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Because, one of the reasons they are terminating the agreement is by claiming that Twitter's alleged misrepresentations will cause a material adverse effect [1]

by chomp 4y ago

Because, one of the reasons they are terminating the agreement is by claiming that Twitter's alleged misrepresentations will cause a material adverse effect [1]. A later court date gives them more time to dig into the data to bubble up any misrepresentations. It's a bit circular - they terminated the agreement on a "maybe," and want more time to bubble up misrepresentations to the public so they can turn that "maybe" into a "definitely". Yes, this is in violation of the anti-disparagement clauses, which Twitter has been complaining about in their filings. Also, I'm in agreement with the others that are claiming that a later court date can possibly give time for the markets (and Tesla's stock) to recover. [1] https://www.sec.gov/Archives/edgar/data/1418091/000110465922078413/tm2220599d1_ex99-p.htm https://www.sec.gov/Archives/edgar/data/1418091/000110465922...

thaumasiotes 4y ago
> Because, one of the reasons they are terminating the agreement is by claiming that Twitter's alleged misrepresentations will cause a material adverse effect [1]. A later court date gives them more time to dig into the data to bubble up any misrepresentations. Well, no, that can't be a reason. In the absence of a material adverse effect, there's no benefit from uncovering a misrepresentation.
- chomp 4y ago
  It depends on how you read into Elon's and Twitter's filings. Elon has 2 core complaints: 1.) Twitter did not give requested info in a timely manner, which in many people's opinion is on shaky ground because the requested information is not related to the consummation of the transaction. 2.) Twitter's firing and layoffs are a breach of the contract, which, depending on how charitably you read into Twitter's negotiated rights under their lawsuit filing, isn't accurate because they negotiated the right to perform these tasks. And one follow-up complaint: 3.) Twitter is liable to suffer a material adverse effect from the misrepresentation of false accounts, and has either already suffered this, or might suffer from it once it's uncovered. [1] #1 and #2 have already come and gone (and could be on shaky ground). There is no need to dive into data for those. The only thing left is the investigation into spam accounts, which is what they want more time for. Their filing seems to be very careful in saying that there is, or maybe is a Material Adverse Effect, and it is clear that this is what Elon wants to investigate (based on his lawyers' filings today). So yeah, they most likely want more time to uncover a concrete misrepresentation to show in court. [1] "Twitter’s representation in the Merger Agreement regarding the accuracy of its SEC disclosures relating to false and spam accounts may have also caused, or is reasonably likely to result in, a Company Material Adverse Effect, which may form an additional basis for terminating the Merger Agreement." https://www.sec.gov/Archives/edgar/data/1418091/000110465922078413/tm2220599d1_ex99-p.htm https://www.sec.gov/Archives/edgar/data/1418091/000110465922...
  - semiquaver 4y ago
    > and has either already suffered this, or might suffer from it once it's uncovered The problem for this legal argument is that Musk is seeking to uncover this in order to create a MAE. If this were a permissible way to torpedo a deal then it would create a very perverse incentive. The appropriate time to act on these concerns was prior to waiving due diligence.

by chomp 4y ago

thaumasiotes 4y ago

> Because, one of the reasons they are terminating the agreement is by claiming that Twitter's alleged misrepresentations will cause a material adverse effect [1]. A later court date gives them more time to dig into the data to bubble up any misrepresentations. Well, no, that can't be a reason. In the absence of a material adverse effect, there's no benefit from uncovering a misrepresentation.

chomp 4y ago
It depends on how you read into Elon's and Twitter's filings. Elon has 2 core complaints: 1.) Twitter did not give requested info in a timely manner, which in many people's opinion is on shaky ground because the requested information is not related to the consummation of the transaction. 2.) Twitter's firing and layoffs are a breach of the contract, which, depending on how charitably you read into Twitter's negotiated rights under their lawsuit filing, isn't accurate because they negotiated the right to perform these tasks. And one follow-up complaint: 3.) Twitter is liable to suffer a material adverse effect from the misrepresentation of false accounts, and has either already suffered this, or might suffer from it once it's uncovered. [1] #1 and #2 have already come and gone (and could be on shaky ground). There is no need to dive into data for those. The only thing left is the investigation into spam accounts, which is what they want more time for. Their filing seems to be very careful in saying that there is, or maybe is a Material Adverse Effect, and it is clear that this is what Elon wants to investigate (based on his lawyers' filings today). So yeah, they most likely want more time to uncover a concrete misrepresentation to show in court. [1] "Twitter’s representation in the Merger Agreement regarding the accuracy of its SEC disclosures relating to false and spam accounts may have also caused, or is reasonably likely to result in, a Company Material Adverse Effect, which may form an additional basis for terminating the Merger Agreement." https://www.sec.gov/Archives/edgar/data/1418091/000110465922078413/tm2220599d1_ex99-p.htm https://www.sec.gov/Archives/edgar/data/1418091/000110465922...
- semiquaver 4y ago
  > and has either already suffered this, or might suffer from it once it's uncovered The problem for this legal argument is that Musk is seeking to uncover this in order to create a MAE. If this were a permissible way to torpedo a deal then it would create a very perverse incentive. The appropriate time to act on these concerns was prior to waiving due diligence.