6 ms·

Ask HN: Did Elon/Twitter face any consequences after it stopped paying rent?

44 points by johntiger1 3y ago

Seems like they unilaterally backed out of a lease and there's some lawsuits pending. Wondering if they will ever face any repercussion from it?

toomuchtodo 3y ago
The question is if any judgements can be collected before Twitter goes bankrupt. Elon knows he can kick this into the future, he’s just trying to buy time. Like FSD and Tesla: Tesla got big enough fast enough the fines or consumer reimbursements become a de minimis cost to the business when FSD judgments catch up (~5-10% of Tesla cash equivalents on hand as of this comment assuming worst case scenario). No one will know until the legal wheels finish turning.
- johntiger1 3y ago
  In Twitter's case, what is the hypergrowth story here? I don't see any revolutions coming from Twitter's business model that haven't already occurred in the past decade. Whereas for something like space flight or FSD or novel therapeutics I can see the large potential upside
  - toomuchtodo 3y ago
    I’m simply stating what I believe to be Elon’s mental model. Reality is different, as you mention, with regards to Twitter’s fundamentals considering value destruction to date ($44B->~$16B) and potential future revenue trajectory. https://www.axios.com/2023/10/29/fidelity-twitter-x-value-elon-musk https://www.axios.com/2023/10/29/fidelity-twitter-x-value-el...
  - jondwillis 3y ago
    Hypergrowth of influence, maybe. Twitter is brimming with even more **riding Elon fanboys than it was a year ago. I don’t see the scummy ads every five posts/comments paying Elon back for his inflated purchase anytime soon.
  - mickdarling 3y ago
    For Twitter, his plan is the opposite of hyper growth. He doesn't just plan on bankrupting it, i.e. making Twitter's debts unmanageable for its revenue and assets. No, his plan is to actually ruin the company and any of its remaining brand identity. He has to destroy all potential value there, so nobody else can pick up the pieces and show how much of an idiot he's been. Also, that has the added value for his investors that no one will be using a revived Twitter to instigate any revolutions in say...somewhere in the Middle East.
    - gala8y 3y ago
      Yesterday there was an article (or a rant) here which was flagged. https://gkeenan.co/avgb/an-inordinate-amount-of-our-attention-is-afforded-to-absurdly-rich-children https://gkeenan.co/avgb/an-inordinate-amount-of-our-attentio... Author describes Musk like this: "Dude will literally drop $44 billion to buy a website instead of going to therapy.", which is a funny way to say that he _should_ go to therapy, with which I agree. Oh, and the whole thing is about OAI.
    - rchaud 3y ago
      Have you seen Musk's Twitter lately? Any revolution being instigated online will be intended for America.
  - jrflowers 3y ago
    > In Twitter's case, what is the hypergrowth story here? The revolutionary strategy is revenue sharing. Before people had to post stuff like “if the 14 words was a guy I’d let him move in with my wife (thinking emoji x3)” for free and now they get paid for the engagement that that generates
    - dilyevsky 3y ago
      So twitter is now collecting even less revenue for what exactly?
      - jrflowers 3y ago
        Critical nineteenth amendment discourse
  - aga98mtl 3y ago
    The plan is to turn Twitter into a SuperApp like WeChat. WeChat is enormous in China because it combines social with payment. It is a proof of who you are and a way to pay. This does not exist currently in the West.
    - NicoJuicy 3y ago
      I doubt lawmakers want x to be that tool.
    - Grimblewald 3y ago
      But in a way google already fills that role? It does ID, payment, social media etc. Several other companies fill various aspects of that void as well, so there really isnt a void to grow into explosivly. Even if twitter has weechat capabilities, then it still is unlikely to see major uptake. Personally id avoid it simply because elon is at the helm and elon is a conman. Additional concerns the average citizen would have is the increased reach this would have on them and their life. We are currently dealing with a significant threat to the longevity of social media in gen. pop. We're all netizens here and so are unlikely to stop living part of our life online, but your gen pop folks are less and less interested. Dumb phones are becoming increasingly popular, leaving social media entierly is also increasingly popular. So much so that mainstream popular icons for younger generations like tom holland take a public stand against social media and make a point of leaving it. If that is a move that isn't career suicide for a celebrity then it has to have pretty good mainstream support. I just dont see how massive broad adoption of a western weechat is going to happen without people being forced to adpot it.
