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> Musk is saying, you haven't demonstrated your numbers are accurate. It has nothing to do with accuracy. Twitter is supposedly not providing the data: 'Whil

> Musk is saying, you haven't demonstrated your numbers are accurate. It has nothing to do with accuracy. Twitter is supposedly not providing the data: 'While Section 6.4 of the Merger Agreement requires Twitter to provide Mr. Musk and his advisors all data and information that Mr. Musk requests “for any reasonable business purpose related to the consummation of the transaction,” Twitter has not complied with its contractual obligations.' > The letter complains that Musk asked for data allowing him to "independently verify Twitter's representations regarding the number of mDAU" -- but where does the agreement provide for that verification as a condition of the deal? Section 6.11, the part of the deal where Twitter needs to provide necessary information to secure debt: 'and under Section 6.11 of the Merger Agreement, to information “reasonably requested” in connection with his efforts to secure the debt financing necessary to consummate the transaction.' I have little doubt anyone lending that kind of money would require the buyer to independently verify the mDAU.

chernevik 4y ago
I will be very surprised that Twitter's position was less than "you can have anything you want", precisely to avoid any complaint of non-cooperation. I do agree that the agreement's debt financing provisions may provide Musk an out -- "I wanted to close, but I couldn't get debt b/c you wouldn't cooperate". I'm a little surprised that Twitter agreed to any sort of financing provision, precisely because it seems to allow Musk to screw up his debt raising and then point to that as an out. But that is not a complaint in the letter, and becomes an argument about what lenders require for debt financing. Musk will have to show that lenders cared about this, and Twitter will have discovery to find evidence they didn't.
- philipwhiuk 4y ago
  > I will be very surprised that Twitter's position was less than "you can have anything you want", precisely to avoid any complaint of non-cooperation. Be very surprised, they capped the firehouse. From the filing: > Additionally, those APIs contained an artificial “cap” on the number of queries that Mr. Musk and his team can run regardless of the rate limit—an issue that initially prevented Mr. Musk and his advisors from completing an analysis of the data in any reasonable period of time. Mr. Musk raised this issue as soon as he became aware of it, in the first paragraph of the June 29 Letter: “we have just been informed by our data experts that Twitter has placed an artificial cap on the number of searches our experts can perform with this data, which is now preventing Mr. Musk and his team from doing their analysis.” That cap was not removed until July 6, after Mr. Musk demanded its removal for a second time.
- spikels 4y ago
  Twitter is demanding "specific performance" (i.e. complete the transaction) which is unrealistic given those financing provisions. No court can force all the other parties to close. No financing, no transaction.
  - tptacek 4y ago
    He has the financing. He secured ~1/3rd of the funds based on committed LBO debt, ~1/3rd in margin loans against TSLA, and ~1/3rd in personal equity. Since then, he's been working to minimize the his personal exposure, but he can't just pretend not to own the TSLA stock he's borrowing against and selling to close the deal.
    - gabereiser 4y ago
      Financing has strings. I’m sure his partners want to make sure the mDAU is accurate as well. The entire value of Twitter depends on it.
      - tptacek 4y ago
        They can't want that, because it was a term Musk explicitly waived, publicly and notoriously, before he attempted to finance the deal. It was newsworthy, and well covered, that Musk secured the 13Bn of LBO debt in the first place.
        gabereiser 4y ago
        What the media says (including musk) and what the term sheet says are two different things. If he mentioned mDAU could be fraudulent to anyone involved, they would be interested to hear what he had to say about it. I believe though that this is a move to reduce the risk and monies he has to pay to try to get a better deal ($30b perhaps?)
        admax88qqq 4y ago
        > they would be interested to hear what he had to say about it. They can be interested all they want, doesn't mean they can back out of a deal unless they can demonstrate fraud or gross negligence on behalf of Twitter.
- FormerBandmate 4y ago
  It would be extremely hard to prove that Elon Musk, the richest man in the world who secured financing for the largest LBO ever in a week, was unable to secure financing because of a technicality in user data which played a key role in his stated rationale for the purchase. Unfortunately for Musk (lmao) and every Twitter employee (my heart actually goes out to them, with the current job market they’re in hell right now), I don’t think there’s any way out of this deal, especially when you look at past precedent like the LVMH-Tiffany’s and Simon-Taubman deals.
