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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 hav

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 5y 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 5y 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 5y ago
    Makes one wonder if they simply called his bluff.
  - jimmydorry 5y 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 5y 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.
    - HWR_14 5y ago
      > I recall reading that none of them even tweet Good drug dealers don't get high on their own supply.
      - jimmydorry 4y ago
        Drug dealers are just middlemen though. Would you really trust the chemist that has never tried their own goods and has an overall disdain for drug usage. Kind of stretching the analogy, but you hopefully get my point.
- rootusrootus 5y ago
  > Most if not all of these people can't liquidate even close to their "net worth" I think that's broadly true, though some of the older ones might be able to. Bill Gates, for example, has diversified his wealth out of Microsoft (and he doesn't control the company these days, anyway). I don't think the market would punish Berk or AutoNation, for example, nearly as hard as they've punished Tesla for Elon cutting his ownership stake.
  - grumple 5y ago
    It's not punishment. Stock price * shares != actual value of the company. As more shares go onto market, demand naturally decreases as supply satiates existing demand, thus causing the price to decrease. I'm sure this is covered in some basic economics course that I never took.
    - rootusrootus 5y ago
      Call it what you will, I don't think it's just the economics of putting more shares on the market. When the CEO dumps ownership, he is signaling a lack of confidence.
      - Bubble_Pop_22 5y ago
        What did Bill Gates signal when he diverted his Microsoft stock into the Bill Gates Foundation back when he was forced to step down as CEO after the antitrust lawsuit? Not all sales are equal. Here you have a guy who essentially arrived at the end of the road and brought Microsoft where only Standard Oil arrived before. Both had extinguished all their natural competitiors and had to be essentially stopped by the US Federal Govt. Stark contrast with the CEO of a luxury automaker who inflated a financial bubble to enrich himself who is now selling to buy a social media platform.
    - tempestn 5y ago
      And yet we treat the market cap as the actual value of the company. Also, sometimes the actual value can be more—for instance if a buyer comes along who wants all of your company, to take it private. It would be interesting if there were some way to calculate something like the "cash net worth" of individuals. Work out what they could actually reasonably expect to get if they liquidated all their assets. Obviously it would be a pretty rough estimate, but you'd definitely see some reshuffling of the richest people lists.
- corrral 5y ago
  If you can get several tens of millions of dollars, liquid, on fairly short notice, there's almost nothing you can't buy on a whim. You may as well have infinite money. It doesn't matter that you can't liquidate another 90-99% of your net worth easily. You borrow $60m for that second yacht, then pay it off as soon as the tax situation looks favorable for realizing some gains. No big deal. Live like (er, better than) a king, pay taxes like a pauper. It's the American way. Larger sums are only really useful for making big-splash investments. Like this. As far as personal spending goes, it's no obstacle, so it doesn't matter that they can't easily turn their entire net worth into a literal billions-of-dollars balance in a checking account.
  - jonny_eh 5y ago
    > there's almost nothing you can't buy on a whim Twitter, you can't buy Twitter on a whim.
    - corrral 5y ago
      Right, big-splash, chest-thumping investments are about the only thing that might be a problem. Not ordinary purchases. But that's not so much buying something, in the ordinary sense, as shifting investment strategy.
      - LigmaYC 5y ago
        Aka, you can't buy anything on a whim.
    - deleted 5y ago
      [deleted]
  - nonameiguess 5y ago
    At least one reason it matters is the gigantic numbers poison public discussion of wealth. People commonly claim things like Musk can single-handedly end world hunger because he has enough net worth to buy everyone food for the next 20 years. That isn't true if there is no way for him to liquidate enough of that worth without destroying the worth in the process. What these people actually can do is give away equity shares to the poor, but you can't buy food with equity shares. Or, in Bezos case, since he owns Whole Foods, I guess he can just give away food.
- munificent 5y ago
