But here, I think, he is just trying to get out of the deal.
The high percentage of bots was exactly the reason why he wanted to buy Twitter in the first place. Because removing the bots would have been a relatively straight-forward way of increasing Twitter's valuation. IIRC he even tweeted about it.
On another note, isn't it amazing how well Twitter hides its advanced search functionality? I still don't understand if it is incompetence or deliberate.
Yes, but sufficiently high amount could potentially mean lower price. So it serves as a way to keep his options open and an indication to counter-party that he could just walk away.
As much as Elon annoys me, it hard for me to say he does not know what he is doing. Even the WFH tweet was timed seemingly to lower the cost of severance payments from announced 10% workforce reduction.
I am not saying what he is doing right now isn't rational. I think it's totally rational. He now has the chance of lowering the price or even abandoning the deal.
(I just don't believe him regarding the bots. He always knew bots are a problem and likely under-reported.)
I will genuinely rather wait for more leaks of emails from the factory than try to divine the meaning behind tweets.
That said, if the message is confusing then either messenger does not know what he is doing or wants the confusion. In his case, I think the latter is more likely.
He might actually have to make this deal. I thought for a while that he had no intention of actually buying them. He just wanted to stir the pot with Twitter. He would then back out, and say something like "Taking these funds and now putting them towards a moon base to mine helium 3 operational by 2023" and people would eat it up. But I think now that it didn't work the way he planned, and now his credibility and ability to make sound judgements is being questioned by many.
I think he's first and foremost an entrepreneur, and people overstate his engineering ability. In many cases, he shows total ignorance for the realities of engineering (see e.g: hyperloop). I suspect in those cases he is just surrounded by yes-men who don't want to tell him he's wrong.
In general, I get the impression that his success over the years has been contingent on the people he has surrounded himself with. That, in itself, is a skill, though, granted.
He might just be trying to reprice the deal at a lower price he now thinks is commensurate to the value. Things were necessarily rushed in the initial agreement due to leaks etc. He and his team have now had time to develop an operating plan. Keep in mind that there are several savvy hedge funds also investing in this deal and this may be driven by their concerns.
There's also a possibility he'd just like to ensure the deal closes in a certain later time window. The composition of his personal wealth is complex and highly dependent on his equity holdings which have grown volatile recently.
He might just be trying to reprice the deal at a lower valuation he thinks is commensurate to the potential. Things were necessarily rushed in the initial agreement due to leaks etc. He and his team have now had time to develop an operating plan. Keep in mind that there are several hedge funds also co-investing in this deal and this may be driven by their concerns.
There's also a possibility he'd just like to ensure the deal closes in a certain later time window. The composition of his personal wealth is complex and highly dependent on his equity holdings which have grown volatile recently.
I don't know much about this specific situation, but isn't it pretty normal to lock in a price for purchase contingent on everything checking out.
It's not like you can go digging around in their databases looking for bot accounts until you have official access.
EDIT: Clearly people feel strongly about this so feel free to look at the comments below for some great answers. I'd ask for you to read before commenting though. I keep getting emails rehashing similar things.
He explicitly waived any kind of due diligence, which is when you would normally agree to a price and make a conditional offer. His offer was unconditional.
No, the whole point of the pre-merger negotiations is to grill the company on that kind of stuff before locking in the price. you don't get "official access" to anything until you've actually finished the transaction and paid for the company (partially for "don't string us along" reasons and partially for antitrust/collusion reasons). Musk decided to rush into this deal with very little negotiations and while waiving the standard due diligence, and now he's bored with it and creating a pretext to get himself out of it. It's insane to believe he really cares about the bot problem—fixing the problem of "too many bots in his mentions" was one of the reasons he bought the company to begin with!
Elon didn't agree to "deal contingent on everything checking out", he agreed to deal. Normally, this would have been vetted in due diligence, but Musk waived that period -- this is why the turnaround from "I might buy Twitter" to "I'm buying Twitter" was much, much faster than your typical acquisition talk. Matt Levine covered this better than I did, so I'll just quote his relevant section below:
“Temporarily on hold” is not a thing. Elon Musk has signed a binding contract requiring him to buy Twitter. Legions of bankers and lawyers and Twitter employees and special-purpose-vehicle promoters are working to fulfill his legal obligation to get the deal closed. “The parties hereto will use their respective reasonable best efforts to consummate and make effective the transactions contemplated by this Agreement,” says the merger agreement. (Section 6.3(a).) He can’t just put that “on hold.”
That contract does not allow Musk to walk away if it turns out that “spam/fake accounts” represent more than 5% of Twitter users. We discussed this last month, when Twitter admitted in a securities filing that it had (slightly) overestimated its daily active users for years. The merger agreement contains a provision that allows Musk to walk away if Twitter’s securities filings are wrong — and this 5% number is in its securities filings — but only if the inaccuracy would have a “Material Adverse Effect” on the company. (See Sections 4.6(a) and 7.2(b).) That is an incredibly high standard: Delaware courts have almost never found an MAE. An MAE has to be something that would “substantially threaten the overall earnings potential of the target in a durationally-significant manner,” the courts have said; there is a rule of thumb that an MAE requires a 40% decrease in long-term profitability. If it turned out that 6% or 20% or 50% of Twitter accounts are bots, that will be embarrassing and might even reduce Twitter’s future advertising revenue, but will it be an MAE? No.
“Pending details supporting calculation” is not how this works. This disclosure — that “the average of false or spam accounts ... represented fewer than 5% of” Twitter’s monetizable daily active users — has been in Twitter’s securities filings for many years, always with a caveat that “in making this determination, we applied significant judgment, so our estimation of false or spam accounts may not accurately represent the actual number of such accounts, and the actual number of false or spam accounts could be higher than we have estimated.” Musk had the opportunity to read these filings before offering to buy Twitter, and he had the opportunity to do due diligence on these numbers before signing the deal. (He declined.) He can’t now go to Twitter and say “actually now you need to prove that your user numbers are right.” If he wants to walk, he has to prove that they’re wrong, and also that they’re wrong in a way that has a material adverse effect on the business. Which he obviously can’t do.
Twitter have no obligation to provide any data to a potential buyer unless there is a contract to protect the effort they have to expend in order to get the information. Even when there are common due-dil type questions that the company might have already prepared, there is nothing stopping somebody from saying that something else is important to them.
He waved his due diligence and now has a cool $1 billion cancellation fee. That's what he's trying to get out of. That's what people mean by "no-condition buyout."
That figure came from a 10K SEC filing by Twitter dated Feb 2022 (https://s22.q4cdn.com/826641620/files/doc_financials/2021/q4...). It is a public document, so of course Musk relied on it. No further due diligence is needed on that point because SEC filings MUST be accurate.
Now if the board lied, in writing, in a 10K filing, it is a Very Big Deal(tm).
It's just silly though -- he complained relentlessly about the bots before he made what was am unconditional offer to buy the company. Twitter hasn't changed their definition of bot in the past decade, they have repeatedly emphasized that they count them in a unique and specific way, and they detailed that methodology (it's not 5% of accounts - it's 5% of "monetizable daily active users"[1]). He has no legal leg to stand on, in a 'legally just' world, he'd be forced to buy Twitter for the price he initially offered. There's a good chance that the entire process would annoy everyone to death, so they may not try and force him to buy a company he no longer wants, but they'd be well within their contractual rights to do so.
[1] From their 2022 10K: We define mDAU as people, organizations, or other accounts who logged in or were otherwise authenticated and accessed Twitter on any given day through twitter.com, Twitter applications that are able to show ads, or paid Twitter products, including subscriptions. Average mDAU for a period represents the number of mDAU on each day of such period divided by the number of days for such period. Changes in mDAU are a measure of changes in the size of our daily logged in or otherwise authenticated active total accounts. To calculate the year-over-year change in mDAU, we subtract the average mDAU for the three month sended in the previous year from the average mDAU for the same three months ended in the current year and divide the result by the average mDAU for the three months ended in the previous year. Additionally, our calculation of mDAU is not based on any standardized industry methodology and is not necessarily calculated in the same manner or comparable to similarly titled measures presented by other companies. Similarly, our measures of mDAU growth and engagement may differ from estimates published by third parties or from similarly-titled metrics of our competitors due to differences in methodology.
I think this is the right approach: zoom in on the language and discuss what is at stake.
So let's talk about the legal leg to stand on part. From his 13d language (amendment #8, filed June 6th, which is public, but I read it on bloomberg and can't find the link to the gov site this second) it doesn't sound like he has an issue with the definition.
He wants to rerun the numbers and see for himself. He is asking for the underlying data. Twitter pushed back to say that is not in the scope of what was asked for (apparently, based on his letter).
Not taking sides because I was not in the negotiations and know nothing about what each side, indicated, what the legal contract says and so forth. Just saying, the issue is whether they should provide the data for him to run his own calculations.
> Not taking sides because I was not in the negotiations and know nothing about what each side, indicated, what the legal contract says and so forth.
That's easy to do though - his offer is unconditional. It's like offering a cash amount to buy a house while waiving inspections and all contingencies, but when it comes time to close, insisting your inspector can go into the basement and look at the foundation. You don't have that right, you made an unconditional offer.
The time for 'running his own calculations' was before he made an offer to buy the company. You might think; "Surely you can't expect him to buy a company when he doesn't know how many accounts are bots." Which is a fair point, but that's precisely why people rarely make unconditional outside bids for companies!
He's making a specious argument that the detail is needed to line up his financing, but to continue the homebuying analogy; After offering cash to buy the home without contingency, he's going back to the seller claiming that he's going to take out a personal loan from his friend and that friend wants to know about the state of the foundation but that only your inspector can satisfy him. Really not the sellers problem!
Let's just say I share your intuition about this hypothetical real estate transaction but I am not convinced that it is an appropriate simile. As I read it, his claim is that he didn't waive inspections but relief on the prior inspection report which he is beginning to question.
But whether even that is the right metaphor almost doesnt matter. I think we would have to be steeped in what the standards are in the industry to have a productive discussion.
This is where someone in HN says: I am an M&A lawyer for 30 years and there are four standards. The X v Y standard whereby the effect of the change has to be material but material is not defined, however...
(Matt Levine has, as always, my favorite elucidation)
Yeah, there's a few different discussions with Levine and others on Twitter - but what Musk is asking for is generally governed by an information covenant - but the covenant in his offer is extremely weak in terms of governing the deal...
What Levine is referring to is that the deal is subject to Twitter not making any representations that amount to "material adverse effects" which is a very high standard that Twitter definitely hasn't broached -- but financing statements are often subject to detail that covers "all material respects" which is a much more broad standard that Elon could plausibly litigate.
It's deeply cynical on Elon's part - he knows what he signed and he knows what he got himself into - which is why he's doing this dumb dance to back out now. It might even work, but it's against the spirit and (IMO) the letter of the contract.
He's relying on section 6.4 to make his case that they need to provide him the bot detail - it's short and sweet:
okay, you seem to know at least as much as I read, so let me ask you this question:
"material adverse effects which is a very high standard that Twitter definitely has not broached"
I guess my question is how do we know -- from the outside -- that they definitely have not broached it? Elon seems to think the bots issue (roughly, that they miscalculate it) does broach the standard. Everyone I have read thinks seems not to think so and shares your view. But for a naive person on the outside, couldn't it be plausibly argued that this bot thing is a material breach?
I am in the awkward position of not knowing either party. I take each at their word, and the dispute seems pretty "sensible" to me.
Yeah that's fair, it does seem sensible from the outside - but the "material adverse effects" standard is an incredibly high standard. All US Corps are organized in Delaware basically because all US corps are organized in Delaware (giving them a long history of well-understood and litigated corporate law).
The "material adverse effect" standard isn't that the bots would have a materially adverse effect on the deal or transaction, but that they'd have a materially adverse effect on Twitter's profitability for a long duration. Levine laid it out already;
> That is an incredibly high standard: Delaware courts have almost never found an MAE. An MAE has to be something that would “substantially threaten the overall earnings potential of the target in a durationally-significant manner,” the courts have said; there is a rule of thumb that an MAE requires a 40% decrease in long-term profitability. If it turned out that 6% or 20% or 50% of Twitter accounts are bots, that will be embarrassing and might even reduce Twitter’s future advertising revenue, but will it be an MAE? No. “Pending details supporting calculation” is not how this works. This disclosure — that “the average of false or spam accounts ... represented fewer than 5% of” Twitter’s monetizable daily active users — has been in Twitter’s securities filings for many years, always with a caveat that “in making this determination, we applied significant judgment, so our estimation of false or spam accounts may not accurately represent the actual number of such accounts, and the actual number of false or spam accounts could be higher than we have estimated.” Musk had the opportunity to read these filings before offering to buy Twitter, and he had the opportunity to do due diligence on these numbers before signing the deal. (He declined.) He can’t now go to Twitter and say “actually now you need to prove that your user numbers are right.” If he wants to walk, he has to prove that they’re wrong, and also that they’re wrong in a way that has a material adverse effect on the business. Which he obviously can’t do.
Advertisers don't really care about how many bots are on Twitter - at least not in the way you might naively expect them to care. Of course they want their ads to be shown to humans, but over a long timeline, it doesn't actually matter what percentage of their views are to humans or bots - only the performance of those ads. If you spend $1 on 100 ads and it leads to $1.25 in sales, you don't really care if it was shown to 95 people and 5 bots, or 90 people and 10 bots, or 50 people and 50 bots. There was a positive ROI for your campaign, so you're going to do another one. You'd prefer it was shown to 100 people and 0 bots, but everyone in the business knows the bot problem is an extremely difficult one to solve, so you just weigh relative performance and adjust the price you're willing to pay while maintaining that ROI.
It's silly for Musk to claim that the deal can't go through because he needs to know how many bots are present to determine potential advertising revenue because he knows how much advertising revenue they have today, regardless of the specific percentage of bots -- if Twitter's wrong about the way they calculate bots, that actually gives the future "bot-free" platform a higher revenue ceiling because then all of the advertisers campaigns would get substantially more performant.
I had read the Levine piece, and when I did, I thought: well, if the bot counts were going from 5% to 25% to 50%, then of course then why would it not be an MAE? That is to say, I don't think I felt swayed by him saying it would not be.
However, I think your pointing out that whatever the bot count is, as long as the ROI is there the advertiser will continue is a good point. It seems obvious now, but I was assuming that the bot count would be a big deal to the advertiser.
Except he very deliberately put himself in this position. Twitter has reported 5% as the bot count for years, it’s not like it was some secret only uncovered during DD here. Additionally one of the main reasons Musk cited for wanting to buy Twitter was to fix the bots!
Say I find a house for sale that I think is at a really low price (I want to flip it), but I can see it has some termite damage on a corner. I don't see damage anywhere else and the owner signs a legal document that the termites are in less than 5% of the house. I think I can fix the termite damage and then turn a profit so I enter into an agreement to buy the house. Before we complete the transaction, I start to notice signs that the termites might be worse that initially thought. I ask to have an inspector come in and determine how much of the house is infested with termites. The owner is denying my inspection request. I inform the owner I won't complete the transaction until I get a termite inspection of the property. The owner's friend owns the local newspaper so they run a story about how I can't afford the house and I'm trying to get out of the purchase. Hi, I'm Elon Musk, but I'm buying a house and not Twitter.
It's more like, I find a house for sale and I announce that the owner is missing out on the potential value of this house, because I can see termites everywhere. I am the termite master. The owner of the house has no idea what they are doing with termites, I announce to the public. I know much more about the termites in that house than they do. They can't even see all the termites I see. What fools! The value I will bring is my termite annihilation skills.
I insist on buying the house. The owner is reluctant to agree. They delay. I continue to insist that I purchase the house immediately. The owner says, hey let's stop and think about this, let's do due diligence and inspections, let's take our time. I say screw you, there is no due diligence allowed, there is no house inspections allowed, you must accept my offer now. NOW. I insist that the house owner has a legal fiduciary responsibility to their family to sell the house, because my offer is above the assessed public value of the house. This house must be sold to me!
They give in to pressure and accept the sale. I sign all the contracts, I waive all the inspections.
"What, the house has termites? What a surprise! I want my money back."
More like, you find a house, you read the seller’s disclosures, waive all inspection rights, then show up just before closing and say oh yeah can i inspect the property now even though I waived inspections and all other contingencies?
I think his argument is that there's way more than 5% and that Twitter mislead him by saying that the bots only account for 5%. Not that it seemed to be a condition on the offer.
That's what I am saying though - Twitter has stated for a lonnngggg time, very publicly, that it's bot number is 5%. Elon bullied them into the purchase contract knowing this information, claiming he was specifically going to fix the bot problem. But now is complaining that it's incorrect and using it as a way out of the agreement.
> Would it be fair to buy a company that 20% of its "customers" are fake?
Yes. for a number of reasons.
1) You carry the investigation BEFORE filling to buy (he waived the investigation).
2) Twitter never said 5% are bots, they said 5% of monetasible daily users are bots. Thats a very important distinction, and one Musk is well aware off. Because he has used bots to affect tesla stock price before.
3) No one forced him to put a 40 billion offer on the table, but once its on, it affects the market so you cannot back away willie nilly. Thousands of people made choices based on him filling that offer, he has to deal with the responsability and the consequences.
> He is forcing twitter to be honest or to at least audit it.
No, he is trying to use public sentiment. Like your comment, to not have to pay the 1,000,000,000 fine if he doesn't buy it. And he will have to pay it because he company is now worth much less and he is trying to find a way to weasel away.
He waived due diligence. If I offer to buy a house and waive contingencies, I can’t subsequently use an inspection report to back out of the sale claiming the house was misrepresented to me.
I feel like a lot of people are talking past each other on this point. Elon Musk's PERSONAL EXPERIENCE of spambots and fake accounts is really terrible because they always glom onto his posts. So he sees way more than 5%. That is what he wants Twitter to fix. He's spent billions of dollars to say that, and may spend billion(s) more to get out of the deal. One would think he could just fund a personal Twitter engineer or two to clean up his feed for him and come out wayyyy ahead on the deal.
> Mr. Musk believes the company is actively resisting and thwarting his information rights (and the company’s corresponding obligations) under the merger agreement. This is a clear material breach of Twitter’s obligations under the merger agreement and Mr. Musk reserves all rights resulting therefrom, including his right not to consummate the transaction and his right to terminate the merger agreement.
