4 ms·

No, he just tried to use the courts to leverage a better deal. Imo, he always intended to buy Twitter, it was just part of the dance.

TigeriusKirk 4y ago
I agree. We know they were meeting to discuss a lower price throughout the process, but no agreement was reached. Not surprising if Twitter felt they were very likely to win, why accept less? But they did discuss it. It's more accurate to say Musk didn't want to buy Twitter for $44 billion. His timing on his bid really sucked. He might have saved half or more if he'd waited a few months.
- arlcode 4y ago
  What baffles me is that he would have just followed the tried and tested procedures of acquiring a company he would have paid less and would have had a chance to reconsider if he reaely wanted to during due diligence. Instead he made a take-it-or-leave-it offer with a ludicrously tight schedule and locked himself into an unfavorable deal without any obvious reason. I am certain there is a bad decision in there sometimes and I'm wondering what it it might be. A small part of me thinks that maybe he was uncertain and scared that he would back out so he took that option off the table preemptively.
tptacek 4y ago
That would be more plausible if he hadn't savaged the company for months, degrading its value, prior to being forced to consummate. It's below the threshold for plausibility now. It's probably more or less the case that for the next several years, it will be difficult for Musk to do any big-ticket M&A, despite having some of the biggest pockets in the business, without agreeing to exceptionally seller-friendly terms. All because of how he handled an acquisition of a flailing media company that it is very unclear that he wanted in the first place.
- ahahahahah 4y ago
  I don't think that's quite right, or rather you're presenting it incorrectly. When musk proposed the twitter deal he was already in the state where any acquisition that he proposed would necessarily be under exceptionally seller-friendly terms, that's why the twitter deal was such. If he already had had to present such terms at that time, what more terms could his proposals possibly provide now after this bullshit?
  - tptacek 4y ago
    He had to buy Twitter under exceptionally seller-friendly terms, because Twitter didn't want to change hands or be taken over by Musk; that's the month of drama leading up to the M&A debacle. What I'm saying is that he'll be getting exceptionally seller-friendly terms from everybody, for years to come, because in the course of this supposed "negotiation" he repeatedly breached the terms of the acquisition agreement, publicly slagged the target over and over again, reneged on the deal, and brought a horseshit case to the Delaware Chancery Court to try to avoid performance when the target held him to the deal he agreed to. Every other company is going to notice that (it's one of the most noticeable things to happen in business in 50 years!), and nobody is going to trust him. I don't believe he did all of that as a negotiating ploy. If he wanted to get the price down, all he had to do was wait before agreeing to an ironclad, overpriced deal. In fact: "waiting" is what he ended up trying to make happen anyways! This wasn't a negotiating strategy.
phatfish 4y ago
You do that BEFORE legally committing to a purchase price, not after. He thought he could get away with an "epic troll" for his acolytes to croon over, like the stock price manipulation Tweets. Turns out the Delaware courts have teeth.
elgenie 4y ago
No, he signed a contract to buy something with no contingencies at what everyone quickly came to realize was 2x to 3x what it was worth. Twitter’s management, acting in the best interest of their shareholders, used the court to force him to hold to the contract when he tried to walk. Musk decided to buy the company for the agreed on price rather than have that imposed on him by court order after (more) embarrassing discovery. Seeing Musk as a business genius in this deal requires ignoring nearly every event in the saga.
- amachefe 4y ago
  There is an opt out of 1bn. That is the only thing he would pay if he wanted to walk...
  - tptacek 4y ago
    No, there wasn't. If he could have paid $1b to be out of this deal, he would have.
    - amachefe 4y ago
      He did not even offer to pay it, that was the reason for the law suit. anyone who actually think he was forced to pay 43bn when he could have paid 1bn. (even 2bn) are just not thinking correctly. https://www.theverge.com/2022/7/8/23201004/twitter-to-sue-elon-musk-for-backing-out-of-merger https://www.theverge.com/2022/7/8/23201004/twitter-to-sue-el...
      - kasey_junk 4y ago
        You are reading the terms of the deal incorrectly. He had the option to pay 1b only under the specific case that his financing fell through. That never happened, quite the opposite the banks backing this deal have been adamant that they were ready to go but Musk was dragging his feet. Meanwhile, Musk was getting absolutely savaged in the Delaware chancery court and they were just in discovery. He was going to lose and that would be more embarrassing (somehow) than this outcome. All because he went off half cocked and didn’t write bog standard contingencies into his offer. He’s come off looking like an absolute simpleton in this and that’s the better outcome for him than if the court case had proceeded.
nirav72 4y ago
Did he get a better deal? Looks like he still had to pay the $54 per share price.