  That's true but wealth at that level is essentially relative anyway. There's little you can do as a billionaire that you couldn't do as a hundred-millionaire when it comes to simply buying things for liquid cash. You can buy all the houses, boats, private islands, etc. that you want. The only meaningful difference in wealth at that scale is buying fundamentally scarce things: specific real estate and private islands, favors from politicians, private time with other powerful people. For all of those, you are competing with other wealthy people to win them, so it's relative wealth that matters.
  - tempestn 5y ago
    I agree with your point in general, but I think you'd need to scale the two example numbers each up by an order of magnitude. A hundred-millionaire is definitely rich, but can't buy all the houses, boats, private islands, etc. that they want. A single property or a yacht can easily cost well into the tens of millions. Plus if you're living in a $10M+ home, your annual expenses are presumably significant, so you'd want to keep a fair amount to live off of. It's probably ridiculous to most to think of hundred-millionaires being financially constrained, but I do think there's a material difference in the buying power of $100M and $1B without getting into unique goods.
anonu 5y ago
It seems like he only needed to put up $4bn of his own money. The rest of the financing was leveraged with loans. And some investors would also keep their shares (like the Saudis) I'm pretty sure "funding secured" in this case.
loceng 5y ago
It will be hard to know how much TSLA's current value is due to this vs. how much is the current climate of the whole market.
- dragontamer 5y ago
  Does it matter? Under the original plan, Musk needs to sell approximately $20 billion more of TSLA stock before the original deal could be accomplished. What do you think will happen to TSLA share price if Musk did that? It's a hard job to find $40+ billion dollars. You gotta sell assets, and when you sell those assets, they fall in price significantly.
  - sounds 5y ago
    I think the parent was suggesting, without being so blunt, that TSLA is undervalued and grabbing some of those shares while they're cheap is his strategy. And, of course, the counterstrategy is to wait until next Wednesday, when the price of TSLA moves upward, then sell and catch the falling knife when other institutional buyers ease off the stock price. To be clear, I hold no shares of TSLA because you can get hurt trying to catch falling knives.
noelsusman 5y ago
I would be more inclined to believe this if every other similar company wasn't also taking a 20%+ hit right now.
heartbreak 5y ago
To further compound the problem, a significant chunk of Musk’s financing for the deal relies on leveraging (some of) his TSLA for a $12b or so loan. The loan mechanics require TSLA to maintain $740 or higher. When the deal was announced, it was $1,026. It has closed below $740 for the past two days currently at $728.
- dragontamer 5y ago
  Yeah, I don't remember all the details. IIRC, Musk makes Twitter a 100% cash offer. Twitter accepts, but writes the deal such that if either side pulls out of the deal, then a $1 billion penalty will be applied. Musk goes to the banks and secures a $20 billion-ish loan, putting TSLA as collateral. Musk starts to sell TSLA for the other $20 billion of cash. Stock tanks as a result, only ~$8 billion sold on public filing documents. Musk runs around looking for another $12 billion for the last week or so. And now we have today where it looks like he is failing his side of the deal. If Musk lost the $20 billion-ish from the banks due to TSLA being too low, it makes sense for him to give up. ------ All that is going on right now is Musk trying to blame Twitter for the failed deal, so that he avoids the $1 billion penalty written into the contract.
  - kodah 5y ago
    I am curious if his inability to raise money for the acquisition is a strong signal of the sliding value of social media. Facebook and Twitter seem to be on a streak of trying to pivot, Reddit is in private equity. Musk is fairly well-connected, so if he's unable to get other rich people to invest, their speculative value (at the height of their value) may be vanishing.
    - dragontamer 5y ago
      The value of internet forums and discussions is roughly the value of the advertisements hosted on those platforms. The value of ads drops during a recession, and things are looking more-and-more bearish this year.
    - jollybean 5y ago
RustyConsul 5y ago
Every step of the way some armchair comes up and concludes that Elon is broke and this deal won't go through. Why wouldn't he put up more Tesla as collateral? How do you know he can't get more financing? How much BTC, Doge and eth does he have? No one knows how rich this man is, people need to stop acting like they do.
- dragontamer 5y ago
