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It's just silly though -- he complained relentlessly about the bots before he made what was am unconditional offer to buy the company. Twitter hasn't changed t

It's just silly though -- he complained relentlessly about the bots before he made what was am unconditional offer to buy the company. Twitter hasn't changed their definition of bot in the past decade, they have repeatedly emphasized that they count them in a unique and specific way, and they detailed that methodology (it's not 5% of accounts - it's 5% of "monetizable daily active users"[1]). He has no legal leg to stand on, in a 'legally just' world, he'd be forced to buy Twitter for the price he initially offered. There's a good chance that the entire process would annoy everyone to death, so they may not try and force him to buy a company he no longer wants, but they'd be well within their contractual rights to do so. [1] From their 2022 10K: We define mDAU as people, organizations, or other accounts who logged in or were otherwise authenticated and accessed Twitter on any given day through twitter.com, Twitter applications that are able to show ads, or paid Twitter products, including subscriptions. Average mDAU for a period represents the number of mDAU on each day of such period divided by the number of days for such period. Changes in mDAU are a measure of changes in the size of our daily logged in or otherwise authenticated active total accounts. To calculate the year-over-year change in mDAU, we subtract the average mDAU for the three month sended in the previous year from the average mDAU for the same three months ended in the current year and divide the result by the average mDAU for the three months ended in the previous year. Additionally, our calculation of mDAU is not based on any standardized industry methodology and is not necessarily calculated in the same manner or comparable to similarly titled measures presented by other companies. Similarly, our measures of mDAU growth and engagement may differ from estimates published by third parties or from similarly-titled metrics of our competitors due to differences in methodology.

omarhaneef 4y ago
I think this is the right approach: zoom in on the language and discuss what is at stake. So let's talk about the legal leg to stand on part. From his 13d language (amendment #8, filed June 6th, which is public, but I read it on bloomberg and can't find the link to the gov site this second) it doesn't sound like he has an issue with the definition. He wants to rerun the numbers and see for himself. He is asking for the underlying data. Twitter pushed back to say that is not in the scope of what was asked for (apparently, based on his letter). Not taking sides because I was not in the negotiations and know nothing about what each side, indicated, what the legal contract says and so forth. Just saying, the issue is whether they should provide the data for him to run his own calculations.
- mikeyouse 4y ago
  > Not taking sides because I was not in the negotiations and know nothing about what each side, indicated, what the legal contract says and so forth. That's easy to do though - his offer is unconditional. It's like offering a cash amount to buy a house while waiving inspections and all contingencies, but when it comes time to close, insisting your inspector can go into the basement and look at the foundation. You don't have that right, you made an unconditional offer. The time for 'running his own calculations' was before he made an offer to buy the company. You might think; "Surely you can't expect him to buy a company when he doesn't know how many accounts are bots." Which is a fair point, but that's precisely why people rarely make unconditional outside bids for companies! He's making a specious argument that the detail is needed to line up his financing, but to continue the homebuying analogy; After offering cash to buy the home without contingency, he's going back to the seller claiming that he's going to take out a personal loan from his friend and that friend wants to know about the state of the foundation but that only your inspector can satisfy him. Really not the sellers problem!
  - omarhaneef 4y ago
    It is hard to write on this without taking sides. Let's just say I share your intuition about this hypothetical real estate transaction but I am not convinced that it is an appropriate simile. As I read it, his claim is that he didn't waive inspections but relief on the prior inspection report which he is beginning to question. But whether even that is the right metaphor almost doesnt matter. I think we would have to be steeped in what the standards are in the industry to have a productive discussion. This is where someone in HN says: I am an M&A lawyer for 30 years and there are four standards. The X v Y standard whereby the effect of the change has to be material but material is not defined, however... (Matt Levine has, as always, my favorite elucidation)
    - mikeyouse 4y ago
      Yeah, there's a few different discussions with Levine and others on Twitter - but what Musk is asking for is generally governed by an information covenant - but the covenant in his offer is extremely weak in terms of governing the deal... https://twitter.com/nycsouthpaw/status/1533820324214611969 https://twitter.com/nycsouthpaw/status/1533820324214611969 What Levine is referring to is that the deal is subject to Twitter not making any representations that amount to "material adverse effects" which is a very high standard that Twitter definitely hasn't broached -- but financing statements are often subject to detail that covers "all material respects" which is a much more broad standard that Elon could plausibly litigate. It's deeply cynical on Elon's part - he knows what he signed and he knows what he got himself into - which is why he's doing this dumb dance to back out now. It might even work, but it's against the spirit and (IMO) the letter of the contract. He's relying on section 6.4 to make his case that they need to provide him the bot detail - it's short and sweet: https://www.sec.gov/Archives/edgar/data/1418091/000119312522120461/d310843dex21.htm https://www.sec.gov/Archives/edgar/data/1418091/000119312522... But he's clearly going to use what they provide him to attempt to back out of the deal which is explicitly against the terms of that section.

