Nowadays when everything is just circus is hard to say when things start and when they end. One thing is clear to me - Elon didn't learn anything from his previous episodes ("funding secure", calling people names, crypto scams, etc).
Elon waived his right to due diligence when he first made the offer to buy Twitter, so backing out of the deal by arguing a lack of due diligence is very funny.
> Despite public speculation on this point, Mr. Musk did not waive his right to review Twitter’s data and information simply because he chose not to seek this data and information before entering into the Merger Agreement. In fact, he negotiated access and information rights within the Merger Agreement precisely so that he could review data and information that is important to Twitter’s business before financing and completing the transaction.
>Section 6.4 Access to Information; Confidentiality. Upon reasonable notice, the Company shall (and shall cause each of its Subsidiaries to) afford to the representatives, officers, directors, employees, agents, attorneys, accountants and financial advisors (“Representatives”) of Parent reasonable access (at Parent’s sole cost and expense), in a manner not disruptive in any material respect to the operations of the business of the Company and its Subsidiaries, during normal business hours and upon reasonable written notice throughout the period commencing on the date of this Agreement until the earlier of the Effective Time and the termination of this Agreement pursuant to Article VIII, to the properties, books and records of the Company and its Subsidiaries and, during such period, shall (and shall cause each of its Subsidiaries to) furnish promptly to such Representatives all information concerning the business, properties and personnel of the Company and its Subsidiaries as may reasonably be requested in writing, in each case, for any reasonable business purpose related to the consummation of the transactions contemplated by this Agreement; provided, however, that nothing herein shall require the Company or any of its Subsidiaries to disclose any information to Parent or Acquisition Sub if such disclosure would, in the reasonable judgment of the Company, (i) cause significant competitive harm to the Company or its Subsidiaries if the transactions contemplated by this Agreement are not consummated, (ii) violate applicable Law or the provisions of any agreement to which the Company or any of its Subsidiaries is a party, or (iii) jeopardize any attorney-client or other legal privilege. No investigation or access permitted pursuant to this Section 6.4 shall affect or be deemed to modify any representation or warranty made by the Company hereunder. Each of Parent and Acquisition Sub agrees that it will not, and will cause its Representatives not to, use any information obtained pursuant to this Section 6.4 (or otherwise pursuant to this Agreement) for any competitive or other purpose unrelated to the consummation of the transactions contemplated by this Agreement. Parent will use its reasonable best efforts to minimize any disruption to the respective business of the Company and its Subsidiaries that may result from requests for access under this Section 6.4 and, notwithstanding anything to the contrary herein, the Company may satisfy its obligations set forth above by electronic means if physical access is not reasonably feasible or would not be permitted under applicable Law as a result of COVID-19 or any COVID-19 Measures. Prior to any disclosure, the Company and Parent shall enter into a customary confidentiality agreement with respect to any information obtained pursuant to this Section 6.4 (or otherwise pursuant to this Agreement).
I suspect Musk violated these terms himself:
> Parent will use its reasonable best efforts to minimize any disruption to the respective business of the Company and its Subsidiaries that may result from requests for access under this Section 6.4 and, notwithstanding anything to the contrary herein
When he made a public m spectacle of the requests for users, etc and publicised data.
after he complained about his access to their API, they additionally provided him with access to their Firehose, which is essentially a stream of all their data
what did musk's filing say about that? any complaints?
Yes they knew, and they've been saying so for ages. They disclose it in their SEC reports. It doesn't matter.
What matters is that Elon has a bad time when he goes on Twitter because he is bombarded by bots and spam.
If there were only 3 bots on Twitter, they would all be bombarding Elon. If there were no bots on Twitter, he would still be bombarded by spam.
I guess you can't really use "I'm tired of my personal experience being terrible on Twitter" to raise money to buy Twitter, or to keep your fanboys engaged, or whatever Elon is thinking.
Personally, I think "I'm tired of my personal experience being terrible on Twitter" would have been a very honest way for him to approach the whole matter.
I also think that it is very natural for people to feel a threat or emotion or anger and then pin that on an external actor or actors, when it's something that they feel inside themselves.
It seems to me that he could've, as a board member, said loudly (and publicly!) that the experience for high-follower, highly active accounts sucks, and they would've had to listen
This argument is a sleight of hand. Nobody has claimed that Musk waived his right to information from Twitter. What he waived was his right to diligence, which is the right to information along with the discretionary right to terminate the deal based on it. What he waived was the ability to do anything with the information absent an (impossible to obtain) MAE discovery.
The obvious legalese thing to do in Musk's buyers-remorse situation is to use the information rights to make demands so unreasonable no acquiree can reasonably honor them, which is exactly what he seems to have done here.
> The obvious legalese thing to do in Musk's buyers-remorse situation is to use the information rights to make demands so unreasonable no acquiree can reasonably honor them, which is exactly what he seems to have done here.
They posted an opinion, not interpretation... The part before the opinion as simply for context.
Perhaps, the actual language of the deal is written in legalese and providing a clear interpretation is valuable? I've certainly been in meetings with lawyers that my company specifically engaged for their ability to provide an interpretation of a contract in clear language. Now, nobody paid the GP to provide that interpretation, but it seems silly to pretend that it's invalid to speculate on the interpretation of a contract when there is an entire profession specialized in the minutia of similar activity.
That misses the point. The question was whether the "clear interpretation" was actually accurate. In other words GP's interpretation might simply be wrong.
> invalid to speculate.
Then say that you are speculating instead if claiming it as the truth.
Oh, have you never dealt with lawyers? There are usually multiple valid interpretations of a contract, depending on what side you are on. I didn't claim to be an oracle of truth, I'm not even tangentially related to this case (as I suspect 99% of the commenter here are).
This is a legal matter, and often it comes down to which side argues their case better. It isn't code where there is only the factual interpretation as seen by the compiler; law takes into account the fuzzy human interpretations that often frustrate programmers. Ultimately, this contract will be enforced by the courts in whichever side makes a better case.
Note that this may mean that even if Elon is in the wrong by canceling, the court may find in his favor simply due to the potential economic fallout. Sucks, but if law was a cut and dried thing we would have eliminated lawyers long ago.
> Well if that's your definition, I'd go so far as to say 'well-written' contracts don't exist.
Do you believe it's not possible to draw up clear contracts with clear meanings? Do you believe that if you just take any contract and pay a lawyer some money, they can argue whatever? In that case, what's the purpose of drawing up a contract at all?
Language is imprecise so I'd argue it is basically impossible to create a contract with zero ambiguity.
Resolving that ambiguity is an important function of law and I'd go so far as to say the primary function of the court system. I do believe that if you pay a lawyer enough money you can probably find one willing to argue what you want although you may not win.
Section 5.11 ("Parent" and "Acquisition Sub" is Musk, "Company" is Twitter):
> Each of Parent and Acquisition Sub has conducted, to its satisfaction, its own independent investigation, review and analysis of the business, results of operations, prospects, condition (financial or otherwise) or assets of the Company and its Subsidiaries. In making its determination to proceed with the transactions contemplated by this Agreement, including the Merger, each of Parent and Acquisition Sub has relied solely on the results of its own independent review and analysis and the covenants, representations and warranties of the Company contained in this Agreement
So, in essence:
1) Musk has been afforded the opportunity to address any concerns he has with Twitter
2) Any concerns of Musks have been satisfactorily resolved by Twitter
3) In determining said satisfaction, Musk is relying on his own judgement and analysis, and is not relying on any analysis by Twitter.
He independently reviewed the covenants, representations and warranties of the Company but there could still be an issue if those representations (by the Company) were falsified or fraudulent.
If you are buying a bank under these same terms and the bank represents that they have $X in deposits, then it turns out that they actually have $X/2 in deposits are you saying the transaction should also be forced to proceed?
Is it meaningfully different here because X is # real users rather than dollars?
First, so far its not an argument that the data is "falsified or fraudulent". Its merely that the data is incorrect. Theres a very big difference, and the 10-Q claims are so measured and non-committal that its very hard to even find anything that could be construed as falsified/fraudulent. The claims themselves even go ahead and say it might not be right, even implying they have a significant likelihood of imprecision due to the methodology employed.
In order for the claims to be falsified/fraudulent, you would have to have actual deliberate lying and coverups to get there. In other words, they found 20% but _intentionally still put 5% even though its a made up metric that they can just move the goal posts on_. It just doesn't make any sense to do that and, in my opinion, is _extremely_ unlikely to be found during discovery.
Second, if the argument being made is that he thinks its higher than 5% _and isnt arguing deliberate fraud_ then the clause I pasted above absolves Twitter because it says Musk has been afforded the opportunity to fact check it and has no reason to debate the accuracy of the claim.
Well based on the termination letter it looks like they are claiming it is deliberate since the number of known-spam accounts (blocked accounts) were not subtracted from the reported total user count.
The notice of termination said that Twitter has violated Section 6.4 and 6.11
> Section 6.4 Access to Information; Confidentiality.
> Upon reasonable notice, the Company shall (and shall cause each of its Subsidiaries to) afford to the representatives, officers, directors, employees, agents, attorneys, accountants and financial advisors (“Representatives”) of Parent reasonable access (at Parent’s sole cost and expense), in a manner not disruptive in any material respect to the operations of the business of the Company and its Subsidiaries, during normal business hours and upon reasonable written notice throughout the period commencing on the date of this Agreement until the earlier of the Effective Time and the termination of this Agreement pursuant to Article VIII, to the properties, books and records of the Company and its Subsidiaries and, during such period, shall (and shall cause each of its Subsidiaries to) furnish promptly to such Representatives all information concerning the business, properties and personnel of the Company and its Subsidiaries as may reasonably be requested in writing, in each case, for any reasonable business purpose related to the consummation of the transactions contemplated by this Agreement;
> Section 6.11 Financing Cooperation.
> (a) The Company shall and shall cause its Subsidiaries to, and shall use its commercially reasonable best efforts to cause each of its Representatives to, at Parent’s sole expense, provide any reasonable cooperation reasonably requested by Parent in writing in connection with (i) the arrangement of the Bank Debt Financing and any other debt financing expressly contemplated by the Bank Debt Commitment Letter...
This argument is saying that Twitter is not holding up it's end of the Merger Agreement by not providing (sufficient/useful) information and not cooperating with debt financing (by not providing information). They give examples like rate limits on developer APIs etc.
So the kernel of the question is: is Twitter providing information to the satisfaction of Merger Agreement?
I don't know the answer to that, but if is "no", would that be grounds for terminating the deal? That seems a bit extreme to me. To me a reasonable ruling would sound something like "Twitter has X days to provide all the information requested and then Musk has to perform the purchase".
Right, but theres a lot of nuance in those sections because they are taken in combination with 5.11 that I posted. In other words, if hes seeking information needed for financing then its fair game. If its to perform "due diligence" or to verify financials for his own edification and/or to build a case for pulling out then thats less kosher.
Its important to keep in mind that until he actually owns Twitter, the current management needs to still operate with an assumption that he may not end up owning Twitter. If they have reason to believe it would harm Twitter financially to give information to him in terms of him using it to undermine them later, or if it would impact business operations today, then they don't need to give it to him under these agreed upon terms.
More broadly I think its important that theres a clear distinction between pre-merger-agreement information requests and post-merger-agreement information requests. An analogy I've made before is that imagine you have 2 offers for your home which you list at $100k. You receive two offers: one is for $100k with no inspection contingency and one is for $100k _with_ an inspection contingency. All else being equal, you will always take the no inspection contingency. Now imagine one is $100k with no inspection, and the other is $500k with an inspection. Some percentage of people will take the $500k offer because they have _paid a sufficient premium for the future uncertainty of consummating the deal_ as well as _the likelihood of renegotiation if anything comes up_. This is extremely relevant to the Musk/Twitter agreement because Pandoras box has already been opened once the agreement goes public. It would be an unfair negotiation to try and _reopen_ negotiation based on things discovered in a _new round_ of "due diligence" analysis. If you wanted that right, you need to pay for it.
> 1. Information related to Twitter’s process for auditing the inclusion of spam and fake accounts in mDAU.
> 2. Information related to Twitter’s process for identifying and suspending spam and fake accounts.
His principle activity is influencing. The main sticking point of the proposed merger is information on how Twitter polices fake accounts. Nothing suspicious about this at all. Reminds me of the time a wolf was interested in buying my farm, and mainly wanted to know when my dog was chained up and how long the chain was exactly.
From what I understand, the sticking point is the total bot count,
and since ElMu can't produce a trustworthy/reliable bot count which differs from Twitter's (meaning, he can't defend his claims),
he appears to be switching to attack, trying to get data on how Twitter produces their counts, even though he can't convincingly articulate any issues with either it or the result.
The sticking point is that he put an offer in when the company was worth twice what it is today, so now he’ll try anything to wriggle out of his commitment
Yes its public, just as this letter is. Notice that they dont refer to any specific section of the agreement in this portion of the statement, unlike the other references they make to the agreement.
They’re not claiming a lack of sue diligence, they’re claiming fraud. Which is different. They’re saying they’re lying about the numbers. Which would be fraud.
> They’re saying they’re lying about the numbers. Which would be fraud.
But they've been sending the SEC these same numbers calculated using the same methodology since 2013, right? If they were materially adverse circumstances, you'd imagine that someone would have caught this in the last 9 years...
The SEC isn't being asked to address anything, it's being informed that Musk is moving to drop the merger which was something SEC had to be informed about the same way that it had to be informed of the merger plans, as I understand it.
Also, Musk routinely knowingly confuses DAUs and normal users. Twitter claims 5% of daily active users are bots, but Musk complains about how many of his followers are bots, when clearly many of those wouldn’t be DAUs.
Not only that, but monetizable DAUs, which is basically an advertising metric consisting primarily of folks whose only actions on a given day might just be "checking my feed, liking a couple posts", and from which fake users are likely already removed without there being a strong reason to shut down their accounts. Whatever ad impressions those users get don't get billed to advertisers, and there's no strong motive to shutting them down if they haven't published anything contravening Twitter's policies...
I can't get to the end of that thread without the Signup nag taking over the whole window and obliterating the content. Tried half a dozen times. Finally got there via an Incognito window (though still don't see Musk's response).
So Twitter tagged my device with a cookie specifically meant to keep me from viewing users' content. How's that support their mission statement, "To give everyone the power to create and share ideas and information instantly, without barriers"?
It's not in my interest, or that of their users. The only benefit is to their bottom line, and I'd argue tactics like that do more long term damage than good. Certainly doesn't make me want to sign up or log in.
They have said, our bes guess is 5%, but the accuracy is limited by these factors, and we make very little promises that it is correct.
Besides, Musk has been complaining about bots for a long time, and has made it clear he doesn't believe the 5% number way before the acquisition. If the 5% number was a sticking point for him, he could have demanded due diligence. He did not demand that, thereby waiving his rights.
If you have proof that twitter is > 50% bots, you should give that evidence to Musk. Or, give it to an attorney that's eager to see Twitter's board go to jail for putting false data in SEC filings.
Right, but Twitter's method of counting the number of daily active users, meaning the number who are seeing ads, which is what the SEC report refers to, was allegedly designed to exclude most bots. Perhaps it's wrong, but they never said 5% of accounts are bots (far more are).
Twitter's SEC filing: "In making this [mDAU] 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."
Neither side said bots, but bots _should_ be a subset of "false or spam" accounts. They basically used "our judgement" and give themselves complete discretion. And 5% is a nice round number plucked from nowhere which sounds awesome! Providing proof of that to a Banker or Backer (or Elon or a future Jury) isn't therefore possible or intended. It's marketing spin in an SEC filing.
> but bots _should_ be a subset of "false or spam" accounts
Do you mean "they should report all bots as part of their false or spam accounts number", or that you believe logically bots are in fact a subset of the number twitter reports, and so twitter's number is bogus if 50% of all accounts are bots?
If it's the latter, you're missing the point of their mDAU marketing metric. It already has all the obvious bots and non active accounts removed. They're saying, what % of advertising revenue turns out to be from bots.
But Twitter said that the number was provided on a best effort basis, so you don’t need to prove the number was wrong. rather, you need to prove that Twitter tried to lie. Unless there’s an internal email saying “I’m making up the number 5% because we know it’s higher but we don’t want to write that,” it doesn’t matter at all. If such an email existed, Twitter wouldn’t be fighting the back-out because revealing that email would mean damages for existing shareholders.
Fraud is not enough. It has to be fraud bad enough to cause a materially adverse effect, which means it would have to seriously impair the value of the business.
Which is why it's not fraud --- Delaware has effectively never finds MAEs. The premise of him walking away is his (utterly specious, but perhaps practically effective) claim that Twitter breached the acquisition contract by refusing to live up to its information covenants.
There aren't claiming fraud, there are claiming breach of contract. Including, among other things, by failing to maintain operations in the regular course of business because of, I kid you not, allowing some senior officials to resign.
(It's true some of the many other things that are claimed to be breaches relate to alleged failure to fulfill obligations to provide information that Musk supposedly wanted to determine if other claims that has been made were fraudulent, but that's different than alleging fraud.)
And “appears to have” is lawyer talk for “we don't know that this occurred and can't prove it and absolutely want to make clear that we will not be accountable for claiming it actually happened.”
It's also lawyer talk for “we’d like the recipient/reader of the document to think it happened, but we don't want accountability, e.g., in the case of a document intended to be made public, for defamation.”
They are claiming breach of contract, and that it looks to them like lying which, if it did happen, might be fraud, but they can't tell, in part because part of the alleged breaches is Twitter not giving them information that might clarify whether the other claims were true or not.
Musk's lawyers are too scared to point out what they are lying about though and where they got that information cause if they did point it out it would destroy Musk's allegations.
It's not about being scared so much as it is about professionalism.
Accusing someone of lying is in effect an accusation of bad faith. An accusation of bad faith is a serious matter, and if you play too freely with it, then you're engaging in bad faith yourself. [1]
The concept of misrepresentation is in a grey area that may or may not have a component of bad faith (see for example the concept of "fraudulent concealment" in courts of equity,[2] the test for which includes a finding of misrepresentation, and note that "fraud" in equity is, confusingly, not at all the same concept as common law fraud), so it's a much more intelligent accusation to make in court unless you have highly probative evidence. [3]
> It says in the first paragraph about making misleading representations.
It says that after, and modified by, the phrase “appears to have”.
Musk’s lawyers are saying that Twitter actually breached the agreement. They are saying it looks like Twitter may have done other bad things, too, but that's not the same as claiming that Twitter actually did the other things.
> Secondly, the ceo was firing aka asking for resignations from key people, no?
The separately call out people being forced out and people resigning. Absent something not in the letter, the former is a much more reasonable, on its face, complaint.
It’s not that subjective anyone using twitter still sees spam accounts promoting a website, business, product, or scam on every post. Twitter just said they remove 1M spam accounts each day. Their mDAU is claimed to be around 200M. This means they are deleting around half a percent of their users every single day. That seems like a lot to be identifying to me, but doesn't really determine if they are deleting enough or not but does show me that being higher than 5% is very possible when you have to delete that many accounts every 10 days.
I’m not saying they are. I’m saying that they are banning enough bots to make up 5 percent every 10 days. With that amount of bots being banned, the possibility of that amount also being missed from being banned is substantial.
Musk himself has addressed this, saying that the waiver is null and void if the data supplied to the SEC by Twitter is fraudulent. I can only assume he believes that is the case.
>>First, although Twitter has consistently represented in securities filings that “fewer than 5%” of its mDAU are false or spam accounts, based on the information provided by Twitter to date, it appears that Twitter is dramatically understating the proportion of spam and false accounts represented in its mDAU count. Preliminary analysis by Mr. Musk’s advisors of the information provided by Twitter to date causes Mr. Musk to strongly believe that the proportion of false and spam accounts included in the reported mDAU count is wildly higher than 5%.
They have to be not only fraudulent but fraudulent to the point of having a "materially adverse effect" on the value of the company. Delaware courts rarely (almost never) find this to be the case.
> the waiver is null and void if the data supplied to the SEC by Twitter is fraudulent.
Look at said SEC filing. It is worded in a way that is impossible to prove fraudulent with the kind of data Musk asked for. He could have proof positive that he is the only human account on Twitter and the Twitter SEC filing would likely not be construed as lying - it very explicitly states that it is a judgment call by the Twitter execs, based on some internal methodology, and that the real number could be higher.
The only way you could prove they lied to the SEC would be if you found emails that say something along the lines of "to the best of our knowledge, 20% of mDAUs are actually bots/spammers, but let's say 5% in our SEC filing".
As Matt Levine explained [0] the “waiving due diligence” doesn’t really mean anything now. What does mean something is that he signed a binding agreement to buy Twitter, giving Twitter the right to compel him to close the deal, and there’s no “too many bots” exception, nor a “you were wrong (or even lied) about something you said” exception. He has to prove that it’s a “material adverse effect” which I understand is nearly impossible (he’d have to convince a Delaware judge that the company is worth at least 40% less than stated because of this, and in practice it seems these suits almost never succeed).
I absolutely love that fact that this tweet happy individual might actually get slapped for just tossing out tweets. Not sure if $1B would make him squirm or not, but even for billionaires, $1B is an expensive twitter rant.
Where are you guys getting this number from? Similar cases have settled for almost the full original amount. Like 95%+. Not half or less than half. Are you just making stuff up?
They’re saying that if everyone just did what they agreed to do:
- Musk would give Twitter shareholders $44B in cash,
- Twitter shareholders would give Musk ownership of the company.
Note that today, Twitter is worth $28B.
So the agreed deal essentially gives the shareholders $16B in profit.