- Because Twitters stock price dipped, he's trying to renegotiate.
- This whole thing wasn't a good faith bid to begin with, and Twitter should insist he pays the $1B exit clause.
Ultimately if he exits without paying this has done Twitter (and their stockholders) harm without any benefit, and it almost feels like a stunt to distract from unrelated controversy surrounding Musk.
Good! They say the wealthy have a better chance at success (especially when it comes establishing businesses) due to their huge financial safety nets.
It would be nice to see this table turn for once; the 1% shouldn't always be able to have their cake and eat it too. Hopefully this bankrupts Musk in a stark turn of sweet, sweet karma deliverance.
This is what you’re waiting for? A billionaire you’ve never met to lose some of this wealth so you can feel better about yourself? This would seems like a crass thing to say even if he had stolen from you personally (and I mean physically, not in some roundabout moral way).
This man told 110,000 of his employees to return to the office or find another job, during a still-surging pandemic. This is immoral and reckless from any angle.
If his net worth is reduced, it will reduce the impact of his actions on people and the environment.
We all share this planet. It is not a free-for-all stomping grounds for the highest paid capitalists.
Whoever supplies your news. I hope they pay your health insurance.
I don’t know where you live or what goes on around you. But people are probably not as evil or greedy as you think.
Though if you believe the headlines, everybody probably should be hanged, and the planet would be better off without all of us.
It’s almost funny that this philosophy sells as well as it does. People rather will the “nothing” than give up willing, said Nietzsche. Like the kids in kindergarten rather destroying the toy than letting the other have it.
I believe it’s not greed we need to look out for. It’s envy. The ability to not waste your time focusing on things you hate, and to rather apply your intelligence and your humanness where it mashes a difference, and does good for others.
Though that’s a lot more difficult than passing judgement. Especially when there is an entire industry supplying you with bite sized pieces that allow you to pass judgment, around the world, across social boundaries, and from the comfort of your bathroom even. Make you feel all special and important... while they FEAST on your SOUL.
But isn't what you describe precisely what Musk did himself? He passed judgement on companies like GM, for instance when they killed the EV1. But he did one step further, and actually started his own company. One that works according to those rules he thinks make more sense.
I mean, even if you disagree with the rules he has come up with... wouldn't you at least have to respect that he did something about it? Isn't that, in a sense, an encouragement for your own values, also? Because it shows you that you, too, can make a difference? And that, even if you don't do it, people with ideas generally do have a chance of rising to the top, where their ideas can have an impact?
If we were talking about some dude who inherited all of his wealth and power from his parents, it would be a different thing.
He did recently have sexual misconduct/prostitution allegations made public against him [1], plus a lot of honorable mentions during the Depp v. Heard trial [2].
> - This whole thing wasn't a good faith bid to begin with, and Twitter should insist he pays the $1B exit clause
This would be a win for Elon. The problem is, it's not clear he has the right to back away and just pay a break-up fee. So the game emerges around how problematically he can position himself to be perceived to be, so Twitter prefers settling versus initiating what will likely be a multi-year court battle.
There is no $1B exit clause - there's just a $1B cap to damages twitter can sue for if the deal falls through. A court would have to decide to award $1B.
Twitter can further sue for "specific performance" and a court could, worst case for Musk, order that the deal go through as agreed.
Seems like he's looking for a tactical retreat — the bots question is hyper-subjective, and provides the company a lot of wiggle-room.
How many Twitter accounts were created in automated fashion, but designed to look authentic, and haven't yet been removed by anti-spam measures? That could conceivably be around 5% of active accounts if Twitter is doing its job.
If you wanted to inflate that number you could include account takeovers, which are a little harder to measure (created by a real person, but taken over by a botnet using hacked/easy-to-guess credentials).
And if you want to inflate the number further, don't just count account numbers — instead look at the % of total activity (likes, retweets, follows) that those accounts represent. You can reasonably expect that number to be higher, given how many dormant accounts Twitter has.
Elon has alleged that his followers include lots of bots. That's not necessarily surprising as "follow Elon's account" is the sort of thing a bot developer might program in to look authentic.
MAU has to be done sort-of retroactively: you could say "given the accounts we now know to be bots and have removed, what percentage of January 2022's MAU were inauthentic".
Sometimes bot accounts will do organic-looking behaviour for at least a month to evade automatic detection, before doing explicit bot-like things (following particular accounts en-masse).
I disagree. I think it’s the opposite, Twitter should be providing this data and it’s pretty straightforward. Not providing it or pretending to provide it seems like a way to get out of the sale but leaving open a way to sue him for breach of the sale.
You don’t have to send the databases over to comply. You can give on-premises access to your data to Musk representatives and let me make their own queries to satisfy themselves. It’s not hard.
Assuming it is not hard (it is). Why? It’s not like Twitter is asking to be bought here. Musk voluntarily waived his rights to due diligence. Presumably his representatives have reviewed this agreement?
Agreeing to be bought doesn’t create any obligation on Twitter’s part to do anything that’s not in the contract. Especially for things that Musk has explicitly waived.
I can't even. The potential privacy violations are the same whether you're giving the database to the other party or letting the other party come to your premises to have sufficient access to the database. No wait, I take that back: they might see (very slightly more) stuff by walking on-site.
It's the data being requested that's a privacy violation, not the place where that data is viewed.
Twitter owns the data, stop acting like it is HIPPA data. Completely unsure where you are getting this PII concern from. They could change their TOS and release everything in a plain text file if they so pleased.
It is 100% legal and ok for them to look at every piece of information they have about every account and analyze it for bot activity, or allow Elon's team to look at the same data.
Secondly, I'm specifically responding to GP's assertion that letting people access the databases on-prem would make any privacy concerns go away. I'm expressing no opinions on the matter of the first place of if those privacy concerns are warranted.
Thirdly, at this point, I would personally be highly skeptical that an NDA would actually provide any meaningful protection when Musk is the one signing it. His recent actions indicate to me a very high disregard for any contractual obligations he enters on, in the apparent belief that he will face zero material repercussions for anything he violates.
Thanks for correcting my spelling. But fundamentally there is no problem with anyone looking at the data with Twitter's blessing.
The comment you were referring to says "because that data includes a ton of PII."
But PII isn't a concern here. Unless we're talking about sharing usernames and passwords, there aren't really any protections in Twitter's TOS for the information you willingly provide to them.
Assuming the data includes that of Europeans, then there is a problem: users must be aware of how their data is to be used from the beginning (and must be able to opt out of data use at any time), and that data usage must be minimal. Most companies have rules against over-sharing PII between different departments, let alone sharing that data with people external to the business.
PII doesn’t just mean usernames and passwords (which the OP seemed to suggest is the case). It’s anything — or any combination — of data that could be associated with someone and identify them.
I live in the EU and Twitter has my data, any handling of that data to a new unspecified 3rd party needs to fall under GDPR guidelines. Musk can't just go to Twitter HQ and look at my data, it's illegal.
I own my data, Twitter is merely handling it. Stop with this presumption that data is Twitter's. Even California has similar provisions on data privacy.
Straightforward? Against an adaptive opponent that’s constantly looking for weakness in their approach?
I don’t think automatic analysis with a 5% false positive rate and materially significant false negative rate is that easy even when the subject doesn’t have an incentive to be subversive — last time I downloaded my Twitter data, turned out they incorrectly thought I understood Indonesian(!), and incorrectly thought my interests included beer, blues, college basketball, cricket, DJs, dance, guitar, hip hop and rap, horror, ice hockey, Japan, luxury, men’s pants, men’s shoes, metal, motorcycles, NFL football, offroad vehicles, olympics, pop, “power and motorcycles” (apparently that’s a single category), rock, skateboarding, South America, sporting goods, talk radio, and wine.
As far as I understand, Musk explicitly waived the opportunity to do due diligence (like investigate bot prevalence) in the purchase agreement. Then he turned around and requested numbers that would have been discovered while doing an investigation, such as the one he waived.
Further, Musk is a hypocrite. There are proven bots, potentially even directly sponsored or controlled by Musk or Tesla, that are pro-Tesla and have been shown to correlate with Tesla’s stock price and active correlated with negative Tesla sentiment on Twitter.
This whole thing is a circus orchestrated by him to either make money on his stock purchase or seed discontent on Twitter through his free speech and bot rhetoric or both.
> Where is your proof that he waived the opportunity to do any due diligence?
The merger announcement [1]. Consummation of the Merger is subject to approval by Twitter's shareholders and the U.S. government. No boilerplate diligence clause.
That "the acquisition proposal was no longer subject to the completion of financing and business due diligence" was also cited by Twitter in its proxy statement [2].
Read section 7.2 - obligations of company state that all of the public information of Twitter shall be true and correct. Elon is only trying to verify that the public filing is correct
(b) (i) each of the representations and warranties of the Company contained in this Agreement (except for the representations and warranties contained in Section 4.2(a) and Section 4.2(b)), without giving effect to any materiality or “Company Material Adverse Effect” qualifications therein, shall be true and correct as of the Closing Date
MAE clauses are not diligence clauses. And in the history of M&A, it has been activated once, in 2017 [1], under circumstances very different from these.
We could go back and forth on this all day. The point is, there is no hard and set clause that says Musk waived all his due diligence rights or right to verify any information. We will see how the case plays out in court:
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Twitter is obligated to provide, information and data for, inter alia, “any reasonable business purpose related to the consummation of the transaction” (Section 6.4). Twitter must also provide reasonable cooperation in connection with Mr. Musk’s efforts to secure the debt financing necessary to consummate the transaction, including by providing information “reasonably requested” by Mr. Musk (Section 6.11). Mr. Musk’s requests for user data not only satisfies both criteria, but also meets even Twitter’s narrowed interpretation of the merger agreement, as this information is necessary to facilitate the closing of the transaction.
> there is no hard and set clause that says Musk waived all his due diligence rights or right to verify any information
The proxy statement sent out with the merger agreement was signed off on by Musks's lawyers. Musk waived his diligence rights. This isn't a fact anyone informed about this is debating. Elon's legal team aren't idiots; they aren't arguing the diligence rights they waived are being denied or that an MAE occurred--both are predictably losing arguments.
Instead, he's arguing that debt-finance facilitation line. The one you quote. That's not a diligence out. Nothing in the data would give him an excuse to kill the deal. But if he can get a lender to say they would have lent had they been given those data, and Twitter won't hand it over, he has an out. Again, not on the basis of the content of the data, but its provisioning per se.
And not to mention, like you do towards the end, one of his biggest "changes" for Twitter that he proposed was "solving the bot problem".
"Hey, I can solve FSD. And I could have solved the Twitter bot problem, but apparently the latter is just too big a hurdle if there's more than 5% of bots."
He's saying he doesn't want to pay the agreed price if Twitter lied about the number of real users. I find it hard to believe you're not understanding this
So utterly tired of this man. We all knew he would do this. He's the person that buys some expensive item he knows he won't keep at a store and returns it, causing headaches for everyone associated with it and him.
Yeah he is the master boss of debt and capitalism and you are on a venture capital forum aka "how to raise ultra risk debt super fast".
So Elon must be doing something right, the same way that YC is doing the right thing.
His behavior is completely fine. Just because you don't want to hear news about him doesn't make his behavior wrong. He's saying that Twitter isn't providing valid information and is blocking him from having access to information he has a right to have access to.
That's an exceptionally naive analysis of the situation. Nobody makes an agreement to buy a multibillion dollar company and waives due diligence, then makes a stink afterwards. He's not some crusading knight in armor protecting the world from twitter's bots.
His behavior (across a wide range of things) is not fine. Which is a real shame because the core of his business activities right now is great, and his behavior constantly distracts from that.
Elon is well known to leap before checking everything on the other side. That's well within the norm of his behavior. For the record, I'd actually prefer if he didn't buy Twitter as I care about him spending that time on SpaceX instead. Getting us to Mars is a much bigger problem than fixing one minor social media platform.
Most of the "behavior" that is reported about him is exaggerated, taken out of context, or outright lies. So no, in general I don't have huge issues with his current behavior. It's a lot better than it was back during the time period when Tesla was having a lot of financial issues and he was an emotional wreck.
Both. I mean, I totally love that he's obsessed with Culture novels and named his money team "Excession". But I think his behavior is antisocial- rich person acting almost entirely from ego.
It's rather fascinating to me that Musk entirely missed the point of the Culture novels. Banks was a socialist, writing about a socialist utopia that literally goes in to intervene and overthrow billionaire oligarchs like Veppers in Surface Detail.
Veppers is even trying to wiggle out of a contract he doesn't want; it's a central plot point!
I didn't particularly like Surface Detail. But, anyway: I think the Culture is post-scarcity, computer-managed, not socialist. Socialist systems deal with scarcity. If people in the culture truly wanted to play with money, there would always have been some station or ship they could go to and play with money.
> He's saying that Twitter isn't providing valid information and is blocking him from having access to information he has a right to have access to.
He should have asked for this prior to agreeing to buy the company. This has veered into legal posturing by his legal team. The letter sent and the on the record with the SEC filing are for future litigation purposes. Many of us expected it would when the market turned and the deal was obviously overvalued. Elon timed the deal incorrectly. Unlikely many of us who would have to live with our poor business decisions, he's using the tools available to someone of his wealth to litigate his way out of this entirely or to a better price.
It's tiring because it was expected. This wasn't 5D chess.
It’s a standard notice of breach, Twitter has a de facto 30 days to respond. I would also point out, this letter follows the original request by 30 days.
I think characterizing Musk’s request for Twitter to substantiate what they have placed in the public record with some actual methodology not fluff as “overinflated” is kinda unreasonable given we all already know their stats are full of shit to begin with.
You do realize that HN is not just one person? The trendy opinion online amongst left leaning millenials is that Elon = BAD. But not everyone feels the same as you.
I've been on this site for nearly 10 years, and read enormous number of comments, enough to synthesize a good working model of the thoughts of the people who comment. Obviously if there are a lot of readers who don't comment I can't really impute their positions, but I think I have a pretty good idea.
I am not pro musk or Anti Musk ( or in this case I am much more on musk's side ), but I do agree with parents that generally speaking majority of HN ( at least those who comment ) is anti Musk, and left leaning, especially in the past few years.
And HN used to be called a platform for Alt-Right in its early days.
It’s absolutely appropriate as he’s a leader in our industry. And on that note I’d no longer apply for a role at Tesla based on his very annoying behavior.
Does your comment on "annoying behavior" relate to him not voting for candidates of your political party any more?
The only annoying behavior I've seen of late are the frothing at the mouth vitriol that's being incessantly flung at him for the last weeks/months before and after the news about buying Twitter.
That's "annoying behavior". What he's been doing has not been that.
Entering into a contract that has major implications for millions of people, and then trying to weasel out of it on baloney pretenses that he of course should have known - that makes him a schmuck.
Also, previously, his falsely accusing a random stranger trying to help others, of being a pedophile - this makes him a schmuck pretty much permanently and where no amount of apologies are enough: https://www.google.com/search?q=musk+accuses+pedophile
And the 10% layoffs were much misreported. The layoffs were only among salaried employees with the release simultaneously saying that they will be increasing hiring for non-salaried production employees. A 10% layoff of only salaried workers isn't that large of a layoff.
Given that the salaried work force is going to be less than half by economic necessity of a manufacturing company, the actual layoff then would be less than 5%.
It's somewhat wild to posit this given how much of his balance sheet is public knowledge. He doesn't have the liquidity, sure. But there's a wide gap between illiquidity and insolvency, and he's not particularly leveraged.
He may not be particularly leveraged, but one could argue that a significant portion of his net worth in the form of Tesla's sky-high valuation is more or less "faith-based". To what extent his Twitter excursion would erode that faith and precipitate a steep drop in Tesla's stock price is still not completely known. So in that sense, it's possible to debate about whether he really "has the money" to do this deal.
> it's possible to debate about whether he really "has the money" to do this deal
Sure, but given the facts on the ground, he has more than enough capital to personally fund the equity. (The debt, LBO style, is held on Twitter's books.) We know there remain commitments from other investors for the equity, so that alone should draw a line under such discussions.
Elon Musk absolutely can fund this deal. He may not want to. And that isn't true in every state of the world. But currently, and in any proximate world state, him not having the money isn't an issue.
One of the ways to stay rich is to use leverage. Using 100% of your own funds is unheard of. Musk obviously is not going to risk $44b of his personal fortune on Twitter.
>See also the recent news about how he pushes for 10% layoffs at Tesla.
These reports are wrong (Reuters is not reliable when it comes to leaks from Tesla).
Tesla intends to lay off about 10% of salaried workers, which make less than 50% of the company's headcount (mostly managers). The company confirmed they're still hiring and will have more employees by EOY versus the day they announced the planned layoff.
Plutocrats, insofar as they exist and insofar as we use their business acumen to measure competence and corruption, have a fairly narrow mandate and lesser legal authority and responsibilities.
One could say the same of Musk haters, and both would be violating the HN guidelines.
Please don't do this here.
> Please don't post insinuations about astroturfing, shilling, bots, brigading, foreign agents and the like. It degrades discussion and is usually mistaken. If you're worried about abuse, email hn@ycombinator.com and we'll look at the data.
To be honest, haters and defenders seem to be pretty evenly matched up at the moment. Maybe even slight edge to the defenders if not by number of accounts then by zeal to make lots of replies.
Hogwash. People made similar arguments about Trump (i.e. that the liberal media was taking his words out of context). I could see both men's juvenile tweets and judge for myself.
Because he's almost single-handedly driven a fix to global warming and he will also vaunt our civilization on to other celestial bodies through the use of cheap space travel.
That's a serious [citation needed] claim; even if everyone switched to electric vehicles tomorrow, that only accounts for 10-20% of global emissions, and we've gotta cut a lot more than that.
you're confusing his scifi future state with the present. He made a successful electric vehicle company (those vehicles still consume electricity, often made from burning gas or goal) and a successful space company (with better, but not "cheap" transport to space). Both are great things, but they don't qualify him as the greatest person in history. You're just hero-worshipping and you picked a pretty bad hero.
Work from home is a temporary thing that's going to be largely ending soon so their long term effect will be minimal. Face to face interaction is important for human communication.
