4 ms·

Well, if he wants to settle it should be for the contracted price + the billion contract clause + legal fees. Twitter has like a 99% chance to win in court an

Well, if he wants to settle it should be for the contracted price + the billion contract clause + legal fees. Twitter has like a 99% chance to win in court and get all of this + additional breach judgement -- with what Musk has done in the public arena (including this last public Just kidding I will pay" ploy to drive the stock price up so he has a chance to get funding secured (vs trying to get the same funding under a judgment and against a much lower share market price) he should get no quick exits from his own pain machine.

abduhl 4y ago
This is a weird take. If Twitter wins then Elon Musk owns Twitter. Who exactly do you think Elon would be paying the billion dollar clause and legal fees to? It’s Twitter, it’s (effectively) his, it’s himself. Shareholders get $54.20. Elon gets double fucked on legal fees either way if he loses because he now owns Twitter and Twitter’s liabilities.
- wstuartcl 4y ago
  Twitter and the shareholders exist as an entity until the sale is complete. The billion + legal fees would go to that entity (and the shareholders) before musk takes ownership of the entity. There is an order of events in a merger/sale.
  - abduhl 4y ago
    OK, and? The check doesn’t get cut to Shareholder X, it gets cut to Twitter. Then Twitter gets given to Musk. The order of operations is irrelevant to this discussion because none of this extra money over $54.20 will ever be returned to the shareholders. It will be paid to Twitter (and their law firms) and Twitter will then be taken over by (majority) Musk. Elon would be paying himself (and both his lawyers and Twitter’s which is exactly what will happen regardless of how this shakes out if Elon buys Twitter).
    - jakeinspace 4y ago
      Im not a lawyer but I’m pretty confident that such a settlement or penalty would end up getting paid out to the current shareholders, or else it would be added on top of the $54.20 per share.
      - abduhl 4y ago
        Why are you confident? Reverse the positions and imagine Twitter is the loser here and has to pay a billion dollars and legal fees to Elon. Do the shareholders each have to send in a check for the amount? Of course not; Twitter would pay it out of their corporate assets. Their stock price might go down because of the event, but the core idea for corporations is that shareholders are not liable for the corporation’s debts/liabilities and, conversely, shareholders have no general claim to the company’s assets (or rather they have the lowest priority claim after all other stakeholders).
        wstuartcl 4y ago
        ffs the difference is the entity exists for the shares, the penalty for the breach impacted the shareholders -- what makes you think that when a merger judgment is filed that a penalty for the misacting buyer would simply be left on the balance sheet for that buyer to reabsorb? It would be split among shareholders and payable along with the judgment's merger price. Do shareholders generally have liability or claims to the entity (beyond things like duty and other shareholder legal protections), no. Are their mechanisms to disperse to shareholders? ffs yes. And if twitter was the loser here, and had to pay 1 billion (which I actually believe is not in the contract from what I read the 1 billion was a directed clause for a misacting buyer) then no the shareholders would not have to pay out of pocket. However, the 1 billion dollar loss would impact the books and probably hit the shareholders with stock pricing outcomes.
- paxys 4y ago
  Exactly. The "win" for shareholders here is that Musk has damaged their asset over the last few months (in terms of reputation and taking cash off the balance sheet in legal fees) but he will still purchase it at the originally agreed upon price.

abduhl 4y ago

This is a weird take. If Twitter wins then Elon Musk owns Twitter. Who exactly do you think Elon would be paying the billion dollar clause and legal fees to? It’s Twitter, it’s (effectively) his, it’s himself. Shareholders get $54.20. Elon gets double fucked on legal fees either way if he loses because he now owns Twitter and Twitter’s liabilities.

wstuartcl 4y ago
Twitter and the shareholders exist as an entity until the sale is complete. The billion + legal fees would go to that entity (and the shareholders) before musk takes ownership of the entity. There is an order of events in a merger/sale.
- abduhl 4y ago
  OK, and? The check doesn’t get cut to Shareholder X, it gets cut to Twitter. Then Twitter gets given to Musk. The order of operations is irrelevant to this discussion because none of this extra money over $54.20 will ever be returned to the shareholders. It will be paid to Twitter (and their law firms) and Twitter will then be taken over by (majority) Musk. Elon would be paying himself (and both his lawyers and Twitter’s which is exactly what will happen regardless of how this shakes out if Elon buys Twitter).
  - jakeinspace 4y ago
    Im not a lawyer but I’m pretty confident that such a settlement or penalty would end up getting paid out to the current shareholders, or else it would be added on top of the $54.20 per share.
    - abduhl 4y ago
      Why are you confident? Reverse the positions and imagine Twitter is the loser here and has to pay a billion dollars and legal fees to Elon. Do the shareholders each have to send in a check for the amount? Of course not; Twitter would pay it out of their corporate assets. Their stock price might go down because of the event, but the core idea for corporations is that shareholders are not liable for the corporation’s debts/liabilities and, conversely, shareholders have no general claim to the company’s assets (or rather they have the lowest priority claim after all other stakeholders).
      - wstuartcl 4y ago
        ffs the difference is the entity exists for the shares, the penalty for the breach impacted the shareholders -- what makes you think that when a merger judgment is filed that a penalty for the misacting buyer would simply be left on the balance sheet for that buyer to reabsorb? It would be split among shareholders and payable along with the judgment's merger price. Do shareholders generally have liability or claims to the entity (beyond things like duty and other shareholder legal protections), no. Are their mechanisms to disperse to shareholders? ffs yes. And if twitter was the loser here, and had to pay 1 billion (which I actually believe is not in the contract from what I read the 1 billion was a directed clause for a misacting buyer) then no the shareholders would not have to pay out of pocket. However, the 1 billion dollar loss would impact the books and probably hit the shareholders with stock pricing outcomes.
paxys 4y ago
Exactly. The "win" for shareholders here is that Musk has damaged their asset over the last few months (in terms of reputation and taking cash off the balance sheet in legal fees) but he will still purchase it at the originally agreed upon price.