So a judge might tell Musk he can’t back out and has to buy Twitter for $44B like he said he would.
Or it might let him just give the shareholders $16B and not get the company.
Typically, if you want to distribute money to each and every shareholder you pay them dividend. Must would only need to wire money to Twitter corporate account first.
idk. the fact that the price had already sunk nearly 40% from his price over this period could clearly indicate that his assumption isn't without merit.
I'd say the tech sector getting routed played a bigger part. It's not like Twitter dropping 40% (for any reason) is exceptional amonst all the other stocks that dropped 20-60% over the last year.
I guess if public investors 100% believed Musk would pay, the stock should sit at $44 billion. I guess if Musk is forced to close or to pay equivalent damages, the value will jump back to that in the end.
If the share price is lower than $54.20, it’s because the market doesn’t believe the sale will be completed. The difference between $54.20 and the current share price represents the probability of the transaction falling through.
Twitter has done nothing to impede the transaction, so any uncertainty (and thus decline in TWTR share price below $54.20) is due to the actions of the buyer, who is… Elon Musk.
Therefore, Elon is responsible for any decline in the share price since the purchase agreement was signed.
Matt Levine has a take down of the supposed bot problem. Basically Elon not only waved due diligence, he signed a binding agreement to buy Twitter, and the bot talk is irrelevant. Even if there’s a problem, Musk should have addressed it before signing an agreement to buy the company.
Can twitter agree to release him from the agreement? For a fee? I know he has a $1B penalty but I didn't think that covered this current situation. Perhaps Twitter would be willing to forget the whole thing for $1.5B
And note Musk did a great deal of damage to the company. On hearing that he wanted to change the character of the company; that he was going to lay off a huge number of people; that he was going to make existing employees work much harder... many of the best and brightest left.
The letter doesn't cite the bot problem directly, but instead Twitter allegedly failing to live up to it's obligation to give Musk info, which he wanted regarding the bot problem. (And a bunch of other alleged breaches.)
Reading Matt I realized there's another layer, which is Musk has complained about the bot problem for a while - heck, one could argue that he bought Twitter not only fully knowing (according to him) it has a bot problem, but he intended to _fix_ the problem.
The agreement have a massive out; yes it doesn't matter what Elon thinks about the bots but if his financier think bots are an issue he gets an out since Twitter for some reason let a financing clause in.
You mean Musk agreed to buy Twitter contingent on financing and now is trying to torpedo his own financing after he himself agreed to the sale? There's a lot of talk of fraud in the comments here, but to me _that_ sounds like fraud on Musk's part.
In any case, I guess we'll have to see if Musk's financing really gets pulled and if that really means Musk is off the hook.
The due-diligence-waive thing isn't really relevant according to Matt Levine, who has been pretty consistent about this for months (see the thread @ https://twitter.com/matt_levine/status/1545151445057536001). A couple of choice tweets here:
"""
the reason that elon musk can't get out of the deal over the bots thing is not that he "waived due diligence." it's that he SIGNED A BINDING AGREEMENT TO BUY TWITTER, and that agreement does not have any outs for "i think there are too many bots.
"""
... and ...
"""
yes i know that this is a small petty thing. but part of my point is that even if he had demanded extensive due diligence, and done it, and then signed the agreement, we'd be in the same place. the waiver or not of due diligence doesn't matter; what matters is we're past that.
"""
>i know i am screaming into a well here but a very bad thing is people going around saying that elon musk "waived due diligence" and so can't bring up the bots thing.
…
>the reason that elon musk can't get out of the deal over the bots thing is not that he "waived due diligence." it's that he SIGNED A BINDING AGREEMENT TO BUY TWITTER, and that agreement does not have any outs for "i think there are too many bots."
I don't know how the legal system works,
but his argument sounds valid to me.
“My offer was based on Twitter's SEC filings being accurate,”
Willfully filing fraudulent SEC filing is a crime - and if Twitter has been engaging in criminal behavior to artificially increase their value - I would think Musk has a good case.
> Willfully filing fraudulent SEC filing is a crime - and if Twitter has been engaging in criminal behavior to artificially increase their value - I would think Musk has a good case.
Ignoring whether this is a legitimate reason to back out of the agreement, Musk hasn't shown that Twitter has been filing fraudulent SEC filings so what does it matter anyway?
> It matters because that will probably be one of the deciding factors should this eventually be assessed in court.
Musk has _not_ provided any evidence of fraud. I'll wait until he actually does before speculating as to how decisive it will be in any future court proceedings.
"In the merger agreement, Twitter promised to do certain things between signing and closing, and it has to do those things, whether or not there would be a material adverse effect from not doing them. So if Musk can prove that Twitter hasn’t complied with its obligations, he can get out of the deal."
So far Musk has provided no evidence that the SEC filings on bots are false and he's basically just making repeated unnecessary requests trying to force Twitter into being "uncooperative". I find the notion that the deal should be terminated based upon that pretty ridiculous. The article you linked seems to agree with me.
Regardless, Musk is making a lot of claims. Let's see if he can provide any reasonable evidence of those claims and make any reasonable arguments that will be accepted in court. There's really no point in speculating anymore. Now we just need to wait to see if a judge is actually buying his arguments.
I'm ready for the fireworks. Odds are he will be forced to go through with it, but he will negotiate a lower price.
Edit: This is over the mDAU thing still? It's been explained to him very slowly that all the bots that post tweets all day are often not seeing ads, right? That the "monetizable" is a key part of that phrase?
I do not think that he can pay the termination fee. I.e. the termination fee itself has rules. Otherwise, he would have payed it (the fee is equal to the daily move of his TESLA shares).
Pretty much. I think it's more likely he's trying to set things up to make the claim that Twitter wasn't co-operative and forthcoming with the information and then try to reduce the break fee in court.
I don't think that's even an option -- that $1B breakup fee was just if the deal was not allowed to go through due to reasons outside of his control (like if it was blocked due to regulatory reasons). Otherwise, I think he's legally obligated to go through with it -- and Twitter's board has fiduciary responsibility to hold him to it.
He has tons of wiggle room. Mostly in this will takes years to resolve, Twitter will be forced to disclose nearly every internal document that will 100% have some email or chat of employees stating, if only as hyperbole, that the bot rate they report to the public is bullshit.
That will get him nowhere in the trial, because incorrect information is only a valid reason to break off the deal if it uncovers a material adverse effect, and it is virtually impossible to get Delaware courts to find an MAE. Matt Levine's shorthand for Delaware MAE is "40% decrease in profitability". Not stock price; a 40% decrease in the fundamentals. It's not happening.
His team apparently had a tough time verifying the data due to API rate limits.
> While Twitter has provided some information, that information has come with strings attached, use limitations or other artificial formatting features, which has rendered some of the information minimally useful to Mr. Musk and his advisors. For example, when Twitter finally provided access to the eight developer “APIs” first explicitly requested by Mr. Musk in the May 25 Letter, those APIs contained a rate limit lower than what Twitter provides to its largest enterprise customers. Twitter only offered to provide Mr. Musk with the same level of access as some of its customers after we explained that throttling the rate limit prevented Mr. Musk and his advisors from performing the analysis that he wished to conduct in any reasonable period of time.
> Additionally, those APIs contained an artificial “cap” on the number of queries that Mr. Musk and his team can run regardless of the rate limit—an issue that initially prevented Mr. Musk and his advisors from completing an analysis of the data in any reasonable period of time. Mr. Musk raised this issue as soon as he became aware of it, in the first paragraph of the June 29 Letter: “we have just been informed by our data experts that Twitter has placed an artificial cap on the number of searches our experts can perform with this data, which is now preventing Mr. Musk and his team from doing their analysis.” That cap was not removed until July 6, after Mr. Musk demanded its removal for a second time.
A lot of these rate limits would have been designed off the rubble of the Cambridge Analytica scandals, and would've been designed to prevent a lot of analysis.
I still find it dubious that they couldn't long poll sufficient samples. I'd love to see the raw feedback of Musk's "Data Experts" versus whatever awful telephone game it became through several layers of Executives and Lawyers. I wonder if Musk just has a nepotistic data team next to him.
he had access to the Firehose, which streams all the data, so his complaints about the other API ring false (which they removed the limits on anyways, according to elon -- but again, the API was a subset of the Firehose access he already had)
it seems more likely that he was upset that he had access to all of Twitter's data via the Firehose, but being impulsive and incompetent in the field of bot detection (having had zero experience), he has absolutely no way to produce a trustworthy report on bots which contradicts Twitter's report
so, he's just complaining about limits he used to have on an API he doesn't need to avoid producing a report he can't produce that requires expertise he doesn't have
> when Twitter finally provided access to the eight developer “APIs” first explicitly requested by Mr. Musk in the May 25 Letter, those APIs contained a rate limit lower than what Twitter provides to its largest enterprise customers. Twitter only offered to provide Mr. Musk with the same level of access as some of its customers after we explained that throttling the rate limit prevented Mr. Musk and his advisors from performing the analysis that he wished to conduct
So... they asked for an API, were provided with it, wanted an API with higher caps, and were provided with it. Their problem is that Twitter didn't properly anticipate the need?
If this goes to the courts then the only two options are he gets to back out entirely or he pays the originally agreed price. There's a chance of a settlement where Twitter agrees to sell for significantly less than that, but (1) there's zero incentive for them to do so and (2) they will definitely not get shareholder approval for that.
One thing for sure though is that a lot of lawyers are about to make a lot of money.
So then it looks like the "right wing" / anti-establishment tech pantheon is then set:
Rumble, Brave, Truth Social, Subscribe Star
Locals and Bitchute gave it a shot (and aren't dead yet). And an Elon owned Twitter might have been interesting, but at this point that's who the players are.
All of them are still bigger than Mastodon. After 6 years, Mastodon failed to show itself to be a proper alternative even during the so-called 'exodus' from Twitter. Given that it is smaller than those social networks, I regard that as a catastrophic failure.
6 years is not early days and Mastodon failed has still failed to attract users from Twitter 2 months ago. No chance of a significant amount of serious users from other social networks migrating over.
Mastadon wasn't built for conservatives though. Truth and it's ilk are built specifically because of conservatives feeling censored. They have a reason to go there. Mastadon has nothing.
It seems apparent to this observer that he developed cold feet pretty fast after an impetuous decision, and has been looking for any reason to back out of it since then. The spam accounts angle seems like a convenient scapegoat, rather than a real surprise to him.
He's clearly eccentric in his approach to decision making: I don't think any Harvard Business School course will teach "the Musk Principles". But it's unclear to me what he initially thought he was getting out of this. In the original news, he said, "Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it." Either he was breathlessly arrogant or astonishingly careless in the first instance. And I say this as someone who has huge respect for his accomplishments in other industries.
According to this hypothesis, he would still walk out with 7.5B in hard cash instead of 8.5B in Tesla share. I'm not in his boots, but I see how it can be seen as worth it.
assuming he can come up with a convincing case that twitter made material lies, otherwise he walks out owning twitter for the cost specified in the contract
Unless he thought he could be a big enough pain in the ass that Twitter folks would rather walk away from the deal and let him skate with a few million penalty while he liquidates Tesla stock with little repercussion to the share price (unfortunately for him, the market tanked in the interim and now his deal is an absolutely amazing one for Twitter shareholders so no way they let him walk away, $1B penalty isn't even an option as this was about outside interference)
I think they’ve clearly shown that’s not true ever since they tried to take him back to court for clearly not having his tweets pre approved, despite the settlement over the “funding secured” tweet.
The man literally tweeted “Tesla stock is too high right now, imo” and nothing happened.
The tweeting came after signing binding agreements. You may disagree that the tweets or buying a business are the same level of seriousness, but the binding part of binding agreement is the rule of law part of society that makes all businesses work.
Musk not being reigned in by the SEC, when looked at in a vacuum is probably not the end of the world or the US economy, but it’s not in a vacuum. Everyone watching right now realizes that you can publicly enter into fraudulent business deals that you leave at convenience and there is nothing you can do about it unless you have have better lawyers. That is gonna be super degrading towards the ease of doing business
the man has plot armor, he can do what he likes knowing that the Department of Defense is counting on him and his launch platform for the next generation of space warfare [0] - any efforts to reel him in will be met with a phone call like Alexander Acosta, "above your pay grade", "leave it alone"
[0] you didn't think Starlink's purpose is to let fisherman watch YouTube did you?
The "if they can nail him" seems like a big if to me.
If it is a scheme and he had no intention of ever actually buying twitter, the government would still have to prove beyond a reasonable doubt that he did it for this fraudulent reason. Or at least collect enough evidence to make him accept a plea deal for fear he could lose in court.
It would seem to me that him backing out now has a bunch of other very plausible explanations beyond "it was fraud all along", including the one this document states, that twitter breached their agreement by not providing the data he wanted to assess the prevalence of fake account himself. Or even that buying some "media company" is just what billionaires do[1], but him being "eccentric" he went in too hard and fast and is now backing out that he has seen the backslash and/or has done some actual due diligence, which would make him stupid and/or irresponsible but not criminal. All that to me seems like good ways for lawyers to claim there is "reasonable doubt" should he ever get charged with fraud, unless the government would happen to find some "smoking gun" piece of evidence.
And of course it assumes there is actually political will to nail him.
I read something that the Sec wants to nail him, but it's also afraid of losing a Supreme court case (a la the epa) that would totally gut its regulatory power. The entire idea of the Sec relies on the idea of the administrative state being constitutional, if they push too hard, our unfriendly reactionary supreme court might snap them, saying congress didn't explicitly say they could nail Musk for x, y, and z, even if all the other pillars of intent are proved.
The poster was positing that Elon lied about his intent to buy Twitter in order to manipulate Tesla investors, which is securities fraud. A public company executive is required to be transparent and honest about actions they take which might impact the company's stock price, especially if they're on the other side of a trade. Basically everyone who bought his $40b in stock or accepted it as pledged collateral could claim damages.
Not necessarily. That all depends on what he gained in return. Unless of course he ends up going to jail for fraud. It took a lot less for Martha Stewart.
My guess is he's hit that obscene level of wealth and realizes he is now beyond the controls of the system, and can therefore game it to his advantage.
When you can afford the best legal team money can buy and payoff the rest of the gatekeepers, then the game is simply to transfer wealth into your own pocket in bigger chunks.
Honestly, so what if he's out $60 bn. I don't think this would affect his lifestyle in any way whatsoever. But it would affect his high score. I'm guessing at one point he realized the former but later realized the latter and cared more about that. Though he's still got a 88bn lead on second place so I'm not sure why he cares.
Not sure it's going to affect his probably-not-that-lavish lifestyle that much. But since those billions are in stock it likely it will affect his level of control of companies, his ability to attract future investments and his future decisions. Which people paying attention to tech companies probably care about more than what flavour caviar he eats and what schools his kids go to anyway.
You can’t bribe the judges in Delaware. They can force him to go through with the deal at the agreed price, now at a significant premium on market value, and it’s reasonably likely they will. This was not a genius move.
I mean, besides the fact that generally I don't think overt corruption is that much of a problem in the U.S., the fact that anyone involved with this case will be under a massive microscope and that Delaware as the general standard place to do business deals with many large transactions so this one may not be all that impressive to local judges
Their reputation and their being paid very well to handle a huge proportion of corporate law in America efficiently and fairly. They’re a huge part of the reason everyone domiciles their companies there.
That may have been part of the original reasoning, but now Delaware has built up the world’s most reliable corporate legal system, and companies like a reliable legal system very much.
Delaware sets the gold standard on corporate law, and has a special courts of law and equity (the CCLD division and the Court of Chancery) that are set up to handle high-value corporate matters.
I don’t think most American judges are susceptible to any kind of bribery (other than jurisdictions where elected judges may expect campaign donations from litigants), but Delaware has to be among the absolute least likely to have that issue.
Let’s see what happens. I doubt very much the scenario you outline will come to pass. Nobody wants this deal any more and he can drag all their dirty laundry into it (bots, fake daus etc).
This will just slowly fade from memory as the lawyers argue and at some point they’ll settle.
> Let’s see what happens. I doubt very much the scenario you outline will come to pass. Nobody wants this deal any more and he can drag all their dirty laundry into it (bots, fake daus etc).
Twitter shareholders do. If I hold $1m in TWTR today, this deal going through is worth around 500K to me, possibly more if we assume the share value now prices in the buyout potential and will drop otherwise.
I think it’s far more likely he’d be on the hook for damages. It would be unusual for a judge to force a sale to a now unwilling buyer. Everyone—Twitter, Twitter shareholders, Musk—would be worse off with that result.
I suppose shareholders wouldn’t mind a special dividend from lawsuit proceeds that captured a good portion of the spread between FMV and $54.20, especially if they get to keep their equity.
It should be noted that this is largely because Musk agreed to it.
The normal remedy for breach of contract is for the breaching party to have to pay the other party monetary damages sufficient to put the other party in the monetary position they would have been in had the contract not been breached. Court generally will only order someone to actually go through with the contract (which is called specific performance) if monetary damages won't work for some reason.
For example if we have a contract for me to sell you a million microcontrollers at $1 each, which you are going to use to make a million units of some gadget that you are going to sell for a profit of $0.10 each, and I find someone who will give me $2 each for the microcontrollers and so let you know I'm going to breach the contract and sell my microcontrollers to them, a court is very unlikely to order me to honor the contract. They will order me to pay you $100k, the profit you were anticipating making from our deal (and probably attorney fees, and other costs you'd incur dealing with the breach).
But, according to this blog [1] at Findlaw:
> If Musk tries to abandon the deal, Twitter could sue him and ask for specific performance. This remedy is usually hard to get, but Musk agreed to a powerful specific performance clause in the merger agreement. In fact, he didn't just agree that Twitter could get specific performance. He promised that he wouldn't argue it couldn't (forgive the double-negative).
I'm unable to think of any good reason one would agree to that.
I think the past few years of watching the rule of law degrade in both the public and private world in the US means we shouldn’t take any possibly off the table that relies on the system working correctly
He's overleveraged and most of his companies are on the brink of falling below the point where he gets margin called. The poor sap wanted to rescue a few billions of dollars that could actually survive a recession, but he picked the wrong way to do it.
I suspect the initial decision was something like "hey I could actually just buy Twitter, that would be funny". It's less clear to me why he almost immediately started trying to back out. It's probably a waste of a significant chunk of money, but is that all?
Well, if the purpose of buying twitter was to improve the user experience of internet users and advance the doctrine of free speech, then why not just spend that same amount of money building your own twitter (mastodon instance or something) and use your publicity to attract users?
Well maybe he realised that in the best case he would govern over Twitter 2.0 with extra toxicity and in the worst case be the proud owner of another cesspool of assholes, pedophiles and people with violent ideas.
I don't believe for a second that Elon Musk really cares about free speech for anyone but himself and he is right now probably not limited by twitter's policy but by other externalities
Pedophiles? I'm pretty sure they would be forced to take down child porn. I mean, it's a public forum. If you are publicly announcing that you are pedophile or terrorist, that sounds like bad news for you.
In any case, does twitter not already have a lot of "assholes" and people with "violent ideas"?
Yes he would (sorry if I went a bit over the top there).
My point being that I don't trust Elon Musk to make better moderation decisions than whoever is in charge right now.
Past attempts of social media with low barriers of what is allowed have absolutely turned out worse than Twitter if you ask me(e.g. 4chan, 8chan, gab etc) That's why I think the best case is "Twitter but more aligned with whatever Elon Musk thinks at the moment"
An established social media platform's most valuable asset is the size of its userbase. Even with the reach of Musk, I think it would be hard to attract a large enough userbase to make the product more compelling than Twitter.
An established platform's most valuable asset is the data of the userbase.
Twitter can leverage a huge amount of data about personal preferences, interests, relationship status, political leanings, income, usage profiles, message habits and content, social graph, and location.
If you specifically wanted to clamp down on certain demographics, it would be an excellent way to locate them.
Can't have a large data trove on your users without users. A huge part of a successful social network is sufficient adoption. If the people your users want to follow aren't on the platform they don't have a real reason to be there. It's a major hurdle for any new social platform and a lot fail at that step.
Stocks went down almost immediately after the deal across the tech sector. Financing got harder, he would have sell off a lot of TSLA at a discount to complete the deal.
Can we not jump to blaming a person's bad choices on the first medical condition that fits? I know Musk has said he has bipolar disorder, and I'm not trying to discount that.
I'm just saying what if... gasp... he simply did something foolish? The blame-it-on-the-bipolar out reinforces the narrative of an infallible person who only make mistakes because of a medical condition. Take that line of thinking one step further and you are now fully onboard the bipolar stigma train.
A mistake or doing something foolish is going out in shorts in the winter and then getting a cold.
He spent days/weeks/months on setting up this deal, he became obsessed with it at some point.
(Hopefully) no one is "blaming" it on the bipolar. It's simply something consistent with bipolar. (But it's also consistent with rich people getting obsessed with something and then spending way too much resources on it.)
> reinforces the narrative
That narrative is simply bad and pushed by people who have no idea what they are talking about. Musk's previous instances of risk taking (that "all" turned out to be fine) is also perfectly consistent with bipolar. (Of course if you look at it then it turns out that he took many risks that made very little sense, like when he talked about taking Tesla private, the infamous funding secured tweet.)
And of course just a label like bipolar means (almost) nothing, these spectrum disorders are complex (and there are usually other comorbidities at the same time, just with different severity), we don't know how he is treating/medicating/managing it, or is it even the right diagnosis or not. Or he could have simply lied.