How are Teslas (which I remind you accounted for less than 1% of total vehicles sold globally in FY21) propelling a zero carbon face-to-face interaction?
yes, combination of video and covid caused my company (in bay area) to stop flying large numbers of employees to the mothership (in basel). People used to go for a 2-day mini-conference (1 day to fly in, 2 on the ground, 1 to fly back) without even adjusting to local time zone. Entire business sections of planes reserved. Not anymore. Company is in top tier of profit margins.
I would like to see a source for your first claim, and I think the only source for the second claim is Musk himself (and I don’t trust much of what he says).
It’s strange how there are people who treat it like it’s their job to hate or defend him. You see the same names replying on every thread making the same points, even across multiple posts.
Agree. He's a lightning road of a character so I think people are attracted to his accomplishments and ability to get execution or alternatively despise his changing social positions.
He's not emblematic of US problems but theres a trajectory that lines up with some of the political discord timeline wise and his change in perspectives going from center left to center right.
> The number is hardly new: Twitter has been giving the same estimate for years, even though critics and experts have said they believe the company is lowballing the actual number of such accounts.
If Musk wanted the deal contingent on this very specific data point, he should've said so before he committed to the $1B cancellation fee and made it part of that agreement.
He wants accurate information after he explicitly waived his right to do due diligence when he was trying to force Twitter’s board to accept his price? He didn’t think of it before?
If you don't kick the tires before agreeing to buy, well, that's on the buyer. DYOR
> "Musk tweeted on Tuesday that Twitter Chief Executive Parag Agrawal has refused to show proof for his company's estimate and that the deal cannot move forward until he does. Twitter's proxy statement shows that in the run-up to the deal Musk made no effort to get information about the issue.
"Mr. Musk did not ask to enter into a confidentiality agreement or seek from Twitter any non-public info regarding Twitter," Twitter said in its proxy statement."
His visibility is magnified by his own Twitter presence posting style, similar to a certain other personality who leveraged Twitter well.
There's a reason so many refer to him on a first-name basis that they don't with other tech CEOs, and it's not because of media coverage. It's because of his own cult of personality that makes his fans think he's one of them and overlook the countless shortfalls in his visions for the future.
I call him with a first name basis because he's probably the person I know best outside my very best friends and my own family. I've been following and listening to him for a decade now and I know his personality well.
Twitter is where he plays around, but his thoughtful personality comes through face to face in talks and interviews. That's what shows how Elon got to where he is. No other CEO talks with the clarity like he does (ironically in a stuttering fashion).
It's not because of a "cult". It's because of his insight into things I had never put that much thought into. He's broken a lot of my own assumptions about how things are supposed to work. He's literally changed how I think as an engineer.
Be careful, parasocial relationships like that can lead to unhealthy behaviour. People sometimes go off the deep end and start arguing with everyone on the internet about the target of their desire, and lose all sense of perspective. You see them taking on all comers in threads like these, and it’s a bit disturbing when you notice it’s just the same username over and over.
Not saying it’s what you’re doing, but your comment reminded me of people like that.
I think he's been stressed out from a number of factors recently from SpaceX not having been able to make any progress recently because it's been hung up on permitting, from the lack of any consistent other person in his life (he recently did an interview where he said that he finds it difficult to balance the time required between his love of work and love of other people), and from the recent attacks that have been coming at him from the left (Biden of note completely snubbing Tesla and apparently valuing union membership over fixing global warming). All of this together along with him seeing the encroachment of censorship on social media made him want to jump to fixing things by buying Twitter which I now see him as regretting with him not realizing how big the problems Twitter faces are.
And yes in his interviews of late he's been a quite clear communicator. Here's a couple within the last month or so that are quite good:
Every year, Elon makes over 100 flights using private aircraft, which offsets the emissions savings of over 100k EVs. Most of these flights are for pleasure, not business.
"Fixing" global warming is just a marketing ploy for Musk, since he seems to be doing an incredible job of personally trying to make it worse. He doesn't get to freeride on the labor of others on this.
> I call him with a first name basis because he's probably the person I know best outside my very best friends and my own family. I've been following and listening to him for a decade now and I know his personality well.
You deny that your admiration for Elon Musk is because of a "cult," but this sounds very cult-like. Have you considered that Elon Musk is not the only person who can make you a better engineer?
He's visible by choice. His bonuses in his Tesla contract are tied to the company's stock price. He realized he could boost the stock by being highly visible, and doing what he does. This lead to multi-billion single day payouts when Musk got people on the internet to buy his inflated stock. Now that he's made himself so visible, it isn't going to change unless he decides to make himself less visible. Which I doubt.
His "bonuses" are his only income first off so they don't really classify as that. And no, they're not tied to company's stock price. They're tied to revenue (or EBITDA) AND stock price. Just pushing the stock price up doesn't get him any more stock options.
He's visible because of his neurosis. He doesn't do it to make money. He's never admitted to it, but it's been hinted at in the past that he also has some kind of bipolar condition as well.
I’m generally weary of “clickbait” being used as an excuse for various things on HN, but this takes the cake: Elon is visible because he loves—nay, craves—attention.
Sure, the media reports on him a lot, but it’s because he gives them endless stuff to report on. He’s made himself the face of every company he owns, and gives ostentatious presentations of products that are often totally bananas (like the CyberTruck). He posts 2011-era memes on Twitter then randomly decides to talk about buying companies or taking companies private while tweeting questions about business strategy at their CEOs. He dated a pop star and they gave their child a name that sounds like a galaxy cluster.
For better or for worse, Elon’s intense visibility is his own doing, and the press is just along for the ride.
My understanding was that Steve Ballmer was primarily a punching bag.
I thought he had a VERY short-lived period where he was popular in the media and everyone was raving about him (Developers, Developers, Developers - like 1 or 2 years after XP), and then after that he was a punching bag for like a decade.
I think the issue is that Ballmer's Microsoft wasn't very effective.
While late-Gates Microsoft was the king of whole technology industry, by late Ballmer it was one of many players. While they haven't decayed into "enterprise" obscurity like IBM, they weren't driving the industry then.
They missed several "trends" like mobile phones, and only thanks to Nadella they've caught up in cloud with Azure.
I dont think Ballmer get's enough credit for reflecting on his tenure, looking at what didnt work, and blowing it up for the future on his way out the door.
Why do you hate arrogant people? Or more/less charitably confident.
He's playing a game and he's winning. While not all his tactics sit well with me, he's created immense value for the world. We want this man to keep investing and running capital. The alternatives are just so much worse.
Some people value character such as modesty, generosity, and kindness more than they value money. With great power comes great responsibility. The fact that there are enormously wealthy people such as Warren Buffett and Bill Gates who provided similar economic value to society without always acting like jerks and demanding the spotlight all the time is an existence proof that other avenues of behavior are possible.
I agree that some people value modesty, I hope those people won't stop the next ego manic from trying to change the world.
I'd equally be happy if we could clone Buffett, Gates, and Musk. We get what we get. Unless you want to build a rocket, we should respect these life enhancing men, despite their character flaws.
Indeed, nobody is perfect. But we have the right to judge people who intentionally place themselves in the public spotlight and insist on leader-like behavior from them.
> I hope those people won't stop the next ego manic from trying to change the world.
You are describing a super villain here! I certainly hope we would try to stop them. “Advancement at any price” is how we end up with dictators and fascists.
Maybe I'm naive, it doesn't seem like there's a desire for world domination. No political aspiration, unlike Sheryl Sandberg. Not implying she is evil or anything just highlighting another highly successful person.
At least in American English, the connotation of the word "arrogant" is so universally negative that it would only ever be used to express distaste for someone. Now whether he is arrogant or just (over)confident is another question but I think you acknowledge there is at least a good case for the former.
> We want this man to keep investing and running capital.
Why? If you ask the folks at the SEC, they probably wouldn't agree with you. From a public perspective, he hasn't exactly been great on regulatory compliance and market protection. From a shareholder/company perspective, he is a major liability. No company ever wants a CEO or any employee that picks fights with regulators, has a massively oversized media spotlight, and entangles the business in unrelated politics and personal fixations. That's textbook bad news for a business.
I can't believe this is a real take. I know this account is a bit new and slightly trolly.
I've used Tesla's products, so as a consumer I'm very grateful for it. I am not a direct investor in Tesla (ie., only via index funds).
The take I can't believe is the SEC should decide how capital gets allocated. Elon created a tremendous amount of value. Both for consumers and for investors. Does he sometimes do things that appear/are dumb. 100%. However, net-net he's been such crazy value add to humanity i can't see why we would want to take this man out.
Is the world really a better place where this man just sits on the beach and does nothing? I think not. You may counter and say, why doesn't he follow the rules like everyone else, well sometimes to get something special we need to make special exceptions.
I think i'm just trying to reconcile that your view is genuine given the age of your account. I'm sadden by this being a real take. We want creators. We want folks to build. It's hard to build to follow all the rules. There are soooo many.
You say this as though creativity is the exclusive attribute of a billionaire who got really lucky during the dot-bomb era (and has since had to rely on government assistance for both of his “successes”).
There are thousands of people smarter than Musk in tech but who didn’t have his money and connections. Give his billions to those people and you’ll get a thousand Teslas.
I'm sure there are thousands of people smarter than Musk.
Intelligence is necessary but not sufficient. In fact, being a little too smart is quite detrimental to success.
I almost want to say intelligence is orthogonal to running a company but that wouldn't be true. You have to have some intellect, anything above that is not that important.
The primary purpose of the SEC is to enforce the law against market manipulation.
Their job is to regulate not allocate. They aren't here to pick winners or losers they only control who is allowed and not allowed to take money and from whom.
SEC protects investors cause investors from its perspective need protecting. It is like a father looking out for his kids. Some of us don't think we are kids that need protecting.
Are you tired of this man or are you tried of the unrelenting media coverage of every single thing he does? The media uses his name to drive ad revenue - he uses the media for free coverage. I would agree he has had too much time in the limelight and many people are getting exhausted of his coverage.
I think that caricature is pretty off base. He bought something that was damaged and its value went off a cliff. What kind of person would pay full freight for Twitter as the tech valuations plummet - only a fool would stay locked into that deal.
He self-publishes his SEC defying schemes and polemics on Twitter all the time. He also reacts to these media stories you mention in ghastly ways. Truly an awful person.
This post is probably not on top of HN because “the media” uses him for ad revenue, just saying.
>[second]
That’s not even close to the full picture. Its not like he went into a shop with cash to buy a car. Not saying that the gp is 100% correct either, but gross simplifications don’t help the discourse. Edit - To clarify: if he believed in the purchase as an investment, temporary tech valuations would not matter, what would matter is the quality of the product relative to the changes he wanted to make in the company. Twitter is very much intact, it didn’t materially change since the situation began.
I used to admire him until probably a year ago and always liked him for saying what it is but recently I've had enough of him. I feel like he has no empathy for people and he has no class anymore. Just look at the 10% layoff email he sent to Tesla employees and see if you can find any empathy in this email.
That actually clarifies the whole circus Musk pulled. He announced that anyone not coming back to the office (which obviously does not apply to factory workers) is effectively tendering their resignation. Then Tesla announces just days later that a 10% layoff of salaried workers is going into place. This is typical Musk behavior in that he tries to control narratives by pre-empting them. By sending this email out and then announcing layoffs later, it sets the narrative that it's an employee problem, and not a Tesla or executive problem. From what I saw of some reports of Tesla employees, Tesla doesn't even have enough desks and parking spaces for everyone to come back to. Musk knew what he was doing.
These types of comments are equally as tiresome. We get it, you don't like Elon Musk and despise anyone making an argument to the contrary. Glad you could enshrine it in this comment that adds absolutely no value to the conversation.
People who like Musk find them tiresome. I was just simply pointing out that it continues to be the case that no matter what Musk does, someone defends what he does and massages things to be viewed as less despicable. (For example, the original comment didn't even mention it was 10% of all workers, as directly implied by the comment I replied to.) Everything he does is in pure self-interest and with manipulation in mind. There is zero humility and zero honesty. How much of this manipulation does he and Tesla and the other bits of his endeavors have to do before people accept what he is? I'm also tired of people who should know better continuing to help form this little bubble around him while people who don't know better (young people and kids who look up to him) are adversely affected by this.
> Glad you could enshrine it in this comment that adds absolutely no value to the conversation.
These comments are equally as tiresome. You reply to a comment that apparently adds no value (not a sentiment I necessarily disagree with) with a comment that adds even less?
People searching for perfect allies are going to be constantly disappointed. Musk, for all his faults, has enabled some amazing things...all of which seems completely lost on rabid Musk haters. Life is a spectrum and living on either end is subscribing to a warped view of reality.
> You reply to a comment that apparently adds no value (not a sentiment I necessarily disagree with) with a comment that adds even less?
So this is going to be an argument of which comment(s) add less value? We already started very close to 0 with yours so can continue to ride the asymptote as far as our stamina allows.
You do realize that he has actually significantly changed the landscape for global warming right? He has lifted off electric vehicle market, changed energy storage, increased global interest in space exploration.
You have to balance his incredibly strong capital manner with the fact that he also is changing our human trajectory. He's tiresome, gets into petty arguments with people but he's also changing our trajectory more than almost all other humans on the planet right now - for better or worse.
Whether his heavy lifts stands the test of time and significantly alter our trajectory is truly the question here. This Twitter buy doesn't really matter in the arc of this century unless it is merely a reflection point which Musk fades to irrelevance.
People will jump through hoops to defend him because he's doing work that no one else is capable of doing.
> You do realize that he has actually significantly changed the landscape for global warming right?
Has he? How do large rockets help with climate change? How does going to Mars, a dead planet that is almost a foreshadowing of where Earth is going with climate change and ecosystem destruction, help fight climate change? Electric cars will improve things a bit, but they are not a one-shot solution to climate change. They are cars after all, and for the first couple years of their life, they contribute more emissions than existing cars, so there's a crossover point. And those emission crossover point calculations do not take into consideration battery recycling or disposal. There are many, many other things that we could be doing. But Musk likes to keep the limelight on him and have his toys.
Many solutions to climate change are actually rather boring and easy in terms of their actionable solutions, but we don't do them. One can't hype up hundreds of millions of dollars of investment for planting native plants or composting or improving ocean ecosystems or reducing plastic use and habitat loss. If Musk truly cared about the climate, he would promote these other things. But he doesn't, because they can't be hyped, they wouldn't get him the attention he craves, and they wouldn't serve his ego.
I have seen it first hand. Young college graduates, apparently concerned about climate change, choosing Tesla over working for a fusion company. These are people whose tech and science influences are Musk and Iron Man.
> ... that he also is changing our human trajectory. ... but he's also changing our trajectory more than almost all other humans on the planet right now - for better or worse.
Comments like these are so hyperbolic that they're tough to even respond to. If I can be frank, they are sort of childish. Even out of billionaires, Musk doesn't contribute as much to these things as people like James Simons, who donates hundreds of millions of dollars to education, climate change research, and other scientific research. But Simons is an actually intelligent person doing actually important things with his money and influence. But funding education and scientific research is boring, apparently according to those obsessed with electric cars and rockets.
> he has actually significantly changed the landscape for global warming
Oh yes, by shilling proof-of-work cryptocurrencies he definitely made a contribution. I'm not even sure if his Tesla venture would offset this damage long term.
I think many (including myself) find this Twitter purchase symbolic of his general demeanour — rather than a careful and calculated decision it appears to be an impulse purchase.
The value of Twitter may have decreased since he made his offer, and he may want to back out, but he (impulsively) made an agreement to purchase it, so backing out comes with the responsibility of $1 billion.
Maybe it is indicative of his demeanor or maybe it isn't - that is your own perspective. Maybe it is impulsive - he certainly is impulsive - though to be fair his impulses (if that is the case) have been pretty accurate though maybe his lucky streak has come to the end.
Honestly I think it's comical that people are complaining that he's not paying up for twitter when valuations went off a cliff and twitter hasn't divulged bot data (when CLEARLY that's what he was doing all along (see my comments eons ago saying that he was pointing to this as an exit strategy). Twitter could have put that information forward and kept the $1B but they knew either (1) don't know or (2) they didn't want to for fear of damaging their company.
It's like all of a sudden Twitter is the good guy and Elon is the bad guy when at the end of the day this is two business entities interacting and positioning themselves.
>Honestly I think it's comical that people are complaining that he's not paying up for twitter when valuations went off a cliff and twitter hasn't divulged bot data
We aren't complaining, we're mostly confused how the world's smartest man would make a bid on a product not based on actual valuation, but instead on the inflated current public market price.
He's free to back out of the deal, but some people aren't falling for the victimization. His bid was a mistake, and he should own it.
>twitter hasn't divulged bot data
Once again, this should have been part of a due diligence process that the Musk team deemed unnecessary.
> this should have been part of a due diligence process that the Musk team deemed unnecessary
Separately from intent (where I agree with you), legally, Twitter was required to provide “properties, books and records [and] information concerning the business, properties and personnel” per section 6.4[0], which is cited in today’s letter[1]. (The fact that it is not a due diligence, IIUC, means that this information should not change the decision to make the purchase; but if Twitter was found to violate the merger agreement, Musk could walk out on it anyway.)
It will all hinge in litigation on whether Twitter can argue that Musk’ demands were not “reasonable business purpose related to the consummation of the transactions” or would “cause significant competitive harm to the Company”.
In my mind, it is easy to argue that Musk did violate section 6.4 by making his request public, impacting the stock, which is not a “reasonable best effort to minimize any disruption to the respective business”.
>He bought something that was damaged and its value went off a cliff.
He waived due diligence now is complaining about something that should have been obvious in advance, and in fact was one of the things he said was an issue with the platform that he'd fix.
>What kind of person would pay full freight for Twitter as the tech valuations plummet
The kind of person that signs a deal. Were he and his team not smart enough to offer fair value for the company? What kind of person absolves a billionaire from rules we all have to follow?
> What kind of person absolves a billionaire from rules we all have to follow?
Twitter have two options if Elon refuses to close. They can sue him. Or they can settle. The former will be a multi-year boondoggle for everyone involved. Nobody wants that. But neither does either side want to settle for less than they can get.
