been violated even without a MAC violation.
Specifically, the merger agreement requires "all information concerning the business ... of the Company ... for any reasonable business purpose related to the consummation of the transactions".
Seems like an arbitrary API rate limit could easily violate this clause. How are you providing "all information [...] requested" if you drip feed it?
The fact they'd even play cloak-and-dagger with this information suggests there's fraud again. Companies with nothing to hide don't mislead acquirers.
Specifically, the merger agreement requires "all information concerning the business ... of the Company ... for any reasonable business purpose related to the consummation of the transactions".
Seems like an arbitrary API rate limit could easily violate this clause. How are you providing "all information [...] requested" if you drip feed it?
The fact they'd even play cloak-and-dagger with this information suggests there's fraud again. Companies with nothing to hide don't mislead acquirers.
You're using lots of words that imply malicious intent and bad faith, without providing anything to back that up.
Not to mention that your theory of Twitter behaving fraudulently in the context of this transaction makes no sense. They've got a commitment to purchase them at vastly more than their market value, so they're highly motivated to see the deal close. What's the incentive for acting in bad faith?
Not to mention that your theory of Twitter behaving fraudulently in the context of this transaction makes no sense. They've got a commitment to purchase them at vastly more than their market value, so they're highly motivated to see the deal close. What's the incentive for acting in bad faith?
You're basing this on what exactly?
Twitter has previously lied to investors about user engagement and paid close to a billion in settlements for it. [1]
Seems to me that the company with a history of lying about engagement shouldn't immediately be trusted about engagement figures. Would you disagree?
[1] https://www.wsj.com/articles/twitter-to-pay-809-5-million-to...
Seems to me that the company with a history of lying about engagement shouldn't immediately be trusted about engagement figures. Would you disagree?
[1] https://www.wsj.com/articles/twitter-to-pay-809-5-million-to...
No I wouldn't agree. Most of the time if you do something dumb at a company you make strong rules to make sure it doesn't happen again.
I guess that's why Boeing's MAX aircraft has had numerous safety issues after the two fatal incidents.
Tell me, do you trust BP's offshore drilling operations today?
In any case, I addressed your question. Twitter are proven liars on this exact metric.
Tell me, do you trust BP's offshore drilling operations today?
In any case, I addressed your question. Twitter are proven liars on this exact metric.
You should have sent that to Musk back when he was talking about buying Twitter, I bet it would have helped his decision making process.
When has a billionaire ever signed a contract for a $44 billion deal this recklessly?
There aren’t many people stupider than Tesla investors so he’s almost certainly the dumbest self-made billionaire I can think of.
Big Tobacco settlement - $206 billion
Deepwater settlement - $20 billion
VW Emissions settlement - $14.7 billion
Deepwater settlement - $20 billion
VW Emissions settlement - $14.7 billion
In an important sense, this particular conflict is (as yet) dramatically better than these -- it hasn't involved thousands of people bickering for many years.
On the agreement he signed, maybe?
texaco v pennzoil.
Are lawsuits limited by max(previous settlements)?
So my hunch that this could lead to him going broke isn't completely off base?
I figure he ends up having to pay $10E+10, and everyone knows it, so he gets short-squeezed in Tesla stock, then margin called on any loans against his stock... then POOF
I figure he ends up having to pay $10E+10, and everyone knows it, so he gets short-squeezed in Tesla stock, then margin called on any loans against his stock... then POOF
$10 bn out of $200+ bn won't make him go broke though. Don't see the logic in that, Mike.
He doesn't have $200,000,000,000 in cash.. he has stock, the value of which is exclusively depended on buyers exchanging their $ for it. There's nothing stopping any publicly traded stock from collapsing in value to the physical assets of the company minus any debts or liabilities.
According to this thing I found on the internet[1], if I read it correctly, Tesla is worth $31B if it were stripped and sold.
Most of Elon's wealth is Tesla stock... far more than the actual value of the company, by a factor of more than 5. If he has any debts against his stock, those could be his downfall.
[1] - https://www.marketwatch.com/investing/stock/tsla/financials/...
According to this thing I found on the internet[1], if I read it correctly, Tesla is worth $31B if it were stripped and sold.
Most of Elon's wealth is Tesla stock... far more than the actual value of the company, by a factor of more than 5. If he has any debts against his stock, those could be his downfall.
[1] - https://www.marketwatch.com/investing/stock/tsla/financials/...
It could if your $200 billion valuation is based on the stock of over-valued companies which you used to over-leverage-borrow, and you need every free penny to continue paying back debt and keep that stock price high.
Elon owns 16% of Tesla and Tesla stock is the vast majority of his wealth. If the market cap of Tesla were to crash below $150 billion it would be in the territory where his penalty to Twitter could be multiple billions more than the value of his Tesla stock.
I personally don’t think Tesla is worth even $100 billion. However, the markets disagree, and it is difficult to imagine a scenario where Tesla loses 80% of its value.
…but it’s not totally inconceivable.
I personally don’t think Tesla is worth even $100 billion. However, the markets disagree, and it is difficult to imagine a scenario where Tesla loses 80% of its value.
…but it’s not totally inconceivable.
> he gets short-squeezed in Tesla stock
What?
What?
Yeah that makes no sense. He has a lot of stock and wants to sell some.
A short squeeze means you have an obligation to buy shares and not enough are available, that drives the price up like crazy.
A short squeeze means you have an obligation to buy shares and not enough are available, that drives the price up like crazy.
I used the wrong words, obviously.
If Tesla stock drops and his loans against Tesla stock go negative, he'll be forced to liquidate more shares to make up the difference to keep the loan afloat... this would then lower the value of the stocks even more, and the positive feedback loop could let all of the air out of his imagined wealth.
In other words - He has effectively sold shares at a price by borrowing against them... if the price falls, he'll have to do something to make up the difference... which is about the same thing as a short-squeeze for him.
If Tesla stock drops and his loans against Tesla stock go negative, he'll be forced to liquidate more shares to make up the difference to keep the loan afloat... this would then lower the value of the stocks even more, and the positive feedback loop could let all of the air out of his imagined wealth.
In other words - He has effectively sold shares at a price by borrowing against them... if the price falls, he'll have to do something to make up the difference... which is about the same thing as a short-squeeze for him.
It's the same mechanism as a short squeeze, just with the roles of stock and cash swapped. There is likely a specific word for that, but the comparison works.
Squeezed short sellers have an obligation to get a specific stock, but only have cash. There are not enough market participants willing to sell the stock, so the price rises astronomically to their disadvantage.
Elon has an obligation to get cash, but only has $TSLA stock. There are not enough market participants willing to buy the stock, so the price drops enormously to his disadvantage.
Squeezed short sellers have an obligation to get a specific stock, but only have cash. There are not enough market participants willing to sell the stock, so the price rises astronomically to their disadvantage.
Elon has an obligation to get cash, but only has $TSLA stock. There are not enough market participants willing to buy the stock, so the price drops enormously to his disadvantage.
You can't short squeeze a seller. Sorry you just can't.
> the difference between the fair current market value (~20B$?) and the purchase price (~44B$)
Why would the current market price have anything to do here? Twitter want him to be forced to buy for $44B, not a penny less.
Why would the current market price have anything to do here? Twitter want him to be forced to buy for $44B, not a penny less.
The original purchase price minus the current market value is how much they lose if he backs out of the deal, so that's the ballpark of what they would want to get paid to let him not buy Twitter.
That’s not true, they lose more. If it is acquired they sell all their shares instantly without any negative effect on the price of the shares. If they did that not as part of an acquisition, the share price would tank.
~10-15B$ is not inbetween the 2 numbers you posited it would be between though.
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.
> 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.
That's not what difference means.
44 - 20 = 22 != 10~15
Username checks out, to an extent.
>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
Bret Taylor, Twitter board chair - 4:51 PM Chicago time · Jul 8, 2022
https://twitter.com/btaylor/status/1545526087089696768
The most likely scenario is a settlement at a lower price imo. Musk was never going to pay the original offer because it was / is well known Twitter has a bot problem. He surfaced the issue and is threatening to scuttle deal based on twitters throttling the API. Which is limiting the due diligence ability of Musk’s financiers to appropriately evaluate their investment.
Now the negotiations will take place and I suspect we will see something like a $10-$20B purchase agreement. Musk will have opportunity for due diligence if they sue. If they don’t sue him, then the shareholders sue Twitter (ironically probably some of the financiers).
Now the negotiations will take place and I suspect we will see something like a $10-$20B purchase agreement. Musk will have opportunity for due diligence if they sue. If they don’t sue him, then the shareholders sue Twitter (ironically probably some of the financiers).
Musk did not 'surface the issue'. He was complaining about bot numbers being higher than Twitter said looong before he ever signed the merger.
Musk does not have a right to due diligence. Just a right to 'information reasonably relevant to the business'. And he has no right to terminate the merger based on that information.
Musk does not have a right to due diligence. Just a right to 'information reasonably relevant to the business'. And he has no right to terminate the merger based on that information.
This thread corrects your misconceptions[1], you might also be wrong about the first part.
[1](https://news.ycombinator.com/item?id=32027341#32027416)
[1](https://news.ycombinator.com/item?id=32027341#32027416)
That states that even if you have no right to back out of a deal, you might get away with it anyway. Which doesn't seem to contradict what I said?
>Which is limiting the due diligence ability of Musk’s financiers to appropriately evaluate their investment.
He waived his DD so that’s 100% on him and his unchecked ego, like most of his problems he likes to blame on everyone else.
He waived his DD so that’s 100% on him and his unchecked ego, like most of his problems he likes to blame on everyone else.
In what fucking universe do you think they would settle on $10b lol. You guys are crazy.
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.
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?
> 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?
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.
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.
So it's like waiving contingencies on a house, then trying to back out because it has electrical problems?
No, it's like trying to back out because you don't like electricity any more
Instead of all this interpretation you're posting, why don't you post the actual language of the deal so people can decide for themselves?
https://www.sec.gov/Archives/edgar/data/0001418091/000119312...
Copying a previous reply I've made on this:
Section 5.11 ("Parent" and "Acquisition Sub" is Musk, "Company" is Twitter):
> Each of Parent and Acquisition Sub has conducted, to its satisfaction, its own independent investigation, review and analysis of the business, results of operations, prospects, condition (financial or otherwise) or assets of the Company and its Subsidiaries. In making its determination to proceed with the transactions contemplated by this Agreement, including the Merger, each of Parent and Acquisition Sub has relied solely on the results of its own independent review and analysis and the covenants, representations and warranties of the Company contained in this Agreement
So, in essence:
1) Musk has been afforded the opportunity to address any concerns he has with Twitter
2) Any concerns of Musks have been satisfactorily resolved by Twitter
3) In determining said satisfaction, Musk is relying on his own judgement and analysis, and is not relying on any analysis by Twitter.
Copying a previous reply I've made on this:
Section 5.11 ("Parent" and "Acquisition Sub" is Musk, "Company" is Twitter):
> Each of Parent and Acquisition Sub has conducted, to its satisfaction, its own independent investigation, review and analysis of the business, results of operations, prospects, condition (financial or otherwise) or assets of the Company and its Subsidiaries. In making its determination to proceed with the transactions contemplated by this Agreement, including the Merger, each of Parent and Acquisition Sub has relied solely on the results of its own independent review and analysis and the covenants, representations and warranties of the Company contained in this Agreement
So, in essence:
1) Musk has been afforded the opportunity to address any concerns he has with Twitter
2) Any concerns of Musks have been satisfactorily resolved by Twitter
3) In determining said satisfaction, Musk is relying on his own judgement and analysis, and is not relying on any analysis by Twitter.
He independently reviewed the covenants, representations and warranties of the Company but there could still be an issue if those representations (by the Company) were falsified or fraudulent.
If you are buying a bank under these same terms and the bank represents that they have $X in deposits, then it turns out that they actually have $X/2 in deposits are you saying the transaction should also be forced to proceed?
Is it meaningfully different here because X is # real users rather than dollars?
If you are buying a bank under these same terms and the bank represents that they have $X in deposits, then it turns out that they actually have $X/2 in deposits are you saying the transaction should also be forced to proceed?
Is it meaningfully different here because X is # real users rather than dollars?
Theres a couple differences here.
First, so far its not an argument that the data is "falsified or fraudulent". Its merely that the data is incorrect. Theres a very big difference, and the 10-Q claims are so measured and non-committal that its very hard to even find anything that could be construed as falsified/fraudulent. The claims themselves even go ahead and say it might not be right, even implying they have a significant likelihood of imprecision due to the methodology employed.
In order for the claims to be falsified/fraudulent, you would have to have actual deliberate lying and coverups to get there. In other words, they found 20% but _intentionally still put 5% even though its a made up metric that they can just move the goal posts on_. It just doesn't make any sense to do that and, in my opinion, is _extremely_ unlikely to be found during discovery.
Second, if the argument being made is that he thinks its higher than 5% _and isnt arguing deliberate fraud_ then the clause I pasted above absolves Twitter because it says Musk has been afforded the opportunity to fact check it and has no reason to debate the accuracy of the claim.
First, so far its not an argument that the data is "falsified or fraudulent". Its merely that the data is incorrect. Theres a very big difference, and the 10-Q claims are so measured and non-committal that its very hard to even find anything that could be construed as falsified/fraudulent. The claims themselves even go ahead and say it might not be right, even implying they have a significant likelihood of imprecision due to the methodology employed.
In order for the claims to be falsified/fraudulent, you would have to have actual deliberate lying and coverups to get there. In other words, they found 20% but _intentionally still put 5% even though its a made up metric that they can just move the goal posts on_. It just doesn't make any sense to do that and, in my opinion, is _extremely_ unlikely to be found during discovery.
Second, if the argument being made is that he thinks its higher than 5% _and isnt arguing deliberate fraud_ then the clause I pasted above absolves Twitter because it says Musk has been afforded the opportunity to fact check it and has no reason to debate the accuracy of the claim.
Well based on the termination letter it looks like they are claiming it is deliberate since the number of known-spam accounts (blocked accounts) were not subtracted from the reported total user count.
The notice of termination said that Twitter has violated Section 6.4 and 6.11
> 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;
> Section 6.11 Financing Cooperation.
> (a) The Company shall and shall cause its Subsidiaries to, and shall use its commercially reasonable best efforts to cause each of its Representatives to, at Parent’s sole expense, provide any reasonable cooperation reasonably requested by Parent in writing in connection with (i) the arrangement of the Bank Debt Financing and any other debt financing expressly contemplated by the Bank Debt Commitment Letter...
This argument is saying that Twitter is not holding up it's end of the Merger Agreement by not providing (sufficient/useful) information and not cooperating with debt financing (by not providing information). They give examples like rate limits on developer APIs etc.
So the kernel of the question is: is Twitter providing information to the satisfaction of Merger Agreement?
I don't know the answer to that, but if is "no", would that be grounds for terminating the deal? That seems a bit extreme to me. To me a reasonable ruling would sound something like "Twitter has X days to provide all the information requested and then Musk has to perform the purchase".
> 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;
> Section 6.11 Financing Cooperation.
> (a) The Company shall and shall cause its Subsidiaries to, and shall use its commercially reasonable best efforts to cause each of its Representatives to, at Parent’s sole expense, provide any reasonable cooperation reasonably requested by Parent in writing in connection with (i) the arrangement of the Bank Debt Financing and any other debt financing expressly contemplated by the Bank Debt Commitment Letter...
This argument is saying that Twitter is not holding up it's end of the Merger Agreement by not providing (sufficient/useful) information and not cooperating with debt financing (by not providing information). They give examples like rate limits on developer APIs etc.
So the kernel of the question is: is Twitter providing information to the satisfaction of Merger Agreement?
I don't know the answer to that, but if is "no", would that be grounds for terminating the deal? That seems a bit extreme to me. To me a reasonable ruling would sound something like "Twitter has X days to provide all the information requested and then Musk has to perform the purchase".
Right, but theres a lot of nuance in those sections because they are taken in combination with 5.11 that I posted. In other words, if hes seeking information needed for financing then its fair game. If its to perform "due diligence" or to verify financials for his own edification and/or to build a case for pulling out then thats less kosher.
Its important to keep in mind that until he actually owns Twitter, the current management needs to still operate with an assumption that he may not end up owning Twitter. If they have reason to believe it would harm Twitter financially to give information to him in terms of him using it to undermine them later, or if it would impact business operations today, then they don't need to give it to him under these agreed upon terms.
More broadly I think its important that theres a clear distinction between pre-merger-agreement information requests and post-merger-agreement information requests. An analogy I've made before is that imagine you have 2 offers for your home which you list at $100k. You receive two offers: one is for $100k with no inspection contingency and one is for $100k _with_ an inspection contingency. All else being equal, you will always take the no inspection contingency. Now imagine one is $100k with no inspection, and the other is $500k with an inspection. Some percentage of people will take the $500k offer because they have _paid a sufficient premium for the future uncertainty of consummating the deal_ as well as _the likelihood of renegotiation if anything comes up_. This is extremely relevant to the Musk/Twitter agreement because Pandoras box has already been opened once the agreement goes public. It would be an unfair negotiation to try and _reopen_ negotiation based on things discovered in a _new round_ of "due diligence" analysis. If you wanted that right, you need to pay for it.
Its important to keep in mind that until he actually owns Twitter, the current management needs to still operate with an assumption that he may not end up owning Twitter. If they have reason to believe it would harm Twitter financially to give information to him in terms of him using it to undermine them later, or if it would impact business operations today, then they don't need to give it to him under these agreed upon terms.
More broadly I think its important that theres a clear distinction between pre-merger-agreement information requests and post-merger-agreement information requests. An analogy I've made before is that imagine you have 2 offers for your home which you list at $100k. You receive two offers: one is for $100k with no inspection contingency and one is for $100k _with_ an inspection contingency. All else being equal, you will always take the no inspection contingency. Now imagine one is $100k with no inspection, and the other is $500k with an inspection. Some percentage of people will take the $500k offer because they have _paid a sufficient premium for the future uncertainty of consummating the deal_ as well as _the likelihood of renegotiation if anything comes up_. This is extremely relevant to the Musk/Twitter agreement because Pandoras box has already been opened once the agreement goes public. It would be an unfair negotiation to try and _reopen_ negotiation based on things discovered in a _new round_ of "due diligence" analysis. If you wanted that right, you need to pay for it.
Perhaps, the actual language of the deal is written in legalese and providing a clear interpretation is valuable? I've certainly been in meetings with lawyers that my company specifically engaged for their ability to provide an interpretation of a contract in clear language. Now, nobody paid the GP to provide that interpretation, but it seems silly to pretend that it's invalid to speculate on the interpretation of a contract when there is an entire profession specialized in the minutia of similar activity.
That misses the point. The question was whether the "clear interpretation" was actually accurate. In other words GP's interpretation might simply be wrong.
> invalid to speculate.
Then say that you are speculating instead if claiming it as the truth.
> invalid to speculate.
Then say that you are speculating instead if claiming it as the truth.
Oh, have you never dealt with lawyers? There are usually multiple valid interpretations of a contract, depending on what side you are on. I didn't claim to be an oracle of truth, I'm not even tangentially related to this case (as I suspect 99% of the commenter here are).
This is a legal matter, and often it comes down to which side argues their case better. It isn't code where there is only the factual interpretation as seen by the compiler; law takes into account the fuzzy human interpretations that often frustrate programmers. Ultimately, this contract will be enforced by the courts in whichever side makes a better case.
Note that this may mean that even if Elon is in the wrong by canceling, the court may find in his favor simply due to the potential economic fallout. Sucks, but if law was a cut and dried thing we would have eliminated lawyers long ago.
This is a legal matter, and often it comes down to which side argues their case better. It isn't code where there is only the factual interpretation as seen by the compiler; law takes into account the fuzzy human interpretations that often frustrate programmers. Ultimately, this contract will be enforced by the courts in whichever side makes a better case.
Note that this may mean that even if Elon is in the wrong by canceling, the court may find in his favor simply due to the potential economic fallout. Sucks, but if law was a cut and dried thing we would have eliminated lawyers long ago.
Well-written contracts don't really have multiple valid interpretations. I don't know why we should assume the contract wasn't well-written.
Well if that's your definition, I'd go so far as to say 'well-written' contracts don't exist.
> Well if that's your definition, I'd go so far as to say 'well-written' contracts don't exist.
Do you believe it's not possible to draw up clear contracts with clear meanings? Do you believe that if you just take any contract and pay a lawyer some money, they can argue whatever? In that case, what's the purpose of drawing up a contract at all?
Do you believe it's not possible to draw up clear contracts with clear meanings? Do you believe that if you just take any contract and pay a lawyer some money, they can argue whatever? In that case, what's the purpose of drawing up a contract at all?
Language is imprecise so I'd argue it is basically impossible to create a contract with zero ambiguity.
Resolving that ambiguity is an important function of law and I'd go so far as to say the primary function of the court system. I do believe that if you pay a lawyer enough money you can probably find one willing to argue what you want although you may not win.
Resolving that ambiguity is an important function of law and I'd go so far as to say the primary function of the court system. I do believe that if you pay a lawyer enough money you can probably find one willing to argue what you want although you may not win.
> 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.
They posted an opinion, not interpretation... The part before the opinion as simply for context.
They posted an opinion, not interpretation... The part before the opinion as simply for context.
[deleted]
Why don't you go do it yourself?
Someone else gave their opinion.
If you disagree, then say why.
If you want that evidence, then go get it yourself.
Someone else gave their opinion.
If you disagree, then say why.
If you want that evidence, then go get it yourself.
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.
> 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.
From what I understand, the sticking point is the total bot count,
and since ElMu can't produce a trustworthy/reliable bot count which differs from Twitter's (meaning, he can't defend his claims),
he appears to be switching to attack, trying to get data on how Twitter produces their counts, even though he can't convincingly articulate any issues with either it or the result.
The sticking point is that he put an offer in when the company was worth twice what it is today, so now he’ll try anything to wriggle out of his commitment
> Is the merger agreement public?
Yes [1].
[1] https://www.sec.gov/Archives/edgar/data/0001418091/000119312...
Yes [1].
[1] https://www.sec.gov/Archives/edgar/data/0001418091/000119312...
Yes its public, just as this letter is. Notice that they dont refer to any specific section of the agreement in this portion of the statement, unlike the other references they make to the agreement.
First result on Google cropped up this:
https://www.sec.gov/Archives/edgar/data/1418091/000119312522...
https://www.sec.gov/Archives/edgar/data/1418091/000119312522...
This is probably the document more people will be interested in.
It outlines the fraud allegations:
https://www.sec.gov/Archives/edgar/data/1418091/000110465922...
It outlines the fraud allegations:
https://www.sec.gov/Archives/edgar/data/1418091/000110465922...
Section 6.4
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.
>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]
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)
Either way, I am laughing at all of them. (Yes. Elon also played the fraudster role as well)
Yes they knew, and they've been saying so for ages. They disclose it in their SEC reports. It doesn't matter.
What matters is that Elon has a bad time when he goes on Twitter because he is bombarded by bots and spam.
If there were only 3 bots on Twitter, they would all be bombarding Elon. If there were no bots on Twitter, he would still be bombarded by spam.
I guess you can't really use "I'm tired of my personal experience being terrible on Twitter" to raise money to buy Twitter, or to keep your fanboys engaged, or whatever Elon is thinking.
Personally, I think "I'm tired of my personal experience being terrible on Twitter" would have been a very honest way for him to approach the whole matter.
I also think that it is very natural for people to feel a threat or emotion or anger and then pin that on an external actor or actors, when it's something that they feel inside themselves.
What matters is that Elon has a bad time when he goes on Twitter because he is bombarded by bots and spam.
If there were only 3 bots on Twitter, they would all be bombarding Elon. If there were no bots on Twitter, he would still be bombarded by spam.
I guess you can't really use "I'm tired of my personal experience being terrible on Twitter" to raise money to buy Twitter, or to keep your fanboys engaged, or whatever Elon is thinking.
Personally, I think "I'm tired of my personal experience being terrible on Twitter" would have been a very honest way for him to approach the whole matter.
I also think that it is very natural for people to feel a threat or emotion or anger and then pin that on an external actor or actors, when it's something that they feel inside themselves.
It seems to me that he could've, as a board member, said loudly (and publicly!) that the experience for high-follower, highly active accounts sucks, and they would've had to listen
Yea, I really don't understand. I think maybe you have to be a billionaire to get it.
I wonder how many other billionaires are sitting around trying to figure this out, why he went so big and flashy
after he complained about his access to their API, they additionally provided him with access to their Firehose, which is essentially a stream of all their data
what did musk's filing say about that? any complaints?
what did musk's filing say about that? any complaints?
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.
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.)
(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.)
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.
Secondly, the ceo was firing aka asking for resignations from key people, no? That is not maintaining the business, that seems like sabotage.
> 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.
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.
Lawyer-talk for fraud is "fraud".
Not sure what your point is. I said misrepresentations is lawyer talk for lying…
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.”
It's lawyer talk for "We think it happened but we want wriggle room"
It's also lawyer talk for “we’d like the recipient/reader of the document to think it happened, but we don't want accountability, e.g., in the case of a document intended to be made public, for defamation.”
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".
Misrepresentation is a necessary but insufficient component for a finding of fraud.
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.
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.
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.
Musk's lawyers are too scared to point out what they are lying about though and where they got that information cause if they did point it out it would destroy Musk's allegations.
It's not about being scared so much as it is about professionalism.
Accusing someone of lying is in effect an accusation of bad faith. An accusation of bad faith is a serious matter, and if you play too freely with it, then you're engaging in bad faith yourself. [1]
The concept of misrepresentation is in a grey area that may or may not have a component of bad faith (see for example the concept of "fraudulent concealment" in courts of equity,[2] the test for which includes a finding of misrepresentation, and note that "fraud" in equity is, confusingly, not at all the same concept as common law fraud), so it's a much more intelligent accusation to make in court unless you have highly probative evidence. [3]
[1] Clean hands doctrine: https://en.wikipedia.org/wiki/Clean_hands
[2] Equity: https://en.wikipedia.org/wiki/Equity_(law)
[3] IANAL
Accusing someone of lying is in effect an accusation of bad faith. An accusation of bad faith is a serious matter, and if you play too freely with it, then you're engaging in bad faith yourself. [1]
The concept of misrepresentation is in a grey area that may or may not have a component of bad faith (see for example the concept of "fraudulent concealment" in courts of equity,[2] the test for which includes a finding of misrepresentation, and note that "fraud" in equity is, confusingly, not at all the same concept as common law fraud), so it's a much more intelligent accusation to make in court unless you have highly probative evidence. [3]
[1] Clean hands doctrine: https://en.wikipedia.org/wiki/Clean_hands
[2] Equity: https://en.wikipedia.org/wiki/Equity_(law)
[3] IANAL
There is nothing professional about what Musk has done. That is like saying Bernie Madoff was just being professional.