... you can call it a mistake, but that emphasizes an irrelevant fact. everyone makes mistakes. rich people do small and big mistakes. we hear about the very stupid (regular florida man) and very expensive mistakes (trader accidentally entry more zeros, etc).
and of course we all hear about the top of the Forbes billionaire list mistakes, the wework scandal and the other questionable decisions of Masayoshi Son, how "the crazier someone it's more likely they get money from Thiel", etc.
but even on top of all these this one easily takes the cake.
yes, in isolation it's a "mistake", but luckily we have plenty of context for it.
I'm trying to communicate that mental/personality disorders don't work like that.
It's a very costly and stubborn mistake either way and he has (or hasn't) bipolar either way.
Even in the most severe substance dependence cases some people can override their short term wants (eg. they don't go and mug people to get money for their next fix), while there's a clear pattern of this behavior in others. (But it's what we expect, since we define one by the other.) So in both of those instances, it was their mental state, but was it the altered part or the underlying base state that let the dependence to form in the first part? It's really not separable.
One explains the other, but there's no direction, no proximate causal relationship. At best there is some predictive power, ie. if someone goes off their meds, or stressors increase they will show behavior consistent with this or that. (But in general everyone will make more mistakes when they have more stress in their life. Who would have guessed, I know.)
Yet these categories (diagnoses) are not useless. They communicate behavior patterns, things to look for, things to be mindful of and try to manage.
The market went to shit almost right after the point where he made his offer. Tesla took a dive at the same time. A lot of the loan he took out is against his tesla stock.
There's another belief floated by Josh Wolfe (an investor with Lux Capital) who claimed it was a ruse to liquidate Tesla stock en masse without Tesla hodlers getting suspicious and tanking the inflated stock price.
That is a very good question, monitor the SEC for clues, if they bring some kind of action (which should either happen soon now that he has made it official he wants to back out or not at all).
With counterparties like Musk it doesn't pay to try to go for some minor infraction, they will just lawyer their way out of it or stretch it forever, but if it is solid enough (and $44B might just do it) then it may well wake up the dragon. To be fair, someone would likely have to ask them nicely to do so because they feel that they have lost a lot of money due to Musk's actions.
Which ones? Basically any way of him dumping billions of Tesla stock would've immediately popped the price. With this action, not only did he get plausible deniability, he also got a massive distraction on top.
All we know are the facts, he agreed to buy twitter and now he is trying to walk
away from the deal.
There could be multiple reasons for that, including what he is saying on face value or a dozen other scenarios.
He could still be wanting to buy twitter and use this as a bargaining tool to lower the price.
You can say he was right, once we know the full facts which will be once this plays out and since it doesn't really affect any of us, speculating right now is simply taking part in silly gossip.
It's incredibly implausible that it's what he's saying on face value because a million other people seem to understand what Twitter was referring to around monetized monthly users or whatnot, and the idea that he didn't at first and then realized this other number was actually make-or-break is ludicrous.
Like, you can sign up for free. What's gonna prevent fake accounts in that case?
Yeah and everyone knew for months this day would come. After the stocks started falling in the spring there was no way he would not try to weasel out.
In my mind this is an insane conspiracy theory that fails occam razor, he was high and said we wanted to buy Twitter. People made fun of him so he dug in to prove all those stupid people. There is no complex deal needed here.
Occam razor is Musk made an offer at the height of the market, now he doesn't want to honor the legally binding contract he entered into because he'd lose 20b right away.
That’s immensely believable, I wonder how he got someone people onboard to be help him fund it though. It’s even more of a stretch but maybe the rest of them wanted more liquidity too?
But Tesla stock did drop after the announcement of the deal. I think that is the real reasoning behind him quickly getting cold feet. He probably thought Twitter would be a fun side project, but the backlash from people in regards to Tesla, SpaceX, and just the general public meant it would be more costly both to his reputation and financially beyond just the sticker price. That took the fun out of it so he has been looking for ways to escape the deal ever since.
This isn’t the first time he has sold Tesla shares. He sold billions of dollars worth last year too. I’m not sure the exact dates to do the math, but did those sales cause a immediate drop of over 10% like the Twitter announcement?
That's not the right question, the question is the perception of the difference between selling $44B of stock outright or selling it with the goal of buying Twitter.
What actually happened isn't relevant. What is relevant is whether he may have thought it would work better. Tricky to prove.
We agree that he didn’t suspect the backlash from buying Twitter. I think our disagreement is just that you think he expected a large backlash from selling Tesla shares and I’m not sure history really suggests that was something to be concerned about.
he wasn't (or isn't) aiming to sell the stock, he was/is aiming to finance the purchase using his Tesla stock as security. So this line of argument... Doesn't really make sense?
This is all publicly available. Due to leverage, he faced ruin if Tesla fell below X (whatever X is) if he funded it all himself. So he opened his side of the deal up to other people, and allowed other large shareholders to come inside his tent - which reduced his exposure.
Then the market dropped 15%.
Matt Levine has an excellent series of newsletters covering it.
His present situation with a multi-billion dollar agreement he entered based on hype and is now very desperate to exit seems to suggest his hype management skills have room for improvement.
He typically creates massive hype, well over what he could possibly deliver, not sure I've ever seen him temper hype.
Just remember the launch of Tesla auto-pilot, where he was promising full self driving within a year or two, so good that you would let your car work as a taxi while you don't need it and it would become a passive stream of income so great you would see your investment back in around a year! He actually said "our goal is to make Ilit financially irresponsible to buy any other car". This is not a man who "manages hype".
If someone's stock is as incredibly overinflated as Tesla has been for so long, choosing the most effective way to liquidate stock without triggering a run becomes a social engineering problem with the incentive of a multi-billion dollar payoff.
Honestly I think other people trying to read this situation in some way that ignores a multi billion dollar incentive just sitting there is utterly naive.
We've had the Teflon Don, now we have the Teflon Elon.
I'm sure he'll be able to weasel his way out of this. He'll spend a crap ton of money to lawyers just to be able to say he doesn't have to pay for it, but he's still paying for it on a smaller scale and not in public. Anything to put up another W on the scoresheet.
The counter point here is that the Twitter board is not poor, and the incentives to force the buyout (or at least extract more money from Musk) are huge.
Yes, and they are the side I'm cheering for in this match. Even if Musk is forced to pay, I doubt it will slow his twitter tirades down. In fact, I'd expect him to come out harder to prove whatever his little ego thinks needs to be proven.
What reads like simple English to you or I does not get read the same way by lawyers. Once lawyers are involved, all reasonable logic goes out the window in my perspective.
Ever since what "the definition of 'is' is", my whole outlook on lawyers was just obliterated.
Not for sure why you're downvoted, because you're right. Lawyers do not operate on logical basis. They operate on interpretations of logic. I found this out when buying my house. Interacting with the lawyers was completely miserable because they live in their own little world. They expected me to just know things that they would poorly specify, requiring several emails to clarify, and then when I would point out mistakes, logical inconsistencies, or poorly defined things in the contract, they would just shrug it off or sort of grudgingly fix them, seemingly just to appease me. Then they would just dig their heels in the ground about what the contract "says" because the contract "says so", even though it made no logical sense. Because the contracts aren't what they say logically. They say what they say based upon a sort of colloquially agreed upon interpretation of them. Lawsuits then center around this colloquial agreement and not around the contractual logic. It's an excruciatingly frustrating world to be introduced to. I wish to never have to deal with lawyers.
> Ever since what "the definition of 'is' is", my whole outlook on lawyers was just obliterated.
Is that in reference to something? Got a link or an article or something?
>Is that in reference to something? Got a link or an article or something?
Very much yes[0]. It was one of the defensive lines from Bill Clinton. I was still in high school during this, and it set me on a very bad path of thinking how to twist anything and everything anyone ever said. After all, if the pres can do it, then we should all be able to do it.
There is no option 2. That was a proviso in case Elon was unable to secure financing. He secured financing, so now he has to buy Twitter. Or they can sue him.
The clause about the $1B penalty says nothing about separation. That clause only activates if the deal is stopped by some outside entity, such as the SEC, or if the two parties mutually agree to stop the process.
In all other cases, Elon has committed to give them $44B in exchange for the company.
Applying unrelated leverage between two parties is usually not looked at favorably by court. And court is likely where the musk/twitter thing will be settled.
Though it's weird to me that it's fine to sell stock just because you want to, but pretending you didn't want to could qualify as securities fraud.
And that seems to be what the concern boils down to? The issue of whether he defrauded twitter is a separate thing. (Though I'm inclined to say no, because twitter came at this in a very skeptical and careful way, and normal fraud requires fooling someone into material loss.)
Mens rea is a necessary but not sufficient component of proving a criminal charge - the defendant intended to break the law. Actus reus is also required, which is actually doing the act.
US law doesn't "judge by intent". If you try to murder someone but you don't succeed, you don't get charged with murder.
Yes, I agree with you and I should have worded my comment better.
To keep with the murder example, intent is what separates 3v2, in most states. Yes, a crime was committed but was the intent to cause bodily harm vs actions causing bodily harm, without intent.
As Levine has repeatedly stated he didn’t “waive due diligence”. It was a binding purchase agreement. It’s meant to come after all of the due diligence.
He didn’t waive his right. He just opted not to do any before buying.
Having driven Twitter's value down by $15B, I can't imagine Musk won't be sued by shareholders for it, since his claims of fake accounts are as yet unproven. The same goes for the damages this little venture has inflicted on Tesla stock. The SEC and FTC are likely to cost Musk Enterptises a pretty penny in legal fees before all of this ends.
The $1B penalty for backing out of the Twitter deal is the least of Musk's concerns.
it's somewhat hard to argue that musk is responsible for the decline given that the entire NASDAQ is also down. you might be able to find some contribution, but only a relatively small amount of it.
But Musk set the price at $54 by agreeing to buy Twitter at that price. If this deal were guaranteed to go through, shares should be trading at that price until the sale is complete. Trading at above that price means shareholders would lose money at closing, and trading at below means someone is leaving money on the table. Market forces should cause the price to converge at $54.
The fact that it’s trading lower means that investors don’t expect the deal to go through. And who exactly as been doing his best to very publicly bring the deal into question? Elon Musk.
If he was the only thing dragging twitter toward $54, and then he stops dragging it as hard, it's hard for me to see that as driving value down. If he hasn't caused any other damage, that's just twitter returning to its natural value.
> Sure, let’s pretend the entire market hasn’t sunk.
Why does that matter? Musk agreed to buy Twitter for $44 billion. If he comes through, that's the value of Twitter. If he doesn't, then the value is something else. The difference between $44 billion and fair market value is just the expectation of investors that Musk really will pay. So yeah the drop really _is_ due to Musk trying to back out of the deal. If Musk weren't backing out of the deal, then then Twitter's value shouldn't drop regardless of the fact that the rest of the market has.
It also does not make sense to do this kind of fraud, as Tesla stock will surely tank on the news of it being used as a collateral in an acquisition deal.
Nah, the "everything is securities fraud" trope is qbout some (usually immoral) behavior that a shareholder argues would materially affect the stock price, and which was not disclosed to shareholders.
Elon Musk announcing some M&A news with the intent of effecting price changes in TWTR,TSLA securies would be pretty boring, vanilla securities fraud.
I have accepted that I will eventually see Musk put behind bars--all of a sudden--by the SEC. I get the sense that they are always building a case on him. He would be a great "Martha Stuart."
SEC can only levy civil penalties, criminal (aka jail) is another matter. Which they are happy to refer to the relevant prosecutor, it just isn’t their job at that point.
I think the incentive you mean is to move out of a stock you think is overvalued (I agree about that). But that works with any purchase, not just Twitter. And with that motive in mind, Twitter would be a really unwise company to buy, when there are so many companies available with actual asset value around. Wouldn't you rather buy something with your over-inflated stock that had some value-preservation attributes? For example, you could buy a mining stock, or a railroad. With Twitter, you're going from the frying pan into the fire.
He could sit next to whatever dark lord descendents currently run Ford, for less. But that would make Tesla into a serious car company; which is a real business deal, for someone serious about changing the world.
This is just one of the impacts of the high potency products at the local cannabis dispensary. You can't function if you wake and bake on that shit.
It's not just the potential impact upon markets. Shareholders of that size have legal obligations as well. If you own that much of a company you are specifically and legally precluded from selling it all at once in many circumstances. Bill Gates could not sell his entire Microsoft stake all at once back in the day into an open market as it might cause the security to drop significantly and for other, legal reasons. Certainly, the securities exchange act of 1934 requires disclosures of certain sales of shareholders above a certain percentage of shares of publically traded companies, but also more nuanced and exacting laws regarding national security interest prohibit the sales of securities and ownership to specific parties or foreign interests. When the scale of your ownership stake is in the billions, that certainly limits the potential buyers of the entire stake to a short list.
If he was able to exit his Twitter stock position after the jump in price he created it would wash out the $1B.
If he exited TSLA to the tune of the remaining $10B or $15B, staving off a 50% decline in that value then he came out way ahead.
It seems very likely to me he will find a way out of the $1B fee and end up settling for some fraction.
Of course if he just borrowed against his TSLA to facilitate this deal, as I have read he did, then his profit on the move depends on the terms of the loan.
The $1B termination fee is the tip of the iceberg. Changing your mind is not covered in the termination clause, and his evidence Twitter mislead him is contradicted by his own statements prior to the deal. Twitter is owed substantially more than a billion. Likely closer to ten.
He sold something around $10 (+/- 2) billion of Tesla stock. The loans don't matter as they were (a) tied in to use only to buy Twitter and (b) allowed to expire last month.
I wondered this early on. More so when I thought he would actually buy twitter as Twitter had had some serious share price decline at that point for over 6 months, so it's a way to shift money from an inflated area to a more moderately priced one. Plus he obviously likes the platform in general.
If true, I don't think it's the case he did it intending to pull out. Seems unlikely he would have signed the billion dollar exit clause when he could have easily dragged the initial talks on a bit longer for largely the same result before 'changing his mind'.
My best guess is the offer was genuine (thought impulsive) but as he's seen the price drop further, now his offer seems too much. Why pay $44bn for a sub $30bn company. Kinda simple but seem most likely than all these more complex theories.
Happy to have a conversation with you on reasoning, and apologise if I'm wrong in how I read your reply message, it feels like a curt criticism statement, not add value to discussion.
But anyway, yes I believe it is possible to be impulsive followed by more logical decision making. This process seems fairly commonplace in the world I observe.
I apologize for being curt, I thought my statement was obvious. Here's some lines from your comment
"If true, I don't think it's the case he did it intending to pull out. Seems unlikely he would have ......
My best guess is the offer was genuine (thought impulsive) but as he's seen the price drop further, now his offer seems..
"
Considering his impulsive behavior, which has prior occurrences. 1. Making an immature derogatory remark to one of the people trying to assist with that cave rescue. 2. His statement that he was taking tesla private that he retracted later 3. This situation..
Why do you think he's acting logically now? Why is it your best guess? Your words
> Why do you think he's acting logically now? Why is it your best guess? Your words
1) As said, its not uncommon to act impulsively, followed by more logical decision making after. From your examples, I dont feel listing a few impulsive cases removes his ability to act logically. And the sequence I've guessed seems the most likely in my kindly eyes.
2) Because its not my second best guess, or any other.
I think we have a disconnect on probability and booleans. Elon musk can act logically or impulsively. Each historical act of impulsiveness increases the probability of future impulsive acts
I feel there is huge profitability growth potential there. If you look at the better quarters the revenues can be significant. If you ran that against a lean headcount and were genuinely A-political there's really a money maker there potentially.
That said the risk is huge as the world can move on quickly as we saw with MySpace. And Elon s becoming increasingly a political risk factor himself in a business were peoples view on the leaders/owners really matters.
My point is he can pay more because he believes he's going to make much more in the future. There is a downturn but most people suffer downturns through life and hold through them. It's just childish to back out now but I would expect that from him.
His views really don't matter. Nothing happened to Facebook and nothing will. People will just continue fighting (tweeting).
I see you point, but being childish in backing out may not mean much if you feel you're overpaying $14bn, or if not him his funding partners. People have a much stronger emotional response to losing something than gaining something.
But really who knows. Maybe he realised he had too much on his plate, or any number of things.
That would be implying that a Musk company was in trouble. They constantly are in trouble, but he can never say it or else it breaks the fiction that Musk companies are predestined to be amazingly successful.
The deal includes a "specific performance" clause, which allows Twitter to force Musk to carry out the deal. He can't simply pay $1 billion and walk away, he's in for a very messy legal fight. This pretext about bots is incredibly weak and he's in no way guaranteed to win.
If this really were part of some grand master plan, I think he would have left himself an easier out.
His legal team maintains Twitter is in material breach of multiple provisions of the Agreement and appears to have made false and misleading representations.
Is Twitter going to spend the next few years litigating this just to force someone to buy the company that doesn't want to? Elon's team can drag this on and on.
What will happen to the value of Twitter's stock in the meantime? What will happen to the value of working at Twitter? It'll become a zombie company.
Yes, that's exactly what will happen. If Twitter were to say now "OK, let's forget this whole thing happened" the stock would drop massively: not only are they losing any chance at the $44B buyout, they are also admitting they (1) lied in their current contract, and (2) likely have huge bot issues that they would rather not litigate.
The only option for Twitter to continue existing is to sue Musk for the amount he promised.
It's worth north of $20B to Twitter shareholders and they have an (almost) rock-solid case. You can bet your ass they're going to spend the next few years to fight for it.
The downvotes on this comment are the clearest evidence that people will downvote verifiable facts presented neutrally if they don’t like the facts, the people or companies involved in the fact.
The karma hit at-fates-hands takes because people are irrational is collateral damage.
The downvotes are most likely because it's a specious claim that Elon's legal team is making, not supported by fact. He waived the due diligence phase. Twitter provided his team with information. He's just trying to get out of the deal because he made an impulsive and stupid decision.
Parroting the statements of his legal team without adding the context around those statements is going to garner downvotes.
It also depends on what the Twitter board and shareholders want. Will they want to get bought out and owned by someone who clearly doesn't want to own the company, and may run it into the ground out of spite? Certainly some shareholders will just want to take the money and run (the agreed-upon buyout price is quite a premium over the current stock price), but others will be more interested in protecting the future of Twitter as a company and platform.
Agree that there will be a massive legal fight, but my guess is that it will be over how much extra Musk has to pay to get out of the deal (beyond the $1B breakup fee), than over making him perform. But who knows; only time will tell.
He's constantly dragged the company and founders through the mud and the stock dropped 7% once he called the deal off.
I'd sued and settle for a few billion instead of taking the one billion backout
He uses his wealth as a weapon against companies he doesn't like, just the mere threat he may get involved causes massive changes in the stock price
and in turn causes investors to suffer financial lose.
> He uses his wealth as a weapon against companies he doesn't like, just the mere threat he may get involved causes massive changes in the stock price and in turn causes investors to suffer financial lose.
Reminds me of Bitcoin "whales". It's a shame that this guy is the figure that will take humanity to Mars.
The Americas were divided among people (original inhabitants, and later colonies), and many countries & people weren’t recipients. But I’d still say that humanity has reached America.
Likely is putting it quite mildly - it's likely to cause a premature death in the same way that throwing yourself off the empire state building is likely to cause some injury.
> It's a shame that this guy is the figure that will take humanity to Mars
That's just more BS from him. He'll just keep kicking the can, resuming the project with some spectacular stunt every time he needs it. Everything Musk does or says is just a performance to manipulate the markets.
I think the Mars stuff is the least likely to be BS. There's been ongoing, real advancement towards the goal for over a decade now, advancement serious enough that NASA's picked them to land their astronauts on the Moon with their Mars rocket.
A permanent colony seems like the sort of thing he'd get bored with, though.
The hard part is getting significant amounts of material into space. Once you do that you can do anything there. Go to Mars, build O'Neil cylinders or even make your own asteroid mining factories up there.
Establishing a colony on another planet is going to require a monstrous amount of money, time and resources. I doubt a single country could manage it (look at what it takes to run the ISS, and that's a joke comparse to Mars), but there are zero chances a single man, no matter how rich, is going to do more than a dent in that enormous task.
Solving the technology problem is just the tip of the iceberg.
> there are zero chances a single man, no matter how rich, is going to do more than a dent in that enormous task... Solving the technology problem is just the tip of the iceberg.
Agreed, but enabling folks to get there makes it possible.
Musk doesn't have to build the colony to have made it possible, and it seems to be the thing his attention is genuinely invested in.
> Agreed, but enabling folks to get there makes it possible.
It doesn't. Getting a few people to Mars alive does not a colony make. And even that sentence is misleading because while getting to Mars orbit is certainly challenging but that's something I can see humanity capable of overcoming with current technology. Although we never kept humans in space for 2-3 years before which is just the travel there so we don't really have any idea what will happen to them but let's pretend.
Landing very fragile humans on Mars, however, is a much, much formidable challenge. The heaviest object we have managed to soft land on Mars, so far, is the 1025kg Perseverance rover. The Apollo Lunar Module carried two people and was 4280kg dry weight. Of course, you don't need to ascend -- getting those people back to Earth is not even considered by anyone sane -- but still, it shows there's a problem here. And that was two people. And you need everything for them to live on the surface, including air and water and that's even more weight that you can't just slam those into surface at the ~20 000 km/h the spacecraft will approach either.
It would be just about infinitely better if he tried to show off with climate change combat projects. If you want to show off, a vast forest would be much better, much easier to achieve and so much cheaper. He could build storage for renewable energy, these are also sufficiently massive to be good for showing off. And so forth. There are easy but significant things one such as him could do. For a more formidable challenge, elevate the Brazilian people so they don't need to burn the Amazon.
