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Not surprising, this is actually the least-shitty path for Musk now. He fucked up and his other alternatives were waaay more expensive (e.g. being forced to se

Not surprising, this is actually the least-shitty path for Musk now. He fucked up and his other alternatives were waaay more expensive (e.g. being forced to sell more stock and lose control of TSLA, shorters have a field day, people lose confidence on TSLA even though FSD is "one month away from working", it could all go down because of this). No one sheds 44B "to honor a deal", at least not him, lol. Epilogue: Matt Levine was on point all the time, I'd like to hear now from all the folks who were saying that Musk was going to get away with it. inb4 "it was all 4D chess, this is what he wanted" Yeah, sure pal ...

pclmulqdq 4y ago
You would shed $44B pretty fast if the Delaware Chancellor sets an emergency conference with you where she is about to say to you, "I am going to force you to buy this pile of garbage, and a lot more embarrassing shit is going to come out because I'm not going to let you seal the proceedings. Settle so we can all save face here."
- arcticbull 4y ago
  And by 'settle' they mean carry out your end of the deal as inked, no compromises :) I can't help but feel everyone is getting exactly what they deserve. Elon is buying a company he didn't want to buy as punishment for trolling that company and their leadership on that company's own platform. Twitter is getting new leadership and lord knows they need it [*]. And the shareholders are getting paid what they were told they'd be paid. [*] Twitter truly is a clown car that fell into a gold mine, and as Elon says, the most entertaining outcome is the most likely. [1] [1] https://twitter.com/elonmusk/status/1347126794172948483?lang=en https://twitter.com/elonmusk/status/1347126794172948483?lang...
  - pclmulqdq 4y ago
    A settlement could have been a $20-25 billion payout to Twitter to exit the deal, or something similar (no, that is not precluded by the contract limiting damages to $1 billion, the settlment agreement [edited] overrides the contract). Twitter's lawyers likely would have been okay with that.
    - tptacek 4y ago
      The court can force performance of the contract. It can't make up a fine or damage award. Twitter, after winning performance in court, is then free to make up any price short of $44B for Musk to wiggle out of the deal.
      - pclmulqdq 4y ago
        That's true, but if he really wanted out, it was a good chance for him and Twitter to set a price to exit the deal. I would bet that Musk had offered a settlement of a $5-10 billion payout to get out of the deal, but Twitter rejected it.
    - arcticbull 4y ago
      The $1B is pretty much a red herring, it's only in play under a specific circumstances. There's no "pay $1B to get out of this no questions asked" clause in the contract. It doesn't limit damages.
      - tptacek 4y ago
        Technically, that's exactly what it does, and $1B is the damage limit (that's one reason the court can't just make up a damages award in the plural billions to compensate Twitter). Twitter is relying on their right to specific performance, not damages. I agree, though, the $1B is a red herring.
        arcticbull 4y ago
        Thanks for clarifying!
  - Bud 4y ago
    Twitter is not "getting new leadership", or at least not leadership as that term is commonly understood. Musk will be distracted and is manifestly unqualified, not to mention uninterested. Twitter "deserves" this? No they don't.
- rodgerd 4y ago
  > ...I'm not going to let you seal the proceedings. The Delaware Chancery email/twitter account that follows proceedings noted that Musk's defence team sued to unseal a great deal of the comms for some reason that, frankly, defies all understanding. So it's not as though this "leaked" or Musk lost a motion to have them sealed. They were sealed by default. Musk moved to have them unsealed over Twitter's objections.
matwood 4y ago
> No one sheds 44B "to honor a deal", at least not him, lol. No, but many were thinking any breaking up fee would be 10B+. At that point, he might as well buy and have some asset at the end. Levine was definitely on point. And I repeated here what he and others said, if Musk wants out negotiations start at 44B.
- joshfraser 4y ago
  The breakup fee was $1 billion. Expensive, but still cheaper than actually going through with the deal.
  - moralestapia 4y ago
    No way, look at the facts, if that were true Musk would've paid 1B and it ends there. The "breakup fee" was a judge ordering him to pay 44B, plus a lot embarrassment. As @matwood pointed out, you start negotiating from that.
  - swores 4y ago
    That was a fee set for if Musk's financing fell through, it was not an opt-out that either side could choose to take. Musk would've jumped at the chance to pay a measly billion to get out of it months ago if he'd had the opportunity.
    - joshfraser 4y ago
      That seems pretty easy to trigger. Just start calling around saying crazy stuff and watch the funding dry up.
      - swores 4y ago
        That would be looked on by Delaware judges about as kindly as using a cigarette lighter to burn the only copy of a contract in front of them. He had the financing contractually agreed, that clause was in case something happened like Tesla or one of the banks providing a loan going bankrupt (actually writing that makes me think I remember that the clause was only applicable to the loans part of the financing and not even the other investors - but I'm not sure I'm right, and too lazy to go find and re-read the purchase agreement they signed). Some people did speculate that the reason Musk started publicly disparaging Twitter was in the hope that some of his financing would try to pull their agreements thus triggering this clause, but the expert opinions I saw were that the court wouldn't accept that, especially after Twitter filed suit against him, and sure enough that strategy (if it was a strategy) didn't pay off - otherwise he wouldn't be where he is today. (Matt Levine covered this particular theory well in his Bloomberg newsletter.)