  > Why wouldn't he put up more Tesla as collateral? Because he didn't. If Elon Musk had easy access to Tesla-as-collateral, he would have put more of it up as collateral. > How do you know he can't get more financing? Because he's cutting himself out of the deal. That suggests he has run out of options to get money. Besides, surprise +50 BPS from the Fed just made it incredibly more difficult to get financing from the banks, and -20% to TSLA's stock price in the past couple of weeks compounds upon this fact, and makes it more difficult to use TSLA-shares as collateral. > How much BTC, Doge and eth does he have? Whatever amount he has, it is worth about 25% less than two weeks ago. -------- EDIT: I mean, maybe Musk has the money and is just trolling all of us? Which sounds on-brand for him frankly. I don't know why he'd want to do that, but he's not exactly a "stable" figure.
  - LigmaYC 5y ago
    > If Elon Musk had easy access to Tesla-as-collateral, he would have put more of it up as collateral Just because he doesn't put up more, doesn't mean he doesn't have access to more. You shouldn't use more collateral than necessary.
hathym 5y ago
I tought Elon is much smarter thatn that, he could have purchased twitter with TSLA stocks in an exchange deal without dumping them on the market.
- alpha_squared 5y ago
  That would mean Tesla would acquire Twitter, not Musk personally. I have a hard time believing that wouldn't have hurt the Tesla stock.
  - deleted 5y ago
    [deleted]
coding123 5y ago
Well if his only goal was to get Trump back on the platform, perhaps it's better he loses 1bn and fail instead of 42b and Trump back on? - and even if he loses the billion, Trump might still get back on.
- not2b 5y ago
  I strongly doubt that this was his goal.
mediaman 5y ago
The $1b is not a simple breakup fee. He can't just say, "I've changed my mind, here's $1b, the deal is off." It's not a $1b option to walk away. The merger contract provides the option to pay $1b to walk away under only limited circumstances: either the acquisition is blocked by a government, or Musk fails to get financing for the deal. The latter can't really be easily faked: if he said 'sorry, I thought I had the money, but I checked my couch cushions and it turns out I don't,' and paid the $1b to walk away, Twitter would sue and this assertion that his financing broke down would be tested by the courts. In fact, out of those limited allowances to pay the $1b and walk away, Musk is bound by the contract to 'specific performance'. That is, he's bound to actually do it. Pay the $54.20. A good M&A analysis of the situation is below. https://yetanothervalueblog.substack.com/p/quick-twtr-thoughts-and-the-tif-lvmh https://yetanothervalueblog.substack.com/p/quick-twtr-though...
- dragontamer 5y ago
  Yeah, I didn't realize this since I guess I've only paid attention to the surface-level facts. But digging deeper, the "people in the know" are now pointing out that this $1 Billion escape clause is actually very restrictive and unlikely to be invoked. Musk might be forced into buying Twitter at the previously negotiated $54.20 price. But there's also the question: will Twitter's board really go to court to force Musk to buy it at $54.20? There's also the question of politics here. Even if Twitter's board is in the legal-right to do so, forcing Musk to become the new owner is bad politics. ------ There's also the possibility of the Twitter Board's incompetence. Maybe they don't realize the advantageous position they're in and give up before testing Musk in court?
  - CPLX 5y ago
    > But there's also the question: will Twitter's board really go to court to force Musk to buy it at $54.20? There's also the question of politics here. Even if Twitter's board is in the legal-right to do so, forcing Musk to become the new owner is bad politics. Is there some kind of politics more important for corporate decision making than claiming the $20bn or so you're entitled to by contract?
belter 5y ago
This is the agreement: PDF: https://d18rn0p25nwr6d.cloudfront.net/CIK-0001418091/e61e4376-e2c5-4d54-8782-d63fc5e096e9.pdf https://d18rn0p25nwr6d.cloudfront.net/CIK-0001418091/e61e437... I don't see mention of the number of Twitter users and investigation on fake accounts. I guess that falls under the misrepresentation of accounting section. It looks like a fairly standard acquisition/merger contract. The mention of the 1 Billion penalty is however pretty easy to find.
jollybean 5y ago
It would be utterly, glibly and completely insane for Musk, or anyone, to buy Twitter outright with their own money. Musk should be in for several billion, surely, but the rest of the money should have come fro Private Equity / Buyout partners. I assumed that this was the case, not just him putting up Tesla stock as collateral.
jjcon 5y ago
>TSLA fell by like $200 or like 20% Everything is down this year - TSLA isn't down as much as Ford in 2022... I'm not sure twitter had tons to do with TSLA stock being down.
caycep 5y ago
i mean...that's one way to get the next round of VC funding (or equivalents...)!

