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> but he will negotiate a lower price How? As best I understand things, he has zero wiggle room - he either buys Twitter for the agreed price or he stumps up

> but he will negotiate a lower price How? As best I understand things, he has zero wiggle room - he either buys Twitter for the agreed price or he stumps up the $1B termination fee. And if Twitter's board did go mad and decide to negotiate a lower price, their shareholders would almost certainly block it and/or sue the board, no?

streetcat1 4y ago
I do not think that he can pay the termination fee. I.e. the termination fee itself has rules. Otherwise, he would have payed it (the fee is equal to the daily move of his TESLA shares).
cbtacy 4y ago
Pretty much. I think it's more likely he's trying to set things up to make the claim that Twitter wasn't co-operative and forthcoming with the information and then try to reduce the break fee in court.
- epberry 4y ago
  Agree. And likewise it seems Twitter is going to court to collect the breakup fee rather than complete the deal.
  - jacquesm 4y ago
    They'd be nuts to do so.
  - lotsofpulp 4y ago
    Twitter’s Chairman disagrees: https://twitter.com/btaylor/status/1545526087089696768 https://twitter.com/btaylor/status/1545526087089696768
adgjlsfhk1 4y ago
A 1B termination fee is relatively small given that Twitter's market cap is down 10B since the beginning of April.
- tptacek 4y ago
  Which is why Twitter has the right to force execution, not just claim the break-up fee.
  - jacquesm 4y ago
    Exactly, this is the point that seems to be missed over and over again: you can't back out of a deal that you've inked because you regret it.
Johnny555 4y ago
he stumps up the $1B termination fee I don't think that's even an option -- that $1B breakup fee was just if the deal was not allowed to go through due to reasons outside of his control (like if it was blocked due to regulatory reasons). Otherwise, I think he's legally obligated to go through with it -- and Twitter's board has fiduciary responsibility to hold him to it.
ozim 4y ago
No because he bid above twitter current stock valuation so he can still go down and people might not be happy but they will not be able to sue anyone.
- ImPostingOnHN 4y ago
  if he goes down, that represents a material loss to shareholders compared to the price he is contractually obligated to pay so, all the same, I think the shareholders will just take his original offer and elon can reflect on his impulsivity (a joke; he won't)
tick_tock_tick 4y ago
He has tons of wiggle room. Mostly in this will takes years to resolve, Twitter will be forced to disclose nearly every internal document that will 100% have some email or chat of employees stating, if only as hyperbole, that the bot rate they report to the public is bullshit.
- tptacek 4y ago
  That will get him nowhere in the trial, because incorrect information is only a valid reason to break off the deal if it uncovers a material adverse effect, and it is virtually impossible to get Delaware courts to find an MAE. Matt Levine's shorthand for Delaware MAE is "40% decrease in profitability". Not stock price; a 40% decrease in the fundamentals. It's not happening.
- KerrAvon 4y ago
  Stipulate for the sake of argument that courts will accept the bot argument -- don't you think discovery would be problematic for Elon? https://www.latimes.com/business/story/2022-04-12/musk-is-off-the-twitter-board-of-directors-the-tesla-twitter-bot-army-marches-on https://www.latimes.com/business/story/2022-04-12/musk-is-of...

streetcat1 4y ago

I do not think that he can pay the termination fee. I.e. the termination fee itself has rules. Otherwise, he would have payed it (the fee is equal to the daily move of his TESLA shares).

cbtacy 4y ago

Pretty much. I think it's more likely he's trying to set things up to make the claim that Twitter wasn't co-operative and forthcoming with the information and then try to reduce the break fee in court.

epberry 4y ago
Agree. And likewise it seems Twitter is going to court to collect the breakup fee rather than complete the deal.
- jacquesm 4y ago
  They'd be nuts to do so.
- lotsofpulp 4y ago
  Twitter’s Chairman disagrees: https://twitter.com/btaylor/status/1545526087089696768 https://twitter.com/btaylor/status/1545526087089696768

adgjlsfhk1 4y ago

A 1B termination fee is relatively small given that Twitter's market cap is down 10B since the beginning of April.

tptacek 4y ago
Which is why Twitter has the right to force execution, not just claim the break-up fee.
- jacquesm 4y ago
  Exactly, this is the point that seems to be missed over and over again: you can't back out of a deal that you've inked because you regret it.

Johnny555 4y ago

he stumps up the $1B termination fee I don't think that's even an option -- that $1B breakup fee was just if the deal was not allowed to go through due to reasons outside of his control (like if it was blocked due to regulatory reasons). Otherwise, I think he's legally obligated to go through with it -- and Twitter's board has fiduciary responsibility to hold him to it.

ozim 4y ago

No because he bid above twitter current stock valuation so he can still go down and people might not be happy but they will not be able to sue anyone.

ImPostingOnHN 4y ago
if he goes down, that represents a material loss to shareholders compared to the price he is contractually obligated to pay so, all the same, I think the shareholders will just take his original offer and elon can reflect on his impulsivity (a joke; he won't)

tick_tock_tick 4y ago

He has tons of wiggle room. Mostly in this will takes years to resolve, Twitter will be forced to disclose nearly every internal document that will 100% have some email or chat of employees stating, if only as hyperbole, that the bot rate they report to the public is bullshit.

tptacek 4y ago
That will get him nowhere in the trial, because incorrect information is only a valid reason to break off the deal if it uncovers a material adverse effect, and it is virtually impossible to get Delaware courts to find an MAE. Matt Levine's shorthand for Delaware MAE is "40% decrease in profitability". Not stock price; a 40% decrease in the fundamentals. It's not happening.
KerrAvon 4y ago
Stipulate for the sake of argument that courts will accept the bot argument -- don't you think discovery would be problematic for Elon? https://www.latimes.com/business/story/2022-04-12/musk-is-off-the-twitter-board-of-directors-the-tesla-twitter-bot-army-marches-on https://www.latimes.com/business/story/2022-04-12/musk-is-of...