5 ms·

I literally can't imagine ever wanting to do business with Elon Musk. Matt Levine has written a lot about this deal and it sounds extremely clearcut that Elon i

by rurp 4y ago

I literally can't imagine ever wanting to do business with Elon Musk. Matt Levine has written a lot about this deal and it sounds extremely clearcut that Elon is contractually committed. There is no "buyers remorse" or "lol, jk" clause in the deal. That said, I have a feeling he will weasel out with nothing more than a slap on the wirst, if even that. Twitter's board isn't exactly known for its competence and backbone, so I suspect it will back down if Elon yells and lies enough about whatever pretext he decides to use to back out of the deal.

samstave 4y ago
Irrespective of anything regarding Musk, Shouldn't transparency and Truth be sought from Twitter. Full Stop. --- I recall when I interviewed there in ~2008?? Don't recall, and they asked me in the interview what I thought Twitter was: I stated "Twitter is a global sentiment engine thats able to take the pulse of users around the globe on any topic" I didn't get the job.
- krapp 4y ago
  > Irrespective of anything regarding Musk, Shouldn't transparency and Truth be sought from Twitter. Full Stop. No. Twitter is not the press, nor is Twitter a public utility. Twitter is under no obligation to provide "Truth" or "transparency" to the public. It's a microblogging service, not the BBC. Full Stop.
  - aliswe 4y ago
    > It's a microblogging service, not the BBC. Full Stop. *publicly listed. so they need to be transparent as far as market information goes, while not disclosing corporate secrets or breaching personal data regulations. and the CEO said from the start that they cant disclose more details regarding their 5% assessment.
  - CommieBobDole 4y ago
    I think you're both right here - transparency and truth from Twitter should be sought, and they are under no obligation to provide it.
  - eloff 4y ago
    No, you're missing the fact that Twitter is a publicly traded company. If they knowingly provide false or misleading information in their filings, the SEC and likely the shareholders can go after them. It would be tricky to prove intent here, but there may be other risks. I'm not a lawyer.
  - _-david-_ 4y ago
    They cannot lie in certain documents since they are a public company.
polski-g 4y ago
If Twitter was lying on their sec reports then yes the deal can certainly be terminated.
- encryptluks2 4y ago
  The SEC reports says they estimate the bot daily active users (or something like that) to be 5%, but in fact could be much larger and it is merely an estimate. These leaves room for bot count to be much higher and they still would not have lied.
  - scotuswroteus 4y ago
    Go to the statement (10-Q I think) and you'll see caveats and conditional statements that are rather clear the estimate was not in anyway definitive or even methodologically sound. They said that. My man Elon is so focused on numbers that he doesn't read the fine print. Certainty intervals matter, even if they're described with words rather than numbers.
    - encryptluks2 4y ago
      Yeah, that is the part I'm referring to. Agreed, that if he read the fine print that he would be litigating this much differently, or at least in his public statements. From the change in strategy, it appears his lawyers are now just trying to claim that Twitter isn't providing some information... although, I'm not sure that they are required to verify any claims regarding bots based on their public filings.
      - JamesSwift 4y ago
        His lawyers are claiming a technicality in the contract, specifically there _is_ a clause that requires Twitter to service any "reasonable" request for information to Elon. Theres 2 important things to keep in mind when judging the violation however: 1) Requests for information are assumed to be to facilitate _closing the deal_. Its not just for any willy-nilly request he wants. 2) It specifically is not to service "due diligence". This is the "open for interpretation" part. The contract _separately_ calls out that Musk has had the opportunity to seek information for due diligence, and Twitter has already fulfilled those requests to his satisfaction. So with that in mind, I would interpret the obligation to service information to be limited to things e.g. related to acquiring financing, or to fill out paperwork etc.
sharken 4y ago
I certainly expect him to pay the 1 billion dollars required for backing out, but of course he will try to avoid that. The real reason is that he can't afford to buy Twitter at the negotiated price, which is entirely on Musk.
- BitwiseFool 4y ago
  Too bad Elon didn't wait a while longer, the market is dipping left and right.
- Zigurd 4y ago
  There is a misapprehension about the breakup fee: It isn't at Musk's discretion that he can pay the fee and walk away. The breakup fee would be paid if the deal can't proceed for reasons outside Musk's control. That does not include wanting to argue due diligence matters, having waived dd.
liuliu 4y ago
But Twitter's board has to fight, no? Elon is essentially accusing them providing fraudulent statements. If they admit as-is, it can open a massive door for other lawsuits.
- gamblor956 4y ago
  No, they don't have to do anything except say, "We had a contract and you agreed to waive due diligence. Pay up." EDIT: pay up in this context probably means $1 billion, though given that he is the world's richest man, it could conceivably include specific performance of the contract (meaning going through with the deal).
  - birdyrooster 4y ago
    Elon has just been thrashing with the reality he is on the hook for $1B due to this stupid idea.
    - toomuchtodo 4y ago
      The problem is that Elon, for so long, has avoided the consequences of his actions that the thought of being held accountable to perform or pay the termination fee feels like oppression to him. Had he acted with integrity and honesty, he wouldn’t be in this situation of his own making, but those traits aren’t what made him wealthy.
    - mlyle 4y ago
      The $1B breakup fee isn't an option that Elon can exercise. See e.g. https://www.cnbc.com/2022/05/13/elon-musk-cant-just-walk-away-from-twitter-deal-by-paying-1-billion.html https://www.cnbc.com/2022/05/13/elon-musk-cant-just-walk-awa...
  - rayiner 4y ago
    I would hesitate caution before assuming that “waiving due diligence” is a magic get out of jail free card. It’s rarely that simple in a contractual dispute.
  - 4y ago
legitster 4y ago
The board may not have a backbone, but their legal team has blood in the water for a multi-billion dollar settlement. I don't see how this doesn't end with years of expensive litigation (barring a new agreement).
- SilasX 4y ago
  Yeah, the updated link content says they plan to sue to enforce the original buyout terms: >>"Twitter has and will continue to cooperatively share information with Mr. Musk to consummate the transaction in accordance with the terms of the merger agreement," the company said in a statement. >>"We believe this agreement is in the best interest of all shareholders," it added. "We intend to close the transaction and enforce the merger agreement at the agreed price and terms."
- TheCoelacanth 4y ago
  There is no way Twitter can possibly back down unless they get a huge settlement from Musk or unless the share price goes way up. If they let him walk away, they would get sued by their own shareholders for losing them a ton of money.
thebradbain 4y ago
Given that the SEC likely has a bone to pick with Elon for his other stunts, I wonder if they'd step in under their authority to make sure he doesn't get away with just a slap on the wrist. Not so much forcing him to go through with the sale, but use their soft power to ensure he pays the breakup fee. At this point the deal is as much politics (not left/right, but posturing between powerful institutions and individuals) as business, so anything could happen.
- Majromax 4y ago
  The SEC has little to do with the legal merger agreement. That will be executed (or not) under Delaware corporate law.
bambax 4y ago
Agreed on all counts. Matt Levine is a genius and one of the best writers ever, and Musk is a charlatan and a bully. > I literally can't imagine ever wanting to do business with Elon Musk. Never mind Twitter. Buying a car from that guy is really absurd and dangerous.
- jonny_eh 4y ago
  This whole episode finally convinced me to sell my Tesla stock. I don't want anything to do with this clown.
- rurp 4y ago
  > Never mind Twitter. Buying a car from that guy is really absurd and dangerous. Very true. I was rooting hard for Tesla to succeed a number of years ago, but these days there's no chance I would even consider buying one of their cars. A few people close to me own Teslas and I worry quite a bit about their safety. I really hope that Musk's absurd behavior lately opens some more eyes to just how reckless and irresponsible the company is.

