7 ms·

>the court will take his assets to compensate. How do you seize billions of dollars of stock without affecting share prices?

by daenz 4y ago

pg_1234 4y ago
You just continue seizing assets until the accumulated cash value realized from the sale of the assets matches the value of the financial judgement against the guilty party. The drop in share prices as you do this is not your concern.
almost_usual 4y ago
Don’t invest in a company ran by a lunatic?
- abirch 4y ago
  Twitter employees are watching the board force a lunatic to buy their company.
  - scaramanga 4y ago
    Because they know he has absolutely no ability to do so. They are simply trying to collect legal fees at this point.
    - bandyaboot 4y ago
      I mean, he does though right? It’s just that doing so at this point would cause a world of hurt for Tesla and its shareholders?
      - scaramanga 4y ago
        I don't think so, I mean, you are not just going to place a single market order for $44bn of stock, you are going to have liquidity problems because there is not that much buy-side volume in the market, so the price must fall drastically to attract new buyers. Also I assume musk has legal obligations not to do stuff like that to begin with, as an executive with fiduciary responsibilities to shareholders. If Musk can tank Tesla, Exxon execs can dismantle Exxon to save the environment. But there's also the fact that a lot of his Tesla shares are already leveraged on loans. The most likely course would be for him to take out loans on the remaining unleveraged stock, but he doesn't have enough of that at the rates the banks are offering. Anyway, I'm no expert on Musk, and I have almost zero interest in Tesla, or Twitter, or any of this clown show. So maybe my ballpark guesstimations of all the relevant numbers are way off. So take it all with a huge pinch of salt. I am just some uninformed spectator watching two lizards fight in the dust and speculating who will win or whatever :) Edit: leveraged -> unleveraged, woops
        bandyaboot 4y ago
        All fair points.
    - danaris 4y ago
      He absolutely has the ability. He's demonstrated that publicly, with his verified presentation of having raised the $44 billion a few weeks ago (through a combination of financial instruments). What he doesn't have is the inclination.
  - bandyaboot 4y ago
    The Twitter board would have a tough time explaining why they didn’t enforce the rock solid agreement allowing the shareholders to sell their shares for an extreme premium.
    - scaramanga 4y ago
      Not just an extreme premium but an "unconditional offer" lol. Imagine I go to mcodnalds and offer $10 for a big-mac unconditionally, lol. I'm going to get a half eaten shit sandwich and a broad grin.
  - scaramanga 4y ago
    But tech workers don't need unions, right. Must be fun for twitter employees to completely powerless spectators with no seat at the negotiating table while the lunatic has a chance at becoming their new King and turning their labour in to an election-swinging doomsday machine at the end of human civilisation. But hey, we've got beanbags and a playstation.
Spivak 4y ago
You don’t care and keep seizing and selling off assets until you hit the target number or you run out of things to seize. You’re acting like the asset value at all matters to the courts.
- daenz 4y ago
  Couldn't other shareholders sue the government for tanking the stock and essentially "stealing" value from them?
  - danielheath 4y ago
    They could certainly try; you can start a lawsuit without any real basis if that's how you want to spend your money. Trying to argue, in court, that you are entitled to have your investment insulated from loss due the primary owner selling it?
    - daenz 4y ago
      >due to the primary owner selling it We were talking about the courts seizing the assets though, it's not being voluntarily sold.
      - cycomanic 4y ago
        Why would that make a difference. When someone defaults on a house/car the seized asset is often sold under value, nobody has any ground to sue.
        daenz 4y ago
        If someone's car is seized by the government, it doesn't cause the value of everyone else's cars to drop by 50%, and if it did, I think people would sue the the government.
  - dodobirdlord 4y ago
    No, they still own the stock, the government hasn’t taken anything from them. The stock might be worth less money the same way a house might be worth less money if a city government decided to stop repairing the road in front of it, or if the city relaxed zoning laws, but the price of assets in the market isn’t a responsibility of the government, and it generally does not incur liability when it causes them to change.
parineum 4y ago
> without affecting share prices Why should that be a concern?
hedora 4y ago
They could simply keep selling Elon's Tesla stock it until they had the money to cover the court order. Why should the court or Twitter care if they end up converting 10x more of Elon's stock to cash? I guess some day traders would get rich (and people that had to sell for the day or so when the stock tanked would take a bath), but that's the biggest problem I can come up with.
throwaway09223 4y ago
It doesn't matter if they're affected. A judgement is going to be for a dollar amount. A court will rule that Musk must pay twitter X billion dollars. Twitter can then pursue Musk, taking basically anything he owns in terms of business. They could contact the broker holding his shares and restrain them, order them sold, and collect the proceeds. They could seize and sell at auction the real property of any of his businesses. SpaceX rockets? Office chairs? Servers? Anything. All of this enforcement costs money. Twitter would account for the money spent seizing assets and charge those expenses to Musk as well. Assets seized in this way (including stock) are often sold for much less than they're ideally worth. It's Musk's problem. Twitter would be empowered to seize seize seize until they've raised enough cash to cover the judgement plus expenses.
- gpm 4y ago
  > They could seize and sell at auction the real property of any of his businesses. SpaceX rockets? Office chairs? Servers? Anything. They could not, because he does not own those businesses outright. Doing so would violate the other owners rights. They can seize his shares in SpaceX, but not SpaceX property.
  - throwaway09223 4y ago
    Sure. The particular way the assets are seized depends on a number of different technical details. But the end result is always the same. You can either voluntarily liquidate and pay your judgements or you can have someone else do it for you.
    - kortilla 4y ago
      I’m having it hard taking you seriously given you making such a basic mistake of thinking they could seize spacex property directly. What industry do you work in?
      - throwaway09223 4y ago
        Oh give me a break. Property of a privately owned company can be directly seized. I have not done an analysis on exactly which of Musk's private companies are jointly owned, and how the ownership is structured. It's a comment on hn for crying out loud.
chartpath 4y ago
It's not like the shares are destroyed or immediately sold. If anything, they are prevented from being sold under pain of contempt, so could increase prices by limiting the supply.
Red_Leaves_Flyy 4y ago
How does a margin call work for $500 please Alex?

