5 ms·

> Twitter committed fraud by lying to the SEC about the mDAU numbers with the intent of inducing Musk to buy Twitter at an inflated price. What is that commonl

> Twitter committed fraud by lying to the SEC about the mDAU numbers with the intent of inducing Musk to buy Twitter at an inflated price. What is that commonly-used aphorism? "One man's trash is another man's treasure"? Like, even if this is true, Musk didn't do (and subsequently waived) due diligence. > No, really, this is the allegation No further comment on it. > Count 2 is that Twitter committed [Texas fraud statute] by lying when it offered its shares. It's shotgun-pled, so I don't know which specific statements are supposed to be wrong, but I'm imagining it's basically the previous count recast under a different statute. If it's due to Texas laws, is the appropriate jurisdiction is the Texas courts or... oh, he's trying to claim that the case should be heard in a federal court (for diversity reasons). Good luck though Musk. > Count 3 says that Twitter broke the contract by failing to provide information. What information? The contract is already in the public, but okay you want to waste court time. > Count 4 says that Twitter broke the contract by instituting a hiring freeze. Twitter could just point to its peers like Google, Meta and Microsoft. > Count 5 is pretty please declare that Twitter lying about mDAUs is a materially adverse event that is cause to break the contract. Yeah, at this point I'm convinced that Musk wants to just waste everyone's time, especially after the chancery court denied his petition to schedule the hearing next year.

Sebb767 4y ago
> What information? The contract is already in the public, but okay you want to waste court time. The contract stated that Twitter had to provide Musk with internal data as required to close the deal. His teams tokens were apparently rate-limited at some point and it took a while for Twitter to give him access to all data, a.k.a. 'the firehose'. Just for completeness sake, Twitter seemed to still try (the token thing was probably a technical error) and whether giving him access to the firehose was actually necessary could even be contested, as he arguably wanted to use the data to not close the deal.
- zinekeller 4y ago
  Quite derailing a bit, but Twitter executives are also saying that it tries to protect Twitter since that Musk indicated that he will launch a rival platform. Honestly this particular part sounds like Stac v. Microsoft (https://en.wikipedia.org/wiki/Stac_v._Microsoft https://en.wikipedia.org/wiki/Stac_v._Microsoft)
- plouffy 4y ago
  Twitter was contractually obliged to give him data to help him close the deal, not to help him find a way to squirrel out of the deal.
  - bXVsbGVy 4y ago
    I suggest reading the twitter complaint. It is not long, and it is very well written. They discuss many (if no all) things musk has been saying trying to avoid the acquisition. If I recall correctly, Twitter says they had no obligation to provide the firehose to Musk, but they did anyway. Musk had issues with rate limit, but twitter fixed it in reasonable time.
- DannyBee 4y ago
  "His teams tokens were apparently rate-limited at some point and it took a while for Twitter to give him access to all data, a.k.a. 'the firehose'." Here's the thing though: None of that data was required to close the deal. Musk had no diligence rights, he explicitly gave them up, and the contract clearly says so. He doesn't get to do regular diligence through that clause, it's meant to cover the literal things necessary to close the deal (like financing info or whatever). So Twitter didn't have to provide anything here, and certainly not access to the firehose. His response is going to be smacked down pretty hard by a chancellor - it's 100% nonsense.
  - throwoutway 4y ago
    IANAL, but I think it makesMore sense if you separate it into: 1. due diligence as a buyer (contract) to review additional information, ask questions etc 2. using public information to purchase as an investor (he was) for a public company regulated by SEC I think the claim is not that he has the right to #1 (he didn’t) but that #2 was false and has been false. No idea if contract laws let #2 get him off the hook though
    - cyanydeez 4y ago
      All that matters, against musk, is that however twitter claimed to count it's users was infact, how they counted. Musk wanted to invent some means to count users in an effort to demonstrate fraud. But that's not fraud. Just because musk provides an alternate means to count users, doesn't demonstrate fraud. Full stop. Unless he proves that they didn't count the way they claim, he has not claim. Waiving he due diligence clause is what makes his claims a non issue.
      - throwoutway 4y ago
        I was not defending Musk, just trying to explain what he might be “thinking”. I see you’re point though. I guess he’d have to prove they used a formula that they knew was wrong for it to be fraud?
        4y ago
bostonsre 4y ago
> Musk didn't do (and subsequently waived) due diligence. Wasn't him collecting all of this MAU stuff to analyze it part of the due diligence needed in order to close the deal?
- theptip 4y ago
  No. He signed the merger agreement without doing DD into mDAU, and didn’t write any contingencies around mDAU onto the contract. You do your diligence BEFORE signing the merger agreement.
  - jacquesm 4y ago
    Exactly. This whole thing smacks of regret on an impulse buy. And as Musk should well know: regret is no cause for contract annulment. Twitter is going to be his Waterloo if he can't follow through on the deal, they're going to force him to perform which means he may have to sell a whole bunch more stock to people who know he has to buy. That isn't going to help at all.
  - bostonsre 4y ago
    O, that seems pretty odd. I can't think of any reason for them to do that beyond trying to get out of the deal or incredible negligence on the musk side in not doing that before hand. Were they able to get that data before hand if they wanted it?
    - glenngillen 4y ago
      It doesn’t really matter at this point, because he signed a binding agreement. He’s the one that made that move. Specifically why is just speculation now. But, hey, we’re all here speculating anyway! My take is: 1) He’s a history of making impulsive decisions without thinking (or caring) about the consequences. 2) It forced Twitter’s hand because they couldn’t act like it was it a non-genuine offer. 3) He’s so rarely held accountable for the consequences of his decisions he knew it didn’t matter because he’s above the law.
coffee_beqn 4y ago
Also I’m pretty sure Musk himself wrote on public Twitter that he would trim the fat once he owns the company ..