    - yuppie_scum 3y ago
      We have ways to pay already.
      - LargeTomato 3y ago
        They aren't integrated to the same level as we chat. We chat is like Facebook, Venmo, what's app, door dash, and yelp combined into one app.
sp332 3y ago
They got evicted from the Boulder, CO office https://arstechnica.com/tech-policy/2023/06/judge-ruled-twitter-must-be-evicted-from-colorado-office-over-unpaid-rent/ https://arstechnica.com/tech-policy/2023/06/judge-ruled-twit... and the Singapore office https://observer.com/2023/01/twitter-employees-evicted-singapore-office-rent/ https://observer.com/2023/01/twitter-employees-evicted-singa... I know they were sued in San Francisco and London as well, but I can't find how those suits turned out. Edit: Bloomberg says they finally paid rent in London and the suit was dropped. https://www.bloomberg.com/news/articles/2023-05-03/twitter-s-unpaid-bills-create-another-headache-for-elon-musk https://www.bloomberg.com/news/articles/2023-05-03/twitter-s... (https://archive.is/3e0Eh https://archive.is/3e0Eh) Edit2: A lawsuit in Oakland and a different one in SF were "dropped" and no one seems to know why. https://therealdeal.com/sanfrancisco/2023/07/03/twitter-rent-update-kkr-drops-oakland-suit/ https://therealdeal.com/sanfrancisco/2023/07/03/twitter-rent...
- washadjeffmad 3y ago
  If I were a billionaire and wanted out of leases on properties in Oakland and SF, I might submit plans to convert them into shelters or free clinics for the thousands there displaced by tech gentrification, or to do the same near every other hard asset owned by the same group. Their investors probably didn't enjoy the taste of not being the big fish for once. Being sued is really just opening negotiations.
  - gtsteve 3y ago
    I love the idea, unfortunately having read a few of these contracts (albeit not for a space so large), they do specify what the premises are to be used for and what they should not - I read one which specifically mentioned that paintballing or adjacent activities was not allowed, which makes me wonder if there was a story behind that. It would be very easy to terminate the lease for breach of contract sadly.
    - CraigRo 3y ago
      Lucent had a floor turned over for roller hockey. I assume some dot com in the early 00s gave up space and the employees used it for paintball
h2odragon 3y ago
some links Seattle office shut down in Jan: https://komonews.com/news/local/twitter-shutdown-seattle-office-after-not-paying-rent-new-york-times-reports-elon-musk-ceo-tech-jobs-amazon-facebook-washington-state-employees-workers-tweets https://komonews.com/news/local/twitter-shutdown-seattle-off... SF HQ: Sued in feb: https://fortune.com/2023/02/24/elon-musk-twitter-rent-landlord-loan-default-columbia-reit-commercial-real-estate/ https://fortune.com/2023/02/24/elon-musk-twitter-rent-landlo... Still underway in aug: https://www.rollingstone.com/culture/culture-features/twitter-hq-neighbor-flashing-x-sign-elon-musk-rent-issues-1234799089/ https://www.rollingstone.com/culture/culture-features/twitte...
jethronethro 3y ago
Wouldn't be surprised if Musk is patting himself on the back for saving the company some money by getting evicted from those offices ...
brudgers 3y ago
The lawyers probably cost less than the rent. And one side has the cash from not paying rent to pay lawyers and the other side is short the same cash but still has to pay lawyers. So-sue-me is a well worn business behavior. Good luck.
- gtirloni 3y ago
  One side is guaranteed to lose though. He's just buying time, but it won't be cheap.
aga98mtl 3y ago
The plan is just to not pay and hope to settle for less then the total rent at some point in the future when the other party needs cash now. Meanwhile it helps with the cashflow.
krapp 3y ago
Consequences are for the proletariat.