>the court will take his assets to compensate. How do you seize billions of dollars of stock without affecting share prices?

by daenz 4y ago

>the court will take his assets to compensate. How do you seize billions of dollars of stock without affecting share prices?

pg_1234 4y ago

You just continue seizing assets until the accumulated cash value realized from the sale of the assets matches the value of the financial judgement against the guilty party. The drop in share prices as you do this is not your concern.

almost_usual 4y ago

Don’t invest in a company ran by a lunatic?

abirch 4y ago
Twitter employees are watching the board force a lunatic to buy their company.
- scaramanga 4y ago
  Because they know he has absolutely no ability to do so. They are simply trying to collect legal fees at this point.
  - bandyaboot 4y ago
    I mean, he does though right? It’s just that doing so at this point would cause a world of hurt for Tesla and its shareholders?
    - scaramanga 4y ago
      I don't think so, I mean, you are not just going to place a single market order for $44bn of stock, you are going to have liquidity problems because there is not that much buy-side volume in the market, so the price must fall drastically to attract new buyers. Also I assume musk has legal obligations not to do stuff like that to begin with, as an executive with fiduciary responsibilities to shareholders. If Musk can tank Tesla, Exxon execs can dismantle Exxon to save the environment. But there's also the fact that a lot of his Tesla shares are already leveraged on loans. The most likely course would be for him to take out loans on the remaining unleveraged stock, but he doesn't have enough of that at the rates the banks are offering. Anyway, I'm no expert on Musk, and I have almost zero interest in Tesla, or Twitter, or any of this clown show. So maybe my ballpark guesstimations of all the relevant numbers are way off. So take it all with a huge pinch of salt. I am just some uninformed spectator watching two lizards fight in the dust and speculating who will win or whatever :) Edit: leveraged -> unleveraged, woops
      - bandyaboot 4y ago
        All fair points.
  - danaris 4y ago
    He absolutely has the ability. He's demonstrated that publicly, with his verified presentation of having raised the $44 billion a few weeks ago (through a combination of financial instruments). What he doesn't have is the inclination.
- bandyaboot 4y ago
  The Twitter board would have a tough time explaining why they didn’t enforce the rock solid agreement allowing the shareholders to sell their shares for an extreme premium.
  - scaramanga 4y ago
    Not just an extreme premium but an "unconditional offer" lol. Imagine I go to mcodnalds and offer $10 for a big-mac unconditionally, lol. I'm going to get a half eaten shit sandwich and a broad grin.
- scaramanga 4y ago
  But tech workers don't need unions, right. Must be fun for twitter employees to completely powerless spectators with no seat at the negotiating table while the lunatic has a chance at becoming their new King and turning their labour in to an election-swinging doomsday machine at the end of human civilisation. But hey, we've got beanbags and a playstation.

