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Was it like $1B for him to back out - I can't recall. But in any case, that's a way better deal to walk away than sink $40B into something worth $20B. Maybe th

Was it like $1B for him to back out - I can't recall. But in any case, that's a way better deal to walk away than sink $40B into something worth $20B. Maybe this whole thing was a way to show everyone it was worthless and now he's going to spend $1B on getting out of the deal and another $1B in starting a Twitter clone.

moralestapia 4y ago
He can't just back out of the deal (according to analysts like Levine).
room500 4y ago
No. The $1B breakup fee is only applicable if the deal falls apart for very specific reasons (trouble getting financing, regulatory concerns, etc). Musk cannot just wake up one morning, decide to not buy Twitter, and pay the breakup fee. He has already agreed to buy Twitter and cannot back out. That is why the bot issue is so important. If Musk can prove that Twitter made false claims to the SEC, he is allowed to get out of the deal. But if not, he must buy Twitter
- newaccount2021 4y ago
- cmeacham98 4y ago
  NAL - what happens if Musk just refuses to do it and never sends the money? Can Twitter get a court order to garnish Musk's bank account and/or assets for $40B?
  - ceejayoz 4y ago
    They'd sue for the $1B cancellation fee, I'd imagine.
    - ahahahahah 4y ago
      FFS, this exact thread points out that there is no $1B cancellation fee.
      - falcolas 4y ago
        https://www.sec.gov/Archives/edgar/data/0001418091/000119312522120461/d310843dex21.htm https://www.sec.gov/Archives/edgar/data/0001418091/000119312... Do a search for "Parent Termination Fee". TL;DR: There is indeed a $1B termination fee.
        papercrane 4y ago
        Do a search in the same document for "Specific Performance".
        tsimionescu 4y ago
        The fee is to be payed by Musk if the deal falls through for a few soecific reasons: either his financing falls through or a few other conditions (for example, USA blocks the deal).
        naveen99 4y ago
        doesn't seem fair for either party to have to pay a fee if USA blocks the deal.
        tsimionescu 4y ago
        Doesn't seem fair to shareholders to initiate a buyout procedure that doesn't go anywhere - there is a significant cost to the company because of the pending offer. The same can't be said for the party that initiated the offer. So, the party that initiates the offer also has to include the chance of regulatory action blocking the deal in their estimates, and decide if paying $1B in that contingency is worth. Musk certainly did, or else he wouldn't have signed the contract. For example, in the case of this acquisition, it seems almost impossible for the government to step in - so, the expected value (in the probability theory sense) of the downside is close to 0.
  - falcolas 4y ago
    I'm NAL either, but most lawyers speaking on this, with knowledge of the clauses thrown into these contracts speculate that he'd be taken to court for breach of contract. IIRC, previous acquisitions that were attempted to be weaseled out of were forced to go through by the courts, when the acquisitor's finances weren't the issue. EDIT: Ooh, the contract is public. Guess that makes sense, as it's a public company. Relevant to this, but section 8.1.d is the stanza relevant to this discussion. And the Act I definitions does define the "parent termination fee" at $1B. https://www.sec.gov/Archives/edgar/data/0001418091/000119312522120461/d310843dex21.htm https://www.sec.gov/Archives/edgar/data/0001418091/000119312... Found via: https://www.youtube.com/watch?v=_HuY9ZqFAsk https://www.youtube.com/watch?v=_HuY9ZqFAsk
  - lmm 4y ago
    Eventually, yes - if they get a judgement against him and he doesn't pay, they can get an order to do that kind of thing. Same way the court system usually works.
- tmp_anon_22 4y ago
  I'm pretty sure most people saying Yes or No to this don't have the information or legal background to actually give that answer. Saying something confidently does not make it so.
  - falcolas 4y ago