I'm talking about the lawyers, not Musk.
> Musk's lawyers are too scared to point out what they are lying about though and where they got that information
Their central allegation is that they didn't get the information because of Twitter’s refusal to uphold their obligations.
Their central allegation is that they didn't get the information because of Twitter’s refusal to uphold their obligations.
The reps are in the merger agreement, ie a contract.
There is a covenant in the contract about running the business between signing and closing.
The claim is breach of contract.
There is a covenant in the contract about running the business between signing and closing.
The claim is breach of contract.
[deleted]
> 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...
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...
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/1526237578843672576?s=20&t...
Twitter’s CEO has addressed this. Musk responded with a poop emoji: https://twitter.com/paraga/status/1526237578843672576?s=20&t...
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...
> Twitter claims 5% of daily active users are bots
You also left out an important piece: 5% of their *monetizable* DAU. Not just DAU.
But you're right, Elon's been convincing the public that Twitter has made claims they never actually made.
You also left out an important piece: 5% of their *monetizable* DAU. Not just DAU.
But you're right, Elon's been convincing the public that Twitter has made claims they never actually made.
I can't get to the end of that thread without the Signup nag taking over the whole window and obliterating the content. Tried half a dozen times. Finally got there via an Incognito window (though still don't see Musk's response).
So Twitter tagged my device with a cookie specifically meant to keep me from viewing users' content. How's that support their mission statement, "To give everyone the power to create and share ideas and information instantly, without barriers"?
It's not in my interest, or that of their users. The only benefit is to their bottom line, and I'd argue tactics like that do more long term damage than good. Certainly doesn't make me want to sign up or log in.
Go choke on Elon's <shit emoji>, Twitter. /rant
So Twitter tagged my device with a cookie specifically meant to keep me from viewing users' content. How's that support their mission statement, "To give everyone the power to create and share ideas and information instantly, without barriers"?
It's not in my interest, or that of their users. The only benefit is to their bottom line, and I'd argue tactics like that do more long term damage than good. Certainly doesn't make me want to sign up or log in.
Go choke on Elon's <shit emoji>, Twitter. /rant
[deleted]
Which only shows Musk is shit himself,
They have said, our bes guess is 5%, but the accuracy is limited by these factors, and we make very little promises that it is correct.
Besides, Musk has been complaining about bots for a long time, and has made it clear he doesn't believe the 5% number way before the acquisition. If the 5% number was a sticking point for him, he could have demanded due diligence. He did not demand that, thereby waiving his rights.
Besides, Musk has been complaining about bots for a long time, and has made it clear he doesn't believe the 5% number way before the acquisition. If the 5% number was a sticking point for him, he could have demanded due diligence. He did not demand that, thereby waiving his rights.
This flavor of “fraud” is something I’d expect an activist investor or short-seller to address, not the SEC.
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.
This is now going to a Delaware court, not the SEC. The filing here is just a notification to shareholders.
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.
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.
[deleted]
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.
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.
It’s not that subjective anyone using twitter still sees spam accounts promoting a website, business, product, or scam on every post. Twitter just said they remove 1M spam accounts each day. Their mDAU is claimed to be around 200M. This means they are deleting around half a percent of their users every single day. That seems like a lot to be identifying to me, but doesn't really determine if they are deleting enough or not but does show me that being higher than 5% is very possible when you have to delete that many accounts every 10 days.
Why do you think Twitter list accounts it knows to be bots as mDAU? Those are very different categories.
I’m not saying they are. I’m saying that they are banning enough bots to make up 5 percent every 10 days. With that amount of bots being banned, the possibility of that amount also being missed from being banned is substantial.
If he's claiming fraud, doesn't he have to prove it?
Of which they have 0 proof of. In fact, Twitter gave them the access they asked for last month.
They who and they who?
They'd have to prove it in court. Good luck with that.
It is quite easy to prove twitter is mostly full of bots. You do not even need a firehose to come to that conclusion.
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).
Twitter's SEC filing: "In making this [mDAU] determination, we applied significant judgment, so our estimation of false or spam accounts may not accurately represent the actual number of such accounts, and the actual number of false or spam accounts could be higher than we have estimated."
Neither side said bots, but bots _should_ be a subset of "false or spam" accounts. They basically used "our judgement" and give themselves complete discretion. And 5% is a nice round number plucked from nowhere which sounds awesome! Providing proof of that to a Banker or Backer (or Elon or a future Jury) isn't therefore possible or intended. It's marketing spin in an SEC filing.
Neither side said bots, but bots _should_ be a subset of "false or spam" accounts. They basically used "our judgement" and give themselves complete discretion. And 5% is a nice round number plucked from nowhere which sounds awesome! Providing proof of that to a Banker or Backer (or Elon or a future Jury) isn't therefore possible or intended. It's marketing spin in an SEC filing.
> but bots _should_ be a subset of "false or spam" accounts
Do you mean "they should report all bots as part of their false or spam accounts number", or that you believe logically bots are in fact a subset of the number twitter reports, and so twitter's number is bogus if 50% of all accounts are bots?
If it's the latter, you're missing the point of their mDAU marketing metric. It already has all the obvious bots and non active accounts removed. They're saying, what % of advertising revenue turns out to be from bots.
Do you mean "they should report all bots as part of their false or spam accounts number", or that you believe logically bots are in fact a subset of the number twitter reports, and so twitter's number is bogus if 50% of all accounts are bots?
If it's the latter, you're missing the point of their mDAU marketing metric. It already has all the obvious bots and non active accounts removed. They're saying, what % of advertising revenue turns out to be from bots.
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.
Even if 50% are bots it doesn’t matter. Twitter’s claims are around mDAUs, not accounts.
But Twitter said that the number was provided on a best effort basis, so you don’t need to prove the number was wrong. rather, you need to prove that Twitter tried to lie. Unless there’s an internal email saying “I’m making up the number 5% because we know it’s higher but we don’t want to write that,” it doesn’t matter at all. If such an email existed, Twitter wouldn’t be fighting the back-out because revealing that email would mean damages for existing shareholders.
>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
…
>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
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. """
""" 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. """
DD would matter in the context that Musk was acting on bad information. But there was no DD AND he wasn't acting on bad information, so it's all moot.
I don't know how the legal system works,
but his argument sounds valid to me.
“My offer was based on Twitter's SEC filings being accurate,”
Willfully filing fraudulent SEC filing is a crime - and if Twitter has been engaging in criminal behavior to artificially increase their value - I would think Musk has a good case.
“My offer was based on Twitter's SEC filings being accurate,”
Willfully filing fraudulent SEC filing is a crime - and if Twitter has been engaging in criminal behavior to artificially increase their value - I would think Musk has a good case.
> Willfully filing fraudulent SEC filing is a crime - and if Twitter has been engaging in criminal behavior to artificially increase their value - I would think Musk has a good case.
Ignoring whether this is a legitimate reason to back out of the agreement, Musk hasn't shown that Twitter has been filing fraudulent SEC filings so what does it matter anyway?
Ignoring whether this is a legitimate reason to back out of the agreement, Musk hasn't shown that Twitter has been filing fraudulent SEC filings so what does it matter anyway?
"In the merger agreement, Twitter promised to do certain things between signing and closing, and it has to do those things, whether or not there would be a material adverse effect from not doing them. So if Musk can prove that Twitter hasn’t complied with its obligations, he can get out of the deal."
From https://www.bloomberg.com/opinion/articles/2022-07-09/elon-s...
From https://www.bloomberg.com/opinion/articles/2022-07-09/elon-s...
So far Musk has provided no evidence that the SEC filings on bots are false and he's basically just making repeated unnecessary requests trying to force Twitter into being "uncooperative". I find the notion that the deal should be terminated based upon that pretty ridiculous. The article you linked seems to agree with me.
Regardless, Musk is making a lot of claims. Let's see if he can provide any reasonable evidence of those claims and make any reasonable arguments that will be accepted in court. There's really no point in speculating anymore. Now we just need to wait to see if a judge is actually buying his arguments.
Regardless, Musk is making a lot of claims. Let's see if he can provide any reasonable evidence of those claims and make any reasonable arguments that will be accepted in court. There's really no point in speculating anymore. Now we just need to wait to see if a judge is actually buying his arguments.
It matters because that will probably be one of the deciding factors should this eventually be assessed in court.
> It matters because that will probably be one of the deciding factors should this eventually be assessed in court.
Musk has _not_ provided any evidence of fraud. I'll wait until he actually does before speculating as to how decisive it will be in any future court proceedings.
Musk has _not_ provided any evidence of fraud. I'll wait until he actually does before speculating as to how decisive it will be in any future court proceedings.
None of that changes that it does seem to be the key criteria that the outcome of case will depend upon.
If that truly is key criteria, then I hope Musk actually has some evidence for his claims for his sake.
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
[0] https://twitter.com/matt_levine/status/1545151445057536001
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.
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.
It would be possible to enter into a contract through tweets alone. That didn't remotely happen here, though.
But he only signed that agreement because his ego wouldn't let him back away from those tweets
Note that Musk stands to spend $44B, not $1B.
He currently owes twitter 44B, but actual damages would be 44B minus the FMV, so closer to like 10-20.
I won't speculate on what the damages might be in a trial, but yes, he owes them $44B but they owe him the whole company after he pays.
Where are you guys getting this number from? Similar cases have settled for almost the full original amount. Like 95%+. Not half or less than half. Are you just making stuff up?
They’re saying that if everyone just did what they agreed to do:
- Musk would give Twitter shareholders $44B in cash,
- Twitter shareholders would give Musk ownership of the company.
Note that today, Twitter is worth $28B. So the agreed deal essentially gives the shareholders $16B in profit.
So a judge might tell Musk he can’t back out and has to buy Twitter for $44B like he said he would. Or it might let him just give the shareholders $16B and not get the company.
Note that today, Twitter is worth $28B. So the agreed deal essentially gives the shareholders $16B in profit.
So a judge might tell Musk he can’t back out and has to buy Twitter for $44B like he said he would. Or it might let him just give the shareholders $16B and not get the company.
It's the internet. Just say it with enough conviction, and others will buy it. Continue to say it, and everyone will buy it.
Er, not just the internet now
Er, not just the internet now
[deleted]
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.
Only if you don’t bother to take a look at the rest of the market.
But for Musk's machinations, said stock price would not be down 40%. He caused the stock to drop.
I guess if public investors 100% believed Musk would pay, the stock should sit at $44 billion. I guess if Musk is forced to close or to pay equivalent damages, the value will jump back to that in the end.
Exactly. Plenty of people willing to profit off the arbitrage if he's actually going to be forced to buy twitter at the original amount.
The current price ($32) reflects be probably won't.
The current price ($32) reflects be probably won't.
I'd say the tech sector getting routed played a bigger part. It's not like Twitter dropping 40% (for any reason) is exceptional amonst all the other stocks that dropped 20-60% over the last year.
Price changes due to macroeconomic circumstances are explicitly listed in the contract as not being grounds to get out of the deal.
I’m telling you, the guy really signed an ironclad contract forcing him to pay $44B to buy Twitter.
I’m telling you, the guy really signed an ironclad contract forcing him to pay $44B to buy Twitter.
If the share price is lower than $54.20, it’s because the market doesn’t believe the sale will be completed. The difference between $54.20 and the current share price represents the probability of the transaction falling through.
Twitter has done nothing to impede the transaction, so any uncertainty (and thus decline in TWTR share price below $54.20) is due to the actions of the buyer, who is… Elon Musk.
Therefore, Elon is responsible for any decline in the share price since the purchase agreement was signed.
Twitter has done nothing to impede the transaction, so any uncertainty (and thus decline in TWTR share price below $54.20) is due to the actions of the buyer, who is… Elon Musk.
Therefore, Elon is responsible for any decline in the share price since the purchase agreement was signed.
maybe if he can prove that his bot claims, and claims about twitter's willful fraud, are both true, and the reason everybody sold
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...
https://twitter.com/matt_levine/status/1545151445057536001?s...
Reading Matt I realized there's another layer, which is Musk has complained about the bot problem for a while - heck, one could argue that he bought Twitter not only fully knowing (according to him) it has a bot problem, but he intended to _fix_ the problem.
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.)
The agreement have a massive out; yes it doesn't matter what Elon thinks about the bots but if his financier think bots are an issue he gets an out since Twitter for some reason let a financing clause in.
You mean Musk agreed to buy Twitter contingent on financing and now is trying to torpedo his own financing after he himself agreed to the sale? There's a lot of talk of fraud in the comments here, but to me _that_ sounds like fraud on Musk's part.
In any case, I guess we'll have to see if Musk's financing really gets pulled and if that really means Musk is off the hook.
In any case, I guess we'll have to see if Musk's financing really gets pulled and if that really means Musk is off the hook.
He doesn't have to torpedo anything just make enough noise that they get cold feet.
> He doesn't have to torpedo anything just make enough noise that they get cold feet.
That falls under my personal definition of "torpedo".
That falls under my personal definition of "torpedo".
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
Yes, but they could potentially get sued by their own shareholders if they let him off too easily.
And note Musk did a great deal of damage to the company. On hearing that he wanted to change the character of the company; that he was going to lay off a huge number of people; that he was going to make existing employees work much harder... many of the best and brightest left.
>many of the best and brightest left.
Well... a number of employees left.
Well... a number of employees left.
Read this a few weeks ago when the newsletter arrived. Money Stuff by Matt Levine is very worth subscribing to!
Tbh i haven't read the agreement and i'm not going to but representations and warranties is generally grounds to terminate.
afaik there are no material representations or warranties made by twitter which elon has proven false
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%.
>>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%.
> the waiver is null and void if the data supplied to the SEC by Twitter is fraudulent.
Look at said SEC filing. It is worded in a way that is impossible to prove fraudulent with the kind of data Musk asked for. He could have proof positive that he is the only human account on Twitter and the Twitter SEC filing would likely not be construed as lying - it very explicitly states that it is a judgment call by the Twitter execs, based on some internal methodology, and that the real number could be higher.
The only way you could prove they lied to the SEC would be if you found emails that say something along the lines of "to the best of our knowledge, 20% of mDAUs are actually bots/spammers, but let's say 5% in our SEC filing".
Look at said SEC filing. It is worded in a way that is impossible to prove fraudulent with the kind of data Musk asked for. He could have proof positive that he is the only human account on Twitter and the Twitter SEC filing would likely not be construed as lying - it very explicitly states that it is a judgment call by the Twitter execs, based on some internal methodology, and that the real number could be higher.
The only way you could prove they lied to the SEC would be if you found emails that say something along the lines of "to the best of our knowledge, 20% of mDAUs are actually bots/spammers, but let's say 5% in our SEC filing".
exactly
Musk has released nothing that would indicate that the numbers are fraudulent.
Read the SEC filing?
"it appears that" = "we have no demonstrable data, but we'd like this to be true, but we're not making a material claim".
I read it, it contains no data, none. But I think you know that and are purposely deflecting.
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.
bare assertions by elon on a matter touching his pride seem more likely to indicate the opposite is in fact true
e.g. elon calling some dude who wounded his pride on twitter, a "pedo"
e.g. elon calling some dude who wounded his pride on twitter, a "pedo"
It's somewhat hilarious to think that even if Twitter were to settle modestly for $5bn, that would be more than double of all profit that Twitter has ever generated as a company.
In a way, Twitter played Musk's ego to perfection and he didn't see it until its too late. In fact I'm not sure he even admits it to himself yet.
Musk played everyone. I called it as soon as it was announced that he was just manipulating the markets. Hopefully SEC actually does something for once.
He didn't play anyone, he got played. There was a ton of way he could have sold stocks without being on the hook for a 44 billions purchase he doesn't want to close. And he even could have sold the stock without any excuses since the stock fell anyway.
He is not getting anything out of this that he couldn't have gotten in a better, smarter way. But they told him he couldn't so he let his ego get the best of him again and got himself trapped.
Even went ahead and threw out his right to due diligence, which is the part that confirms it was ego and not smart thinking, and the entire reason he cannot get a clean exit now.
He is not getting anything out of this that he couldn't have gotten in a better, smarter way. But they told him he couldn't so he let his ego get the best of him again and got himself trapped.
Even went ahead and threw out his right to due diligence, which is the part that confirms it was ego and not smart thinking, and the entire reason he cannot get a clean exit now.
>hopefully the SEC actually does something for once
They can’t when people like Musk are allowed to rip the few teeth they have out any time they try to hold wealthy individuals/companies accountable. Jon Stewart did a really interesting interview with a former SEC chair few months ago (“The Problem with Jon Stewart”), and while Jon clearly clearly tells him to not pass the buck/not make excuses, it’s also clear to him that the SEC is outgunned and a serious example of regulatory capture.
They can’t throw money at the problem, they can’t get clever or they’re sued for being “out of bounds,” and they’ve been successfully demonized to the public, so they have no support virtually anywhere.
It’s like the whole “tax the rich” battle cry. We won’t see it happen so long as the IRS is considered borderline an enemy of the people, because who could ever campaign on “increase funding for the IRS so they’ll be better at collecting taxes”?
They can’t when people like Musk are allowed to rip the few teeth they have out any time they try to hold wealthy individuals/companies accountable. Jon Stewart did a really interesting interview with a former SEC chair few months ago (“The Problem with Jon Stewart”), and while Jon clearly clearly tells him to not pass the buck/not make excuses, it’s also clear to him that the SEC is outgunned and a serious example of regulatory capture.
They can’t throw money at the problem, they can’t get clever or they’re sued for being “out of bounds,” and they’ve been successfully demonized to the public, so they have no support virtually anywhere.
It’s like the whole “tax the rich” battle cry. We won’t see it happen so long as the IRS is considered borderline an enemy of the people, because who could ever campaign on “increase funding for the IRS so they’ll be better at collecting taxes”?
That would imply that he didn’t outplay SEC, which is a big deal. So not that smart.
It’s been amusing to see the flip from people saying Musk can’t buy Twitter to Musk must buy Twitter.
Buying Twitter the way Musk did right before the most telegraphed recession in modern history was colossal stupidity. I have no insight to Musks liquidity, but if Twitter is able to force him to complete the sale in the middle of a raging recession then how much of his empire would be diminished by forced liquidations. And was this decision made so he could promote Shivon to CEO of Twitter? That could make it the most expensive (including the cascade of losses due to liquidation) gift to a mistress (?) in human history.
But Musk has a habit of escaping justice (see ‘pedo’ case which was egregious) and I have a feeling there would be little appetite to damage his empire due to the job losses it would cause, especially in a recession.
Buying Twitter the way Musk did right before the most telegraphed recession in modern history was colossal stupidity. I have no insight to Musks liquidity, but if Twitter is able to force him to complete the sale in the middle of a raging recession then how much of his empire would be diminished by forced liquidations. And was this decision made so he could promote Shivon to CEO of Twitter? That could make it the most expensive (including the cascade of losses due to liquidation) gift to a mistress (?) in human history.
But Musk has a habit of escaping justice (see ‘pedo’ case which was egregious) and I have a feeling there would be little appetite to damage his empire due to the job losses it would cause, especially in a recession.
Why would it cause job losses? Wouldn't others be able to hire due to the money transferring to them?
Trickle-down economics has consistently shown to be a failed hypothesis.
It’s a good thing that was invented by a comedian and not an economist (easier to refute it that way).
> “’Trickle down’ has been a characterization and rejection of what somebody else supposedly believed.” But “no recognized economist of any school of thought has ever had any such theory or made any such proposal. It is a straw man. It cannot be found in even the most voluminous and learned histories of economic theories.”
> “’Trickle down’ has been a characterization and rejection of what somebody else supposedly believed.” But “no recognized economist of any school of thought has ever had any such theory or made any such proposal. It is a straw man. It cannot be found in even the most voluminous and learned histories of economic theories.”
One of the things I like most about HN is that, by and large, people tend to assume at least a fair or reasonable interpretation of others’ arguments.
In your case, you’re trying to drill down on a semantics issue to discredit this guy. It is reasonable to assume most people on HN know that “trickle down” economics is “supply side” economics. Just like when people say “Obamacare” instead of “the ACA” and everyone knows what’s being said.
In both cases yes, the moniker is generally seen as a critique on its own, but to act as if that person is incorrect or “using the wrong term” is disingenuous at best.
In your case, you’re trying to drill down on a semantics issue to discredit this guy. It is reasonable to assume most people on HN know that “trickle down” economics is “supply side” economics. Just like when people say “Obamacare” instead of “the ACA” and everyone knows what’s being said.
In both cases yes, the moniker is generally seen as a critique on its own, but to act as if that person is incorrect or “using the wrong term” is disingenuous at best.
I don't think anyone would care if they used "Reagonmics" instead, or something like Obamacare, those are more usefully descriptive than partisan.
Regardless using a term that purposefully misrepresents the economics behind it is not a good way to start any online discussion or make a critique. And if it's not purposeful then is just demonstrates a poor grasp of the concept.
Why else would people take issue with it so often? I've seen that term discredited on HN many times, I'm not the first.
Regardless using a term that purposefully misrepresents the economics behind it is not a good way to start any online discussion or make a critique. And if it's not purposeful then is just demonstrates a poor grasp of the concept.
Why else would people take issue with it so often? I've seen that term discredited on HN many times, I'm not the first.
>Obamacare, those are more usefully descriptive than partisan
Obamacare is pretty partisan, but at the very least meant as a derogatory name. It’s definitely not primarily descriptive. It’s also a callback to “Hillarycare.”
Obamacare is pretty partisan, but at the very least meant as a derogatory name. It’s definitely not primarily descriptive. It’s also a callback to “Hillarycare.”
What does trickle down have to do with Musk losing money to others though? Right now, it's trickle down hoping he'll do something with it. Like you said, it's a failed hypothesis.
Theoretically yes, but that’s not how courts view it.
What happened to the poison pill strategy to keep him from buying it?
The point of a poison pill isn't to prevent a takeover, it's to prevent a _hostile_ takeover. It's standard practice and once you've ensured the takeover will be fair to all shareholders, as is your duty as the board, there's no more need for it.
A moderate breeze came along and the Twitter board gave up on it after about an hour.
literally literally laughing out loud :)
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.
In that case, everybody I don't like loses, which is pretty close to me winning, I think.
His buying offer includes a fair number of Co financers, he can't just close on them. You just have to look at what happened to solar city (or even the genesis of starlink as a feeder for SpaceX) to know that not screwing with his big investors is the one thing he seems to take seriously without letting his ego screw it all up.
Facebook would be winning big time.
Ugh, good point. They're doing a decent job of virtually digging their own meta grave, though.
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.
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.
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
https://twitter.com/wolfejosh/status/1545387947578597376
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.
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.
You say social engineering, I say criminal fraud.
But this is only because everywhere, everything is securities fraud
https://www.bloomberg.com/opinion/articles/2019-06-26/everyt...
It also does not make sense to do this kind of fraud, as Tesla stock will surely tank on the news of it being used as a collateral in an acquisition deal.
https://www.bloomberg.com/opinion/articles/2019-06-26/everyt...
It also does not make sense to do this kind of fraud, as Tesla stock will surely tank on the news of it being used as a collateral in an acquisition deal.
Nah, the "everything is securities fraud" trope is qbout some (usually immoral) behavior that a shareholder argues would materially affect the stock price, and which was not disclosed to shareholders.
Elon Musk announcing some M&A news with the intent of effecting price changes in TWTR,TSLA securies would be pretty boring, vanilla securities fraud.
Elon Musk announcing some M&A news with the intent of effecting price changes in TWTR,TSLA securies would be pretty boring, vanilla securities fraud.
That depends on the amount especially since he's already been caught doing this when he claimed he would take Tesla private
I knew it had to be Matt Levine :)
More precisely, securities fraud.
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.)
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.)
Having driven Twitter's value down by $15B, I can't imagine Musk won't be sued by shareholders for it, since his claims of fake accounts are as yet unproven. The same goes for the damages this little venture has inflicted on Tesla stock. The SEC and FTC are likely to cost Musk Enterptises a pretty penny in legal fees before all of this ends.
The $1B penalty for backing out of the Twitter deal is the least of Musk's concerns.
The $1B penalty for backing out of the Twitter deal is the least of Musk's concerns.
it's somewhat hard to argue that musk is responsible for the decline given that the entire NASDAQ is also down. you might be able to find some contribution, but only a relatively small amount of it.
But Musk set the price at $54 by agreeing to buy Twitter at that price. If this deal were guaranteed to go through, shares should be trading at that price until the sale is complete. Trading at above that price means shareholders would lose money at closing, and trading at below means someone is leaving money on the table. Market forces should cause the price to converge at $54.
The fact that it’s trading lower means that investors don’t expect the deal to go through. And who exactly as been doing his best to very publicly bring the deal into question? Elon Musk.
The fact that it’s trading lower means that investors don’t expect the deal to go through. And who exactly as been doing his best to very publicly bring the deal into question? Elon Musk.
If he was the only thing dragging twitter toward $54, and then he stops dragging it as hard, it's hard for me to see that as driving value down. If he hasn't caused any other damage, that's just twitter returning to its natural value.
Given the agreement, it sure seems to me that Twitter's natural value is currently $44 billion dollars.
Is it down $15B from the post-announcement peak, or from pre-announcement? I’d think only the latter would hold up in court.
Having driven Tesla's value down (below the market decline) by nonstop trolling, …
Sure, let’s pretend the entire market hasn’t sunk.
> Sure, let’s pretend the entire market hasn’t sunk.
Why does that matter? Musk agreed to buy Twitter for $44 billion. If he comes through, that's the value of Twitter. If he doesn't, then the value is something else. The difference between $44 billion and fair market value is just the expectation of investors that Musk really will pay. So yeah the drop really _is_ due to Musk trying to back out of the deal. If Musk weren't backing out of the deal, then then Twitter's value shouldn't drop regardless of the fact that the rest of the market has.
Why does that matter? Musk agreed to buy Twitter for $44 billion. If he comes through, that's the value of Twitter. If he doesn't, then the value is something else. The difference between $44 billion and fair market value is just the expectation of investors that Musk really will pay. So yeah the drop really _is_ due to Musk trying to back out of the deal. If Musk weren't backing out of the deal, then then Twitter's value shouldn't drop regardless of the fact that the rest of the market has.
Intent is the core issue of most white collar fraud.
I'd say that's because harm (and reliance) is usually easy to prove.
From my understanding, US law is based on King George III, which inherently requires intent to be proven.
In other words, US law judges by intent vs actual action/damage.
One example of this is: Credit Card Fraud is prosecuted based on max possible theft vs money stolen.
https://www.law.cornell.edu/wex/intent
In other words, US law judges by intent vs actual action/damage.
