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Running Twitter into the ground for 50 a share sounds like a great deal for shareholders. Heck, given the cesspool that Twitter is, it might even be good for so

by rocqua 4y ago

Running Twitter into the ground for 50 a share sounds like a great deal for shareholders. Heck, given the cesspool that Twitter is, it might even be good for society. It would suck for Musk and his financers, but they have a simple alternative: stick to the agreement they signed. It's not like the risks of merger agreements are unknown. And the waiving of due diligence wasn't a minor, easy to miss, point either. Musk wants to back out because of price. He cannot, and he is throwing the equivalent of a tantrum. I do hope this doesn't end up with Musk losing control of spaceX. Some actual quality is comming out of there.

DoesntMatter22 4y ago
He's not going to have to buy twitter, it's that simple. He has multiple avenues of getting out of it.
- Cederfjard 4y ago
  Such as?
  - hef19898 4y ago
    Settling for an amount between his agreed upon acquisition price and the current market value, basically paying Twitter owners billions for nothing.
    - edgyquant 4y ago
      Doesn’t seem like getting out of it to me
- rocqua 4y ago
  The contract does not give many avenues. It is either a 'materially adverse effect', 'breaking a covenant', or not being able to get the loans he wanted lined up. -Materially adverse effects are not within play here. The threshold for that is really high. -The loans are committed. Banks have signed for the loan, and they can't get out of it. - That leaves the covenants. That is the main approach Musk is trying, but it is a stretch. The only other avenues to get out are: - Get Twitter to amend the contract - Ignore the contract Threatening to try the second (which would really suck for twitter, even if it almost certainly won't work) might be a way to get twitter to do the first. But I get the sense that the board feels they have a strong position. Moreover the board is likely getting a lot of pressure from shareholders to not give in to Musk.

by rocqua 4y ago

DoesntMatter22 4y ago

He's not going to have to buy twitter, it's that simple. He has multiple avenues of getting out of it.

Cederfjard 4y ago
Such as?
- hef19898 4y ago
  Settling for an amount between his agreed upon acquisition price and the current market value, basically paying Twitter owners billions for nothing.
  - edgyquant 4y ago
    Doesn’t seem like getting out of it to me
rocqua 4y ago
The contract does not give many avenues. It is either a 'materially adverse effect', 'breaking a covenant', or not being able to get the loans he wanted lined up. -Materially adverse effects are not within play here. The threshold for that is really high. -The loans are committed. Banks have signed for the loan, and they can't get out of it. - That leaves the covenants. That is the main approach Musk is trying, but it is a stretch. The only other avenues to get out are: - Get Twitter to amend the contract - Ignore the contract Threatening to try the second (which would really suck for twitter, even if it almost certainly won't work) might be a way to get twitter to do the first. But I get the sense that the board feels they have a strong position. Moreover the board is likely getting a lot of pressure from shareholders to not give in to Musk.