omarhaneef 4y ago

I think this is the right approach: zoom in on the language and discuss what is at stake. So let's talk about the legal leg to stand on part. From his 13d language (amendment #8, filed June 6th, which is public, but I read it on bloomberg and can't find the link to the gov site this second) it doesn't sound like he has an issue with the definition. He wants to rerun the numbers and see for himself. He is asking for the underlying data. Twitter pushed back to say that is not in the scope of what was asked for (apparently, based on his letter). Not taking sides because I was not in the negotiations and know nothing about what each side, indicated, what the legal contract says and so forth. Just saying, the issue is whether they should provide the data for him to run his own calculations.

mikeyouse 4y ago
> Not taking sides because I was not in the negotiations and know nothing about what each side, indicated, what the legal contract says and so forth. That's easy to do though - his offer is unconditional. It's like offering a cash amount to buy a house while waiving inspections and all contingencies, but when it comes time to close, insisting your inspector can go into the basement and look at the foundation. You don't have that right, you made an unconditional offer. The time for 'running his own calculations' was before he made an offer to buy the company. You might think; "Surely you can't expect him to buy a company when he doesn't know how many accounts are bots." Which is a fair point, but that's precisely why people rarely make unconditional outside bids for companies! He's making a specious argument that the detail is needed to line up his financing, but to continue the homebuying analogy; After offering cash to buy the home without contingency, he's going back to the seller claiming that he's going to take out a personal loan from his friend and that friend wants to know about the state of the foundation but that only your inspector can satisfy him. Really not the sellers problem!
- omarhaneef 4y ago
  It is hard to write on this without taking sides. Let's just say I share your intuition about this hypothetical real estate transaction but I am not convinced that it is an appropriate simile. As I read it, his claim is that he didn't waive inspections but relief on the prior inspection report which he is beginning to question. But whether even that is the right metaphor almost doesnt matter. I think we would have to be steeped in what the standards are in the industry to have a productive discussion. This is where someone in HN says: I am an M&A lawyer for 30 years and there are four standards. The X v Y standard whereby the effect of the change has to be material but material is not defined, however... (Matt Levine has, as always, my favorite elucidation)
  - mikeyouse 4y ago
    Yeah, there's a few different discussions with Levine and others on Twitter - but what Musk is asking for is generally governed by an information covenant - but the covenant in his offer is extremely weak in terms of governing the deal... https://twitter.com/nycsouthpaw/status/1533820324214611969 https://twitter.com/nycsouthpaw/status/1533820324214611969 What Levine is referring to is that the deal is subject to Twitter not making any representations that amount to "material adverse effects" which is a very high standard that Twitter definitely hasn't broached -- but financing statements are often subject to detail that covers "all material respects" which is a much more broad standard that Elon could plausibly litigate. It's deeply cynical on Elon's part - he knows what he signed and he knows what he got himself into - which is why he's doing this dumb dance to back out now. It might even work, but it's against the spirit and (IMO) the letter of the contract. He's relying on section 6.4 to make his case that they need to provide him the bot detail - it's short and sweet: https://www.sec.gov/Archives/edgar/data/1418091/000119312522120461/d310843dex21.htm https://www.sec.gov/Archives/edgar/data/1418091/000119312522... But he's clearly going to use what they provide him to attempt to back out of the deal which is explicitly against the terms of that section.