Both are thus positioning to make it seem like they'll make the boondoggle the boondoggliest if they're forced to face it. Twitter isn't great at theatrics. Elon is. Thus, he's taking the lead. That said, it remains in both parties' rational interests to appear willing to pursue their aims to an irrational extent in the courts, so the other side settles for less than that. Keep that in mind over the coming weeks.
Point is, yes, when you're a billionaire, signing a contract means something different from you or myself because the cost of enforcing a $44bn deal is minuscule compared to the cost of the deal. (And in this, he's far from unique.)
But the OP's interpretation of events is dead-wrong. This isn't the media picking on poor Elon. The guy dove head-first into something without thinking through consequences, now he and his supporters are claiming to be some kind of victims in this. Twitter did nothing wrong here.
I have nothing but respect for Elon's work at Tesla and SpaceX. But Elon Musk is a known quantity in terms of counterparty behavior. Nobody should be surprised this is happening, least of all Twitter's Board.
I never said poor Elon so please don't use false language to frame your own counter statement. I said the media and Elon use each other and that we're all pretty tired of that.
"Twitter did nothing wrong here" -- what kind of framing is that?
Again there is no victimization of Elon - he's just trying to get out of a deal - you are using some overly hyperbolic language in your comment which is common these days and equally as annoying as Elon's twitter thread.
> unrelenting media coverage of every single thing he does?
Oh stop it! I lived in Los Angeles, that place is too big and populated by too many sharks. You only become famous if you really, really want to and deploy resources in a way that is optimized to reach that goal.
Musk wanted to be famous ever since the Paypal days.
There's a reason why you don't hear media obsessively reporting on 3 time Oscar winners Daniel Day Lewis and Jack Nicholson anymore. They have concluded their respective press tours (Lewis at least temporarily and Nicholson for a good 10 years, ever since he made "The Departed")
You need to seek press to get press, you don't stumble into it.
Agree with you. It's a 100% part of his strategy to get earned media and now maybe he's addicted to it.
I would wager that the risk to his earned media strategy is he is going a bit off the rails in the last 6 months and staff might not be as interested working for him in the future. I don't think it has scared off investors yet as it appears he has the midas touch in the business world.
The terms of the deal waived any kind of due diligence or fluctuation in market price. The price reflected those terms. Musk recognized that there is a price that Twitter has to pay to enforce this contract. He is hoping that between the costs of enforcing the contract and the risk that the contract is enforceable, twitter walks away from the whole thing. Short term this seems like a pretty rational thing to do. In the future, if I were looking to do a deal with Musk, I wouldn't give much of a discount for waving due diligence, and make sure that I am protected from him pulling this kind of stunt.
There's "knowing that there are bots" and then there's "knowing that a significant amount of engagement is bots." I think most people hear Twitter's "less than 5%" and think bullshit.
> There's "knowing that there are bots" and then there's "knowing that a significant amount of engagement is bots." I think most people hear Twitter's "less than 5%" and think bullshit.
Disingenuous again. Most people knows a significant amount of engagement is bots, as you yourself agreed.
Not sure where the "again" is coming from. I'm not the same person.
>Most people knows a significant amount of engagement is bots
No, I don't think most people know that. They know there are bots, and they suspect there's a lot. That's why I said there's a difference between the two.
There's a standard due diligence process that companies go through for mergers and acquisitions etc, through which you get access to material data.
He chose not to do that. He chose to make the acquisition "sight unseen" in a way that also left the him on the hook for $1bn if he pulled out of the deal.
Now he's trying to dodge the $1bn clause, but the contract he signed doesn't give him many ways out.
Not a lawyer, but I wonder if the wording on that applies only if there was no attempt to deceive, which would be criminal. It might apply a different standard, since the user count has been used for years in public filings misrepresenting the true value of the company to their shareholders. Could open up twitter to a class action.
I agree it'll end up being a fight for the lawyers, but Musk cannot credibly claim to be surprised by the bot problem when so much of his and Tesla's twitter presence is propped up by bots (25% of activity due to a recent study - https://today.umd.edu/researcher-studies-teslas-twitter-bot-...)
Tired is the right word. He's a complex person doing interesting things, with a lot of noise mixed in. I don't care for how the cult of celebrity has grown to dominate public discourse, particularly since Trump got elected. Keep your celebrities out of my limited attention, particularly if its irrelevant to the actual events at hand.
Of course, the fact that Musk is materially affecting Twitter, Trump was president, etc. totally call for their manic actions as newsworthy. Ugh. Too much power concentrated in the hands of too few.
Why is Twitter not providing this data? It’s a straightforward request and it’s not like he would disclose it publicly. It feels like Twitter is trying to get out of the sale by using loopholes, this is very strange.
You really think he wouldn't disclose it publicly if he thought it benefited him/for the lulz? He's exactly the kind of person who would just get the papers and publish them immediately.
Please assume good faith... Also if he was going to buy it, why would he do that? If he wasn't going to buy it, well if Twitter provides it, then he's forced to buy it so it doesn't matter if he reveals it or not.
I'm assuming that the OP is posting the question in good faith - Musk on the other hand has a track record of disclosing private information for fun/retaliation, whether or not it's legal for him to do so. "Assume good faith" doesn't mean you have to overlook everything about the situation when discussing the situation.
I'm not asserting that Musk would do anything illegal in this case, just that there's a reason the Twitter board may not want to give him private data. It's not obvious that he wouldn't disclose, either directly or implicitly, anything he's given.
Didn't he literally break the NDA with Twitter with some data they did give him? If I didn't dream that up, that alone proves there is no reason to believe in good faith on his part.
Or Twitter management is operating in standard SV mode, aka ”if we say there are no bots, then there are no bots”
I pity the poor engineers who get the task. ”Hey Claire we need a report by tomorrow 8am that shows we only have under 5% bots. If there are more, just figure out a way to hide them. PS We are not telling you to falsify data, we are just making it very clear that these are the numbers we need, and you are indeed easily fired”
No, they disclose a metric called monetizable MAU which already excludes a vast number of bots, to the best of their ability. Then they estimate that no more than 5% of those monetizable MAU are bots. The lower that drive that number, the greater the number of genuine users that get excluded as bots.
What makes you think Twitter isn't actually providing the data, doesn't want to believe it, and -- in the end -- this is just yet more bluster from Musk?
Evaluating bots seems like the sort of thing you'd want IP addresses for; should he get an export of everyone's IP list, including journalists and other critics he's publicly feuded with?
If I had to speculate: a) Twitter is not obligated to provide this data to Musk (he waived his right to due diligence, after all); b) Musk appears to be trying as hard as he can to wriggle out of the deal, whether by renegotiating to a lower sales price or finding some loophole to extricate himself for the other; and c) there's no real upside to providing the data to Musk.
If this went to court, Musk definitely has the weaker legal position here: he signed a deal that obligates him to buy Twitter at a certain price contingent pretty much only on being able to actually obtain financing, and (despite recent market events), that financing doesn't look hard for him to get.
For Musk to get out of the deal, there would have to be a "material adverse effect" resulting from any past misrepresentation by Twitter. The standard for MAE used by Delaware courts is apparently very high. For example, if Twitter had misstated its earnings for years and half of the cash on its books just didn't exist, that would be MAE. An estimate about the number of bots that was always couched in airtight legal disclaimers seems to fall far short of MAE.
However Twitter's board seems to be a bunch of uninterested pushovers who don't care about the company or the product, so they'll probably just give Musk what he wants to make the PR headache go away.
M&A lawyer here. Based on my read, Musk is trying to establish that the Company has "materially breached" the Merger Agreement by not providing the requested information. If he can show that, there's no requirement to show a material adverse effect, which is a 2nd and distinct way he could avoid closing.
What he's doing is pretty transparent; based on my Monday morning quarterback view of this situation, he simply believes that the price he agreed to for the company is too high given the state of the market.
His letter isn't made in good faith and if this gets litigated, I bet the Delaware courts will relish making an example of him.
The real question is what will he do if the court orders a fine or specific performance! Can't you just see him ignoring it...and daring them to...what, hold him in contempt? He's completely ignored the SEC already.
> Can't you just see him ignoring it...and daring them to...what, hold him in contempt? He's completely ignored the SEC already.
The SEC is a civil agency. Court orders are super different. The former can't put anyone in jail. The latter can. They can also, worst case, transfer his assets into receivership and have a court-administered trustee perform from there.
Realistically? An adverse court ruling would be headline news, so Musk can't bury the news. A fine would be easier to enforce (you can basically go to the people who pay him and demand that they pay you instead).
However, given the dickishness that he has already displayed, I quite like the (completely unrealistic) idea of the penalty being that Twitter acquires ownership of Tesla instead, whereupon they kick Musk out as CEO.
I’m sorry but Tesla engineering is responsible for producing a beta-quality product that is being tested on public roads without public consent, a product which has predictably killed people intentional flaws they refuse to fix. You should not respect Tesla engineers or consider their products as good engineering.
Tesla are subject to the same governing body as every other carmaker? ICE cars kill people all the time. Not sure that claim is supportable (Tesla distinct from other carmakers in this way).
I’m specifically referencing their self driving features being beta tested on public roads by their customers.
When there’s a defect in other cars that cause deaths the cars are recalled. Tesla hides behind a “beta” smokescreen to excuse their defects, which they never really intend to fix (if they did, they wouldn’t have had two consecutive decapitations due to the negligent design of product)
Oh please get your head out of sand. Just look at a teardown of their vehicle and compare it to their competitors. They are in a class of their own and they are constantly iterating and improving without slowing down so when their competitors eventually copy their designs, they are already onto the next thing. Yeah ok you don't typically see the engineering, you just drive the car. But as an engineer myself, it really lights up an area of my mind to see how well they challenge conventional norms about how a specific part or process is typically done in a car and then go and do a much better job of it. Plus the cross pollination between SpaceX and Tesla is introducing so many cool things that we would not typically see in the car industry.
Tesla's competitors aren't testing "beta" self driving technology (marketed as magic "Full Self Driving" or "Autopilot") on public roads, which has predictably resulted in deaths and property damage. They are not iterating and improving, because if they were they would have fixed the flaw which lead to a decapitation 2016. Instead, they doubled down on their negligent sensor stack, and predictably another decapitation happened in 2019.
As a robotics engineer myself, it makes my brain bleed to watch Teslas operate autonomously (because watching them operate reveals how terribly they are engineered), and it makes me furious to think that these things are allowed to operate on public roads around people.
> they challenge conventional norms about how a specific part or process is typically done ... introducing so many cool things that we would not typically see in the car industry.
Tesla can keep whatever changes they would like to make to the car industry, imo. Challenging norms is sometimes okay but other times not. For example, when the norm is "we shouldn't beta-test autonomous machines on the general public because it is dangerous", maybe we should leave that one alone.
Tesla, especially Musk, is responsible for irreparably damaging the culture of safety that was created around autonomous cars circa 2007 at the DARPA Urban Challenge. Back then safety was a top concern -- beta-quality autonomous cars were equipped with flashing lights, had safety kill switches, were operated by trained technicians, and everyone in the vicinity were aware of their existence and more importantly consented to be a part of the test.
Today, thanks to Tesla, buggy driverless cars are operating covertly on public roads without the public's consent, by clueless people without any training. What an improvement, and definitely something we all asked for!
This has lead to people dying, as everyone has predicted. But does that deter Tesla? Of course not. They continue undeterred and even doubled down. If your friend loses their head or gets run over by a Tesla, will you thank Tesla's engineers for their high-quality products? Will you thank Elon Musk for his "move fast and break things" attitude when it comes to 2 ton death machines rolling around in your town?
> Plus the cross pollination between SpaceX and Tesla is introducing so many cool things that we would not typically see in the car industry.
This reminds me a of a story I heard of SpaceX engineers having to be brought in to Tesla to teach them the proper way to use pointers. Probably not the kind of cross-pollination you were thinking of. I guess that's a testament to Tesla's engineering prowess.
Oh for goodness sake you hang your hat on the self driving group while totally ignoring the entire other organization actually designing and producing the cars.
Same dumb attitude I witnessed when I was deep within the skeptic community during 2016-2019(/r/RealTesla and the major players on Twitter). Tesla's engineering has proven themselves time and time again but the skeptic community has devolved into nothing but conspiracy theory nonsense with the explicit goal to bash everything that Tesla has done just because it is a MuskCo. They are not capable of objectively looking at the organization as a whole and all the amazing things going on over there but instead let their bias focus them on nothing but the failures.
There is no reasoning with the skeptic community and as a result, major innovations will be missed and will instead creep up as surprises when they inevitably have longer term impacts on the automotive industry.
You chide me for not considering the totality of Tesla engineering while focusing on the self-driving group, yet it seems you're doing exactly the opposite: hanging your hat on whichever engineers you respect while ignoring the negligent practices of the self driving group. So maybe we're talking past one another a little here, but at the same time I don't think the problems I point out could persist in a corporate culture where engineers were empowered.
> focus them on nothing but the failures.
To be clear, the failures I'm speaking of here are deaths due to Tesla's negligent engineering. Actually I take that back. The real failure here of Tesla's engineering is not the first decapitation but the second one. That's a process problem, and is indicative of rot in the entire corporation (starting at the top; Musk's ego is the whole reason Teslas self-driving group is kneecapped). You want to look at the corporation as a whole? Start with the fact that their product killed someone, and they didn't fix the failure mode which resulted in that death, which then resulted in a second death in the same way. And they still haven't fixed it, so it's only a matter of time until the next decapitation. What kind of sick organization lets this kind of problem persist? I'll tell you: one where it's more important to be right (we don't need no stinking LIDAR!) than safe (LIDAR are safer than what Tesla is using). That's an ego problem right there.
Anyway, I see you didn't address any of my points except to say that there's no reasoning behind my words and my attitude is "dumb". So unless you want to respond to an actual point instead of just asserting without fact that Tesla is so amazing, so innovative, and so proven (I mean, yeah, they are certainly proving themselves, but maybe they are building the wrong reputation...), then I think we're done here.
It's interesting how conservative icons in America nowadays are men who flaunt the law in the most visible ways.
I guess it comes down to this Frank Wilhoit quote:
"Conservatism consists of exactly one proposition, to wit: There must be in-groups whom the law protects but does not bind, alongside out-groups whom the law binds but does not protect."
> Misleading a buyer about user count is material, even if musk is acting in bad faith
Materiality with respect to MAE/MAC clauses is way more demanding.
The first (and to my understanding, only) time Delaware found an MAE was in 2017. That was after a material fall in revenue alongside ignored (and hidden) whistleblower complaints and the company scaling back basically all QA spending right after signing the merger agreement [1]. So 33%+ drop in revenue and 300% drop in operating income + fraud + negligence rivaling sabotage.
There's a lot here, and Musk is counting on the public not understanding what he's doing.
The letter doesn't allege materiality about user counts. It alleges that Twitter's failure to provide certain information is a "material breach" (term of art) of the covenant for Twitter to provide information during the period between signing and closing.
There's nothing about user counts at all in the agreement. Musk is hanging his hat on a tortured, 5-step argument:
1. Twitter represented in the Merger Agreement that their public filings with the SEC were materially accurate and not misleading. Standard enough, and no reason Twitter can't make this rep since if they filed false information with the SEC, the SEC would come down on them.
2. Musk alleges Twitter's disclosure about user counts in their public filings may have been wrong, so they might have filed false information with the SEC. (Why he didn't verify these public claims before signing the agreement is the smoking gun that this is all a pretext.)
3. He's purporting to request information from Twitter that would help him verify those allegedly false claims with the SEC.
4. Twitter is allegedly not providing this requested information.
5. That failure to provide information is a material breach.
Musk could have negotiated for much better protections than he got, but he ended up signing a very seller-friendly agreement because he was so sanguine to do the deal. In my opinion, he's resorting to these contortions because he doesn't have any outs here.
Throwing darts at the SEC filings after signing a deal "hmm, I wonder if their revenue numbers were falsely filed to the SEC. Please show me all financial data now..."
> His letter isn't made in good faith and if this gets litigated, I bet the Delaware courts will relish making an example of him.
Why is a big shoe law firm offering up their name to sign it then? Don't attorneys have a duty to only raise good faith arguments and not mislead others with claims that have no reasonable basis of holding up. Not like the big name lawyers on the other side will actually be mislead, but still.
Sadly, there's no general duty of lawyers to only raise good faith arguments. There are specific duties not to mislead courts, but it's a pretty high bar and not relevant here since there's no court involved (yet).
There is a possibility that Musk's tactic will work here. I just think it's unlikely because the Delaware courts will see this for what it is: a pretext for buyer's remorse.
Because of this (small) possibility of success, there isn't any reason why Mike & Skadden can't ethically represent Musk here.
There's an interesting question here about what extent inflating engagement metrics such as MAUs/DAUs is fraudulent. There are lots of subjective edge-cases - do you count multiple profiles as multiple users? Does _any_ engagement qualify as activity? How aggressively do you discount your metrics based on assumed botting rates?
Twitter has overstated it's DAUs previously by 1.9m per quarter[1]. If this has a direct impact on the price, is this therefore fraud? I think we wouldn't be in this situation if the rules were clearer.
The thing is, this isn’t actually easy to figure out. There isn’t even one right answer for how to do it. And if Twitter revisited their analysis and found they were off by one percent, IMO that correction shows good faith, not attempted fraud.
It seems like the fake accounts issue was most likely known all along, and Musk kept it as an escape rope if the deal ended up not appearing to be as good as hoped. The market downturn affecting TSLA and TWTR, deals he had to make for financing, and Twitter internals not seeming as rosy probably led him to want out. Finding a key point where the other party was arguably being deceptive which would have a real impact on the value of your investment and then keeping that aside in case the deal seems bad and you want out without paying a billion dollars seems a really quite reasonable play that would be natural in this kind of deal. It's not like Twitter is some poor victim of an aggressor, it's just business. These kind of games don't come off particularly positively for anyone and give people with an axe to grind something to gripe about, but it's all very meh.
He'll either get a much lower price for TWTR or all his money back to put back into TSLA or some other venture.
Twitter stock price is down ~5% today after this. I think it’s pretty clear that Musk wants to walk from the Twitter deal because of the crash in Twitter’s stock price along with the issues he’s had finding funding for the deal. Twitter was required to provide information that will help close the deal, but claiming that Musk needs the algorithm that they use to determine if an account is spam frankly sounds like a bad excuse. Especially since countering spam bots was the reason he gave for doing a deal in the first place.
