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I strongly feel that the spammers thing is smoke and mirrors. The deal at $54.20 was maybe OK for him a month ago (it was great for Twitter because nobody else

I strongly feel that the spammers thing is smoke and mirrors. The deal at $54.20 was maybe OK for him a month ago (it was great for Twitter because nobody else was interested at that price). Since then, Twitter reported disappointing numbers for the past quarter, and the entire market took a nose dive, with tech hit especially hard. TWTR stock price was in the mid-30s before Musk's offer. Without the offer, and with the disappointing numbers, and with the recent market development, one could reasonably assume that the stock would be below 30 today. Musk should just pay the break fee of $1bn, and renegotiate for $42.69 or whatever meme number he fancies. Why pay $42bn total for something when you can get it for $30bn.

nicce 4y ago
You always need to pay much more on payouts than the current stock price. There is no chance he could buy it for $30bn. Unless history and future predictions suggests that there is no chance for stock to grow in foreseeable future.
zerocrates 4y ago
Feels like you'd have to offer substantially more premium, or more breakup fee, or (probably) both, if you've intentionally broken your last deal and then you turn around and propose another. Now that's premium starting from a lower base, but... Also, it does feel a little "manipulation"-y to tank the price on news of you yourself trashing your deal, then taking advantage of that to make the same deal but cheaper? Of course any analysis is assuming Elon actually means it and didn't just tweet this as a joke or on a whim.
- kibwen 4y ago
  > Also, it does feel a little "manipulation"-y to tank the price on news of you yourself trashing your deal, then taking advantage of that to make the same deal but cheaper? Elon Musk's past behavior has shown him to be extremely comfortable with this tactic.
itsoktocry 4y ago
>Musk should just pay the break fee of $1bn, and renegotiate for $42.69 or whatever meme number he fancies. Why pay $42bn total for something when you can get it for $30bn. Perhaps because the board and shareholders will be far more inclined to reject an offer from Musk after he feigned buying it one time and backed out?
- ckastner 4y ago
  > Perhaps because the board and shareholders will be far more inclined to reject an offer from Musk after he feigned buying it one time and backed out? He didn't feign anything. On the contrary, he's proved that he was dead serious about it. All he'd be doing would be renegotiating the price, which is something that any reasonable person would do when the circumstances change so drastically (assuming, of course, that a renegotiation would be possible). Don't think for a second that Twitter would walk away from Musks's offer if someone were to offer $60 a share.
thedufer 4y ago
> Musk should just pay the break fee of $1bn, and renegotiate for $42.69 or whatever meme number he fancies. Why pay $42bn total for something when you can get it for $30bn. That's not really how the break fee works. There's a specific performance clause that allows Twitter to force Musk to go through with the deal as long as he has the money (which, shockingly, seems to have come through). They'd only give up on that and take the break fee if the deal was truly over and they were prepared to say no to a lower offer.
- throwawaylinux 4y ago
  Interesting. Is this deal public somewhere? Does it include any clauses relating to Twitter misrepresenting of their userbase?
  - hooande 4y ago
    Yes, it is public though I don't have a link. To the best of my knowledge, Twitter is accountable to the SEC if they materially misrepresented any numbers about their business. I don't think the deal has any specific language about that.
  - danielmarkbruce 4y ago
    https://www.bamsec.com/filing/119312522120461/2?cik=1418091 https://www.bamsec.com/filing/119312522120461/2?cik=1418091 4.6
- Flankk 4y ago
  I looked it up and the news seems to be reporting what you said, but it is not true. Section 9.9 of the agreement is contingent on a bunch of conditions being met, after which the deal is forced through if it is also funded. For some reason the media misreported it out of context. The break fee is paid by either Twitter or Elon, depending on who cancels the deal.
- ckastner 4y ago
  I admittedly haven't checked the full agreement, but if that is the case, then the angle over the less than 5% spammers/bots makes even more sense, if that number was indeed part of the agreement.
dragontamer 4y ago
When Musk started selling his TSLA shares to buy Twitter, TSLA fell by like $200 or like 20%. It was becoming obvious that to buy Twitter, TSLA value would have to decline severely. IIRC, Musk only got around to selling $8 Billion pretax before quitting. Musk thought he could afford Twitter. He sells some TSLA and the market collapses, and he suddenly decides against it. Everything else is smoke and mirrors. Musk doesn't have the cash for the deal anymore (maybe he never had the cash for the deal). I guess Musk is looking at the $1 Billion ejection clause now and trying to weasel around it. But at this rate, it looks like Musk owes Twitter $1 billion cash for this broke deal.
