5 ms·

The WSJ has a very different take: https://archive.ph/DKex6 https://archive.ph/DKex6 The ATL blog post from Joe Patrice seems to hinge its argument on two thin

The WSJ has a very different take: https://archive.ph/DKex6 https://archive.ph/DKex6 The ATL blog post from Joe Patrice seems to hinge its argument on two things: (a) specific performance is a major threat and "one expects that someone will prevail upon Musk to settle before that happens" (emphasis in original); and (b) due diligence was waived so Musk doesn't have a leg to stand on (Patrice is "flummoxed by Musk’s theory that he’ll ever see this data in court [because h]e waived diligence"). That's a weak argument. Specific performance is drastic, and arguably unconstitutional in many contexts (albeit not this one most likely), so courts almost never order it. Additionally, waiving due diligence doesn't grant the seller free rein to provide material misrepresentations. If Twitter is making a claim about how many actual human users it has (which it is doing by providing the number of users and saying 5% or less are bots), and that claim is materially false, that's the ballgame. (AboveTheLaw tends to be long on cheerleading and snark, and short on legal analysis, particularly when an issue presents itself as GenZ fan faces versus The Establishment, something you can see by reading their many other articles.) (Disclaimer: IAAL but IANAMAL. My comment here has a modicum of insight over a random layman but is emphatically not the opinion of an expert or practitioner in this particular field.)

dragontamer 4y ago
> The WSJ has a very different take: https://archive.ph/DKex6 https://archive.ph/DKex6 Your link has nothing to do with any statement you made.
- torstenvl 4y ago
  You're right, sorry. I can't edit it now but this is the WSJ link I meant to post. https://archive.ph/HsGyY https://archive.ph/HsGyY
seanhunter 4y ago
Not only do courts order specific performance but the exact judge hearing this case ordered specific performance in a merger where the purchaser attempted to pull out claiming a material adverse change.
TigeriusKirk 4y ago
>"one expects that someone will prevail upon Musk to settle before that happens" My question is "Settle how?" Pay a penalty and still not own Twitter? That seems like an unlikely outcome to me. Why would he do that? Why would he not simply complete the transaction instead?
- abracadaniel 4y ago
  If the options are to pay $50b for something worth $20b, or pay $1b and walk away, then walking away is the better choice by far.
  - AnimalMuppet 4y ago
    Yeah, but I don't think those are his choices. Pay $1b and walk away is his best outcome. That's if he wins. If he loses, he may have to pay $50b for something worth $20b. Settling will be somewhere in between - maybe paying $10-15b to walk away. Of course, if he settles, it will be with a sealed agreement. And then he can publicly claim victory...
    - pengaru 4y ago
      > Pay $1b and walk away is his best outcome. That's if he wins. No, his best out come if he wins is he pays nothing because Twitter lied about what they're selling.
      - dragontamer 4y ago
        Except Elon Musk went to Twitter with a seller-friendly request and signed away his right to due diligence. Twitter never "lied" about anything. Heck, they barely negotiated anything at all. Elon Musk arrived, bought 9% of the company (and had a number of SEC violations while doing so since he didn't file various forms in time), and then threatened to enter into a hostile takeover of Twitter.
        pengaru 4y ago
anotherman554 4y ago
Specific performance is perfectly constitutional in this matter, and you don't seem to understand that Twitter's representations were highly qualified, making it seemingly impossible for Musk to show there were material misrepresentations. You seem to be under the misapprehension that Twitter claimed there were 5% or less bots. This is not true. They never made unqualified claims about the number of bots. How do I know this? I subscribe to Matt Levine's newsletter. He's a lawyer who follows this stuff for a living.
Kon-Peki 4y ago
> AboveTheLaw tends to be long on cheerleading and snark, and short on legal analysis, particularly when an issue presents itself as GenZ fan faces versus The Establishment, something you can see by reading their many other articles. That would be a major change from the old days. Back before Gen Z was old enough to get a job, ATL was a blog run by a woman named Ellie. It was aimed specifically at BigLaw associates and was total snark all day, everyday. If you saw something there you didn’t see elsewhere, there was a 99% chance it was inside info from one of the associates on the case.
dragonwriter 4y ago
> Specific performance is drastic, and arguably unconstitutional in many contexts Specific performance is not all drastic (and not remotely arguably unconstitutional) in the case of agreements to transmit specific tangible or intangible property. It is impermissible, and often argued further to be a violation of the 13th Amendment, for personal services contracts, but that’s not even remotely at issue here. Now, arguably, since Musk’s end of the deal was to pay cash while Twitter’s end was to provide specific property, you can make the case that specific performance cannot be justified because Twitter can be made whole by a damage award, to wit, via compensatory damages equal to the difference between the amount of money Musk offered and the value of 100% of Twitter stock at the time damages are assessed. > If Twitter is making a claim about how many actual human users it has (which it is doing by providing the number of users and saying 5% or less are bots), and that claim is materially false, that’s the ballgame. That’s rather imprecisely worded (aside from also drastically factually misrepresenting the content of Twitter’s bot-related claims), and resolving that sloppiness in a way that is tolerably approximately true (aside, again, from the misrepresentation of what Twitter has actually claimed), “materially” is doing a lot of work in that sentence.
- roughly 4y ago
  Also, to be clear, Twitter is not making a claim about how many actual human users it has - it is making a claim about how many actual human mDAU, or monetizable daily active users, it has. 90% of Twitter's users can be bots, as long as no more than half a percent or so of those are counted as mDAU.
- tveita 4y ago
  > Twitter can be made whole by a damage award, to wit, via compensatory damages equal to the difference between the amount of money Musk offered and the value of 100% of Twitter stock at the time damages are assessed. This sounds difficult to assess - the possibility of damages being awarded should itself be affecting the stock price. E.g. if you were 100% assured of a payout of $52.40 - stock price, the stock should trade for $52.40... but then the damages would be $0.
  - 4y ago