berkeleyjunk 4y ago
It would not surprise me if we come to find out that some people in the know (not Twitter insiders) were stocking up on TWTR shares during the lawsuit drama. Wonder if SEC has any restrictions on non-insiders with material knowledge.
- jimnotgym 4y ago
  If you have material knowledge aren't you automatically an insider?
  - tptacek 4y ago
    No. You're an insider when you have material knowledge and a duty to the shareholders, implied or otherwise, not to abuse it.
    - manquer 4y ago
      > An “insider” is an officer, director, 10% stockholder and anyone who possesses inside information because of his or her relationship with the Company or with an officer, director or principal stockholder of the Company. Rule 10b-5’s application goes considerably beyond just officers, directors and principal stockholders. [1] > This rule also covers any employee who has obtained material non-public corporate information, as well as any person who has received a “tip” from an Insider of the Company concerning information about the Company that is material and nonpublic, and trades (i.e. purchase or sells) the Company’s stock or other securities" [1] The formal Insider Trading Policy applies to any person who has the information, for the purposes of this law Insider ( as defined in the first part) is materially same. While you are half right that they are not "Insider" the law does not differentiate any person who got the information from the "Insider", so they are still a insider from the SEC regulations PoV and law applies to them if they trade on material non-public information obtained from a "tip". [1]https://www.sec.gov/Archives/edgar/data/1164964/000101968715004168/globalfuture_8k-ex9904.htm https://www.sec.gov/Archives/edgar/data/1164964/000101968715...
      - 4y ago
nimbius 4y ago
thats the understatement of the century but true. abdicating your responsibility for a discovery phase during an acquisition is tantamount to fraud in the United States, but when he started to drag his feet and publicly proclaim a "hold" on the twitter deal due to spam accounts, it likely started triggering investigation into securities fraud. Musk may have wound up in the frying pan, but he didnt exactly do much to turn down the heat. The court of public opinion is a bully pulpit for the wealthy elite but only if its the public opinion you intend to sway. Elon was about to start taking swings at investors and board members, who arent generally moved by public bloviation or jingoist egocentrism. Chancery court didnt last long but im sure it was a sobering experience for such a cloistered elite, assuming the near constant looming presence of the SEC hasnt rattled his bones enough.
- mlyle 4y ago
  > abdicating your responsibility for a discovery phase during an acquisition is tantamount to fraud in the United States, Skipping due diligence is the buyer's option. It may be irresponsible if you're using other people's money (especially money from public capital markets), but there's nothing that obligates me to closely look at an asset that I'm buying with my money or even my money and my buddies' money that they pledged.
la64710 4y ago
Time for Parag to send back the emoji to Musk :D
- moralestapia 4y ago
  I hope he reads this and I hope he does it. It has potential to become the most liked tweet in history.
  - la64710 4y ago
    Only thing is that Parag probably won’t… see it’s because Parag is the grown up here :D
- ekianjo 4y ago
  Parag is the first one on the ejecting seat once Musk comes in, in case you have not realized.
  - pclmulqdq 4y ago
    But with a hell of a golden parachute. Parag is set up very well to become an "investor" or "thought leader" or something else in Silicon Valley.
bambax 4y ago
> Epilogue: Matt Levine was on point all the time Matt Levine is always on point. He's a brillant writer and one of the funniest, too. A true living genius. But even he wasn't able to predict that last development. Also: Poor Matt. Tomorrow was supposed to be a day off for him, and it probably won't... ;-)
- glenngillen 4y ago
  I’m starting to think Elon reads the newsletter, and deliberately times these things just to mess with Levine.
  - bambax 4y ago
    Indeed! From today's letter: At the top: > Programming note: I apparently have some very bad sins to atone for. And then at the end of the Twitter saga: > Anyway I’m tired of this and I have a new retirement plan. Every time this newsletter starts with “Programming note: Money Stuff will be off tomorrow,” Musk does something outrageous, and Twitter’s stock swings up or down. So I’m going to buy a bunch of Twitter straddles and then take a vacation, while Twitter is still public and that trick can still work. I’ll make a fortune.
- kwertyoowiyop 4y ago
  Tomorrow may well be one of his funniest columns EVER. It may also be his most fun to write. Go Matt! (Vacation can wait a day)
  - bambax 4y ago
    Some truly hilarious moments... > Last night Musk tweeted that “Buying Twitter is an accelerant to creating X, the everything app,” which sounds exhausting. The app will do everything, but it will start with two functions: You can read tweets, or you can be shot on a rocket into space. Choose wisely. And also: > Is he going to try to raise more money? Is he going to go out to potential investors again and say “changed my mind, Twitter is great now, this’ll be fun, can I pencil you in for $1 billion?” (...) Every little bit helps, no? What does the disclosure document for that investment look like? “Yes Elon Musk has said that Twitter is a dysfunctional fraudulent conspiracy, but everything is fine now, and it’s an accelerant to creating X, the everything app.”
zamalek 4y ago
> inb4 "it was all 4D chess, this is what he wanted" Yeah, sure pal ... He would need more sleep for that. I think a lot of his bizarre behavior can be explained by (a) generally being an asshole (b) medicating to avoid sleep.
enviclash 4y ago
Man this "4D chess" expression is really something to describe Musk's strategies.