- eftychis 4y ago
  I would be surprised if not all lenders / investors did not ask for such data. Especially, after the first tweets from Musk. Musk did go around knocking on lots of doors to get money and I am not sure if he actually managed to get enough funds; I don't think personally it is a good deal without some internal fundamental data to prove otherwise. Of course, I am puzzled also that Twitter gave him a smidge of a way out.
deleted 4y ago
[deleted]
sbf501 4y ago
> Twitter is supposedly not providing the data Didn't he get access to the firehose, which is, AFAIK, -ALL- the data? (not the 50GB he tweeted about but supposedly a 2TB/day stream?)
- jchook 4y ago
  IIRC "the firehose" is around 10%
  - dfabulich 4y ago
    No, you're thinking of the "decahose." The "Firehose" is the whole thing. https://developer.twitter.com/en/docs/twitter-api/enterprise/decahose-api/overview/decahose https://developer.twitter.com/en/docs/twitter-api/enterprise... > The Decahose delivers a 10% random sample of the realtime Twitter Firehose through a streaming connection.
    - whiplash451 4y ago
      Shouldn’t it be called the Decihose, then? The name is confusing.
  - deleted 4y ago
    [deleted]
- jameshart 4y ago
  The firehose is all the posts. It's not all the views. And 'daily active users' are mainly viewing, not posting. Which makes me wonder why the argument about 'the firehose' and 'bots' matters.
  - FartyMcFarter 4y ago
    Perhaps because it's not actually about the bots, it's about buyer's remorse and trying to get out of the transaction via some excuse.
  - sbf501 4y ago
tptacek 4y ago
Musk already secured financing, and most of the recent financial engineering he was doing was in the service of minimizing his own exposure (ie, the amount of TSLA he'd need to sell to cover his end of the deal). His lenders couldn't "independently verify" the mDAU, because he waived diligence --- he was entitled to information as a contractual technicality, but he was not entitled to condition the deal based on anything contained in that information, short of a "material adverse effect", which is in practice an impossible bar to clear.
- prescriptivist 4y ago
- imwillofficial 4y ago
  - colinmhayes 4y ago
    Wrong. He had laid out where the money would come from in the deal, the bank loans have already been secured.
    - imwillofficial 4y ago
      - tptacek 4y ago
        I'm surprised you believe you've explained it. I think it's going to take you more than a sentence or two.
        imwillofficial 4y ago
        4y ago
danielmarkbruce 4y ago
It does have something to do with accuracy, because further down the page the letter explicitly calls out the SEC filings and the 5% number and the fact that it was a rep and that there is an MAE. The letter is throwing several pieces of shit against the wall and seeing which will stick.
JamesSwift 4y ago
> Twitter is supposedly not providing the data Not really. Reading the letter it sounds more like Musk has started to make more specific requests, likely in the hopes of them not being able to service them. For example, he claims in the letter that he requested daily mDAU numbers for the previous 8 quarters (i.e. 2 years) and they only gave him rolled-up numbers. I find it completely believable that they may not have a daily breakdown for 8 quarters, and so they can't provide the information requested.
- googlryas 4y ago
  Stats get increasingly expensive and useless to store, but one would think mDAU would be one tagged for high precision long retention storage.
  - abofh 4y ago
    I mean, no? Why on earth would I want Thursday the twenty thirds mDAU from a year and a half ago? If it's not bringing value, it's costing money, and it's unlikely to provide value, so why keep it?
    - smaryjerry 4y ago
      Your right twitter might just be incompetent and not keep that data, but this would be one of the most basic forms of data you need for analysis when your entire revenue model relies on that statistic.
    - herewulf 4y ago
      Because sometimes it costs more money to discard some data than it does to simply keep it.
    - deleted 4y ago
      [deleted]
    - tick_tock_tick 4y ago
      When I was in mobile gaming we stored that data for way longer.... Do you really think twitter is throwing away user activity data?
Lazare 4y ago
> I have little doubt anyone lending that kind of money would require the buyer to independently verify the mDAU. Nope. Musk's financing is not conditional on that.
rocqua 4y ago
"For any reasonable business purpose" is different from 'any information you think is reasonable'. I would presume (guess) that Musk kept asking for more info until he found a point where Twitter stopped responding just so he could argue this clause was broken.