dragontamer 4y ago

> The WSJ has a very different take: https://archive.ph/DKex6 https://archive.ph/DKex6 Your link has nothing to do with any statement you made.

torstenvl 4y ago
You're right, sorry. I can't edit it now but this is the WSJ link I meant to post. https://archive.ph/HsGyY https://archive.ph/HsGyY

seanhunter 4y ago

Not only do courts order specific performance but the exact judge hearing this case ordered specific performance in a merger where the purchaser attempted to pull out claiming a material adverse change.

TigeriusKirk 4y ago

>"one expects that someone will prevail upon Musk to settle before that happens" My question is "Settle how?" Pay a penalty and still not own Twitter? That seems like an unlikely outcome to me. Why would he do that? Why would he not simply complete the transaction instead?

abracadaniel 4y ago
If the options are to pay $50b for something worth $20b, or pay $1b and walk away, then walking away is the better choice by far.
- AnimalMuppet 4y ago
  Yeah, but I don't think those are his choices. Pay $1b and walk away is his best outcome. That's if he wins. If he loses, he may have to pay $50b for something worth $20b. Settling will be somewhere in between - maybe paying $10-15b to walk away. Of course, if he settles, it will be with a sealed agreement. And then he can publicly claim victory...
  - pengaru 4y ago
    > Pay $1b and walk away is his best outcome. That's if he wins. No, his best out come if he wins is he pays nothing because Twitter lied about what they're selling.
    - dragontamer 4y ago
      Except Elon Musk went to Twitter with a seller-friendly request and signed away his right to due diligence. Twitter never "lied" about anything. Heck, they barely negotiated anything at all. Elon Musk arrived, bought 9% of the company (and had a number of SEC violations while doing so since he didn't file various forms in time), and then threatened to enter into a hostile takeover of Twitter.
      - pengaru 4y ago

anotherman554 4y ago

Specific performance is perfectly constitutional in this matter, and you don't seem to understand that Twitter's representations were highly qualified, making it seemingly impossible for Musk to show there were material misrepresentations. You seem to be under the misapprehension that Twitter claimed there were 5% or less bots. This is not true. They never made unqualified claims about the number of bots. How do I know this? I subscribe to Matt Levine's newsletter. He's a lawyer who follows this stuff for a living.

Kon-Peki 4y ago

> AboveTheLaw tends to be long on cheerleading and snark, and short on legal analysis, particularly when an issue presents itself as GenZ fan faces versus The Establishment, something you can see by reading their many other articles. That would be a major change from the old days. Back before Gen Z was old enough to get a job, ATL was a blog run by a woman named Ellie. It was aimed specifically at BigLaw associates and was total snark all day, everyday. If you saw something there you didn’t see elsewhere, there was a 99% chance it was inside info from one of the associates on the case.

dragonwriter 4y ago

> Specific performance is drastic, and arguably unconstitutional in many contexts Specific performance is not all drastic (and not remotely arguably unconstitutional) in the case of agreements to transmit specific tangible or intangible property. It is impermissible, and often argued further to be a violation of the 13th Amendment, for personal services contracts, but that’s not even remotely at issue here. Now, arguably, since Musk’s end of the deal was to pay cash while Twitter’s end was to provide specific property, you can make the case that specific performance cannot be justified because Twitter can be made whole by a damage award, to wit, via compensatory damages equal to the difference between the amount of money Musk offered and the value of 100% of Twitter stock at the time damages are assessed. > If Twitter is making a claim about how many actual human users it has (which it is doing by providing the number of users and saying 5% or less are bots), and that claim is materially false, that’s the ballgame. That’s rather imprecisely worded (aside from also drastically factually misrepresenting the content of Twitter’s bot-related claims), and resolving that sloppiness in a way that is tolerably approximately true (aside, again, from the misrepresentation of what Twitter has actually claimed), “materially” is doing a lot of work in that sentence.

roughly 4y ago
Also, to be clear, Twitter is not making a claim about how many actual human users it has - it is making a claim about how many actual human mDAU, or monetizable daily active users, it has. 90% of Twitter's users can be bots, as long as no more than half a percent or so of those are counted as mDAU.
tveita 4y ago
> Twitter can be made whole by a damage award, to wit, via compensatory damages equal to the difference between the amount of money Musk offered and the value of 100% of Twitter stock at the time damages are assessed. This sounds difficult to assess - the possibility of damages being awarded should itself be affecting the stock price. E.g. if you were 100% assured of a payout of $52.40 - stock price, the stock should trade for $52.40... but then the damages would be $0.
- 4y ago