pclmulqdq 4y ago

You would shed $44B pretty fast if the Delaware Chancellor sets an emergency conference with you where she is about to say to you, "I am going to force you to buy this pile of garbage, and a lot more embarrassing shit is going to come out because I'm not going to let you seal the proceedings. Settle so we can all save face here."

arcticbull 4y ago
And by 'settle' they mean carry out your end of the deal as inked, no compromises :) I can't help but feel everyone is getting exactly what they deserve. Elon is buying a company he didn't want to buy as punishment for trolling that company and their leadership on that company's own platform. Twitter is getting new leadership and lord knows they need it [*]. And the shareholders are getting paid what they were told they'd be paid. [*] Twitter truly is a clown car that fell into a gold mine, and as Elon says, the most entertaining outcome is the most likely. [1] [1] https://twitter.com/elonmusk/status/1347126794172948483?lang=en https://twitter.com/elonmusk/status/1347126794172948483?lang...
- pclmulqdq 4y ago
  A settlement could have been a $20-25 billion payout to Twitter to exit the deal, or something similar (no, that is not precluded by the contract limiting damages to $1 billion, the settlment agreement [edited] overrides the contract). Twitter's lawyers likely would have been okay with that.
  - tptacek 4y ago
    The court can force performance of the contract. It can't make up a fine or damage award. Twitter, after winning performance in court, is then free to make up any price short of $44B for Musk to wiggle out of the deal.
    - pclmulqdq 4y ago
      That's true, but if he really wanted out, it was a good chance for him and Twitter to set a price to exit the deal. I would bet that Musk had offered a settlement of a $5-10 billion payout to get out of the deal, but Twitter rejected it.
  - arcticbull 4y ago
    The $1B is pretty much a red herring, it's only in play under a specific circumstances. There's no "pay $1B to get out of this no questions asked" clause in the contract. It doesn't limit damages.
    - tptacek 4y ago
      Technically, that's exactly what it does, and $1B is the damage limit (that's one reason the court can't just make up a damages award in the plural billions to compensate Twitter). Twitter is relying on their right to specific performance, not damages. I agree, though, the $1B is a red herring.
      - arcticbull 4y ago
        Thanks for clarifying!
- Bud 4y ago
  Twitter is not "getting new leadership", or at least not leadership as that term is commonly understood. Musk will be distracted and is manifestly unqualified, not to mention uninterested. Twitter "deserves" this? No they don't.
rodgerd 4y ago
> ...I'm not going to let you seal the proceedings. The Delaware Chancery email/twitter account that follows proceedings noted that Musk's defence team sued to unseal a great deal of the comms for some reason that, frankly, defies all understanding. So it's not as though this "leaked" or Musk lost a motion to have them sealed. They were sealed by default. Musk moved to have them unsealed over Twitter's objections.