shmatt 5y 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 5y 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 5y ago
  Makes one wonder if they simply called his bluff.
- jimmydorry 5y 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 5y 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.
  - HWR_14 5y ago
    > I recall reading that none of them even tweet Good drug dealers don't get high on their own supply.
    - jimmydorry 4y ago
      Drug dealers are just middlemen though. Would you really trust the chemist that has never tried their own goods and has an overall disdain for drug usage. Kind of stretching the analogy, but you hopefully get my point.
rootusrootus 5y ago
> Most if not all of these people can't liquidate even close to their "net worth" I think that's broadly true, though some of the older ones might be able to. Bill Gates, for example, has diversified his wealth out of Microsoft (and he doesn't control the company these days, anyway). I don't think the market would punish Berk or AutoNation, for example, nearly as hard as they've punished Tesla for Elon cutting his ownership stake.
- grumple 5y ago
  It's not punishment. Stock price * shares != actual value of the company. As more shares go onto market, demand naturally decreases as supply satiates existing demand, thus causing the price to decrease. I'm sure this is covered in some basic economics course that I never took.
  - rootusrootus 5y ago
    Call it what you will, I don't think it's just the economics of putting more shares on the market. When the CEO dumps ownership, he is signaling a lack of confidence.
    - Bubble_Pop_22 5y ago
      What did Bill Gates signal when he diverted his Microsoft stock into the Bill Gates Foundation back when he was forced to step down as CEO after the antitrust lawsuit? Not all sales are equal. Here you have a guy who essentially arrived at the end of the road and brought Microsoft where only Standard Oil arrived before. Both had extinguished all their natural competitiors and had to be essentially stopped by the US Federal Govt. Stark contrast with the CEO of a luxury automaker who inflated a financial bubble to enrich himself who is now selling to buy a social media platform.
  - tempestn 5y ago
    And yet we treat the market cap as the actual value of the company. Also, sometimes the actual value can be more—for instance if a buyer comes along who wants all of your company, to take it private. It would be interesting if there were some way to calculate something like the "cash net worth" of individuals. Work out what they could actually reasonably expect to get if they liquidated all their assets. Obviously it would be a pretty rough estimate, but you'd definitely see some reshuffling of the richest people lists.
corrral 5y ago
If you can get several tens of millions of dollars, liquid, on fairly short notice, there's almost nothing you can't buy on a whim. You may as well have infinite money. It doesn't matter that you can't liquidate another 90-99% of your net worth easily. You borrow $60m for that second yacht, then pay it off as soon as the tax situation looks favorable for realizing some gains. No big deal. Live like (er, better than) a king, pay taxes like a pauper. It's the American way. Larger sums are only really useful for making big-splash investments. Like this. As far as personal spending goes, it's no obstacle, so it doesn't matter that they can't easily turn their entire net worth into a literal billions-of-dollars balance in a checking account.
- jonny_eh 5y ago
  > there's almost nothing you can't buy on a whim Twitter, you can't buy Twitter on a whim.
  - corrral 5y ago
    Right, big-splash, chest-thumping investments are about the only thing that might be a problem. Not ordinary purchases. But that's not so much buying something, in the ordinary sense, as shifting investment strategy.
    - LigmaYC 5y ago
      Aka, you can't buy anything on a whim.
  - deleted 5y ago
    [deleted]
- nonameiguess 5y ago
  At least one reason it matters is the gigantic numbers poison public discussion of wealth. People commonly claim things like Musk can single-handedly end world hunger because he has enough net worth to buy everyone food for the next 20 years. That isn't true if there is no way for him to liquidate enough of that worth without destroying the worth in the process. What these people actually can do is give away equity shares to the poor, but you can't buy food with equity shares. Or, in Bezos case, since he owns Whole Foods, I guess he can just give away food.
munificent 5y ago
That's true but wealth at that level is essentially relative anyway. There's little you can do as a billionaire that you couldn't do as a hundred-millionaire when it comes to simply buying things for liquid cash. You can buy all the houses, boats, private islands, etc. that you want. The only meaningful difference in wealth at that scale is buying fundamentally scarce things: specific real estate and private islands, favors from politicians, private time with other powerful people. For all of those, you are competing with other wealthy people to win them, so it's relative wealth that matters.
- tempestn 5y ago
  I agree with your point in general, but I think you'd need to scale the two example numbers each up by an order of magnitude. A hundred-millionaire is definitely rich, but can't buy all the houses, boats, private islands, etc. that they want. A single property or a yacht can easily cost well into the tens of millions. Plus if you're living in a $10M+ home, your annual expenses are presumably significant, so you'd want to keep a fair amount to live off of. It's probably ridiculous to most to think of hundred-millionaires being financially constrained, but I do think there's a material difference in the buying power of $100M and $1B without getting into unique goods.