One example of this is: Credit Card Fraud is prosecuted based on max possible theft vs money stolen.
https://www.law.cornell.edu/wex/intent
Mens rea is a necessary but not sufficient component of proving a criminal charge - the defendant intended to break the law. Actus reus is also required, which is actually doing the act.
US law doesn't "judge by intent". If you try to murder someone but you don't succeed, you don't get charged with murder.
US law doesn't "judge by intent". If you try to murder someone but you don't succeed, you don't get charged with murder.
Yes, I agree with you and I should have worded my comment better.
To keep with the murder example, intent is what separates 3v2, in most states. Yes, a crime was committed but was the intent to cause bodily harm vs actions causing bodily harm, without intent.
To keep with the murder example, intent is what separates 3v2, in most states. Yes, a crime was committed but was the intent to cause bodily harm vs actions causing bodily harm, without intent.
There's a contract in place (that waves due diligence!).
If he entered into that contract with no intent to honor it...
If he entered into that contract with no intent to honor it...
As Levine has repeatedly stated he didn’t “waive due diligence”. It was a binding purchase agreement. It’s meant to come after all of the due diligence.
He didn’t waive his right. He just opted not to do any before buying.
He didn’t waive his right. He just opted not to do any before buying.
[deleted]
Is there any hope that this time he will pay for his shenanigans?
We've had the Teflon Don, now we have the Teflon Elon.
I'm sure he'll be able to weasel his way out of this. He'll spend a crap ton of money to lawyers just to be able to say he doesn't have to pay for it, but he's still paying for it on a smaller scale and not in public. Anything to put up another W on the scoresheet.
I'm sure he'll be able to weasel his way out of this. He'll spend a crap ton of money to lawyers just to be able to say he doesn't have to pay for it, but he's still paying for it on a smaller scale and not in public. Anything to put up another W on the scoresheet.
The counter point here is that the Twitter board is not poor, and the incentives to force the buyout (or at least extract more money from Musk) are huge.
Yes, and they are the side I'm cheering for in this match. Even if Musk is forced to pay, I doubt it will slow his twitter tirades down. In fact, I'd expect him to come out harder to prove whatever his little ego thinks needs to be proven.
I legitimately think removing Musk’s account from the platform entirely might be their best bargaining chip to actually get the deal to go through.
They just reinstated Alex Berenson, apparently in a complete win for him (details are not yet public)
Removing musk account, if they do thAt, might backfire spectacularly.
Removing musk account, if they do thAt, might backfire spectacularly.
How might it “backfire spectacularly”? What could Musk possibly do to harm Twitter any further?
Isn’t the entire breakup clause contractually written in?
From my understanding, the current choice is:
1. Does Elon get sued by Twitter to force sale, per the initial agreement, where Elon agreed to allowing Twitter to force a sale.
2. Does Elon just pay the billion separation clause and walk away.
Do you see it differently?
From my understanding, the current choice is:
1. Does Elon get sued by Twitter to force sale, per the initial agreement, where Elon agreed to allowing Twitter to force a sale.
2. Does Elon just pay the billion separation clause and walk away.
Do you see it differently?
There is no option 2. That was a proviso in case Elon was unable to secure financing. He secured financing, so now he has to buy Twitter. Or they can sue him.
https://www.sec.gov/Archives/edgar/data/1418091/000119312522...
Is there a different version of the doc than listed above? I couldn’t find any revisions and it sure seems that there are options available to Musk.
Is there a different version of the doc than listed above? I couldn’t find any revisions and it sure seems that there are options available to Musk.
The clause about the $1B penalty says nothing about separation. That clause only activates if the deal is stopped by some outside entity, such as the SEC, or if the two parties mutually agree to stop the process.
In all other cases, Elon has committed to give them $44B in exchange for the company.
In all other cases, Elon has committed to give them $44B in exchange for the company.
https://www.sec.gov/Archives/edgar/data/1418091/000119312522...
There’s quite a bit about separation, sections 7 & 8
There’s quite a bit about separation, sections 7 & 8
What reads like simple English to you or I does not get read the same way by lawyers. Once lawyers are involved, all reasonable logic goes out the window in my perspective.
Ever since what "the definition of 'is' is", my whole outlook on lawyers was just obliterated.
Ever since what "the definition of 'is' is", my whole outlook on lawyers was just obliterated.
Not for sure why you're downvoted, because you're right. Lawyers do not operate on logical basis. They operate on interpretations of logic. I found this out when buying my house. Interacting with the lawyers was completely miserable because they live in their own little world. They expected me to just know things that they would poorly specify, requiring several emails to clarify, and then when I would point out mistakes, logical inconsistencies, or poorly defined things in the contract, they would just shrug it off or sort of grudgingly fix them, seemingly just to appease me. Then they would just dig their heels in the ground about what the contract "says" because the contract "says so", even though it made no logical sense. Because the contracts aren't what they say logically. They say what they say based upon a sort of colloquially agreed upon interpretation of them. Lawsuits then center around this colloquial agreement and not around the contractual logic. It's an excruciatingly frustrating world to be introduced to. I wish to never have to deal with lawyers.
> Ever since what "the definition of 'is' is", my whole outlook on lawyers was just obliterated.
Is that in reference to something? Got a link or an article or something?
> Ever since what "the definition of 'is' is", my whole outlook on lawyers was just obliterated.
Is that in reference to something? Got a link or an article or something?
You say OSINT, I say, you just used google with quotes.
I have accepted that I will eventually see Musk put behind bars--all of a sudden--by the SEC. I get the sense that they are always building a case on him. He would be a great "Martha Stuart."
SEC can only levy civil penalties, criminal (aka jail) is another matter. Which they are happy to refer to the relevant prosecutor, it just isn’t their job at that point.
I wondered this early on. More so when I thought he would actually buy twitter as Twitter had had some serious share price decline at that point for over 6 months, so it's a way to shift money from an inflated area to a more moderately priced one. Plus he obviously likes the platform in general.
If true, I don't think it's the case he did it intending to pull out. Seems unlikely he would have signed the billion dollar exit clause when he could have easily dragged the initial talks on a bit longer for largely the same result before 'changing his mind'.
My best guess is the offer was genuine (thought impulsive) but as he's seen the price drop further, now his offer seems too much. Why pay $44bn for a sub $30bn company. Kinda simple but seem most likely than all these more complex theories.
If true, I don't think it's the case he did it intending to pull out. Seems unlikely he would have signed the billion dollar exit clause when he could have easily dragged the initial talks on a bit longer for largely the same result before 'changing his mind'.
My best guess is the offer was genuine (thought impulsive) but as he's seen the price drop further, now his offer seems too much. Why pay $44bn for a sub $30bn company. Kinda simple but seem most likely than all these more complex theories.
So you acknowledge the possibility that he acted impulsively but think his other decision were all rational and intelligent?
Happy to have a conversation with you on reasoning, and apologise if I'm wrong in how I read your reply message, it feels like a curt criticism statement, not add value to discussion.
But anyway, yes I believe it is possible to be impulsive followed by more logical decision making. This process seems fairly commonplace in the world I observe.
But anyway, yes I believe it is possible to be impulsive followed by more logical decision making. This process seems fairly commonplace in the world I observe.
I apologize for being curt, I thought my statement was obvious. Here's some lines from your comment
"If true, I don't think it's the case he did it intending to pull out. Seems unlikely he would have ...... My best guess is the offer was genuine (thought impulsive) but as he's seen the price drop further, now his offer seems.. "
Considering his impulsive behavior, which has prior occurrences. 1. Making an immature derogatory remark to one of the people trying to assist with that cave rescue. 2. His statement that he was taking tesla private that he retracted later 3. This situation..
Why do you think he's acting logically now? Why is it your best guess? Your words
"If true, I don't think it's the case he did it intending to pull out. Seems unlikely he would have ...... My best guess is the offer was genuine (thought impulsive) but as he's seen the price drop further, now his offer seems.. "
Considering his impulsive behavior, which has prior occurrences. 1. Making an immature derogatory remark to one of the people trying to assist with that cave rescue. 2. His statement that he was taking tesla private that he retracted later 3. This situation..
Why do you think he's acting logically now? Why is it your best guess? Your words
> Why do you think he's acting logically now? Why is it your best guess? Your words
1) As said, its not uncommon to act impulsively, followed by more logical decision making after. From your examples, I dont feel listing a few impulsive cases removes his ability to act logically. And the sequence I've guessed seems the most likely in my kindly eyes.
2) Because its not my second best guess, or any other.
3) See 1) & 2)
1) As said, its not uncommon to act impulsively, followed by more logical decision making after. From your examples, I dont feel listing a few impulsive cases removes his ability to act logically. And the sequence I've guessed seems the most likely in my kindly eyes.
2) Because its not my second best guess, or any other.
3) See 1) & 2)
I think we have a disconnect on probability and booleans. Elon musk can act logically or impulsively. Each historical act of impulsiveness increases the probability of future impulsive acts
Musk probably believes he can grow the company into a $100B+ company.
I feel there is huge profitability growth potential there. If you look at the better quarters the revenues can be significant. If you ran that against a lean headcount and were genuinely A-political there's really a money maker there potentially.
That said the risk is huge as the world can move on quickly as we saw with MySpace. And Elon s becoming increasingly a political risk factor himself in a business were peoples view on the leaders/owners really matters.
That said the risk is huge as the world can move on quickly as we saw with MySpace. And Elon s becoming increasingly a political risk factor himself in a business were peoples view on the leaders/owners really matters.
My point is he can pay more because he believes he's going to make much more in the future. There is a downturn but most people suffer downturns through life and hold through them. It's just childish to back out now but I would expect that from him.
His views really don't matter. Nothing happened to Facebook and nothing will. People will just continue fighting (tweeting).
His views really don't matter. Nothing happened to Facebook and nothing will. People will just continue fighting (tweeting).
I see you point, but being childish in backing out may not mean much if you feel you're overpaying $14bn, or if not him his funding partners. People have a much stronger emotional response to losing something than gaining something.
But really who knows. Maybe he realised he had too much on his plate, or any number of things.
But really who knows. Maybe he realised he had too much on his plate, or any number of things.
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.
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 in terms of distracting the market from the diversification.
The move would have to be perceived as financially irrational for it to be operable in terms of distracting the market from the diversification.
He could sit next to whatever dark lord descendents currently run Ford, for less. But that would make Tesla into a serious car company; which is a real business deal, for someone serious about changing the world.
This is just one of the impacts of the high potency products at the local cannabis dispensary. You can't function if you wake and bake on that shit.
This is just one of the impacts of the high potency products at the local cannabis dispensary. You can't function if you wake and bake on that shit.
This would have been switching from an overinflated stock to a much more overinflated stock.
The theory presumes he never intended to actually buy Twitter stocks, just keep the cash.
But why would he need cash? To buy another company, or start one of his own?
He knows Tesla is overpriced and wants to take some of his money off the table. He knows it is due for a major haircut.
Why would anyone need cash ahead of a recession? I wonder...
To prevent itbecome worthless from a Tesla stock crash. Either putting it in the abnk or other investments.
To buy more tesla stocks than he had before, at a lower price point each.
He doesn't hide he would like to have the company private. Owning more stocks moves him closer to this ideal.
Just speculating, I have no inside info on what he really wants to do with the cash.
He doesn't hide he would like to have the company private. Owning more stocks moves him closer to this ideal.
Just speculating, I have no inside info on what he really wants to do with the cash.
Minus 1 billion for a termination fee. Why would he have agreed to that if it was his plan all along?
If he was able to exit his Twitter stock position after the jump in price he created it would wash out the $1B.
If he exited TSLA to the tune of the remaining $10B or $15B, staving off a 50% decline in that value then he came out way ahead.
It seems very likely to me he will find a way out of the $1B fee and end up settling for some fraction.
Of course if he just borrowed against his TSLA to facilitate this deal, as I have read he did, then his profit on the move depends on the terms of the loan.
If he exited TSLA to the tune of the remaining $10B or $15B, staving off a 50% decline in that value then he came out way ahead.
It seems very likely to me he will find a way out of the $1B fee and end up settling for some fraction.
Of course if he just borrowed against his TSLA to facilitate this deal, as I have read he did, then his profit on the move depends on the terms of the loan.
The $1B termination fee is the tip of the iceberg. Changing your mind is not covered in the termination clause, and his evidence Twitter mislead him is contradicted by his own statements prior to the deal. Twitter is owed substantially more than a billion. Likely closer to ten.
He sold something around $10 (+/- 2) billion of Tesla stock. The loans don't matter as they were (a) tied in to use only to buy Twitter and (b) allowed to expire last month.
Sell $40b of Tesla without causing a dip, is worth a lot more than $1b. A 3% dip from news he's selling that much stock would cost way more than $1b.
It's not just the potential impact upon markets. Shareholders of that size have legal obligations as well. If you own that much of a company you are specifically and legally precluded from selling it all at once in many circumstances. Bill Gates could not sell his entire Microsoft stake all at once back in the day into an open market as it might cause the security to drop significantly and for other, legal reasons. Certainly, the securities exchange act of 1934 requires disclosures of certain sales of shareholders above a certain percentage of shares of publically traded companies, but also more nuanced and exacting laws regarding national security interest prohibit the sales of securities and ownership to specific parties or foreign interests. When the scale of your ownership stake is in the billions, that certainly limits the potential buyers of the entire stake to a short list.
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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.
If this really were part of some grand master plan, I think he would have left himself an easier out.
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.
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.
He's constantly dragged the company and founders through the mud and the stock dropped 7% once he called the deal 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.
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.
> 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.
Reminds me of Bitcoin "whales". It's a shame that this guy is the figure that will take humanity to Mars.
> It's a shame that this guy is the figure that will take humanity to Mars
That's just more BS from him. He'll just keep kicking the can, resuming the project with some spectacular stunt every time he needs it. Everything Musk does or says is just a performance to manipulate the markets.
That's just more BS from him. He'll just keep kicking the can, resuming the project with some spectacular stunt every time he needs it. Everything Musk does or says is just a performance to manipulate the markets.
I think the Mars stuff is the least likely to be BS. There's been ongoing, real advancement towards the goal for over a decade now, advancement serious enough that NASA's picked them to land their astronauts on the Moon with their Mars rocket.
A permanent colony seems like the sort of thing he'd get bored with, though.
A permanent colony seems like the sort of thing he'd get bored with, though.
Establishing a colony on another planet is going to require a monstrous amount of money, time and resources. I doubt a single country could manage it (look at what it takes to run the ISS, and that's a joke comparse to Mars), but there are zero chances a single man, no matter how rich, is going to do more than a dent in that enormous task.
Solving the technology problem is just the tip of the iceberg.
Solving the technology problem is just the tip of the iceberg.
> there are zero chances a single man, no matter how rich, is going to do more than a dent in that enormous task... Solving the technology problem is just the tip of the iceberg.
Agreed, but enabling folks to get there makes it possible.
Musk doesn't have to build the colony to have made it possible, and it seems to be the thing his attention is genuinely invested in.
Agreed, but enabling folks to get there makes it possible.
Musk doesn't have to build the colony to have made it possible, and it seems to be the thing his attention is genuinely invested in.
> Agreed, but enabling folks to get there makes it possible.
It doesn't. Getting a few people to Mars alive does not a colony make. And even that sentence is misleading because while getting to Mars orbit is certainly challenging but that's something I can see humanity capable of overcoming with current technology. Although we never kept humans in space for 2-3 years before which is just the travel there so we don't really have any idea what will happen to them but let's pretend.
Landing very fragile humans on Mars, however, is a much, much formidable challenge. The heaviest object we have managed to soft land on Mars, so far, is the 1025kg Perseverance rover. The Apollo Lunar Module carried two people and was 4280kg dry weight. Of course, you don't need to ascend -- getting those people back to Earth is not even considered by anyone sane -- but still, it shows there's a problem here. And that was two people. And you need everything for them to live on the surface, including air and water and that's even more weight that you can't just slam those into surface at the ~20 000 km/h the spacecraft will approach either.
It would be just about infinitely better if he tried to show off with climate change combat projects. If you want to show off, a vast forest would be much better, much easier to achieve and so much cheaper. He could build storage for renewable energy, these are also sufficiently massive to be good for showing off. And so forth. There are easy but significant things one such as him could do. For a more formidable challenge, elevate the Brazilian people so they don't need to burn the Amazon.
We already have a terraformed planet but the climate is changing in a way which is incompatible with the way humanity currently exists. It would be prudent to change both -- while the change is inevitable it could be slowed and humanity could change too. Once we bought time, we can wait until material and other sciences make space elevators possible and then we can send robots to Mars to build a space elevator too and then we can begin to think about colonizing Mars.
It doesn't. Getting a few people to Mars alive does not a colony make. And even that sentence is misleading because while getting to Mars orbit is certainly challenging but that's something I can see humanity capable of overcoming with current technology. Although we never kept humans in space for 2-3 years before which is just the travel there so we don't really have any idea what will happen to them but let's pretend.
Landing very fragile humans on Mars, however, is a much, much formidable challenge. The heaviest object we have managed to soft land on Mars, so far, is the 1025kg Perseverance rover. The Apollo Lunar Module carried two people and was 4280kg dry weight. Of course, you don't need to ascend -- getting those people back to Earth is not even considered by anyone sane -- but still, it shows there's a problem here. And that was two people. And you need everything for them to live on the surface, including air and water and that's even more weight that you can't just slam those into surface at the ~20 000 km/h the spacecraft will approach either.
It would be just about infinitely better if he tried to show off with climate change combat projects. If you want to show off, a vast forest would be much better, much easier to achieve and so much cheaper. He could build storage for renewable energy, these are also sufficiently massive to be good for showing off. And so forth. There are easy but significant things one such as him could do. For a more formidable challenge, elevate the Brazilian people so they don't need to burn the Amazon.
We already have a terraformed planet but the climate is changing in a way which is incompatible with the way humanity currently exists. It would be prudent to change both -- while the change is inevitable it could be slowed and humanity could change too. Once we bought time, we can wait until material and other sciences make space elevators possible and then we can send robots to Mars to build a space elevator too and then we can begin to think about colonizing Mars.
If Starship can get reusable, zero-disposable flight working, and on-orbit refueling, all of those issues become quite surmountable. Mass to Mars (or the Moon) ceases to be "what's the most we can fling in a single launch", and the flight can be shorter if you can depart Earth orbit with a lot more fuel. I can't find numbers for the current iteration, but they were batting around 90-110 day transits with the older ITS proposal.
You start talking about being able to build propellant depots in Earth orbit, build Aldrin cyclers, send large amounts of supplies (or even a whole station on the slow, efficient route) in advance to Mars, etc.
You start talking about being able to build propellant depots in Earth orbit, build Aldrin cyclers, send large amounts of supplies (or even a whole station on the slow, efficient route) in advance to Mars, etc.
Our current technology is capable of doing everything you listed and more. The problem is their cost. There is no point to doing it while the cost is this great and there is absolutely no monetary return from doing it. And Musk's effort has been for reducing that cost so that he could do it with the capital he has.
If need be, large countries that have the technology like China, Russia, US could do it. But it would still require gigantic amounts of capital allocation and effort at this stage. So no one will do it. The biggest thing that is happening right now is China and Russia signing an agreement to build a base on the moon. (yes)
If need be, large countries that have the technology like China, Russia, US could do it. But it would still require gigantic amounts of capital allocation and effort at this stage. So no one will do it. The biggest thing that is happening right now is China and Russia signing an agreement to build a base on the moon. (yes)
You can't really compare what the government spends to accomplish something with what a private company would need to spend.
Except that Mars is a terrible location for a settlement in the next 100 years.
Bezos has the right idea, leaning into O'Neil cylinders.
Bezos has the right idea, leaning into O'Neil cylinders.
The hard part is getting significant amounts of material into space. Once you do that you can do anything there. Go to Mars, build O'Neil cylinders or even make your own asteroid mining factories up there.
I recommend checking out O'Neill's book The High Frontier where he lays out a plan for how to do this.
Keyword: regolith
Mars is at least 10x harder. The path to space settlement is in our own backyard.
Keyword: regolith
Mars is at least 10x harder. The path to space settlement is in our own backyard.
The only catch is you have to build five of them.
Someone's going to get people on Mars, but it's not going to be Elon Musk.
Nobody else is making a serious try.
wait till he discovers Mars is full of bots!
100% of active users on Mars are bots!
Notice of termination of Mars colonization efforts.
> It's a shame that this guy is the figure that will take humanity to Mars.
Not humanity. Only selected ones.
Not humanity. Only selected ones.
There was an interesting critique of Musks futurism by Tom Nicholas. It definitely gave me another perspective.
https://www.youtube.com/watch?v=5OtKEetGy2Y
https://www.youtube.com/watch?v=5OtKEetGy2Y
You don't want to be on that train anyway. It only goes one way. And it will likely result in a premature death.
> And it will likely result in a premature death.
Likely is putting it quite mildly - it's likely to cause a premature death in the same way that throwing yourself off the empire state building is likely to cause some injury.
Likely is putting it quite mildly - it's likely to cause a premature death in the same way that throwing yourself off the empire state building is likely to cause some injury.
This comment is like someone saying they’re eating pizza, and responding “you’re only eating a few slices”
I think you mean the benefit of technological advances from a mars trip.
A mars trip itself is only for those going. Most people don't get a part of it unlike pizza which can be divided
A mars trip itself is only for those going. Most people don't get a part of it unlike pizza which can be divided
So, how would you define “taking humanity to Mars”? Surely you don’t have to take all the humans to Mars.
We’d all agree that Europeans (non-exclusively) colonized the Americas, but not all Europeans went and not all had the opportunity.
We’d all agree that Europeans (non-exclusively) colonized the Americas, but not all Europeans went and not all had the opportunity.
You compared a tangible item being divided amoung people to an achievement for humanity as a species. They are two different things.
That's my issue
That's my issue
The Americas were divided among people (original inhabitants, and later colonies), and many countries & people weren’t recipients. But I’d still say that humanity has reached America.
Your second sentence makes no sense. If the board and shareholders sell the company, "they" aren't owned by anyone. The board is no longer the board and the shareholders are no longer the shareholders. They're just a bunch of regular people holding big bags of money.
It's like if you sell your car to a dangerous driver: you have no financial stake in whether they go on to crash it.
It's like if you sell your car to a dangerous driver: you have no financial stake in whether they go on to crash it.
> 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?
Uh, yes?
The shareholders, and the board as their agents, care about the company as a means to an end: and that end is making money. They’ve already concluded the sale achieves that goal.
If Musk wants to burn the company to the ground after they cash out, they don't care.
Heck, some of them may invest in competitors after the sale banking on that to make even more money.
Uh, yes?
The shareholders, and the board as their agents, care about the company as a means to an end: and that end is making money. They’ve already concluded the sale achieves that goal.
If Musk wants to burn the company to the ground after they cash out, they don't care.
Heck, some of them may invest in competitors after the sale banking on that to make even more money.
The board already willfully agreed to sell him the company and the deal is even better now than at the time they made it. Why would they also want to drop the deal?
The notion that the board is all of a sudden worried about what Musk might do with Twitter is about as silly as Musk thinking he can weasel his way out of a binding contract he already signed.
The notion that the board is all of a sudden worried about what Musk might do with Twitter is about as silly as Musk thinking he can weasel his way out of a binding contract he already signed.
> but others will be more interested in protecting the future of Twitter as a company and platform.
Almost everyone votes their economic interest.
Almost everyone votes their economic interest.
If you talk to random people in a democracy, they can't vote their interest even if they wanted to, because they don't know what's actually affected by politics and what isn't.
Some people switched to culture/values voting (ie, telling other people what to do), some people just enjoy winning and so vote for whoever they think is going to win.
Some people switched to culture/values voting (ie, telling other people what to do), some people just enjoy winning and so vote for whoever they think is going to win.
I find these responses strange. I never was talking about voting in a democracy. I was talking about how shareholders vote shares in public companies.
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.
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.
I don't see how you can simultaneously believe that this is some 4D chess move from Musk to allow him to cleverly liquidate his Tesla holdings without tanking the stock - and also believe he is too incompetent to make sure he could actually back out of the Twitter deal which he never intended to complete in the first place.
The fact that his supposed plan here has some flaws is not _further_ evidence that it was planned from the beginning, that's absurd.
It seems much more likely that buying Twitter was just an impulsive decision for him that he is now regretting and looking for a way out of.
I agree with you that many supposed conspiracies require too much competence in order to pull off, and can usually be dismissed as impossible to achieve in practice. But it doesn't follow that, as a consequence, any action that would be incompetent as part of a conspiracy should be considered evidence that a conspiracy exists.
The fact that his supposed plan here has some flaws is not _further_ evidence that it was planned from the beginning, that's absurd.
It seems much more likely that buying Twitter was just an impulsive decision for him that he is now regretting and looking for a way out of.
I agree with you that many supposed conspiracies require too much competence in order to pull off, and can usually be dismissed as impossible to achieve in practice. But it doesn't follow that, as a consequence, any action that would be incompetent as part of a conspiracy should be considered evidence that a conspiracy exists.
I don’t know if you’ve ever played chess against a more skilled player. But when I play, I usually think I have a sure way of taking my opponents rook for a knight, only to realize too late that I’m stuck in a trap.
You only need to be competent enough to realize how markets can be manipulated to initiate a conspiracy, however successfully executing one requires a whole new master level of skill set. Off course the people with such skill set exist (as evidenced by the numerous market manipulation schemes successfully executed in today’s business world) and if Musk was smart he would hire such an expert to scheme it for him.
What we might be witnessing here is a business person that is smart enough to realize that market can be manipulated, and see a position to where they can execute such a manipulation, but not competent enough to execute a non-trivial plan without flaws. And worse not smart enough to hire a person with the correct skill set to do it for him.
You only need to be competent enough to realize how markets can be manipulated to initiate a conspiracy, however successfully executing one requires a whole new master level of skill set. Off course the people with such skill set exist (as evidenced by the numerous market manipulation schemes successfully executed in today’s business world) and if Musk was smart he would hire such an expert to scheme it for him.
What we might be witnessing here is a business person that is smart enough to realize that market can be manipulated, and see a position to where they can execute such a manipulation, but not competent enough to execute a non-trivial plan without flaws. And worse not smart enough to hire a person with the correct skill set to do it for him.
> The more competent the plan and execution need to be, the less likely it is to be a conspiracy.
That’s a great point. Thank you :)
That’s a great point. Thank you :)
What is a theory you have dismissed because it seems too competent?
For me, flat Earth. The sheer skill necessary to bribe or convince so many governments to gaslight their population, the incredible optics and geodesics work necessary to fake a curved horizon in a plane window and have consistent flight durations, and the maintenance of shadow power across millenia, paints the picture of a group of people way beyond what human competence can achieve.
