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Twitter Sues Musk After He Tries Backing Out of $44B Deal

37 points by kirubakaran 4y ago

minimaxir 4y ago
PDF of the Complaint: https://www.documentcloud.org/documents/22084453-twittermuskcomplaint https://www.documentcloud.org/documents/22084453-twittermusk...
- encryptluks2 4y ago
  That complaint was even more satisfying that I could have imagined. They didn't skip a beat. Wait until Musk tries to argue that it is the fault of a mental illness and that he shouldn't be held accountable.
  - deleted 4y ago
    [deleted]
  - SaulJLH 4y ago
    @encryptluks2 RE this submission of yours, what was it all about? https://news.ycombinator.com/item?id=31856190 https://news.ycombinator.com/item?id=31856190 The link is dead, & your OP is unclear to me...
    - deleted 4y ago
      [deleted]
paulpauper 4y ago
I think it's very unlikely twitter gets $44 billion. More likely elon will pay a fine or negotiate a lower price.
- minimaxir 4y ago
  It's too late for both possibilities. The only way Elon pays less money is if it's a settlement in which he does not get ownership of Twitter. (or wins the lawsuit)
  - TillE 4y ago
    I can't imagine Twitter accepting less than $10 billion or so, given the damage this has caused to the company and its stock price, and I can't imagine Musk agreeing to pay that much for nothing. It's pretty unusual for a lawsuit, but I would expect this one to end with the judge having to enforce the contract.
fghr6yu45764 4y ago
flutas 4y ago
Honestly it sounds like they are both trying to hide behind different terms. Twitter constantly uses "mDAU" which they define as people, organizations or other accounts who logged in or were otherwise authenticated and accessed Twitter on any given day through twitter.com, Twitter applications that are able to show ads, or paid Twitter products, including subscriptions. which would miss all of the "spam bots" that use the API to publish tweets. While Musk is constantly claiming general Users. I'm no contract lawyer but this is certainly going to be a fun one to watch.
- deleted 4y ago
  [deleted]
- JamesSwift 4y ago
  Importantly, the only term that matters legally is the one Twitter chooses to hide behind. It doesnt matter how Musk classifies the users into buckets, because his statements on what % of bots are not what hes claiming Twitter lied about. The only thing that matters is that the made up metric they came up with and called mDAU and the arbitrary method they used to count the bots in that metric (5%) is not part of a nefarious plan to mislead the SEC/investors. Even if their process was a bad one, it doesn't matter as long as it wasn't _intentionally_ bad or if the made up number was actually way higher.
chomp 4y ago
So let me get this straight. In March he was pledging that spam was an issue, and that he wanted to "defeat the spam bots" (p.3) So he then he initiated his purchase, and signed a legally binding agreement to purchase that was not contingent on due diligence: (p.12) >Musk’s counsel sent over a draft agreement, reiterated that Musk’s offer was not contingent on any due diligence, and underscored that the form of the proposed agreement was “intended to make this easy on all to get to a deal asap.” >Twitter had taken Musk’s claimed “seller friendly” draft agreement and secured other key concessions to make it even more so. Not only were there no financing or diligence conditions, but Musk had already secured debt commitments that together with his personal equity commitment would suffice to fund the purchase. Then, he went on a crusade to get Twitter to prove that actually, spam isn't an issue. Twitter held multiple meetings showing him how they come to the number, including a 2 hour meeting where they explain that they do a daily random statistical human sampling, but he actually didn't read it: (p.43) >Indeed, in a June 30 conversation with Segal, Musk acknowledged he had not read the detailed summary of Twitter’s sampling process provided back in May. He winds up disparaging the company multiple times, terminates the agreement, and then posted memes of himself acting like this whole thing was a chess game to get Twitter to release user data. Meanwhile, Twitter couldn't implement any retention programs (p.49) because he withheld consent, and mulled over the idea of layoffs to the Twitter employees, nuking morale, all the while just posting memes to Twitter, sucking down Twitter resources for his fishing expedition, and then he just bounces? What the heck?
- TheLoafOfBread 4y ago
  Meanwhile he turned some of his Tesla stock into 8,5 billion USD saying that it is for buying of Twitter. Then he bounces on bogus reasons. Is it clear now? https://fortune.com/2022/07/09/how-elon-musk-bizarre-twitter-takeover-saga-could-have-just-been-a-cover-for-him-to-sell-8-billion-in-tesla-stock/ https://fortune.com/2022/07/09/how-elon-musk-bizarre-twitter...
- nebula8804 4y ago
  I wish we could have a 'free market' of sorts for hyper-scaling hard science companies and their leadership. This guy has his power and fame because no one (thus far) was able to match the performance of the electric car/space company he created. This aura of excellence attracts the best of the best which he then grinds to dust which perpetuates a feedback loop of top tier design and execution attracting the next wave of top performing people. Yes you can make arguments that some parts of his organizations may not be up to snuff & playing with fire (Autopilot for example) but overall he is operating in a class of his own and that is going to force the people who want to be part of this (supposed) A-Team to have to put up with Musk as a person. If there was another Musk that could match him at his own game, and was a lot nicer and respectful then I argue Musk would have sunk himself by now. But as it stands, so many people & institutions are having to tolerate him because they have nowhere else to go. It was the Peter Theil playbook executed masterfully.