By the way, Hindenburg took out a short position against Twitter early in May, and their position was that the deal no longer made sense and would only go through at a lower price. https://hindenburgresearch.com/twitter/
> claiming that Musk needs the algorithm that they use to determine if an account is spam frankly sounds like a bad excuse. Especially since countering spam bots was the reason he gave for doing a deal in the first place.
Knowing the current practices to combat spam is highly relevant for improving upon it.
He doesn't own the company yet, and is making it pretty clear that he never intends to. As an outsider like you and me, he has nothing to do with improving upon Twitter spam. If he were to purchase the company, then as its owner he would have all the Twitter confidential information he wants. He doesn't get to have it now, especially after waiving due diligence on the no-longer-intended purchase.
I used to like Musk but honestly I’m so sick of him nowadays. His constant need for media attention, his shit posting on Twitter, his backwards attitude to remote work, damn he annoys me.
Which is a real shame because I’d have loved to work for Space X but what a way to put people off.
the dude was always a toxic bullshitter. it's amazing how people were blinded to this. telsa cars are poor quality garbage, and reflect elon's personality to a T. flashy, but under the surface it's all lies and decay.
Creating companies like SpaceX and Tesla, I can see how people would turn a blind eye to his more troublesome traits because he was creating companies that pointed towards the future in the way other billionaires weren't necessarily. Wanting that to be true and good is perfectly understandable, even if it is also incredibly dangerous.
I'm the OP of the comment this thread was responding too, talking about how I dislike Musk, but I'd still say he was the driving force of Tesla in that it was a close-to-bankrupt company that is unrecognisable of the company you see today. Same with the whole idea he's only rich because his dad is - Zip2 and Paypal were huge acquisitions that dwarf his fathers net worth back then, and having wealth is in no way a guarantee you'll > 1000x that amount.
What nonsense. How many business owners in the US immigrated with basically zero and made > $1m? How many startup founders have come from disadvantaged backgrounds and exited/got acquired? How many first-gen college grads got into good schools and ended up firmly in the upper-middle class (US based, that is?). It's far easier to 1000x when you have little than when you have a good amount. Just look at the number of millionaires compared to billionaires.
He did create Tesla. He went to AC Propulsion and tried to form a company with them but they weren't interested and instead directed him to two guys who had incorporation papers and nothing else. He then funded 90% of the Series A round when there were only the two "founders". He was involved with the company from that point forward.
Do you have a source on what they were doing before Series A? I didn't start paying close attention personally until around the time the Model S started getting close to production. I've never heard anything about a "proprietary motor".
>We expect the 2022 Model 3 will have about average reliability when compared to the average new car. This prediction is based on data from 2019, 2020 and 2021 models. Select the used car model year to see reported issues with those similar past models.
“We expect”. Rather than expecting, let’s look at what CR says about Tesla.
Consumer Reports states that Tesla’s Model 3 has average reliability. The Model Y still has body hardware issues with the tailgate and door alignment, paint defects, and multiple other problems. The Model X and Model S have body hardware, climate system, and in-car electronics problems. All three models are well below average.
He's never been a toxic bullshitter. He aims big, and gives dates with lots of caveats/uncertainties attached to them (that the media never reports). In a recent interview he stated a great statement "At SpaceX we specialize in converting the impossible into the late" which is a nice truthism about all of his companies.
Tesla cars are quite reliable but their unreliability is over reported giving the perception of a higher unreliability than is actually the case.
> and gives dates with lots of caveats/uncertainties attached to them (that the media never reports)
When is FSD coming? According to Musk, he's said every year for the last seven years running that it is coming "this year" or "months away", and the only "caveat" he's ever mentioned is "subject to regulatory approval", and that is clearly factually incorrect. FSD is not, and certainly was not "complete but for legal approvals".
Unless you have some other explanation for what "You will be able to drive coast to coast, with zero driver interventions, this year".
At some point repeatedly "aiming big" becomes a caricature, and then eventually seen for the BS/hype it is.
> At some point repeatedly "aiming big" becomes a caricature, and then eventually seen for the BS/hype it is.
I disagree. There are different incentives at play. I'll list the few I see.
When does FSD come? You can't say stuff like "10 years out". That'd be a hard sell in academia and an even harder sell in business. Moreover, Tesla is trying to move as fast as possible. The other issue is that they have to give a deadline estimate. As we all know, the business world cannot operate without any deadline estimates. So Elon gives them. If it sounds vaguely familiar to software engineering that's because it's the same misaligned incentive at play here, but then at a larger scale.
Also, he aimed big, and some of those big aims actually became reality. Isn't it the case with R&D and innovation that you have to fail a lot? It isn't easy.
So now we're in a situation where there are people that demand: whatever Tesla decides to innovate on must be a success and accurately estimated time-wise. No organization in the world has ever been able to do that, so to expect that is a fool's errand, IMO.
FSD is a hard problem. Other companies, public ones, have no issue talking about it as a multi/many year project (at best).
Elon constantly says "it's months away", "it's this year", "no, really, this year". Hell he just recently pushed a date back from June to September because "we might be able to announce something".
Having seen the issues with FSD versions dropping today, no-one can seriously think that some September announcement is going to be a "solution".
I get what you're saying. And it's not about being "aspirational". It's repeatedly, to the point of eye-rolling, over-promising, and underdelivering.
> Which is a real shame because I’d have loved to work for Space X but what a way to put people off.
Space X is good place to work for if you’re willing to put 80h per week for below average pay, while working for wealthiest person in the world. Cool place to possibly jump start your career in the industry, but not a great place to be for any significant amount of time.
Another way to achieve that would be to contribute to Open Source software. Github for example awarded a badge to developers who contributed to libraries which are used by the helicopter on Mars to make such achievements more transparent: https://github.blog/changelog/2021-04-19-new-badge-for-devel...
There are a lot of grad students out there that would love to talk to you and need the help badly.
If you really would like to write space-bound code, I would suggest reaching out to the grad students directly. Nearly all space science programs have dozens of students currently working on instruments or platforms that will be going into space in the next few years.
To get you started, here's the faculty page for ASU: https://sese.asu.edu/people/faculty You can chose any other university any where on the planet too.
Look through some of the labs there. Find a project you may like to work with. Contact the grad students on the PI's homepage directly. You do not need to talk to the professor beforehand. I'll repeat, there is no level of politeness that says you need to talk to the professor beforehand; talking to the grad students directly is perfectly acceptable. See if the grad student needs a hand and what with.
I will warn you, they are scientists that begrudgingly code, they are not coders. Their code is downright cringe in it's simplicity. That's because they are scientists first. Do not try to introduce complex concepts like git to them.
I would really really encourage you to reach out and lend a hand, they need it.
If you are interested in writing open-source code that ends up in space. Don't hesitate to check Libre Space Foundation's repositories https://gitlab.com/librespacefoundation/ there are several open-source software and hardware projects currently in development including satellites and their components. More info on the organization here: https://libre.space
Disclaimer: I'm the vice-chair of the organization, and I might be biased.
Twitter making material representations that less than 5% of accounts as part of this deal is gross negligence on the part of the board. They may have had their hands tied. To say otherwise may have contradicted statements they've made to the market and that could land the board and executives in hot water with the SEC and shareholders.
I'm not a Twitter investor so I have never looked deeply into their financials. Is this consistent with previous representations?
But it should be clear that if Musk insisted on this being part of the deal he would press them on it. Many (including myself) have long suspected a ton of Twitter activity is bot-related.
Twitter may end up owing Musk $1 billion in a breakup fee if they renege on their deal (including making material misrepresentations). This combined with the reputational damage may be a fatal blow to Twitter. And by "fatal" I mean vulnerable to a hostile takeover or forced to take an even worse acquisition deal.
I respect Musk's accomplishments with SpaceX. Everything else seems to be sussy AF. SolarCity famously was a bailout of one of his companies (SolarCity) that owed a lot of money to another of his companies (SpaceX) by yet another of his companies (Tesla). Tesla too seems to be in trouble.
Like many though I have Musk fatigue. He seems to have personally gone off the deep end. I kinda wish they'd lock him up in one of the old nuclear cities and make him build rockets away from social media.
> I'm not a Twitter investor so I have never looked deeply into their financials. Is this consistent with previous representations?
Yes, it very much is. And, actually, given their definitions, it's something I find highly plausible (essentially, they're saying that less than 5% of accounts that look like active daily users are bots).
The letter[1] is very interesting as well. I think Twitter simply refuses to share the numbers because it really does not know + it might also lead to an investigation of misleading shareholders about DAUs/MAUs.
Could it be that buying Twitter was just a pretext for unloading billions of dollars' worth of overvalued Tesla stocks without causing the stock to tank?
I'm confused as to why the amount of bots means much to Musk in this deal. I know he mentioned that he wants to eliminate them which is an admirable goal but as to the methodology to discern which account is a bot account versus a real person isn't exact which is what the current CEO admitted to in a thread. The whole idea of just taking a sample of 100 twitter accounts and testing them may not be the best option to make that determination. If Musk was serious about the bot issue then he should be happy to throw a few million at the problem independently rather than waiting for Twitter Inc to do the same job. Absent his move to purchase Twitter, there's nothing stopping him from building up that analysis. He's just using it as a smokescreen, in my opinion, to get out of the acquisition.
This may have been pointed out elsewhere, but the questions surrounding the % of users that are bots/spam accounts was addressed by Twitter about 3 years ago. In early 2019, Twitter stopped reporting overall user numbers and instead offered the alternative metric "monetizable daily active users." Without saying it outright, the difference between dau and mdau is bots/spam accounts. Many articles discussed this massive change, which happened THREE YEARS AGO. Here is one such article:
https://www.socialmediatoday.com/news/twitter-reports-anothe...
Q1 2019 was the only quarterly report I can find that included both total users and monetizable users. If we take the difference as representing bots etc, then we can see in the linked article that about 60% of overall Twitter users were not monetizable, ie, 60% of Twitter accounts were bot/spam accounts. So, this is all in the public record.
Doubting how much of Twitter's overall accounts are bots - which is what Elon is pursuing - is massively different from Twitter standing by its claim that only 5% of MDAUs are bots. Elon seems to be talking about DAUs and Twitter only reports MDAUs. This distinction seems to be lost on most people following this debate. I think both parties could be offering accurate assessments: Elon could be right that over half of Twitter's users are fake, and Twitter could be right that only 5% of the MDAUs are fake. While both could be right in their assertions, Elon is in the wrong in the big picture. All of this has been disclosed publicly and Twitter never claims that only 5% of users are bots, just 5% of monetizable users. Elon's claims of malfeasance or obfuscation are wrong.
This is an interesting take I hadn't heard before. Thank you. I wonder why this hasn't been getting communicated by Twitter to Elon though (he likely has not have realized that this change occurred).
I too don't know why Twitter or the press doesn't make this metric more apparent. But I will say, if Musk didn't know about this change, then he already is what he's long aspired to be: a space cadet.
Because it’s not necessarily in their best interest. Everything is a negotiation tactic on both sides. Does Twitter want Musk to buy them? Maybe, or maybe not. Less than 2 months ago it was actively trying to prevent it. Now it’s trying to force it to happen?
Four months ago, Musk wanted to destroy Twitter by starting a competitor. Two months ago he wanted to buy it, now he wants to back out of the deal.
It has been communicated to Elon by Twitter. Repeatedly. It's in the SEC filings, it's in their annual reports. Here's a really long twitter thread by the CEO explicitly pointing out that they are measuring spam accounts as % of MDAUs - literally putting that in asterisks for emphasis: https://twitter.com/paraga/status/1526237578843672576
The problem isn't that no one has bridged this divide, it's that Elon Musk is acting in bad faith to derail the deal that he fucked up by signing. There's no point talking about spam accounts because that's literally not the issue. The issue is that Musk signed a deal valuing Twitter at a premium at the peak of the market with no real escape clauses, and since there are no legitimate ways for him to renegotiate he needs to come up with a pretense.
It’s amazing to me that one party here can literally sling shit and still be taken as a serious, rational, adult person by anyone. A poop emoji is a clearer way to say “I’m acting in bad faith” than literally saying “I’m acting in bad faith”.
Yes, but I think it's reasonable to demand evidence that the mDAU numbers really do include only 5% bots. Laziness and wrong incentives could easily combine to let that percentage creep up over the years. It wouldn't be the first company this happened to.
It's hard to have 100% confidence in Twitter's ability to classify bots accurately for mDAU purposes, given their terrible accuracy for anti-spam purposes. It's a slightly different problem (because ads can be counted after the fact while anti-spam has to be immediate) but it raises enough doubt about the mDAU numbers that I'd want to see more data.
It is prudent to check all facts when negotiating an acquisition. The time to do this was before agreeing to the acquisition. I would also argue the way he's doing it is wrong, but I'm not a hardball negotiator so maybe publicly venting is right.
I think it is important that we all distinguish between DAU and MDAU when debating what the likely number is. Frankly, I do not understand why it matters. Musk bought the company based on the idea that it is undervalued: 1) he wants to move away from ads and 2) he wants to grow the user base. If it turns out there are fewer "real" users on the platform than previously thought, isn't that bullish for the prospect of adding more users?
I find Musk's tactics to be abhorrent, but I'm looking beyond tactics at the core argument: I do not think it's clearly bad if it turned out Twitter had fewer than expected users when his case is that he can add more users. So long as they didn't fudge the money numbers - earnings and revenue - I don't see how this metric is considered material enough to break the deal.
What he's saying today is distinct from the MAE implication, he's saying that he has the right to this info now (not that it is part of due diligence). He quotes some parts of the original merger agreement and claims his right to this data falls under that.
Public companies are limited in what data they can provide to potential buyers. In general, they can't provide any more than what's in their public statements. The SEC enforces this rule to ensure that all investors have access to the same info.
Also, when buying public companies, you have to be extremely careful not to let word get out before it's publicly announced. It's easy to imagine a Twitter employee tasked with sending logs to E.M. Acquisition Corp leaking this particular bombshell to the press.
So it's normal to make an acquisition bid based only on their publicly reported numbers. The acquisition contract provides for a due-diligence phase that happens between when the deal is announced and when it's final (ie, now) where the buyer can verify that there aren't material misrepresentations in the public filings. If there are, they can back out.
Everything about this process is normal, except the hyperventilating press.
I don't think it really is. Their estimate of 5% of mDAU being bots came with a lot of caveats that should cover them unless there is evidence of them specifically setting out to come up with a fraudulent estimate.
It would have been reasonable to dig into during due diligence, but Musk waived due diligence.
For a little bit of nuance, those non-m users would consist of:
- bots, as you say
- "legit" bots e.g. customer service
- inactive accounts
- accounts that use some alternate client (tweetdeck or whatever)
- API users
- possibly web accounts using ad block (depending on whether twitter measures literal ad views vs. "users logging in with a client that could show ads"
- ...
> Elon could be right that over half of Twitter's users are fake, and Twitter could be right that only 5% of the MDAUs are fake. While both could be right in their assertions, Elon is in the wrong in the big picture. All of this has been disclosed publicly and Twitter never claims that only 5% of users are bots, just 5% of monetizable users. Elon's claims of malfeasance or obfuscation are wrong.
Thanks for contributing to my comment with further information. I find it odd (in an unconvincing sort of way) that Musk's only complaint has to do with a company-defined metric, as opposed to something like "revenue" or "cash flow" that is standardized. Twitter can define mdau's any way they choose such that, if they wanted, they could draw up the definition in order to end up with a 5% number.
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[ 2.7 ms ] story [ 283 ms ] threadBut here, I think, he is just trying to get out of the deal.
The high percentage of bots was exactly the reason why he wanted to buy Twitter in the first place. Because removing the bots would have been a relatively straight-forward way of increasing Twitter's valuation. IIRC he even tweeted about it.
[See my clarification below in a comment]
As much as Elon annoys me, it hard for me to say he does not know what he is doing. Even the WFH tweet was timed seemingly to lower the cost of severance payments from announced 10% workforce reduction.
(I just don't believe him regarding the bots. He always knew bots are a problem and likely under-reported.)
https://www.carscoops.com/2022/06/elon-musk-backtracks-on-te...
That said, if the message is confusing then either messenger does not know what he is doing or wants the confusion. In his case, I think the latter is more likely.
I think he's first and foremost an entrepreneur, and people overstate his engineering ability. In many cases, he shows total ignorance for the realities of engineering (see e.g: hyperloop). I suspect in those cases he is just surrounded by yes-men who don't want to tell him he's wrong.
In general, I get the impression that his success over the years has been contingent on the people he has surrounded himself with. That, in itself, is a skill, though, granted.
Engineer? What exactly has Musk ever engineered? You could maybe argue "designer" but even that may be generous.
A public persona that he's now diligently working to destroy?
There's also a possibility he'd just like to ensure the deal closes in a certain later time window. The composition of his personal wealth is complex and highly dependent on his equity holdings which have grown volatile recently.
There's also a possibility he'd just like to ensure the deal closes in a certain later time window. The composition of his personal wealth is complex and highly dependent on his equity holdings which have grown volatile recently.
You actually disagree with him, but just the fact that you admire him triggers people.
It's not like you can go digging around in their databases looking for bot accounts until you have official access.
EDIT: Clearly people feel strongly about this so feel free to look at the comments below for some great answers. I'd ask for you to read before commenting though. I keep getting emails rehashing similar things.