We already have a terraformed planet but the climate is changing in a way which is incompatible with the way humanity currently exists. It would be prudent to change both -- while the change is inevitable it could be slowed and humanity could change too. Once we bought time, we can wait until material and other sciences make space elevators possible and then we can send robots to Mars to build a space elevator too and then we can begin to think about colonizing Mars.
If Starship can get reusable, zero-disposable flight working, and on-orbit refueling, all of those issues become quite surmountable. Mass to Mars (or the Moon) ceases to be "what's the most we can fling in a single launch", and the flight can be shorter if you can depart Earth orbit with a lot more fuel. I can't find numbers for the current iteration, but they were batting around 90-110 day transits with the older ITS proposal.
You start talking about being able to build propellant depots in Earth orbit, build Aldrin cyclers, send large amounts of supplies (or even a whole station on the slow, efficient route) in advance to Mars, etc.
Mars landing of objects is now a TRL9 problem that has been solved already, and the science has moved forward greatly [1]
Recent rover landings happened at what, < 1 M/S ? which is well within the capacity of the human body.
Considering that Mars atmosphere is substantially thinner, and gravity there much weaker, landing there would be different from Earth anyways.
We are not currently employing any of the more cost efficient methods of getting things to orbit in the first place, for large scale missions of epic size, nor are we currently employing the most efficient propulsion types.
The way I see it, the biggest problem is not one actually being discussed which are the longterm effects on the human body of living on a planet without a protective atmosphere, and protective magnetic field [2]. If getting mass to space becomes less of a financial constraint due to more efficient launch mechanisms, then, shielding would much less of an issue because mass in space would be cheaper [3]
I think that much of these problems come down to the huge capital cost, and unsolved problems around low cost launches; the novel technologies that need to be developed & turned into a new space launch system, and no, i am not talking about traditional rockets.
There’s no problem with landing. The weight limitations you mention are entirely a factor if the current “it has to all fit in one rocket launch” limitation.
Our current technology is capable of doing everything you listed and more. The problem is their cost. There is no point to doing it while the cost is this great and there is absolutely no monetary return from doing it. And Musk's effort has been for reducing that cost so that he could do it with the capital he has.
If need be, large countries that have the technology like China, Russia, US could do it. But it would still require gigantic amounts of capital allocation and effort at this stage. So no one will do it. The biggest thing that is happening right now is China and Russia signing an agreement to build a base on the moon. (yes)
The board already willfully agreed to sell him the company and the deal is even better now than at the time they made it. Why would they also want to drop the deal?
The notion that the board is all of a sudden worried about what Musk might do with Twitter is about as silly as Musk thinking he can weasel his way out of a binding contract he already signed.
Your second sentence makes no sense. If the board and shareholders sell the company, "they" aren't owned by anyone. The board is no longer the board and the shareholders are no longer the shareholders. They're just a bunch of regular people holding big bags of money.
It's like if you sell your car to a dangerous driver: you have no financial stake in whether they go on to crash it.
If you talk to random people in a democracy, they can't vote their interest even if they wanted to, because they don't know what's actually affected by politics and what isn't.
Some people switched to culture/values voting (ie, telling other people what to do), some people just enjoy winning and so vote for whoever they think is going to win.
> It also depends on what the Twitter board and shareholders want. Will they want to get bought out and owned by someone who clearly doesn't want to own the company, and may run it into the ground out of spite?
Uh, yes?
The shareholders, and the board as their agents, care about the company as a means to an end: and that end is making money. They’ve already concluded the sale achieves that goal.
If Musk wants to burn the company to the ground after they cash out, they don't care.
Heck, some of them may invest in competitors after the sale banking on that to make even more money.
Never underestimate the incompetence of the average human. Doubly so if they are rich and powerful. In fact if a master plan has several fatal flaws on closer inspection, then that’s just evidence that the perpetrator just didn’t think it all through before executing.
If you watch an amateur chess game you’ll find that most players actually have some master plan, but don’t have the skills to see the flaws, or even if the plan is perfect, they don’t have the skills to play it through either.
My sniff test for any conspiracy theory actually involves incompetence. The more competent the plan and execution need to be, the less likely it is to be a conspiracy.
The fake moon landing conspiracy is a good example. Then number of people involved would be pretty big, and the science is complicated. The logistics behind such a big secret operation requires such skill that it is hard to believe anyone would be able to pull it off. If the moon landing was truly fake surely they would have messed up somewhere.
On the other hand many things went wrong in the actual moon landing. There were liftoffs that failed, experiments that went nowhere, targets that were missed, and even people that died. The actual moon landing was a hard task they succeeded at while making a ton of mistakes in the process, just like humans do in the real world when we are at our best.
Indeed it is different. My point was simply that incompetence is not evidence against conspiracy. My sniff test was simply emphasizing this point. Further, a sniff test is—by definition—not supposed to be your only marker in evaluating a theory, it is merely supposed to be a marker determining if evaluating further evidence is even worth your time.
The conspiracy theory that Musk is using this twitter scheme to manipulate the markets in his favor does not fail any sniff tests that I’m aware of.
For me, flat Earth. The sheer skill necessary to bribe or convince so many governments to gaslight their population, the incredible optics and geodesics work necessary to fake a curved horizon in a plane window and have consistent flight durations, and the maintenance of shadow power across millenia, paints the picture of a group of people way beyond what human competence can achieve.
Of course, there are simpler examples, like John Titor, or Pierre de Fermat’s last theorem proof that he would have done all in his head.
It's a pretty universal reason to dismiss or at least cast serious doubt on conspiracy theories. A close cousin of Ockham's Razor and Hanlon's Law
The amount of competence required to prepare a controlled demolition of a 110 storey trade center which is occupied 24/7 and full of cameras without anyone noticing and associating this prep work with the much publicised plane crashes that happened afterwards would be staggering, even before considering the insanity of such a scheme.
At the risk of opening a can of worms, the best evidence against the considerably more plausible "lab-leak" COVID theory is that manufacturing an alternative chain of evidence that convinces most unconnected foreign experts of an alternative theory (which still points at Wuhan and Chinese market regulations) when they have plenty of reason to find fault with it requires a lot of competence, as well as totally the opposite approach to China's usual way of suppressing stories.
I don't see how you can simultaneously believe that this is some 4D chess move from Musk to allow him to cleverly liquidate his Tesla holdings without tanking the stock - and also believe he is too incompetent to make sure he could actually back out of the Twitter deal which he never intended to complete in the first place.
The fact that his supposed plan here has some flaws is not _further_ evidence that it was planned from the beginning, that's absurd.
It seems much more likely that buying Twitter was just an impulsive decision for him that he is now regretting and looking for a way out of.
I agree with you that many supposed conspiracies require too much competence in order to pull off, and can usually be dismissed as impossible to achieve in practice. But it doesn't follow that, as a consequence, any action that would be incompetent as part of a conspiracy should be considered evidence that a conspiracy exists.
I don’t know if you’ve ever played chess against a more skilled player. But when I play, I usually think I have a sure way of taking my opponents rook for a knight, only to realize too late that I’m stuck in a trap.
You only need to be competent enough to realize how markets can be manipulated to initiate a conspiracy, however successfully executing one requires a whole new master level of skill set. Off course the people with such skill set exist (as evidenced by the numerous market manipulation schemes successfully executed in today’s business world) and if Musk was smart he would hire such an expert to scheme it for him.
What we might be witnessing here is a business person that is smart enough to realize that market can be manipulated, and see a position to where they can execute such a manipulation, but not competent enough to execute a non-trivial plan without flaws. And worse not smart enough to hire a person with the correct skill set to do it for him.
Couldn't he have sold Tesla as part of an offer that still had due diligence and was in negotiations rather than waiving due diligence and committing to a deal?
More than one financial analysit/money manager has floated this idea in our circle. It seems reasonalble; an pointing to the last time he sold a bunch (11B?) and told everyone it was to pay his taxes. They seem to think it was to just convert some high-risk (TSLA) to low risk (Cash, etc).
That sounds reasonably logical, but by what measure of logic is overpaying for Twitter, of all assets, a good deal? There are surely better companies to do this sort of thing with, and end up with an actually valuable asset at the end of it.
To over simplify: it's the trick of a illusionist; look over there! Something interesting (now switch the rabbit for the dove or whatever). So while GenPop is looking at this noisy deal; he's able to shuffle around money in three(?) ways -- where the net result is to reduce the TSLA holdings w/o too much penalty (or somethign). I'm not smart or rich enough to fully understand. The logic is distraction to execute a big dollar amount shift in equity positions.
According to this theory, he never intended to buy Twitter. He just used the offer to liquidate stock without raising too many eyebrows and now he's backing out, with a few billion extra in cash and, if everything works out for him, not even a termination fee.
Sure but then why skip diligence? That would be the ideal time to sell lots of Tesla stock and eventually say “You know what? Nah” without any sticky legal issues.
AKA the Lou Pai option, which is an extremely funny (and almost certainly untrue) theory that Pai deliberately got caught by his wife with a stripper so that he would be "forced" to liquidate his Enron stock which he allegedly already knew would soon be worthless without having to explain the timing of that to a court later.
I don’t buy it. Musk compulsively creates huge and innovative companies. To liquidate stock, he could just as easily have just waited until his next big thing and sold off his stock then, once again, in order to pay for a non-Tesla venture; and then either used the money for the company, or bailed on the new company. Involving Twitter doesn’t make sense and is unnecessary
why do people assume that all aspects of this transaction and negotiation have been happening in the public and thus qualify for all these folks here to make claims like they know what's going on.
People here don't know what claims in entirety were made by either party, and thus, it's impossible to speculate. This is what courts are for and Elon, and his team, are not idiots.
This is such a strange take. There's any number of more effective ways for Musk to justify selling some Tesla stock that aren't especially likely to tank it. On top of that, announcing his intent to buy Twitter did in fact get factored into the stock quite rapidly, in the negative direction as you'd assume, because Twitter is not seen as an especially good investment while Tesla has been.
He’s not the only one to float this possibility. It’s one of the more plausible explanations if you take the assumption that Musk was acting rationally with forethought.
I also read somewhere that if Elon ran Twitter into the ground in the next decade, using it just to advertise Tesla cars, he would have paid an amount in line with what GM pays for advertising their cars (at least what they paid pre-pandemic) https://www.statista.com/statistics/286522/general-motors-ad....
It blows my mind how much (non Tesla) car companies spend just on advertising.
I tend to believe it's something along these lines. The real question is why is he going to such great lengths to liquidate stock? He is not the only high profile billionaire who has recently come up with sudden circumstances to justify the liquidation of massive amounts of stock.
I doubt that is the case, because of such a flimsy reason chosen to back out of the twitter deal, if the plan was all along to create a ruse deal, I think the exit would have been better planned
Either he was breathlessly arrogant or astonishingly careless in the first instance.
Perhaps he didn't expect the Nasdaq composite to drop 2000 over the next several months? That could have been careless, depending on the sort of agreement he signed. I guess he can afford a $1B penalty, but good luck finding another buyer after that. It's not as though Twitter are overflowing with ideas for profit...
The $1B is if there's some outside reason why the deal cannot get done, e.g. because of regulatory concerns.
It's not a "pay a $1B break-up fee at your discretion to get out of the deal" clause.
> Accordingly, the parties hereto acknowledge and agree that the parties hereto shall be entitled to an injunction, specific performance and other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof, in addition to any other remedy to which they are entitled at law or in equity. Each of the parties hereto agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief on the basis that any other party has an adequate remedy at law or that any award of specific performance is not an appropriate remedy for any reason at law or in equity.
...
> (b) Notwithstanding anything herein to the contrary, including the availability of the Parent Termination Fee or other monetary damages, remedy or award, it is hereby acknowledged and agreed that the Company shall be entitled to specific performance or other equitable remedy to enforce Parent and Acquisition Sub’s obligations to cause the Equity Investor to fund the Equity Financing, or to enforce the Equity Investor’s obligation to fund the Equity Financing directly, and to consummate the Closing ....
It's all Greek to me. It seems we're always warned that the Law can't be reduced to a simple formula. Scott Galloway seemed to indicate in his gleeful "Elon pulls out" emergency podcast episode that one valid reason to go to the $1B penalty could have been that Musk couldn't get the right financing together. Would it be so hard for him to get some I-banker on the stand to tell that tale? Why would any of the big banks care about the feelings of Twitter execs?
To quote the great Crash Davis, speaking to minor league pitching phenom Ebby Calvin 'Nuke' LaLoosh, "Your shower shoes have fungus on them. You'll never make it to the bigs with fungus on your shower shoes. Think classy, you'll be classy. If you win 20 in the show, you can let the fungus grow back and the press'll think you're colorful. Until you win 20 in the show, however, it means you are a slob."
It’s irresponsible to do something eccentric when poor people bear the brunt of the consequences because you can afford to lose a billion here and there while people pay for that with their jobs, homes, lives.
Are you saying that poor people would lose their livelihoods due to Tesla and Twitter stock price changes? You might need to reevaluate your definition of poor if so.
Considering the contagion that can occur whever far ranging stock is discovered to be over inflated in price, I think it's arrogant to look at these types of things and discount what downstream effects could occur.
Well, are the recent layoffs at both companies completely unrelated to that? How far do the rippling effects of billions "lost" from the rich person economy go? I'm 100% some people who were just scraping by have been hurt by this. If only because there are 10 less good tippers / day at the coffee shop down the street from the twitter offices.
And the mental illness of worshiping billionaires seems to have spread worldwide. Why else would you leap to defend elon musk's erratic behavior, and carry water for the damage he leaves in his wake?
There’s a difference between saying “wow that guy is an irresponsible asshole for intentionally or unintentionally fucking up my job” and expecting the market or your job to take care of you.
I know some drivers will run red lights and stop signs, so I walk and bike accordingly. I’m still in the right to get mad when a driver narrowly misses me because he’s a self involved clown.
>There’s a difference between saying “wow that guy is an irresponsible asshole for intentionally or unintentionally fucking up my job” and expecting the market or your job to take care of you.
I keep explaining the connection between my ideas, and you keep repeating that they are unconnected without acknowledging my reasoning. In retrospect, I should have left things back at have a nice day
It’s masterful moves like calling opinions you don’t agree with “strawmen” that make you such a persuasive debater. I’m out gunned and out maneuvered - you win. I was wrong to describe elon musk’s actions as irresponsible.
Governments create rules that force corporations to take care of employees. Maybe not so much in the USA. But that can be improved thru higher taxation and better employment regulations.
we spend over half our waking hours for often over half of our lives spent working — you think it’s a mental illness for a person to consider how all of these hours and expended energy impact their life?
honestly, you think this is a mental illness?
and i think there are many reasonable arguments that huge chunks of the world care far more about their jobs impact on their lives than we (u.s. americans) do.
a mental illness? the way you say everything in your comment, as if that belief is somehow a universal truth is wild.
He relies heavily on his average decision-making ability being way above average. By being this volatile he basically captures surprisingly many good risky decisions. At the same time he ends up with things like this.
Termination fee is like 1 billion I think so it will still be cheaper for him to back out and then buy it when its stock price crumples over the next couple of quarters.
That's only in case he can't get financing. There's no option to pay $1B and walk away. Twitter can sue to force him to complete the deal under the contract they signed.
However I suspect the lawsuit to be settled rather than drag on for years. Probably he'll buy it at a reduced price or pay a larger termination fee to walk away.
isnt it also possible he (some might say rather impulsively) decided to buy twitter, and then upon further investigating finds that his quick rationales no longer make sense if bot traffic indeed is way above 5%? that perhaps he feels that if it indeed is way above 5%, twitter is scamming?
but it is part of the deal, given that twitter says "bot % is <=5", now he may believe that not to be the case. I think its concievable he may have acted before he fully considered whether that number indeed is true
one would think so, so it will be interesting to see how he argues that, but the contract does include more things, including twitter having to provide anything required to obtain funding, which one would probably strongly be able to argue covers data to independently verify this
Good luck with that. He tweeted, early on: "If our Twitter bid succeeds, we will defeat the spam bots or die trying!"
Then, when you conclude a definitive agreement without any provision for an "out" based on an issue that you've already acknowledged knowing about (and hoping to fix post-acq)-- you're kinda stuck with it.
I think the big issue is that with the movement in equities, it requires him to overpay for Twitter with Tesla stock that is much less valuable. Financing the deal got much harder for him.
He is a man who owns and can raise massive amounts of money and promise smart people the ability to build something they want to build. That he gets so much credit for his ventures is a very strange thing to me given how many he has vs how few hours in the day he must have to actually pay any attention to them.
Most other people don't have access to nearly the same levels of capital that would allow them to fail at multiple millions, now billions, of dollars investments. And of the few that do have that money they are generally fairly risk adverse to losing so much when they can get near guaranteed returns rather than making huge gambling risks. Especially when doubling your millions of dollars would mean basically nothing in terms of quality of life improvements.
> The spam accounts angle seems like a convenient scapegoat, rather than a real surprise to him.
It seems apparent to this observer that the spam accounts thing and other metrics were always super inflated and perhaps now there will be a reckoning.
I also think it is very funny how there was much gnashing of teeth and literal tears at the prospect of him owning twitter but now they might end up chasing him and try to force him to buy them, thus further alienating the woke mob and sowing chaos internally. Look how the turn tables have turn tabled.
If they are greedy enough to go to court over it the question of just how fake this company is will stay in the news for the duration of the trial and the stock will tank. If they don't they might have to, you know, actually function like a real company.
No kidding Twitter has spam/fake accounts, isn't that part of why Musk wanted to buy Twitter in the first place?
He publicly stated that he wanted to buy Twitter to clear up the fake account issue, he knew about the issue before entering the deal, when signing he waived due diligence that could have given him the opportunity to investigate the issue before signing...
Musk's own tweets will work against him if he tries to use the fake accounts issue to back out.
His stated reason to buy twitter was in defense of free speech, despite the bots not because of them.
I'm guessing he saw a glimpse of just how extensive the problem really is and the unwillingness of the organization to be remotely honest about it. It would not surprise me if it was 95% bots, rather than 5%.
This is such a terrible look for Elon. I’ve really liked him up until now but this just feels like playing with our emotions. Honestly starting to question how much hope there is for mars to happen at all.
Musk receives a lot of flak because he presents extremely hard problems as easy, and sells the idea that only he can solve them. But this is clearly not true, just look at all the progress that is happening in automated driving and EV technology outside of Tesla, with Waymo, Cruise, and other companies already offering limited driverless rides, and with the Rivian and Ford 150 Lightning beating the cybertruck to market by years.
Real progress takes real work, not promises and marketing fluff. If humanity makes it to Mars it will likely be without his help.
Real progress takes real work, not promises and marketing fluff.
I've never seen a Waymo, Cruise, Rivian or a Ford 150 Lightning in my entire life and I've been in many major cities across the world. You know what I do see on a daily basis though? Teslas.
Eh, I think he’s a believer. I like Jack. He dreams big and is pretty inspirational to wild ideas. You are high if you are reading this and think he’s not upset with where Twitter landed.
Yeah I mean I guess that’s what I’m trying to say. I do think Dorsey is a believer which makes it so odd to me that Dorsey and Musk apparently had enough of a relationship for Dorsey to say Musk was the best person to take over Twitter, and then see the takeover later become so disorganized.
edit: dont know why this had to be flagged. I guess some people really take personal offense in that elon musk might be correct in his thoughts about twitter daily bot %
Somebody being impolite or insulting to someone does not mean they are saying the truth. People who do that only do that to rile up their own group and divide people. Anyone can express their opinions objectively without insulting others.
the real reason he's filing the sec notice is the gas has run out of the bullshit bus. nobody believes his due diligence claims, the board just sent him a resounding vote of approval to buy, and the legal pain train of that comes with anymore of this childish foot dragging sideshow is pulling into the station.
I'd be stunned if he gets to walk off with the billion dollar penalty. too many financial guarantees and backings have been made, and musks had an SEC crosshair on him for years now. they know exactly what patent brand of bullshit he's peddling and have shown themselves more than willing in the past to take action.
musk can file all the notices he wants but i suspect hes about to get ready for the billionaires version of a shotgun wedding.
He has made billions using twitter spamming Tesla and doge. It’s a playground for for the guy. And therefore cheap at almost any price. But of course why pay more than needed.
On a more semi serious note: it must seem ludicrously easy for the guy.
He has laid it all out:
Mars needs:
VTOL rockets since no infrastructure
Methane due to atmospheric constraints
Tunnels for transport see also infrastructure
Starlink see also infrastructure
Direct democracy via twitter ( imperator status exempt )
Have as many kids as possible since it’s obvious he will own the solar system. He ain’t gonna be that democratic therefore. Just another dynasty but maybe the last
Actually, these sorts of things are expected in merger agreements, baked into almost all of them. It isn't unusual, when the seller doesn't provide the required data for the purchaser's due diligence that the agreement will terminate.
Who in their right mind would spend billions of dollars without being allowed to "look at the books" regarding the spam account ratio?
Elon Musk explicitly waived his right to due diligence. You're right about these things being expected, but Elon can't be hampered by such standard conventions.
Well, Twitter (and stocks in general) sorta crashed right after the offer, too, so there's a real question whether that prior valuation makes any sense any longer.
There’s the HN theory, but then he was invited at twitter answering questions that employees had. Why would someone do that if they were just fucking around.