by rurp 4y ago

samstave 4y ago

Irrespective of anything regarding Musk, Shouldn't transparency and Truth be sought from Twitter. Full Stop. --- I recall when I interviewed there in ~2008?? Don't recall, and they asked me in the interview what I thought Twitter was: I stated "Twitter is a global sentiment engine thats able to take the pulse of users around the globe on any topic" I didn't get the job.

krapp 4y ago
> Irrespective of anything regarding Musk, Shouldn't transparency and Truth be sought from Twitter. Full Stop. No. Twitter is not the press, nor is Twitter a public utility. Twitter is under no obligation to provide "Truth" or "transparency" to the public. It's a microblogging service, not the BBC. Full Stop.
- aliswe 4y ago
  > It's a microblogging service, not the BBC. Full Stop. *publicly listed. so they need to be transparent as far as market information goes, while not disclosing corporate secrets or breaching personal data regulations. and the CEO said from the start that they cant disclose more details regarding their 5% assessment.
- CommieBobDole 4y ago
  I think you're both right here - transparency and truth from Twitter should be sought, and they are under no obligation to provide it.
- eloff 4y ago
  No, you're missing the fact that Twitter is a publicly traded company. If they knowingly provide false or misleading information in their filings, the SEC and likely the shareholders can go after them. It would be tricky to prove intent here, but there may be other risks. I'm not a lawyer.
- _-david-_ 4y ago
  They cannot lie in certain documents since they are a public company.

polski-g 4y ago

If Twitter was lying on their sec reports then yes the deal can certainly be terminated.

