7 ms·
Is the calculation just that the cost of litigation will be less than the full contract lease? I don’t understand how that could work.
by romellem 4y ago
Is the calculation just that the cost of litigation will be less than the full contract lease? I don’t understand how that could work.
- cozzyd 4y agoMusk probably fired the guy in charge of paying rent
- barbazoo 4y agoSimplest explanation, probably right.
- hef19898 4y agoThat person was totally unproductive anyway. Just image, they barely wrote a single line of code!
- saalweachter 4y agoIf you fire everyone who knows how to cut a check, your outflows will reduce dramatically.
- dekhn 4y agoWell, at least in the short term...
- 93po 4y agoIt's cool that HN just turns into baseless speculation around Elon now
- kingofpandora 4y agoI wouldn't call it baseless ...
- kibwen 4y agoIndubitably, this speculation is based.
- deleted 4y ago[deleted]
- naveen99 4y agoTwitter could just declare bankruptcy and restructure.
- tonystubblebine 4y agoI agree this is where things are headed. Is it a sure thing that Elon maintains control in a restructuring?
- nostrademons 4y agoUsually not. Typically in a bankruptcy the debtholders become the new shareholders and then replace existing management with ones more friendly to their interests.
- hn_go_brrrrr 4y agoAt which point Musk wouldn't own Twitter anymore, like he wanted. It sounds crazy, but is this his exit strategy?
- mikro2nd 4y agoHow does he recover 44B this way?
- Retric 4y agoHe “recovers” the value of the loans he defaults on, which could easily be worth more than Twitter at this point.
- raverbashing 4y agoI dunno, I can think of cooler ways of disposing 44bi $, preferably in a non-reputation damaging way
- mschuster91 4y agoBreaking apart Twitter would certainly be in the interest of Saudi-Murderabia. For the Saudis, their loan amount is petty change, and they get to destabilize the main driving force behind all major political unrest in the Arabic region and the best and most efficient way to share and spread documentation of government-committed crimes also vanishes.
- nostrademons 4y agoLitigation takes years to play out, paying the lease would result in bankruptcy imminently. Plan is to live another day, long enough to stabilize finances, and then unload it on the public markets where the litigation becomes somebody else's problem.
- jsnell 4y agoThis is Musk stiffing a supplier for $100k. That seems unlikely to make their bankruptcy any more imminent. But it does signal (on the record, not just rumours) to literally anybody that Twitter is doing business with that they are distressed, and should be extended no credit. Payment up front, or no service.
- IG_Semmelweiss 4y agoSeems a reasonable for a service company with no inputs to COGS that are on credit terms. Payroll is not on credit, and most infra is metal, or on some VP's CC, anyway. The reasonable signal is yes indeed for Twitter vendors, if you are opex and a long contract, be ready to have our lawyers sit down and hash it out.
- HarryHirsch 4y agoit does signal ... that Twitter ... are distressed Disagree - this is automobile industry tactics where you pay your suppliers late and short because they have no choice. Musk is negotiating for lower rent.
- phpisthebest 4y agoYep... Ford, GM, and the rest have played that game for years, including just telling suppliers they are now going to pay less for parts.... and since the suppliers have built their business around that one contract there is not much they can do about
- basketdryer 4y ago> they have no choice A commercial landlord in downtown SF has many, many choices. The power imbalance here is not even remotely close to the one given in your analogy.
- redtexture 4y agoCreditors can force a company into involuntary bankruptcy proceedings. Bankruptcy and leases survey: https://www.jdsupra.com/legalnews/what-to-do-when-commercial-leases-end-32005/ https://www.jdsupra.com/legalnews/what-to-do-when-commercial...
- mschuster91 4y agoI have no idea about the contracts, but I could imagine a scenario where Twitter signed a 10 year lease that's expiring in five years or more, and Musk believes / hopes that being enough of an arsehole will lead the landlords to just dropping the contracts instead of risking a multi-year court battle - even if the landlords would eventually win the lawsuit, it will be a risk on their balance the whole time, whereas Musk doesn't have to answer anyone but his creditors about the lawsuit risk.