matwood 4y ago

> No one sheds 44B "to honor a deal", at least not him, lol. No, but many were thinking any breaking up fee would be 10B+. At that point, he might as well buy and have some asset at the end. Levine was definitely on point. And I repeated here what he and others said, if Musk wants out negotiations start at 44B.

joshfraser 4y ago
The breakup fee was $1 billion. Expensive, but still cheaper than actually going through with the deal.
- moralestapia 4y ago
  No way, look at the facts, if that were true Musk would've paid 1B and it ends there. The "breakup fee" was a judge ordering him to pay 44B, plus a lot embarrassment. As @matwood pointed out, you start negotiating from that.
- swores 4y ago
  That was a fee set for if Musk's financing fell through, it was not an opt-out that either side could choose to take. Musk would've jumped at the chance to pay a measly billion to get out of it months ago if he'd had the opportunity.
  - joshfraser 4y ago
    That seems pretty easy to trigger. Just start calling around saying crazy stuff and watch the funding dry up.
    - swores 4y ago
      That would be looked on by Delaware judges about as kindly as using a cigarette lighter to burn the only copy of a contract in front of them. He had the financing contractually agreed, that clause was in case something happened like Tesla or one of the banks providing a loan going bankrupt (actually writing that makes me think I remember that the clause was only applicable to the loans part of the financing and not even the other investors - but I'm not sure I'm right, and too lazy to go find and re-read the purchase agreement they signed). Some people did speculate that the reason Musk started publicly disparaging Twitter was in the hope that some of his financing would try to pull their agreements thus triggering this clause, but the expert opinions I saw were that the court wouldn't accept that, especially after Twitter filed suit against him, and sure enough that strategy (if it was a strategy) didn't pay off - otherwise he wouldn't be where he is today. (Matt Levine covered this particular theory well in his Bloomberg newsletter.)

berkeleyjunk 4y ago

It would not surprise me if we come to find out that some people in the know (not Twitter insiders) were stocking up on TWTR shares during the lawsuit drama. Wonder if SEC has any restrictions on non-insiders with material knowledge.

jimnotgym 4y ago
If you have material knowledge aren't you automatically an insider?
- tptacek 4y ago
  No. You're an insider when you have material knowledge and a duty to the shareholders, implied or otherwise, not to abuse it.
  - manquer 4y ago
    > An “insider” is an officer, director, 10% stockholder and anyone who possesses inside information because of his or her relationship with the Company or with an officer, director or principal stockholder of the Company. Rule 10b-5’s application goes considerably beyond just officers, directors and principal stockholders. [1] > This rule also covers any employee who has obtained material non-public corporate information, as well as any person who has received a “tip” from an Insider of the Company concerning information about the Company that is material and nonpublic, and trades (i.e. purchase or sells) the Company’s stock or other securities" [1] The formal Insider Trading Policy applies to any person who has the information, for the purposes of this law Insider ( as defined in the first part) is materially same. While you are half right that they are not "Insider" the law does not differentiate any person who got the information from the "Insider", so they are still a insider from the SEC regulations PoV and law applies to them if they trade on material non-public information obtained from a "tip". [1]https://www.sec.gov/Archives/edgar/data/1164964/000101968715004168/globalfuture_8k-ex9904.htm https://www.sec.gov/Archives/edgar/data/1164964/000101968715...
    - 4y ago

