4 ms·
Presumably if the fine is bigger then the delta between the current share price and what Musk offered, he'd be better off buying the company and then trying to
by simplicio 4y ago
Presumably if the fine is bigger then the delta between the current share price and what Musk offered, he'd be better off buying the company and then trying to turn around and sell it then paying the fine.
Similarly, if the fine is smaller, Twitter share-holders would be better off just forcing him to buy and forgoing the fine.
So a settlement number seems kinda hard to agree on, unless they have differing opinions on what the company is currently worth.
- bambax 4y agoTrue. However there is a distinct possibility that Musk could run Twitter into the ground out of spite, if he's made to buy it. So there's a negative externality to force him to buy. A fine close to the spread, but still a bit lower, accounts for that.
- ryukoposting 4y agoIf I were a Twitter share-holder, I'd be fine with getting a slice of a $10B settlement, keeping my stake in a successful social media & analytics company, banning Musk's account, and watching him squirm. I don't know if it'd be a perfect financial move, but it would feel good.
- ncallaway 4y ago> Presumably if the fine is bigger then the delta between the current share price and what Musk offered, Not necessarily. There's a world where Musk really can't get the financing together, and stumping up the $44B in cash is too much of a hurdle to be worth-while. Imagine, you could either pay $1,000 as a fine, or spend $10,000 on a car that you're pretty sure you could sell for $9,200. Obviously, in absolute terms you're better off buying and selling the car. But if you only have $5,000, it might not be worth the hassle to raise the other $5,000 to be able to buy then sell the car. Not to mention the risk that once you get the car, and go to sell it, there's a chance it only sells for $8,800.