37 points by kirubakaran 4y ago

PDF of the Complaint: https://www.documentcloud.org/documents/22084453-twittermuskcomplaint https://www.documentcloud.org/documents/22084453-twittermusk...

encryptluks2 4y ago
That complaint was even more satisfying that I could have imagined. They didn't skip a beat. Wait until Musk tries to argue that it is the fault of a mental illness and that he shouldn't be held accountable.
- deleted 4y ago
  [deleted]
- SaulJLH 4y ago
  @encryptluks2 RE this submission of yours, what was it all about? https://news.ycombinator.com/item?id=31856190 https://news.ycombinator.com/item?id=31856190 The link is dead, & your OP is unclear to me...
  - deleted 4y ago
    [deleted]

paulpauper 4y ago

I think it's very unlikely twitter gets $44 billion. More likely elon will pay a fine or negotiate a lower price.

minimaxir 4y ago
It's too late for both possibilities. The only way Elon pays less money is if it's a settlement in which he does not get ownership of Twitter. (or wins the lawsuit)
- TillE 4y ago
  I can't imagine Twitter accepting less than $10 billion or so, given the damage this has caused to the company and its stock price, and I can't imagine Musk agreeing to pay that much for nothing. It's pretty unusual for a lawsuit, but I would expect this one to end with the judge having to enforce the contract.

fghr6yu45764 4y ago

flutas 4y ago

Honestly it sounds like they are both trying to hide behind different terms. Twitter constantly uses "mDAU" which they define as people, organizations or other accounts who logged in or were otherwise authenticated and accessed Twitter on any given day through twitter.com, Twitter applications that are able to show ads, or paid Twitter products, including subscriptions. which would miss all of the "spam bots" that use the API to publish tweets. While Musk is constantly claiming general Users. I'm no contract lawyer but this is certainly going to be a fun one to watch.

deleted 4y ago
[deleted]
JamesSwift 4y ago
Importantly, the only term that matters legally is the one Twitter chooses to hide behind. It doesnt matter how Musk classifies the users into buckets, because his statements on what % of bots are not what hes claiming Twitter lied about. The only thing that matters is that the made up metric they came up with and called mDAU and the arbitrary method they used to count the bots in that metric (5%) is not part of a nefarious plan to mislead the SEC/investors. Even if their process was a bad one, it doesn't matter as long as it wasn't _intentionally_ bad or if the made up number was actually way higher.

chomp 4y ago

So let me get this straight. In March he was pledging that spam was an issue, and that he wanted to "defeat the spam bots" (p.3) So he then he initiated his purchase, and signed a legally binding agreement to purchase that was not contingent on due diligence: (p.12) >Musk’s counsel sent over a draft agreement, reiterated that Musk’s offer was not contingent on any due diligence, and underscored that the form of the proposed agreement was “intended to make this easy on all to get to a deal asap.” >Twitter had taken Musk’s claimed “seller friendly” draft agreement and secured other key concessions to make it even more so. Not only were there no financing or diligence conditions, but Musk had already secured debt commitments that together with his personal equity commitment would suffice to fund the purchase. Then, he went on a crusade to get Twitter to prove that actually, spam isn't an issue. Twitter held multiple meetings showing him how they come to the number, including a 2 hour meeting where they explain that they do a daily random statistical human sampling, but he actually didn't read it: (p.43) >Indeed, in a June 30 conversation with Segal, Musk acknowledged he had not read the detailed summary of Twitter’s sampling process provided back in May. He winds up disparaging the company multiple times, terminates the agreement, and then posted memes of himself acting like this whole thing was a chess game to get Twitter to release user data. Meanwhile, Twitter couldn't implement any retention programs (p.49) because he withheld consent, and mulled over the idea of layoffs to the Twitter employees, nuking morale, all the while just posting memes to Twitter, sucking down Twitter resources for his fishing expedition, and then he just bounces? What the heck?

TheLoafOfBread 4y ago
Meanwhile he turned some of his Tesla stock into 8,5 billion USD saying that it is for buying of Twitter. Then he bounces on bogus reasons. Is it clear now? https://fortune.com/2022/07/09/how-elon-musk-bizarre-twitter-takeover-saga-could-have-just-been-a-cover-for-him-to-sell-8-billion-in-tesla-stock/ https://fortune.com/2022/07/09/how-elon-musk-bizarre-twitter...
nebula8804 4y ago
I wish we could have a 'free market' of sorts for hyper-scaling hard science companies and their leadership. This guy has his power and fame because no one (thus far) was able to match the performance of the electric car/space company he created. This aura of excellence attracts the best of the best which he then grinds to dust which perpetuates a feedback loop of top tier design and execution attracting the next wave of top performing people. Yes you can make arguments that some parts of his organizations may not be up to snuff & playing with fire (Autopilot for example) but overall he is operating in a class of his own and that is going to force the people who want to be part of this (supposed) A-Team to have to put up with Musk as a person. If there was another Musk that could match him at his own game, and was a lot nicer and respectful then I argue Musk would have sunk himself by now. But as it stands, so many people & institutions are having to tolerate him because they have nowhere else to go. It was the Peter Theil playbook executed masterfully.