9 ms·

Since when is providing pertinent information to someone performing pre purchase due diligence calling their bluff?

ceejayoz 4y ago
https://www.cnbc.com/2022/06/06/musk-says-twitter-is-refusing-to-share-data-on-spam-accounts.html https://www.cnbc.com/2022/06/06/musk-says-twitter-is-refusin... > Musk waived due diligence when he agreed to buy Twitter at $54.20 per share in April.
- roamerz 4y ago
  If there was false information provided by Twitter (a little irony there) I believe that agreement’s validity would be in question by common sense or in any court of law.
  - ceejayoz 4y ago
    Unlikely; they're quite careful in their wording. From their latest annual report: https://s22.q4cdn.com/826641620/files/doc_financials/2021/ar/FiscalYR2021_Twitter_Annual_-Report.pdf https://s22.q4cdn.com/826641620/files/doc_financials/2021/ar... > We estimate that the average of false or spam accounts during the fourth quarter of 2021 continued to represent fewer than 5% of our mDAU during the quarter. However, this estimate is based on an internal review of a sample of accounts and we apply significant judgment in making this determination. As such, our estimation of false or spam accounts may not accurately represent the actual number of such accounts, and the actual number of false or spam accounts could be higher than we have currently estimated.
    - nhkcode 4y ago
      >the average of false or spam accounts during the fourth quarter of 2021 continued to represent fewer than 5% of our mDAU Not a native English speaker so maybe I'm just not understanding it correctly. Since mDAU are a subset of DAU, probably a tiny subset of it, wouldn't that statement mean that way way less than 5% of DAU would be bots?
      - Dylan16807 4y ago
        No. That statement is the fraction of mDAU accounts that are false/spam. In a situation like this there is a very strong implication that you're talking about the intersection of the sets 'bots' and 'mDAU'. To talk about the raw number of bots vs. the raw number of mDAU would require very explicit wording to override that implication.
  - trs8080 4y ago
    There was no false information provided by Twitter /because he waived due diligence/. > Musk waived due diligence when he moved to buy the company, seemingly to hasten the acceptance of his bid. > He wrote in a letter to Twitter Chairman Bret Taylor on April 24, "As we discussed, $54.20 has been and will remain my best and final offer, period. This is binary – my offer will either be accepted or I will exit my position." > Twitter announced the company had accepted his offer the next day. > But in the weeks that followed, Musk vocally criticized Twitter during media interviews and on Twitter, where he has tens of millions of followers.
  - Ensorceled 4y ago
    The SEC filings are not new information, so unless he has new information that show those filings are false, there is nothing to question in a court of law NOR the court of common sense.
  - threeseed 4y ago
    > If there was false information provided by Twitter Then pretty sure advertisers who are savvy about these things would've done something about it.
  - rurp 4y ago
    Oh please, all of the principles involved here know that this is kayfabe. The bot issue is a pretense for Elon to try and weasel out of either the price or the entire deal. Both sides are aware that Twitter isn't even providing data that would let Musk verify the monetizable user calculation. The firehose is for posted tweets, while monetizable users mostly read.
  - dragonwriter 4y ago
    > If there was false information provided by Twitter (a little irony there) I believe that agreement’s validity would be in question by common sense or in any court of law. By waiving due diligence, Musk has put himself into situation where it is entirely his responsibility to establish the existence of material false information, and no one else's opportunity to help, short of required discovery should he file a lawsuit establishing a legally cognizable claim.
  - dundarious 4y ago
    No, the standard is Material Adverse Effect, and that would be something like “50% of revenue is fake, they’ve been cooking the books”. https://archive.ph/20220607031236/https://www.bloomberg.com/opinion/articles/2022-06-06/elon-has-a-new-bot-excuse https://archive.ph/20220607031236/https://www.bloomberg.com/...
  - Dylan16807 4y ago
    He might think the bot estimates are wrong, but his opinion seems to have been exactly the same when he made the offer. So that's not a reasonable way to get out of the deal.
notyourday 4y ago
The vast majority of people playing "experts" have never engaged in any business transaction hence they don't know.
- camdat 4y ago
  Honestly I feel its the exact opposite. Anyone whose ever purchased a home or business should rightfully have cringed at the ~35% premium Musk is paying, and doubly so once he waved due diligence. It seems like the people who are supporting this move assume Elon has some secret plan we're not privy too, but if so why would his actions be so erratic?
  - sudosysgen 4y ago
    A 35% premium over market price for a public company isn't necessarily cringe worthy.
    - BbzzbB 4y ago
      I'd call it ordinary. Microsoft offered (IIRC) like a 45% premium for Activision.
      - TheCoelacanth 4y ago
        Yes, the price that gets quoted for stocks is just the point that marginal shares are getting traded at. You have to pay slightly higher than that to acquire even a single share. If you actually want to acquire every single share, you always have to pay a significant premium.
- Ensorceled 4y ago
  I think a lot of people understand that "contractually waiving a home inspection" means you can't withdraw from a home purchase because you didn't get a home inspection. Even if you are now claiming, without proof, that the basement leaks.
  - 4y ago
andrelaszlo 4y ago
I think the "bluff" part of the headline is insinuating that Musk isn't doing due diligence, just stalling, and that perhaps he didn't even want to buy Twitter in the first place.
- roamerz 4y ago
  That’s what I read from the title as well.
- XorNot 4y ago
  $1 billion down cash to Twitter for pulling out is a lot of money "for teh lulz".
  - tsimionescu 4y ago
    Compared to the $44B he owes them, finding some way to trigger the special clause that only requires him to pay $1B may be great.
    - XorNot 4y ago
      AFAIK the $1 billion is just the "I don't want to do this anymore" clause he signed - if he just pulls out, the same applicable to Twitter if they pull out. The weirder part is technically Twitter can sue to force the deal to close anyway.
      - tsimionescu 4y ago
        No it's not. It's the "you started this, if you can't pull through on your financing you still have to pay us something for all the turmoil" clause. Musk has already agreed to buy Twitter: only extreme circumstances could lead to him not having to pay the amount he agreed to ($44B).
        XorNot 4y ago
        I don't think we're disagreeing? Musk doesn't have the money cash in hand, so the default position is "he doesn't have financing". The most he can become personally liable for I believe is the $1 billion fee.
topspin 4y ago
That's what I'm wondering. Not really. This is particularly transparent spin. Analyzing the raw feed isn't all that hard for someone with Musk's resources. A fat pipe and a ClickHouse cluster could boil this down pretty efficiently. At least the metadata. Analyzing tweet content would involve more effort, obviously. But bot operators aren't all that bright and much of their activity will be obvious. The real question is would any conclusions of such analysis be actionable? Could Musk produce an analysis credible enough in the time available to lead to renegotiation? That is highly dubious.
- KerrAvon 4y ago
  The bluff is that the bot issue is of any relevance whatsoever. It’s nonsense.
jquery 4y ago
Elon is bluffing that he has the right to perform due diligence. Twitter has every legal right to ignore him. Instead, they played along, thus "calling his bluff".
snowwrestler 4y ago
When the information is not actually pertinent (good luck identifying bots from the firehose data), and the purchase contract has already been signed.

