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If Twitter went bankrupt, could Elon buy its intellectual property at auction for a discount to effectively reduce his acquisition price? Or is the majority of
by shanebellone 4y ago
If Twitter went bankrupt, could Elon buy its intellectual property at auction for a discount to effectively reduce his acquisition price? Or is the majority of debt tied to Musk personally?
I'm not a Musk fan but if this play is in the cards, his actions could be rational.
- IceWreck 4y agoI dont know how it works but there must be some way to prevent that. Otherwise poeple would just - buy 51 % stake - run the company into the ground - announce its bankrupt - at the auction buy back IP for pennies on the dollar - start new company with previous IP, same domain name, same servers etc Also if there was an auction, what prevents Google, Meta, MS, Amazon, etc from buying the IP instead.
- shanebellone 4y agohttps://en.wikipedia.org/wiki/Corporate_raid https://en.wikipedia.org/wiki/Corporate_raid
- grumple 4y agoCreditors should have the right to any assets, including any IP.
- tcmart14 4y agoI could be missing some details here, but when he bought it and took it private, doesn't he already technically own all of Twitter's IP? So he would crash his company to buy back his own IP from himself at a discounted rate?
- shanebellone 4y agoIf the business failed, IP would be sold to satisfy creditors. If you bought a widget for $100, but financed $50 of the purchase, you've effectively spent $50. If you then go bankrupt, buy that something back at auction for $10, you've reduced your cost from $100 ($50 + $50 of debt) to $60 ($50 + $10) after defaulting on the debt.
- tcmart14 4y agoGotcha, that makes a lot of sense then. Thank you!