“Temporarily on hold” is not a thing. Elon Musk has signed a binding contract requiring him to buy Twitter. Legions of bankers and lawyers and Twitter employees and special-purpose-vehicle promoters are working to fulfill his legal obligation to get the deal closed. “The parties hereto will use their respective reasonable best efforts to consummate and make effective the transactions contemplated by this Agreement,” says the merger agreement. (Section 6.3(a).) He can’t just put that “on hold.” That contract does not allow Musk to walk away if it turns out that “spam/fake accounts” represent more than 5% of Twitter users. We discussed this last month, when Twitter admitted in a securities filing that it had (slightly) overestimated its daily active users for years. The merger agreement contains a provision that allows Musk to walk away if Twitter’s securities filings are wrong — and this 5% number is in its securities filings — but only if the inaccuracy would have a “Material Adverse Effect” on the company. (See Sections 4.6(a) and 7.2(b).) That is an incredibly high standard: Delaware courts have almost never found an MAE. An MAE has to be something that would “substantially threaten the overall earnings potential of the target in a durationally-significant manner,” the courts have said; there is a rule of thumb that an MAE requires a 40% decrease in long-term profitability. If it turned out that 6% or 20% or 50% of Twitter accounts are bots, that will be embarrassing and might even reduce Twitter’s future advertising revenue, but will it be an MAE? No. “Pending details supporting calculation” is not how this works. This disclosure — that “the average of false or spam accounts ... represented fewer than 5% of” Twitter’s monetizable daily active users — has been in Twitter’s securities filings for many years, always with a caveat that “in making this determination, we applied significant judgment, so our estimation of false or spam accounts may not accurately represent the actual number of such accounts, and the actual number of false or spam accounts could be higher than we have estimated.” Musk had the opportunity to read these filings before offering to buy Twitter, and he had the opportunity to do due diligence on these numbers before signing the deal. (He declined.) He can’t now go to Twitter and say “actually now you need to prove that your user numbers are right.” If he wants to walk, he has to prove that they’re wrong, and also that they’re wrong in a way that has a material adverse effect on the business. Which he obviously can’t do.
Now if the board lied, in writing, in a 10K filing, it is a Very Big Deal(tm).
[1] From their 2022 10K: We define mDAU as people, organizations, or other accounts who logged in or were otherwise authenticated and accessed Twitter on any given day through twitter.com, Twitter applications that are able to show ads, or paid Twitter products, including subscriptions. Average mDAU for a period represents the number of mDAU on each day of such period divided by the number of days for such period. Changes in mDAU are a measure of changes in the size of our daily logged in or otherwise authenticated active total accounts. To calculate the year-over-year change in mDAU, we subtract the average mDAU for the three month sended in the previous year from the average mDAU for the same three months ended in the current year and divide the result by the average mDAU for the three months ended in the previous year. Additionally, our calculation of mDAU is not based on any standardized industry methodology and is not necessarily calculated in the same manner or comparable to similarly titled measures presented by other companies. Similarly, our measures of mDAU growth and engagement may differ from estimates published by third parties or from similarly-titled metrics of our competitors due to differences in methodology.
So let's talk about the legal leg to stand on part. From his 13d language (amendment #8, filed June 6th, which is public, but I read it on bloomberg and can't find the link to the gov site this second) it doesn't sound like he has an issue with the definition.
He wants to rerun the numbers and see for himself. He is asking for the underlying data. Twitter pushed back to say that is not in the scope of what was asked for (apparently, based on his letter).
Not taking sides because I was not in the negotiations and know nothing about what each side, indicated, what the legal contract says and so forth. Just saying, the issue is whether they should provide the data for him to run his own calculations.
That's easy to do though - his offer is unconditional. It's like offering a cash amount to buy a house while waiving inspections and all contingencies, but when it comes time to close, insisting your inspector can go into the basement and look at the foundation. You don't have that right, you made an unconditional offer.
The time for 'running his own calculations' was before he made an offer to buy the company. You might think; "Surely you can't expect him to buy a company when he doesn't know how many accounts are bots." Which is a fair point, but that's precisely why people rarely make unconditional outside bids for companies!
He's making a specious argument that the detail is needed to line up his financing, but to continue the homebuying analogy; After offering cash to buy the home without contingency, he's going back to the seller claiming that he's going to take out a personal loan from his friend and that friend wants to know about the state of the foundation but that only your inspector can satisfy him. Really not the sellers problem!
Let's just say I share your intuition about this hypothetical real estate transaction but I am not convinced that it is an appropriate simile. As I read it, his claim is that he didn't waive inspections but relief on the prior inspection report which he is beginning to question.
But whether even that is the right metaphor almost doesnt matter. I think we would have to be steeped in what the standards are in the industry to have a productive discussion.
This is where someone in HN says: I am an M&A lawyer for 30 years and there are four standards. The X v Y standard whereby the effect of the change has to be material but material is not defined, however...
(Matt Levine has, as always, my favorite elucidation)
https://twitter.com/nycsouthpaw/status/1533820324214611969
What Levine is referring to is that the deal is subject to Twitter not making any representations that amount to "material adverse effects" which is a very high standard that Twitter definitely hasn't broached -- but financing statements are often subject to detail that covers "all material respects" which is a much more broad standard that Elon could plausibly litigate.
It's deeply cynical on Elon's part - he knows what he signed and he knows what he got himself into - which is why he's doing this dumb dance to back out now. It might even work, but it's against the spirit and (IMO) the letter of the contract.
He's relying on section 6.4 to make his case that they need to provide him the bot detail - it's short and sweet:
https://www.sec.gov/Archives/edgar/data/1418091/000119312522...
But he's clearly going to use what they provide him to attempt to back out of the deal which is explicitly against the terms of that section.
"material adverse effects which is a very high standard that Twitter definitely has not broached"
I guess my question is how do we know -- from the outside -- that they definitely have not broached it? Elon seems to think the bots issue (roughly, that they miscalculate it) does broach the standard. Everyone I have read thinks seems not to think so and shares your view. But for a naive person on the outside, couldn't it be plausibly argued that this bot thing is a material breach?
I am in the awkward position of not knowing either party. I take each at their word, and the dispute seems pretty "sensible" to me.
The "material adverse effect" standard isn't that the bots would have a materially adverse effect on the deal or transaction, but that they'd have a materially adverse effect on Twitter's profitability for a long duration. Levine laid it out already;
> That is an incredibly high standard: Delaware courts have almost never found an MAE. An MAE has to be something that would “substantially threaten the overall earnings potential of the target in a durationally-significant manner,” the courts have said; there is a rule of thumb that an MAE requires a 40% decrease in long-term profitability. If it turned out that 6% or 20% or 50% of Twitter accounts are bots, that will be embarrassing and might even reduce Twitter’s future advertising revenue, but will it be an MAE? No. “Pending details supporting calculation” is not how this works. This disclosure — that “the average of false or spam accounts ... represented fewer than 5% of” Twitter’s monetizable daily active users — has been in Twitter’s securities filings for many years, always with a caveat that “in making this determination, we applied significant judgment, so our estimation of false or spam accounts may not accurately represent the actual number of such accounts, and the actual number of false or spam accounts could be higher than we have estimated.” Musk had the opportunity to read these filings before offering to buy Twitter, and he had the opportunity to do due diligence on these numbers before signing the deal. (He declined.) He can’t now go to Twitter and say “actually now you need to prove that your user numbers are right.” If he wants to walk, he has to prove that they’re wrong, and also that they’re wrong in a way that has a material adverse effect on the business. Which he obviously can’t do.
Advertisers don't really care about how many bots are on Twitter - at least not in the way you might naively expect them to care. Of course they want their ads to be shown to humans, but over a long timeline, it doesn't actually matter what percentage of their views are to humans or bots - only the performance of those ads. If you spend $1 on 100 ads and it leads to $1.25 in sales, you don't really care if it was shown to 95 people and 5 bots, or 90 people and 10 bots, or 50 people and 50 bots. There was a positive ROI for your campaign, so you're going to do another one. You'd prefer it was shown to 100 people and 0 bots, but everyone in the business knows the bot problem is an extremely difficult one to solve, so you just weigh relative performance and adjust the price you're willing to pay while maintaining that ROI.
It's silly for Musk to claim that the deal can't go through because he needs to know how many bots are present to determine potential advertising revenue because he knows how much advertising revenue they have today, regardless of the specific percentage of bots -- if Twitter's wrong about the way they calculate bots, that actually gives the future "bot-free" platform a higher revenue ceiling because then all of the advertisers campaigns would get substantially more performant.
However, I think your pointing out that whatever the bot count is, as long as the ROI is there the advertiser will continue is a good point. It seems obvious now, but I was assuming that the bot count would be a big deal to the advertiser.
You could turn this point into a twitter thread.
I insist on buying the house. The owner is reluctant to agree. They delay. I continue to insist that I purchase the house immediately. The owner says, hey let's stop and think about this, let's do due diligence and inspections, let's take our time. I say screw you, there is no due diligence allowed, there is no house inspections allowed, you must accept my offer now. NOW. I insist that the house owner has a legal fiduciary responsibility to their family to sell the house, because my offer is above the assessed public value of the house. This house must be sold to me!
They give in to pressure and accept the sale. I sign all the contracts, I waive all the inspections.
"What, the house has termites? What a surprise! I want my money back."
Elon Musk the Termite master ... I LOLd
"I can solve Twitter's bot problem!"
"Oh wait, they have 10%* bots, not 5% bots? Oohh, that's a bridge too far, too hard."
*Arbitrary number chosen
Yes, but you wouldn't put yourself in his position. This is an entirely unforced error on his part.
Lets suppose it is not only 5%.
Maybe 20%.
Would it be fair to buy a company that 20% of its "customers" are fake?
He is forcing twitter to be honest or to at least audit it.
> If our twitter bid succeeds, we will defeat the spam bots or die trying!
> And authenticate all real humans
It's a bit weird to now have him go "I'm backing out on the bid because Twitter has many bots and does not authenticate real humans"
Yes. for a number of reasons.
1) You carry the investigation BEFORE filling to buy (he waived the investigation).
2) Twitter never said 5% are bots, they said 5% of monetasible daily users are bots. Thats a very important distinction, and one Musk is well aware off. Because he has used bots to affect tesla stock price before.
3) No one forced him to put a 40 billion offer on the table, but once its on, it affects the market so you cannot back away willie nilly. Thousands of people made choices based on him filling that offer, he has to deal with the responsability and the consequences.
> He is forcing twitter to be honest or to at least audit it.
No, he is trying to use public sentiment. Like your comment, to not have to pay the 1,000,000,000 fine if he doesn't buy it. And he will have to pay it because he company is now worth much less and he is trying to find a way to weasel away.
> Mr. Musk believes the company is actively resisting and thwarting his information rights (and the company’s corresponding obligations) under the merger agreement. This is a clear material breach of Twitter’s obligations under the merger agreement and Mr. Musk reserves all rights resulting therefrom, including his right not to consummate the transaction and his right to terminate the merger agreement.
My guess is the intention is to delay the transaction for some reason.
- Because Twitters stock price dipped, he's trying to renegotiate.
- This whole thing wasn't a good faith bid to begin with, and Twitter should insist he pays the $1B exit clause.
Ultimately if he exits without paying this has done Twitter (and their stockholders) harm without any benefit, and it almost feels like a stunt to distract from unrelated controversy surrounding Musk.
It would be nice to see this table turn for once; the 1% shouldn't always be able to have their cake and eat it too. Hopefully this bankrupts Musk in a stark turn of sweet, sweet karma deliverance.
This man told 110,000 of his employees to return to the office or find another job, during a still-surging pandemic. This is immoral and reckless from any angle.
If his net worth is reduced, it will reduce the impact of his actions on people and the environment.
We all share this planet. It is not a free-for-all stomping grounds for the highest paid capitalists.
I don’t know where you live or what goes on around you. But people are probably not as evil or greedy as you think.
Though if you believe the headlines, everybody probably should be hanged, and the planet would be better off without all of us.
It’s almost funny that this philosophy sells as well as it does. People rather will the “nothing” than give up willing, said Nietzsche. Like the kids in kindergarten rather destroying the toy than letting the other have it.
I believe it’s not greed we need to look out for. It’s envy. The ability to not waste your time focusing on things you hate, and to rather apply your intelligence and your humanness where it mashes a difference, and does good for others.
Though that’s a lot more difficult than passing judgement. Especially when there is an entire industry supplying you with bite sized pieces that allow you to pass judgment, around the world, across social boundaries, and from the comfort of your bathroom even. Make you feel all special and important... while they FEAST on your SOUL.
Resentment for the wealthy/elite is not a new concept, nor is it being "fed" to anyone with half a brain. [0]
I am a mild to moderate anti-capitalist; some may mischaracterize this as envy, greed, or hate.
It's important to point out flaws (and by association, pass judgement) in people and systems; that is how we make them better!
[0] https://en.wikipedia.org/wiki/Eat_the_rich_(slogan)
But isn't what you describe precisely what Musk did himself? He passed judgement on companies like GM, for instance when they killed the EV1. But he did one step further, and actually started his own company. One that works according to those rules he thinks make more sense.
I mean, even if you disagree with the rules he has come up with... wouldn't you at least have to respect that he did something about it? Isn't that, in a sense, an encouragement for your own values, also? Because it shows you that you, too, can make a difference? And that, even if you don't do it, people with ideas generally do have a chance of rising to the top, where their ideas can have an impact?
If we were talking about some dude who inherited all of his wealth and power from his parents, it would be a different thing.
[1] https://www.businessinsider.com/spacex-paid-250000-to-a-flig...
[2] https://www.newsweek.com/amber-heard-elon-musk-cara-deleving...
This would be a win for Elon. The problem is, it's not clear he has the right to back away and just pay a break-up fee. So the game emerges around how problematically he can position himself to be perceived to be, so Twitter prefers settling versus initiating what will likely be a multi-year court battle.
Twitter can further sue for "specific performance" and a court could, worst case for Musk, order that the deal go through as agreed.
Whacky.
How many Twitter accounts were created in automated fashion, but designed to look authentic, and haven't yet been removed by anti-spam measures? That could conceivably be around 5% of active accounts if Twitter is doing its job.
If you wanted to inflate that number you could include account takeovers, which are a little harder to measure (created by a real person, but taken over by a botnet using hacked/easy-to-guess credentials).
And if you want to inflate the number further, don't just count account numbers — instead look at the % of total activity (likes, retweets, follows) that those accounts represent. You can reasonably expect that number to be higher, given how many dormant accounts Twitter has.
Elon has alleged that his followers include lots of bots. That's not necessarily surprising as "follow Elon's account" is the sort of thing a bot developer might program in to look authentic.
You would measure it in terms of MAU - not total created accounts - right?
Sometimes bot accounts will do organic-looking behaviour for at least a month to evade automatic detection, before doing explicit bot-like things (following particular accounts en-masse).
Any data you do provide will be based on some sort of analysis and/or sampling.
It's the data being requested that's a privacy violation, not the place where that data is viewed.
It is 100% legal and ok for them to look at every piece of information they have about every account and analyze it for bot activity, or allow Elon's team to look at the same data.
Secondly, I'm specifically responding to GP's assertion that letting people access the databases on-prem would make any privacy concerns go away. I'm expressing no opinions on the matter of the first place of if those privacy concerns are warranted.
Thirdly, at this point, I would personally be highly skeptical that an NDA would actually provide any meaningful protection when Musk is the one signing it. His recent actions indicate to me a very high disregard for any contractual obligations he enters on, in the apparent belief that he will face zero material repercussions for anything he violates.
The comment you were referring to says "because that data includes a ton of PII."
But PII isn't a concern here. Unless we're talking about sharing usernames and passwords, there aren't really any protections in Twitter's TOS for the information you willingly provide to them.
PII doesn’t just mean usernames and passwords (which the OP seemed to suggest is the case). It’s anything — or any combination — of data that could be associated with someone and identify them.
I own my data, Twitter is merely handling it. Stop with this presumption that data is Twitter's. Even California has similar provisions on data privacy.
Yes they can? Why can't they? Citation needed. Not sure where you get this idea from.
I don’t think automatic analysis with a 5% false positive rate and materially significant false negative rate is that easy even when the subject doesn’t have an incentive to be subversive — last time I downloaded my Twitter data, turned out they incorrectly thought I understood Indonesian(!), and incorrectly thought my interests included beer, blues, college basketball, cricket, DJs, dance, guitar, hip hop and rap, horror, ice hockey, Japan, luxury, men’s pants, men’s shoes, metal, motorcycles, NFL football, offroad vehicles, olympics, pop, “power and motorcycles” (apparently that’s a single category), rock, skateboarding, South America, sporting goods, talk radio, and wine.
Further, Musk is a hypocrite. There are proven bots, potentially even directly sponsored or controlled by Musk or Tesla, that are pro-Tesla and have been shown to correlate with Tesla’s stock price and active correlated with negative Tesla sentiment on Twitter.
This whole thing is a circus orchestrated by him to either make money on his stock purchase or seed discontent on Twitter through his free speech and bot rhetoric or both.
Is it not a conspiracy theory if only one person, "him," is doing it?
The merger announcement [1]. Consummation of the Merger is subject to approval by Twitter's shareholders and the U.S. government. No boilerplate diligence clause.
That "the acquisition proposal was no longer subject to the completion of financing and business due diligence" was also cited by Twitter in its proxy statement [2].
[1] https://www.sec.gov/Archives/edgar/data/1418091/000119312522...
[2] https://d18rn0p25nwr6d.cloudfront.net/CIK-0001418091/ee07b45...
(b) (i) each of the representations and warranties of the Company contained in this Agreement (except for the representations and warranties contained in Section 4.2(a) and Section 4.2(b)), without giving effect to any materiality or “Company Material Adverse Effect” qualifications therein, shall be true and correct as of the Closing Date
[1] https://www.gibsondunn.com/wp-content/uploads/2019/06/Becker...
Twitter is obligated to provide, information and data for, inter alia, “any reasonable business purpose related to the consummation of the transaction” (Section 6.4). Twitter must also provide reasonable cooperation in connection with Mr. Musk’s efforts to secure the debt financing necessary to consummate the transaction, including by providing information “reasonably requested” by Mr. Musk (Section 6.11). Mr. Musk’s requests for user data not only satisfies both criteria, but also meets even Twitter’s narrowed interpretation of the merger agreement, as this information is necessary to facilitate the closing of the transaction.
The proxy statement sent out with the merger agreement was signed off on by Musks's lawyers. Musk waived his diligence rights. This isn't a fact anyone informed about this is debating. Elon's legal team aren't idiots; they aren't arguing the diligence rights they waived are being denied or that an MAE occurred--both are predictably losing arguments.
Instead, he's arguing that debt-finance facilitation line. The one you quote. That's not a diligence out. Nothing in the data would give him an excuse to kill the deal. But if he can get a lender to say they would have lent had they been given those data, and Twitter won't hand it over, he has an out. Again, not on the basis of the content of the data, but its provisioning per se.