    Most folks are basing their opinions off the standard business acquisition contracts, which include limited exit opportunities for the buyer. Several of these contracts have even gone to court, so their typical clauses are public knowledge (including the verdicts), even if the specifics are not. EDIT: The actual contract is public (which makes sense, Twitter is public; a deal to buy would also be public). I have posted it in a sibling contract.
  - wolverine876 4y ago
    > Saying something confidently does not make it so. Then why does (or did) everyone believe Musk? Why do they believe everything else said confidently on the Internet?
- icedchai 4y ago
  As I said in a previous thread, if this were true, the stock price would be higher. Options premiums would be much higher. They are not. The market already knows: he is not buying Twitter for 54.20.
  - roflyear 4y ago
    Market is not always rational. Also it could take years and years for the deal to go through. It would require Twitter to sue musk and everyone to come to some kind of settlement. That settlement would likely be less than the price but not much less. Maybe a few percent less. It is also Musk. People know he's insane so that is an additional hit to the price. They know he'll do anything to get out of the deal. Doesn't mean he will.
    - icedchai 4y ago
      If you really believe the deal will go through as written, buy calls a couple years out. Anything is possible.
      - roflyear 4y ago
        True. I am not sure I really believe that. I think that is why the price is lower. My head knows the deal should go through - but I also know crazier things have happened.
- gamblor956 4y ago
  No, the agreement does not provide that Musk can withdraw from the agreement based on Twitter's (mis)representations to the SEC, as that is something that would have been covered by due diligence...which Musk waived. And indeed, Musk's own letter to the SEC confirms that his sole reason for seeking the data is that it relates to his ability to acquire financing for the deal. https://www.sec.gov/Archives/edgar/data/1418091/000110465922068347/tm2217761d1_ex99-o.htm https://www.sec.gov/Archives/edgar/data/1418091/000110465922...
Clent 4y ago
This notion that every bad decision made by a billionaire is a strategic chest move where they come out on top, is odd. They are billionaires. They will come out on top because at the end of it they will still be a billionaire. Name one billionaire that isn't on top.
- krapp 4y ago
  >Name one billionaire that isn't on top. Donald Trump.
  - cmeacham98 4y ago
    Trump was able to win election for president in the US, one of the most powerful positions in the world. Is that not the ultimate example of a billionaire coming out "on top"?
    - krapp 4y ago
      >Is that not the ultimate example of a billionaire coming out "on top"? If you want to pretend the end of his term and everything afterwards never happened, sure. But as of now, he's the ultimate example of spectacular failure despite his resources. He is still a billionaire, though. I suppose it depends on where you decide the top is.
      - ryandvm 4y ago
        I dunno. It's quite clear that while he may never be president again, there's absolutely no way he's going to A) end up in jail or B) lose a significant amount of his wealth. That's exactly the "coming out on top" the original comment was referring to.
      - cmeacham98 4y ago
        I'm not sure what you mean - of course the end of his term happened, we elect presidents for 4 years in the US, were you expecting him to become a dictator or something? Are you referring to the fact he lost the most recent election? He did pretty good in my opinion, especially considering now notably unpopular he was in his first term. And his opponent got the most votes ever in history (and he was number 2!)
prawn 4y ago
That's another weird thing - if Twitter frustrated him so much, he could've put $10m into each of 10 crack teams trying to supplant Twitter. With a warchest, it would have to be beatable; it's hardly a perfect platform. Given enough money, you could pay a lot of top creators to switch platforms and encourage their followers to move with them.