https://www.cnbc.com/2022/06/06/musk-says-twitter-is-refusing-to-share-data-on-spam-accounts.html https://www.cnbc.com/2022/06/06/musk-says-twitter-is-refusin... > Musk waived due diligence when he agreed to buy Twitter at $54.20 per share in April.

roamerz 4y ago
If there was false information provided by Twitter (a little irony there) I believe that agreement’s validity would be in question by common sense or in any court of law.
- ceejayoz 4y ago
  Unlikely; they're quite careful in their wording. From their latest annual report: https://s22.q4cdn.com/826641620/files/doc_financials/2021/ar/FiscalYR2021_Twitter_Annual_-Report.pdf https://s22.q4cdn.com/826641620/files/doc_financials/2021/ar... > We estimate that the average of false or spam accounts during the fourth quarter of 2021 continued to represent fewer than 5% of our mDAU during the quarter. However, this estimate is based on an internal review of a sample of accounts and we apply significant judgment in making this determination. As such, our estimation of false or spam accounts may not accurately represent the actual number of such accounts, and the actual number of false or spam accounts could be higher than we have currently estimated.
  - nhkcode 4y ago
    >the average of false or spam accounts during the fourth quarter of 2021 continued to represent fewer than 5% of our mDAU Not a native English speaker so maybe I'm just not understanding it correctly. Since mDAU are a subset of DAU, probably a tiny subset of it, wouldn't that statement mean that way way less than 5% of DAU would be bots?
    - Dylan16807 4y ago
      No. That statement is the fraction of mDAU accounts that are false/spam. In a situation like this there is a very strong implication that you're talking about the intersection of the sets 'bots' and 'mDAU'. To talk about the raw number of bots vs. the raw number of mDAU would require very explicit wording to override that implication.
- trs8080 4y ago
  There was no false information provided by Twitter /because he waived due diligence/. > Musk waived due diligence when he moved to buy the company, seemingly to hasten the acceptance of his bid. > He wrote in a letter to Twitter Chairman Bret Taylor on April 24, "As we discussed, $54.20 has been and will remain my best and final offer, period. This is binary – my offer will either be accepted or I will exit my position." > Twitter announced the company had accepted his offer the next day. > But in the weeks that followed, Musk vocally criticized Twitter during media interviews and on Twitter, where he has tens of millions of followers.
- Ensorceled 4y ago
  The SEC filings are not new information, so unless he has new information that show those filings are false, there is nothing to question in a court of law NOR the court of common sense.
- threeseed 4y ago
  > If there was false information provided by Twitter Then pretty sure advertisers who are savvy about these things would've done something about it.
- rurp 4y ago
  Oh please, all of the principles involved here know that this is kayfabe. The bot issue is a pretense for Elon to try and weasel out of either the price or the entire deal. Both sides are aware that Twitter isn't even providing data that would let Musk verify the monetizable user calculation. The firehose is for posted tweets, while monetizable users mostly read.
- dragonwriter 4y ago
  > If there was false information provided by Twitter (a little irony there) I believe that agreement’s validity would be in question by common sense or in any court of law. By waiving due diligence, Musk has put himself into situation where it is entirely his responsibility to establish the existence of material false information, and no one else's opportunity to help, short of required discovery should he file a lawsuit establishing a legally cognizable claim.
- dundarious 4y ago
  No, the standard is Material Adverse Effect, and that would be something like “50% of revenue is fake, they’ve been cooking the books”. https://archive.ph/20220607031236/https://www.bloomberg.com/opinion/articles/2022-06-06/elon-has-a-new-bot-excuse https://archive.ph/20220607031236/https://www.bloomberg.com/...
- Dylan16807 4y ago
  He might think the bot estimates are wrong, but his opinion seems to have been exactly the same when he made the offer. So that's not a reasonable way to get out of the deal.