chernevik 4y ago

I will be very surprised that Twitter's position was less than "you can have anything you want", precisely to avoid any complaint of non-cooperation. I do agree that the agreement's debt financing provisions may provide Musk an out -- "I wanted to close, but I couldn't get debt b/c you wouldn't cooperate". I'm a little surprised that Twitter agreed to any sort of financing provision, precisely because it seems to allow Musk to screw up his debt raising and then point to that as an out. But that is not a complaint in the letter, and becomes an argument about what lenders require for debt financing. Musk will have to show that lenders cared about this, and Twitter will have discovery to find evidence they didn't.

philipwhiuk 4y ago
> I will be very surprised that Twitter's position was less than "you can have anything you want", precisely to avoid any complaint of non-cooperation. Be very surprised, they capped the firehouse. From the filing: > Additionally, those APIs contained an artificial “cap” on the number of queries that Mr. Musk and his team can run regardless of the rate limit—an issue that initially prevented Mr. Musk and his advisors from completing an analysis of the data in any reasonable period of time. Mr. Musk raised this issue as soon as he became aware of it, in the first paragraph of the June 29 Letter: “we have just been informed by our data experts that Twitter has placed an artificial cap on the number of searches our experts can perform with this data, which is now preventing Mr. Musk and his team from doing their analysis.” That cap was not removed until July 6, after Mr. Musk demanded its removal for a second time.
spikels 4y ago
Twitter is demanding "specific performance" (i.e. complete the transaction) which is unrealistic given those financing provisions. No court can force all the other parties to close. No financing, no transaction.
- tptacek 4y ago
  He has the financing. He secured ~1/3rd of the funds based on committed LBO debt, ~1/3rd in margin loans against TSLA, and ~1/3rd in personal equity. Since then, he's been working to minimize the his personal exposure, but he can't just pretend not to own the TSLA stock he's borrowing against and selling to close the deal.
  - gabereiser 4y ago
    Financing has strings. I’m sure his partners want to make sure the mDAU is accurate as well. The entire value of Twitter depends on it.
    - tptacek 4y ago
      They can't want that, because it was a term Musk explicitly waived, publicly and notoriously, before he attempted to finance the deal. It was newsworthy, and well covered, that Musk secured the 13Bn of LBO debt in the first place.
      - gabereiser 4y ago
        What the media says (including musk) and what the term sheet says are two different things. If he mentioned mDAU could be fraudulent to anyone involved, they would be interested to hear what he had to say about it. I believe though that this is a move to reduce the risk and monies he has to pay to try to get a better deal ($30b perhaps?)
        admax88qqq 4y ago
        > they would be interested to hear what he had to say about it. They can be interested all they want, doesn't mean they can back out of a deal unless they can demonstrate fraud or gross negligence on behalf of Twitter.
FormerBandmate 4y ago
It would be extremely hard to prove that Elon Musk, the richest man in the world who secured financing for the largest LBO ever in a week, was unable to secure financing because of a technicality in user data which played a key role in his stated rationale for the purchase. Unfortunately for Musk (lmao) and every Twitter employee (my heart actually goes out to them, with the current job market they’re in hell right now), I don’t think there’s any way out of this deal, especially when you look at past precedent like the LVMH-Tiffany’s and Simon-Taubman deals.
eftychis 4y ago
I would be surprised if not all lenders / investors did not ask for such data. Especially, after the first tweets from Musk. Musk did go around knocking on lots of doors to get money and I am not sure if he actually managed to get enough funds; I don't think personally it is a good deal without some internal fundamental data to prove otherwise. Of course, I am puzzled also that Twitter gave him a smidge of a way out.