The twitter board has already announced it intends to litigate this. And they are not after just the $1B fee. That might be what Mr. Musk had in mind when he mentioned he was lawyering up in a few tweets awhile back. Even though he waved due diligence, that might not clear twitter from having lied about the bot problem. I suspect this is going into months of litigation. Perhaps Twitter will be willing to accept a lower price. It might be what Musk is angling for.
Oh? This is news to me. The media are all claiming he waived it, though I tended to doubt it. That he would waive it does seem kind of odd, since even waiving due diligence should not absolve a company from lying about its assets if found out.
> it's unclear to me what he initially thought he was getting out of this
You have to look at it from the angle of Musk being a troll and a right wing figure. He wanted to impress his right wing followers by making Twitter a more free and open place for all kinds of speech (even hate, violence, etc). Maybe he realized this was a bad idea and managing Twitter is more a job for a grown up than a troll, so he looked for a way out.
While I would agree his offer was absurdly overvaluing twitter, and reason enough to back out after sobering up, if what is being stated in the letter is true, twitter has likely been committing serious fraud.
It has continually been one of the most underperforming platforms of it's size. Head of Data Science resigning doesn't bode well during a deal hinging on the accuracy of the data.
> he developed cold feet pretty fast after an impetuous decision
I don't think it was impetuous. I think he did this all on purpose and planned on using his usual tactics of improvisational manipulation and grandstanding to get what he wanted, whether it was Twitter at a cheap price, manipulating the Twitter stock price to make a quick buck off of his stock purchase, liquidate some of his Tesla stock, seed further discontent on Twitter, spur on rabble around bots (despite knowing full well that Tesla and himself have benefited from Twitter bots and potentially even controlled them), drone on about free speech in some sort of libertarian political play, or whatever else. And it has all failed. Now, he's just gonna let his dirty lawyers figure some way out of it all and move on to the next scam.
I think that requires a level of competence that Musk has failed to display in the past. Shotwell told an interesting story once, in response to a question like "what's it like to work for Elon?" She related an occasion when she got frantic calls from a meeting Musk was in. In the meeting he had decided to cancel Falcon Heavy to meet a schedule for something else. Shotwell went in and reminded everyone (Elon) they had customers who had already paid for Falcon Heavy and cancelling it wasn't an option and to find another solution. Elon responded like "oh yeah, ok well...."
Then there was BTC to purchase Tesla cars, then there was Doge. The point being I think these types of things indicate Musk, like a lot of smart people can be really, really dumb sometimes. Also a bit Hanlons Razor.
I agree with that. I don't consider him intelligent at all. My suspicion is that it's just a case of him having a loose collection of these outcomes that he considers wins, and then he just kicks it off, hoping he can manipulate things along the way towards one of his wins. I don't think he has an actual plan. He's an improvisational manipulator, very similar to a former president.
Then again, it seems the main "win" he often has in mind is just getting attention, so maybe his need for attention exceeds even what I thought.
No Money Stuff today :( Monday is going to be very juicy, though I'm hoping for a special Saturday edition to talk about how this is all so very stupid.
If he can just walk away and get sued that would probably be cheaper than spending all those billions on Twitter. I'm not a lawyer tho so no idea what's going to happen.
Look around in the thread. M&A experts have confirmed that Musk cannot walk away from the deal, even by paying the $1 billion, unless Twitter lets him.
Is he an idiot who realized he was in too deep / paid too much? Or was he trying to find a way to discredit their user numbers and wanted big headlines?
1. TSLA is trading at $750/share (so if Elon musk was 100% in TSLA, he lost 25% of his wealth).
2. Twitter's comprable, Facebook, fell roughly 33% on revised revenue projections and slowing growth. TWTR roughly tracks Facebook, except for last quarter where the stock hasn't moved due to Musk's offer.
So Musk became poorer, and TWTR, which probably should be trading in the high 20s, has an offer for $54/share; meaning Musk may be paying double what it is currently worth.
I find it pretty amusing Musk has meme'd his way into a disastrous deal.
It's true enough. He isn't 100% tesla, but the vast majority of his wealth is in tesla and spacex, and only one of those is actually redeemable in the short to medium term.
Of course it's not 100% true, the only thing you should take away is that by TSLA shares crashing, Elon lost a significant amount of wealth that would have been used to purchase Twitter.
This was obvious from the moment he brought up the fake accounts problem.
The stock market (especially tech) tanked, other investors started having cold feet, and he realized his purchase was a mistake.
It is bizarre though that Twitter leadership/board continued to engage with him on the matter – even handing him internal data to analyze – expecting a good faith resolution. Nothing Musk has done in the last few months has been in good faith. You either lawyer up and force him to stick to the agreement, or take the loss and move on. Appeasement isn't going to work.
You'd have to provide some pretty compelling reasoning to support that Tesla is successful in spite of Musk; i.e. that without him, its market cap today would be higher than 780 billion dollars.
Even discounting all other data, Tesla avoided bankruptcy in 2008 only because Musk tricked a key investor into believing that he could personally finance their investment round if the other investors didn't sign.
You'd have a hard time tracking down a single eligible CEO who could play that role in 2008, let alone get them in a position to actually be with Tesla at the time. And this is only a single example of a pivotal moment during Tesla's history that hinges on Musk.
It’s because they want him to pay the agreed price. It is an extremely good deal for the shareholders now, so they are behaving perfectly rationally. And they can possibly force him to.
Yes but it was clear (to all outside observers, not the board apparently) that Musk never intended to pay the agreed price. He was just collecting enough material from them to justify his breach, and fake users was a smokescreen. Their response to any questions/statements about fake users should have been the equivalent of "you signed the agreement, now stick to it" not "let's work together and resolve your issues".
So? What does twitter care whether he intended to do it? He agreed to! And they can still force him to do it. So even if he drags out the litigation, they still have a strong position to negotiate a settlement for somewhere between 1 and 40 billion. Free money for his stupidity.
I’m not terribly familiar with the specifics of the deal but IIRC there’s a penalty clause that’s dependent on who, ultimately, backs out of the deal. It seems like Musk is angling to get Twitter to pull out and Twitter is doing everything they can to engage with Musk’s requests in “good faith” so he can’t claim Twitter has constructively backed out— a bit of M&A malicious compliance/a game of chicken, I believe.
are you saying it is 100% impossible that there really is way more than 5% of daily active users being bots? unless you have some information here, it seems like a fairly big claim to make? if elon musk thinks 20% is bots, that is a very different thing than <=5%, would you not agree?
Everyone talking about this claim drops the important word. Less than 5% of _monetizable_ daily active users are bots. A non-monetizable user can exist and many do: people with ad blockers, people using third party Twitter clients, and people using APIs to interact with Twitter. Bot accounts are very likely to not be counted as monetizable daily active uers.
wouldnt a bot user by definition not be monetizable? I dont think this is what it is about at all, it makes no sense? They public a count of daily active users, this includes bots. The amount of those daily active users is very important
They're not obligated to; boards can pretty much do whatever they want.
However, Twitter's board doesn't use Twitter and doesn't actually seem to care about it at all, so they're not exactly going to claim to shareholders they can run it better than an offer that much above its current value.
Hmm this might be hard for you to believe but I've never negotiated in my life. I always accept asked price. Didn't realize this is not the norm. This is not in business context though.
At work, I was involved in a deal with a large company. The numbers are back and forth like 10 times with adds-on and discounts. It's just standard stuff.
I'm not sure if that is because of a modified offer, or the offer was based on some benchmark that had dropped (he already had a large portion of Twitter's shares).
Also between April 14th when he initially made an initial offer and April 25th when they accepted one, the bottom had started falling out. Facebook, in the same sector had dropped by around 10%, so by the time they accepted it was much more attractive.
Musk seems to have timed the offer and the initial separate share purchase all horribly wrong.
Have you read the termination letter? The letter was sent by Elon's lawyers working with Twitter's lawyers according to the merger terms they had all agreed to. Why shouldn't they have expected a "good faith resolution"? A termination can still be made in M&A under good faith.
Where did you get the "working with Twitter's lawyers" part? This letter is sent to Twitter's lawyers informing them that Musk is terminating the agreement.
They helped craft the agreement, according to Musk, twitter is violating the agreement which is grounds for termination as per the agreement.
I'm not going to pretend to know who's right or how this will play out legally, but Twitter's lawyers did participate in the creation of the agreement and therefore the current state of affairs.
I think you're getting downvoted because it's apparent that musk's naked assertions are untrustworthy, given his track record of being untrustworthy and making untrustworthy statements, so it isn't even worth considering the possibility the claims are true unless he actually brings some evidence to the table
I don't care about votes. This isn't reddit. I just have discussions on this site and that's all I care about.
But on the topic, I think I'm getting down voted as an emotional reaction. I clearly said I don't want to pretend to know if he's legally right or not, a position which if most of us are being honest we should all be taking. But people aren't taking that position and they're reacting emotionally to words they don't want to hear. All I've said in the above comment was that Twitters lawyers did indeed contribute to the current state of affairs when they participated in the creation of the agreement in question. This is true by definition.
sorry, I didn't mean to refocus the discussion to voting itself, the focus should be on the fact that elon is extremely untrustworthy and thus his bare assertions are worthless and not worth considering absent any evidence
I mean, yeah, twitter's lawyers were definitely involved in drafting up the contract between twitter and elon, but that doesn't really have any bearing on elon regretting signing that contract which mandates his closing the deal -- sucks to be him
Maybe there are some downvotes because this branch of the discussion was about whether Musk and Twitter’s lawyers worked together on the termination letter and you seem to have shifted to whether they worked together on the agreement?
They wanted to cash out of a declining position as much as he wanted to renege on the deal... he was overpaying at that point, why wouldn't they want to sell?
No; Musk has demonstrated with his actions that he is a liar and his word means little. You could look at his “taking Tesla private at $420; funding secured” tweet, or his late SEC filing for his large ownership stake in Twitter where he claimed to be a passive investor days before making this offer, or any number of prior examples. If you assume good faith from Musk at this point, you are a fool.
That's not what "bad faith" means. If GP didn't care if their statement were true but just said it to make Musk look bad, then it would be in bad faith.
Musk has been very publicly coy about his intentions for several months, so it's hard not to have an opinion at this point. Just because that opinion may be wrong doesn't mean it's offered in bad faith.
Elon got what he wanted. Everyone on his side now thinks he's a bastion of free speech, and he can forever say "If I owned Twitter, I would have...". And he gets the credit he wants without having to actually do anything.
Twitter got what they wanted. They didn't want Elon to own the company, but they also couldn't ignore the offer. So they called his bluff. They would have ended up with a world of pain if they didn't accept the offer, but nobody at Twitter wanted it to close. And now they'll be able to sue Elon and get the upper hand.
Both sides got what they wanted here. I just wish it didn't have to distract all of us so a few rich people could mutually level up.
>'Everyone on his side now thinks he's a bastion of free speech, and he can forever say "If I owned Twitter, I would have...".'
Doesn't he kind of forfeit that bragging right if he tries to walk away from the deal though?
>"Twitter got what they wanted. They didn't want Elon to own the company, but they also couldn't ignore the offer."
What happens to their stock price after this though if this deal doesn't happen? Hasn't it basically been flat or trending down for some time before this current situation? Doesn't Twitter still have all the same problems they had before this current circus started?
Also is there a possibility that if that deal doesn't happen there becomes a bigger spotlight on Twitter's future filings in regards to their quoted percentage of "fake or spam accounts on Twitter’s platform"?
> Doesn't he kind of forfeit that bragging right if he tries to walk away from the deal though?
Look at this thread, you'll find enough of his fan calling this a victory because it will expose how corrupt Twitter is or whatever. Reason, common sense and the frigging obvious don't have a grip in their minds.
Twitter is going to be the downfall of Elon. I don’t understand is fascination with it. It’s a big distraction and he alienates a certain percentage of his customers for Tesla.
How exactly would it result in his downfall? Do you think the terminally online even buy Teslas, or use Starlink, or, you know, shoot rockets into space?
in this imaginary bingo game you invented to avoid discussing elon's failings, are you playing all alone, or are you also imagining that you have friends there?
Because a non small part of his success is based on portraying himself as a form of real world tony stark, mainly over twitter.
Without that he wouldn't have gotten nearly anywhere close to where he ended up.
Because for a lot of his ventures he used that image to collect way more money then the company would normally had gotten and the used the additional money to try to beat the completion enough so that the investors won't complain even through the company didn't reach to promised (and often outright absurd) goal anywhere close in time/at all.
Tony Stark from the comic books was based on Howard Hughes. When they developed the character for film, they used Elon Musk as inspiration for the character. So you have it backwards, Elon was even in Iron Man 2. Most of his PR stunts make the news so I don't think Twitter makes much difference.
Really? I guess I'd believe it. He was a wealthy aircraft designer / Hollywood A-lister.
Fun fact about Howard Hughes, he once crashed a biplane during the filming of a movie he was directing. (One of four airplane crashes he experienced)
The stunt pilots had all refused to try the maneuver he wanted to do, so he hopped into the plane, took off, and did exactly what they anticipated.
It's not clear whether he was pulled from the wreckage or found in a nearby hangar after walking away from it, but he survived and finished the movie, which made a loss despite being the top-grossing film of 1930.
I can believe he used some of that logic to justify the decision to bid for it...
But in reality his ventures collect way more money than companies of those types normally get because he hit home runs in the early internet era, then started tackling some incredibly ambitious hardware engineering problems and built companies that actually started to solve them, complete with an exciting thesis about them being all being linked to Mars colonies. That's where the "Tony Stark" reputation comes from and why people bothered following him on Twitter in the first place.
Sure, some retail investors follow him on Twitter and end up buying his stocks (or some random crypto thing he has no financial connection with but thinks is funny...) because they think he's great, but if the difference actually owning the platform makes to his ability to raise capital isn't absolute zero, it's closer to zero than $44B. And not necessarily positive, because owning Twitter doesn't make batteries cheaper or ease the technical and regulatory challenges of self driving or LEO mesh networks, but it would take up a lot of his time and resources.
I think it's simple.. he is insanely egotistical. He thinks he is some super genius. I'm not saying he's not a smart guy, but he was able to benefit from the early dot-com era mostly because of timing- he happen to be a smart guy at the right age of tech when it was much "easier". There are millions of people who are really smart and work in tech but it's not like they can just magically make an insane amount of money like early on.
He thinks because he is the richest person in the world that he has also worked the most and is the smartest. Both are extremely far from reality- but you can't convince someone of him like that.
Anyway- my point is he loves being able to just post a tweet and have however many people read it and talk about it. Similar to someone like Trump- they just love all the attention to an insane amount, and unfortunately technology makes that possible these days.
For anyone thinking he can pay the 1B$ termination fee and walk away, it's not that simple.
The 1B$ is a "reverse breakup" fee, and applies when an outside force (like SEC or financing) prevents the deal. That 1B$ has nothing to do with any choices on either side, and is unlikely to factor into this process.
At this point they're clearly going to trial, and it's not unlikely that the cost to Elon will be somewhere in the neighborhood of the difference between the fair current market value (~20B$?) and the purchase price (~44B$).
Eh, math when written out instead of expressed numerically is sometimes hard. Props for admitting the brain fart though, as the sister comments show being wrong on the internet isn't always easy.
As in my post, assuming this reaches a "negotiated" settlement there are going to be two important values: the original purchase price (OPP), and the fair market value (FMV).
If Twitter "wins", they get Elon to pay the full market value. Now, they don't actually want Elon to be involved, so if Elon pays the difference between FMV and OPP (~$24B) that's essentially the same as buying then divesting with fewer steps.
If Elon "wins", he gets out paying nothing.
So the range is 0 to $24B.
Elon has a terrible case here, so the best negotiating tactic he has is being a disruptive asshole so TWTR just wants it done with (this is playing to his strengths). I'm also making a big assumption about the FMV, which could easily rebound a bit by EOY. With those factors pulling it down from 24, I'm expecting in the 10-15 range, and if I had to guess I'd say $12.5B.
Pick your own inputs for your own estimate, but this is the deal structure.
If Elon wins his claim that they breached contract, he will be able to go after them for damages. It's pretty clear Twitter was lying and fudging fake user numbers, the question is how much and whether that was a breach of contract.
1) The contract states they are obligated to provide information, Elon alleges such information was withheld or curtailed - a contract violation. There doesn't need to be a specific clause about a particular metric because the obligation to provide information is broad.
2) Facebook lied about video watch time for years, including in SEC filings and to advertisers (essentially fraud). Is this an appeal to the sanctity of SEC filings? I don't think Facebook is significantly more reputable than Twitter, they're both pretty shady.
Why should we just trust the company, as you imply? Companies routinely and regularly lie in SEC filings, including big tech -- and Twitter! They paid close to a billion in securities settlements for - wait for it - lying about user engagement!
Twitter admitted to lying about user engagement in 2015 and paid a hefty fine for it. [1]
Is your argument really "the company that has been proven to lie about user engagement wouldn't lie this time"? Seems flimsy.
Contract violations are more complex than that. You can’t simply void a contract over a little technicality. Even if they had given him the data, he wouldn’t have been able to get out of the contract. So a judge is not going to look at that and say, “oh yeah, Musk was paying $44B for the company and the right to review its data, so unless he gets both he pays nothing.” The judge is going to go, “okay the company is worth nominally $44B and reviewing data is worth zilch in light of the rest of the contract, so these aren’t equal parts.”
1) They provided access to their firehose API, how is that not enough? The crap about rate limiting doesn't apply to the firehose, and decent engineers can get around rate limiting, so either way this doesn't hold up.
2) Twitter's CEO gave a pretty good explanation of how they combat bots and how they calculate their mDAUs, Elon Musk responded with a poop emoji. I get that his personal experience on Twitter is heavily bot-infested, a significant proportion of bots on Twitter engage with his account and use his image as a user profile. Twitter doesn't claim that the bots in Musk's feed are under 5% of users, or that the number of bots overall are under 5% of users, they claim that the number of monetizable daily active users is under 5%. Given the definition of a "daily active user", reduce to "monetizable", and consider the number of users who never post anything but read tweets and click on ads and promoted tweets, and this isn't hard to believe.
On the other side we have Elon Musk, notorious liar, claiming that he doesn't want to buy Twitter because Twitter is lying about the number of bots, despite the fact that before tech stocks crashed, he said he wanted to buy Twitter to solve the bot problem. This isn't hard. He has buyer's remorse and the bots thing is the best excuse he has to get out of a contract he signed. It's a shitty excuse and no one other than Musk fanboys have any reason to believe him, and it's not even an excuse in court.
>Twitter's CEO gave a pretty good explanation of how they combat bots and how they calculate their mDAUs
Company that previously lied to investors about engagement and settled a massive billion-dollar lawsuit makes further unproven claims about engagement. You believe them why?
Should corporations which deliberately lie to investors be immediately trusted again, especially on the same topic they got caught lying about previously?
Your argument is an appeal to authority where no authority exists. They're liars. Not just liars in general, but liars about this exact topic. Do you trust BP's offshore drilling because the CEO now insists it's totally safe this time?
>Twitter doesn't claim that the bots in Musk's feed are under 5% of users
He never claimed this, this seems like a strawman. Did you read the complaint?
>this isn't hard to believe
Choosing to believe a company that has admitted to lying to investors is your prerogative, it doesn't make them trustworthy or correct -- and it absolutely doesn't make your argument based in any kind of reality (why should we take the liars at their word?). Why go to bat for a company with a billion in fines for misleading investors? Under what basis do you believe they've reformed and can be trusted?
I don't understand why you believe Elon can't be believed because of his history of lying while you ignore Twitter's sordid past of securities violations and lying to investors.
>Elon Musk, notorious liar
Why don't you label Twitter as notorious liars, given their billion in settlements for lying to investors?
> Choosing to believe a company that has admitted to lying to investors is your prerogative, it doesn't make them trustworthy or correct
More to the point, it's Musk's perogative, which he excercised when he signed a contract to buy the company based on their represenations while choosing not to do any due diligence to verify those representations.
I think Twitter is probably more believable here than you give them credit for, but Musk trusted them 100% for some reason.
> Should corporations which deliberately lie to investors be immediately trusted again, especially on the same topic they got caught lying about previously?
For lies known previously to Musk's offer, he had every opportunity to decide whether to trust Twitter or not, and he chose to by waiving due diligence.
If there's an allegation of an additional lie that's material to the deal, Musk hasn't provided evidence of that here.
>If there's an allegation of an additional lie that's material to the deal, Musk hasn't provided evidence of that here.
Did you read the filing? He provided evidence of them violating their obligations under the agreement (refusing to provide adequate access to data to independently verify claims made about user engagement). Twitter agreed to these terms. Read the original agreement to see for yourself.
>he had every opportunity to decide whether to trust Twitter or not
How does that mean fraud is okay? If Twitter lied again, it would be a clear contract violation. You can't just lie about critical company metrics to acquirers, due diligence or not. It's fraud AND a contract violation.
Given we're talking about a disreputable company with a history of lying, I'm not inclined to believe them and I don't know why you immediately believe their claims. Perhaps you can enlighten me as to why you think they deserve trust in this matter.
Twitter admitted to lying about user engagement in 2015 and paid a hefty price for it. [1]
Your argument is absolutely ridiculous. They've done it before, and settled.
Seems you have absolutely no idea who you're defending, which is a company that has routinely misled investors on user engagement and paid settlements for that very fact.
"The company with a history of lying to investors about user engagement would never lie about user engagement!"
Be that as it may, it’s not relevant to Musk getting out of his merger agreement now, which is unconditional except for 1) material adverse effect (which is a way higher bar than the well known bot issue) and 2) Twitter fulfilling the covenants in the agreement, such as continuing to run their business and providing requested information within reason. Since there is no way he is getting out under 1, MAE, he is trying 2.