44 points by johntiger1 3y ago

Seems like they unilaterally backed out of a lease and there's some lawsuits pending. Wondering if they will ever face any repercussion from it?

toomuchtodo 3y ago

The question is if any judgements can be collected before Twitter goes bankrupt. Elon knows he can kick this into the future, he’s just trying to buy time. Like FSD and Tesla: Tesla got big enough fast enough the fines or consumer reimbursements become a de minimis cost to the business when FSD judgments catch up (~5-10% of Tesla cash equivalents on hand as of this comment assuming worst case scenario). No one will know until the legal wheels finish turning.

johntiger1 3y ago
In Twitter's case, what is the hypergrowth story here? I don't see any revolutions coming from Twitter's business model that haven't already occurred in the past decade. Whereas for something like space flight or FSD or novel therapeutics I can see the large potential upside
- toomuchtodo 3y ago
  I’m simply stating what I believe to be Elon’s mental model. Reality is different, as you mention, with regards to Twitter’s fundamentals considering value destruction to date ($44B->~$16B) and potential future revenue trajectory. https://www.axios.com/2023/10/29/fidelity-twitter-x-value-elon-musk https://www.axios.com/2023/10/29/fidelity-twitter-x-value-el...
- jondwillis 3y ago
  Hypergrowth of influence, maybe. Twitter is brimming with even more **riding Elon fanboys than it was a year ago. I don’t see the scummy ads every five posts/comments paying Elon back for his inflated purchase anytime soon.
- mickdarling 3y ago
  For Twitter, his plan is the opposite of hyper growth. He doesn't just plan on bankrupting it, i.e. making Twitter's debts unmanageable for its revenue and assets. No, his plan is to actually ruin the company and any of its remaining brand identity. He has to destroy all potential value there, so nobody else can pick up the pieces and show how much of an idiot he's been. Also, that has the added value for his investors that no one will be using a revived Twitter to instigate any revolutions in say...somewhere in the Middle East.
  - gala8y 3y ago
    Yesterday there was an article (or a rant) here which was flagged. https://gkeenan.co/avgb/an-inordinate-amount-of-our-attention-is-afforded-to-absurdly-rich-children https://gkeenan.co/avgb/an-inordinate-amount-of-our-attentio... Author describes Musk like this: "Dude will literally drop $44 billion to buy a website instead of going to therapy.", which is a funny way to say that he _should_ go to therapy, with which I agree. Oh, and the whole thing is about OAI.
  - rchaud 3y ago
    Have you seen Musk's Twitter lately? Any revolution being instigated online will be intended for America.
- jrflowers 3y ago
  > In Twitter's case, what is the hypergrowth story here? The revolutionary strategy is revenue sharing. Before people had to post stuff like “if the 14 words was a guy I’d let him move in with my wife (thinking emoji x3)” for free and now they get paid for the engagement that that generates
  - dilyevsky 3y ago
    So twitter is now collecting even less revenue for what exactly?
    - jrflowers 3y ago
      Critical nineteenth amendment discourse
- aga98mtl 3y ago
  The plan is to turn Twitter into a SuperApp like WeChat. WeChat is enormous in China because it combines social with payment. It is a proof of who you are and a way to pay. This does not exist currently in the West.
  - NicoJuicy 3y ago
    I doubt lawmakers want x to be that tool.
  - Grimblewald 3y ago
    But in a way google already fills that role? It does ID, payment, social media etc. Several other companies fill various aspects of that void as well, so there really isnt a void to grow into explosivly. Even if twitter has weechat capabilities, then it still is unlikely to see major uptake. Personally id avoid it simply because elon is at the helm and elon is a conman. Additional concerns the average citizen would have is the increased reach this would have on them and their life. We are currently dealing with a significant threat to the longevity of social media in gen. pop. We're all netizens here and so are unlikely to stop living part of our life online, but your gen pop folks are less and less interested. Dumb phones are becoming increasingly popular, leaving social media entierly is also increasingly popular. So much so that mainstream popular icons for younger generations like tom holland take a public stand against social media and make a point of leaving it. If that is a move that isn't career suicide for a celebrity then it has to have pretty good mainstream support. I just dont see how massive broad adoption of a western weechat is going to happen without people being forced to adpot it.
  - yuppie_scum 3y ago
    We have ways to pay already.
    - LargeTomato 3y ago
      They aren't integrated to the same level as we chat. We chat is like Facebook, Venmo, what's app, door dash, and yelp combined into one app.

