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Even if that’s the case, and that’s a big if, it’s not enough in and of itself to let him out of the deal. He needs to prove a material adverse effect of someth

Even if that’s the case, and that’s a big if, it’s not enough in and of itself to let him out of the deal. He needs to prove a material adverse effect of something like 20-40% of the value of the company - then the court may let him off the hook. Another avenue for him might be if the banks pull their funding, then the deal falls through and he may just have to eat the $1bn penalty (but that can’t have been initiated or influenced by him). He made an impulsive decision, the market went down making him regret it, and since then he’s been trying to squirm out of the deal he signed by grasping at straws and in the process hurting the company he promised to buy. He’s in trouble, and some potential minor discrepancy in how Twitter has represented their users will not absolve him of it.

boffinAudio 4y ago
If Twitter are lying about how many bots they have and how many real humans they have, that is not some potential minor discrepancy. That is a HUGE red flag which justifies bowing out of the deal. Would you be happy investing in a company that lies about its sales figures and doesn't provide the statistics and real evidence to back up their claims? This irrational Musk-hate is occluding rational thought.
- ypzhang2 4y ago
  The legal standard is material adverse effect. It’s a very high bar. As commentators have noted, it’s unlikely any court finds for that legal standard. This is why Elons lawyers have been using pretextual reasons to walk away. He is notably not saying he is walking because of “too many bots”. He is saying that twitter is breaching an information convenant because he needs to find a pretext that will stand up in the court of law.
- Cederfjard 4y ago
  > That is a HUGE red flag which justifies bowing out of the deal. Not according to law and precedent, which is what I’m telling you. Whether Elon can be allowed to renege on this deal does not hinge on whether you personally think Twitter has been telling falsehoods. Show concrete evidence of the very substantial discrepancy in Twitter’s value that would be based on these lies (again, it would have to be on the order of 20-40%), and I’ll concede that he might have a chance to win on that merit. The bar is that high, whether you like it or not.
- MrMan 4y ago
  A minor point about this new bot hysteria. Twitter is a very well-scrutinized company with many analysts covering it and a lot of big institutional ownership. If there was some surprising element to musks bot assertions, it would be big news. In fact, there is nothing to see, and this is partly borne out by the lack of buy and sell side analysts collectively smacking their foreheads after realizing they has been completely wrong about Twitter the last 10 years.
  - threeseed 4y ago
    > Twitter is a very well-scrutinized company with many analysts covering it and a lot of big institutional ownership You missed out the most important group: advertisers. If Twitter has been wilfully lying for years about their metrics there would be thousands of lawsuits popping up from advertisers of all sizes. It would be the death of the company by paper cut.
- dragonwriter 4y ago
  > If Twitter are lying about how many bots they have and how many real humans they have, that is not some potential minor discrepancy. That is a HUGE red flag which justifies bowing out of the deal. Well, no, if you had doubts about that going in (which Musk publicly did) but then agreed to a contract waiving due diligence (which Musk did), it would not justify backing out of the deal that you...suspected they might be lying and we're not provided sufficient information to assuage your concerns. There might be an argument that you stumbling into clear proof of deception that you didn't have before signing the agreement would justify that, but Musk has never claimed such a discovery, but there is no reasonable argument I can see that Twitter was obligated to satisfy Musk’s concerns here, when he explicitly waived the usual requirement in acquisition deals that would be the basis of such an obligation. > Would you be happy investing in a company that lies about its sales figures and doesn't provide the statistics and real evidence to back up their claims? No, and, more to the point, I wouldn't be happy buying a social media company where I was uncertain about the basis for it's claims of real users. But then, that's why I wouldn't agree to buy such a company—especially where I had doubts about those claims going in—and waive due diligence as part of the deal. That would be idiotic.
- threeseed 4y ago
  > That is a HUGE red flag which justifies bowing out of the deal. There is no evidence of any bot problem let alone a massive one. Even if there was, Musk publicly claimed he would fix it.

boffinAudio 4y ago

If Twitter are lying about how many bots they have and how many real humans they have, that is not some potential minor discrepancy. That is a HUGE red flag which justifies bowing out of the deal. Would you be happy investing in a company that lies about its sales figures and doesn't provide the statistics and real evidence to back up their claims? This irrational Musk-hate is occluding rational thought.

ypzhang2 4y ago
The legal standard is material adverse effect. It’s a very high bar. As commentators have noted, it’s unlikely any court finds for that legal standard. This is why Elons lawyers have been using pretextual reasons to walk away. He is notably not saying he is walking because of “too many bots”. He is saying that twitter is breaching an information convenant because he needs to find a pretext that will stand up in the court of law.
Cederfjard 4y ago
> That is a HUGE red flag which justifies bowing out of the deal. Not according to law and precedent, which is what I’m telling you. Whether Elon can be allowed to renege on this deal does not hinge on whether you personally think Twitter has been telling falsehoods. Show concrete evidence of the very substantial discrepancy in Twitter’s value that would be based on these lies (again, it would have to be on the order of 20-40%), and I’ll concede that he might have a chance to win on that merit. The bar is that high, whether you like it or not.
MrMan 4y ago
A minor point about this new bot hysteria. Twitter is a very well-scrutinized company with many analysts covering it and a lot of big institutional ownership. If there was some surprising element to musks bot assertions, it would be big news. In fact, there is nothing to see, and this is partly borne out by the lack of buy and sell side analysts collectively smacking their foreheads after realizing they has been completely wrong about Twitter the last 10 years.
- threeseed 4y ago
  > Twitter is a very well-scrutinized company with many analysts covering it and a lot of big institutional ownership You missed out the most important group: advertisers. If Twitter has been wilfully lying for years about their metrics there would be thousands of lawsuits popping up from advertisers of all sizes. It would be the death of the company by paper cut.
dragonwriter 4y ago
> If Twitter are lying about how many bots they have and how many real humans they have, that is not some potential minor discrepancy. That is a HUGE red flag which justifies bowing out of the deal. Well, no, if you had doubts about that going in (which Musk publicly did) but then agreed to a contract waiving due diligence (which Musk did), it would not justify backing out of the deal that you...suspected they might be lying and we're not provided sufficient information to assuage your concerns. There might be an argument that you stumbling into clear proof of deception that you didn't have before signing the agreement would justify that, but Musk has never claimed such a discovery, but there is no reasonable argument I can see that Twitter was obligated to satisfy Musk’s concerns here, when he explicitly waived the usual requirement in acquisition deals that would be the basis of such an obligation. > Would you be happy investing in a company that lies about its sales figures and doesn't provide the statistics and real evidence to back up their claims? No, and, more to the point, I wouldn't be happy buying a social media company where I was uncertain about the basis for it's claims of real users. But then, that's why I wouldn't agree to buy such a company—especially where I had doubts about those claims going in—and waive due diligence as part of the deal. That would be idiotic.
threeseed 4y ago
> That is a HUGE red flag which justifies bowing out of the deal. There is no evidence of any bot problem let alone a massive one. Even if there was, Musk publicly claimed he would fix it.