You claim that lying about user engagement could never qualify as a "material adverse effect". On what basis do you make this claim?
As a thought experiment, if 50% of Twitter's claimed MAUs were bots, it would absolutely be material.
Given Twitter has a history of lying about this exact metric, under what basis do you believe that the bot issue isn't material? Blind trust in the same company that lied about it before?
I'm trying to understand why people trust the company that was caught lying to investors about the very subject they were lying about. Where do you get this trust?
For it to be relevant, the "material adverse effect" needs to have been caused by an action by the company subsequent to the deal being signed. Like, for example, the corporate treasurer suddenly going to Vegas and losing the treasury on blackjack.
Twitter may well have been grossly lying all these years, but the time to figure that out is before you sign the deal. That's kinda the point of doing due diligence.
The merger agreement requires Twitter to provide adequate access to data requested, if they haven't done this then the merger agreement has been violated even without a MAC violation.
Specifically, the merger agreement requires "all information concerning the business ... of the Company ... for any reasonable business purpose related to the consummation of the transactions".
Seems like an arbitrary API rate limit could easily violate this clause. How are you providing "all information [...] requested" if you drip feed it?
The fact they'd even play cloak-and-dagger with this information suggests there's fraud again. Companies with nothing to hide don't mislead acquirers.
You're using lots of words that imply malicious intent and bad faith, without providing anything to back that up.
Not to mention that your theory of Twitter behaving fraudulently in the context of this transaction makes no sense. They've got a commitment to purchase them at vastly more than their market value, so they're highly motivated to see the deal close. What's the incentive for acting in bad faith?
I mean, I'm anti-musk, but I certainly would believe his claim they've been lying about the bit population. Both Twitter and Facebook have lied about this in the past, so the only part of musk's position I find believable is that Twitter underreported bot users. That being said, he waived his right to due-diligence, so lol. Truly a situation where both sides are dislikable.
But there is lying as in “not telling the truth in a technically correct way”* and there is lying as in “committing a fraud”.
Musk would need to show the latter, not only the former. And that carries rather stiff penalties. As opposed to reading the rules very precisely and only effectively lying. Which is what lawyers are for
* always remember that Bull Clinton technically didn’t lie. He in fact asked his lawyers before that hearing and was told that “no getting a BJ, according to the law, does not constitute a sexual relationship”. In didn’t end up mattering because him staying president is a _political_ decision. Unfortunately for Musk, public opinion does not matter here
> Elon has a terrible case here, so the best negotiating tactic he has is being a disruptive asshole so TWTR just wants it done with (this is playing to his strengths).
Twitter isn't trying to stop him, probably because they don't use their product and may have forgotten they can just ban him.
Banning him at this stage would almost certainly expose Twitter to massive liability, especially as they have shown they will ignore rules for public figures. Twitter could only get away with banning Elon if he egregiously violated their policies, and Elon is too good of a troll to do anything that severe.
That doesn’t follow. The exceptionality of Elon is obvious to everyone. He’s the richest man on earth (by some measures), not an Everyman voicing a contrarian opinion. You couldn’t convince anyone you honestly thought “if they banned him, they could ban me” After all your latte art tweets aren’t significantly, materially damaging Twitter’s financial outlook
I'm saying that the formerly most famous tweeter (trump) fluted rules that would have gotten my account banned. Twitter didn't ban trump until after Jan 6th; so Twitter doesn't have any way to legally justify banning Elon unless he does something equally egregious. That's why Elon didn't get banned for the pedo claims or the multiple SEC violations. He is such a notable figure that Twitter can't ban him (without violating the terms of the acquisition) without stupendously egregious evidence that Elon violated their terms.
If Twitter banned Elon's account for a minor TOC violation now, they would likely expose themselves to legal retaliation. Sucks, but it seems we both agree that there are separate rules for the ultra-wealthy.
Edit: I can't swing any stocks with my tweets; whereas Musk can. That is the difference, is who has the platform.
If he's calling off the deal (which isn't a thing but they can pretend he is), it doesn't seem like a violation if you agree it's off. He might then get bored and decide to make it on again.
They had good reasons for not banning Trump until then, namely that he literally would've gotten their employees killed.
Which actually makes Elon's position worse, since theoretically that reduces Twitter's stock price and increases the spread between the fixed offer and the current valuation. Plus, his financing tanks since it is predicated on Tespa's stock value.
For that to happen, the market would have to (1) believe there is a very very high probability that the deal won't happen, and (2) believe Twitter is suddenly going to grow significantly.
Neither of these seem very likely, especially in combination.
In an important sense, this particular conflict is (as yet) dramatically better than these -- it hasn't involved thousands of people bickering for many years.
The original purchase price minus the current market value is how much they lose if he backs out of the deal, so that's the ballpark of what they would want to get paid to let him not buy Twitter.
That’s not true, they lose more. If it is acquired they sell all their shares instantly without any negative effect on the price of the shares. If they did that not as part of an acquisition, the share price would tank.
It probably depends on how much you need to think about it. If you have a minion to whom you can say "I'd like to buy Twitter, go figure it out, then let me know where to sign", there's a lot of room for being impulsive.
Tesla and SpaceX success is depending on the public opinion of Musk. If he ends up paying 15 billion (or whatever the number is) over a botched take over, one that had a negative impact on Tesla shares, this opinion might just change. In which case Teslas future preception as a tech company might be at risk.
An advantage that we cannot be sure exists to begin with since SpaceX isn't piblishing financials. And for some launches Arianne Space is already now competitive using the Arianne 5, by all means an out dated design, one that was initially intended to carry a European space shuttle into space.
More generally so, I have no idea why people expect any company to own a market completely. Any market is usually big enough for one than one company to be successful.
SpaceX's product isn't reusable launches it's just launches, the reusability is their competitive advantage. There's a lot of other launch providers out there.
So my hunch that this could lead to him going broke isn't completely off base?
I figure he ends up having to pay $10E+10, and everyone knows it, so he gets short-squeezed in Tesla stock, then margin called on any loans against his stock... then POOF
It could if your $200 billion valuation is based on the stock of over-valued companies which you used to over-leverage-borrow, and you need every free penny to continue paying back debt and keep that stock price high.
He doesn't have $200,000,000,000 in cash.. he has stock, the value of which is exclusively depended on buyers exchanging their $ for it. There's nothing stopping any publicly traded stock from collapsing in value to the physical assets of the company minus any debts or liabilities.
According to this thing I found on the internet[1], if I read it correctly, Tesla is worth $31B if it were stripped and sold.
Most of Elon's wealth is Tesla stock... far more than the actual value of the company, by a factor of more than 5. If he has any debts against his stock, those could be his downfall.
Elon owns 16% of Tesla and Tesla stock is the vast majority of his wealth. If the market cap of Tesla were to crash below $150 billion it would be in the territory where his penalty to Twitter could be multiple billions more than the value of his Tesla stock.
I personally don’t think Tesla is worth even $100 billion. However, the markets disagree, and it is difficult to imagine a scenario where Tesla loses 80% of its value.
If Tesla stock drops and his loans against Tesla stock go negative, he'll be forced to liquidate more shares to make up the difference to keep the loan afloat... this would then lower the value of the stocks even more, and the positive feedback loop could let all of the air out of his imagined wealth.
In other words - He has effectively sold shares at a price by borrowing against them... if the price falls, he'll have to do something to make up the difference... which is about the same thing as a short-squeeze for him.
It's the same mechanism as a short squeeze, just with the roles of stock and cash swapped. There is likely a specific word for that, but the comparison works.
Squeezed short sellers have an obligation to get a specific stock, but only have cash. There are not enough market participants willing to sell the stock, so the price rises astronomically to their disadvantage.
Elon has an obligation to get cash, but only has $TSLA stock. There are not enough market participants willing to buy the stock, so the price drops enormously to his disadvantage.
I stand by my theory that the whole thing was a displacement activity that caught his attention instead of something else more arduous that he was supposed to do that month.
Like when I suddenly develop an interest in Columbo trivia when actually I'm supposed to be doing my accounts.
This is good for Twitter, and good for the world. Musk's misguided approach to free speech, which says anything that is not explicitly illegal is allowed, would have made Twitter an open forum for spreading lies and hate.
My guess is Musk never intended to buy Twitter. He needed an excuse for dumping billions of dollars' worth of TSLA at its peak (while at the same time faulting Bill Gates for shorting TSLA), and his proposal to buy Twitter provided a convenient cover.
> Musk's misguided approach to free speech, which says anything that is not explicitly illegal is allowed, would have made Twitter an open forum for spreading lies and hate.
Twitter is of course currently known as a source of Truth and Harmony.
"anything not illegal is allowed" sounds decent to me; if you want stuff illegal, make it illegal. If you want unwritten laws dreamt up by anonymous elites and enforced for random reason, go talk to Tipper Gore and the PMRC.
>"anything not illegal is allowed" sounds decent to me; if you want stuff illegal, make it illegal.
Twitter is based in the US, the 1st Amendment protects hate speech such as explicit support for genocide. I don't consider a social network full of genocide promotion to be a good thing.
The argument GP is making is that if the government can't make it illegal, private companies shouldn't disallow it; the person you're replying to is pointing out that the First Amendment sets that bar far higher than GP probably realized.
This is not historically the reality of 1a jurisprudence. Before the Internet, the ruling was that private companies cannot restrict your speech in public view. See Marsh v. Alabama for this -- a company town was prohibited from barring picketing and pamphleting on private sidewalks.
The exceptions to this were carved out in a court case regarding Compuserve, which was a subscription-only service. The stare decisis in this instance is on far shakier ground than Roe was.
You have to register to use twitter. Marsh v Alabama had nothing to do with compuserve. That would matter if a website was truly a de facto public square, but given the whole registration thing, they're not.
The compuserve case led to section 230 of the CDA being created, but again that doesn't have to do with Marsh v Alabama. To have that apply, you'd need to make the argument that Twitter both is, and intends to be a public square, and well, the fact that they have posted moderation policies makes it clear that they don't.
Marsh was not the public square. It was the sidewalks of random streets. The company that owned them explicitly did not intend for them to be a public square.
In contrast, the historical statements of Twitter make it very clear that they intended to be the public square, e.g. "free speech wing of the free speech party." Additionally, the assertions and decisions of the state in regards to social media indicate massive influence over politics that far exceeds any city street. They say people are denied their rights of free expression because Trump blocked them on Twitter, and that Russia successfully manipulated our elections because a few Russians bought a tiny amount of Facebook ads.
> It was the sidewalks of random streets. The company that owned them explicitly did not intend for them to be a public square.
Sidewalks of random streets are considered to be "the public square" in US law (broadly because random streets are usually publicly owned. You need things like gates and signs and such to revoke such an assumption). The Marsh v. Alabama ruling relied on the fact that the town didn't try to make its streets un-square like, and in fact encouraged public square-like use!
> In contrast, the historical statements of Twitter make it very clear that they intended to be the public square, e.g. "free speech wing of the free speech party."
You will be hard pressed to take a single statement, made by a minor executive who acts outside of US jurisdiction, in 2012, as superior to the actual user agreements that Twitter has (and had at the time) in the US.
Have you spent much time on "anything not illegal is allowed" forums?
Try to talk about popular movies are TV shows and you get things like this on such sites [1]. Want to discuss an episode of PBS Space Time such as this one [2]. Don't be surprised if this is the discussion you get [3].
What almost always happens on such forums is that the people there who aren't racists, sexists, antisemites, inane conspiracy theorists etc., leave, and the forum ends up being largely just such people.
Voat suffered from a flood of toxicity caused by Reddit banning toxic behaviors. From what I could tell, it was practically uninhabited before.
Reddit itself was largely "anything not illegal is allowed" at the time (in part due to lax enforcement of the few rules they had), and was largely fine. The toxic communities sequestered themselves for the most part.
Twitter would probably be much the same. The greater issue they'd have is the same Reddit had; it's hard to sell any advertising on a site where you can't guarantee ads won't show up next to racist/sexist/etc diatribes.
So when you say anything not illegal is allowed, do you mean that I can post porn anywhere? That spammers and bots can't be banned?
Any remotely reasonable approach here has the state deciding which attributes can be used for moderation decision and which can't, which also isn't feasible.
> Musk's misguided approach to free speech, which says anything that is not explicitly illegal is allowed
What is free speech but that.....
> would have made Twitter an open forum for spreading lies and hate.
Like it isn't now. Twitter lets pretty much anything and everything except hate against specific subgroups they've decided are "protected". It really doesn't help there choices are entirely arbitrary with no internal consistency.
Why does he need a cover to sell his stock? He sold $10B+ last year without the twitter excuse. Also TSLA stock in March was at least 40% below it's peak
So, you don't see a conflict if Musk criticizes Gates for shorting TSLA (because Gates thinks it is overvalued) and then turning around and selling billions of dollars' worth of TSLA? I do. I think that qualifies has hypocrisy.
The headline is: "Elon Musk Sells $8.5 Billion of Tesla Shares After Deal to Buy Twitter"
The deal to buy Twitter gave Musk an excellent cover for selling billions of dollars' worth of TSLA. He doesn't need to sell all of TSLA. He sold a massive amount. If he didn't have this cover it would have looked like he thinks TSLA is overvalued (which in fact it is).
Both Gates and Musk sold TSLA. Gates sold borrowed shares, Musk sold shares he owned. That's the only difference. Of course Musk still has tons of TSLA remaining. But that doesn't change the fact that both Gates and Musk did the same thing (sell TSLA) and yet Musk criticized Gates for it. What a hypocrite!
I am so tired of seeing this overplayed urban myth. The precedent you mention was set by Schenck v. United States in 1919, but it was partially overturned later in Brandenburg v. Ohio in 1969 [0]. Which is the part that people who bring up this myth every time conveniently forget about.
So no, you can yell "fire" in a crowded theater or whatever else you want, as long as it doesn't meet the legal standard for imminent lawless action (e.g., a riot). And the legal standard for imminent lawless action is much higher than you think it is.
> as long as it doesn't meet the legal standard for imminent lawless action
So there is no absolute free speech then. Which is the point of bringing up the "fire" example.
If you're a visitor in my house there is no free speech at all. If you say something I don't like I'll legally kick you out. Private companies such as Twitter and Facebook have the same right. Their platform, their rules.
If someone is a visitor in your house, you can kick them out for literally any reason you want or no reason at all.
No idea how this is relevant to your claim that "yelling fire in a crowded theater isn't allowed under free speech". It is legally allowed under free speech, it isn't a crime, despite what a lot of people claim. The theater might kick you out or ban you, but that has nothing to do with free speech.
The other part of the myth people forget is that the metaphorical fire-yellers were socialists distributing anti-draft pamphlets. It's hardly a good thing to cite today on freedom of speech.
> Musk's misguided approach to free speech, which says anything that is not explicitly illegal is allowed
Genuinely interested, and not just trying to argue: how would you otherwise define free speech? It sounds like you think free speech should have defined limits - which surely means it's not free speech any more?
I am going to let Sacha Baron Cohen, of all people, answer your question [1]:
Voltaire was right when he said "Those who can make you believe absurdities can make you commit atrocities." And social media lets authoritarians push absurdities to millions of people. President Trump using Twitter has spread conspiracy theories more than 1700 times to his 67 million followers.
Freedom of speech is not freedom of reach. Sadly There will always be racists, misogynists, anti-Semites, and child abusers. We should not be giving bigots and pedophiles a free platform to amplify their views and target their victims.
Zuckerberg says people should decide what's credible, not tech companies. When 2/3rds of millennials have not heard of Auschwitz how are they supposed to know what's true? There is such a thing as objective truth. Facts do exist.
Unless I'm misunderstanding the quote, that's very much not answering my question: it discusses limiting reach (i.e. ability to disseminate one's views widely and easily) and explicitly not free speech itself?
Free speech doesn't have a single meaning. Freedom is relative. There is no right to absolute free speech anywhere. For example, you can't yell "fire" in a crowded theater. On social media owned by private corporations, "fire" isn't the only thing you aren't allowed to yell. Subverting democracy, inciting violence, propaganda from foreign governments pretending to be grassroots movement inside the US, etc., are all banned, and yet I would consider Twitter a free platform, albeit with sensible limits. But you're right, that's not absolute freedom.
Fire in a theatre came up in the context of squashing a protestor against the draft, from a judge who thought eugenics may have something going for it.
How can you separate speech and reach in this specific case? Twitter could allow all speech but limit reach, ie shadow ban. Would that satisfy your notion of free speech?
Communication, as the atomic element of networking, requires both transmission and receipt to be said to have happened.
Speech is transmission.
Reach is landing at a receiver.
Substituting /dev/null in place of a human being does not satisfy speech having occurred. A concordance must be reached between the speaker and at least one other individual.
imo this is pretty bad for twitter the company. they’ve been flat for years, they’re current valuation is less than in 2013. they’ve lost the plot a while ago and seem to have been in a managed decline, probably because they were looking for buyers.
> and good for the world
you are overestimating how many people care about twitter outside of the US.
His buying offer includes a fair number of Co financers, he can't just close on them. You just have to look at what happened to solar city (or even the genesis of starlink as a feeder for SpaceX) to know that not screwing with his big investors is the one thing he seems to take seriously without letting his ego screw it all up.
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[ 0.23 ms ] story [ 233 ms ] thread> Despite public speculation on this point, Mr. Musk did not waive his right to review Twitter’s data and information simply because he chose not to seek this data and information before entering into the Merger Agreement. In fact, he negotiated access and information rights within the Merger Agreement precisely so that he could review data and information that is important to Twitter’s business before financing and completing the transaction.
Is the merger agreement public?
https://www.sec.gov/Archives/edgar/data/1418091/000119312522...
Either way, I am laughing at all of them. (Yes. Elon also played the fraudster role as well)
what did musk's filing say about that? any complaints?
What matters is that Elon has a bad time when he goes on Twitter because he is bombarded by bots and spam.
If there were only 3 bots on Twitter, they would all be bombarding Elon. If there were no bots on Twitter, he would still be bombarded by spam.
I guess you can't really use "I'm tired of my personal experience being terrible on Twitter" to raise money to buy Twitter, or to keep your fanboys engaged, or whatever Elon is thinking.
Personally, I think "I'm tired of my personal experience being terrible on Twitter" would have been a very honest way for him to approach the whole matter.
I also think that it is very natural for people to feel a threat or emotion or anger and then pin that on an external actor or actors, when it's something that they feel inside themselves.
It outlines the fraud allegations:
https://www.sec.gov/Archives/edgar/data/1418091/000110465922...
The obvious legalese thing to do in Musk's buyers-remorse situation is to use the information rights to make demands so unreasonable no acquiree can reasonably honor them, which is exactly what he seems to have done here.
Someone else gave their opinion.
If you disagree, then say why.
If you want that evidence, then go get it yourself.
They posted an opinion, not interpretation... The part before the opinion as simply for context.
> invalid to speculate.
Then say that you are speculating instead if claiming it as the truth.
This is a legal matter, and often it comes down to which side argues their case better. It isn't code where there is only the factual interpretation as seen by the compiler; law takes into account the fuzzy human interpretations that often frustrate programmers. Ultimately, this contract will be enforced by the courts in whichever side makes a better case.
Note that this may mean that even if Elon is in the wrong by canceling, the court may find in his favor simply due to the potential economic fallout. Sucks, but if law was a cut and dried thing we would have eliminated lawyers long ago.
Do you believe it's not possible to draw up clear contracts with clear meanings? Do you believe that if you just take any contract and pay a lawyer some money, they can argue whatever? In that case, what's the purpose of drawing up a contract at all?
Resolving that ambiguity is an important function of law and I'd go so far as to say the primary function of the court system. I do believe that if you pay a lawyer enough money you can probably find one willing to argue what you want although you may not win.
Copying a previous reply I've made on this:
Section 5.11 ("Parent" and "Acquisition Sub" is Musk, "Company" is Twitter):
> Each of Parent and Acquisition Sub has conducted, to its satisfaction, its own independent investigation, review and analysis of the business, results of operations, prospects, condition (financial or otherwise) or assets of the Company and its Subsidiaries. In making its determination to proceed with the transactions contemplated by this Agreement, including the Merger, each of Parent and Acquisition Sub has relied solely on the results of its own independent review and analysis and the covenants, representations and warranties of the Company contained in this Agreement
So, in essence:
1) Musk has been afforded the opportunity to address any concerns he has with Twitter
2) Any concerns of Musks have been satisfactorily resolved by Twitter
3) In determining said satisfaction, Musk is relying on his own judgement and analysis, and is not relying on any analysis by Twitter.
If you are buying a bank under these same terms and the bank represents that they have $X in deposits, then it turns out that they actually have $X/2 in deposits are you saying the transaction should also be forced to proceed?
Is it meaningfully different here because X is # real users rather than dollars?
First, so far its not an argument that the data is "falsified or fraudulent". Its merely that the data is incorrect. Theres a very big difference, and the 10-Q claims are so measured and non-committal that its very hard to even find anything that could be construed as falsified/fraudulent. The claims themselves even go ahead and say it might not be right, even implying they have a significant likelihood of imprecision due to the methodology employed.
In order for the claims to be falsified/fraudulent, you would have to have actual deliberate lying and coverups to get there. In other words, they found 20% but _intentionally still put 5% even though its a made up metric that they can just move the goal posts on_. It just doesn't make any sense to do that and, in my opinion, is _extremely_ unlikely to be found during discovery.