Sebb767 4y ago

> What information? The contract is already in the public, but okay you want to waste court time. The contract stated that Twitter had to provide Musk with internal data as required to close the deal. His teams tokens were apparently rate-limited at some point and it took a while for Twitter to give him access to all data, a.k.a. 'the firehose'. Just for completeness sake, Twitter seemed to still try (the token thing was probably a technical error) and whether giving him access to the firehose was actually necessary could even be contested, as he arguably wanted to use the data to not close the deal.

zinekeller 4y ago
Quite derailing a bit, but Twitter executives are also saying that it tries to protect Twitter since that Musk indicated that he will launch a rival platform. Honestly this particular part sounds like Stac v. Microsoft (https://en.wikipedia.org/wiki/Stac_v._Microsoft https://en.wikipedia.org/wiki/Stac_v._Microsoft)
plouffy 4y ago
Twitter was contractually obliged to give him data to help him close the deal, not to help him find a way to squirrel out of the deal.
- bXVsbGVy 4y ago
  I suggest reading the twitter complaint. It is not long, and it is very well written. They discuss many (if no all) things musk has been saying trying to avoid the acquisition. If I recall correctly, Twitter says they had no obligation to provide the firehose to Musk, but they did anyway. Musk had issues with rate limit, but twitter fixed it in reasonable time.
DannyBee 4y ago
"His teams tokens were apparently rate-limited at some point and it took a while for Twitter to give him access to all data, a.k.a. 'the firehose'." Here's the thing though: None of that data was required to close the deal. Musk had no diligence rights, he explicitly gave them up, and the contract clearly says so. He doesn't get to do regular diligence through that clause, it's meant to cover the literal things necessary to close the deal (like financing info or whatever). So Twitter didn't have to provide anything here, and certainly not access to the firehose. His response is going to be smacked down pretty hard by a chancellor - it's 100% nonsense.
- throwoutway 4y ago
  IANAL, but I think it makesMore sense if you separate it into: 1. due diligence as a buyer (contract) to review additional information, ask questions etc 2. using public information to purchase as an investor (he was) for a public company regulated by SEC I think the claim is not that he has the right to #1 (he didn’t) but that #2 was false and has been false. No idea if contract laws let #2 get him off the hook though
  - cyanydeez 4y ago
    All that matters, against musk, is that however twitter claimed to count it's users was infact, how they counted. Musk wanted to invent some means to count users in an effort to demonstrate fraud. But that's not fraud. Just because musk provides an alternate means to count users, doesn't demonstrate fraud. Full stop. Unless he proves that they didn't count the way they claim, he has not claim. Waiving he due diligence clause is what makes his claims a non issue.
    - throwoutway 4y ago
      I was not defending Musk, just trying to explain what he might be “thinking”. I see you’re point though. I guess he’d have to prove they used a formula that they knew was wrong for it to be fraud?
      - 4y ago

bostonsre 4y ago

> Musk didn't do (and subsequently waived) due diligence. Wasn't him collecting all of this MAU stuff to analyze it part of the due diligence needed in order to close the deal?

theptip 4y ago
No. He signed the merger agreement without doing DD into mDAU, and didn’t write any contingencies around mDAU onto the contract. You do your diligence BEFORE signing the merger agreement.
- jacquesm 4y ago
  Exactly. This whole thing smacks of regret on an impulse buy. And as Musk should well know: regret is no cause for contract annulment. Twitter is going to be his Waterloo if he can't follow through on the deal, they're going to force him to perform which means he may have to sell a whole bunch more stock to people who know he has to buy. That isn't going to help at all.
- bostonsre 4y ago
  O, that seems pretty odd. I can't think of any reason for them to do that beyond trying to get out of the deal or incredible negligence on the musk side in not doing that before hand. Were they able to get that data before hand if they wanted it?
  - glenngillen 4y ago
    It doesn’t really matter at this point, because he signed a binding agreement. He’s the one that made that move. Specifically why is just speculation now. But, hey, we’re all here speculating anyway! My take is: 1) He’s a history of making impulsive decisions without thinking (or caring) about the consequences. 2) It forced Twitter’s hand because they couldn’t act like it was it a non-genuine offer. 3) He’s so rarely held accountable for the consequences of his decisions he knew it didn’t matter because he’s above the law.

coffee_beqn 4y ago

Also I’m pretty sure Musk himself wrote on public Twitter that he would trim the fat once he owns the company ..