Of course, there are simpler examples, like John Titor, or Pierre de Fermat’s last theorem proof that he would have done all in his head.
Of course, there are simpler examples, like John Titor, or Pierre de Fermat’s last theorem proof that he would have done all in his head.
The fake moon landing conspiracy is a good example. Then number of people involved would be pretty big, and the science is complicated. The logistics behind such a big secret operation requires such skill that it is hard to believe anyone would be able to pull it off. If the moon landing was truly fake surely they would have messed up somewhere.
On the other hand many things went wrong in the actual moon landing. There were liftoffs that failed, experiments that went nowhere, targets that were missed, and even people that died. The actual moon landing was a hard task they succeeded at while making a ton of mistakes in the process, just like humans do in the real world when we are at our best.
On the other hand many things went wrong in the actual moon landing. There were liftoffs that failed, experiments that went nowhere, targets that were missed, and even people that died. The actual moon landing was a hard task they succeeded at while making a ton of mistakes in the process, just like humans do in the real world when we are at our best.
The "massive rocket" is also an issue: https://www.youtube.com/watch?v=sE-tpiAiiHo
Okay, I agree that the fake moon landing conspiracy would have involved an excessive amount of competence to believe.
That seems pretty different from, "If your entire plan is to back out of a contract, add a clause to the contract that lets you back out of it."
That seems pretty different from, "If your entire plan is to back out of a contract, add a clause to the contract that lets you back out of it."
Indeed it is different. My point was simply that incompetence is not evidence against conspiracy. My sniff test was simply emphasizing this point. Further, a sniff test is—by definition—not supposed to be your only marker in evaluating a theory, it is merely supposed to be a marker determining if evaluating further evidence is even worth your time.
The conspiracy theory that Musk is using this twitter scheme to manipulate the markets in his favor does not fail any sniff tests that I’m aware of.
The conspiracy theory that Musk is using this twitter scheme to manipulate the markets in his favor does not fail any sniff tests that I’m aware of.
It's a pretty universal reason to dismiss or at least cast serious doubt on conspiracy theories. A close cousin of Ockham's Razor and Hanlon's Law
The amount of competence required to prepare a controlled demolition of a 110 storey trade center which is occupied 24/7 and full of cameras without anyone noticing and associating this prep work with the much publicised plane crashes that happened afterwards would be staggering, even before considering the insanity of such a scheme.
At the risk of opening a can of worms, the best evidence against the considerably more plausible "lab-leak" COVID theory is that manufacturing an alternative chain of evidence that convinces most unconnected foreign experts of an alternative theory (which still points at Wuhan and Chinese market regulations) when they have plenty of reason to find fault with it requires a lot of competence, as well as totally the opposite approach to China's usual way of suppressing stories.
The amount of competence required to prepare a controlled demolition of a 110 storey trade center which is occupied 24/7 and full of cameras without anyone noticing and associating this prep work with the much publicised plane crashes that happened afterwards would be staggering, even before considering the insanity of such a scheme.
At the risk of opening a can of worms, the best evidence against the considerably more plausible "lab-leak" COVID theory is that manufacturing an alternative chain of evidence that convinces most unconnected foreign experts of an alternative theory (which still points at Wuhan and Chinese market regulations) when they have plenty of reason to find fault with it requires a lot of competence, as well as totally the opposite approach to China's usual way of suppressing stories.
Not GP, but chemtrails and flat earth are obvious ones.
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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/1418091/000110465922...
https://www.sec.gov/Archives/edgar/data/1418091/000110465922...
His legal team can maintain that the sky is a vibrant chartreuse, but that doesn't mean it's true.
So what though?
Is Twitter going to spend the next few years litigating this just to force someone to buy the company that doesn't want to? Elon's team can drag this on and on.
What will happen to the value of Twitter's stock in the meantime? What will happen to the value of working at Twitter? It'll become a zombie company.
Is Twitter going to spend the next few years litigating this just to force someone to buy the company that doesn't want to? Elon's team can drag this on and on.
What will happen to the value of Twitter's stock in the meantime? What will happen to the value of working at Twitter? It'll become a zombie company.
Yes, that's exactly what will happen. If Twitter were to say now "OK, let's forget this whole thing happened" the stock would drop massively: not only are they losing any chance at the $44B buyout, they are also admitting they (1) lied in their current contract, and (2) likely have huge bot issues that they would rather not litigate.
The only option for Twitter to continue existing is to sue Musk for the amount he promised.
The only option for Twitter to continue existing is to sue Musk for the amount he promised.
What will happen to the price of the stock is that it will be inflated over the "true price" by risk adjusted premium of the buyout.
Stock price = "stock price without Elon owning it" + "Elons premium" * "likelihood of Elon losing the lawsuit and being forced to buy the company"
That likelihood should never be less than 0, so I think this legal fight would only help the twitter stock price.
I guess I am assuming that the "true price" is actually lower than what Elon offered for it.
Stock price = "stock price without Elon owning it" + "Elons premium" * "likelihood of Elon losing the lawsuit and being forced to buy the company"
That likelihood should never be less than 0, so I think this legal fight would only help the twitter stock price.
I guess I am assuming that the "true price" is actually lower than what Elon offered for it.
It's worth north of $20B to Twitter shareholders and they have an (almost) rock-solid case. You can bet your ass they're going to spend the next few years to fight for it.
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.
It’s not like he came up with the “they’re all bots” theory after committing.
The downvotes on this comment are the clearest evidence that people will downvote verifiable facts presented neutrally if they don’t like the facts, the people or companies involved in the fact.
The karma hit at-fates-hands takes because people are irrational is collateral damage.
Have an upvote.
The karma hit at-fates-hands takes because people are irrational is collateral damage.
Have an upvote.
The downvotes are most likely because it's a specious claim that Elon's legal team is making, not supported by fact. He waived the due diligence phase. Twitter provided his team with information. He's just trying to get out of the deal because he made an impulsive and stupid decision.
Parroting the statements of his legal team without adding the context around those statements is going to garner downvotes.
Parroting the statements of his legal team without adding the context around those statements is going to garner downvotes.
Isn't the context the link to the EDGAR documents?
Neutral TLDR summaries are viewed as a good thing on HN. Given the rest of these comments, the theme here is pure hate for the man.
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.
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.
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?
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.
What actually happened isn't relevant. What is relevant is whether he may have thought it would work better. Tricky to prove.
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.
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.
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.
But he has been saying Tesla was way over valued for over a year…
> 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.
There's no way he didn't foresee this.
It would be shocking if he is lacking in self-awareness to that extent.
> It would be shocking if he is lacking in self-awareness to that extent.
'Ol Musky missing self-awareness? Surely, you jest Mr. Spock!
'Ol Musky missing self-awareness? Surely, you jest Mr. Spock!
There's a lot of things Elon is not, but he definitely is a smart business man and he can manage hype.
His present situation with a multi-billion dollar agreement he entered based on hype and is now very desperate to exit seems to suggest his hype management skills have room for improvement.
He typically creates massive hype, well over what he could possibly deliver, not sure I've ever seen him temper hype.
Just remember the launch of Tesla auto-pilot, where he was promising full self driving within a year or two, so good that you would let your car work as a taxi while you don't need it and it would become a passive stream of income so great you would see your investment back in around a year! He actually said "our goal is to make Ilit financially irresponsible to buy any other car". This is not a man who "manages hype".
Just remember the launch of Tesla auto-pilot, where he was promising full self driving within a year or two, so good that you would let your car work as a taxi while you don't need it and it would become a passive stream of income so great you would see your investment back in around a year! He actually said "our goal is to make Ilit financially irresponsible to buy any other car". This is not a man who "manages hype".
Note that Josh has been a huge Tesla (and Musk) critic for years, starting as far back as this 2010 tweet:
https://twitter.com/wolfejosh/status/19430106783023104
He's called Tesla a "fraud" and that it would collapse many, many times while it's just kept going up and up and up over the last decade. For example:
https://twitter.com/wolfejosh/status/1178486986790854658
https://twitter.com/wolfejosh/status/1074055027021369344
https://twitter.com/wolfejosh/status/19430106783023104
He's called Tesla a "fraud" and that it would collapse many, many times while it's just kept going up and up and up over the last decade. For example:
https://twitter.com/wolfejosh/status/1178486986790854658
https://twitter.com/wolfejosh/status/1074055027021369344
And?
Is it Josh's fault that the market has listened to Musk when he's said, every year since 2016, that FSD is "coming, this year, for real"?
Is it Josh's fault that the market has listened to Musk when he's said, every year since 2016, that FSD is "coming, this year, for real"?
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).
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.
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.
According to this theory, he never intended to buy Twitter. He just used the offer to liquidate stock without raising too many eyebrows and now he's backing out, with a few billion extra in cash and, if everything works out for him, not even a termination fee.
The Go masters insist that every stone must have at least two reasons for its placement.
[deleted]
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.
Most people do not liquidate billions of assets while waiting for due diligence to go through. They wait for diligence, then liquidate the assets.
Well yes, but most people also intend to actually go through with an acquisition
[deleted]
Musk wanted to be warrior king of the internet edge lords. He was not playing chess.
AKA the Lou Pai option, which is an extremely funny (and almost certainly untrue) theory that Pai deliberately got caught by his wife with a stripper so that he would be "forced" to liquidate his Enron stock which he allegedly already knew would soon be worthless without having to explain the timing of that to a court later.
> 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?
Couldn't he just have said "SpaceX needs more cash" or something like that?
That would be implying that a Musk company was in trouble. They constantly are in trouble, but he can never say it or else it breaks the fiction that Musk companies are predestined to be amazingly successful.
Didn't he famously say it about SpaceX last year?
It was leaked from an internal memo. He admitted it about tesla a few years ago now that tesla is in okay financial shape.
I also read somewhere that if Elon ran Twitter into the ground in the next decade, using it just to advertise Tesla cars, he would have paid an amount in line with what GM pays for advertising their cars (at least what they paid pre-pandemic) https://www.statista.com/statistics/286522/general-motors-ad....
It blows my mind how much (non Tesla) car companies spend just on advertising.
It blows my mind how much (non Tesla) car companies spend just on advertising.
Well he pays for advertising. Tesla flame throwers, Tesla whistles and so on are campaigns.
This is such a strange take. There's any number of more effective ways for Musk to justify selling some Tesla stock that aren't especially likely to tank it. On top of that, announcing his intent to buy Twitter did in fact get factored into the stock quite rapidly, in the negative direction as you'd assume, because Twitter is not seen as an especially good investment while Tesla has been.
I don’t buy it. Musk compulsively creates huge and innovative companies. To liquidate stock, he could just as easily have just waited until his next big thing and sold off his stock then, once again, in order to pay for a non-Tesla venture; and then either used the money for the company, or bailed on the new company. Involving Twitter doesn’t make sense and is unnecessary
I tend to believe it's something along these lines. The real question is why is he going to such great lengths to liquidate stock? He is not the only high profile billionaire who has recently come up with sudden circumstances to justify the liquidation of massive amounts of stock.
[deleted]
I doubt that is the case, because of such a flimsy reason chosen to back out of the twitter deal, if the plan was all along to create a ruse deal, I think the exit would have been better planned
He’s not the only one to float this possibility. It’s one of the more plausible explanations if you take the assumption that Musk was acting rationally with forethought.
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?
why do people assume that all aspects of this transaction and negotiation have been happening in the public and thus qualify for all these folks here to make claims like they know what's going on.
People here don't know what claims in entirety were made by either party, and thus, it's impossible to speculate. This is what courts are for and Elon, and his team, are not idiots.
People here don't know what claims in entirety were made by either party, and thus, it's impossible to speculate. This is what courts are for and Elon, and his team, are not idiots.
Wolfe has being on anti Musk crusade for a long time.
That's a strange way of saying he was right.
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.
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.
It's incredibly implausible that it's what he's saying on face value because a million other people seem to understand what Twitter was referring to around monetized monthly users or whatnot, and the idea that he didn't at first and then realized this other number was actually make-or-break is ludicrous.
Like, you can sign up for free. What's gonna prevent fake accounts in that case?
Like, you can sign up for free. What's gonna prevent fake accounts in that case?
Yeah and everyone knew for months this day would come. After the stocks started falling in the spring there was no way he would not try to weasel out.
In my mind this is an insane conspiracy theory that fails occam razor, he was high and said we wanted to buy Twitter. People made fun of him so he dug in to prove all those stupid people. There is no complex deal needed here.
In my mind this is an insane conspiracy theory that fails occam razor, he was high and said we wanted to buy Twitter. People made fun of him so he dug in to prove all those stupid people. There is no complex deal needed here.
Occam razor is Musk made an offer at the height of the market, now he doesn't want to honor the legally binding contract he entered into because he'd lose 20b right away.
Not that complicated really.
Not that complicated really.
I have no clue if he is right or not
But is it true?
I would imagine there are cheaper ways to accomplish the same goal
That still does not answer the question.
How would you find a definitive answer?
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).
given the SEC's regular lack of enforcement, their inaction would not be evidence of lack of wrongdoing
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.
Not just Elon but his brother as well.
I mean, it didn't necessarily take Josh Wolfe to see this as a viable possibility.
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?
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?
>> 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.
That's what you do when you sober up and realize what a mess you've made.
Perhaps underneath the 420 jokes lies the reality that he's high fairly often.
I am sure the offer price of $54.20 was a joke. With Musk, the appearance of those digits is never an accident.
I am sure the offer price of $54.20 was a joke. With Musk, the appearance of those digits is never an accident.
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?
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.
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.
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.
Can't have a large data trove on your users without users. A huge part of a successful social network is sufficient adoption. If the people your users want to follow aren't on the platform they don't have a real reason to be there. It's a major hurdle for any new social platform and a lot fail at that step.
If spending a ton of money was a reliable way to build a new social network we would all be having this conversation on Google+.
because that doesn't work.
[deleted]
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
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
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"?
In any case, does twitter not already have a lot of "assholes" and people with "violent ideas"?
Yes he would (sorry if I went a bit over the top there).
My point being that I don't trust Elon Musk to make better moderation decisions than whoever is in charge right now.
Past attempts of social media with low barriers of what is allowed have absolutely turned out worse than Twitter if you ask me(e.g. 4chan, 8chan, gab etc) That's why I think the best case is "Twitter but more aligned with whatever Elon Musk thinks at the moment"
My point being that I don't trust Elon Musk to make better moderation decisions than whoever is in charge right now.
Past attempts of social media with low barriers of what is allowed have absolutely turned out worse than Twitter if you ask me(e.g. 4chan, 8chan, gab etc) That's why I think the best case is "Twitter but more aligned with whatever Elon Musk thinks at the moment"
This seems to happen with some regularity in Musk's timeline.
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.
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.
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.
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.
It makes more sense if you assume that Elon Musk is both a sometimes successful businessman and also suffering from unmanaged bipolar disorder.
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.
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.
A mistake or doing something foolish is going out in shorts in the winter and then getting a cold.
He spent days/weeks/months on setting up this deal, he became obsessed with it at some point.
(Hopefully) no one is "blaming" it on the bipolar. It's simply something consistent with bipolar. (But it's also consistent with rich people getting obsessed with something and then spending way too much resources on it.)
> reinforces the narrative
That narrative is simply bad and pushed by people who have no idea what they are talking about. Musk's previous instances of risk taking (that "all" turned out to be fine) is also perfectly consistent with bipolar. (Of course if you look at it then it turns out that he took many risks that made very little sense, like when he talked about taking Tesla private, the infamous funding secured tweet.)
And of course just a label like bipolar means (almost) nothing, these spectrum disorders are complex (and there are usually other comorbidities at the same time, just with different severity), we don't know how he is treating/medicating/managing it, or is it even the right diagnosis or not. Or he could have simply lied.
He spent days/weeks/months on setting up this deal, he became obsessed with it at some point.
(Hopefully) no one is "blaming" it on the bipolar. It's simply something consistent with bipolar. (But it's also consistent with rich people getting obsessed with something and then spending way too much resources on it.)
> reinforces the narrative
That narrative is simply bad and pushed by people who have no idea what they are talking about. Musk's previous instances of risk taking (that "all" turned out to be fine) is also perfectly consistent with bipolar. (Of course if you look at it then it turns out that he took many risks that made very little sense, like when he talked about taking Tesla private, the infamous funding secured tweet.)
And of course just a label like bipolar means (almost) nothing, these spectrum disorders are complex (and there are usually other comorbidities at the same time, just with different severity), we don't know how he is treating/medicating/managing it, or is it even the right diagnosis or not. Or he could have simply lied.
> It's simply something consistent with bipolar.
It's also consistent with making a mistake.
It's also consistent with making a mistake.
... you can call it a mistake, but that emphasizes an irrelevant fact. everyone makes mistakes. rich people do small and big mistakes. we hear about the very stupid (regular florida man) and very expensive mistakes (trader accidentally entry more zeros, etc).
and of course we all hear about the top of the Forbes billionaire list mistakes, the wework scandal and the other questionable decisions of Masayoshi Son, how "the crazier someone it's more likely they get money from Thiel", etc.
but even on top of all these this one easily takes the cake.
yes, in isolation it's a "mistake", but luckily we have plenty of context for it.
and of course we all hear about the top of the Forbes billionaire list mistakes, the wework scandal and the other questionable decisions of Masayoshi Son, how "the crazier someone it's more likely they get money from Thiel", etc.
but even on top of all these this one easily takes the cake.
yes, in isolation it's a "mistake", but luckily we have plenty of context for it.
> everyone makes mistakes. rich people do small and big mistakes.
So then you agree that it being a mistake is entirely plausible and that it having anything to do with being bipolar is pure speculation?
So then you agree that it being a mistake is entirely plausible and that it having anything to do with being bipolar is pure speculation?
I'm trying to communicate that mental/personality disorders don't work like that.
It's a very costly and stubborn mistake either way and he has (or hasn't) bipolar either way.
Even in the most severe substance dependence cases some people can override their short term wants (eg. they don't go and mug people to get money for their next fix), while there's a clear pattern of this behavior in others. (But it's what we expect, since we define one by the other.) So in both of those instances, it was their mental state, but was it the altered part or the underlying base state that let the dependence to form in the first part? It's really not separable.
One explains the other, but there's no direction, no proximate causal relationship. At best there is some predictive power, ie. if someone goes off their meds, or stressors increase they will show behavior consistent with this or that. (But in general everyone will make more mistakes when they have more stress in their life. Who would have guessed, I know.)
Yet these categories (diagnoses) are not useless. They communicate behavior patterns, things to look for, things to be mindful of and try to manage.
It's a very costly and stubborn mistake either way and he has (or hasn't) bipolar either way.
Even in the most severe substance dependence cases some people can override their short term wants (eg. they don't go and mug people to get money for their next fix), while there's a clear pattern of this behavior in others. (But it's what we expect, since we define one by the other.) So in both of those instances, it was their mental state, but was it the altered part or the underlying base state that let the dependence to form in the first part? It's really not separable.
One explains the other, but there's no direction, no proximate causal relationship. At best there is some predictive power, ie. if someone goes off their meds, or stressors increase they will show behavior consistent with this or that. (But in general everyone will make more mistakes when they have more stress in their life. Who would have guessed, I know.)
Yet these categories (diagnoses) are not useless. They communicate behavior patterns, things to look for, things to be mindful of and try to manage.
Do you have any experience with bipolar?
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.
[deleted]
Or it is far more likely that he isn't so much smarter than everyone else like he pretends and regularly makes mistakes like anybody else.
This assumes he was serious about it at some point, instead of just cover to sell more Tesla shares and free marketing for himself.
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.
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.
That’s smart.
If that was his intent, it's fraud and has (in theory) criminal penalties.
Judging by his dealings with the SEC, I don't feel like he respects the law all that much.
I don't think the SEC cares very much what Elon respects or not, if they can nail him they will.
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...
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...
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.
The man literally tweeted “Tesla stock is too high right now, imo” and nothing happened.
I see some difference between tweeting stuff and signing binding agreements for purchase and using stock as collateral at a particular valuation.
The tweeting came after signing binding agreements. You may disagree that the tweets or buying a business are the same level of seriousness, but the binding part of binding agreement is the rule of law part of society that makes all businesses work.
Musk not being reigned in by the SEC, when looked at in a vacuum is probably not the end of the world or the US economy, but it’s not in a vacuum. Everyone watching right now realizes that you can publicly enter into fraudulent business deals that you leave at convenience and there is nothing you can do about it unless you have have better lawyers. That is gonna be super degrading towards the ease of doing business
Musk not being reigned in by the SEC, when looked at in a vacuum is probably not the end of the world or the US economy, but it’s not in a vacuum. Everyone watching right now realizes that you can publicly enter into fraudulent business deals that you leave at convenience and there is nothing you can do about it unless you have have better lawyers. That is gonna be super degrading towards the ease of doing business
I read something that the Sec wants to nail him, but it's also afraid of losing a Supreme court case (a la the epa) that would totally gut its regulatory power. The entire idea of the Sec relies on the idea of the administrative state being constitutional, if they push too hard, our unfriendly reactionary supreme court might snap them, saying congress didn't explicitly say they could nail Musk for x, y, and z, even if all the other pillars of intent are proved.
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.
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>
[0] you didn't think Starlink's purpose is to let fisherman watch YouTube did you?
</tinfoil>
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.
He's publicly committed securities fraud several times. The SEC has demonstrated repeatedly that it cannot nail him.
How exactly would that be fraud?
The poster was positing that Elon lied about his intent to buy Twitter in order to manipulate Tesla investors, which is securities fraud. A public company executive is required to be transparent and honest about actions they take which might impact the company's stock price, especially if they're on the other side of a trade. Basically everyone who bought his $40b in stock or accepted it as pledged collateral could claim damages.
that's smaller than a Venmo transaction fee (3%)
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)
> 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.
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.
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
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.
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.
A Joe Boggs acting in this fgashion would have been taken to the cleaners long ago.
> 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.
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.
isnt it also possible he (some might say rather impulsively) decided to buy twitter, and then upon further investigating finds that his quick rationales no longer make sense if bot traffic indeed is way above 5%? that perhaps he feels that if it indeed is way above 5%, twitter is scamming?
is this just 100% unthinkable?
is this just 100% unthinkable?
Good luck with that. He tweeted, early on: "If our Twitter bid succeeds, we will defeat the spam bots or die trying!"
Then, when you conclude a definitive agreement without any provision for an "out" based on an issue that you've already acknowledged knowing about (and hoping to fix post-acq)-- you're kinda stuck with it.
I think the big issue is that with the movement in equities, it requires him to overpay for Twitter with Tesla stock that is much less valuable. Financing the deal got much harder for him.
Then, when you conclude a definitive agreement without any provision for an "out" based on an issue that you've already acknowledged knowing about (and hoping to fix post-acq)-- you're kinda stuck with it.
I think the big issue is that with the movement in equities, it requires him to overpay for Twitter with Tesla stock that is much less valuable. Financing the deal got much harder for him.
Wouldn’t he have made that part of the deal if that was a concern?
Fake followers and accounts and twitter’s battle with them is well known. Are we thinking he had no clue until after he signed on the dotted line?
Fake followers and accounts and twitter’s battle with them is well known. Are we thinking he had no clue until after he signed on the dotted line?
but it is part of the deal, given that twitter says "bot % is <=5", now he may believe that not to be the case. I think its concievable he may have acted before he fully considered whether that number indeed is true
Would he need to show it isn’t true?
And prove that’s enough of a reason to end the deal?
And prove that’s enough of a reason to end the deal?
one would think so, so it will be interesting to see how he argues that, but the contract does include more things, including twitter having to provide anything required to obtain funding, which one would probably strongly be able to argue covers data to independently verify this
>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.
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.
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.
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.
"ha ha only serious."
What a blow to his already tarnished reputation. Imagine the conversation next time he tries to acquire a company.
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...
He sent his selfie in a tweet response to Parag’s tweet explanation.
https://www.forbes.com/sites/abrambrown/2022/05/16/twitter-b...
so... its just 100% unthinkable Musk is right?
edit: dont know why this had to be flagged. I guess some people really take personal offense in that elon musk might be correct in his thoughts about twitter daily bot %
edit: dont know why this had to be flagged. I guess some people really take personal offense in that elon musk might be correct in his thoughts about twitter daily bot %
Somebody being impolite or insulting to someone does not mean they are saying the truth. People who do that only do that to rile up their own group and divide people. Anyone can express their opinions objectively without insulting others.
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.
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.
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.
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...
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...
I think the past few years of watching the rule of law degrade in both the public and private world in the US means we shouldn’t take any possibly off the table that relies on the system working correctly
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.
This will just slowly fade from memory as the lawyers argue and at some point they’ll settle.
> 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.
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.
Carl Icahn or Paul Singer would love to deal with it. They might well settle, but it might well be for $15 bill.
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.
Twitter shareholders would be worse off.. how? $54.20 is 55% higher than the current after-hours TWTR share price of $35
They can still get cash. Lots and lots of cash.
I suppose shareholders wouldn’t mind a special dividend from lawsuit proceeds that captured a good portion of the spread between FMV and $54.20, especially if they get to keep their equity.
Yep, and I'd guess that's the most likely outcome.
twitter share price is currently lower than what he bid, so twitter shareholders would be materially better off
I'm no expert, so what makes Delaware judges specially incorruptible?
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
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.
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.
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.
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.
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.
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.
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.
Not sure it's going to affect his probably-not-that-lavish lifestyle that much. But since those billions are in stock it likely it will affect his level of control of companies, his ability to attract future investments and his future decisions. Which people paying attention to tech companies probably care about more than what flavour caviar he eats and what schools his kids go to anyway.
He's overleveraged and most of his companies are on the brink of falling below the point where he gets margin called. The poor sap wanted to rescue a few billions of dollars that could actually survive a recession, but he picked the wrong way to do it.
> Either he was breathlessly arrogant
Isn't that like more than half of his MO?
Isn't that like more than half of his MO?
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.
Most folks who subscribe to the "Musk Principles" aren't nearly as lucky and go bust much earlier.
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...
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...
> I guess he can afford a $1B penalty,
The $1B is if there's some outside reason why the deal cannot get done, e.g. because of regulatory concerns.
It's not a "pay a $1B break-up fee at your discretion to get out of the deal" clause.
> Accordingly, the parties hereto acknowledge and agree that the parties hereto shall be entitled to an injunction, specific performance and other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof, in addition to any other remedy to which they are entitled at law or in equity. Each of the parties hereto agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief on the basis that any other party has an adequate remedy at law or that any award of specific performance is not an appropriate remedy for any reason at law or in equity.
...