Second, if the argument being made is that he thinks its higher than 5% _and isnt arguing deliberate fraud_ then the clause I pasted above absolves Twitter because it says Musk has been afforded the opportunity to fact check it and has no reason to debate the accuracy of the claim.
> Section 6.4 Access to Information; Confidentiality.
> Upon reasonable notice, the Company shall (and shall cause each of its Subsidiaries to) afford to the representatives, officers, directors, employees, agents, attorneys, accountants and financial advisors (“Representatives”) of Parent reasonable access (at Parent’s sole cost and expense), in a manner not disruptive in any material respect to the operations of the business of the Company and its Subsidiaries, during normal business hours and upon reasonable written notice throughout the period commencing on the date of this Agreement until the earlier of the Effective Time and the termination of this Agreement pursuant to Article VIII, to the properties, books and records of the Company and its Subsidiaries and, during such period, shall (and shall cause each of its Subsidiaries to) furnish promptly to such Representatives all information concerning the business, properties and personnel of the Company and its Subsidiaries as may reasonably be requested in writing, in each case, for any reasonable business purpose related to the consummation of the transactions contemplated by this Agreement;
> Section 6.11 Financing Cooperation.
> (a) The Company shall and shall cause its Subsidiaries to, and shall use its commercially reasonable best efforts to cause each of its Representatives to, at Parent’s sole expense, provide any reasonable cooperation reasonably requested by Parent in writing in connection with (i) the arrangement of the Bank Debt Financing and any other debt financing expressly contemplated by the Bank Debt Commitment Letter...
This argument is saying that Twitter is not holding up it's end of the Merger Agreement by not providing (sufficient/useful) information and not cooperating with debt financing (by not providing information). They give examples like rate limits on developer APIs etc.
So the kernel of the question is: is Twitter providing information to the satisfaction of Merger Agreement?
I don't know the answer to that, but if is "no", would that be grounds for terminating the deal? That seems a bit extreme to me. To me a reasonable ruling would sound something like "Twitter has X days to provide all the information requested and then Musk has to perform the purchase".
Its important to keep in mind that until he actually owns Twitter, the current management needs to still operate with an assumption that he may not end up owning Twitter. If they have reason to believe it would harm Twitter financially to give information to him in terms of him using it to undermine them later, or if it would impact business operations today, then they don't need to give it to him under these agreed upon terms.
More broadly I think its important that theres a clear distinction between pre-merger-agreement information requests and post-merger-agreement information requests. An analogy I've made before is that imagine you have 2 offers for your home which you list at $100k. You receive two offers: one is for $100k with no inspection contingency and one is for $100k _with_ an inspection contingency. All else being equal, you will always take the no inspection contingency. Now imagine one is $100k with no inspection, and the other is $500k with an inspection. Some percentage of people will take the $500k offer because they have _paid a sufficient premium for the future uncertainty of consummating the deal_ as well as _the likelihood of renegotiation if anything comes up_. This is extremely relevant to the Musk/Twitter agreement because Pandoras box has already been opened once the agreement goes public. It would be an unfair negotiation to try and _reopen_ negotiation based on things discovered in a _new round_ of "due diligence" analysis. If you wanted that right, you need to pay for it.
> 1. Information related to Twitter’s process for auditing the inclusion of spam and fake accounts in mDAU.
> 2. Information related to Twitter’s process for identifying and suspending spam and fake accounts.
His principle activity is influencing. The main sticking point of the proposed merger is information on how Twitter polices fake accounts. Nothing suspicious about this at all. Reminds me of the time a wolf was interested in buying my farm, and mainly wanted to know when my dog was chained up and how long the chain was exactly.
Yes [1].
[1] https://www.sec.gov/Archives/edgar/data/0001418091/000119312...
But they've been sending the SEC these same numbers calculated using the same methodology since 2013, right? If they were materially adverse circumstances, you'd imagine that someone would have caught this in the last 9 years...
Twitter’s CEO has addressed this. Musk responded with a poop emoji: https://twitter.com/paraga/status/1526237578843672576?s=20&t...
You also left out an important piece: 5% of their *monetizable* DAU. Not just DAU.
But you're right, Elon's been convincing the public that Twitter has made claims they never actually made.
So Twitter tagged my device with a cookie specifically meant to keep me from viewing users' content. How's that support their mission statement, "To give everyone the power to create and share ideas and information instantly, without barriers"?
It's not in my interest, or that of their users. The only benefit is to their bottom line, and I'd argue tactics like that do more long term damage than good. Certainly doesn't make me want to sign up or log in.
Go choke on Elon's <shit emoji>, Twitter. /rant
Besides, Musk has been complaining about bots for a long time, and has made it clear he doesn't believe the 5% number way before the acquisition. If the 5% number was a sticking point for him, he could have demanded due diligence. He did not demand that, thereby waiving his rights.
Neither side said bots, but bots _should_ be a subset of "false or spam" accounts. They basically used "our judgement" and give themselves complete discretion. And 5% is a nice round number plucked from nowhere which sounds awesome! Providing proof of that to a Banker or Backer (or Elon or a future Jury) isn't therefore possible or intended. It's marketing spin in an SEC filing.
Do you mean "they should report all bots as part of their false or spam accounts number", or that you believe logically bots are in fact a subset of the number twitter reports, and so twitter's number is bogus if 50% of all accounts are bots?
If it's the latter, you're missing the point of their mDAU marketing metric. It already has all the obvious bots and non active accounts removed. They're saying, what % of advertising revenue turns out to be from bots.
(It's true some of the many other things that are claimed to be breaches relate to alleged failure to fulfill obligations to provide information that Musk supposedly wanted to determine if other claims that has been made were fraudulent, but that's different than alleging fraud.)
Secondly, the ceo was firing aka asking for resignations from key people, no? That is not maintaining the business, that seems like sabotage.
They are claiming breach of contract, and that it looks to them like lying which, if it did happen, might be fraud, but they can't tell, in part because part of the alleged breaches is Twitter not giving them information that might clarify whether the other claims were true or not.
Accusing someone of lying is in effect an accusation of bad faith. An accusation of bad faith is a serious matter, and if you play too freely with it, then you're engaging in bad faith yourself. [1]
The concept of misrepresentation is in a grey area that may or may not have a component of bad faith (see for example the concept of "fraudulent concealment" in courts of equity,[2] the test for which includes a finding of misrepresentation, and note that "fraud" in equity is, confusingly, not at all the same concept as common law fraud), so it's a much more intelligent accusation to make in court unless you have highly probative evidence. [3]
[1] Clean hands doctrine: https://en.wikipedia.org/wiki/Clean_hands
[2] Equity: https://en.wikipedia.org/wiki/Equity_(law)
[3] IANAL
Their central allegation is that they didn't get the information because of Twitter’s refusal to uphold their obligations.
It says that after, and modified by, the phrase “appears to have”.
Musk’s lawyers are saying that Twitter actually breached the agreement. They are saying it looks like Twitter may have done other bad things, too, but that's not the same as claiming that Twitter actually did the other things.
> Secondly, the ceo was firing aka asking for resignations from key people, no?
The separately call out people being forced out and people resigning. Absent something not in the letter, the former is a much more reasonable, on its face, complaint.
There is a covenant in the contract about running the business between signing and closing.
The claim is breach of contract.
How can you identify a "spam account"? It's not possible to definitively determine the intent of someone opening or using a new account.
So the numbers are arguable either way. Musk is using this fact to try to wriggle out of a disastrous impulse buy.
>>First, although Twitter has consistently represented in securities filings that “fewer than 5%” of its mDAU are false or spam accounts, based on the information provided by Twitter to date, it appears that Twitter is dramatically understating the proportion of spam and false accounts represented in its mDAU count. Preliminary analysis by Mr. Musk’s advisors of the information provided by Twitter to date causes Mr. Musk to strongly believe that the proportion of false and spam accounts included in the reported mDAU count is wildly higher than 5%.
e.g. elon calling some dude who wounded his pride on twitter, a "pedo"
Look at said SEC filing. It is worded in a way that is impossible to prove fraudulent with the kind of data Musk asked for. He could have proof positive that he is the only human account on Twitter and the Twitter SEC filing would likely not be construed as lying - it very explicitly states that it is a judgment call by the Twitter execs, based on some internal methodology, and that the real number could be higher.
The only way you could prove they lied to the SEC would be if you found emails that say something along the lines of "to the best of our knowledge, 20% of mDAUs are actually bots/spammers, but let's say 5% in our SEC filing".
[0] https://twitter.com/matt_levine/status/1545151445057536001
It would be possible to enter into a contract through tweets alone. That didn't remotely happen here, though.
Er, not just the internet now
Note that today, Twitter is worth $28B. So the agreed deal essentially gives the shareholders $16B in profit.
So a judge might tell Musk he can’t back out and has to buy Twitter for $44B like he said he would. Or it might let him just give the shareholders $16B and not get the company.
The current price ($32) reflects be probably won't.
Twitter has done nothing to impede the transaction, so any uncertainty (and thus decline in TWTR share price below $54.20) is due to the actions of the buyer, who is… Elon Musk.
Therefore, Elon is responsible for any decline in the share price since the purchase agreement was signed.
I’m telling you, the guy really signed an ironclad contract forcing him to pay $44B to buy Twitter.
https://twitter.com/matt_levine/status/1545151445057536001?s...
Well... a number of employees left.
In any case, I guess we'll have to see if Musk's financing really gets pulled and if that really means Musk is off the hook.
That falls under my personal definition of "torpedo".
""" the reason that elon musk can't get out of the deal over the bots thing is not that he "waived due diligence." it's that he SIGNED A BINDING AGREEMENT TO BUY TWITTER, and that agreement does not have any outs for "i think there are too many bots. """
... and ...
""" yes i know that this is a small petty thing. but part of my point is that even if he had demanded extensive due diligence, and done it, and then signed the agreement, we'd be in the same place. the waiver or not of due diligence doesn't matter; what matters is we're past that. """
…
>the reason that elon musk can't get out of the deal over the bots thing is not that he "waived due diligence." it's that he SIGNED A BINDING AGREEMENT TO BUY TWITTER, and that agreement does not have any outs for "i think there are too many bots."
- Matt Levine esq of Bloomberg
https://twitter.com/matt_levine/status/1545152302142689281
“My offer was based on Twitter's SEC filings being accurate,”
Willfully filing fraudulent SEC filing is a crime - and if Twitter has been engaging in criminal behavior to artificially increase their value - I would think Musk has a good case.
Ignoring whether this is a legitimate reason to back out of the agreement, Musk hasn't shown that Twitter has been filing fraudulent SEC filings so what does it matter anyway?
Musk has _not_ provided any evidence of fraud. I'll wait until he actually does before speculating as to how decisive it will be in any future court proceedings.
From https://www.bloomberg.com/opinion/articles/2022-07-09/elon-s...
Regardless, Musk is making a lot of claims. Let's see if he can provide any reasonable evidence of those claims and make any reasonable arguments that will be accepted in court. There's really no point in speculating anymore. Now we just need to wait to see if a judge is actually buying his arguments.
Edit: This is over the mDAU thing still? It's been explained to him very slowly that all the bots that post tweets all day are often not seeing ads, right? That the "monetizable" is a key part of that phrase?
How? As best I understand things, he has zero wiggle room - he either buys Twitter for the agreed price or he stumps up the $1B termination fee.
And if Twitter's board did go mad and decide to negotiate a lower price, their shareholders would almost certainly block it and/or sue the board, no?
https://twitter.com/btaylor/status/1545526087089696768
I don't think that's even an option -- that $1B breakup fee was just if the deal was not allowed to go through due to reasons outside of his control (like if it was blocked due to regulatory reasons). Otherwise, I think he's legally obligated to go through with it -- and Twitter's board has fiduciary responsibility to hold him to it.
so, all the same, I think the shareholders will just take his original offer and elon can reflect on his impulsivity (a joke; he won't)
https://www.latimes.com/business/story/2022-04-12/musk-is-of...
> While Twitter has provided some information, that information has come with strings attached, use limitations or other artificial formatting features, which has rendered some of the information minimally useful to Mr. Musk and his advisors. For example, when Twitter finally provided access to the eight developer “APIs” first explicitly requested by Mr. Musk in the May 25 Letter, those APIs contained a rate limit lower than what Twitter provides to its largest enterprise customers. Twitter only offered to provide Mr. Musk with the same level of access as some of its customers after we explained that throttling the rate limit prevented Mr. Musk and his advisors from performing the analysis that he wished to conduct in any reasonable period of time.
> Additionally, those APIs contained an artificial “cap” on the number of queries that Mr. Musk and his team can run regardless of the rate limit—an issue that initially prevented Mr. Musk and his advisors from completing an analysis of the data in any reasonable period of time. Mr. Musk raised this issue as soon as he became aware of it, in the first paragraph of the June 29 Letter: “we have just been informed by our data experts that Twitter has placed an artificial cap on the number of searches our experts can perform with this data, which is now preventing Mr. Musk and his team from doing their analysis.” That cap was not removed until July 6, after Mr. Musk demanded its removal for a second time.
I still find it dubious that they couldn't long poll sufficient samples. I'd love to see the raw feedback of Musk's "Data Experts" versus whatever awful telephone game it became through several layers of Executives and Lawyers. I wonder if Musk just has a nepotistic data team next to him.
if he was hitting up against rate limits, it's easy for Twitter to call his requests adverse
Pretty hard to argue that is was "adverse" in that case.
it seems more likely that he was upset that he had access to all of Twitter's data via the Firehose, but being impulsive and incompetent in the field of bot detection (having had zero experience), he has absolutely no way to produce a trustworthy report on bots which contradicts Twitter's report
so, he's just complaining about limits he used to have on an API he doesn't need to avoid producing a report he can't produce that requires expertise he doesn't have
So... they asked for an API, were provided with it, wanted an API with higher caps, and were provided with it. Their problem is that Twitter didn't properly anticipate the need?
One thing for sure though is that a lot of lawyers are about to make a lot of money.
The one thing written in this thread that I am 100% confident is true.
Rumble, Brave, Truth Social, Subscribe Star
Locals and Bitchute gave it a shot (and aren't dead yet). And an Elon owned Twitter might have been interesting, but at this point that's who the players are.
6 years is not early days and Mastodon failed has still failed to attract users from Twitter 2 months ago. No chance of a significant amount of serious users from other social networks migrating over.
He's clearly eccentric in his approach to decision making: I don't think any Harvard Business School course will teach "the Musk Principles". But it's unclear to me what he initially thought he was getting out of this. In the original news, he said, "Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it." Either he was breathlessly arrogant or astonishingly careless in the first instance. And I say this as someone who has huge respect for his accomplishments in other industries.
According to this hypothesis, he would still walk out with 7.5B in hard cash instead of 8.5B in Tesla share. I'm not in his boots, but I see how it can be seen as worth it.
That’s smart.
The man literally tweeted “Tesla stock is too high right now, imo” and nothing happened.
Musk not being reigned in by the SEC, when looked at in a vacuum is probably not the end of the world or the US economy, but it’s not in a vacuum. Everyone watching right now realizes that you can publicly enter into fraudulent business deals that you leave at convenience and there is nothing you can do about it unless you have have better lawyers. That is gonna be super degrading towards the ease of doing business
[0] you didn't think Starlink's purpose is to let fisherman watch YouTube did you?
</tinfoil>
If it is a scheme and he had no intention of ever actually buying twitter, the government would still have to prove beyond a reasonable doubt that he did it for this fraudulent reason. Or at least collect enough evidence to make him accept a plea deal for fear he could lose in court.
It would seem to me that him backing out now has a bunch of other very plausible explanations beyond "it was fraud all along", including the one this document states, that twitter breached their agreement by not providing the data he wanted to assess the prevalence of fake account himself. Or even that buying some "media company" is just what billionaires do[1], but him being "eccentric" he went in too hard and fast and is now backing out that he has seen the backslash and/or has done some actual due diligence, which would make him stupid and/or irresponsible but not criminal. All that to me seems like good ways for lawyers to claim there is "reasonable doubt" should he ever get charged with fraud, unless the government would happen to find some "smoking gun" piece of evidence.
And of course it assumes there is actually political will to nail him.
[1] https://www.investopedia.com/billionaires-who-bought-publish...
A Joe Boggs acting in this fgashion would have been taken to the cleaners long ago.
Isn't that like more than half of his MO?
When you can afford the best legal team money can buy and payoff the rest of the gatekeepers, then the game is simply to transfer wealth into your own pocket in bigger chunks.
I don’t think most American judges are susceptible to any kind of bribery (other than jurisdictions where elected judges may expect campaign donations from litigants), but Delaware has to be among the absolute least likely to have that issue.
This will just slowly fade from memory as the lawyers argue and at some point they’ll settle.
Twitter shareholders do. If I hold $1m in TWTR today, this deal going through is worth around 500K to me, possibly more if we assume the share value now prices in the buyout potential and will drop otherwise.
The normal remedy for breach of contract is for the breaching party to have to pay the other party monetary damages sufficient to put the other party in the monetary position they would have been in had the contract not been breached. Court generally will only order someone to actually go through with the contract (which is called specific performance) if monetary damages won't work for some reason.
For example if we have a contract for me to sell you a million microcontrollers at $1 each, which you are going to use to make a million units of some gadget that you are going to sell for a profit of $0.10 each, and I find someone who will give me $2 each for the microcontrollers and so let you know I'm going to breach the contract and sell my microcontrollers to them, a court is very unlikely to order me to honor the contract. They will order me to pay you $100k, the profit you were anticipating making from our deal (and probably attorney fees, and other costs you'd incur dealing with the breach).
But, according to this blog [1] at Findlaw:
> If Musk tries to abandon the deal, Twitter could sue him and ask for specific performance. This remedy is usually hard to get, but Musk agreed to a powerful specific performance clause in the merger agreement. In fact, he didn't just agree that Twitter could get specific performance. He promised that he wouldn't argue it couldn't (forgive the double-negative).
I'm unable to think of any good reason one would agree to that.
[1] https://www.findlaw.com/legalblogs/courtside/is-elon-musk-go...
That's what you do when you sober up and realize what a mess you've made.
I don't believe for a second that Elon Musk really cares about free speech for anyone but himself and he is right now probably not limited by twitter's policy but by other externalities
In any case, does twitter not already have a lot of "assholes" and people with "violent ideas"?
My point being that I don't trust Elon Musk to make better moderation decisions than whoever is in charge right now.
Past attempts of social media with low barriers of what is allowed have absolutely turned out worse than Twitter if you ask me(e.g. 4chan, 8chan, gab etc) That's why I think the best case is "Twitter but more aligned with whatever Elon Musk thinks at the moment"
Twitter can leverage a huge amount of data about personal preferences, interests, relationship status, political leanings, income, usage profiles, message habits and content, social graph, and location.
If you specifically wanted to clamp down on certain demographics, it would be an excellent way to locate them.
I am sure the offer price of $54.20 was a joke. With Musk, the appearance of those digits is never an accident.
I'm just saying what if... gasp... he simply did something foolish? The blame-it-on-the-bipolar out reinforces the narrative of an infallible person who only make mistakes because of a medical condition. Take that line of thinking one step further and you are now fully onboard the bipolar stigma train.
He spent days/weeks/months on setting up this deal, he became obsessed with it at some point.
(Hopefully) no one is "blaming" it on the bipolar. It's simply something consistent with bipolar. (But it's also consistent with rich people getting obsessed with something and then spending way too much resources on it.)
> reinforces the narrative
That narrative is simply bad and pushed by people who have no idea what they are talking about. Musk's previous instances of risk taking (that "all" turned out to be fine) is also perfectly consistent with bipolar. (Of course if you look at it then it turns out that he took many risks that made very little sense, like when he talked about taking Tesla private, the infamous funding secured tweet.)
And of course just a label like bipolar means (almost) nothing, these spectrum disorders are complex (and there are usually other comorbidities at the same time, just with different severity), we don't know how he is treating/medicating/managing it, or is it even the right diagnosis or not. Or he could have simply lied.
It's also consistent with making a mistake.
and of course we all hear about the top of the Forbes billionaire list mistakes, the wework scandal and the other questionable decisions of Masayoshi Son, how "the crazier someone it's more likely they get money from Thiel", etc.
but even on top of all these this one easily takes the cake.
yes, in isolation it's a "mistake", but luckily we have plenty of context for it.
So then you agree that it being a mistake is entirely plausible and that it having anything to do with being bipolar is pure speculation?
It's a very costly and stubborn mistake either way and he has (or hasn't) bipolar either way.
Even in the most severe substance dependence cases some people can override their short term wants (eg. they don't go and mug people to get money for their next fix), while there's a clear pattern of this behavior in others. (But it's what we expect, since we define one by the other.) So in both of those instances, it was their mental state, but was it the altered part or the underlying base state that let the dependence to form in the first part? It's really not separable.
One explains the other, but there's no direction, no proximate causal relationship. At best there is some predictive power, ie. if someone goes off their meds, or stressors increase they will show behavior consistent with this or that. (But in general everyone will make more mistakes when they have more stress in their life. Who would have guessed, I know.)
Yet these categories (diagnoses) are not useless. They communicate behavior patterns, things to look for, things to be mindful of and try to manage.
https://twitter.com/wolfejosh/status/1545387947578597376
Regardless, the fall in share price likely drove the outcome.
All we know are the facts, he agreed to buy twitter and now he is trying to walk away from the deal.
There could be multiple reasons for that, including what he is saying on face value or a dozen other scenarios.
He could still be wanting to buy twitter and use this as a bargaining tool to lower the price.