- shmatt 4y ago
  This is the pretty good point to all the "richest person" "net worth XX Billion" lists and calculations. Most if not all of these people can't liquidate even close to their "net worth"
  - Spivak 4y ago
    Which is why it's not at all unexpected that the Twitter board after some hand-wringing jumped on the deal because even at a "loss" someone who offers to turn your illiquid assets into cash without tanking the value of those assets is literally the dream exit.
    - ckozlowski 4y ago
      Makes one wonder if they simply called his bluff.
    - jimmydorry 4y ago
      Except the Twitter board had almost no shares between them (Jack being the only exception). I recall reading that none of them even tweet, but that's neither here nor there.
      - solveit 4y ago
        That said, it's clearly a good deal for their shareholders for this very reason, and the board should act in the interests of their shareholders.
newaccount2021 4y ago
Damage to Twitter is terminal even if Musk walks The board and execs consented to a takeover by an ideological adversary...the company culture is smashed and will never return If he walks, the stock craters and employees know the board is no longer invested in the future...if the deal goes through, employees will have to March to Elon's beat or be fired. Either way...bye Twitter
- nickthegreek 4y ago
  plus they just fired 2 high level employees yesterday.
- rchaud 4y ago
  This sounds like some kind of ancient samurai lore wrapped in traditions of sacrifice and nobility.....instead of a business deal happening in the United States of America. "Consented to takeover by an ideological adversary" -- why, because Trump is banned? Is Musk going to try to bluff Facebook with an offer too? What if the deal fails? How will Musk ever live down the dishonor?
abofh 4y ago
Twitter would pocket a billion dollars - ~5x its net cash flow for last year - why on earth would it sell for _less_ when it can invest that cash in just about anything? He'd be buying the company years of runway to build... whatever it wants - at that point I'd invest in twitter as soon as Musk's check cleared. This isn't a renegotiation, this is him paying points on his mortgage for a lower rate - but where the points paid go towards the previous owners either way.
- amptorn 4y ago
  The offered price to buy Twitter is ~220 times its net annual cash flow? Something about that does not compute.
brentm 4y ago
Without this deal TWTR could easily be $15-$20 right now.
mannykannot 4y ago
I am not a lawyer, let alone a securities lawyer, but from what I have seen over the years, I suspect that if he just backed out but did not renegotiate, or did not do so with a plausibly-acceptable offer, he would likely be sued by Twitter stockholders claiming his actions had done harm to Twitter's valuation - a claim which can at least be made even though the market is falling broadly. If that puts pressure on him to renegotiate, that pressure would seem to strengthen the Twitter board's hand in seeking a considerable premium over whatever the then-current valuation of Twitter will be. It is not clear to me that the personal cost to Musk would be less than what he initially expected it to be, measured in units of Tesla stock, though I agree it could be less than if he completes the current deal. As for the spammers thing, Musk waived an extensive due-diligence investigation, and now he is complaining about issues that should have been covered by that investigation.
JeremyNT 4y ago
> Musk should just pay the break fee of $1bn, and renegotiate for $42.69 or whatever meme number he fancies. Why pay $42bn total for something when you can get it for $30bn. I just assumed this is his plan here? He manipulates the market with his shenanigans and trash talking, lowers the price of Twitter by a massive amount, then buys it for a bargain.
- fullshark 4y ago
  He breaks, says his independent investigation says 5-30% of Twitter is bots. Price tanks even further than natural market would dictate. Buy at a much lower price.
  - elliekelly 4y ago
    I'm dying to know how they're defining "bots" for this purpose and whether it's specifically defined in the agreement. I suspect a (perhaps feigned) argument over the scope of the definition will be the deal's undoing.
  - rightbyte 4y ago
    There is no way the bot share is so low among active users? When I look at replies to some celeb tweet there are so many obvious bots.
    - swores 4y ago
      And yet you've probably never seen my tweets, because I'm generally not replying to celebs' tweets. Bots (owners) are trying harder than most people to maximise their visibility before getting banned, so it's expected that you would notice a higher proportion than they actually represent. That's not to say I have any reason to think the bot share isn't higher, just I don't think it's possible for any single person to judge anywhere near accurately considering the huge scale of Twitter and that therefore any one of us users is only seeing a tiny, tiny fraction of the accounts/tweets being posted.
