5 ms·

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 wo

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.
- tptacek 4y ago
  They can't just demonstrate "fraud" or "gross negligence". They have to demonstrate a "material adverse effect", which, as Matt Levine shorthands it, is something on the order of a 40% drop in profitability --- not the stock price, but the fundamentals of the company. Not happening.
  - dvt 4y ago
    [flagged]
    - couchand 4y ago
      20% is on the order of 40%
      - shkkmo 4y ago
        "in/on the order of" does not mean "the same order of magnitude as" by rather "approximately the same as". Nobody would call 20% approximately the same as 40% so you are incorrect.
    - tptacek 4y ago
      All I know is, he's a former M&A lawyer, unlike any commenter here.
  - 1R 4y ago
    What if 40% of the percentage of users that twitter proposes are real people are actually bots? Wouldn't that qualify as material adverse effect?
    - hef19898 4y ago
      Propably not if those users can, and are, monetized.
    - JumpCrisscross 4y ago
      > Wouldn't that qualify as material adverse effect? Probably not. There has been one MAC finding in the history of MACs. It was a trifecta of fraud, management throwing in the towel the moment the merger was agreed and a massive revenue drop. Musk’s only hope is to get his banks to pull financing. That’s going to be tough.
      - jakelazaroff 4y ago
        Would that even work, though? It’s not like he can’t afford it; his money is just tied up in TSLA. Presumably the court can force him to liquidate his shares if his lenders somehow back out.
        HWR_14 4y ago
        No, I the two conditions other than a materially adverse effect that lets Musk back out are if his debt financing falls through or if the government stops it.
- suzzer99 4y ago
  So the financiers do back out, then what? Twitter sues them for the full amount, and both parties end up settling for X% of the full amount?
  - martin8412 4y ago
    X=100
papercrane 4y ago
> If he mentioned mDAU could be fraudulent to anyone involved One problem for Musk is he's been casting doubt on the bot numbers publicly, even before the deal. One of he's stated reasons for the deal was to deal with spam bots. Twitter has also reported basically the same 5% number in it's filings for years. If it really was a sticking point for Musk he should've done his due diligence before committing to to buy Twitter.
- meatsauce 4y ago
  Well twitter is a cesspool of bots, mostly international actors, so I don't see how material facts are a problem.

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.

tptacek 4y ago
They can't just demonstrate "fraud" or "gross negligence". They have to demonstrate a "material adverse effect", which, as Matt Levine shorthands it, is something on the order of a 40% drop in profitability --- not the stock price, but the fundamentals of the company. Not happening.
- dvt 4y ago
  [flagged]
  - couchand 4y ago
    20% is on the order of 40%
    - shkkmo 4y ago
      "in/on the order of" does not mean "the same order of magnitude as" by rather "approximately the same as". Nobody would call 20% approximately the same as 40% so you are incorrect.
  - tptacek 4y ago
    All I know is, he's a former M&A lawyer, unlike any commenter here.
- 1R 4y ago
  What if 40% of the percentage of users that twitter proposes are real people are actually bots? Wouldn't that qualify as material adverse effect?
  - hef19898 4y ago
    Propably not if those users can, and are, monetized.
  - JumpCrisscross 4y ago
    > Wouldn't that qualify as material adverse effect? Probably not. There has been one MAC finding in the history of MACs. It was a trifecta of fraud, management throwing in the towel the moment the merger was agreed and a massive revenue drop. Musk’s only hope is to get his banks to pull financing. That’s going to be tough.
    - jakelazaroff 4y ago
      Would that even work, though? It’s not like he can’t afford it; his money is just tied up in TSLA. Presumably the court can force him to liquidate his shares if his lenders somehow back out.
      - HWR_14 4y ago
        No, I the two conditions other than a materially adverse effect that lets Musk back out are if his debt financing falls through or if the government stops it.
suzzer99 4y ago
So the financiers do back out, then what? Twitter sues them for the full amount, and both parties end up settling for X% of the full amount?
- martin8412 4y ago
  X=100

papercrane 4y ago

> If he mentioned mDAU could be fraudulent to anyone involved One problem for Musk is he's been casting doubt on the bot numbers publicly, even before the deal. One of he's stated reasons for the deal was to deal with spam bots. Twitter has also reported basically the same 5% number in it's filings for years. If it really was a sticking point for Musk he should've done his due diligence before committing to to buy Twitter.

meatsauce 4y ago
Well twitter is a cesspool of bots, mostly international actors, so I don't see how material facts are a problem.