TigeriusKirk 4y ago

I agree. We know they were meeting to discuss a lower price throughout the process, but no agreement was reached. Not surprising if Twitter felt they were very likely to win, why accept less? But they did discuss it. It's more accurate to say Musk didn't want to buy Twitter for $44 billion. His timing on his bid really sucked. He might have saved half or more if he'd waited a few months.

arlcode 4y ago
What baffles me is that he would have just followed the tried and tested procedures of acquiring a company he would have paid less and would have had a chance to reconsider if he reaely wanted to during due diligence. Instead he made a take-it-or-leave-it offer with a ludicrously tight schedule and locked himself into an unfavorable deal without any obvious reason. I am certain there is a bad decision in there sometimes and I'm wondering what it it might be. A small part of me thinks that maybe he was uncertain and scared that he would back out so he took that option off the table preemptively.

tptacek 4y ago

That would be more plausible if he hadn't savaged the company for months, degrading its value, prior to being forced to consummate. It's below the threshold for plausibility now. It's probably more or less the case that for the next several years, it will be difficult for Musk to do any big-ticket M&A, despite having some of the biggest pockets in the business, without agreeing to exceptionally seller-friendly terms. All because of how he handled an acquisition of a flailing media company that it is very unclear that he wanted in the first place.

ahahahahah 4y ago
I don't think that's quite right, or rather you're presenting it incorrectly. When musk proposed the twitter deal he was already in the state where any acquisition that he proposed would necessarily be under exceptionally seller-friendly terms, that's why the twitter deal was such. If he already had had to present such terms at that time, what more terms could his proposals possibly provide now after this bullshit?
- tptacek 4y ago
  He had to buy Twitter under exceptionally seller-friendly terms, because Twitter didn't want to change hands or be taken over by Musk; that's the month of drama leading up to the M&A debacle. What I'm saying is that he'll be getting exceptionally seller-friendly terms from everybody, for years to come, because in the course of this supposed "negotiation" he repeatedly breached the terms of the acquisition agreement, publicly slagged the target over and over again, reneged on the deal, and brought a horseshit case to the Delaware Chancery Court to try to avoid performance when the target held him to the deal he agreed to. Every other company is going to notice that (it's one of the most noticeable things to happen in business in 50 years!), and nobody is going to trust him. I don't believe he did all of that as a negotiating ploy. If he wanted to get the price down, all he had to do was wait before agreeing to an ironclad, overpriced deal. In fact: "waiting" is what he ended up trying to make happen anyways! This wasn't a negotiating strategy.

phatfish 4y ago

You do that BEFORE legally committing to a purchase price, not after. He thought he could get away with an "epic troll" for his acolytes to croon over, like the stock price manipulation Tweets. Turns out the Delaware courts have teeth.

elgenie 4y ago

No, he signed a contract to buy something with no contingencies at what everyone quickly came to realize was 2x to 3x what it was worth. Twitter’s management, acting in the best interest of their shareholders, used the court to force him to hold to the contract when he tried to walk. Musk decided to buy the company for the agreed on price rather than have that imposed on him by court order after (more) embarrassing discovery. Seeing Musk as a business genius in this deal requires ignoring nearly every event in the saga.

amachefe 4y ago
There is an opt out of 1bn. That is the only thing he would pay if he wanted to walk...
- tptacek 4y ago
  No, there wasn't. If he could have paid $1b to be out of this deal, he would have.
  - amachefe 4y ago
    He did not even offer to pay it, that was the reason for the law suit. anyone who actually think he was forced to pay 43bn when he could have paid 1bn. (even 2bn) are just not thinking correctly. https://www.theverge.com/2022/7/8/23201004/twitter-to-sue-elon-musk-for-backing-out-of-merger https://www.theverge.com/2022/7/8/23201004/twitter-to-sue-el...
    - kasey_junk 4y ago
      You are reading the terms of the deal incorrectly. He had the option to pay 1b only under the specific case that his financing fell through. That never happened, quite the opposite the banks backing this deal have been adamant that they were ready to go but Musk was dragging his feet. Meanwhile, Musk was getting absolutely savaged in the Delaware chancery court and they were just in discovery. He was going to lose and that would be more embarrassing (somehow) than this outcome. All because he went off half cocked and didn’t write bog standard contingencies into his offer. He’s come off looking like an absolute simpleton in this and that’s the better outcome for him than if the court case had proceeded.

nirav72 4y ago

Did he get a better deal? Looks like he still had to pay the $54 per share price.