sp332 3y ago

They got evicted from the Boulder, CO office https://arstechnica.com/tech-policy/2023/06/judge-ruled-twitter-must-be-evicted-from-colorado-office-over-unpaid-rent/ https://arstechnica.com/tech-policy/2023/06/judge-ruled-twit... and the Singapore office https://observer.com/2023/01/twitter-employees-evicted-singapore-office-rent/ https://observer.com/2023/01/twitter-employees-evicted-singa... I know they were sued in San Francisco and London as well, but I can't find how those suits turned out. Edit: Bloomberg says they finally paid rent in London and the suit was dropped. https://www.bloomberg.com/news/articles/2023-05-03/twitter-s-unpaid-bills-create-another-headache-for-elon-musk https://www.bloomberg.com/news/articles/2023-05-03/twitter-s... (https://archive.is/3e0Eh https://archive.is/3e0Eh) Edit2: A lawsuit in Oakland and a different one in SF were "dropped" and no one seems to know why. https://therealdeal.com/sanfrancisco/2023/07/03/twitter-rent-update-kkr-drops-oakland-suit/ https://therealdeal.com/sanfrancisco/2023/07/03/twitter-rent...

washadjeffmad 3y ago
If I were a billionaire and wanted out of leases on properties in Oakland and SF, I might submit plans to convert them into shelters or free clinics for the thousands there displaced by tech gentrification, or to do the same near every other hard asset owned by the same group. Their investors probably didn't enjoy the taste of not being the big fish for once. Being sued is really just opening negotiations.
- gtsteve 3y ago
  I love the idea, unfortunately having read a few of these contracts (albeit not for a space so large), they do specify what the premises are to be used for and what they should not - I read one which specifically mentioned that paintballing or adjacent activities was not allowed, which makes me wonder if there was a story behind that. It would be very easy to terminate the lease for breach of contract sadly.
  - CraigRo 3y ago
    Lucent had a floor turned over for roller hockey. I assume some dot com in the early 00s gave up space and the employees used it for paintball

h2odragon 3y ago

some links Seattle office shut down in Jan: https://komonews.com/news/local/twitter-shutdown-seattle-office-after-not-paying-rent-new-york-times-reports-elon-musk-ceo-tech-jobs-amazon-facebook-washington-state-employees-workers-tweets https://komonews.com/news/local/twitter-shutdown-seattle-off... SF HQ: Sued in feb: https://fortune.com/2023/02/24/elon-musk-twitter-rent-landlord-loan-default-columbia-reit-commercial-real-estate/ https://fortune.com/2023/02/24/elon-musk-twitter-rent-landlo... Still underway in aug: https://www.rollingstone.com/culture/culture-features/twitter-hq-neighbor-flashing-x-sign-elon-musk-rent-issues-1234799089/ https://www.rollingstone.com/culture/culture-features/twitte...

jethronethro 3y ago

Wouldn't be surprised if Musk is patting himself on the back for saving the company some money by getting evicted from those offices ...

brudgers 3y ago

The lawyers probably cost less than the rent. And one side has the cash from not paying rent to pay lawyers and the other side is short the same cash but still has to pay lawyers. So-sue-me is a well worn business behavior. Good luck.

gtirloni 3y ago
One side is guaranteed to lose though. He's just buying time, but it won't be cheap.

aga98mtl 3y ago

The plan is just to not pay and hope to settle for less then the total rent at some point in the future when the other party needs cash now. Meanwhile it helps with the cashflow.

krapp 3y ago

Consequences are for the proletariat.