4 ms·

“Temporarily on hold” is not a thing. Musk has signed a binding contract

12 points by nabla9 5y ago

nabla9 5y ago
A good writeup from Matt Levine. Summary: The deal is watertight. There is no $1B walk away fee as reported somewhere. $54.20 seems really good deal for Twitter now when tech stocks are down and they have every reason to force Musk to go trough it. .. read the whole thing. There are interesting details.
- bediger4000 5y ago
  I choose to believe the richest, and therefore the smartest, man in the world over some lib reporter's fake news at Bloomberg. If Elon says it's on hold, it's on hold. Beware, Twitter! The New Sherriff in Town will grind your bots to dust and make you eat them!
  - vba616 5y ago
    So far, the column has been thoroughly misrepresented to wind people up. Levine, the "lib reporter" in question, made it very clear that despite Musk not having a legal, ethical, or logical leg to stand on, it's quite likely that he can do what he wants and get away with it. Levine acknowledged that the fact that Twitter could sue and theoretically win doesn't mean they want to go through the hassle. Even if they did win, something external might happen that would make the deal closure impossible. Levine has pointed out several times that Musk is a guy who has gone out and tried to ruin the careers of SEC personnel, and this must have some chilling effect on regulators enforcing the rules. Other people might have noticed that the richest man in the world is pretty vindictive. He further points to news the SEC is "investigating" the incorrect filing of forms related to buying Twitter stock and ridicules the idea - look at the calendar and look at when the forms were filed, he says - as he called it in an earlier column.
  - sidibe 4y ago
    This is the gist of it. Though you have to dress it up in a million different ways, many if which he will offer ready to go on his Twitter.
logicalmonster 5y ago
If the item for sale has been misrepresented, there's probably some contractual wiggle room. Personally speaking, as somebody who has studied this a little bit, I don't think it's realistic that just 5% of Twitter accounts are bots: it feels like much higher. Governments, activists, and NGOs use Twitter to affect public opinion. Businesses use bots to fortify their follower counts to rank higher in searches and to affect public perception. An army of independent spammers use bots to try and shill various products and websites. Social media manipulation is basically an entire industry. Where I think the key point is is either side willing to go to court to expose the dirty laundry. I'm sure you will find some emails in discovery (if things go to some kind of court) where Twitter employees express complaints about mass numbers of bots far in excess of their public statements. There's probably some backdoor dealings going on where both sides are playing chicken and threatening to expose the other, if I had to guess.
- deleted 5y ago
  [deleted]
- nabla9 5y ago
  >2.That contract does not allow Musk to walk away if it turns out that “spam/fake accounts” represent more than 5% of Twitter users. We discussed this last month, when Twitter admitted in a securities filing that it had (slightly) overestimated its daily active users for years. The merger agreement contains a provision that allows Musk to walk away if Twitter’s securities filings are wrong — and this 5% number is in its securities filings — but only if the inaccuracy would have a “Material Adverse Effect” on the company. (See Sections 4.6(a) and 7.2(b).) That is an incredibly high standard: Delaware courts have almost never found an MAE. An MAE has to be something that would “substantially threaten the overall earnings potential of the target in a durationally-significant manner,” the courts have said; there is a rule of thumb that an MAE requires a 40% decrease in long-term profitability. If it turned out that 6% or 20% or 50% of Twitter accounts are bots, that will be embarrassing and might even reduce Twitter’s future advertising revenue, but will it be an MAE? No.
  - veltas 5y ago
    If Twitter overestimated actual users by like 200% then that wouldn't affect its profitability by 40%? It could do, not sure why Bloomberg is defending Twitter so hard.
throwaway4good 5y ago
Hn needs to fix its link submission mechanism for links that redirects like Bloomberg does. In the meanwhile: https://archive.ph/a4o8m https://archive.ph/a4o8m
Tomte 5y ago
Not the real title: https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html

12 points by nabla9 5y ago

A good writeup from Matt Levine. Summary: The deal is watertight. There is no $1B walk away fee as reported somewhere. $54.20 seems really good deal for Twitter now when tech stocks are down and they have every reason to force Musk to go trough it. .. read the whole thing. There are interesting details.

bediger4000 5y ago
I choose to believe the richest, and therefore the smartest, man in the world over some lib reporter's fake news at Bloomberg. If Elon says it's on hold, it's on hold. Beware, Twitter! The New Sherriff in Town will grind your bots to dust and make you eat them!
- vba616 5y ago
  So far, the column has been thoroughly misrepresented to wind people up. Levine, the "lib reporter" in question, made it very clear that despite Musk not having a legal, ethical, or logical leg to stand on, it's quite likely that he can do what he wants and get away with it. Levine acknowledged that the fact that Twitter could sue and theoretically win doesn't mean they want to go through the hassle. Even if they did win, something external might happen that would make the deal closure impossible. Levine has pointed out several times that Musk is a guy who has gone out and tried to ruin the careers of SEC personnel, and this must have some chilling effect on regulators enforcing the rules. Other people might have noticed that the richest man in the world is pretty vindictive. He further points to news the SEC is "investigating" the incorrect filing of forms related to buying Twitter stock and ridicules the idea - look at the calendar and look at when the forms were filed, he says - as he called it in an earlier column.
- sidibe 4y ago
  This is the gist of it. Though you have to dress it up in a million different ways, many if which he will offer ready to go on his Twitter.

logicalmonster 5y ago

If the item for sale has been misrepresented, there's probably some contractual wiggle room. Personally speaking, as somebody who has studied this a little bit, I don't think it's realistic that just 5% of Twitter accounts are bots: it feels like much higher. Governments, activists, and NGOs use Twitter to affect public opinion. Businesses use bots to fortify their follower counts to rank higher in searches and to affect public perception. An army of independent spammers use bots to try and shill various products and websites. Social media manipulation is basically an entire industry. Where I think the key point is is either side willing to go to court to expose the dirty laundry. I'm sure you will find some emails in discovery (if things go to some kind of court) where Twitter employees express complaints about mass numbers of bots far in excess of their public statements. There's probably some backdoor dealings going on where both sides are playing chicken and threatening to expose the other, if I had to guess.

deleted 5y ago
[deleted]
nabla9 5y ago
>2.That contract does not allow Musk to walk away if it turns out that “spam/fake accounts” represent more than 5% of Twitter users. We discussed this last month, when Twitter admitted in a securities filing that it had (slightly) overestimated its daily active users for years. The merger agreement contains a provision that allows Musk to walk away if Twitter’s securities filings are wrong — and this 5% number is in its securities filings — but only if the inaccuracy would have a “Material Adverse Effect” on the company. (See Sections 4.6(a) and 7.2(b).) That is an incredibly high standard: Delaware courts have almost never found an MAE. An MAE has to be something that would “substantially threaten the overall earnings potential of the target in a durationally-significant manner,” the courts have said; there is a rule of thumb that an MAE requires a 40% decrease in long-term profitability. If it turned out that 6% or 20% or 50% of Twitter accounts are bots, that will be embarrassing and might even reduce Twitter’s future advertising revenue, but will it be an MAE? No.
- veltas 5y ago
  If Twitter overestimated actual users by like 200% then that wouldn't affect its profitability by 40%? It could do, not sure why Bloomberg is defending Twitter so hard.

throwaway4good 5y ago

Hn needs to fix its link submission mechanism for links that redirects like Bloomberg does. In the meanwhile: https://archive.ph/a4o8m https://archive.ph/a4o8m

Tomte 5y ago

Not the real title: https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html