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This would be a great point if Musk hadn't waved due diligence. He knew this was a risk before he made the offer and now he's just posturing.

freediver 4y ago
I think he didn't wave due dillegence, but his due dilligence was based on public filings that Twitter made, which may prove to be wrong.
- mikkergp 4y ago
  I'm curious about the nuances of this, I haven't seen this argument made elsewhere yet, but it does seem to make sense that you would make that kind of exception. Even when you buy a house as-is, exceptions are generally going to be made for existential threats (leans on the house, title issues, etc.) outside of the _condition_ of the house. But it still feels like posturing, especially since he knew this was an issue before he made the offer, why not explicitly call this out in the contract? It definitely feels like the weight of the economy collapsing is the substantive issue.
- JamesSwift 4y ago
  No, the SEC agreement directly addresses this. Section 5.11 ("Parent" and "Acquisition Sub" is Musk, "Company" is Twitter): > Each of Parent and Acquisition Sub has conducted, to its satisfaction, its own independent investigation, review and analysis of the business, results of operations, prospects, condition (financial or otherwise) or assets of the Company and its Subsidiaries. In making its determination to proceed with the transactions contemplated by this Agreement, including the Merger, each of Parent and Acquisition Sub has relied solely on the results of its own independent review and analysis and the covenants, representations and warranties of the Company contained in this Agreement So, in essence: 1) Musk has been afforded the opportunity to address any concerns he has with Twitter 2) Any concerns of Musks have been satisfactorily resolved by Twitter 3) In determining said satisfaction, Musk is relying on his own judgement and analysis, and is not relying on any analysis by Twitter. There is absolutely 0 ground to his complaints today and claiming he "isnt being given the information hes been asking for" or that "I was going off your numbers but I want to run my own".
phlhr 4y ago
- sbf501 4y ago
- wollsmoth 4y ago
  I don't think he's defending fraud, he's saying despite this Musk has committed to the transaction.
  - deleted 4y ago
    [deleted]
  - phlhr 4y ago
    the poster is defending Twitter be able to lie on their public filings. If their bot % is materially higher then 5% they have committed securities fraud. Twitter are stuck. If they admit a bot count of say 25% and say "sorry Mr. Musk but you committed to buy no matter what... buyer beware" then yes, Musk should be force to continue the sale but they can't because it raises much more serious questions.
phailhaus 4y ago
Not only that, his biggest argument for buying Twitter was literally that there were too many bots and that he would solve it. Now that he's waived due-diligence and the market is tanking, he's "concerned" about the number of bots? It's such transparent BS that it's embarrassing.
- bitshiftfaced 4y ago
  I don't have a horse in this race, but I don't follow your reasoning. If you thought there was a large bot problem, part of the appeal would be that there's an opportunity to fix that problem. That would increase the value of the company after you've fixed the problem. Assuming that's the case, then finding out there's not a big bot problem would mean there's not as much of an opportunity.
  - mikkergp 4y ago
    If that's the case, then there is missing information that you should have done due diligence for?
    - wollsmoth 4y ago
      yeah, maybe he could have spent a little time looking into this stuff before committing. Oh well, I'm sure his lawyers are happy to take the billable hours!
    - bitshiftfaced 4y ago
      Eh, should've done my homework before commenting. Looks like Twitter has been saying 5% since well before Musk made the deal.
  - moralestapia 4y ago
    It comes down to not being able to state that he was unaware of a bot problem (as an argument for walking out of the deal) if he has very publicly said that he's doing this because of and to fix the bot problem.
  - 4y ago

freediver 4y ago

I think he didn't wave due dillegence, but his due dilligence was based on public filings that Twitter made, which may prove to be wrong.

mikkergp 4y ago
I'm curious about the nuances of this, I haven't seen this argument made elsewhere yet, but it does seem to make sense that you would make that kind of exception. Even when you buy a house as-is, exceptions are generally going to be made for existential threats (leans on the house, title issues, etc.) outside of the _condition_ of the house. But it still feels like posturing, especially since he knew this was an issue before he made the offer, why not explicitly call this out in the contract? It definitely feels like the weight of the economy collapsing is the substantive issue.
JamesSwift 4y ago
No, the SEC agreement directly addresses this. Section 5.11 ("Parent" and "Acquisition Sub" is Musk, "Company" is Twitter): > Each of Parent and Acquisition Sub has conducted, to its satisfaction, its own independent investigation, review and analysis of the business, results of operations, prospects, condition (financial or otherwise) or assets of the Company and its Subsidiaries. In making its determination to proceed with the transactions contemplated by this Agreement, including the Merger, each of Parent and Acquisition Sub has relied solely on the results of its own independent review and analysis and the covenants, representations and warranties of the Company contained in this Agreement So, in essence: 1) Musk has been afforded the opportunity to address any concerns he has with Twitter 2) Any concerns of Musks have been satisfactorily resolved by Twitter 3) In determining said satisfaction, Musk is relying on his own judgement and analysis, and is not relying on any analysis by Twitter. There is absolutely 0 ground to his complaints today and claiming he "isnt being given the information hes been asking for" or that "I was going off your numbers but I want to run my own".

phlhr 4y ago

sbf501 4y ago
wollsmoth 4y ago
I don't think he's defending fraud, he's saying despite this Musk has committed to the transaction.
- deleted 4y ago
  [deleted]
- phlhr 4y ago
  the poster is defending Twitter be able to lie on their public filings. If their bot % is materially higher then 5% they have committed securities fraud. Twitter are stuck. If they admit a bot count of say 25% and say "sorry Mr. Musk but you committed to buy no matter what... buyer beware" then yes, Musk should be force to continue the sale but they can't because it raises much more serious questions.

phailhaus 4y ago

Not only that, his biggest argument for buying Twitter was literally that there were too many bots and that he would solve it. Now that he's waived due-diligence and the market is tanking, he's "concerned" about the number of bots? It's such transparent BS that it's embarrassing.

bitshiftfaced 4y ago
I don't have a horse in this race, but I don't follow your reasoning. If you thought there was a large bot problem, part of the appeal would be that there's an opportunity to fix that problem. That would increase the value of the company after you've fixed the problem. Assuming that's the case, then finding out there's not a big bot problem would mean there's not as much of an opportunity.
- mikkergp 4y ago
  If that's the case, then there is missing information that you should have done due diligence for?
  - wollsmoth 4y ago
    yeah, maybe he could have spent a little time looking into this stuff before committing. Oh well, I'm sure his lawyers are happy to take the billable hours!
  - bitshiftfaced 4y ago
    Eh, should've done my homework before commenting. Looks like Twitter has been saying 5% since well before Musk made the deal.
- moralestapia 4y ago
  It comes down to not being able to state that he was unaware of a bot problem (as an argument for walking out of the deal) if he has very publicly said that he's doing this because of and to fix the bot problem.
- 4y ago