moralestapia 4y ago

He can't just back out of the deal (according to analysts like Levine).

room500 4y ago

No. The $1B breakup fee is only applicable if the deal falls apart for very specific reasons (trouble getting financing, regulatory concerns, etc). Musk cannot just wake up one morning, decide to not buy Twitter, and pay the breakup fee. He has already agreed to buy Twitter and cannot back out. That is why the bot issue is so important. If Musk can prove that Twitter made false claims to the SEC, he is allowed to get out of the deal. But if not, he must buy Twitter

newaccount2021 4y ago
cmeacham98 4y ago
NAL - what happens if Musk just refuses to do it and never sends the money? Can Twitter get a court order to garnish Musk's bank account and/or assets for $40B?
- ceejayoz 4y ago
  They'd sue for the $1B cancellation fee, I'd imagine.
  - ahahahahah 4y ago
    FFS, this exact thread points out that there is no $1B cancellation fee.
    - falcolas 4y ago
      https://www.sec.gov/Archives/edgar/data/0001418091/000119312522120461/d310843dex21.htm https://www.sec.gov/Archives/edgar/data/0001418091/000119312... Do a search for "Parent Termination Fee". TL;DR: There is indeed a $1B termination fee.
      - papercrane 4y ago
        Do a search in the same document for "Specific Performance".
      - tsimionescu 4y ago
        The fee is to be payed by Musk if the deal falls through for a few soecific reasons: either his financing falls through or a few other conditions (for example, USA blocks the deal).
        naveen99 4y ago
        doesn't seem fair for either party to have to pay a fee if USA blocks the deal.
        tsimionescu 4y ago
        Doesn't seem fair to shareholders to initiate a buyout procedure that doesn't go anywhere - there is a significant cost to the company because of the pending offer. The same can't be said for the party that initiated the offer. So, the party that initiates the offer also has to include the chance of regulatory action blocking the deal in their estimates, and decide if paying $1B in that contingency is worth. Musk certainly did, or else he wouldn't have signed the contract. For example, in the case of this acquisition, it seems almost impossible for the government to step in - so, the expected value (in the probability theory sense) of the downside is close to 0.
- falcolas 4y ago
  I'm NAL either, but most lawyers speaking on this, with knowledge of the clauses thrown into these contracts speculate that he'd be taken to court for breach of contract. IIRC, previous acquisitions that were attempted to be weaseled out of were forced to go through by the courts, when the acquisitor's finances weren't the issue. EDIT: Ooh, the contract is public. Guess that makes sense, as it's a public company. Relevant to this, but section 8.1.d is the stanza relevant to this discussion. And the Act I definitions does define the "parent termination fee" at $1B. https://www.sec.gov/Archives/edgar/data/0001418091/000119312522120461/d310843dex21.htm https://www.sec.gov/Archives/edgar/data/0001418091/000119312... Found via: https://www.youtube.com/watch?v=_HuY9ZqFAsk https://www.youtube.com/watch?v=_HuY9ZqFAsk
- lmm 4y ago
  Eventually, yes - if they get a judgement against him and he doesn't pay, they can get an order to do that kind of thing. Same way the court system usually works.
tmp_anon_22 4y ago
I'm pretty sure most people saying Yes or No to this don't have the information or legal background to actually give that answer. Saying something confidently does not make it so.
- falcolas 4y ago
  Most folks are basing their opinions off the standard business acquisition contracts, which include limited exit opportunities for the buyer. Several of these contracts have even gone to court, so their typical clauses are public knowledge (including the verdicts), even if the specifics are not. EDIT: The actual contract is public (which makes sense, Twitter is public; a deal to buy would also be public). I have posted it in a sibling contract.
- wolverine876 4y ago
  > Saying something confidently does not make it so. Then why does (or did) everyone believe Musk? Why do they believe everything else said confidently on the Internet?
icedchai 4y ago
As I said in a previous thread, if this were true, the stock price would be higher. Options premiums would be much higher. They are not. The market already knows: he is not buying Twitter for 54.20.
- roflyear 4y ago
  Market is not always rational. Also it could take years and years for the deal to go through. It would require Twitter to sue musk and everyone to come to some kind of settlement. That settlement would likely be less than the price but not much less. Maybe a few percent less. It is also Musk. People know he's insane so that is an additional hit to the price. They know he'll do anything to get out of the deal. Doesn't mean he will.
  - icedchai 4y ago
    If you really believe the deal will go through as written, buy calls a couple years out. Anything is possible.
    - roflyear 4y ago
      True. I am not sure I really believe that. I think that is why the price is lower. My head knows the deal should go through - but I also know crazier things have happened.
gamblor956 4y ago
No, the agreement does not provide that Musk can withdraw from the agreement based on Twitter's (mis)representations to the SEC, as that is something that would have been covered by due diligence...which Musk waived. And indeed, Musk's own letter to the SEC confirms that his sole reason for seeking the data is that it relates to his ability to acquire financing for the deal. https://www.sec.gov/Archives/edgar/data/1418091/000110465922068347/tm2217761d1_ex99-o.htm https://www.sec.gov/Archives/edgar/data/1418091/000110465922...

Clent 4y ago

This notion that every bad decision made by a billionaire is a strategic chest move where they come out on top, is odd. They are billionaires. They will come out on top because at the end of it they will still be a billionaire. Name one billionaire that isn't on top.

krapp 4y ago
>Name one billionaire that isn't on top. Donald Trump.
- cmeacham98 4y ago
  Trump was able to win election for president in the US, one of the most powerful positions in the world. Is that not the ultimate example of a billionaire coming out "on top"?
  - krapp 4y ago
    >Is that not the ultimate example of a billionaire coming out "on top"? If you want to pretend the end of his term and everything afterwards never happened, sure. But as of now, he's the ultimate example of spectacular failure despite his resources. He is still a billionaire, though. I suppose it depends on where you decide the top is.
    - ryandvm 4y ago
      I dunno. It's quite clear that while he may never be president again, there's absolutely no way he's going to A) end up in jail or B) lose a significant amount of his wealth. That's exactly the "coming out on top" the original comment was referring to.
    - cmeacham98 4y ago
      I'm not sure what you mean - of course the end of his term happened, we elect presidents for 4 years in the US, were you expecting him to become a dictator or something? Are you referring to the fact he lost the most recent election? He did pretty good in my opinion, especially considering now notably unpopular he was in his first term. And his opponent got the most votes ever in history (and he was number 2!)

prawn 4y ago

That's another weird thing - if Twitter frustrated him so much, he could've put $10m into each of 10 crack teams trying to supplant Twitter. With a warchest, it would have to be beatable; it's hardly a perfect platform. Given enough money, you could pay a lot of top creators to switch platforms and encourage their followers to move with them.