There's a deal to be worked out. Elon is one of Twitter's biggest users. That's a boon and a curse for both sides.
I did some research and found this statement from Twitter’s Schedule 14A proxy statement filed on May, 17, 2022:
> Mr. Musk also disclosed that his acquisition proposal was no longer subject to the completion of financing and business due diligence.
https://d18rn0p25nwr6d.cloudfront.net/CIK-0001418091/ee07b45...
https://investor.twitterinc.com/financial-information/sec-fi...
"Hey, I can solve FSD. And I could have solved the Twitter bot problem, but apparently the latter is just too big a hurdle if there's more than 5% of bots."
It makes zero sense.
It seems like people are working really hard not to understand this situation.
Now: "Woah, there's too many bots on Twitter. I don't want it."
Because all these numbers come from their SEC filings, and specify caveats, etc.
So that's a pretty serious allegation.
His behavior (across a wide range of things) is not fine. Which is a real shame because the core of his business activities right now is great, and his behavior constantly distracts from that.
Most of the "behavior" that is reported about him is exaggerated, taken out of context, or outright lies. So no, in general I don't have huge issues with his current behavior. It's a lot better than it was back during the time period when Tesla was having a lot of financial issues and he was an emotional wreck.
Not fine, or you just disagree with? Two very different things.
Veppers is even trying to wiggle out of a contract he doesn't want; it's a central plot point!
He should have asked for this prior to agreeing to buy the company. This has veered into legal posturing by his legal team. The letter sent and the on the record with the SEC filing are for future litigation purposes. Many of us expected it would when the market turned and the deal was obviously overvalued. Elon timed the deal incorrectly. Unlikely many of us who would have to live with our poor business decisions, he's using the tools available to someone of his wealth to litigate his way out of this entirely or to a better price.
It's tiring because it was expected. This wasn't 5D chess.
I think characterizing Musk’s request for Twitter to substantiate what they have placed in the public record with some actual methodology not fluff as “overinflated” is kinda unreasonable given we all already know their stats are full of shit to begin with.
Oh yes? Reading minds much?
Don't claim to speak for others.
And HN used to be called a platform for Alt-Right in its early days.
The only annoying behavior I've seen of late are the frothing at the mouth vitriol that's being incessantly flung at him for the last weeks/months before and after the news about buying Twitter.
That's "annoying behavior". What he's been doing has not been that.
Twitter's character limit unfortunately requires everyone to simplify.
I wasn't aware he could vote for my political party of choice in England!
Also, previously, his falsely accusing a random stranger trying to help others, of being a pedophile - this makes him a schmuck pretty much permanently and where no amount of apologies are enough: https://www.google.com/search?q=musk+accuses+pedophile
https://www.google.com/search?q=schmuck - a foolish or contemptible person.
And the 10% layoffs were much misreported. The layoffs were only among salaried employees with the release simultaneously saying that they will be increasing hiring for non-salaried production employees. A 10% layoff of only salaried workers isn't that large of a layoff.
How many people does this amount to?
I thought he had to seek additional funds because tesla stock dropped.
It's somewhat wild to posit this given how much of his balance sheet is public knowledge. He doesn't have the liquidity, sure. But there's a wide gap between illiquidity and insolvency, and he's not particularly leveraged.
Sure, but given the facts on the ground, he has more than enough capital to personally fund the equity. (The debt, LBO style, is held on Twitter's books.) We know there remain commitments from other investors for the equity, so that alone should draw a line under such discussions.
Elon Musk absolutely can fund this deal. He may not want to. And that isn't true in every state of the world. But currently, and in any proximate world state, him not having the money isn't an issue.
These reports are wrong (Reuters is not reliable when it comes to leaks from Tesla).
Tesla intends to lay off about 10% of salaried workers, which make less than 50% of the company's headcount (mostly managers). The company confirmed they're still hiring and will have more employees by EOY versus the day they announced the planned layoff.
> The company confirmed they're still hiring
That's not accurate, for salaried workers. Similarly, there is a hiring freeze for salaried workers. They're still hiring hourly workers.
I also think your relative corruption analysis is so far off base, you might as well be on the moon.
Elon Musk is doing his best to ruin something he thought he wanted, and it should be taken in the same bad faith he offered it in.
Please don't do this here.
> Please don't post insinuations about astroturfing, shilling, bots, brigading, foreign agents and the like. It degrades discussion and is usually mistaken. If you're worried about abuse, email hn@ycombinator.com and we'll look at the data.
We fixed global warming?
Stop looking at the showmanship and look at the crude numbers.
Thanks in part to Elon Musk.
You honestly can't try and equate this with Elon almost single handedly bring the EV car market to the planet.
It either shows you are being disingenuous at best or ignorant in the subject matter at worse.
He's not emblematic of US problems but theres a trajectory that lines up with some of the political discord timeline wise and his change in perspectives going from center left to center right.
A great example of how far gone the misinformation campaign already is.
If he now regrets that, it’s his own fault.
> The number is hardly new: Twitter has been giving the same estimate for years, even though critics and experts have said they believe the company is lowballing the actual number of such accounts.
If Musk wanted the deal contingent on this very specific data point, he should've said so before he committed to the $1B cancellation fee and made it part of that agreement.
> "Musk tweeted on Tuesday that Twitter Chief Executive Parag Agrawal has refused to show proof for his company's estimate and that the deal cannot move forward until he does. Twitter's proxy statement shows that in the run-up to the deal Musk made no effort to get information about the issue. "Mr. Musk did not ask to enter into a confidentiality agreement or seek from Twitter any non-public info regarding Twitter," Twitter said in its proxy statement."
https://www.reuters.com/markets/deals/twitter-committed-elon...
There's a reason so many refer to him on a first-name basis that they don't with other tech CEOs, and it's not because of media coverage. It's because of his own cult of personality that makes his fans think he's one of them and overlook the countless shortfalls in his visions for the future.
Twitter is where he plays around, but his thoughtful personality comes through face to face in talks and interviews. That's what shows how Elon got to where he is. No other CEO talks with the clarity like he does (ironically in a stuttering fashion).
It's not because of a "cult". It's because of his insight into things I had never put that much thought into. He's broken a lot of my own assumptions about how things are supposed to work. He's literally changed how I think as an engineer.
Not saying it’s what you’re doing, but your comment reminded me of people like that.
And yes in his interviews of late he's been a quite clear communicator. Here's a couple within the last month or so that are quite good:
https://www.youtube.com/watch?v=YRvf00NooN8
https://www.youtube.com/watch?v=CnxzrX9tNoc
https://www.youtube.com/watch?v=2WX_mgnAFA0
Every year, Elon makes over 100 flights using private aircraft, which offsets the emissions savings of over 100k EVs. Most of these flights are for pleasure, not business.
"Fixing" global warming is just a marketing ploy for Musk, since he seems to be doing an incredible job of personally trying to make it worse. He doesn't get to freeride on the labor of others on this.
You deny that your admiration for Elon Musk is because of a "cult," but this sounds very cult-like. Have you considered that Elon Musk is not the only person who can make you a better engineer?
Seek help. I mean it. This is not healthy. You do not know him, you are infatuated with aspects of his public persona.
He's visible because of his neurosis. He doesn't do it to make money. He's never admitted to it, but it's been hinted at in the past that he also has some kind of bipolar condition as well.
Sure, the media reports on him a lot, but it’s because he gives them endless stuff to report on. He’s made himself the face of every company he owns, and gives ostentatious presentations of products that are often totally bananas (like the CyberTruck). He posts 2011-era memes on Twitter then randomly decides to talk about buying companies or taking companies private while tweeting questions about business strategy at their CEOs. He dated a pop star and they gave their child a name that sounds like a galaxy cluster.
For better or for worse, Elon’s intense visibility is his own doing, and the press is just along for the ride.
I thought he had a VERY short-lived period where he was popular in the media and everyone was raving about him (Developers, Developers, Developers - like 1 or 2 years after XP), and then after that he was a punching bag for like a decade.
Is this wrong?
While late-Gates Microsoft was the king of whole technology industry, by late Ballmer it was one of many players. While they haven't decayed into "enterprise" obscurity like IBM, they weren't driving the industry then.
They missed several "trends" like mobile phones, and only thanks to Nadella they've caught up in cloud with Azure.
Balmer was responsible for the One Microsoft reorganization which Nadella finished executing.
https://www.theverge.com/2013/7/11/4514160/steve-ballmers-re...
https://www.theverge.com/2013/7/11/4486730/microsoft-reorgan...
I dont think Ballmer get's enough credit for reflecting on his tenure, looking at what didnt work, and blowing it up for the future on his way out the door.
[1] https://xkcd.com/323/
That's just negotiations 101.
He's playing a game and he's winning. While not all his tactics sit well with me, he's created immense value for the world. We want this man to keep investing and running capital. The alternatives are just so much worse.
I agree that some people value modesty, I hope those people won't stop the next ego manic from trying to change the world.
I'd equally be happy if we could clone Buffett, Gates, and Musk. We get what we get. Unless you want to build a rocket, we should respect these life enhancing men, despite their character flaws.
> I hope those people won't stop the next ego manic from trying to change the world.
You are describing a super villain here! I certainly hope we would try to stop them. “Advancement at any price” is how we end up with dictators and fascists.
Maybe I'm naive, it doesn't seem like there's a desire for world domination. No political aspiration, unlike Sheryl Sandberg. Not implying she is evil or anything just highlighting another highly successful person.
This sounds like how people discuss celebrity beefs.
At least in American English, the connotation of the word "arrogant" is so universally negative that it would only ever be used to express distaste for someone. Now whether he is arrogant or just (over)confident is another question but I think you acknowledge there is at least a good case for the former.
> We want this man to keep investing and running capital.
Why? If you ask the folks at the SEC, they probably wouldn't agree with you. From a public perspective, he hasn't exactly been great on regulatory compliance and market protection. From a shareholder/company perspective, he is a major liability. No company ever wants a CEO or any employee that picks fights with regulators, has a massively oversized media spotlight, and entangles the business in unrelated politics and personal fixations. That's textbook bad news for a business.
I've used Tesla's products, so as a consumer I'm very grateful for it. I am not a direct investor in Tesla (ie., only via index funds).
The take I can't believe is the SEC should decide how capital gets allocated. Elon created a tremendous amount of value. Both for consumers and for investors. Does he sometimes do things that appear/are dumb. 100%. However, net-net he's been such crazy value add to humanity i can't see why we would want to take this man out.
Is the world really a better place where this man just sits on the beach and does nothing? I think not. You may counter and say, why doesn't he follow the rules like everyone else, well sometimes to get something special we need to make special exceptions.
I think i'm just trying to reconcile that your view is genuine given the age of your account. I'm sadden by this being a real take. We want creators. We want folks to build. It's hard to build to follow all the rules. There are soooo many.
There are thousands of people smarter than Musk in tech but who didn’t have his money and connections. Give his billions to those people and you’ll get a thousand Teslas.
Intelligence is necessary but not sufficient. In fact, being a little too smart is quite detrimental to success.
I almost want to say intelligence is orthogonal to running a company but that wouldn't be true. You have to have some intellect, anything above that is not that important.
That's literally its job, and they charged him with securities fraud didn't they?
Their job is to regulate not allocate. They aren't here to pick winners or losers they only control who is allowed and not allowed to take money and from whom.
SEC protects investors cause investors from its perspective need protecting. It is like a father looking out for his kids. Some of us don't think we are kids that need protecting.
That's the context of what was being replying to - the "who" part.
I think that caricature is pretty off base. He bought something that was damaged and its value went off a cliff. What kind of person would pay full freight for Twitter as the tech valuations plummet - only a fool would stay locked into that deal.
This post is probably not on top of HN because “the media” uses him for ad revenue, just saying.
>[second]
That’s not even close to the full picture. Its not like he went into a shop with cash to buy a car. Not saying that the gp is 100% correct either, but gross simplifications don’t help the discourse. Edit - To clarify: if he believed in the purchase as an investment, temporary tech valuations would not matter, what would matter is the quality of the product relative to the changes he wanted to make in the company. Twitter is very much intact, it didn’t materially change since the situation began.
And the layoff isn't 10% of all workers. It was 10% of salaried workers, a much smaller amount.
This goes exactly to the point of the person you responded to. The media blows up smaller news items into bigger ones for clickbait.
Could you clarify what the set complement of a salaried worker is?
> Glad you could enshrine it in this comment that adds absolutely no value to the conversation.
These comments are equally as tiresome. You reply to a comment that apparently adds no value (not a sentiment I necessarily disagree with) with a comment that adds even less?
> You reply to a comment that apparently adds no value (not a sentiment I necessarily disagree with) with a comment that adds even less?
So this is going to be an argument of which comment(s) add less value? We already started very close to 0 with yours so can continue to ride the asymptote as far as our stamina allows.
You have to balance his incredibly strong capital manner with the fact that he also is changing our human trajectory. He's tiresome, gets into petty arguments with people but he's also changing our trajectory more than almost all other humans on the planet right now - for better or worse.
Whether his heavy lifts stands the test of time and significantly alter our trajectory is truly the question here. This Twitter buy doesn't really matter in the arc of this century unless it is merely a reflection point which Musk fades to irrelevance.
People will jump through hoops to defend him because he's doing work that no one else is capable of doing.
Has he? How do large rockets help with climate change? How does going to Mars, a dead planet that is almost a foreshadowing of where Earth is going with climate change and ecosystem destruction, help fight climate change? Electric cars will improve things a bit, but they are not a one-shot solution to climate change. They are cars after all, and for the first couple years of their life, they contribute more emissions than existing cars, so there's a crossover point. And those emission crossover point calculations do not take into consideration battery recycling or disposal. There are many, many other things that we could be doing. But Musk likes to keep the limelight on him and have his toys.
Many solutions to climate change are actually rather boring and easy in terms of their actionable solutions, but we don't do them. One can't hype up hundreds of millions of dollars of investment for planting native plants or composting or improving ocean ecosystems or reducing plastic use and habitat loss. If Musk truly cared about the climate, he would promote these other things. But he doesn't, because they can't be hyped, they wouldn't get him the attention he craves, and they wouldn't serve his ego.
I have seen it first hand. Young college graduates, apparently concerned about climate change, choosing Tesla over working for a fusion company. These are people whose tech and science influences are Musk and Iron Man.
> ... that he also is changing our human trajectory. ... but he's also changing our trajectory more than almost all other humans on the planet right now - for better or worse.
Comments like these are so hyperbolic that they're tough to even respond to. If I can be frank, they are sort of childish. Even out of billionaires, Musk doesn't contribute as much to these things as people like James Simons, who donates hundreds of millions of dollars to education, climate change research, and other scientific research. But Simons is an actually intelligent person doing actually important things with his money and influence. But funding education and scientific research is boring, apparently according to those obsessed with electric cars and rockets.
Oh yes, by shilling proof-of-work cryptocurrencies he definitely made a contribution. I'm not even sure if his Tesla venture would offset this damage long term.
The value of Twitter may have decreased since he made his offer, and he may want to back out, but he (impulsively) made an agreement to purchase it, so backing out comes with the responsibility of $1 billion.
Honestly I think it's comical that people are complaining that he's not paying up for twitter when valuations went off a cliff and twitter hasn't divulged bot data (when CLEARLY that's what he was doing all along (see my comments eons ago saying that he was pointing to this as an exit strategy). Twitter could have put that information forward and kept the $1B but they knew either (1) don't know or (2) they didn't want to for fear of damaging their company.
It's like all of a sudden Twitter is the good guy and Elon is the bad guy when at the end of the day this is two business entities interacting and positioning themselves.
We aren't complaining, we're mostly confused how the world's smartest man would make a bid on a product not based on actual valuation, but instead on the inflated current public market price.
He's free to back out of the deal, but some people aren't falling for the victimization. His bid was a mistake, and he should own it.
>twitter hasn't divulged bot data
Once again, this should have been part of a due diligence process that the Musk team deemed unnecessary.
And I'm not necessarily saying HN complaining - I'm referring to the general public narrative
Separately from intent (where I agree with you), legally, Twitter was required to provide “properties, books and records [and] information concerning the business, properties and personnel” per section 6.4[0], which is cited in today’s letter[1]. (The fact that it is not a due diligence, IIUC, means that this information should not change the decision to make the purchase; but if Twitter was found to violate the merger agreement, Musk could walk out on it anyway.)
It will all hinge in litigation on whether Twitter can argue that Musk’ demands were not “reasonable business purpose related to the consummation of the transactions” or would “cause significant competitive harm to the Company”.
In my mind, it is easy to argue that Musk did violate section 6.4 by making his request public, impacting the stock, which is not a “reasonable best effort to minimize any disruption to the respective business”.
[0]: https://www.sec.gov/Archives/edgar/data/1418091/000119312522...
[1]: https://www.sec.gov/Archives/edgar/data/0001418091/000110465...
He waived due diligence now is complaining about something that should have been obvious in advance, and in fact was one of the things he said was an issue with the platform that he'd fix.
>What kind of person would pay full freight for Twitter as the tech valuations plummet
The kind of person that signs a deal. Were he and his team not smart enough to offer fair value for the company? What kind of person absolves a billionaire from rules we all have to follow?
Twitter have two options if Elon refuses to close. They can sue him. Or they can settle. The former will be a multi-year boondoggle for everyone involved. Nobody wants that. But neither does either side want to settle for less than they can get.
Both are thus positioning to make it seem like they'll make the boondoggle the boondoggliest if they're forced to face it. Twitter isn't great at theatrics. Elon is. Thus, he's taking the lead. That said, it remains in both parties' rational interests to appear willing to pursue their aims to an irrational extent in the courts, so the other side settles for less than that. Keep that in mind over the coming weeks.
Point is, yes, when you're a billionaire, signing a contract means something different from you or myself because the cost of enforcing a $44bn deal is minuscule compared to the cost of the deal. (And in this, he's far from unique.)
Sure, I agree.
But the OP's interpretation of events is dead-wrong. This isn't the media picking on poor Elon. The guy dove head-first into something without thinking through consequences, now he and his supporters are claiming to be some kind of victims in this. Twitter did nothing wrong here.
I have nothing but respect for Elon's work at Tesla and SpaceX. But Elon Musk is a known quantity in terms of counterparty behavior. Nobody should be surprised this is happening, least of all Twitter's Board.
