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This is my thinking, he didn’t anticipate the market would tank as bad as it did and now the math on the deal isn’t what it was before all the multiple compress

This is my thinking, he didn’t anticipate the market would tank as bad as it did and now the math on the deal isn’t what it was before all the multiple compression both for Tesla and Twitter. People saying he wasn’t serious about it from the start are off the mark.

throwaway0a5e 4y ago
Exactly. Everyone is serious at one price and a tire kicker at another price. Due to the market drop the dollar figure is now more expensive relatively speaking. I would not be surprised if some lawsuits fly back and forth and the deal winds up going through at a valuation that is similar in relative terms to the offer when it was made but different numerically.
- HWR_14 4y ago
  > a valuation that is similar in relative terms to the offer when it was made but different numerically. I have no idea what that means. You think they negotiate to 53.69/share so Musk can save some face?
  - throwaway0a5e 4y ago
    Both Twitter's value and the value of the stuff that underlies Musk's wealth has dropped. So they could agree to a new lower price and Twitter shareholders would still make the same money relative to the recent value of the stock and Musk would take a similar ding relative to his net worth. It's like if you agree with someone's heirs to buy something after the current owners croaks but the current owner takes long enough to croak that the market for that thing changes. The typical path forward is to re-adjust so the deal is just as fair for both parties as it used to be and get on with it. But because of the dollar figures involved here the parties will sue each other instead of exchanging emails/texts like normal people looking to buy and sell stuff do.
    - skohan 4y ago
      > So they could agree to a new lower price and Twitter shareholders would still make the same money relative to the recent value of the stock What? So let's imagine I bought 10000 shares of TWTR in 2018 for $25. And now Musk wants to revise the offer down from 54.20 down to 34.20. Why should I accept a $200k smaller return, just to be more "fair to Elon" in terms of the effect on his net worth? Or worse, what if I bought 10000 shares close to the peak? Why should I accept a $200k larger loss on the stock? He made a contract to pay a certain price - it's in no way a wash to shareholders if he wants to pay less. He just made a bad deal. Nobody forced him to sign a contract to acquire Twitter at that price.
- skohan 4y ago
  I have no idea why Twitter would agree to that. It seems to me the more likely outcome is that Musk will use lawsuits as a disincentive to prevent Twitter from forcing him to go through with the deal, and he will back out at the cost of a massive penalty payment.
  - pmorici 4y ago
    It isn’t without precedent there were pending acquisitions during the COVID crash in 2020 that got renegotiated to a lower price.

throwaway0a5e 4y ago

Exactly. Everyone is serious at one price and a tire kicker at another price. Due to the market drop the dollar figure is now more expensive relatively speaking. I would not be surprised if some lawsuits fly back and forth and the deal winds up going through at a valuation that is similar in relative terms to the offer when it was made but different numerically.

HWR_14 4y ago
> a valuation that is similar in relative terms to the offer when it was made but different numerically. I have no idea what that means. You think they negotiate to 53.69/share so Musk can save some face?
- throwaway0a5e 4y ago
  Both Twitter's value and the value of the stuff that underlies Musk's wealth has dropped. So they could agree to a new lower price and Twitter shareholders would still make the same money relative to the recent value of the stock and Musk would take a similar ding relative to his net worth. It's like if you agree with someone's heirs to buy something after the current owners croaks but the current owner takes long enough to croak that the market for that thing changes. The typical path forward is to re-adjust so the deal is just as fair for both parties as it used to be and get on with it. But because of the dollar figures involved here the parties will sue each other instead of exchanging emails/texts like normal people looking to buy and sell stuff do.
  - skohan 4y ago
    > So they could agree to a new lower price and Twitter shareholders would still make the same money relative to the recent value of the stock What? So let's imagine I bought 10000 shares of TWTR in 2018 for $25. And now Musk wants to revise the offer down from 54.20 down to 34.20. Why should I accept a $200k smaller return, just to be more "fair to Elon" in terms of the effect on his net worth? Or worse, what if I bought 10000 shares close to the peak? Why should I accept a $200k larger loss on the stock? He made a contract to pay a certain price - it's in no way a wash to shareholders if he wants to pay less. He just made a bad deal. Nobody forced him to sign a contract to acquire Twitter at that price.
skohan 4y ago
I have no idea why Twitter would agree to that. It seems to me the more likely outcome is that Musk will use lawsuits as a disincentive to prevent Twitter from forcing him to go through with the deal, and he will back out at the cost of a massive penalty payment.
- pmorici 4y ago
  It isn’t without precedent there were pending acquisitions during the COVID crash in 2020 that got renegotiated to a lower price.