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Lets say you promise to buy a car in 30 days at a dealership (fully fictitious. This obviously can't really happen in real life). You sign a contract saying "I

Lets say you promise to buy a car in 30 days at a dealership (fully fictitious. This obviously can't really happen in real life). You sign a contract saying "I promise to pay $20,000 for this car and I'll be back in 30 days". --------- What happens if, within those 30 days, the car market collapses and the cars are now worth $15,000 ? Well, if you were an honest man, you'd still carry through with your $20,000 promised payment. If you were a dishonest man, you'd try to find a way around it. Same thing here. Twitter's stock price has no relevance after Elon Musk buys it. But we all know that the 60% drop in Tech prices means that Twitter is *probably* down 60%+ like all other tech stocks.

thaumasiotes 4y ago
This is what I'm saying: Once you agree to buy the company, a drop in the stock price doesn't make you any worse off. Your circumstances are exactly the same. You are worse off relative to a counterfactual scenario in which you agreed to buy the company after the stock drop instead of before. But you are no worse off after the stock drops than you were before it dropped. And this fact is not at all compatible with shapefrog's argument. Elon Musk didn't experience a loss. There is no bag for him to hold. He will experience a loss if he cancels the deal, but that's an unrelated scenario. In your scenario, the car buyer can immediately benefit from canceling the contract by buying a car (from some other vendor) and pocketing the $5,000 difference. No such option is available in the case of Twitter.