notyourday 4y ago

The vast majority of people playing "experts" have never engaged in any business transaction hence they don't know.

camdat 4y ago
Honestly I feel its the exact opposite. Anyone whose ever purchased a home or business should rightfully have cringed at the ~35% premium Musk is paying, and doubly so once he waved due diligence. It seems like the people who are supporting this move assume Elon has some secret plan we're not privy too, but if so why would his actions be so erratic?
- sudosysgen 4y ago
  A 35% premium over market price for a public company isn't necessarily cringe worthy.
  - BbzzbB 4y ago
    I'd call it ordinary. Microsoft offered (IIRC) like a 45% premium for Activision.
    - TheCoelacanth 4y ago
      Yes, the price that gets quoted for stocks is just the point that marginal shares are getting traded at. You have to pay slightly higher than that to acquire even a single share. If you actually want to acquire every single share, you always have to pay a significant premium.
Ensorceled 4y ago
I think a lot of people understand that "contractually waiving a home inspection" means you can't withdraw from a home purchase because you didn't get a home inspection. Even if you are now claiming, without proof, that the basement leaks.
- 4y ago

andrelaszlo 4y ago

I think the "bluff" part of the headline is insinuating that Musk isn't doing due diligence, just stalling, and that perhaps he didn't even want to buy Twitter in the first place.

roamerz 4y ago
That’s what I read from the title as well.
XorNot 4y ago
$1 billion down cash to Twitter for pulling out is a lot of money "for teh lulz".
- tsimionescu 4y ago
  Compared to the $44B he owes them, finding some way to trigger the special clause that only requires him to pay $1B may be great.
  - XorNot 4y ago
    AFAIK the $1 billion is just the "I don't want to do this anymore" clause he signed - if he just pulls out, the same applicable to Twitter if they pull out. The weirder part is technically Twitter can sue to force the deal to close anyway.
    - tsimionescu 4y ago
      No it's not. It's the "you started this, if you can't pull through on your financing you still have to pay us something for all the turmoil" clause. Musk has already agreed to buy Twitter: only extreme circumstances could lead to him not having to pay the amount he agreed to ($44B).
      - XorNot 4y ago
        I don't think we're disagreeing? Musk doesn't have the money cash in hand, so the default position is "he doesn't have financing". The most he can become personally liable for I believe is the $1 billion fee.

topspin 4y ago

That's what I'm wondering. Not really. This is particularly transparent spin. Analyzing the raw feed isn't all that hard for someone with Musk's resources. A fat pipe and a ClickHouse cluster could boil this down pretty efficiently. At least the metadata. Analyzing tweet content would involve more effort, obviously. But bot operators aren't all that bright and much of their activity will be obvious. The real question is would any conclusions of such analysis be actionable? Could Musk produce an analysis credible enough in the time available to lead to renegotiation? That is highly dubious.

KerrAvon 4y ago
The bluff is that the bot issue is of any relevance whatsoever. It’s nonsense.

jquery 4y ago

Elon is bluffing that he has the right to perform due diligence. Twitter has every legal right to ignore him. Instead, they played along, thus "calling his bluff".

snowwrestler 4y ago

When the information is not actually pertinent (good luck identifying bots from the firehose data), and the purchase contract has already been signed.