> (b) Notwithstanding anything herein to the contrary, including the availability of the Parent Termination Fee or other monetary damages, remedy or award, it is hereby acknowledged and agreed that the Company shall be entitled to specific performance or other equitable remedy to enforce Parent and Acquisition Sub’s obligations to cause the Equity Investor to fund the Equity Financing, or to enforce the Equity Investor’s obligation to fund the Equity Financing directly, and to consummate the Closing ....
The $1B is if there's some outside reason why the deal cannot get done, e.g. because of regulatory concerns.
It's not a "pay a $1B break-up fee at your discretion to get out of the deal" clause.
> Accordingly, the parties hereto acknowledge and agree that the parties hereto shall be entitled to an injunction, specific performance and other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof, in addition to any other remedy to which they are entitled at law or in equity. Each of the parties hereto agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief on the basis that any other party has an adequate remedy at law or that any award of specific performance is not an appropriate remedy for any reason at law or in equity.
...
> (b) Notwithstanding anything herein to the contrary, including the availability of the Parent Termination Fee or other monetary damages, remedy or award, it is hereby acknowledged and agreed that the Company shall be entitled to specific performance or other equitable remedy to enforce Parent and Acquisition Sub’s obligations to cause the Equity Investor to fund the Equity Financing, or to enforce the Equity Investor’s obligation to fund the Equity Financing directly, and to consummate the Closing ....
It's all Greek to me. It seems we're always warned that the Law can't be reduced to a simple formula. Scott Galloway seemed to indicate in his gleeful "Elon pulls out" emergency podcast episode that one valid reason to go to the $1B penalty could have been that Musk couldn't get the right financing together. Would it be so hard for him to get some I-banker on the stand to tell that tale? Why would any of the big banks care about the feelings of Twitter execs?
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.
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.
Eh, I think he’s a believer. I like Jack. He dreams big and is pretty inspirational to wild ideas. You are high if you are reading this and think he’s not upset with where Twitter landed.
Yeah I mean I guess that’s what I’m trying to say. I do think Dorsey is a believer which makes it so odd to me that Dorsey and Musk apparently had enough of a relationship for Dorsey to say Musk was the best person to take over Twitter, and then see the takeover later become so disorganized.
Dorsey is also naive, so perhaps he just didn't question Musk's stated position much.
'eccentric in his approach'
by that you mean straight up lying, attempting fraud etc...
by that you mean straight up lying, attempting fraud etc...
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.
The twitter board has already announced it intends to litigate this. And they are not after just the $1B fee. That might be what Mr. Musk had in mind when he mentioned he was lawyering up in a few tweets awhile back. Even though he waved due diligence, that might not clear twitter from having lied about the bot problem. I suspect this is going into months of litigation. Perhaps Twitter will be willing to accept a lower price. It might be what Musk is angling for.
He didn’t waive due diligence. He chose to forego any due diligence before making an offer.
This isn’t like buying a house…
This isn’t like buying a house…
Oh? This is news to me. The media are all claiming he waived it, though I tended to doubt it. That he would waive it does seem kind of odd, since even waiving due diligence should not absolve a company from lying about its assets if found out.
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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.
If he isn't deserving of credit, why has nobody else managed to do it?
Most other people don't have access to nearly the same levels of capital that would allow them to fail at multiple millions, now billions, of dollars investments. And of the few that do have that money they are generally fairly risk adverse to losing so much when they can get near guaranteed returns rather than making huge gambling risks. Especially when doubling your millions of dollars would mean basically nothing in terms of quality of life improvements.
I.e. Musk did it and they didn't. Musk gets the credit.
> Either he was breathlessly arrogant or astonishingly careless
Why not both? Arrogance tends to lead to carelessness.
Why not both? Arrogance tends to lead to carelessness.
why not both?
the real reason he's filing the sec notice is the gas has run out of the bullshit bus. nobody believes his due diligence claims, the board just sent him a resounding vote of approval to buy, and the legal pain train of that comes with anymore of this childish foot dragging sideshow is pulling into the station.
I'd be stunned if he gets to walk off with the billion dollar penalty. too many financial guarantees and backings have been made, and musks had an SEC crosshair on him for years now. they know exactly what patent brand of bullshit he's peddling and have shown themselves more than willing in the past to take action.
musk can file all the notices he wants but i suspect hes about to get ready for the billionaires version of a shotgun wedding.
the real reason he's filing the sec notice is the gas has run out of the bullshit bus. nobody believes his due diligence claims, the board just sent him a resounding vote of approval to buy, and the legal pain train of that comes with anymore of this childish foot dragging sideshow is pulling into the station.
I'd be stunned if he gets to walk off with the billion dollar penalty. too many financial guarantees and backings have been made, and musks had an SEC crosshair on him for years now. they know exactly what patent brand of bullshit he's peddling and have shown themselves more than willing in the past to take action.
musk can file all the notices he wants but i suspect hes about to get ready for the billionaires version of a shotgun wedding.
Musk has always had problems(especially with telling the truth), but things seemed to really go downhill after he started doing drugs with Grimes.
Market manipulation disguised as free speech advocacy. Pure and simple.
He has made billions using twitter spamming Tesla and doge. It’s a playground for for the guy. And therefore cheap at almost any price. But of course why pay more than needed.
On a more semi serious note: it must seem ludicrously easy for the guy.
He has laid it all out:
Mars needs:
VTOL rockets since no infrastructure
Methane due to atmospheric constraints
Tunnels for transport see also infrastructure
Starlink see also infrastructure
Direct democracy via twitter ( imperator status exempt )
Have as many kids as possible since it’s obvious he will own the solar system. He ain’t gonna be that democratic therefore. Just another dynasty but maybe the last
Have as many kids as possible since it’s obvious he will own the solar system. He ain’t gonna be that democratic therefore. Just another dynasty but maybe the last
What he was getting out of it was that he was/is addicted to Twitter, and has an outsized view of its overall importance and value.
The market crash makes it impossible to evaluate. It was a stupid price.
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.
Musk receives a lot of flak because he presents extremely hard problems as easy, and sells the idea that only he can solve them. But this is clearly not true, just look at all the progress that is happening in automated driving and EV technology outside of Tesla, with Waymo, Cruise, and other companies already offering limited driverless rides, and with the Rivian and Ford 150 Lightning beating the cybertruck to market by years.
Real progress takes real work, not promises and marketing fluff. If humanity makes it to Mars it will likely be without his help.
Real progress takes real work, not promises and marketing fluff. If humanity makes it to Mars it will likely be without his help.
Real progress takes real work, not promises and marketing fluff.
I've never seen a Waymo, Cruise, Rivian or a Ford 150 Lightning in my entire life and I've been in many major cities across the world. You know what I do see on a daily basis though? Teslas.
I've never seen a Waymo, Cruise, Rivian or a Ford 150 Lightning in my entire life and I've been in many major cities across the world. You know what I do see on a daily basis though? Teslas.
You’ve also never seen a driverless Tesla or a cybertruck, so compare apples to apples. Yes Tesla killed it with their sedans and the model 3.
I've started to see Rivian trucks are on the road in South Bay Area and in Berkeley.
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>Honestly starting to question how much hope there is for mars to happen at all.
i spat out my drink reading this
i spat out my drink reading this
Well, Twitter (and stocks in general) sorta crashed right after the offer, too, so there's a real question whether that prior valuation makes any sense any longer.
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>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
Answer: some sort of stock manipulation whether it be Tesla's or Twitter's
While I would agree his offer was absurdly overvaluing twitter, and reason enough to back out after sobering up, if what is being stated in the letter is true, twitter has likely been committing serious fraud.
It has continually been one of the most underperforming platforms of it's size. Head of Data Science resigning doesn't bode well during a deal hinging on the accuracy of the data.
It has continually been one of the most underperforming platforms of it's size. Head of Data Science resigning doesn't bode well during a deal hinging on the accuracy of the data.
Seems like a manic episode enabled by yes-men.
What my school teacher used to say about
- cold feet - impetous - eccentric - breathlessly arrogant - astonishingly careless
pupils
- cold feet - impetous - eccentric - breathlessly arrogant - astonishingly careless
pupils
Well his principles are mostly scamming tactics, because he is mostly a scammer.
"Twitter has tremendous potential"
He may have been honest and correct about that, but later realized that he simply does not have the time to be CEO of yet another large company.
He may have been honest and correct about that, but later realized that he simply does not have the time to be CEO of yet another large company.
> I don't think any Harvard Business School course will teach "the Musk Principles".
Well history is not yet written. They could be taught as negative examples
Well history is not yet written. They could be taught as negative examples
There’s the HN theory, but then he was invited at twitter answering questions that employees had. Why would someone do that if they were just fucking around.
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Possibly it's because the marketnshit the bed and he felt like he would be overpaying under current conditions.
Actually, these sorts of things are expected in merger agreements, baked into almost all of them. It isn't unusual, when the seller doesn't provide the required data for the purchaser's due diligence that the agreement will terminate.
Who in their right mind would spend billions of dollars without being allowed to "look at the books" regarding the spam account ratio?
Who in their right mind would spend billions of dollars without being allowed to "look at the books" regarding the spam account ratio?
Elon Musk explicitly waived his right to due diligence. You're right about these things being expected, but Elon can't be hampered by such standard conventions.
> he developed cold feet pretty fast after an impetuous decision
I don't think it was impetuous. I think he did this all on purpose and planned on using his usual tactics of improvisational manipulation and grandstanding to get what he wanted, whether it was Twitter at a cheap price, manipulating the Twitter stock price to make a quick buck off of his stock purchase, liquidate some of his Tesla stock, seed further discontent on Twitter, spur on rabble around bots (despite knowing full well that Tesla and himself have benefited from Twitter bots and potentially even controlled them), drone on about free speech in some sort of libertarian political play, or whatever else. And it has all failed. Now, he's just gonna let his dirty lawyers figure some way out of it all and move on to the next scam.
I don't think it was impetuous. I think he did this all on purpose and planned on using his usual tactics of improvisational manipulation and grandstanding to get what he wanted, whether it was Twitter at a cheap price, manipulating the Twitter stock price to make a quick buck off of his stock purchase, liquidate some of his Tesla stock, seed further discontent on Twitter, spur on rabble around bots (despite knowing full well that Tesla and himself have benefited from Twitter bots and potentially even controlled them), drone on about free speech in some sort of libertarian political play, or whatever else. And it has all failed. Now, he's just gonna let his dirty lawyers figure some way out of it all and move on to the next scam.
I think that requires a level of competence that Musk has failed to display in the past. Shotwell told an interesting story once, in response to a question like "what's it like to work for Elon?" She related an occasion when she got frantic calls from a meeting Musk was in. In the meeting he had decided to cancel Falcon Heavy to meet a schedule for something else. Shotwell went in and reminded everyone (Elon) they had customers who had already paid for Falcon Heavy and cancelling it wasn't an option and to find another solution. Elon responded like "oh yeah, ok well...."
Then there was BTC to purchase Tesla cars, then there was Doge. The point being I think these types of things indicate Musk, like a lot of smart people can be really, really dumb sometimes. Also a bit Hanlons Razor.
Then there was BTC to purchase Tesla cars, then there was Doge. The point being I think these types of things indicate Musk, like a lot of smart people can be really, really dumb sometimes. Also a bit Hanlons Razor.
I agree with that. I don't consider him intelligent at all. My suspicion is that it's just a case of him having a loose collection of these outcomes that he considers wins, and then he just kicks it off, hoping he can manipulate things along the way towards one of his wins. I don't think he has an actual plan. He's an improvisational manipulator, very similar to a former president.
Then again, it seems the main "win" he often has in mind is just getting attention, so maybe his need for attention exceeds even what I thought.
Then again, it seems the main "win" he often has in mind is just getting attention, so maybe his need for attention exceeds even what I thought.
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.
That's only in case he can't get financing. There's no option to pay $1B and walk away. Twitter can sue to force him to complete the deal under the contract they signed.
However I suspect the lawsuit to be settled rather than drag on for years. Probably he'll buy it at a reduced price or pay a larger termination fee to walk away.
However I suspect the lawsuit to be settled rather than drag on for years. Probably he'll buy it at a reduced price or pay a larger termination fee to walk away.
> it's unclear to me what he initially thought he was getting out of this
You have to look at it from the angle of Musk being a troll and a right wing figure. He wanted to impress his right wing followers by making Twitter a more free and open place for all kinds of speech (even hate, violence, etc). Maybe he realized this was a bad idea and managing Twitter is more a job for a grown up than a troll, so he looked for a way out.
You have to look at it from the angle of Musk being a troll and a right wing figure. He wanted to impress his right wing followers by making Twitter a more free and open place for all kinds of speech (even hate, violence, etc). Maybe he realized this was a bad idea and managing Twitter is more a job for a grown up than a troll, so he looked for a way out.
> 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".
Being called Eccentric is the luxury of the rich. If he was poor one will say "irresponsible" or even "crazy".
It is irresponsible to do something eccentric if you cannot afford it
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.
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.
Well, are the recent layoffs at both companies completely unrelated to that? How far do the rippling effects of billions "lost" from the rich person economy go? I'm 100% some people who were just scraping by have been hurt by this. If only because there are 10 less good tippers / day at the coffee shop down the street from the twitter offices.
Considering the contagion that can occur whever far ranging stock is discovered to be over inflated in price, I think it's arrogant to look at these types of things and discount what downstream effects could occur.
A job is a way to make money.
It is not the responsibility of a corporation to keep you fed or alive.
If you don't like how a job treats you find another one.
This pseudo familial relationship with jobs that Americans seem to have is one of the oddest mental illnesses I've seen.
It is not the responsibility of a corporation to keep you fed or alive.
If you don't like how a job treats you find another one.
This pseudo familial relationship with jobs that Americans seem to have is one of the oddest mental illnesses I've seen.
we spend over half our waking hours for often over half of our lives spent working — you think it’s a mental illness for a person to consider how all of these hours and expended energy impact their life?
honestly, you think this is a mental illness?
and i think there are many reasonable arguments that huge chunks of the world care far more about their jobs impact on their lives than we (u.s. americans) do.
a mental illness? the way you say everything in your comment, as if that belief is somehow a universal truth is wild.
honestly, you think this is a mental illness?
and i think there are many reasonable arguments that huge chunks of the world care far more about their jobs impact on their lives than we (u.s. americans) do.
a mental illness? the way you say everything in your comment, as if that belief is somehow a universal truth is wild.
You've wildly misread what I wrote. Please read the post again.
And the mental illness of worshiping billionaires seems to have spread worldwide. Why else would you leap to defend elon musk's erratic behavior, and carry water for the damage he leaves in his wake?
Musk is a retard, but he's still less retarded than anyone who expects firms and the market to take care of them.
There’s a difference between saying “wow that guy is an irresponsible asshole for intentionally or unintentionally fucking up my job” and expecting the market or your job to take care of you.
I know some drivers will run red lights and stop signs, so I walk and bike accordingly. I’m still in the right to get mad when a driver narrowly misses me because he’s a self involved clown.
I know some drivers will run red lights and stop signs, so I walk and bike accordingly. I’m still in the right to get mad when a driver narrowly misses me because he’s a self involved clown.
>There’s a difference between saying “wow that guy is an irresponsible asshole for intentionally or unintentionally fucking up my job” and expecting the market or your job to take care of you.
There isn't. Have a nice day.
There isn't. Have a nice day.
If company owners want credit for creating jobs, that comes with the reciprocal responsibility of it being your fault if those jobs go away.
Jobs are a cost center. Companies don't create them on purpose anymore than having a higher electricity bill.
I have no idea why you would think that is an argument for anything.
I have no idea why you would think that is an argument for anything.
https://mobile.twitter.com/elonmusk/status/10167318121592545...
Because they ask for that credit, and their defenders give them that credit when you criticize them.
Because they ask for that credit, and their defenders give them that credit when you criticize them.
Governments create rules that force corporations to take care of employees. Maybe not so much in the USA. But that can be improved thru higher taxation and better employment regulations.
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."
I think there is a 1A aspect to his involvement with Twitter.
> 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.
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.
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.
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.
His stated reason to buy twitter was in defense of free speech, despite the bots not because of them.
I'm guessing he saw a glimpse of just how extensive the problem really is and the unwillingness of the organization to be remotely honest about it. It would not surprise me if it was 95% bots, rather than 5%.
I'm guessing he saw a glimpse of just how extensive the problem really is and the unwillingness of the organization to be remotely honest about it. It would not surprise me if it was 95% bots, rather than 5%.
> 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.
Interesting. Technical limitation, or not, it's unlikely that their API was changed just to upset Musk's team. It's most probably a pile of wonky code with artificial limitations hardcoded by customer so it doesn't crash their database.
> 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.
Interesting. Technical limitation, or not, it's unlikely that their API was changed just to upset Musk's team. It's most probably a pile of wonky code with artificial limitations hardcoded by customer so it doesn't crash their database.
It doesn’t really matter. The time to ask these questions was before signing a binding contract to purchase the company.
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..
How much foot dragging does the Delaware Chancery Court usually tolerate in these sorts of situations?
Asking for a friend xD
Asking for a friend xD
Very little, actually. The Delaware Chancery Court is arguably the US's most efficient judicial institution. They don't mess around.
I wouldn't be surprised if it's concluded by EOY. If Elon wanted to drag it out he'd have waited the full 6mo review period before making his intent official, and Twitter clearly wants it done with.
The only way I see this dragging out is if shareholder lawsuits from Elon's filing "mistakes" or SEC actions (for any of a dozen good reasons when Elon's involved) muddy the waters.
I wouldn't be surprised if it's concluded by EOY. If Elon wanted to drag it out he'd have waited the full 6mo review period before making his intent official, and Twitter clearly wants it done with.
The only way I see this dragging out is if shareholder lawsuits from Elon's filing "mistakes" or SEC actions (for any of a dozen good reasons when Elon's involved) muddy the waters.
So embarrassing if he ends up being forced to own it and everyone knows he tried to back out.
And if the SEC steps in regarding his selloff of Tesla stock puts him in jail and he gets sued by their shareholders and Twitter's too.
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?
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?
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.
> 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.
> 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
So... they asked for an API, were provided with it, wanted an API with higher caps, and were provided with it. Their problem is that Twitter didn't properly anticipate the need?
So... they asked for an API, were provided with it, wanted an API with higher caps, and were provided with it. Their problem is that Twitter didn't properly anticipate the need?
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.
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.
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
if he was hitting up against rate limits, it's easy for Twitter to call his requests adverse
How would it be adverse? Are you suggesting his data scientists are querying the API so much that they are DDoSing Twitter?
They gave higher rate limits to existing enterprise customers.
Pretty hard to argue that is was "adverse" in that case.
Pretty hard to argue that is was "adverse" in that case.
he had access to the Firehose, which streams all the data, so his complaints about the other API ring false (which they removed the limits on anyways, according to elon -- but again, the API was a subset of the Firehose access he already had)
it seems more likely that he was upset that he had access to all of Twitter's data via the Firehose, but being impulsive and incompetent in the field of bot detection (having had zero experience), he has absolutely no way to produce a trustworthy report on bots which contradicts Twitter's report
so, he's just complaining about limits he used to have on an API he doesn't need to avoid producing a report he can't produce that requires expertise he doesn't have
it seems more likely that he was upset that he had access to all of Twitter's data via the Firehose, but being impulsive and incompetent in the field of bot detection (having had zero experience), he has absolutely no way to produce a trustworthy report on bots which contradicts Twitter's report
so, he's just complaining about limits he used to have on an API he doesn't need to avoid producing a report he can't produce that requires expertise he doesn't have
APIs aren't the only way to deliver data
They had firehose access - there was no limiting
> 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?
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?
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.
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.
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).
A 1B termination fee is relatively small given that Twitter's market cap is down 10B since the beginning of April.
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.
Agree. And likewise it seems Twitter is going to court to collect the breakup fee rather than complete the deal.
Twitter’s Chairman disagrees:
https://twitter.com/btaylor/status/1545526087089696768
https://twitter.com/btaylor/status/1545526087089696768
They'd be nuts to do so.
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.
if he goes down, that represents a material loss to shareholders compared to the price he is contractually obligated to pay
so, all the same, I think the shareholders will just take his original offer and elon can reflect on his impulsivity (a joke; he won't)
so, all the same, I think the shareholders will just take his original offer and elon can reflect on his impulsivity (a joke; he won't)
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.
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.
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...
https://www.latimes.com/business/story/2022-04-12/musk-is-of...
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.
One thing for sure though is that a lot of lawyers are about to make a lot of money.
> 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.
The one thing written in this thread that I am 100% confident is true.
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.
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.
> Tesla is a car company.
Tesla is a very complex financial operation which, sometimes, sells some cars. From Musk's point of view it's working exactly as planned.
Tesla is a very complex financial operation which, sometimes, sells some cars. From Musk's point of view it's working exactly as planned.
>> Tesla is a car company.
> Tesla is a very complex financial operation which, sometimes, sells some cars.
That's not that unique, my understanding is most of the major car companies are primarily in the business of auto financing, but they make cars to give people something to finance.
> Tesla is a very complex financial operation which, sometimes, sells some cars.
That's not that unique, my understanding is most of the major car companies are primarily in the business of auto financing, but they make cars to give people something to finance.
I am not entirely sure where that comes from.
Let’s take a look at GM, as those numbers are readily available.
GM Financial: $13.419 billion in 2021 GM: $127 billion in 2021 https://en.wikipedia.org/wiki/GM_Financial
Seems to be a lot more revenue coming from the cars than the financing…
Let’s take a look at GM, as those numbers are readily available.
GM Financial: $13.419 billion in 2021 GM: $127 billion in 2021 https://en.wikipedia.org/wiki/GM_Financial
Seems to be a lot more revenue coming from the cars than the financing…
True, but the Net Income numbers ($3.8 billion from GM Financial, $9.9 billion at all of GM) are a lot closer. Looks like 38% of GM Net Income is earned by GM Financial?
Can you provide the detailed schedule for battery factories? Can you provide the communications that show the lines are running too slowly? Can you provide the development roadmap for self driving to demonstrate it's ceasing to have progress? Can you provide evidence that the equipment in Giga Factory in Austin that's installed and ready to build the cyber trunk isn't going to be used for that?
Yes, but there is a service charge for doing homework.
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 50% 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?
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?
There’s a chance Twitter accepts 5-10B in exchange for dropping their objections to the end of the merger.
Why would they take a 5B settlement when they have legal grounds to force the deal through for 44B?
In theory accepting 44B minus the current market value as a settlement is equal in value to buying it 44B (though I'm sure many large investors might prefer the cash and cash out of Twitter entirely). But yeah 5B wouldn't cut it. Though settling for 5B or 10B or something under the true worth might be worth it if Twitter thinks there's a chance they won't win.
Because there’s always the chance you lose in court, and years worth of nasty litigation is distracting and unfun.
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.
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.
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.
I can believe he used some of that logic to justify the decision to bid for it...
But in reality his ventures collect way more money than companies of those types normally get because he hit home runs in the early internet era, then started tackling some incredibly ambitious hardware engineering problems and built companies that actually started to solve them, complete with an exciting thesis about them being all being linked to Mars colonies. That's where the "Tony Stark" reputation comes from and why people bothered following him on Twitter in the first place.
Sure, some retail investors follow him on Twitter and end up buying his stocks (or some random crypto thing he has no financial connection with but thinks is funny...) because they think he's great, but if the difference actually owning the platform makes to his ability to raise capital isn't absolute zero, it's closer to zero than $44B. And not necessarily positive, because owning Twitter doesn't make batteries cheaper or ease the technical and regulatory challenges of self driving or LEO mesh networks, but it would take up a lot of his time and resources.
But in reality his ventures collect way more money than companies of those types normally get because he hit home runs in the early internet era, then started tackling some incredibly ambitious hardware engineering problems and built companies that actually started to solve them, complete with an exciting thesis about them being all being linked to Mars colonies. That's where the "Tony Stark" reputation comes from and why people bothered following him on Twitter in the first place.
Sure, some retail investors follow him on Twitter and end up buying his stocks (or some random crypto thing he has no financial connection with but thinks is funny...) because they think he's great, but if the difference actually owning the platform makes to his ability to raise capital isn't absolute zero, it's closer to zero than $44B. And not necessarily positive, because owning Twitter doesn't make batteries cheaper or ease the technical and regulatory challenges of self driving or LEO mesh networks, but it would take up a lot of his time and resources.
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.
Really? I guess I'd believe it. He was a wealthy aircraft designer / Hollywood A-lister.
Fun fact about Howard Hughes, he once crashed a biplane during the filming of a movie he was directing. (One of four airplane crashes he experienced)
The stunt pilots had all refused to try the maneuver he wanted to do, so he hopped into the plane, took off, and did exactly what they anticipated.
It's not clear whether he was pulled from the wreckage or found in a nearby hangar after walking away from it, but he survived and finished the movie, which made a loss despite being the top-grossing film of 1930.
Celebrities, eh?
https://en.wikipedia.org/wiki/Hell%27s_Angels_(film)
Fun fact about Howard Hughes, he once crashed a biplane during the filming of a movie he was directing. (One of four airplane crashes he experienced)
The stunt pilots had all refused to try the maneuver he wanted to do, so he hopped into the plane, took off, and did exactly what they anticipated.
It's not clear whether he was pulled from the wreckage or found in a nearby hangar after walking away from it, but he survived and finished the movie, which made a loss despite being the top-grossing film of 1930.
Celebrities, eh?
https://en.wikipedia.org/wiki/Hell%27s_Angels_(film)
Robert Downey Jr Met musk to prepare for the role. His portrayal is definitely based on Musk, not the other way around.
Still helps Musk.
Still helps Musk.
Elon is going to be the downfall of Elon.
Trying to buy Twitter is just a symptom.
Trying to buy Twitter is just a symptom.
>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.
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.
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?
> Do you think the terminally online even buy Teslas,
Absolutely yes
Absolutely yes
His tweets are shared on the news. Like when he accused Thailand diver of being a pedophile.
Thanks you just finished my HN-thread-about-Elon bingo card.
in this imaginary bingo game you invented to avoid discussing elon's failings, are you playing all alone, or are you also imagining that you have friends there?
and you just finished mine
yes, yes, no
Ego is the problem. The Twitter habit is but a symptom.
[deleted]
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.
Like when I suddenly develop an interest in Columbo trivia when actually I'm supposed to be doing my accounts.
Would be even funnier if it had to do with impressing a woman.
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.
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.
Did Elon ever really intend to buy Twitter in the first place, or was he just looking for a way to get inside information about the company without paying for it like twitter's "largest enterprise customers" do? Then he could dig up a reason to abandon the deal, and back out without losing anything, and having gained much valuable information that could be used against Twitter in some other spat.
Good analysis.
> 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.
Has Musk demonstrated that he has a viable business plan for Twitter that would help it avoid mismanagement into irrelevance?
> 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.
Has Musk demonstrated that he has a viable business plan for Twitter that would help it avoid mismanagement into irrelevance?