anonu 5y ago

It seems like he only needed to put up $4bn of his own money. The rest of the financing was leveraged with loans. And some investors would also keep their shares (like the Saudis) I'm pretty sure "funding secured" in this case.

loceng 5y ago

It will be hard to know how much TSLA's current value is due to this vs. how much is the current climate of the whole market.

dragontamer 5y ago
Does it matter? Under the original plan, Musk needs to sell approximately $20 billion more of TSLA stock before the original deal could be accomplished. What do you think will happen to TSLA share price if Musk did that? It's a hard job to find $40+ billion dollars. You gotta sell assets, and when you sell those assets, they fall in price significantly.
- sounds 5y ago
  I think the parent was suggesting, without being so blunt, that TSLA is undervalued and grabbing some of those shares while they're cheap is his strategy. And, of course, the counterstrategy is to wait until next Wednesday, when the price of TSLA moves upward, then sell and catch the falling knife when other institutional buyers ease off the stock price. To be clear, I hold no shares of TSLA because you can get hurt trying to catch falling knives.

noelsusman 5y ago

I would be more inclined to believe this if every other similar company wasn't also taking a 20%+ hit right now.

heartbreak 5y ago

To further compound the problem, a significant chunk of Musk’s financing for the deal relies on leveraging (some of) his TSLA for a $12b or so loan. The loan mechanics require TSLA to maintain $740 or higher. When the deal was announced, it was $1,026. It has closed below $740 for the past two days currently at $728.

dragontamer 5y ago
Yeah, I don't remember all the details. IIRC, Musk makes Twitter a 100% cash offer. Twitter accepts, but writes the deal such that if either side pulls out of the deal, then a $1 billion penalty will be applied. Musk goes to the banks and secures a $20 billion-ish loan, putting TSLA as collateral. Musk starts to sell TSLA for the other $20 billion of cash. Stock tanks as a result, only ~$8 billion sold on public filing documents. Musk runs around looking for another $12 billion for the last week or so. And now we have today where it looks like he is failing his side of the deal. If Musk lost the $20 billion-ish from the banks due to TSLA being too low, it makes sense for him to give up. ------ All that is going on right now is Musk trying to blame Twitter for the failed deal, so that he avoids the $1 billion penalty written into the contract.
- kodah 5y ago
  I am curious if his inability to raise money for the acquisition is a strong signal of the sliding value of social media. Facebook and Twitter seem to be on a streak of trying to pivot, Reddit is in private equity. Musk is fairly well-connected, so if he's unable to get other rich people to invest, their speculative value (at the height of their value) may be vanishing.
  - dragontamer 5y ago
    The value of internet forums and discussions is roughly the value of the advertisements hosted on those platforms. The value of ads drops during a recession, and things are looking more-and-more bearish this year.
  - jollybean 5y ago

RustyConsul 5y ago

Every step of the way some armchair comes up and concludes that Elon is broke and this deal won't go through. Why wouldn't he put up more Tesla as collateral? How do you know he can't get more financing? How much BTC, Doge and eth does he have? No one knows how rich this man is, people need to stop acting like they do.