encryptluks2 4y ago
The SEC reports says they estimate the bot daily active users (or something like that) to be 5%, but in fact could be much larger and it is merely an estimate. These leaves room for bot count to be much higher and they still would not have lied.
- scotuswroteus 4y ago
  Go to the statement (10-Q I think) and you'll see caveats and conditional statements that are rather clear the estimate was not in anyway definitive or even methodologically sound. They said that. My man Elon is so focused on numbers that he doesn't read the fine print. Certainty intervals matter, even if they're described with words rather than numbers.
  - encryptluks2 4y ago
    Yeah, that is the part I'm referring to. Agreed, that if he read the fine print that he would be litigating this much differently, or at least in his public statements. From the change in strategy, it appears his lawyers are now just trying to claim that Twitter isn't providing some information... although, I'm not sure that they are required to verify any claims regarding bots based on their public filings.
    - JamesSwift 4y ago
      His lawyers are claiming a technicality in the contract, specifically there _is_ a clause that requires Twitter to service any "reasonable" request for information to Elon. Theres 2 important things to keep in mind when judging the violation however: 1) Requests for information are assumed to be to facilitate _closing the deal_. Its not just for any willy-nilly request he wants. 2) It specifically is not to service "due diligence". This is the "open for interpretation" part. The contract _separately_ calls out that Musk has had the opportunity to seek information for due diligence, and Twitter has already fulfilled those requests to his satisfaction. So with that in mind, I would interpret the obligation to service information to be limited to things e.g. related to acquiring financing, or to fill out paperwork etc.

sharken 4y ago

I certainly expect him to pay the 1 billion dollars required for backing out, but of course he will try to avoid that. The real reason is that he can't afford to buy Twitter at the negotiated price, which is entirely on Musk.

BitwiseFool 4y ago
Too bad Elon didn't wait a while longer, the market is dipping left and right.
Zigurd 4y ago
There is a misapprehension about the breakup fee: It isn't at Musk's discretion that he can pay the fee and walk away. The breakup fee would be paid if the deal can't proceed for reasons outside Musk's control. That does not include wanting to argue due diligence matters, having waived dd.

liuliu 4y ago

But Twitter's board has to fight, no? Elon is essentially accusing them providing fraudulent statements. If they admit as-is, it can open a massive door for other lawsuits.

gamblor956 4y ago
No, they don't have to do anything except say, "We had a contract and you agreed to waive due diligence. Pay up." EDIT: pay up in this context probably means $1 billion, though given that he is the world's richest man, it could conceivably include specific performance of the contract (meaning going through with the deal).
- birdyrooster 4y ago
  Elon has just been thrashing with the reality he is on the hook for $1B due to this stupid idea.
  - toomuchtodo 4y ago
    The problem is that Elon, for so long, has avoided the consequences of his actions that the thought of being held accountable to perform or pay the termination fee feels like oppression to him. Had he acted with integrity and honesty, he wouldn’t be in this situation of his own making, but those traits aren’t what made him wealthy.
  - mlyle 4y ago
    The $1B breakup fee isn't an option that Elon can exercise. See e.g. https://www.cnbc.com/2022/05/13/elon-musk-cant-just-walk-away-from-twitter-deal-by-paying-1-billion.html https://www.cnbc.com/2022/05/13/elon-musk-cant-just-walk-awa...
- rayiner 4y ago
  I would hesitate caution before assuming that “waiving due diligence” is a magic get out of jail free card. It’s rarely that simple in a contractual dispute.
- 4y ago

legitster 4y ago

The board may not have a backbone, but their legal team has blood in the water for a multi-billion dollar settlement. I don't see how this doesn't end with years of expensive litigation (barring a new agreement).

SilasX 4y ago
Yeah, the updated link content says they plan to sue to enforce the original buyout terms: >>"Twitter has and will continue to cooperatively share information with Mr. Musk to consummate the transaction in accordance with the terms of the merger agreement," the company said in a statement. >>"We believe this agreement is in the best interest of all shareholders," it added. "We intend to close the transaction and enforce the merger agreement at the agreed price and terms."
TheCoelacanth 4y ago
There is no way Twitter can possibly back down unless they get a huge settlement from Musk or unless the share price goes way up. If they let him walk away, they would get sued by their own shareholders for losing them a ton of money.

thebradbain 4y ago

Given that the SEC likely has a bone to pick with Elon for his other stunts, I wonder if they'd step in under their authority to make sure he doesn't get away with just a slap on the wrist. Not so much forcing him to go through with the sale, but use their soft power to ensure he pays the breakup fee. At this point the deal is as much politics (not left/right, but posturing between powerful institutions and individuals) as business, so anything could happen.

Majromax 4y ago
The SEC has little to do with the legal merger agreement. That will be executed (or not) under Delaware corporate law.

bambax 4y ago

Agreed on all counts. Matt Levine is a genius and one of the best writers ever, and Musk is a charlatan and a bully. > I literally can't imagine ever wanting to do business with Elon Musk. Never mind Twitter. Buying a car from that guy is really absurd and dangerous.

jonny_eh 4y ago
This whole episode finally convinced me to sell my Tesla stock. I don't want anything to do with this clown.
rurp 4y ago
> Never mind Twitter. Buying a car from that guy is really absurd and dangerous. Very true. I was rooting hard for Tesla to succeed a number of years ago, but these days there's no chance I would even consider buying one of their cars. A few people close to me own Teslas and I worry quite a bit about their safety. I really hope that Musk's absurd behavior lately opens some more eyes to just how reckless and irresponsible the company is.