Who cares? He's taking the company private.
> illegally acquired stock
Illegal how?
Illegal how?
Not the OP, but when an investor acquires more than 5% of a stock, they have a limited time to disclose it. Elon disclosed his Twitter stock acquisition too late (20 days after instead of 10) and using the wrong form (Schedule 13G instead of Schedule 13D), painting him as a passive investor rather than an activist.
https://www.bloomberg.com/opinion/articles/2022-04-06/elon-m... talks about it.
https://www.bloomberg.com/opinion/articles/2022-04-06/elon-m... talks about it.
Isn't it pure speculation on your part that he had non-passive intentions at the time he acquired the shares? The barrier to prove intent is high, and speculation doesn't cut it.
It's valid to buy as a passive investor and then turn into an activist or an interested party, even a short time later.
It's valid to buy as a passive investor and then turn into an activist or an interested party, even a short time later.
given that elon is not the type of person who can avoid loudly announcing his intentions, he did not, and had previously frequently announced ideas to change Twitter, on Twitter itself
I imagine his lawyers hate him almost as much as a certain other famous narcissist's lawyers hate that person
I imagine his lawyers hate him almost as much as a certain other famous narcissist's lawyers hate that person
[deleted]
well, sure he played fast and loose on the forms but then there would be a lot of "illegal" tax filers and thats not the commonly understood meaning of "illegal".
One senses there are hoards of lawyers out there gleefully rubbing their hands together and salivating over the feasting to come.
And they know Musk is a fool.
Paul Graham: https://mobile.twitter.com/paulg/status/1545547177849667585
Let me answer that: they do not want to be owned by someone who doesn't want to.
But they want the 40B more.
Let me answer that: they do not want to be owned by someone who doesn't want to.
But they want the 40B more.
That tweet seems a bit weird, especially coming from him.
It makes sense from purely a) founder/entrepreneur perspective which PG normally speaks from. Forcing someone to run a company they don’t believe in is normally a bad strategy. And b) assuming the board member cares about Twitter as an entity beyond the short term monetary gain/share prices. Since most board members are already wealthy and are motivated by more than $$ when taking on the job
Of course fundamentally the question is obviously moot give the legal obligation both from Musk and for the shareholders to optimize payout before a recession, but it’s an interesting thought experiment of whether it’s going to harm them either by going to court and/or having a disinterested owner.
Personally I think regardless if Elon is forced to buy Twitter he’s obviously going to do try to make the best out of his investment (or at least a better product). He’s a poweruser who clearly cares about the product. Can’t be much worse than it already is. His concern is probably just the price not that he doesn’t want to own Twitter.
Of course fundamentally the question is obviously moot give the legal obligation both from Musk and for the shareholders to optimize payout before a recession, but it’s an interesting thought experiment of whether it’s going to harm them either by going to court and/or having a disinterested owner.
Personally I think regardless if Elon is forced to buy Twitter he’s obviously going to do try to make the best out of his investment (or at least a better product). He’s a poweruser who clearly cares about the product. Can’t be much worse than it already is. His concern is probably just the price not that he doesn’t want to own Twitter.
> Let me answer that: they do not want to be owned by someone who doesn't want to.
That person wanted to own Twitter, though, and very much so. To that effect, that person made and absolutely ludicrous offer (e.g., merger without due digligence), just to end up owning Twitter as soon as possible.
The fact that a few weeks later, the same person changed their mind about Twitter, is absolutely their own fault. They agreed to terms.
That person wanted to own Twitter, though, and very much so. To that effect, that person made and absolutely ludicrous offer (e.g., merger without due digligence), just to end up owning Twitter as soon as possible.
The fact that a few weeks later, the same person changed their mind about Twitter, is absolutely their own fault. They agreed to terms.
Man PG has jumped the shark completely. What the hell is that tweet - a deal is a deal, how can he implicitly say it should be ok for it not to be honoured (and with his twitter following, saying something publicly has an impact, however small)
Oh boy. The real circus is about to begin. Everything before this was just a warm up.
Nowadays when everything is just circus is hard to say when things start and when they end. One thing is clear to me - Elon didn't learn anything from his previous episodes ("funding secure", calling people names, crypto scams, etc).
"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 (https://twitter.com/btaylor/status/1545526087089696768)
Elon is on the record talking about the 'bot problem' over the years (on Twitter!). He's about to get a very expensive lesson that agreements can't be breached even if you have more money than sense to spend on litigation and you can't just say stuff willy-nilly, because it can come back to bite you sometimes.
- Bret Taylor (https://twitter.com/btaylor/status/1545526087089696768)
Elon is on the record talking about the 'bot problem' over the years (on Twitter!). He's about to get a very expensive lesson that agreements can't be breached even if you have more money than sense to spend on litigation and you can't just say stuff willy-nilly, because it can come back to bite you sometimes.
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.
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.
> 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.
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.
Have you spent much time on "anything not illegal is allowed" forums?
Try to talk about popular movies are TV shows and you get things like this on such sites [1]. Want to discuss an episode of PBS Space Time such as this one [2]. Don't be surprised if this is the discussion you get [3].
What almost always happens on such forums is that the people there who aren't racists, sexists, antisemites, inane conspiracy theorists etc., leave, and the forum ends up being largely just such people.
[1] https://web.archive.org/web/20201225021055/https://voat.co/v...
[2] https://www.youtube.com/watch?v=RlXdsyctD50
[3] https://web.archive.org/web/20201223123156/https://voat.co/v...
Try to talk about popular movies are TV shows and you get things like this on such sites [1]. Want to discuss an episode of PBS Space Time such as this one [2]. Don't be surprised if this is the discussion you get [3].
What almost always happens on such forums is that the people there who aren't racists, sexists, antisemites, inane conspiracy theorists etc., leave, and the forum ends up being largely just such people.
[1] https://web.archive.org/web/20201225021055/https://voat.co/v...
[2] https://www.youtube.com/watch?v=RlXdsyctD50
[3] https://web.archive.org/web/20201223123156/https://voat.co/v...
I don't think Voat is really a fair comparison.
Voat suffered from a flood of toxicity caused by Reddit banning toxic behaviors. From what I could tell, it was practically uninhabited before.
Reddit itself was largely "anything not illegal is allowed" at the time (in part due to lax enforcement of the few rules they had), and was largely fine. The toxic communities sequestered themselves for the most part.
Twitter would probably be much the same. The greater issue they'd have is the same Reddit had; it's hard to sell any advertising on a site where you can't guarantee ads won't show up next to racist/sexist/etc diatribes.
Voat suffered from a flood of toxicity caused by Reddit banning toxic behaviors. From what I could tell, it was practically uninhabited before.
Reddit itself was largely "anything not illegal is allowed" at the time (in part due to lax enforcement of the few rules they had), and was largely fine. The toxic communities sequestered themselves for the most part.
Twitter would probably be much the same. The greater issue they'd have is the same Reddit had; it's hard to sell any advertising on a site where you can't guarantee ads won't show up next to racist/sexist/etc diatribes.
all white men are racist, sexist and antisemitic. That's patriarchy and systemic racism. You are looking for a platform without white men.
I unironically think that 4chan is better twitter, especially the smaller boards.
"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.
And there are numerous forums where that standard is applied; Twitter just happens not to be one of them because they like money.
So when you say anything not illegal is allowed, do you mean that I can post porn anywhere? That spammers and bots can't be banned?
Any remotely reasonable approach here has the state deciding which attributes can be used for moderation decision and which can't, which also isn't feasible.
Any remotely reasonable approach here has the state deciding which attributes can be used for moderation decision and which can't, which also isn't feasible.
> So when you say anything not illegal is allowed, do you mean that I can post porn anywhere?
Can't you already do this on Twitter? You just need to mark it as sensitive.
> That spammers and bots can't be banned?
It would be like 4chan I assume, spam/bots are banned.
Can't you already do this on Twitter? You just need to mark it as sensitive.
> That spammers and bots can't be banned?
It would be like 4chan I assume, spam/bots are banned.
But spam/bots are legal, so even 4chans moderation is too heavyhanded.
>"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.
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.
Nope, 1st Amendment only means the government can't restrict your speech. Private companies can.
The argument GP is making is that if the government can't make it illegal, private companies shouldn't disallow it; the person you're replying to is pointing out that the First Amendment sets that bar far higher than GP probably realized.
This is not historically the reality of 1a jurisprudence. Before the Internet, the ruling was that private companies cannot restrict your speech in public view. See Marsh v. Alabama for this -- a company town was prohibited from barring picketing and pamphleting on private sidewalks.
The exceptions to this were carved out in a court case regarding Compuserve, which was a subscription-only service. The stare decisis in this instance is on far shakier ground than Roe was.
The exceptions to this were carved out in a court case regarding Compuserve, which was a subscription-only service. The stare decisis in this instance is on far shakier ground than Roe was.
You have to register to use twitter. Marsh v Alabama had nothing to do with compuserve. That would matter if a website was truly a de facto public square, but given the whole registration thing, they're not.
The compuserve case led to section 230 of the CDA being created, but again that doesn't have to do with Marsh v Alabama. To have that apply, you'd need to make the argument that Twitter both is, and intends to be a public square, and well, the fact that they have posted moderation policies makes it clear that they don't.
The compuserve case led to section 230 of the CDA being created, but again that doesn't have to do with Marsh v Alabama. To have that apply, you'd need to make the argument that Twitter both is, and intends to be a public square, and well, the fact that they have posted moderation policies makes it clear that they don't.
Marsh was not the public square. It was the sidewalks of random streets. The company that owned them explicitly did not intend for them to be a public square.
In contrast, the historical statements of Twitter make it very clear that they intended to be the public square, e.g. "free speech wing of the free speech party." Additionally, the assertions and decisions of the state in regards to social media indicate massive influence over politics that far exceeds any city street. They say people are denied their rights of free expression because Trump blocked them on Twitter, and that Russia successfully manipulated our elections because a few Russians bought a tiny amount of Facebook ads.
In contrast, the historical statements of Twitter make it very clear that they intended to be the public square, e.g. "free speech wing of the free speech party." Additionally, the assertions and decisions of the state in regards to social media indicate massive influence over politics that far exceeds any city street. They say people are denied their rights of free expression because Trump blocked them on Twitter, and that Russia successfully manipulated our elections because a few Russians bought a tiny amount of Facebook ads.
> It was the sidewalks of random streets. The company that owned them explicitly did not intend for them to be a public square.
Sidewalks of random streets are considered to be "the public square" in US law (broadly because random streets are usually publicly owned. You need things like gates and signs and such to revoke such an assumption). The Marsh v. Alabama ruling relied on the fact that the town didn't try to make its streets un-square like, and in fact encouraged public square-like use!
Notable here is https://en.wikipedia.org/wiki/Lloyd_Corp._v._Tanner, which in the case of a private entity that isn't literally acting like a municipality, they can kick you out!
> In contrast, the historical statements of Twitter make it very clear that they intended to be the public square, e.g. "free speech wing of the free speech party."
You will be hard pressed to take a single statement, made by a minor executive who acts outside of US jurisdiction, in 2012, as superior to the actual user agreements that Twitter has (and had at the time) in the US.
Sidewalks of random streets are considered to be "the public square" in US law (broadly because random streets are usually publicly owned. You need things like gates and signs and such to revoke such an assumption). The Marsh v. Alabama ruling relied on the fact that the town didn't try to make its streets un-square like, and in fact encouraged public square-like use!
Notable here is https://en.wikipedia.org/wiki/Lloyd_Corp._v._Tanner, which in the case of a private entity that isn't literally acting like a municipality, they can kick you out!
> In contrast, the historical statements of Twitter make it very clear that they intended to be the public square, e.g. "free speech wing of the free speech party."
You will be hard pressed to take a single statement, made by a minor executive who acts outside of US jurisdiction, in 2012, as superior to the actual user agreements that Twitter has (and had at the time) in the US.
> 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.
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.
> 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?
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?
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
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
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?
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.
For the love of God, don't bring up that old turkey.
https://www.popehat.com/2012/09/19/three-generations-of-a-ha...
Fire in a theatre came up in the context of squashing a protestor against the draft, from a judge who thought eugenics may have something going for it.
Just let it die. Please.
https://www.popehat.com/2012/09/19/three-generations-of-a-ha...
Fire in a theatre came up in the context of squashing a protestor against the draft, from a judge who thought eugenics may have something going for it.
Just let it die. Please.
How can you separate speech and reach in this specific case? Twitter could allow all speech but limit reach, ie shadow ban. Would that satisfy your notion of free speech?
Communication, as the atomic element of networking, requires both transmission and receipt to be said to have happened.
Speech is transmission.
Reach is landing at a receiver.
Substituting /dev/null in place of a human being does not satisfy speech having occurred. A concordance must be reached between the speaker and at least one other individual.
Speech is transmission.
Reach is landing at a receiver.
Substituting /dev/null in place of a human being does not satisfy speech having occurred. A concordance must be reached between the speaker and at least one other individual.
> 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.
That's what free speech is, whether or not you agree that such a policy of unrestricted free speech is constructive or beneficial.
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
Also disagree that such unrestricted free speech is constructive or beneficial. Sacha Baron Cohen explains it best: https://www.youtube.com/watch?v=ymaWq5yZIYM
> You can't yell "fire" in a crowded theater.
I am so tired of seeing this overplayed urban myth. The precedent you mention was set by Schenck v. United States in 1919, but it was partially overturned later in Brandenburg v. Ohio in 1969 [0]. Which is the part that people who bring up this myth every time conveniently forget about.
So no, you can yell "fire" in a crowded theater or whatever else you want, as long as it doesn't meet the legal standard for imminent lawless action (e.g., a riot). And the legal standard for imminent lawless action is much higher than you think it is.
0. https://en.wikipedia.org/wiki/Shouting_fire_in_a_crowded_the...
I am so tired of seeing this overplayed urban myth. The precedent you mention was set by Schenck v. United States in 1919, but it was partially overturned later in Brandenburg v. Ohio in 1969 [0]. Which is the part that people who bring up this myth every time conveniently forget about.
So no, you can yell "fire" in a crowded theater or whatever else you want, as long as it doesn't meet the legal standard for imminent lawless action (e.g., a riot). And the legal standard for imminent lawless action is much higher than you think it is.
0. https://en.wikipedia.org/wiki/Shouting_fire_in_a_crowded_the...
> as long as it doesn't meet the legal standard for imminent lawless action
So there is no absolute free speech then. Which is the point of bringing up the "fire" example.
If you're a visitor in my house there is no free speech at all. If you say something I don't like I'll legally kick you out. Private companies such as Twitter and Facebook have the same right. Their platform, their rules.
So there is no absolute free speech then. Which is the point of bringing up the "fire" example.
If you're a visitor in my house there is no free speech at all. If you say something I don't like I'll legally kick you out. Private companies such as Twitter and Facebook have the same right. Their platform, their rules.
If someone is a visitor in your house, you can kick them out for literally any reason you want or no reason at all.
No idea how this is relevant to your claim that "yelling fire in a crowded theater isn't allowed under free speech". It is legally allowed under free speech, it isn't a crime, despite what a lot of people claim. The theater might kick you out or ban you, but that has nothing to do with free speech.
No idea how this is relevant to your claim that "yelling fire in a crowded theater isn't allowed under free speech". It is legally allowed under free speech, it isn't a crime, despite what a lot of people claim. The theater might kick you out or ban you, but that has nothing to do with free speech.
The other part of the myth people forget is that the metaphorical fire-yellers were socialists distributing anti-draft pamphlets. It's hardly a good thing to cite today on freedom of speech.
>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.
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.
> This is good for Twitter
i think you are referring to twitter.com
imo this is pretty bad for twitter the company. they’ve been flat for years, they’re current valuation is less than in 2013. they’ve lost the plot a while ago and seem to have been in a managed decline, probably because they were looking for buyers.
> and good for the world
you are overestimating how many people care about twitter outside of the US.
i think you are referring to twitter.com
imo this is pretty bad for twitter the company. they’ve been flat for years, they’re current valuation is less than in 2013. they’ve lost the plot a while ago and seem to have been in a managed decline, probably because they were looking for buyers.
> and good for the world
you are overestimating how many people care about twitter outside of the US.
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
> 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...
Wouldn't he look to be a hypocrite otherwise? [1]
[1] https://nypost.com/2022/05/31/elon-musk-calls-out-bill-gates...
I don’t see how, Gates is short TSLA and musk is the exact opposite, the biggest TSLA shareholder in the world
So, you don't see a conflict if Musk criticizes Gates for shorting TSLA (because Gates thinks it is overvalued) and then turning around and selling billions of dollars' worth of TSLA? I do. I think that qualifies has hypocrisy.
no it would be hypocrisy if he was short too but he is massively long
Look at this story:
https://www.wsj.com/articles/elon-musk-sells-billions-of-dol...
The headline is: "Elon Musk Sells $8.5 Billion of Tesla Shares After Deal to Buy Twitter"
The deal to buy Twitter gave Musk an excellent cover for selling billions of dollars' worth of TSLA. He doesn't need to sell all of TSLA. He sold a massive amount. If he didn't have this cover it would have looked like he thinks TSLA is overvalued (which in fact it is).
Both Gates and Musk sold TSLA. Gates sold borrowed shares, Musk sold shares he owned. That's the only difference. Of course Musk still has tons of TSLA remaining. But that doesn't change the fact that both Gates and Musk did the same thing (sell TSLA) and yet Musk criticized Gates for it. What a hypocrite!
The headline is: "Elon Musk Sells $8.5 Billion of Tesla Shares After Deal to Buy Twitter"
The deal to buy Twitter gave Musk an excellent cover for selling billions of dollars' worth of TSLA. He doesn't need to sell all of TSLA. He sold a massive amount. If he didn't have this cover it would have looked like he thinks TSLA is overvalued (which in fact it is).
Both Gates and Musk sold TSLA. Gates sold borrowed shares, Musk sold shares he owned. That's the only difference. Of course Musk still has tons of TSLA remaining. But that doesn't change the fact that both Gates and Musk did the same thing (sell TSLA) and yet Musk criticized Gates for it. What a hypocrite!
>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).
Well, especially with that billion dollar termination fee (well, if they get it since Musk is probably gonna lawyer up now).
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?"
What if he's not a genius and actually he's just some guy, and his wealth is actually arbitrary.
Absolutely chilling thought, eh?
Absolutely chilling thought, eh?
Genius is not an absolute that applies across everything one done. In fact most geniuses are very very good across one dimension + they benefit from the halo effect.
Musk can be a "genius" when it comes to electric cars and space exploration while at the same time being total wrong about almost everything else.
Musk can be a "genius" when it comes to electric cars and space exploration while at the same time being total wrong about almost everything else.
He's got that affluenza disorder.
The market crashed to hell and it makes no sense to close on a ~50% markup when the penalty is at most $1B. It seems kind of obvious to me he’s angling to get a nice discount and close, since he has almost all the leverage (the shareholders are going to sue the board if they end up having their stock directly exposed to the radioactive hellscape that is the equities market.)
> when the penalty is at most $1B
This isn't correct. People keep saying this, but it's not true. $1B is the penalty if Musk can't get financing. He has financing. He has no escape clause now, and this is a transparent and frankly pathetically weak attempt to get out of the deal. If he gets out at all, it will be at a much higher price than $1B.
> It seems kind of obvious to me he’s angling to get a nice discount and close, since he has almost all the leverage
He really doesn't. He signed a binding agreement to purchase Twitter at $54.20/share and none of the excuses he put in this termination notice hold water. The Twitter board has every right and incentive to sue him for specific performance and that's exactly what they're doing. They are in the legal right and have a great chance of winning.
This isn't correct. People keep saying this, but it's not true. $1B is the penalty if Musk can't get financing. He has financing. He has no escape clause now, and this is a transparent and frankly pathetically weak attempt to get out of the deal. If he gets out at all, it will be at a much higher price than $1B.
> It seems kind of obvious to me he’s angling to get a nice discount and close, since he has almost all the leverage
He really doesn't. He signed a binding agreement to purchase Twitter at $54.20/share and none of the excuses he put in this termination notice hold water. The Twitter board has every right and incentive to sue him for specific performance and that's exactly what they're doing. They are in the legal right and have a great chance of winning.
His financiers were the ones requesting validation. At this point it appears they pulled financing as the conditions weren’t met.
Source? As far as I know his financiers committed on the same terms he did and neither he or they have any right to demand proof about Twitter's user information. You say "it appears" which sounds like speculation.
This is all wrong. The penalty is at most $44 bill. Maybe more.
[deleted]
That's musk's fault. He signed a contract.
Too bad, I was looking forward to a social network run differently while still being able to provide strong security and take down illegal / pointlessly obnoxious content. Twitter combine with Musk's wealth would have been able to do that. I guess the upside is that upstarts like MeWe now have more chance to take on established players who have grown condescending to their own users.
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 :)
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.
No. You can think it's bad he will control Twitter and also that it's bad that he thinks he can do whatever he wants and get away with it (like harm all the Twitter shareholders etc)
That's not how hypocrisy works.
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.
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.
This was never in doubt. He made a foolish decision to buy Twitter with his stock and then immediately regretted it the moment the stock market tanked. Tesla itself went down by a lot and it made it almost impossible for him to finance it. He wanted out and made up reasons. Twitter will try to enforce the purchase agreement. It will be interesting to follow this case.
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...
[0] - page 5 https://www.sec.gov/Archives/edgar/data/1418091/000110465922...
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.
Bet he (and his friends, if he has any) made a mint off this farce.
Not that I have any faith it will happen.
Musk does yet another brazenly out of pocket thing and forces the world to look at him. Yawn.
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.
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.
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?
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.
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.
Do you really believe that the "if" in 1) is true? Really? Enough to make that comment?
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.
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.
and there was money parked in bitcoin...
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.
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.
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.
actually, at first he said he didn't care about the bots and was buying to FIX the bots issue: https://techcrunch.com/2022/04/14/elon-musk-buying-twitter-t...
then all of a sudden he cared, after he had signed.
then all of a sudden he cared, after he had signed.
Yes it's all a conspiracy and he's playing 5 dimensional chess.
Twitter can’t give Musk the data he needs to determine fake accounts. It’s obvious that while Twitter does some work to detect fake accounts, they probably only go after low hanging fruit. Twitter is balancing investment costs vs impact to the platform and obviously they are coming in light. Everyone that uses Twitter knows it has a bot problem.
If Musk’s team does a deeper dive than Twitter is willing to invest in and determines that the number of bots is material, it calls into question the entire financial model of Twitter. Customers will demand refunds and earnings will have to be restated going back years. It’s going to be a nuclear financial bomb.
So of course Twitter is going to sandbag. They can’t afford to release that data because they know it’s going to be material. Musk knows this and Twitter knows this.
I think Twitter is actually fucked now because their number of accounts will come into question and maybe even the SEC might squeeze them. But Twitter will probably look tough but try to close this chapter as quickly as possible and hope that no one digs deeper into the fake accounts.
If Musk’s team does a deeper dive than Twitter is willing to invest in and determines that the number of bots is material, it calls into question the entire financial model of Twitter. Customers will demand refunds and earnings will have to be restated going back years. It’s going to be a nuclear financial bomb.
So of course Twitter is going to sandbag. They can’t afford to release that data because they know it’s going to be material. Musk knows this and Twitter knows this.
I think Twitter is actually fucked now because their number of accounts will come into question and maybe even the SEC might squeeze them. But Twitter will probably look tough but try to close this chapter as quickly as possible and hope that no one digs deeper into the fake accounts.
> If Musk’s team does a deeper dive than Twitter is willing to invest in and determines that the number of bots is material, it calls into question the entire financial model of Twitter. Customers will demand refunds and earnings will have to be restated going back years. It’s going to be a nuclear financial bomb.
This doesn't make sense. "Material" is a term of art defined with regard to the current deal, there's no such thing as determining "the number of bots is material" in a general sense such that customers (I presume you mean advertisers) would automatically be allowed to sue.
Sure, if Musk finds Twitter has historically lied that would be significant. But Twitter doesn't have a single "bot number". In specific circumstances they make specific calculations using defined procedures. For example, the number Musk is whining about uses active - not all - users as the denominator, so of course it's going to be lower than the "real" number of bots.
Surprisingly to me, so far Musk hasn't provided an argument beyond this same sort of word salad. Maybe he's playing n-dimensional chess, but if Twitter sues him he'll presumably have to make his real secret arguments in open court. We'll see then.
This doesn't make sense. "Material" is a term of art defined with regard to the current deal, there's no such thing as determining "the number of bots is material" in a general sense such that customers (I presume you mean advertisers) would automatically be allowed to sue.
Sure, if Musk finds Twitter has historically lied that would be significant. But Twitter doesn't have a single "bot number". In specific circumstances they make specific calculations using defined procedures. For example, the number Musk is whining about uses active - not all - users as the denominator, so of course it's going to be lower than the "real" number of bots.
Surprisingly to me, so far Musk hasn't provided an argument beyond this same sort of word salad. Maybe he's playing n-dimensional chess, but if Twitter sues him he'll presumably have to make his real secret arguments in open court. We'll see then.
Of course it makes sense. “Material” is a financial term that is used all the time. It’s not a surprising term at all and fits here.
Twitter doesn’t have to be caught in a lie. They can just be caught with having a materially different numbers of fake accounts from their stated numbers.
If 25% of the amount you paid to Twitter for ads went to bots and fake accounts, you don’t think that you deserve a refund? You don’t think advertisers would take advantage of that to get refunds? You don’t think the SEC would be interested in this?
The whole point is Musk’s team is going to dig up stuff that Twitter won’t want to fix because the cost to find and track it will overweigh the amount of money they make probably. But it will have ramifications in terms of things like refunds and customers leaving the platform entirely. It will make them look really bad. It’s inevitable.
Twitter doesn’t have to be caught in a lie. They can just be caught with having a materially different numbers of fake accounts from their stated numbers.
If 25% of the amount you paid to Twitter for ads went to bots and fake accounts, you don’t think that you deserve a refund? You don’t think advertisers would take advantage of that to get refunds? You don’t think the SEC would be interested in this?
The whole point is Musk’s team is going to dig up stuff that Twitter won’t want to fix because the cost to find and track it will overweigh the amount of money they make probably. But it will have ramifications in terms of things like refunds and customers leaving the platform entirely. It will make them look really bad. It’s inevitable.
> “Material” is a financial term that is used all the time. It’s not a surprising term at all and fits here.
Yes, but it's only well-defined with regard to specific circumstances. It makes no sense to say something material to this deal will inherently be material to completely different circumstances like the contracts signed with advertisers or users.
Yes, but it's only well-defined with regard to specific circumstances. It makes no sense to say something material to this deal will inherently be material to completely different circumstances like the contracts signed with advertisers or users.