deleted 4y ago

[deleted]

sbf501 4y ago

> Twitter is supposedly not providing the data Didn't he get access to the firehose, which is, AFAIK, -ALL- the data? (not the 50GB he tweeted about but supposedly a 2TB/day stream?)

jchook 4y ago
IIRC "the firehose" is around 10%
- dfabulich 4y ago
  No, you're thinking of the "decahose." The "Firehose" is the whole thing. https://developer.twitter.com/en/docs/twitter-api/enterprise/decahose-api/overview/decahose https://developer.twitter.com/en/docs/twitter-api/enterprise... > The Decahose delivers a 10% random sample of the realtime Twitter Firehose through a streaming connection.
  - whiplash451 4y ago
    Shouldn’t it be called the Decihose, then? The name is confusing.
- deleted 4y ago
  [deleted]
jameshart 4y ago
The firehose is all the posts. It's not all the views. And 'daily active users' are mainly viewing, not posting. Which makes me wonder why the argument about 'the firehose' and 'bots' matters.
- FartyMcFarter 4y ago
  Perhaps because it's not actually about the bots, it's about buyer's remorse and trying to get out of the transaction via some excuse.
- sbf501 4y ago

tptacek 4y ago

Musk already secured financing, and most of the recent financial engineering he was doing was in the service of minimizing his own exposure (ie, the amount of TSLA he'd need to sell to cover his end of the deal). His lenders couldn't "independently verify" the mDAU, because he waived diligence --- he was entitled to information as a contractual technicality, but he was not entitled to condition the deal based on anything contained in that information, short of a "material adverse effect", which is in practice an impossible bar to clear.

prescriptivist 4y ago
imwillofficial 4y ago
- colinmhayes 4y ago
  Wrong. He had laid out where the money would come from in the deal, the bank loans have already been secured.
  - imwillofficial 4y ago
    - tptacek 4y ago
      I'm surprised you believe you've explained it. I think it's going to take you more than a sentence or two.
      - imwillofficial 4y ago
        4y ago

danielmarkbruce 4y ago

It does have something to do with accuracy, because further down the page the letter explicitly calls out the SEC filings and the 5% number and the fact that it was a rep and that there is an MAE. The letter is throwing several pieces of shit against the wall and seeing which will stick.

JamesSwift 4y ago

> Twitter is supposedly not providing the data Not really. Reading the letter it sounds more like Musk has started to make more specific requests, likely in the hopes of them not being able to service them. For example, he claims in the letter that he requested daily mDAU numbers for the previous 8 quarters (i.e. 2 years) and they only gave him rolled-up numbers. I find it completely believable that they may not have a daily breakdown for 8 quarters, and so they can't provide the information requested.

googlryas 4y ago
Stats get increasingly expensive and useless to store, but one would think mDAU would be one tagged for high precision long retention storage.
- abofh 4y ago
  I mean, no? Why on earth would I want Thursday the twenty thirds mDAU from a year and a half ago? If it's not bringing value, it's costing money, and it's unlikely to provide value, so why keep it?
  - smaryjerry 4y ago
    Your right twitter might just be incompetent and not keep that data, but this would be one of the most basic forms of data you need for analysis when your entire revenue model relies on that statistic.
  - herewulf 4y ago
    Because sometimes it costs more money to discard some data than it does to simply keep it.
  - deleted 4y ago
    [deleted]
  - tick_tock_tick 4y ago
    When I was in mobile gaming we stored that data for way longer.... Do you really think twitter is throwing away user activity data?

Lazare 4y ago

> I have little doubt anyone lending that kind of money would require the buyer to independently verify the mDAU. Nope. Musk's financing is not conditional on that.

rocqua 4y ago

"For any reasonable business purpose" is different from 'any information you think is reasonable'. I would presume (guess) that Musk kept asking for more info until he found a point where Twitter stopped responding just so he could argue this clause was broken.