    - abnry 4y ago
gordon_freeman 4y ago
He specifically said this is his final offer and he does not want to do back and forth to negotiate the deal. Then why would he do it now? It would look like he is not keeping his word/promise by not respecting his "final offer". He should just admit that he paid too much for the deal and just pay up and move on.
- rtkwe 4y ago
  Yeah and he's said for half a decade now full self driving was coming next year. Never believe a Musk timeline.
gizzlon 4y ago
Did Hindenburg call it a few days ago? : > As a result of these developments, we believe that if Elon Musk’s bid for Twitter disappeared tomorrow, Twitter’s equity would fall by 50% from current levels. Consequently, we see a significant risk that the deal gets repriced lower. https://hindenburgresearch.com/twitter/ https://hindenburgresearch.com/twitter/
dkjaudyeqooe 4y ago
Musk didn't really think this through before he acted. A great way to spend a billion!
- dylan604 4y ago
  Does it stipulate that the billion has to be in cash? What if he trades rides to the ISS for the board members? If it doesn't have to be in cash, then it could cost Musk less than the number of the contract.??
  - dkjaudyeqooe 4y ago
    That's some out of the box thinking there. Have you considered working for Musk as his M&A strategist? Just tweet at him until he hires or blocks you.
  - not2b 4y ago
    Not sure if you're serious, but no, he can't pull crap like that and neither can anyone else who signs a contract specifying a penalty in dollars. Rides to the ISS aren't dollars.
    - dylan604 4y ago
      Of course I'm not serious. If the board accepted payout equivalents for themselves and not the remaining stock holders, they would not be upholding their fiduciary duties. Oh, and then you know, accepting of bribes and what not.
  - rchaud 4y ago
    I'm sure he could pump some shitcoin with a tweet and defray that expense with his winnings.
JYellensFuckboy 4y ago
Is this legal? It seems like such a devious exploit. 1. Announce buyout (priced at a premium, of course) is "on hold" 2. Stock drops due to bad news 3. Re-negotiate for lower buyout after manipulating the stock to a lower price
- 542458 4y ago
  No, that's not legal. Trying to back out of this deal because market fluctuations caused the company to be worth less than he wanted would be very, very much against his contract. He can only back out is Twitter's securities filings are so wrong that profit projections are more than 40% off (MAE standard) or he was unable to secure financing. Spambots being a bit higher than projected is not enough to break the contract, especially given that Musk waived due diligence and that the Twitter filings have always said that the bot number is an estimate. Elon Musk's lawyers are probably more than a bit panicked right now.
  - cozzyd 4y ago
    Being one of Musk's lawyers sounds like possibly one of the most stressful jobs in the world!
    - not2b 4y ago
      Doubt it. They have a client who makes things difficult, but that's nothing compared to the stress of being in a job where a wrong decision costs lives.
      - rchaud 4y ago
        So Tesla's lawyers probably aren't doing great either.
      - mrtranscendence 4y ago
        I think you underestimate the human ability to feel stress. I recently heard about a video game developer/director having a stroke due to stress from extended crunch. A video game! No lives at stake there. Heck, you should have seen how stressed I was in grad school ... I was nearly suicidal on occasion. But absolutely nothing substantial hinged on the work I was doing.
pyinstallwoes 4y ago
It's probably with this highly evident fact: https://bird.trom.tf/elonmusk/status/1524909413462573058#m https://bird.trom.tf/elonmusk/status/1524909413462573058#m
deleted 4y ago
[deleted]
pclmulqdq 4y ago
The break fee is not an option, it's a penalty. Twitter can sue him to force the deal to go through unless it's off for a specific reason.
- onlyrealcuzzo 4y ago
  Musk is worth 2-3x Twitter. I'm guessing he can afford better lawyers to win this case. He also has much more at stake.
  - rtkwe 4y ago
    Better lawyers isn't a fool proof trump card you can use to just get out of anything. This isn't like Trump stiffing contractors on a job site where he has all the money and the contractors are (relatively speaking) penniless.
  - deleted 4y ago
    [deleted]
Saint_Genet 4y ago
I mena, he’s obviously rich as hell, but the imaginary la la land of his reported net work isn’t real. When it comes to actually forking over real money he can’t afford to buy twitter
myko 4y ago
It's more likely Musk never intended to go through with it but got caught up in his own bravado. Now reality is coming in hard. He was going to lose a lot on this deal.