You’re not making any sense.
If you’re an advertiser and you’ve been paying for ads, but 25% of the engagement was fake, you won’t ask for a refund?
If you’re a new advertiser and you find a platform where 25 % of the engagement is bots, will you want to pay full price?
If you’re an advertiser and you’ve been paying for ads, but 25% of the engagement was fake, you won’t ask for a refund?
If you’re a new advertiser and you find a platform where 25 % of the engagement is bots, will you want to pay full price?
No because that’s not how advertisers price ads. They measure an ROI on their spends and if it’s greater than 1, they’ll buy another set of ads. If the ROI is >1 with 25% bots on current Twitter, they should be worth much more to Musk Twitter because their current ads will outperform when musk enacts his magic bot preventers.
> Twitter can’t give Musk the data he needs to determine fake accounts.
Twitter has already given Musk access to the "firehose of data". [1]
Musk bragged about buying Twitter because of the bots. Nobody is going to believe that he suddenly cares now that there are too many, not after he waived due diligence and set the buying price as a 420 joke.
[1] https://www.wired.com/story/elon-musk-twitter-firehose/
Twitter has already given Musk access to the "firehose of data". [1]
Musk bragged about buying Twitter because of the bots. Nobody is going to believe that he suddenly cares now that there are too many, not after he waived due diligence and set the buying price as a 420 joke.
[1] https://www.wired.com/story/elon-musk-twitter-firehose/
Read the letter from the lawyers. They gave Musk’s team limited access via api until a couple of days ago despite asking for it since may. The limited access was rate limited and had other restrictions. It’s obvious that with a rate limit the amount of data is not enough to do what they need to do.
Okay if the issue was his access being rate-limited, then what's the issue now that it no longer is? So Musk is able to actually find the evidence he needs now right?
> Everyone that uses Twitter knows it has a bot problem.
Which is precisely the problem with signing a "I'm buying you for $44B" and then claiming you had no idea they had so many bots to back out of it.
Which is precisely the problem with signing a "I'm buying you for $44B" and then claiming you had no idea they had so many bots to back out of it.
Your argument doesn’t hold water. You can have a sense of the amount of bots but if it’s wildly off, then of course it’s going to be shocking.
He opted to buy the company, and very shortly afterwards said the 5% number - which they've consistently submitted to the SEC for years - is obviously wrong.
Unless he can convincingly explain how he went from naively believing the 5% number to certain it's massively and fraudulently incorrect - in a matter of weeks and with no new information - to the court, he's pretty fucked here.
Unless he can convincingly explain how he went from naively believing the 5% number to certain it's massively and fraudulently incorrect - in a matter of weeks and with no new information - to the court, he's pretty fucked here.
You simply don’t know what you’re talking about. That’s not how the real world works.
https://www.bloomberg.com/opinion/articles/2022-07-09/elon-s...
> The bots thing, man, I don’t know. We have talked about this before. Back before the market crashed, back when he was pretending to want to buy Twitter, Musk was pretending that he wanted to buy Twitter in order to clean up the bot problem. Now he is pretending to want to get out of the deal because of the bot problem. It is tiresome to pretend to take this seriously, so let’s not.
Read the whole thing.
> The bots thing, man, I don’t know. We have talked about this before. Back before the market crashed, back when he was pretending to want to buy Twitter, Musk was pretending that he wanted to buy Twitter in order to clean up the bot problem. Now he is pretending to want to get out of the deal because of the bot problem. It is tiresome to pretend to take this seriously, so let’s not.
Read the whole thing.
I'm increasingly getting the sense that SpaceX is the anomaly here and otherwise Elon has been steadily failing upwards his entire life. Is that just me? Obligatory joke: this is the only time Elon has pulled out (if you know you know).
Tesla's peak market cap is ~$1.5T. It's still sitting at just under ~$800B. Tesla sold just under 1M cars last year putting one metric at (currently) $800,000 per car sold in a year.
How does any of that make sense? Just watch as traditional auto manufacturers ramp up EV production. The Ford F150 Lightning is in my mind a bellwether. From what I've seen it's been incredibly well-received and that's only the beginning. Compare that to the often ridiculed and clearly beleaguered Cybertruck.
I really wonder if Elon's attempted acquisition of Twitter is just a symptom of him becoming increasingly unhinged (eg his screeds against the "far left"). I really wonder if this hwole thing wasn't motivated by the perceived injustice (according to him) of Trump being banned in particular and the idea that conservatives are somehow being silenced.
But maybe this is 5 dimensional Chess. One can argue this hass done a lot of damage to Twitter and Elon may be on the hook for more than the $1B breakout fee (which he will of course try and weasel out of). This may actually drag on for years.
Personally I'd be happy just disappeared into a lab in a remote location where he can build rockets without distraction. I can but hope.
I honestly think the skyrocketing valuation
Tesla's peak market cap is ~$1.5T. It's still sitting at just under ~$800B. Tesla sold just under 1M cars last year putting one metric at (currently) $800,000 per car sold in a year.
How does any of that make sense? Just watch as traditional auto manufacturers ramp up EV production. The Ford F150 Lightning is in my mind a bellwether. From what I've seen it's been incredibly well-received and that's only the beginning. Compare that to the often ridiculed and clearly beleaguered Cybertruck.
I really wonder if Elon's attempted acquisition of Twitter is just a symptom of him becoming increasingly unhinged (eg his screeds against the "far left"). I really wonder if this hwole thing wasn't motivated by the perceived injustice (according to him) of Trump being banned in particular and the idea that conservatives are somehow being silenced.
But maybe this is 5 dimensional Chess. One can argue this hass done a lot of damage to Twitter and Elon may be on the hook for more than the $1B breakout fee (which he will of course try and weasel out of). This may actually drag on for years.
Personally I'd be happy just disappeared into a lab in a remote location where he can build rockets without distraction. I can but hope.
I honestly think the skyrocketing valuation
PE of 90 and 2 new factories only starting to ramp up it. It makes perfect sense.
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.
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...
“ 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...
I never understood the spam accounts argument…
One of musks main things he wanted to do with Twitter was to fight those spam/bot accounts.
He thinks getting rid of them is good for Twitter. If there are more bots than estimated Twitter will get even better than anticipated. If there are less bots than estimated this means the user base is more healthy than assume / one problem you don’t have to solve.
Each scenario is neither clearly good nor bad for a potential buyer.
One of musks main things he wanted to do with Twitter was to fight those spam/bot accounts.
He thinks getting rid of them is good for Twitter. If there are more bots than estimated Twitter will get even better than anticipated. If there are less bots than estimated this means the user base is more healthy than assume / one problem you don’t have to solve.
Each scenario is neither clearly good nor bad for a potential buyer.
[deleted]
> 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.
It's hillarious (and pretty stupid) they capped his use of the firehose.
It's hillarious (and pretty stupid) they capped his use of the firehose.
[deleted]
So glad HN got back online when the day got interesting
What was up with that? Was it server failure? Did HN move from old vps provider to AWS? Also, does HN run on one EC2 instance?
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...
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...
Is it just me or is Musk constantly finding himself in the middle of failed and shady deals?
[deleted]
I love the irony that Musk wants to buy Twitter and force it to promote "free speech", but is also worried about "fake" accounts.
If I want to run a thousand bots spouting fake news, isn't that my freedom of speech in action?
If I want to run a thousand bots spouting fake news, isn't that my freedom of speech in action?
Was really looking forward to watching him eat this shit sandwich he made for himself.
As soon as Tesla’s stock started falling I knew this wasn’t going to happen. But from everything I’ve read the agreement is iron clad, Elon waived diligence, and he’s on the hook for 45B.
If I were Twitter I’d take my chances in court to sue him for everything I’m owed, the full 45B or something really close to it. At least they’re due the breakup fee. Maybe they can 10x that for breach of contract.
If this does go to court and the outcome is that the agreement is thrown out or something like that it will severely undermine the legally-binding nature of contracts and have all sorts of ramifications.
If I were Twitter I’d take my chances in court to sue him for everything I’m owed, the full 45B or something really close to it. At least they’re due the breakup fee. Maybe they can 10x that for breach of contract.
If this does go to court and the outcome is that the agreement is thrown out or something like that it will severely undermine the legally-binding nature of contracts and have all sorts of ramifications.
Well that’s certainly an editorialized title.
> 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
https://twitter.com/tomwarren/status/1545527519008509952
So I load up on some stocks, I have a massive cult following, let it be known I'm going to buy the company, stocks rise, I sell them for a profit then load up on some shorts and cite an impossible to prove reason why I could not go through with the purchase, stocks fall, I profit again.
Perfectly legal process only accessible to the very rich in which to further consolidate their position of being the very rich. Nobody else on this planet could pull this off as they dont have a cult following. Cult's dont have to be religious, unless money is a religion?
Is anyone surprised?
Perfectly legal process only accessible to the very rich in which to further consolidate their position of being the very rich. Nobody else on this planet could pull this off as they dont have a cult following. Cult's dont have to be religious, unless money is a religion?
Is anyone surprised?
It seems more productive to take this at face value vs conjecture and rumors…
Suppose the filing is true - all of it. Let’s start the conversation with that and see what people think and what happens next to Twitter.
Suppose the filing is true - all of it. Let’s start the conversation with that and see what people think and what happens next to Twitter.
Okay, if everyone is posting conspiracy theories - here's mine. Musk did this for people to stop clamouring about his alleged twins with that blue-eyed smarty from Neuralink.
Don't forget the SpaceX flight attendant he exposed his penis to and propositioned for sexual acts.
Allegedly. It's shameful that people throw around unproven claims on social media like this, and in their second breath will complain about disinformation coming from people they don't like.
The bot thing is obviously a pretext but I wouldn't be surprised if all the major social networks lie about what proportion of their active users are synthetic. In my experience, running ads on both Twitter and Facebook tends to drive an absurdly large amount of suspicious traffic if you don't very tightly target them. 5% seems unbelivably low just based on that experience and the experience of using Twitter in general.
[deleted]
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.
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.
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.
In fact they have a fiduciary responsibility to pursue this.
People keep saying this... But twitter board accepts the very first offer from Musk.
Who does that in a business negotiation?
Who does that in a business negotiation?
>But twitter board accepts the very first offer from Musk.
Is this true?
From here it seems to have gone up for $43 billion to $44 billion somehow after the initial offer:
https://en.wikipedia.org/wiki/Proposed_acquisition_of_Twitte...
I'm not sure if that is because of a modified offer, or the offer was based on some benchmark that had dropped (he already had a large portion of Twitter's shares).
Also between April 14th when he initially made an initial offer and April 25th when they accepted one, the bottom had started falling out. Facebook, in the same sector had dropped by around 10%, so by the time they accepted it was much more attractive.
Musk seems to have timed the offer and the initial separate share purchase all horribly wrong.
Is this true?
From here it seems to have gone up for $43 billion to $44 billion somehow after the initial offer:
https://en.wikipedia.org/wiki/Proposed_acquisition_of_Twitte...
I'm not sure if that is because of a modified offer, or the offer was based on some benchmark that had dropped (he already had a large portion of Twitter's shares).
Also between April 14th when he initially made an initial offer and April 25th when they accepted one, the bottom had started falling out. Facebook, in the same sector had dropped by around 10%, so by the time they accepted it was much more attractive.
Musk seems to have timed the offer and the initial separate share purchase all horribly wrong.
From what I've read, they're obligated to accept that sort of offer for their shareholders.
They're not obligated to; boards can pretty much do whatever they want.
However, Twitter's board doesn't use Twitter and doesn't actually seem to care about it at all, so they're not exactly going to claim to shareholders they can run it better than an offer that much above its current value.
However, Twitter's board doesn't use Twitter and doesn't actually seem to care about it at all, so they're not exactly going to claim to shareholders they can run it better than an offer that much above its current value.
> Twitter's board doesn't use Twitter
[citation needed]
[citation needed]
Aren't they obligated to negotiate for a higher price? At least, they should try.
Who the heck doesn't negotiate?
How is no negotiation the best strategy?
Who the heck doesn't negotiate?
How is no negotiation the best strategy?
Hmm this might be hard for you to believe but I've never negotiated in my life. I always accept asked price. Didn't realize this is not the norm. This is not in business context though.
You are not running a $30b company.
At work, I was involved in a deal with a large company. The numbers are back and forth like 10 times with adds-on and discounts. It's just standard stuff.
At work, I was involved in a deal with a large company. The numbers are back and forth like 10 times with adds-on and discounts. It's just standard stuff.
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".
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.
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.
They said “let’s work together “ precisely to be able to sue and increase their chances of win for acting in good faith.
That’s not how i remember the last HN discussion on this
are you saying it is 100% impossible that there really is way more than 5% of daily active users being bots? unless you have some information here, it seems like a fairly big claim to make? if elon musk thinks 20% is bots, that is a very different thing than <=5%, would you not agree?
Everyone talking about this claim drops the important word. Less than 5% of _monetizable_ daily active users are bots. A non-monetizable user can exist and many do: people with ad blockers, people using third party Twitter clients, and people using APIs to interact with Twitter. Bot accounts are very likely to not be counted as monetizable daily active uers.
wouldnt a bot user by definition not be monetizable? I dont think this is what it is about at all, it makes no sense? They public a count of daily active users, this includes bots. The amount of those daily active users is very important
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...
Most forget that Elon did not found or invent Tesla
Most realize it doesn't matter who founded it. Elon is the reason it is successful.
Reasonable people can disagree with this thesis.
What is the counter argument?
I'm not arguing it one way or the other, but the obvious counter is "Tesla's success was orthogonal to, or in spite of, Musk."
You'd have to provide some pretty compelling reasoning to support that Tesla is successful in spite of Musk; i.e. that without him, its market cap today would be higher than 780 billion dollars.
Even discounting all other data, Tesla avoided bankruptcy in 2008 only because Musk tricked a key investor into believing that he could personally finance their investment round if the other investors didn't sign.
You'd have a hard time tracking down a single eligible CEO who could play that role in 2008, let alone get them in a position to actually be with Tesla at the time. And this is only a single example of a pivotal moment during Tesla's history that hinges on Musk.
Without Musk then, no Tesla today.
Even discounting all other data, Tesla avoided bankruptcy in 2008 only because Musk tricked a key investor into believing that he could personally finance their investment round if the other investors didn't sign.
You'd have a hard time tracking down a single eligible CEO who could play that role in 2008, let alone get them in a position to actually be with Tesla at the time. And this is only a single example of a pivotal moment during Tesla's history that hinges on Musk.
Without Musk then, no Tesla today.
Presumably, if Twitter goes out of their way to demonstrate good faith towards Musk, it will benefit any potential legal cases in the future.
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.
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?
>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.
Isn't this itself arguing in bad faith? It's fundamentally speculative to make claims about his intentions.
No; Musk has demonstrated with his actions that he is a liar and his word means little. You could look at his “taking Tesla private at $420; funding secured” tweet, or his late SEC filing for his large ownership stake in Twitter where he claimed to be a passive investor days before making this offer, or any number of prior examples. If you assume good faith from Musk at this point, you are a fool.
Musk has lied repeatedly in public, so it's difficult to assume good faith from him.
That's not what "bad faith" means. If GP didn't care if their statement were true but just said it to make Musk look bad, then it would be in bad faith.
Musk has been very publicly coy about his intentions for several months, so it's hard not to have an opinion at this point. Just because that opinion may be wrong doesn't mean it's offered in bad faith.
Musk has been very publicly coy about his intentions for several months, so it's hard not to have an opinion at this point. Just because that opinion may be wrong doesn't mean it's offered in bad faith.
[deleted]
The internal data grant could be so Elon has no defense when Twitter is ultimately gonna sue him next. It's coming
[deleted]
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.
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.
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.
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.
I think you're getting downvoted because it's apparent that musk's naked assertions are untrustworthy, given his track record of being untrustworthy and making untrustworthy statements, so it isn't even worth considering the possibility the claims are true unless he actually brings some evidence to the table
I don't care about votes. This isn't reddit. I just have discussions on this site and that's all I care about.
But on the topic, I think I'm getting down voted as an emotional reaction. I clearly said I don't want to pretend to know if he's legally right or not, a position which if most of us are being honest we should all be taking. But people aren't taking that position and they're reacting emotionally to words they don't want to hear. All I've said in the above comment was that Twitters lawyers did indeed contribute to the current state of affairs when they participated in the creation of the agreement in question. This is true by definition.
But on the topic, I think I'm getting down voted as an emotional reaction. I clearly said I don't want to pretend to know if he's legally right or not, a position which if most of us are being honest we should all be taking. But people aren't taking that position and they're reacting emotionally to words they don't want to hear. All I've said in the above comment was that Twitters lawyers did indeed contribute to the current state of affairs when they participated in the creation of the agreement in question. This is true by definition.
Maybe there are some downvotes because this branch of the discussion was about whether Musk and Twitter’s lawyers worked together on the termination letter and you seem to have shifted to whether they worked together on the agreement?
sorry, I didn't mean to refocus the discussion to voting itself, the focus should be on the fact that elon is extremely untrustworthy and thus his bare assertions are worthless and not worth considering absent any evidence
I mean, yeah, twitter's lawyers were definitely involved in drafting up the contract between twitter and elon, but that doesn't really have any bearing on elon regretting signing that contract which mandates his closing the deal -- sucks to be him
I mean, yeah, twitter's lawyers were definitely involved in drafting up the contract between twitter and elon, but that doesn't really have any bearing on elon regretting signing that contract which mandates his closing the deal -- sucks to be him
I should also add, it's a common rhetological fallacy to advocate for withholding judgement when the evidence weighs against you
[deleted]
The bigger story (if you can get past the juicy Elon-a-drama)… is
Twitter stinks.
You can smell the <insert_elon_poop_emoji> in their ad program a mile away and it’s finally free game to call out.
I remember buying Facebook ads once and I got more likes than God and not a single one of them seemed like they were “real”. Maybe they were “mDAU real” or whatever…
These company’s are liars and have been ripping people, small and big business off for years.
Google ads, search ads, Twitter, Facebook, Snap, TT, Reddit, Yelp, etc… it’s all stretched fake engagement. We all know it and have known it for years — if you’ll admit it or not.
Twitter stinks.
You can smell the <insert_elon_poop_emoji> in their ad program a mile away and it’s finally free game to call out.
I remember buying Facebook ads once and I got more likes than God and not a single one of them seemed like they were “real”. Maybe they were “mDAU real” or whatever…
These company’s are liars and have been ripping people, small and big business off for years.
Google ads, search ads, Twitter, Facebook, Snap, TT, Reddit, Yelp, etc… it’s all stretched fake engagement. We all know it and have known it for years — if you’ll admit it or not.
I promoted a tweet just for curiosity and a significant portion of the engagement was spammy.
A lot of likes from accounts selling some kind of sex work, some really blatant spam, a lot of small time self promotion from wannabe influencers. Much of this was probably “real people” but also “spam”. There is a spectrum of what is and is not “real” usage vs spam, but if I were advertising for real, I wouldn’t want to target the Twitter account representing a furry onlyfans creator. Of those there were several in the few hours and ~$100 I left the tweet up.
In other words a significant part of the engagement in my promoted tweet was low quality Twitter accounts engaging with my tweet in order to get more attention for themselves.
A lot of likes from accounts selling some kind of sex work, some really blatant spam, a lot of small time self promotion from wannabe influencers. Much of this was probably “real people” but also “spam”. There is a spectrum of what is and is not “real” usage vs spam, but if I were advertising for real, I wouldn’t want to target the Twitter account representing a furry onlyfans creator. Of those there were several in the few hours and ~$100 I left the tweet up.
In other words a significant part of the engagement in my promoted tweet was low quality Twitter accounts engaging with my tweet in order to get more attention for themselves.
Does anyone here actually believe Twitter doesn’t know this and have exact metrics down to a science?
Or those stock options and gains too big to have any real morals?
Or those stock options and gains too big to have any real morals?
I’m not so sure there can be exact metrics, when exactly an account is and is not spam is probably impossible to determine, there is a lot of grey area.
Ha, yes impossible... I too have enjoyed the massive big tech bull run. Very impossible
Twitter's ads are extremely strange and inaccurate and it doesn't seem to matter to anyone. Recently I only get ads for strange pharmaceuticals, mostly mABs for cancer patients.
Also, they're different on different clients even if I'm signed into my account on all of them. So I'm not sure what the signals it uses are.
Also, they're different on different clients even if I'm signed into my account on all of them. So I'm not sure what the signals it uses are.
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...
[0] https://www.bloomberg.com/opinion/authors/ARbTQlRLRjE/matthe...
[1] https://twitter.com/matt_levine/status/1545519476707319808?s...
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
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
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.
It was really hard to see how he would apply his usual tricks, and I always figured he was going to wiggle out.
In this sort of deal, is it common for the buyer (or whoever is leveraging them) to purchase some sort of hedge to protect themselves from the stock price diving during the DD or legal process? For instance, if I agree to buy company for $X but buy LEAPS to protect me if it dips below X*0.75.
Musk would have been a political player, as the owner of twitter. That could have gotten him into a fight with the wrong people, and could have hurt his business.
I mean AWS didn't get the big pentagon contract, under the previous US president. Mr. Besos was very upset about this. Now Musk is much more exposed to that kind of thing, as SpaceX is a major Nasa contractor.
There must be some politics here, if you consider the amount of tax money being involved. Now the politics of Mr. Musk doesn't quite align with that of the president, and we saw some spats between them in the past. I would argue that this would have a potential for escalation and would have much more weight than the bot issue on twitter.
'Biden wishes Elon Musk "lots of luck" on moon trip' - could be read as a kind of veiled threat. https://www.youtube.com/watch?v=igSyBMYus5A
MSNBC says that Musk and Biden are in a kind of fight now https://www.youtube.com/watch?v=Fgj2jfmPfRE
I mean AWS didn't get the big pentagon contract, under the previous US president. Mr. Besos was very upset about this. Now Musk is much more exposed to that kind of thing, as SpaceX is a major Nasa contractor.
There must be some politics here, if you consider the amount of tax money being involved. Now the politics of Mr. Musk doesn't quite align with that of the president, and we saw some spats between them in the past. I would argue that this would have a potential for escalation and would have much more weight than the bot issue on twitter.
'Biden wishes Elon Musk "lots of luck" on moon trip' - could be read as a kind of veiled threat. https://www.youtube.com/watch?v=igSyBMYus5A
MSNBC says that Musk and Biden are in a kind of fight now https://www.youtube.com/watch?v=Fgj2jfmPfRE
wow, once upon a time you could have a discussion here on any topic, hope that feature is not disappearing....
You were downvoted because your comment about the veiled threat from Biden is a pretty crazy conspiracy theory.
yeah, ownership of the biggest public platform that is frequented by the elite has nothing to do with politics. I think that such a notion is pretty crazy.
So he does know how to pull out...
This is going to end with Elon a lot poorer, and Twitter owning a large chunk of Tesla stock, isn't it?
If I were Twitter, the last thing I would accept is Tesla stock when what I really was owed is cash.
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!
Besides all his, he has no regard, empathy for his employees - the real people who made him, who he is. What an irony!
I hope he hangs lol. Not out of any disrespect for musks achievements like those cars or the first online payment method that did not involve a credit card but he's been doing too many disruptive unnecessary things that will have cost a lot of ordinary retail stockholders a pretty penny.
Musk’s account keeps getting suspended/unsuspended in the past hour: https://twitter.com/growing_daniel/status/154562588715182080...
Not quite - the screenshots being circulated show an account with a different name that visually looks quite similar. Instead of a lowercase `l`, the suspended account has an uppercase `I`. In many fonts, these end up looking quite similar.
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.
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.
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.
>My email is literally filled with twitter emails trying to activate my inactive account to temporary inflate their numbers.
Big if true
Big if true
I just went and double checked, 4 emails a day for the last month ( not 10). All the same email suggesting I login.
I have not logged into twitter since 2016, no friends and no followers. Just set up for my company noticeboard.
I have not logged into twitter since 2016, no friends and no followers. Just set up for my company noticeboard.
> Everyone knows twitter is majority bots, gpt influence accounts
You are writing fan-fiction, not making an argument.
You are writing fan-fiction, not making an argument.
Most of social media is PR companies running bot farms, this has been the case for many years. Especially around African elections (well studied) or large social issues ( Johnny deep court case )
My country is notability bad they close the comment section so real accounts can't out comment the bot accounts, our government has social media influence programmers running this, people I know. ( small country )
They use gpt 2 to generate around 100 curated comments for each news article, You can typically tell by going into their account and seeing when they joined and friend count ect. However recently they started hiring normal people to comment.
This has been the PR industry for at least 4 years.
My country is notability bad they close the comment section so real accounts can't out comment the bot accounts, our government has social media influence programmers running this, people I know. ( small country )
They use gpt 2 to generate around 100 curated comments for each news article, You can typically tell by going into their account and seeing when they joined and friend count ect. However recently they started hiring normal people to comment.
This has been the PR industry for at least 4 years.
You have provided no evidence.
https://www.skynettoday.com/overviews/misinfo
"There has been a 150% increase in countries using organised social media manipulation campaigns over the last two years." [University of Oxford]
https://www.newstalkzb.co.nz/news/entertainment/amber-heard-...
"A new survey has proved a large number of Amber Heard's Twitter support is coming from "fake" accounts."
https://www.news.com.au/entertainment/celebrity-life/large-p...
"Nearly 11 per cent of all Twitter accounts participating in discourse surrounding Johnny Depp's defamation trial"
https://democracyinafrica.org/cambridge-analytica-africa-kno...
https://m.dw.com/en/dictators-in-africa-using-social-media-t...
"There has been a 150% increase in countries using organised social media manipulation campaigns over the last two years." [University of Oxford]
https://www.newstalkzb.co.nz/news/entertainment/amber-heard-...
"A new survey has proved a large number of Amber Heard's Twitter support is coming from "fake" accounts."
https://www.news.com.au/entertainment/celebrity-life/large-p...
"Nearly 11 per cent of all Twitter accounts participating in discourse surrounding Johnny Depp's defamation trial"
https://democracyinafrica.org/cambridge-analytica-africa-kno...
https://m.dw.com/en/dictators-in-africa-using-social-media-t...
Their was a guy on here a few weeks ago that made 10% of all comments on 4chan using three bot accounts over the span of a month, running gpt-j fine tuned.
You need so remarkably few people/PR agencies to outnumber active humans.
Its such a problem creating a social media account is actually quite hard, often you need a phone number and a separate IP address.
You need so remarkably few people/PR agencies to outnumber active humans.
Its such a problem creating a social media account is actually quite hard, often you need a phone number and a separate IP address.
You have provided no evidence.
https://www.firstpost.com/tech/news-analysis/researchers-fin...
