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It would have cost him "only" a $B to weasel out, much less than expected losses. So it has value to him greater than those losses. Would be unsurprising if he
by pencilguin 4y ago
It would have cost him "only" a $B to weasel out, much less than expected losses. So it has value to him greater than those losses. Would be unsurprising if he used it for political leverage. I don't think he is allowed to run for the presidency, but he can probably seat his choice.
- johannes1234321 4y agoNo, it would have him cost 1bn if he wouldn't have completed the deal due to regulatory or similar reasons.
- Eji1700 4y agoCorrect. More people need to be aware of this. The 1 billion termination fee was never on the table
- Analemma_ 4y agoThis is a common misunderstanding. The $1B clause was for if the deal was blocked by regulators, it had nothing to do with Elon just deciding to back out of the deal, so just paying that to walk away was never an option. The commenters above saying that the court was about to order specific performance have it right.
- pencilguin 4y agoThat makes no sense. Why would anybody agree to a penalty for something they have no control over?
- detaro 4y ago(Reverse) break-up fees are a tool to ensure commitment of both sides to a deal. The main target in the Twitter deal was probably the financing, not the regulatory case, making it a bit less attractive to fail the financing for the deal somehow to get out of it (although there was some debate how realistic that option was anyways). And in the other direction, Twitter was on the hook for a billion for various things it could've done to hurt the deal, e.g. the board recommending shareholders vote against it, or for a competing offer.