Spivak 4y ago

You don’t care and keep seizing and selling off assets until you hit the target number or you run out of things to seize. You’re acting like the asset value at all matters to the courts.

daenz 4y ago
Couldn't other shareholders sue the government for tanking the stock and essentially "stealing" value from them?
- danielheath 4y ago
  They could certainly try; you can start a lawsuit without any real basis if that's how you want to spend your money. Trying to argue, in court, that you are entitled to have your investment insulated from loss due the primary owner selling it?
  - daenz 4y ago
    >due to the primary owner selling it We were talking about the courts seizing the assets though, it's not being voluntarily sold.
    - cycomanic 4y ago
      Why would that make a difference. When someone defaults on a house/car the seized asset is often sold under value, nobody has any ground to sue.
      - daenz 4y ago
        If someone's car is seized by the government, it doesn't cause the value of everyone else's cars to drop by 50%, and if it did, I think people would sue the the government.
- dodobirdlord 4y ago
  No, they still own the stock, the government hasn’t taken anything from them. The stock might be worth less money the same way a house might be worth less money if a city government decided to stop repairing the road in front of it, or if the city relaxed zoning laws, but the price of assets in the market isn’t a responsibility of the government, and it generally does not incur liability when it causes them to change.

parineum 4y ago

> without affecting share prices Why should that be a concern?

hedora 4y ago

They could simply keep selling Elon's Tesla stock it until they had the money to cover the court order. Why should the court or Twitter care if they end up converting 10x more of Elon's stock to cash? I guess some day traders would get rich (and people that had to sell for the day or so when the stock tanked would take a bath), but that's the biggest problem I can come up with.

throwaway09223 4y ago

It doesn't matter if they're affected. A judgement is going to be for a dollar amount. A court will rule that Musk must pay twitter X billion dollars. Twitter can then pursue Musk, taking basically anything he owns in terms of business. They could contact the broker holding his shares and restrain them, order them sold, and collect the proceeds. They could seize and sell at auction the real property of any of his businesses. SpaceX rockets? Office chairs? Servers? Anything. All of this enforcement costs money. Twitter would account for the money spent seizing assets and charge those expenses to Musk as well. Assets seized in this way (including stock) are often sold for much less than they're ideally worth. It's Musk's problem. Twitter would be empowered to seize seize seize until they've raised enough cash to cover the judgement plus expenses.

gpm 4y ago
> They could seize and sell at auction the real property of any of his businesses. SpaceX rockets? Office chairs? Servers? Anything. They could not, because he does not own those businesses outright. Doing so would violate the other owners rights. They can seize his shares in SpaceX, but not SpaceX property.
- throwaway09223 4y ago
  Sure. The particular way the assets are seized depends on a number of different technical details. But the end result is always the same. You can either voluntarily liquidate and pay your judgements or you can have someone else do it for you.
  - kortilla 4y ago
    I’m having it hard taking you seriously given you making such a basic mistake of thinking they could seize spacex property directly. What industry do you work in?
    - throwaway09223 4y ago
      Oh give me a break. Property of a privately owned company can be directly seized. I have not done an analysis on exactly which of Musk's private companies are jointly owned, and how the ownership is structured. It's a comment on hn for crying out loud.

chartpath 4y ago

It's not like the shares are destroyed or immediately sold. If anything, they are prevented from being sold under pain of contempt, so could increase prices by limiting the supply.

Red_Leaves_Flyy 4y ago

How does a margin call work for $500 please Alex?