"Twitter did nothing wrong here" -- what kind of framing is that?
Again there is no victimization of Elon - he's just trying to get out of a deal - you are using some overly hyperbolic language in your comment which is common these days and equally as annoying as Elon's twitter thread.
Oh stop it! I lived in Los Angeles, that place is too big and populated by too many sharks. You only become famous if you really, really want to and deploy resources in a way that is optimized to reach that goal.
Musk wanted to be famous ever since the Paypal days.
There's a reason why you don't hear media obsessively reporting on 3 time Oscar winners Daniel Day Lewis and Jack Nicholson anymore. They have concluded their respective press tours (Lewis at least temporarily and Nicholson for a good 10 years, ever since he made "The Departed")
You need to seek press to get press, you don't stumble into it.
I would wager that the risk to his earned media strategy is he is going a bit off the rails in the last 6 months and staff might not be as interested working for him in the future. I don't think it has scared off investors yet as it appears he has the midas touch in the business world.
Disingenuous.
He knew about the bots. Everyone knows about the bots.
Disingenuous again. Most people knows a significant amount of engagement is bots, as you yourself agreed.
>Most people knows a significant amount of engagement is bots
No, I don't think most people know that. They know there are bots, and they suspect there's a lot. That's why I said there's a difference between the two.
How was he to know they would intentionally misrepresent the number of fake users on the platform? Couldn't he argue twitter tried to defraud?
He chose not to do that. He chose to make the acquisition "sight unseen" in a way that also left the him on the hook for $1bn if he pulled out of the deal.
Now he's trying to dodge the $1bn clause, but the contract he signed doesn't give him many ways out.
Of course, the fact that Musk is materially affecting Twitter, Trump was president, etc. totally call for their manic actions as newsworthy. Ugh. Too much power concentrated in the hands of too few.
In Musk's case? Half of what he does is openly trolling.
"Assume good faith" means "assume good faith until reason to do otherwise", not "assume good faith no matter what".
I'm not asserting that Musk would do anything illegal in this case, just that there's a reason the Twitter board may not want to give him private data. It's not obvious that he wouldn't disclose, either directly or implicitly, anything he's given.
I pity the poor engineers who get the task. ”Hey Claire we need a report by tomorrow 8am that shows we only have under 5% bots. If there are more, just figure out a way to hide them. PS We are not telling you to falsify data, we are just making it very clear that these are the numbers we need, and you are indeed easily fired”
Evaluating bots seems like the sort of thing you'd want IP addresses for; should he get an export of everyone's IP list, including journalists and other critics he's publicly feuded with?
If this went to court, Musk definitely has the weaker legal position here: he signed a deal that obligates him to buy Twitter at a certain price contingent pretty much only on being able to actually obtain financing, and (despite recent market events), that financing doesn't look hard for him to get.
This could end up as endless argument about the correct methodology of determining real vs fake/bot account.
[1] https://www.sec.gov/Archives/edgar/data/0001418091/000110465...
However Twitter's board seems to be a bunch of uninterested pushovers who don't care about the company or the product, so they'll probably just give Musk what he wants to make the PR headache go away.
What he's doing is pretty transparent; based on my Monday morning quarterback view of this situation, he simply believes that the price he agreed to for the company is too high given the state of the market.
His letter isn't made in good faith and if this gets litigated, I bet the Delaware courts will relish making an example of him.
The SEC is a civil agency. Court orders are super different. The former can't put anyone in jail. The latter can. They can also, worst case, transfer his assets into receivership and have a court-administered trustee perform from there.
However, given the dickishness that he has already displayed, I quite like the (completely unrealistic) idea of the penalty being that Twitter acquires ownership of Tesla instead, whereupon they kick Musk out as CEO.
I truly respect Tesla engineering and wish them no ill will but what a hilarious outcome that would be.
When there’s a defect in other cars that cause deaths the cars are recalled. Tesla hides behind a “beta” smokescreen to excuse their defects, which they never really intend to fix (if they did, they wouldn’t have had two consecutive decapitations due to the negligent design of product)
As a robotics engineer myself, it makes my brain bleed to watch Teslas operate autonomously (because watching them operate reveals how terribly they are engineered), and it makes me furious to think that these things are allowed to operate on public roads around people.
> they challenge conventional norms about how a specific part or process is typically done ... introducing so many cool things that we would not typically see in the car industry.
Tesla can keep whatever changes they would like to make to the car industry, imo. Challenging norms is sometimes okay but other times not. For example, when the norm is "we shouldn't beta-test autonomous machines on the general public because it is dangerous", maybe we should leave that one alone.
Tesla, especially Musk, is responsible for irreparably damaging the culture of safety that was created around autonomous cars circa 2007 at the DARPA Urban Challenge. Back then safety was a top concern -- beta-quality autonomous cars were equipped with flashing lights, had safety kill switches, were operated by trained technicians, and everyone in the vicinity were aware of their existence and more importantly consented to be a part of the test.
Today, thanks to Tesla, buggy driverless cars are operating covertly on public roads without the public's consent, by clueless people without any training. What an improvement, and definitely something we all asked for!
This has lead to people dying, as everyone has predicted. But does that deter Tesla? Of course not. They continue undeterred and even doubled down. If your friend loses their head or gets run over by a Tesla, will you thank Tesla's engineers for their high-quality products? Will you thank Elon Musk for his "move fast and break things" attitude when it comes to 2 ton death machines rolling around in your town?
> Plus the cross pollination between SpaceX and Tesla is introducing so many cool things that we would not typically see in the car industry.
This reminds me a of a story I heard of SpaceX engineers having to be brought in to Tesla to teach them the proper way to use pointers. Probably not the kind of cross-pollination you were thinking of. I guess that's a testament to Tesla's engineering prowess.
Same dumb attitude I witnessed when I was deep within the skeptic community during 2016-2019(/r/RealTesla and the major players on Twitter). Tesla's engineering has proven themselves time and time again but the skeptic community has devolved into nothing but conspiracy theory nonsense with the explicit goal to bash everything that Tesla has done just because it is a MuskCo. They are not capable of objectively looking at the organization as a whole and all the amazing things going on over there but instead let their bias focus them on nothing but the failures.
There is no reasoning with the skeptic community and as a result, major innovations will be missed and will instead creep up as surprises when they inevitably have longer term impacts on the automotive industry.
> focus them on nothing but the failures.
To be clear, the failures I'm speaking of here are deaths due to Tesla's negligent engineering. Actually I take that back. The real failure here of Tesla's engineering is not the first decapitation but the second one. That's a process problem, and is indicative of rot in the entire corporation (starting at the top; Musk's ego is the whole reason Teslas self-driving group is kneecapped). You want to look at the corporation as a whole? Start with the fact that their product killed someone, and they didn't fix the failure mode which resulted in that death, which then resulted in a second death in the same way. And they still haven't fixed it, so it's only a matter of time until the next decapitation. What kind of sick organization lets this kind of problem persist? I'll tell you: one where it's more important to be right (we don't need no stinking LIDAR!) than safe (LIDAR are safer than what Tesla is using). That's an ego problem right there.
Anyway, I see you didn't address any of my points except to say that there's no reasoning behind my words and my attitude is "dumb". So unless you want to respond to an actual point instead of just asserting without fact that Tesla is so amazing, so innovative, and so proven (I mean, yeah, they are certainly proving themselves, but maybe they are building the wrong reputation...), then I think we're done here.
I guess it comes down to this Frank Wilhoit quote:
"Conservatism consists of exactly one proposition, to wit: There must be in-groups whom the law protects but does not bind, alongside out-groups whom the law binds but does not protect."
https://crookedtimber.org/2018/03/21/liberals-against-progre...
Materiality with respect to MAE/MAC clauses is way more demanding.
The first (and to my understanding, only) time Delaware found an MAE was in 2017. That was after a material fall in revenue alongside ignored (and hidden) whistleblower complaints and the company scaling back basically all QA spending right after signing the merger agreement [1]. So 33%+ drop in revenue and 300% drop in operating income + fraud + negligence rivaling sabotage.
[1] https://www.gibsondunn.com/wp-content/uploads/2019/06/Becker...
The letter doesn't allege materiality about user counts. It alleges that Twitter's failure to provide certain information is a "material breach" (term of art) of the covenant for Twitter to provide information during the period between signing and closing.
There's nothing about user counts at all in the agreement. Musk is hanging his hat on a tortured, 5-step argument:
1. Twitter represented in the Merger Agreement that their public filings with the SEC were materially accurate and not misleading. Standard enough, and no reason Twitter can't make this rep since if they filed false information with the SEC, the SEC would come down on them.
2. Musk alleges Twitter's disclosure about user counts in their public filings may have been wrong, so they might have filed false information with the SEC. (Why he didn't verify these public claims before signing the agreement is the smoking gun that this is all a pretext.)
3. He's purporting to request information from Twitter that would help him verify those allegedly false claims with the SEC.
4. Twitter is allegedly not providing this requested information.
5. That failure to provide information is a material breach.
Musk could have negotiated for much better protections than he got, but he ended up signing a very seller-friendly agreement because he was so sanguine to do the deal. In my opinion, he's resorting to these contortions because he doesn't have any outs here.
Why is a big shoe law firm offering up their name to sign it then? Don't attorneys have a duty to only raise good faith arguments and not mislead others with claims that have no reasonable basis of holding up. Not like the big name lawyers on the other side will actually be mislead, but still.
There is a possibility that Musk's tactic will work here. I just think it's unlikely because the Delaware courts will see this for what it is: a pretext for buyer's remorse.
Because of this (small) possibility of success, there isn't any reason why Mike & Skadden can't ethically represent Musk here.
Twitter has overstated it's DAUs previously by 1.9m per quarter[1]. If this has a direct impact on the price, is this therefore fraud? I think we wouldn't be in this situation if the rules were clearer.
[1] https://www.theverge.com/2022/4/28/23046170/twitter-miscount...
He'll either get a much lower price for TWTR or all his money back to put back into TSLA or some other venture.
Twitter stock price is down ~5% today after this. I think it’s pretty clear that Musk wants to walk from the Twitter deal because of the crash in Twitter’s stock price along with the issues he’s had finding funding for the deal. Twitter was required to provide information that will help close the deal, but claiming that Musk needs the algorithm that they use to determine if an account is spam frankly sounds like a bad excuse. Especially since countering spam bots was the reason he gave for doing a deal in the first place.
By the way, Hindenburg took out a short position against Twitter early in May, and their position was that the deal no longer made sense and would only go through at a lower price. https://hindenburgresearch.com/twitter/
Knowing the current practices to combat spam is highly relevant for improving upon it.
Which is a real shame because I’d have loved to work for Space X but what a way to put people off.
That's not true.
They were already working on a proprietary motor that would go on to become the basis of the Tesla motor.
They got Series A funding from Musk and other sources (though Musk was the largest funder) at the start of 2004.
He also wasn't really involved in day to day ops, but provided "vision" for the Roadster from 2007 onwards - that's when he became more involved.
https://www.consumerreports.org/cars/tesla/model-3/2022/reli...
Consumer Reports states that Tesla’s Model 3 has average reliability. The Model Y still has body hardware issues with the tailgate and door alignment, paint defects, and multiple other problems. The Model X and Model S have body hardware, climate system, and in-car electronics problems. All three models are well below average.
https://insideevs.com/news/549130/consumerreports-tesla-reli...
Tesla cars are quite reliable but their unreliability is over reported giving the perception of a higher unreliability than is actually the case.
When is FSD coming? According to Musk, he's said every year for the last seven years running that it is coming "this year" or "months away", and the only "caveat" he's ever mentioned is "subject to regulatory approval", and that is clearly factually incorrect. FSD is not, and certainly was not "complete but for legal approvals".
Unless you have some other explanation for what "You will be able to drive coast to coast, with zero driver interventions, this year".
At some point repeatedly "aiming big" becomes a caricature, and then eventually seen for the BS/hype it is.
I disagree. There are different incentives at play. I'll list the few I see.
When does FSD come? You can't say stuff like "10 years out". That'd be a hard sell in academia and an even harder sell in business. Moreover, Tesla is trying to move as fast as possible. The other issue is that they have to give a deadline estimate. As we all know, the business world cannot operate without any deadline estimates. So Elon gives them. If it sounds vaguely familiar to software engineering that's because it's the same misaligned incentive at play here, but then at a larger scale.
Also, he aimed big, and some of those big aims actually became reality. Isn't it the case with R&D and innovation that you have to fail a lot? It isn't easy.
So now we're in a situation where there are people that demand: whatever Tesla decides to innovate on must be a success and accurately estimated time-wise. No organization in the world has ever been able to do that, so to expect that is a fool's errand, IMO.
Elon constantly says "it's months away", "it's this year", "no, really, this year". Hell he just recently pushed a date back from June to September because "we might be able to announce something".
Having seen the issues with FSD versions dropping today, no-one can seriously think that some September announcement is going to be a "solution".
I get what you're saying. And it's not about being "aspirational". It's repeatedly, to the point of eye-rolling, over-promising, and underdelivering.
Space X is good place to work for if you’re willing to put 80h per week for below average pay, while working for wealthiest person in the world. Cool place to possibly jump start your career in the industry, but not a great place to be for any significant amount of time.
If you really would like to write space-bound code, I would suggest reaching out to the grad students directly. Nearly all space science programs have dozens of students currently working on instruments or platforms that will be going into space in the next few years.
To get you started, here's the faculty page for ASU: https://sese.asu.edu/people/faculty You can chose any other university any where on the planet too.
Look through some of the labs there. Find a project you may like to work with. Contact the grad students on the PI's homepage directly. You do not need to talk to the professor beforehand. I'll repeat, there is no level of politeness that says you need to talk to the professor beforehand; talking to the grad students directly is perfectly acceptable. See if the grad student needs a hand and what with.
I will warn you, they are scientists that begrudgingly code, they are not coders. Their code is downright cringe in it's simplicity. That's because they are scientists first. Do not try to introduce complex concepts like git to them.
I would really really encourage you to reach out and lend a hand, they need it.
Disclaimer: I'm the vice-chair of the organization, and I might be biased.
That's pretty much most of the world today, every wants to post pictures on social media for likes, appreciation, comments etc.
>>his shit posting on Twitter,
Well again the same thing, we are just in these times where everyone wants to voice their opinion.
>>his backwards attitude to remote work
Well you can't make cars at your home, nor can you make rocket/components. Kind of makes sense that you need to be there at the plant.
I'm not a Twitter investor so I have never looked deeply into their financials. Is this consistent with previous representations?
But it should be clear that if Musk insisted on this being part of the deal he would press them on it. Many (including myself) have long suspected a ton of Twitter activity is bot-related.
Twitter may end up owing Musk $1 billion in a breakup fee if they renege on their deal (including making material misrepresentations). This combined with the reputational damage may be a fatal blow to Twitter. And by "fatal" I mean vulnerable to a hostile takeover or forced to take an even worse acquisition deal.
I respect Musk's accomplishments with SpaceX. Everything else seems to be sussy AF. SolarCity famously was a bailout of one of his companies (SolarCity) that owed a lot of money to another of his companies (SpaceX) by yet another of his companies (Tesla). Tesla too seems to be in trouble.
Like many though I have Musk fatigue. He seems to have personally gone off the deep end. I kinda wish they'd lock him up in one of the old nuclear cities and make him build rockets away from social media.
Yes, it very much is. And, actually, given their definitions, it's something I find highly plausible (essentially, they're saying that less than 5% of accounts that look like active daily users are bots).
Outside of just bots, I think Twitter's revenue per user is fairly low.
Then again a correction has just started, so it's understandable he wants out
Musk is probably using their aversion to a legal deep dive on the topic to renegotiate the price. Which would be good, if brutal, business.
[1]https://www.sec.gov/Archives/edgar/data/0001418091/000110465...
[1] https://www.forbes.com/sites/sergeiklebnikov/2022/04/29/elon...
I used to worry what would happen to Tesla if they lost Musk. Now I worry what will happen to happen to Tesla if Musk sticks around.
Four months ago, Musk wanted to destroy Twitter by starting a competitor. Two months ago he wanted to buy it, now he wants to back out of the deal.
Seems to me a dance is taking place.
Here is Elon Musk responding to that thread with a poop emoji: https://twitter.com/elonmusk/status/1526246899606601730
The problem isn't that no one has bridged this divide, it's that Elon Musk is acting in bad faith to derail the deal that he fucked up by signing. There's no point talking about spam accounts because that's literally not the issue. The issue is that Musk signed a deal valuing Twitter at a premium at the peak of the market with no real escape clauses, and since there are no legitimate ways for him to renegotiate he needs to come up with a pretense.
Money has amazing perception bending properties.
It's hard to have 100% confidence in Twitter's ability to classify bots accurately for mDAU purposes, given their terrible accuracy for anti-spam purposes. It's a slightly different problem (because ads can be counted after the fact while anti-spam has to be immediate) but it raises enough doubt about the mDAU numbers that I'd want to see more data.
Also, when buying public companies, you have to be extremely careful not to let word get out before it's publicly announced. It's easy to imagine a Twitter employee tasked with sending logs to E.M. Acquisition Corp leaking this particular bombshell to the press.
So it's normal to make an acquisition bid based only on their publicly reported numbers. The acquisition contract provides for a due-diligence phase that happens between when the deal is announced and when it's final (ie, now) where the buyer can verify that there aren't material misrepresentations in the public filings. If there are, they can back out.
Everything about this process is normal, except the hyperventilating press.
It would have been reasonable to dig into during due diligence, but Musk waived due diligence.
- bots, as you say
- "legit" bots e.g. customer service
- inactive accounts
- accounts that use some alternate client (tweetdeck or whatever)
- API users
- possibly web accounts using ad block (depending on whether twitter measures literal ad views vs. "users logging in with a client that could show ads"
- ...
> Elon could be right that over half of Twitter's users are fake, and Twitter could be right that only 5% of the MDAUs are fake. While both could be right in their assertions, Elon is in the wrong in the big picture. All of this has been disclosed publicly and Twitter never claims that only 5% of users are bots, just 5% of monetizable users. Elon's claims of malfeasance or obfuscation are wrong.
That's exactly my conclusion as well