nicce 4y ago

You always need to pay much more on payouts than the current stock price. There is no chance he could buy it for $30bn. Unless history and future predictions suggests that there is no chance for stock to grow in foreseeable future.

zerocrates 4y ago

Feels like you'd have to offer substantially more premium, or more breakup fee, or (probably) both, if you've intentionally broken your last deal and then you turn around and propose another. Now that's premium starting from a lower base, but... Also, it does feel a little "manipulation"-y to tank the price on news of you yourself trashing your deal, then taking advantage of that to make the same deal but cheaper? Of course any analysis is assuming Elon actually means it and didn't just tweet this as a joke or on a whim.

kibwen 4y ago
> Also, it does feel a little "manipulation"-y to tank the price on news of you yourself trashing your deal, then taking advantage of that to make the same deal but cheaper? Elon Musk's past behavior has shown him to be extremely comfortable with this tactic.

itsoktocry 4y ago

>Musk should just pay the break fee of $1bn, and renegotiate for $42.69 or whatever meme number he fancies. Why pay $42bn total for something when you can get it for $30bn. Perhaps because the board and shareholders will be far more inclined to reject an offer from Musk after he feigned buying it one time and backed out?

ckastner 4y ago
> Perhaps because the board and shareholders will be far more inclined to reject an offer from Musk after he feigned buying it one time and backed out? He didn't feign anything. On the contrary, he's proved that he was dead serious about it. All he'd be doing would be renegotiating the price, which is something that any reasonable person would do when the circumstances change so drastically (assuming, of course, that a renegotiation would be possible). Don't think for a second that Twitter would walk away from Musks's offer if someone were to offer $60 a share.

thedufer 4y ago

> Musk should just pay the break fee of $1bn, and renegotiate for $42.69 or whatever meme number he fancies. Why pay $42bn total for something when you can get it for $30bn. That's not really how the break fee works. There's a specific performance clause that allows Twitter to force Musk to go through with the deal as long as he has the money (which, shockingly, seems to have come through). They'd only give up on that and take the break fee if the deal was truly over and they were prepared to say no to a lower offer.

throwawaylinux 4y ago
Interesting. Is this deal public somewhere? Does it include any clauses relating to Twitter misrepresenting of their userbase?
- hooande 4y ago
  Yes, it is public though I don't have a link. To the best of my knowledge, Twitter is accountable to the SEC if they materially misrepresented any numbers about their business. I don't think the deal has any specific language about that.
- danielmarkbruce 4y ago
  https://www.bamsec.com/filing/119312522120461/2?cik=1418091 https://www.bamsec.com/filing/119312522120461/2?cik=1418091 4.6
Flankk 4y ago
I looked it up and the news seems to be reporting what you said, but it is not true. Section 9.9 of the agreement is contingent on a bunch of conditions being met, after which the deal is forced through if it is also funded. For some reason the media misreported it out of context. The break fee is paid by either Twitter or Elon, depending on who cancels the deal.
ckastner 4y ago
I admittedly haven't checked the full agreement, but if that is the case, then the angle over the less than 5% spammers/bots makes even more sense, if that number was indeed part of the agreement.

dragontamer 4y ago

When Musk started selling his TSLA shares to buy Twitter, TSLA fell by like $200 or like 20%. It was becoming obvious that to buy Twitter, TSLA value would have to decline severely. IIRC, Musk only got around to selling $8 Billion pretax before quitting. Musk thought he could afford Twitter. He sells some TSLA and the market collapses, and he suddenly decides against it. Everything else is smoke and mirrors. Musk doesn't have the cash for the deal anymore (maybe he never had the cash for the deal). I guess Musk is looking at the $1 Billion ejection clause now and trying to weasel around it. But at this rate, it looks like Musk owes Twitter $1 billion cash for this broke deal.