nimbius 4y ago

thats the understatement of the century but true. abdicating your responsibility for a discovery phase during an acquisition is tantamount to fraud in the United States, but when he started to drag his feet and publicly proclaim a "hold" on the twitter deal due to spam accounts, it likely started triggering investigation into securities fraud. Musk may have wound up in the frying pan, but he didnt exactly do much to turn down the heat. The court of public opinion is a bully pulpit for the wealthy elite but only if its the public opinion you intend to sway. Elon was about to start taking swings at investors and board members, who arent generally moved by public bloviation or jingoist egocentrism. Chancery court didnt last long but im sure it was a sobering experience for such a cloistered elite, assuming the near constant looming presence of the SEC hasnt rattled his bones enough.

mlyle 4y ago
> abdicating your responsibility for a discovery phase during an acquisition is tantamount to fraud in the United States, Skipping due diligence is the buyer's option. It may be irresponsible if you're using other people's money (especially money from public capital markets), but there's nothing that obligates me to closely look at an asset that I'm buying with my money or even my money and my buddies' money that they pledged.

la64710 4y ago

Time for Parag to send back the emoji to Musk :D

moralestapia 4y ago
I hope he reads this and I hope he does it. It has potential to become the most liked tweet in history.
- la64710 4y ago
  Only thing is that Parag probably won’t… see it’s because Parag is the grown up here :D
ekianjo 4y ago
Parag is the first one on the ejecting seat once Musk comes in, in case you have not realized.
- pclmulqdq 4y ago
  But with a hell of a golden parachute. Parag is set up very well to become an "investor" or "thought leader" or something else in Silicon Valley.

bambax 4y ago

> Epilogue: Matt Levine was on point all the time Matt Levine is always on point. He's a brillant writer and one of the funniest, too. A true living genius. But even he wasn't able to predict that last development. Also: Poor Matt. Tomorrow was supposed to be a day off for him, and it probably won't... ;-)

glenngillen 4y ago
I’m starting to think Elon reads the newsletter, and deliberately times these things just to mess with Levine.
- bambax 4y ago
  Indeed! From today's letter: At the top: > Programming note: I apparently have some very bad sins to atone for. And then at the end of the Twitter saga: > Anyway I’m tired of this and I have a new retirement plan. Every time this newsletter starts with “Programming note: Money Stuff will be off tomorrow,” Musk does something outrageous, and Twitter’s stock swings up or down. So I’m going to buy a bunch of Twitter straddles and then take a vacation, while Twitter is still public and that trick can still work. I’ll make a fortune.
kwertyoowiyop 4y ago
Tomorrow may well be one of his funniest columns EVER. It may also be his most fun to write. Go Matt! (Vacation can wait a day)
- bambax 4y ago
  Some truly hilarious moments... > Last night Musk tweeted that “Buying Twitter is an accelerant to creating X, the everything app,” which sounds exhausting. The app will do everything, but it will start with two functions: You can read tweets, or you can be shot on a rocket into space. Choose wisely. And also: > Is he going to try to raise more money? Is he going to go out to potential investors again and say “changed my mind, Twitter is great now, this’ll be fun, can I pencil you in for $1 billion?” (...) Every little bit helps, no? What does the disclosure document for that investment look like? “Yes Elon Musk has said that Twitter is a dysfunctional fraudulent conspiracy, but everything is fine now, and it’s an accelerant to creating X, the everything app.”

zamalek 4y ago

> inb4 "it was all 4D chess, this is what he wanted" Yeah, sure pal ... He would need more sleep for that. I think a lot of his bizarre behavior can be explained by (a) generally being an asshole (b) medicating to avoid sleep.

enviclash 4y ago

Man this "4D chess" expression is really something to describe Musk's strategies.