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<5% bots is a material statement that Twitter made that appears to be false. It's very much related to the bid. If you materially mis-represent your company th

by kjksf 4y ago

<5% bots is a material statement that Twitter made that appears to be false. It's very much related to the bid. If you materially mis-represent your company then it's a valid reason to scrap the deal. > As for that bid, the time for due diligence is before, not after, one signs the merger agreement. That's not how it works. Try calling Twitter: "I'm doing due diligence on you guys, could you open your books to me"? They'll laugh at you and hung up. The agreements is a pre-requisite of doing what "due diligence" means in this context. "Due diligence" specifically involves looking at things that you're typically not allowed to looked at. Things like auditing financials of the company, doing an audit of the source code, proprietary technology etc. It requires the company being acquired to share a lot of proprietary information. The agreement, which includes $1 billion breakup clause, is necessary to filter out people who are not serious.

syspec 4y ago
>Try calling Twitter: "I'm doing due diligence on you guys, could you open your books to me"? > They'll laugh at you and hung up. Sure, but we're not the richest person on the planet, Elon Musk
stinky613 4y ago
Musk waived his right to exercise internal due diligence https://arstechnica.com/tech-policy/2022/05/twitter-board-tells-elon-musk-we-will-not-alter-the-deal/ https://arstechnica.com/tech-policy/2022/05/twitter-board-te... https://www.bloomberg.com/opinion/articles/2022-05-17/elon-musk-does-not-care-about-spam-bots https://www.bloomberg.com/opinion/articles/2022-05-17/elon-m...
- JamesSwift 4y ago
  He didnt "waive" it as far as I know. The agreement explicitly says that at the time of the SEC filing, the due diligence has been completed to the satisfaction of Musk. Now, this might mean he just didn't ask for any information, so that could technically mean he waived it. See my other comment about section 5.11.
rurp 4y ago
Sounds like Elon shouldn't have explicitly refused the opportunity for due diligence then.
JamesSwift 4y ago
The SEC filing (https://www.sec.gov/Archives/edgar/data/1418091/000119312522120461/d310843dex21.htm https://www.sec.gov/Archives/edgar/data/1418091/000119312522...) very explicitly says that Musk has _already had the opportunity to ask for clarifying information_ and that Musk _is already happy with the results of those discussions_. It explicitly explains that the only thing that Musk considers material is included in this document already, and that anything outside of this document should not be considered when evaluating the agreement. Section 5.11 (note that "Parent" / "Acquisition Sub" refers to Musk and "Company" refers to 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. Parent and Acquisition Sub hereby acknowledge that, notwithstanding anything contained in this Agreement to the contrary, (i) neither the Company nor any of its Subsidiaries, nor any other Person, makes or has made or is making any express or implied representation or warranty with respect to the Company or any of its Subsidiaries or their respective business or operations, in each case, other than those expressly given solely by the Company in Article IV; and (ii) neither Parent nor Acquisition Sub is relying on any express or implied representation or warranty, or the accuracy or the completeness of the representations and warranties set forth in Article IV, with respect to the Company or any of its Subsidiaries or their respective business or operations, in each case, other than those expressly given solely by the Company in Article IV.

by kjksf 4y ago

syspec 4y ago

>Try calling Twitter: "I'm doing due diligence on you guys, could you open your books to me"? > They'll laugh at you and hung up. Sure, but we're not the richest person on the planet, Elon Musk

stinky613 4y ago

Musk waived his right to exercise internal due diligence https://arstechnica.com/tech-policy/2022/05/twitter-board-tells-elon-musk-we-will-not-alter-the-deal/ https://arstechnica.com/tech-policy/2022/05/twitter-board-te... https://www.bloomberg.com/opinion/articles/2022-05-17/elon-musk-does-not-care-about-spam-bots https://www.bloomberg.com/opinion/articles/2022-05-17/elon-m...

JamesSwift 4y ago
He didnt "waive" it as far as I know. The agreement explicitly says that at the time of the SEC filing, the due diligence has been completed to the satisfaction of Musk. Now, this might mean he just didn't ask for any information, so that could technically mean he waived it. See my other comment about section 5.11.

rurp 4y ago

Sounds like Elon shouldn't have explicitly refused the opportunity for due diligence then.

JamesSwift 4y ago

The SEC filing (https://www.sec.gov/Archives/edgar/data/1418091/000119312522120461/d310843dex21.htm https://www.sec.gov/Archives/edgar/data/1418091/000119312522...) very explicitly says that Musk has _already had the opportunity to ask for clarifying information_ and that Musk _is already happy with the results of those discussions_. It explicitly explains that the only thing that Musk considers material is included in this document already, and that anything outside of this document should not be considered when evaluating the agreement. Section 5.11 (note that "Parent" / "Acquisition Sub" refers to Musk and "Company" refers to 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. Parent and Acquisition Sub hereby acknowledge that, notwithstanding anything contained in this Agreement to the contrary, (i) neither the Company nor any of its Subsidiaries, nor any other Person, makes or has made or is making any express or implied representation or warranty with respect to the Company or any of its Subsidiaries or their respective business or operations, in each case, other than those expressly given solely by the Company in Article IV; and (ii) neither Parent nor Acquisition Sub is relying on any express or implied representation or warranty, or the accuracy or the completeness of the representations and warranties set forth in Article IV, with respect to the Company or any of its Subsidiaries or their respective business or operations, in each case, other than those expressly given solely by the Company in Article IV.