shmatt 4y ago
This is the pretty good point to all the "richest person" "net worth XX Billion" lists and calculations. Most if not all of these people can't liquidate even close to their "net worth"
- Spivak 4y ago
  Which is why it's not at all unexpected that the Twitter board after some hand-wringing jumped on the deal because even at a "loss" someone who offers to turn your illiquid assets into cash without tanking the value of those assets is literally the dream exit.
  - ckozlowski 4y ago
    Makes one wonder if they simply called his bluff.
  - jimmydorry 4y ago
    Except the Twitter board had almost no shares between them (Jack being the only exception). I recall reading that none of them even tweet, but that's neither here nor there.
    - solveit 4y ago
      That said, it's clearly a good deal for their shareholders for this very reason, and the board should act in the interests of their shareholders.

newaccount2021 4y ago

Damage to Twitter is terminal even if Musk walks The board and execs consented to a takeover by an ideological adversary...the company culture is smashed and will never return If he walks, the stock craters and employees know the board is no longer invested in the future...if the deal goes through, employees will have to March to Elon's beat or be fired. Either way...bye Twitter

nickthegreek 4y ago
plus they just fired 2 high level employees yesterday.
rchaud 4y ago
This sounds like some kind of ancient samurai lore wrapped in traditions of sacrifice and nobility.....instead of a business deal happening in the United States of America. "Consented to takeover by an ideological adversary" -- why, because Trump is banned? Is Musk going to try to bluff Facebook with an offer too? What if the deal fails? How will Musk ever live down the dishonor?

abofh 4y ago

Twitter would pocket a billion dollars - ~5x its net cash flow for last year - why on earth would it sell for _less_ when it can invest that cash in just about anything? He'd be buying the company years of runway to build... whatever it wants - at that point I'd invest in twitter as soon as Musk's check cleared. This isn't a renegotiation, this is him paying points on his mortgage for a lower rate - but where the points paid go towards the previous owners either way.

amptorn 4y ago
The offered price to buy Twitter is ~220 times its net annual cash flow? Something about that does not compute.

brentm 4y ago

Without this deal TWTR could easily be $15-$20 right now.

mannykannot 4y ago

I am not a lawyer, let alone a securities lawyer, but from what I have seen over the years, I suspect that if he just backed out but did not renegotiate, or did not do so with a plausibly-acceptable offer, he would likely be sued by Twitter stockholders claiming his actions had done harm to Twitter's valuation - a claim which can at least be made even though the market is falling broadly. If that puts pressure on him to renegotiate, that pressure would seem to strengthen the Twitter board's hand in seeking a considerable premium over whatever the then-current valuation of Twitter will be. It is not clear to me that the personal cost to Musk would be less than what he initially expected it to be, measured in units of Tesla stock, though I agree it could be less than if he completes the current deal. As for the spammers thing, Musk waived an extensive due-diligence investigation, and now he is complaining about issues that should have been covered by that investigation.

JeremyNT 4y ago

> Musk should just pay the break fee of $1bn, and renegotiate for $42.69 or whatever meme number he fancies. Why pay $42bn total for something when you can get it for $30bn. I just assumed this is his plan here? He manipulates the market with his shenanigans and trash talking, lowers the price of Twitter by a massive amount, then buys it for a bargain.

fullshark 4y ago
He breaks, says his independent investigation says 5-30% of Twitter is bots. Price tanks even further than natural market would dictate. Buy at a much lower price.
- elliekelly 4y ago
  I'm dying to know how they're defining "bots" for this purpose and whether it's specifically defined in the agreement. I suspect a (perhaps feigned) argument over the scope of the definition will be the deal's undoing.
- rightbyte 4y ago
  There is no way the bot share is so low among active users? When I look at replies to some celeb tweet there are so many obvious bots.
  - swores 4y ago
    And yet you've probably never seen my tweets, because I'm generally not replying to celebs' tweets. Bots (owners) are trying harder than most people to maximise their visibility before getting banned, so it's expected that you would notice a higher proportion than they actually represent. That's not to say I have any reason to think the bot share isn't higher, just I don't think it's possible for any single person to judge anywhere near accurately considering the huge scale of Twitter and that therefore any one of us users is only seeing a tiny, tiny fraction of the accounts/tweets being posted.
  - abnry 4y ago

gordon_freeman 4y ago

He specifically said this is his final offer and he does not want to do back and forth to negotiate the deal. Then why would he do it now? It would look like he is not keeping his word/promise by not respecting his "final offer". He should just admit that he paid too much for the deal and just pay up and move on.

