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As Matt Levine explained [0] the “waiving due diligence” doesn’t really mean anything now. What does mean something is that he signed a binding agreement to buy
by bryananderson 4y ago
As Matt Levine explained [0] the “waiving due diligence” doesn’t really mean anything now. What does mean something is that he signed a binding agreement to buy Twitter, giving Twitter the right to compel him to close the deal, and there’s no “too many bots” exception, nor a “you were wrong (or even lied) about something you said” exception. He has to prove that it’s a “material adverse effect” which I understand is nearly impossible (he’d have to convince a Delaware judge that the company is worth at least 40% less than stated because of this, and in practice it seems these suits almost never succeed).
[0] https://twitter.com/matt_levine/status/1545151445057536001 https://twitter.com/matt_levine/status/1545151445057536001
- dylan604 4y agoI absolutely love that fact that this tweet happy individual might actually get slapped for just tossing out tweets. Not sure if $1B would make him squirm or not, but even for billionaires, $1B is an expensive twitter rant.
- swores 4y agoIf he gets punished it won't be for "just tossing out tweets" it will be for negotiating and signing a legally binding contract and then breaking it. It would be possible to enter into a contract through tweets alone. That didn't remotely happen here, though.
- dylan604 4y agoBut he only signed that agreement because his ego wouldn't let him back away from those tweets
- tsimionescu 4y agoNote that Musk stands to spend $44B, not $1B.
- deelowe 4y agoHe currently owes twitter 44B, but actual damages would be 44B minus the FMV, so closer to like 10-20.
- roflyear 4y agoWhere are you guys getting this number from? Similar cases have settled for almost the full original amount. Like 95%+. Not half or less than half. Are you just making stuff up?
- dylan604 4y agoIt's the internet. Just say it with enough conviction, and others will buy it. Continue to say it, and everyone will buy it. Er, not just the internet now
- deleted 4y ago[deleted]
- cookingrobot 4y agoThey’re saying that if everyone just did what they agreed to do: - Musk would give Twitter shareholders $44B in cash, - Twitter shareholders would give Musk ownership of the company. Note that today, Twitter is worth $28B. So the agreed deal essentially gives the shareholders $16B in profit. So a judge might tell Musk he can’t back out and has to buy Twitter for $44B like he said he would. Or it might let him just give the shareholders $16B and not get the company.
- roflyear 4y agoWhen has the second instance ever happened and what's the mechanism for that? Every shareholder gets a check?
- 988747 4y agoTypically, if you want to distribute money to each and every shareholder you pay them dividend. Must would only need to wire money to Twitter corporate account first.
- somenewaccount1 4y agoidk. the fact that the price had already sunk nearly 40% from his price over this period could clearly indicate that his assumption isn't without merit.
- bryananderson 4y agoPrice changes due to macroeconomic circumstances are explicitly listed in the contract as not being grounds to get out of the deal. I’m telling you, the guy really signed an ironclad contract forcing him to pay $44B to buy Twitter.
- ceejayoz 4y agoOnly if you don’t bother to take a look at the rest of the market.
- donarb 4y agoBut for Musk's machinations, said stock price would not be down 40%. He caused the stock to drop.
- jimmydorry 4y agoI'd say the tech sector getting routed played a bigger part. It's not like Twitter dropping 40% (for any reason) is exceptional amonst all the other stocks that dropped 20-60% over the last year.
- CogitoCogito 4y agoI guess if public investors 100% believed Musk would pay, the stock should sit at $44 billion. I guess if Musk is forced to close or to pay equivalent damages, the value will jump back to that in the end.
- harambae 4y agoExactly. Plenty of people willing to profit off the arbitrage if he's actually going to be forced to buy twitter at the original amount. The current price ($32) reflects be probably won't.