dragontamer 5y ago
> Why wouldn't he put up more Tesla as collateral? Because he didn't. If Elon Musk had easy access to Tesla-as-collateral, he would have put more of it up as collateral. > How do you know he can't get more financing? Because he's cutting himself out of the deal. That suggests he has run out of options to get money. Besides, surprise +50 BPS from the Fed just made it incredibly more difficult to get financing from the banks, and -20% to TSLA's stock price in the past couple of weeks compounds upon this fact, and makes it more difficult to use TSLA-shares as collateral. > How much BTC, Doge and eth does he have? Whatever amount he has, it is worth about 25% less than two weeks ago. -------- EDIT: I mean, maybe Musk has the money and is just trolling all of us? Which sounds on-brand for him frankly. I don't know why he'd want to do that, but he's not exactly a "stable" figure.
- LigmaYC 5y ago
  > If Elon Musk had easy access to Tesla-as-collateral, he would have put more of it up as collateral Just because he doesn't put up more, doesn't mean he doesn't have access to more. You shouldn't use more collateral than necessary.

hathym 5y ago

I tought Elon is much smarter thatn that, he could have purchased twitter with TSLA stocks in an exchange deal without dumping them on the market.

alpha_squared 5y ago
That would mean Tesla would acquire Twitter, not Musk personally. I have a hard time believing that wouldn't have hurt the Tesla stock.
- deleted 5y ago
  [deleted]

coding123 5y ago

Well if his only goal was to get Trump back on the platform, perhaps it's better he loses 1bn and fail instead of 42b and Trump back on? - and even if he loses the billion, Trump might still get back on.

not2b 5y ago
I strongly doubt that this was his goal.

mediaman 5y ago

The $1b is not a simple breakup fee. He can't just say, "I've changed my mind, here's $1b, the deal is off." It's not a $1b option to walk away. The merger contract provides the option to pay $1b to walk away under only limited circumstances: either the acquisition is blocked by a government, or Musk fails to get financing for the deal. The latter can't really be easily faked: if he said 'sorry, I thought I had the money, but I checked my couch cushions and it turns out I don't,' and paid the $1b to walk away, Twitter would sue and this assertion that his financing broke down would be tested by the courts. In fact, out of those limited allowances to pay the $1b and walk away, Musk is bound by the contract to 'specific performance'. That is, he's bound to actually do it. Pay the $54.20. A good M&A analysis of the situation is below. https://yetanothervalueblog.substack.com/p/quick-twtr-thoughts-and-the-tif-lvmh https://yetanothervalueblog.substack.com/p/quick-twtr-though...

dragontamer 5y ago
Yeah, I didn't realize this since I guess I've only paid attention to the surface-level facts. But digging deeper, the "people in the know" are now pointing out that this $1 Billion escape clause is actually very restrictive and unlikely to be invoked. Musk might be forced into buying Twitter at the previously negotiated $54.20 price. But there's also the question: will Twitter's board really go to court to force Musk to buy it at $54.20? There's also the question of politics here. Even if Twitter's board is in the legal-right to do so, forcing Musk to become the new owner is bad politics. ------ There's also the possibility of the Twitter Board's incompetence. Maybe they don't realize the advantageous position they're in and give up before testing Musk in court?
- CPLX 5y ago
  > But there's also the question: will Twitter's board really go to court to force Musk to buy it at $54.20? There's also the question of politics here. Even if Twitter's board is in the legal-right to do so, forcing Musk to become the new owner is bad politics. Is there some kind of politics more important for corporate decision making than claiming the $20bn or so you're entitled to by contract?

belter 5y ago

This is the agreement: PDF: https://d18rn0p25nwr6d.cloudfront.net/CIK-0001418091/e61e4376-e2c5-4d54-8782-d63fc5e096e9.pdf https://d18rn0p25nwr6d.cloudfront.net/CIK-0001418091/e61e437... I don't see mention of the number of Twitter users and investigation on fake accounts. I guess that falls under the misrepresentation of accounting section. It looks like a fairly standard acquisition/merger contract. The mention of the 1 Billion penalty is however pretty easy to find.

jollybean 5y ago

It would be utterly, glibly and completely insane for Musk, or anyone, to buy Twitter outright with their own money. Musk should be in for several billion, surely, but the rest of the money should have come fro Private Equity / Buyout partners. I assumed that this was the case, not just him putting up Tesla stock as collateral.

jjcon 5y ago

>TSLA fell by like $200 or like 20% Everything is down this year - TSLA isn't down as much as Ford in 2022... I'm not sure twitter had tons to do with TSLA stock being down.

caycep 5y ago

i mean...that's one way to get the next round of VC funding (or equivalents...)!