Honestly this is such a common thing in PR it's silly posting more examples, for social issues and elections most content is bots.
The only thing new is gpt which allows huge scale.
Where groups like this
https://en.m.wikipedia.org/wiki/50_Cent_Party
No longer have to hire people to make comments they can just shotgun influence with GPT type language models.
This video is has pretty good sources
https://m.youtube.com/watch?v=Xl0TrA8oXXo
It only talks about politics, but the same campaigns exist for other topics like reputation management and social issues.
Honestly this is such a common thing in PR it's silly posting more examples, for social issues and elections most content is bots.
The only thing new is gpt which allows huge scale.
Where groups like this
https://en.m.wikipedia.org/wiki/50_Cent_Party
No longer have to hire people to make comments they can just shotgun influence with GPT type language models.
This video is has pretty good sources
https://m.youtube.com/watch?v=Xl0TrA8oXXo
It only talks about politics, but the same campaigns exist for other topics like reputation management and social issues.
> https://www.firstpost.com/tech/news-analysis/researchers-fin...
This doesn't say anything about the concentration or percentage of bots on Twitter.
> https://en.m.wikipedia.org/wiki/50_Cent_Party
Neither does this.
> https://www.youtube.com/watch?app=desktop&v=Xl0TrA8oXXo
Nor this. Nobody said bots aren't on twitter. What's under discussion is whether or not the bots make up a large percentage of users on twitter.
> Honestly this is such a common thing in PR it's silly posting more examples That's kind of hand-wavey. I'd appreciate more examples.
This doesn't say anything about the concentration or percentage of bots on Twitter.
> https://en.m.wikipedia.org/wiki/50_Cent_Party
Neither does this.
> https://www.youtube.com/watch?app=desktop&v=Xl0TrA8oXXo
Nor this. Nobody said bots aren't on twitter. What's under discussion is whether or not the bots make up a large percentage of users on twitter.
> Honestly this is such a common thing in PR it's silly posting more examples That's kind of hand-wavey. I'd appreciate more examples.
Okay, plot twist. Musk never intended to buy twitter. Whole ploy was to get access to twitter’s firehose of data to train his AI.
On the serious side, I can’t believe someone would gamble with half of his net worth. But this is Musk!
On the serious side, I can’t believe someone would gamble with half of his net worth. But this is Musk!
What is wonderful about this is that we all trust that courts will be objective in this. No amount of money will corrupt the courts here. I wish I could say the same for my country.
Wow, this is almost as embarrassing as the Las Vegas Tunnel...
To me Musk is trying to get out of the deal while at the same time twitter owners know they found a great patsy so they are unwilling to release real numbers.
[deleted]
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.
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.
It can in certain be a spam account though.
Please, let the man walk away from the deal. We do not want the world's richest man controlling his own propaganda system.
Tesla and SpaceX may need his capital to survive the downturn. They both have an arsenal of options to raise further cash.
Is there anyway for Elon to prove there are more bots than Twitter claims? If so, would twitter then be sued by the sec?
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?
Any legal experts out there?
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.
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.
[deleted]
What is most surprising about this, is that he had built up a significant percent ownership before the offer.
Everyone is saying Musk waived is due diligence rights. Where can I read that?
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.
Look up Matt Levine’s newsletter, he’s been covering the whole saga and is an expert on M&A.
He spent a billion dollars to troll hand-wringing Twitter users
This was the first time I bet against musk and it is paying off
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.
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.
>'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"?
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"?
> Doesn't he kind of forfeit that bragging right if he tries to walk away from the deal though?
Look at this thread, you'll find enough of his fan calling this a victory because it will expose how corrupt Twitter is or whatever. Reason, common sense and the frigging obvious don't have a grip in their minds.
Look at this thread, you'll find enough of his fan calling this a victory because it will expose how corrupt Twitter is or whatever. Reason, common sense and the frigging obvious don't have a grip in their minds.
> 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"
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"
If you look at Twitter's stock price, it never stayed near his $54.20 offer price, unlike other actual legitimate offers for buyouts.
Anyone who took it seriously...I'd like to sell them a bridge.
Anyone who took it seriously...I'd like to sell them a bridge.
Something tells me this ride isn’t over yet…
Just another example of Elon Musk committing to doing something crazy to generate headlines then not following through with it. Not sure when people are going to realize this guy's a total fraud.
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.
How that goes is anyone's guess.
Not, plus additional penalties. See:
https://www.cnbc.com/2022/05/13/elon-musk-cant-just-walk-awa...
https://www.cnbc.com/2022/05/13/elon-musk-cant-just-walk-awa...
Musk never wanted to buy Twitter, anyone who thought so was deluded. The guy is a psychopath and is playing with people's money by manipulating assets.
[deleted]
Twitter is a great LBO candidate but Elon Musk tried to buy it as a consumption good rather than an asset investment. Not that surprised that the deal he made in a fit of pique did not seem so good without the beer goggles and with the market having fallen 30%. I hope courts compel him to execute the transaction but I also know that he probably has a million ways of getting out of it.
Where does the Musk hate on hn come from?
Edit: that’s an actual question. If you downvote, at least comment why I’m wrong.
Edit: that’s an actual question. If you downvote, at least comment why I’m wrong.
I don't think it's irrational
https://www.vanityfair.com/news/2022/04/elon-musk-twitter-te...
https://www.vanityfair.com/news/2022/04/elon-musk-twitter-te...
Vanityfair?
A thing I'm confused about here is how Twitter's stock price is still US$35.04 in after-hours trading, amounting to a market cap of US$28.13B. This valuation implies a time-discounted long-term expectation that Twitter will earn about US$1.4 billion per year, if we divide by a nominal P/E ratio of 20 years. Alternatively it represents about a 70% probability that Musk will acquire the company for the agreed-upon US$54.20 per share, or that some other similar acquisition will happen.
Twitter is a somewhat stagnant social networking service; it hasn't been experiencing the meteoric growth of things like Instagram or TikTok. Its yearly revenues are US$5.1B, but instead of earning US$1.4B per year, it's losing US$220M per year, so it's spending US$5.3B per year (on 229 million "mDAUs" ("monetizable daily active users"), so that's US$23 per user per year). I think most of its 7500 employees are high-paid tech employees, who cost maybe US$300k per year each—including benefits, remember, having an employee typically costs about twice their salary. That works out to US$2.25B per year of employee-having costs, leaving about US$3.0B for everything else.
Large profit margins are common at social networking services; Meta makes US$39.37 billion of net income on US$117.929 billion of revenue, a 33% profit margin.
So, what's Twitter's path to earning US$1.4 billion per year? Either it could increase its revenues by at least US$1.6 billion, for example by growing its user base by 40%, without increasing its expenses much; or it could decrease its expenses by at least US$1.6 billion, for example by laying off most of its employees, without reducing its revenues much.
A dramatic expansion of Twitter's business in the next few years doesn't seem likely to me; is that what investors are betting on? Looking at https://en.wikipedia.org/w/index.php?title=Twitter&oldid=793... they had 319 million active users in 02016, so the crudest approximation suggests that their yearly growth rate is -6.5% per year. At that rate, growing their user base by the requisite 40% will take them another negative five years. (More charitably, maybe they are in fact growing, but mDAUs are a small enough subset of what they were reporting as "active users" in 02016 that it more than makes up the difference—but their yearly growth rate still isn't likely much more than +6.5%.) Alternatively they could get better at squeezing money out of their existing users. Or maybe they could buy another Vine and this time not shut it down so that a Chinese clone becomes the hottest new social networking app. But that would require them to have money to fund the acquisition, and where is that going to come from? Or are the founders of the hot new startup going to accept Twitter stock?
More plausible is a skeleton-crew Twitter with a 20% smaller userbase and US$4.2 billion of yearly revenue spending only US$2.8 billion—depending on what its actual expenses are. But getting from here to there would be very traumatic and poses a substantial risk of total collapse, either because Twitter loses the institutional knowledge of how to keep the site running when it lays off most of its staff, or because their cuts send them into a death spiral where revenues decline even more than expenses.
It's against this background that, somehow, Musk's trolling with this merger termination has only dropped Twitter's market cap by 4.8% today.
So, how are Twitter's remaining investors justifying their US$28 billion bet on Twitter? In this situation I can easily imagine Twitter being worth US$6B or maybe US$10B, but US$28B, the hell?
Are they figuring that there's a 35% chance that a Delaware court will order specific performance of the Twitter acquisition (and that someone will lend Musk the money to go through with it, despite his best efforts to convince everyone that Twitter is a massive fraud?) and a 50% chance that, failing that, Twitter will successfully make the transition to a skeleton-crew shadow of its former self that nevertheless knocks out Facebook-like earnings every year?
Do they think Twitter's management team will miraculously figure out how to leverage their evident ability to get a moronic clown elected President of the USA into actual profits?
Do they think another acquirer willing to pay a premium over today's price will materialize, perhaps motivated by the prospect of political influence rather than selling colored water to the Twits, if that's what Twitter users are called?
Here's the most plausible hypothesis I've seen. TSLA's market cap is US$779.67B (https://www.google.com/finance/quote/TSLA:NASDAQ?window=5Y), so the US$44B purchase price would be about 5.6% of TSLA's outstanding stock, about 58 million shares. The trading volume is 31 million shares per day, so Musk could presumably liquidate 58 million shares over the course of a few weeks without totally tanking the stock, and so could any potential lender who gave him a cash loan secured by that stock. Musk's net worth was reported as over US$300 billion in November (https://en.wikipedia.org/wiki/Elon_Musk#Wealth), three-quarters of which is Tesla stock and stock-price-related instruments such as purchase warrants. Tesla has fallen 38% since then, so he must still have at least US$180 billion worth of TSLA.
So, the Twitter investors are betting that there's an excellent chance that the court will in fact order specific performance and the deal will go through despite Musk's most eloquent protests of fraud on the part of Twitter's current management team.
Twitter is a somewhat stagnant social networking service; it hasn't been experiencing the meteoric growth of things like Instagram or TikTok. Its yearly revenues are US$5.1B, but instead of earning US$1.4B per year, it's losing US$220M per year, so it's spending US$5.3B per year (on 229 million "mDAUs" ("monetizable daily active users"), so that's US$23 per user per year). I think most of its 7500 employees are high-paid tech employees, who cost maybe US$300k per year each—including benefits, remember, having an employee typically costs about twice their salary. That works out to US$2.25B per year of employee-having costs, leaving about US$3.0B for everything else.
Large profit margins are common at social networking services; Meta makes US$39.37 billion of net income on US$117.929 billion of revenue, a 33% profit margin.
So, what's Twitter's path to earning US$1.4 billion per year? Either it could increase its revenues by at least US$1.6 billion, for example by growing its user base by 40%, without increasing its expenses much; or it could decrease its expenses by at least US$1.6 billion, for example by laying off most of its employees, without reducing its revenues much.
A dramatic expansion of Twitter's business in the next few years doesn't seem likely to me; is that what investors are betting on? Looking at https://en.wikipedia.org/w/index.php?title=Twitter&oldid=793... they had 319 million active users in 02016, so the crudest approximation suggests that their yearly growth rate is -6.5% per year. At that rate, growing their user base by the requisite 40% will take them another negative five years. (More charitably, maybe they are in fact growing, but mDAUs are a small enough subset of what they were reporting as "active users" in 02016 that it more than makes up the difference—but their yearly growth rate still isn't likely much more than +6.5%.) Alternatively they could get better at squeezing money out of their existing users. Or maybe they could buy another Vine and this time not shut it down so that a Chinese clone becomes the hottest new social networking app. But that would require them to have money to fund the acquisition, and where is that going to come from? Or are the founders of the hot new startup going to accept Twitter stock?
More plausible is a skeleton-crew Twitter with a 20% smaller userbase and US$4.2 billion of yearly revenue spending only US$2.8 billion—depending on what its actual expenses are. But getting from here to there would be very traumatic and poses a substantial risk of total collapse, either because Twitter loses the institutional knowledge of how to keep the site running when it lays off most of its staff, or because their cuts send them into a death spiral where revenues decline even more than expenses.
It's against this background that, somehow, Musk's trolling with this merger termination has only dropped Twitter's market cap by 4.8% today.
So, how are Twitter's remaining investors justifying their US$28 billion bet on Twitter? In this situation I can easily imagine Twitter being worth US$6B or maybe US$10B, but US$28B, the hell?
Are they figuring that there's a 35% chance that a Delaware court will order specific performance of the Twitter acquisition (and that someone will lend Musk the money to go through with it, despite his best efforts to convince everyone that Twitter is a massive fraud?) and a 50% chance that, failing that, Twitter will successfully make the transition to a skeleton-crew shadow of its former self that nevertheless knocks out Facebook-like earnings every year?
Do they think Twitter's management team will miraculously figure out how to leverage their evident ability to get a moronic clown elected President of the USA into actual profits?
Do they think another acquirer willing to pay a premium over today's price will materialize, perhaps motivated by the prospect of political influence rather than selling colored water to the Twits, if that's what Twitter users are called?
Here's the most plausible hypothesis I've seen. TSLA's market cap is US$779.67B (https://www.google.com/finance/quote/TSLA:NASDAQ?window=5Y), so the US$44B purchase price would be about 5.6% of TSLA's outstanding stock, about 58 million shares. The trading volume is 31 million shares per day, so Musk could presumably liquidate 58 million shares over the course of a few weeks without totally tanking the stock, and so could any potential lender who gave him a cash loan secured by that stock. Musk's net worth was reported as over US$300 billion in November (https://en.wikipedia.org/wiki/Elon_Musk#Wealth), three-quarters of which is Tesla stock and stock-price-related instruments such as purchase warrants. Tesla has fallen 38% since then, so he must still have at least US$180 billion worth of TSLA.
So, the Twitter investors are betting that there's an excellent chance that the court will in fact order specific performance and the deal will go through despite Musk's most eloquent protests of fraud on the part of Twitter's current management team.
> So, how are Twitter's remaining investors justifying their US$28 billion bet on Twitter? In this situation I can easily imagine Twitter being worth US$6B or maybe US$10B, but US$28B, the hell?
> TSLA's market cap is US$779.67B
I'd love to see plausible and realistic justifications that Tesla's market cap is worth more than every other car company in existence combined.
Some vague hope that one year, Musk's annual "FSD. This year. For real this time." will come true?
Robotaxis?
It's certainly not their horrific approach to service and quality.
> TSLA's market cap is US$779.67B
I'd love to see plausible and realistic justifications that Tesla's market cap is worth more than every other car company in existence combined.
Some vague hope that one year, Musk's annual "FSD. This year. For real this time." will come true?
Robotaxis?
It's certainly not their horrific approach to service and quality.
It's an interesting question, but for the purpose of this discussion, it doesn't really matter whether Tesla's market cap is so high because Tesla's investors are deluded fools or because Tesla will really have over US$40 billion a year in profits someday soon, like Apple, Saudi Aramco, ICBC, Alphabet, Berkshire Hathaway, JPMorgan Chase, Microsoft, and I think no other companies in the history of the world. (I'm looking at https://en.wikipedia.org/wiki/List_of_largest_companies_by_r....)
What matters is how much Tesla's investors would change their minds if Elon, or his lender, unloaded 5% of the company's stock on the market. How much would the stock price move? Would Elon's paper wealth evaporate, leaving him unable to follow through on the Twitter offer? Since 5% of TSLA is less than two days of market volume, I think the answer is that the price would move very little, and so he would be able to complete the acquisition.
What matters is how much Tesla's investors would change their minds if Elon, or his lender, unloaded 5% of the company's stock on the market. How much would the stock price move? Would Elon's paper wealth evaporate, leaving him unable to follow through on the Twitter offer? Since 5% of TSLA is less than two days of market volume, I think the answer is that the price would move very little, and so he would be able to complete the acquisition.
So is there a court that can enforce the merger agreement ? What’s the worst Delaware can do ?
lol
Ms. Gadde:
sounds like William Gaddis, one of whose novels involves fictitious lawsuits
Ms. Gadde:
sounds like William Gaddis, one of whose novels involves fictitious lawsuits
very excited to read what Mat Levine has to say about this...
this website needs to be renamed to conjecture.com
Did they wait for Matt Levine's article to drop today before they submitted this?
[deleted]
[deleted]
I’m curious if Twitter will kick Elon Musk off the network.
I'm surprised anybody thought this was actually going to happen. From day one this had all the trappings of a typical Musk publicity stunt.
> 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.
There’s no evidence that he’s a good engineer or a good businessman, save if committing fraud or stealing the accomplishments of others is in the list of things that qualifies one of either. It’s beyond time to start taking his actions present and historical seriously instead of feeding into his cult of ego.
There’s no evidence that he’s a good engineer or a good businessman, save if committing fraud or stealing the accomplishments of others is in the list of things that qualifies one of either. It’s beyond time to start taking his actions present and historical seriously instead of feeding into his cult of ego.
SpaceX is actually doing great things.
Tesla was very innovative 5 years ago.
These two, especially spaceX, are quite impressive.
These two, especially spaceX, are quite impressive.
Tesla is stolen and only saw success because of endless amount of government subsidies and a tremendous amount of fraud on Musk’s part and SpaceX was a shitshow until he went hands off.
Comments like this break the site guidelines. If you wouldn't mind reviewing https://news.ycombinator.com/newsguidelines.html and taking the intended spirit more to heart, we'd be grateful. We want thoughtful, curious conversation here, not flamebait, fulminating, or name-calling.
meatsauce(1)
We detached this flamewar tangent from https://news.ycombinator.com/item?id=32028410.
Please see https://news.ycombinator.com/item?id=32039467.
Please see https://news.ycombinator.com/item?id=32039467.
> save if committing fraud or stealing the accomplishments of others
meatsauce(1)
Read the reason.
Twitter is all fake bots.
You gotta be nuts to own that.
Lots of Twitter fraud here.
Too many bots.
Kind of like the boy brigade here.
gamache(3)
ramacastro(3)
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...
- 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...
With age, you will look back on your infantile attitude to this situation and realise that you were simply a rube.
You went straight to personal attacks. You may be the one that needs to grow up.
If you disagree with my summaries or don't think they occurred in the thread, dispute it. I see no reason to attack me personally.
If you disagree with my summaries or don't think they occurred in the thread, dispute it. I see no reason to attack me personally.
> If you disagree with my summaries or don't think they occurred in the thread, dispute it.
Disputed. Please show a comment that says the following:
> Twitter is allowed to claim whatever % of spam bots they want for the deal
and this
> Twitter's censorship is actually a good thing, here's why...
Disputed. Please show a comment that says the following:
> Twitter is allowed to claim whatever % of spam bots they want for the deal
and this
> Twitter's censorship is actually a good thing, here's why...
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!
- 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!
I don't think we are reading the same thread or even the same site.
Well put.
Also:
- I'd hate it if Elon bought Twitter
Same person:
- What? This is bullshit! Elon should be forced to buy Twitter!
Also:
- I'd hate it if Elon bought Twitter
Same person:
- What? This is bullshit! Elon should be forced to buy Twitter!
I am that person and I’m very disappointed in myself for it.
But the idea of someone buying twitter against their will just cracks me up.
Also really punctures the visionary genius narrative.
But the idea of someone buying twitter against their will just cracks me up.
Also really punctures the visionary genius narrative.
Probably for the best.
The only way I was going back to twitter was if Musk took over, took decisive action, and it stopped being a left wing echo-chamber.
But wasting more of my life on social media is not a net positive.
So overall I'm glad, I can continue to ignore twitter exists except when people occasionally link a tweet (which half the time I regret clicking anyway).
The only way I was going back to twitter was if Musk took over, took decisive action, and it stopped being a left wing echo-chamber.
But wasting more of my life on social media is not a net positive.
So overall I'm glad, I can continue to ignore twitter exists except when people occasionally link a tweet (which half the time I regret clicking anyway).
So you want to give the richest man in the world more control over the flow of information?
I've always though it better to avoid massive concentrations of power, but that's just me.
I've always though it better to avoid massive concentrations of power, but that's just me.
I mean there's no point me joining a platform like twitter where I'm plainly not welcome. Musk might have changed that.
So you want to rejoin twitter, and the best way to make that a possibility is to concentrate more power around the richest person in the world?
I dunno how many different ways I can explain this.
- Twitter is a left wing echo chamber
- I thought Elon might have changed that
- He didn't end up buying it, moot point
- So I'm not on there.
How rich he is or isn't was irrelevant in my calculus.
- Twitter is a left wing echo chamber
- I thought Elon might have changed that
- He didn't end up buying it, moot point
- So I'm not on there.
How rich he is or isn't was irrelevant in my calculus.
So you only care about rejoining twitter, and not what happens to other people?
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.
> 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.
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.
sure, but now more events have unfolded, the results of which remain to be seen—so why can't we discuss the situation and speculate as to what will happen going forward without all the emotionally-loaded verbiage?
You are writing fan fiction, not observing reality.
please then, enlighten me to reality.
Begin by stating your evidence for the claims you made. You are writing a story, not advancing an argument.
so is pretty much everyone else here though?
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.
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.
All of them are incredibly small though. Most conservatives still use regular social media.
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.
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.
Mastadon wasn't built for conservatives though. Truth and it's ilk are built specifically because of conservatives feeling censored. They have a reason to go there. Mastadon has nothing.
Why would he spend $44B on a company worth $28B today? I’d make a new offer of $35B. They’d probably accept.
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.
I’d rather lose $1B than $15B. Stock will rank to < $10/share over next year now.
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.
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.
Why not? Elon would be snarky to not buy and only lose $1B vs $10B. Clearly after investigation the company isn’t worth that and the public markets will vet forget. The stock likely tanks to < $10 over the next year now.
They should be happy to get $35.
They should be happy to get $35.
That model works when the parties in power own the business
The board does not own twitter, they only have fiduciary power to act on behalf the interest of shareholders. The merger agreement is strong and legal precedence in such cases has almost always been in favor of the seller , Twitter's probability of winning in court is therefore quite high and they can reasonably expect to force Musk to honor the agreement.
Given this scenario, there will be significant portion of shareholders ( likely the majority) who would want to take the legal route and try and maximize their value, even more so because now the stock is not going to reach same levels anytime soon.
If the board did not honor these expectations, those shareholders have good cause to sue and win an argument that board did not do their job[1] and have to compensate them for lost value in the sale. Loosing such a case(likely) will be catastrophic for the board members.
[1] This construct and limitations on the board is there for good reasons, otherwise a buyer would just bribe the board with far smaller amount than the value of company .
The board does not own twitter, they only have fiduciary power to act on behalf the interest of shareholders. The merger agreement is strong and legal precedence in such cases has almost always been in favor of the seller , Twitter's probability of winning in court is therefore quite high and they can reasonably expect to force Musk to honor the agreement.
Given this scenario, there will be significant portion of shareholders ( likely the majority) who would want to take the legal route and try and maximize their value, even more so because now the stock is not going to reach same levels anytime soon.
If the board did not honor these expectations, those shareholders have good cause to sue and win an argument that board did not do their job[1] and have to compensate them for lost value in the sale. Loosing such a case(likely) will be catastrophic for the board members.
[1] This construct and limitations on the board is there for good reasons, otherwise a buyer would just bribe the board with far smaller amount than the value of company .
The dude is funny, gotta give him at least that.
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
Oopsie. Stonks do bite back sometimes.
I guess we'll never see how a free speech Twitter works. I think this is sad.
You're being downvoted. Another sad day on HN when free speech is downvoted.
This has nothing to do with free speech.
Was gp sarcastic? Are you sarcarstic? (I need an app for that..)
I guess we'll never know. I think this is sad.
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.
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.
Elon is pretty straightforward.
The deal is obviously not worth it if a sizable chunk of user are fake.
His first action would be to get rid of fake account and doing so decrease the value of Twitter for him and everyone that join him.
It’s better if the value decrease now to reflect reality, then buy at a far price and improve from that point.
I think the deal might go own at a much lower price. The lying is going to get out, the value of Twitter will then have to be evaluate at the current economic level.
The deal is obviously not worth it if a sizable chunk of user are fake.
His first action would be to get rid of fake account and doing so decrease the value of Twitter for him and everyone that join him.
It’s better if the value decrease now to reflect reality, then buy at a far price and improve from that point.
I think the deal might go own at a much lower price. The lying is going to get out, the value of Twitter will then have to be evaluate at the current economic level.
He achieved something good though: he exposed Twitter as a corrupt, biased company full of spam bots.
Thank you Elon
Thank you Elon
Everyone knew about the spam bots. They're spam bots so they're extremely visible.
I didn’t
Nobody should be forced to buy something they don't want to.
> BUT HE AGREED BEFORE!
He changed his mind after Twitter didn't provide the information they said they would.
> BUT HE HAS TO BUY IT NOW!
No, he doesn't have to, people can revoke buying offers. I'm afraid to ask your views on sexual consent.
At the cost of a financial penalty.
Try buying a house, but changing your mind right before going to a notary. At least here in the Netherlands congrats typically state you’ll have to pay 10%.
The agreement that Elon apparently had with Twitter included similar clauses.
Try buying a house, but changing your mind right before going to a notary. At least here in the Netherlands congrats typically state you’ll have to pay 10%.
The agreement that Elon apparently had with Twitter included similar clauses.
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.
Either you want the deal consummated or you don't. Stop being such hypocrites.
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.
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.
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.
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.
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.
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.
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.
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...
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...
Those monkeys at CNN are just there to turn the popcorn machine handle. I'll bet $100 gentlemen's wager his lability won't be over $100 mill.
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?
If you are not, where does the "all he has to show...." part come from? Do you have a source?
LOL. The hate for Elon is strong in this one.
You don't have to be a lawyer to have legal experience mate.
I'm sorry my opinion bothered your grandness.
ROFLMAO.
You don't have to be a lawyer to have legal experience mate.
I'm sorry my opinion bothered your grandness.
ROFLMAO.
Seems to me he makes a pretty sound argument here to back out.
The Hacker News community has really turned into an angry mob over the years! Wow. So much Elon Hate - he made the Electric Car, He makes Rockets. Give the dude a break. I know its hard to live up to your personal standard of Piety/Orthodoxy - but realize some people are producing things.
This is an example of a recent Trend:
https://twitter.com/search?q=%22Jared%20Kushner%22&src=trend...
Click on the top 10 accounts. None are real people. Likely CCP Army, or Russian trolls, bots of some type - but certainly not users who should be counted as mDAUs.
This is an example of a recent Trend:
https://twitter.com/search?q=%22Jared%20Kushner%22&src=trend...
Click on the top 10 accounts. None are real people. Likely CCP Army, or Russian trolls, bots of some type - but certainly not users who should be counted as mDAUs.
Quick, call Elon's lawyers! You have incontrovertible proof!
Proof? Legal Discovery will force the burden of proof on Twitter.
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.