rtkwe 4y ago
Yeah and he's said for half a decade now full self driving was coming next year. Never believe a Musk timeline.

gizzlon 4y ago

Did Hindenburg call it a few days ago? : > As a result of these developments, we believe that if Elon Musk’s bid for Twitter disappeared tomorrow, Twitter’s equity would fall by 50% from current levels. Consequently, we see a significant risk that the deal gets repriced lower. https://hindenburgresearch.com/twitter/ https://hindenburgresearch.com/twitter/

dkjaudyeqooe 4y ago

Musk didn't really think this through before he acted. A great way to spend a billion!

dylan604 4y ago
Does it stipulate that the billion has to be in cash? What if he trades rides to the ISS for the board members? If it doesn't have to be in cash, then it could cost Musk less than the number of the contract.??
- dkjaudyeqooe 4y ago
  That's some out of the box thinking there. Have you considered working for Musk as his M&A strategist? Just tweet at him until he hires or blocks you.
- not2b 4y ago
  Not sure if you're serious, but no, he can't pull crap like that and neither can anyone else who signs a contract specifying a penalty in dollars. Rides to the ISS aren't dollars.
  - dylan604 4y ago
    Of course I'm not serious. If the board accepted payout equivalents for themselves and not the remaining stock holders, they would not be upholding their fiduciary duties. Oh, and then you know, accepting of bribes and what not.
- rchaud 4y ago
  I'm sure he could pump some shitcoin with a tweet and defray that expense with his winnings.

JYellensFuckboy 4y ago

Is this legal? It seems like such a devious exploit. 1. Announce buyout (priced at a premium, of course) is "on hold" 2. Stock drops due to bad news 3. Re-negotiate for lower buyout after manipulating the stock to a lower price

542458 4y ago
No, that's not legal. Trying to back out of this deal because market fluctuations caused the company to be worth less than he wanted would be very, very much against his contract. He can only back out is Twitter's securities filings are so wrong that profit projections are more than 40% off (MAE standard) or he was unable to secure financing. Spambots being a bit higher than projected is not enough to break the contract, especially given that Musk waived due diligence and that the Twitter filings have always said that the bot number is an estimate. Elon Musk's lawyers are probably more than a bit panicked right now.
- cozzyd 4y ago
  Being one of Musk's lawyers sounds like possibly one of the most stressful jobs in the world!
  - not2b 4y ago
    Doubt it. They have a client who makes things difficult, but that's nothing compared to the stress of being in a job where a wrong decision costs lives.
    - rchaud 4y ago
      So Tesla's lawyers probably aren't doing great either.
    - mrtranscendence 4y ago
      I think you underestimate the human ability to feel stress. I recently heard about a video game developer/director having a stroke due to stress from extended crunch. A video game! No lives at stake there. Heck, you should have seen how stressed I was in grad school ... I was nearly suicidal on occasion. But absolutely nothing substantial hinged on the work I was doing.

pyinstallwoes 4y ago

It's probably with this highly evident fact: https://bird.trom.tf/elonmusk/status/1524909413462573058#m https://bird.trom.tf/elonmusk/status/1524909413462573058#m

deleted 4y ago

[deleted]

pclmulqdq 4y ago

The break fee is not an option, it's a penalty. Twitter can sue him to force the deal to go through unless it's off for a specific reason.

onlyrealcuzzo 4y ago
Musk is worth 2-3x Twitter. I'm guessing he can afford better lawyers to win this case. He also has much more at stake.
- rtkwe 4y ago
  Better lawyers isn't a fool proof trump card you can use to just get out of anything. This isn't like Trump stiffing contractors on a job site where he has all the money and the contractors are (relatively speaking) penniless.
- deleted 4y ago
  [deleted]

Saint_Genet 4y ago

I mena, he’s obviously rich as hell, but the imaginary la la land of his reported net work isn’t real. When it comes to actually forking over real money he can’t afford to buy twitter

myko 4y ago

It's more likely Musk never intended to go through with it but got caught up in his own bravado. Now reality is coming in hard. He was going to lose a lot on this deal.