You can say he was right, once we know the full facts which will be once this plays out and since it doesn't really affect any of us, speculating right now is simply taking part in silly gossip.
Like, you can sign up for free. What's gonna prevent fake accounts in that case?
In my mind this is an insane conspiracy theory that fails occam razor, he was high and said we wanted to buy Twitter. People made fun of him so he dug in to prove all those stupid people. There is no complex deal needed here.
Not that complicated really.
What actually happened isn't relevant. What is relevant is whether he may have thought it would work better. Tricky to prove.
This is all publicly available. Due to leverage, he faced ruin if Tesla fell below X (whatever X is) if he funded it all himself. So he opened his side of the deal up to other people, and allowed other large shareholders to come inside his tent - which reduced his exposure. Then the market dropped 15%.
Matt Levine has an excellent series of newsletters covering it.
There's no way he didn't foresee this.
It would be shocking if he is lacking in self-awareness to that extent.
'Ol Musky missing self-awareness? Surely, you jest Mr. Spock!
Just remember the launch of Tesla auto-pilot, where he was promising full self driving within a year or two, so good that you would let your car work as a taxi while you don't need it and it would become a passive stream of income so great you would see your investment back in around a year! He actually said "our goal is to make Ilit financially irresponsible to buy any other car". This is not a man who "manages hype".
Honestly I think other people trying to read this situation in some way that ignores a multi billion dollar incentive just sitting there is utterly naive.
I'm sure he'll be able to weasel his way out of this. He'll spend a crap ton of money to lawyers just to be able to say he doesn't have to pay for it, but he's still paying for it on a smaller scale and not in public. Anything to put up another W on the scoresheet.
From my understanding, the current choice is:
1. Does Elon get sued by Twitter to force sale, per the initial agreement, where Elon agreed to allowing Twitter to force a sale.
2. Does Elon just pay the billion separation clause and walk away.
Do you see it differently?
Ever since what "the definition of 'is' is", my whole outlook on lawyers was just obliterated.
> Ever since what "the definition of 'is' is", my whole outlook on lawyers was just obliterated.
Is that in reference to something? Got a link or an article or something?
Very much yes[0]. It was one of the defensive lines from Bill Clinton. I was still in high school during this, and it set me on a very bad path of thinking how to twist anything and everything anyone ever said. After all, if the pres can do it, then we should all be able to do it.
[0] https://slate.com/news-and-politics/1998/09/bill-clinton-and...
Is there a different version of the doc than listed above? I couldn’t find any revisions and it sure seems that there are options available to Musk.
In all other cases, Elon has committed to give them $44B in exchange for the company.
There’s quite a bit about separation, sections 7 & 8
Removing musk account, if they do thAt, might backfire spectacularly.
- Stabbed man
And that seems to be what the concern boils down to? The issue of whether he defrauded twitter is a separate thing. (Though I'm inclined to say no, because twitter came at this in a very skeptical and careful way, and normal fraud requires fooling someone into material loss.)
In other words, US law judges by intent vs actual action/damage.
One example of this is: Credit Card Fraud is prosecuted based on max possible theft vs money stolen.
https://www.law.cornell.edu/wex/intent
US law doesn't "judge by intent". If you try to murder someone but you don't succeed, you don't get charged with murder.
To keep with the murder example, intent is what separates 3v2, in most states. Yes, a crime was committed but was the intent to cause bodily harm vs actions causing bodily harm, without intent.
If he entered into that contract with no intent to honor it...
He didn’t waive his right. He just opted not to do any before buying.
The $1B penalty for backing out of the Twitter deal is the least of Musk's concerns.
The fact that it’s trading lower means that investors don’t expect the deal to go through. And who exactly as been doing his best to very publicly bring the deal into question? Elon Musk.
Why does that matter? Musk agreed to buy Twitter for $44 billion. If he comes through, that's the value of Twitter. If he doesn't, then the value is something else. The difference between $44 billion and fair market value is just the expectation of investors that Musk really will pay. So yeah the drop really _is_ due to Musk trying to back out of the deal. If Musk weren't backing out of the deal, then then Twitter's value shouldn't drop regardless of the fact that the rest of the market has.
https://www.bloomberg.com/opinion/articles/2019-06-26/everyt...
It also does not make sense to do this kind of fraud, as Tesla stock will surely tank on the news of it being used as a collateral in an acquisition deal.
Elon Musk announcing some M&A news with the intent of effecting price changes in TWTR,TSLA securies would be pretty boring, vanilla securities fraud.
He doesn't hide he would like to have the company private. Owning more stocks moves him closer to this ideal.
Just speculating, I have no inside info on what he really wants to do with the cash.
The move would have to be perceived as financially irrational for it to be operable in terms of distracting the market from the diversification.
This is just one of the impacts of the high potency products at the local cannabis dispensary. You can't function if you wake and bake on that shit.
If he exited TSLA to the tune of the remaining $10B or $15B, staving off a 50% decline in that value then he came out way ahead.
It seems very likely to me he will find a way out of the $1B fee and end up settling for some fraction.
Of course if he just borrowed against his TSLA to facilitate this deal, as I have read he did, then his profit on the move depends on the terms of the loan.
If true, I don't think it's the case he did it intending to pull out. Seems unlikely he would have signed the billion dollar exit clause when he could have easily dragged the initial talks on a bit longer for largely the same result before 'changing his mind'.
My best guess is the offer was genuine (thought impulsive) but as he's seen the price drop further, now his offer seems too much. Why pay $44bn for a sub $30bn company. Kinda simple but seem most likely than all these more complex theories.
But anyway, yes I believe it is possible to be impulsive followed by more logical decision making. This process seems fairly commonplace in the world I observe.
"If true, I don't think it's the case he did it intending to pull out. Seems unlikely he would have ...... My best guess is the offer was genuine (thought impulsive) but as he's seen the price drop further, now his offer seems.. "
Considering his impulsive behavior, which has prior occurrences. 1. Making an immature derogatory remark to one of the people trying to assist with that cave rescue. 2. His statement that he was taking tesla private that he retracted later 3. This situation..
Why do you think he's acting logically now? Why is it your best guess? Your words
1) As said, its not uncommon to act impulsively, followed by more logical decision making after. From your examples, I dont feel listing a few impulsive cases removes his ability to act logically. And the sequence I've guessed seems the most likely in my kindly eyes.
2) Because its not my second best guess, or any other.
3) See 1) & 2)
That said the risk is huge as the world can move on quickly as we saw with MySpace. And Elon s becoming increasingly a political risk factor himself in a business were peoples view on the leaders/owners really matters.
His views really don't matter. Nothing happened to Facebook and nothing will. People will just continue fighting (tweeting).
But really who knows. Maybe he realised he had too much on his plate, or any number of things.
Couldn't he just have said "SpaceX needs more cash" or something like that?
If this really were part of some grand master plan, I think he would have left himself an easier out.
https://www.sec.gov/Archives/edgar/data/1418091/000110465922...
It’s not like he came up with the “they’re all bots” theory after committing.
Is Twitter going to spend the next few years litigating this just to force someone to buy the company that doesn't want to? Elon's team can drag this on and on.
What will happen to the value of Twitter's stock in the meantime? What will happen to the value of working at Twitter? It'll become a zombie company.
Stock price = "stock price without Elon owning it" + "Elons premium" * "likelihood of Elon losing the lawsuit and being forced to buy the company"
That likelihood should never be less than 0, so I think this legal fight would only help the twitter stock price.
I guess I am assuming that the "true price" is actually lower than what Elon offered for it.
The only option for Twitter to continue existing is to sue Musk for the amount he promised.
The karma hit at-fates-hands takes because people are irrational is collateral damage.
Have an upvote.
Parroting the statements of his legal team without adding the context around those statements is going to garner downvotes.
Agree that there will be a massive legal fight, but my guess is that it will be over how much extra Musk has to pay to get out of the deal (beyond the $1B breakup fee), than over making him perform. But who knows; only time will tell.
I'd sued and settle for a few billion instead of taking the one billion backout
He uses his wealth as a weapon against companies he doesn't like, just the mere threat he may get involved causes massive changes in the stock price and in turn causes investors to suffer financial lose.
Reminds me of Bitcoin "whales". It's a shame that this guy is the figure that will take humanity to Mars.
Not humanity. Only selected ones.
A mars trip itself is only for those going. Most people don't get a part of it unlike pizza which can be divided
We’d all agree that Europeans (non-exclusively) colonized the Americas, but not all Europeans went and not all had the opportunity.
That's my issue
Likely is putting it quite mildly - it's likely to cause a premature death in the same way that throwing yourself off the empire state building is likely to cause some injury.
https://www.youtube.com/watch?v=5OtKEetGy2Y
That's just more BS from him. He'll just keep kicking the can, resuming the project with some spectacular stunt every time he needs it. Everything Musk does or says is just a performance to manipulate the markets.
A permanent colony seems like the sort of thing he'd get bored with, though.
Bezos has the right idea, leaning into O'Neil cylinders.
"???"
Keyword: regolith
Mars is at least 10x harder. The path to space settlement is in our own backyard.
Solving the technology problem is just the tip of the iceberg.
Agreed, but enabling folks to get there makes it possible.
Musk doesn't have to build the colony to have made it possible, and it seems to be the thing his attention is genuinely invested in.
It doesn't. Getting a few people to Mars alive does not a colony make. And even that sentence is misleading because while getting to Mars orbit is certainly challenging but that's something I can see humanity capable of overcoming with current technology. Although we never kept humans in space for 2-3 years before which is just the travel there so we don't really have any idea what will happen to them but let's pretend.
Landing very fragile humans on Mars, however, is a much, much formidable challenge. The heaviest object we have managed to soft land on Mars, so far, is the 1025kg Perseverance rover. The Apollo Lunar Module carried two people and was 4280kg dry weight. Of course, you don't need to ascend -- getting those people back to Earth is not even considered by anyone sane -- but still, it shows there's a problem here. And that was two people. And you need everything for them to live on the surface, including air and water and that's even more weight that you can't just slam those into surface at the ~20 000 km/h the spacecraft will approach either.
It would be just about infinitely better if he tried to show off with climate change combat projects. If you want to show off, a vast forest would be much better, much easier to achieve and so much cheaper. He could build storage for renewable energy, these are also sufficiently massive to be good for showing off. And so forth. There are easy but significant things one such as him could do. For a more formidable challenge, elevate the Brazilian people so they don't need to burn the Amazon.
We already have a terraformed planet but the climate is changing in a way which is incompatible with the way humanity currently exists. It would be prudent to change both -- while the change is inevitable it could be slowed and humanity could change too. Once we bought time, we can wait until material and other sciences make space elevators possible and then we can send robots to Mars to build a space elevator too and then we can begin to think about colonizing Mars.
You start talking about being able to build propellant depots in Earth orbit, build Aldrin cyclers, send large amounts of supplies (or even a whole station on the slow, efficient route) in advance to Mars, etc.
Recent rover landings happened at what, < 1 M/S ? which is well within the capacity of the human body.
Considering that Mars atmosphere is substantially thinner, and gravity there much weaker, landing there would be different from Earth anyways.
We are not currently employing any of the more cost efficient methods of getting things to orbit in the first place, for large scale missions of epic size, nor are we currently employing the most efficient propulsion types.
The way I see it, the biggest problem is not one actually being discussed which are the longterm effects on the human body of living on a planet without a protective atmosphere, and protective magnetic field [2]. If getting mass to space becomes less of a financial constraint due to more efficient launch mechanisms, then, shielding would much less of an issue because mass in space would be cheaper [3]
I think that much of these problems come down to the huge capital cost, and unsolved problems around low cost launches; the novel technologies that need to be developed & turned into a new space launch system, and no, i am not talking about traditional rockets.
[1] https://engineering.stanford.edu/magazine/article/safe-landi...
[2] https://www.nuclear-power.com/nuclear-engineering/radiation-...
[3] https://www.nasa.gov/feature/goddard/2019/how-nasa-protects-...
If need be, large countries that have the technology like China, Russia, US could do it. But it would still require gigantic amounts of capital allocation and effort at this stage. So no one will do it. The biggest thing that is happening right now is China and Russia signing an agreement to build a base on the moon. (yes)
The notion that the board is all of a sudden worried about what Musk might do with Twitter is about as silly as Musk thinking he can weasel his way out of a binding contract he already signed.
It's like if you sell your car to a dangerous driver: you have no financial stake in whether they go on to crash it.
Almost everyone votes their economic interest.
Some people switched to culture/values voting (ie, telling other people what to do), some people just enjoy winning and so vote for whoever they think is going to win.
Uh, yes?
The shareholders, and the board as their agents, care about the company as a means to an end: and that end is making money. They’ve already concluded the sale achieves that goal.
If Musk wants to burn the company to the ground after they cash out, they don't care.
Heck, some of them may invest in competitors after the sale banking on that to make even more money.
If you watch an amateur chess game you’ll find that most players actually have some master plan, but don’t have the skills to see the flaws, or even if the plan is perfect, they don’t have the skills to play it through either.
My sniff test for any conspiracy theory actually involves incompetence. The more competent the plan and execution need to be, the less likely it is to be a conspiracy.
On the other hand many things went wrong in the actual moon landing. There were liftoffs that failed, experiments that went nowhere, targets that were missed, and even people that died. The actual moon landing was a hard task they succeeded at while making a ton of mistakes in the process, just like humans do in the real world when we are at our best.
That seems pretty different from, "If your entire plan is to back out of a contract, add a clause to the contract that lets you back out of it."
The conspiracy theory that Musk is using this twitter scheme to manipulate the markets in his favor does not fail any sniff tests that I’m aware of.
Of course, there are simpler examples, like John Titor, or Pierre de Fermat’s last theorem proof that he would have done all in his head.
The amount of competence required to prepare a controlled demolition of a 110 storey trade center which is occupied 24/7 and full of cameras without anyone noticing and associating this prep work with the much publicised plane crashes that happened afterwards would be staggering, even before considering the insanity of such a scheme.
At the risk of opening a can of worms, the best evidence against the considerably more plausible "lab-leak" COVID theory is that manufacturing an alternative chain of evidence that convinces most unconnected foreign experts of an alternative theory (which still points at Wuhan and Chinese market regulations) when they have plenty of reason to find fault with it requires a lot of competence, as well as totally the opposite approach to China's usual way of suppressing stories.
The fact that his supposed plan here has some flaws is not _further_ evidence that it was planned from the beginning, that's absurd.
It seems much more likely that buying Twitter was just an impulsive decision for him that he is now regretting and looking for a way out of.
I agree with you that many supposed conspiracies require too much competence in order to pull off, and can usually be dismissed as impossible to achieve in practice. But it doesn't follow that, as a consequence, any action that would be incompetent as part of a conspiracy should be considered evidence that a conspiracy exists.
You only need to be competent enough to realize how markets can be manipulated to initiate a conspiracy, however successfully executing one requires a whole new master level of skill set. Off course the people with such skill set exist (as evidenced by the numerous market manipulation schemes successfully executed in today’s business world) and if Musk was smart he would hire such an expert to scheme it for him.
What we might be witnessing here is a business person that is smart enough to realize that market can be manipulated, and see a position to where they can execute such a manipulation, but not competent enough to execute a non-trivial plan without flaws. And worse not smart enough to hire a person with the correct skill set to do it for him.
That’s a great point. Thank you :)
https://twitter.com/wolfejosh/status/19430106783023104
He's called Tesla a "fraud" and that it would collapse many, many times while it's just kept going up and up and up over the last decade. For example:
https://twitter.com/wolfejosh/status/1178486986790854658
https://twitter.com/wolfejosh/status/1074055027021369344
Is it Josh's fault that the market has listened to Musk when he's said, every year since 2016, that FSD is "coming, this year, for real"?
People here don't know what claims in entirety were made by either party, and thus, it's impossible to speculate. This is what courts are for and Elon, and his team, are not idiots.
It blows my mind how much (non Tesla) car companies spend just on advertising.
Most folks who subscribe to the "Musk Principles" aren't nearly as lucky and go bust much earlier.
Perhaps he didn't expect the Nasdaq composite to drop 2000 over the next several months? That could have been careless, depending on the sort of agreement he signed. I guess he can afford a $1B penalty, but good luck finding another buyer after that. It's not as though Twitter are overflowing with ideas for profit...
The $1B is if there's some outside reason why the deal cannot get done, e.g. because of regulatory concerns.
It's not a "pay a $1B break-up fee at your discretion to get out of the deal" clause.
> Accordingly, the parties hereto acknowledge and agree that the parties hereto shall be entitled to an injunction, specific performance and other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof, in addition to any other remedy to which they are entitled at law or in equity. Each of the parties hereto agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief on the basis that any other party has an adequate remedy at law or that any award of specific performance is not an appropriate remedy for any reason at law or in equity.
...
> (b) Notwithstanding anything herein to the contrary, including the availability of the Parent Termination Fee or other monetary damages, remedy or award, it is hereby acknowledged and agreed that the Company shall be entitled to specific performance or other equitable remedy to enforce Parent and Acquisition Sub’s obligations to cause the Equity Investor to fund the Equity Financing, or to enforce the Equity Investor’s obligation to fund the Equity Financing directly, and to consummate the Closing ....
Being called Eccentric is the luxury of the rich. If he was poor one will say "irresponsible" or even "crazy".
It is not the responsibility of a corporation to keep you fed or alive.
If you don't like how a job treats you find another one.
This pseudo familial relationship with jobs that Americans seem to have is one of the oddest mental illnesses I've seen.
I know some drivers will run red lights and stop signs, so I walk and bike accordingly. I’m still in the right to get mad when a driver narrowly misses me because he’s a self involved clown.
There isn't. Have a nice day.
I have no idea why you would think that is an argument for anything.
Because they ask for that credit, and their defenders give them that credit when you criticize them.
honestly, you think this is a mental illness?
and i think there are many reasonable arguments that huge chunks of the world care far more about their jobs impact on their lives than we (u.s. americans) do.
a mental illness? the way you say everything in your comment, as if that belief is somehow a universal truth is wild.
The best hypothesis I've heard is that he was trying to secure the raw materials that Tesla's stock price is made out of.
Twitter is influential to the concerns of Musk's competitors and potential regulators who might stand in his way.
Regardless of its deflated value, (all assets were way puffed up) Twitter is still extremely valuable.
Arguably, it is still positioned to be worth more than Facebook.
However I suspect the lawsuit to be settled rather than drag on for years. Probably he'll buy it at a reduced price or pay a larger termination fee to walk away.
Why not both? Arrogance tends to lead to carelessness.
The more it goes on it feels like “I don't like how twitter works, I’ll show them! <insert some less developed ideas of free speech on the internet>”
Later:
“Oh noes if I do what I want here the result might be bad…”
It just feels like a YOLO business deal that wasn’t thought out the more this goes on.
is this just 100% unthinkable?
Fake followers and accounts and twitter’s battle with them is well known. Are we thinking he had no clue until after he signed on the dotted line?
And prove that’s enough of a reason to end the deal?
Then, when you conclude a definitive agreement without any provision for an "out" based on an issue that you've already acknowledged knowing about (and hoping to fix post-acq)-- you're kinda stuck with it.
I think the big issue is that with the movement in equities, it requires him to overpay for Twitter with Tesla stock that is much less valuable. Financing the deal got much harder for him.
- cold feet - impetous - eccentric - breathlessly arrogant - astonishingly careless
pupils
by that you mean straight up lying, attempting fraud etc...
It seems apparent to this observer that the spam accounts thing and other metrics were always super inflated and perhaps now there will be a reckoning.
I also think it is very funny how there was much gnashing of teeth and literal tears at the prospect of him owning twitter but now they might end up chasing him and try to force him to buy them, thus further alienating the woke mob and sowing chaos internally. Look how the turn tables have turn tabled.
If they are greedy enough to go to court over it the question of just how fake this company is will stay in the news for the duration of the trial and the stock will tank. If they don't they might have to, you know, actually function like a real company.
This story is far from over.
He publicly stated that he wanted to buy Twitter to clear up the fake account issue, he knew about the issue before entering the deal, when signing he waived due diligence that could have given him the opportunity to investigate the issue before signing...
Musk's own tweets will work against him if he tries to use the fake accounts issue to back out.
I'm guessing he saw a glimpse of just how extensive the problem really is and the unwillingness of the organization to be remotely honest about it. It would not surprise me if it was 95% bots, rather than 5%.
i spat out my drink reading this
Real progress takes real work, not promises and marketing fluff. If humanity makes it to Mars it will likely be without his help.
I've never seen a Waymo, Cruise, Rivian or a Ford 150 Lightning in my entire life and I've been in many major cities across the world. You know what I do see on a daily basis though? Teslas.
Answer: some sort of stock manipulation whether it be Tesla's or Twitter's
https://www.cnbc.com/2022/04/26/jack-dorsey-elon-musk-is-the...
This most of all makes me think he was really into it and then fucked it all up. Or Jack was just trying to get back at the board.
He sent his selfie in a tweet response to Parag’s tweet explanation.
https://www.forbes.com/sites/abrambrown/2022/05/16/twitter-b...
edit: dont know why this had to be flagged. I guess some people really take personal offense in that elon musk might be correct in his thoughts about twitter daily bot %
the real reason he's filing the sec notice is the gas has run out of the bullshit bus. nobody believes his due diligence claims, the board just sent him a resounding vote of approval to buy, and the legal pain train of that comes with anymore of this childish foot dragging sideshow is pulling into the station.
I'd be stunned if he gets to walk off with the billion dollar penalty. too many financial guarantees and backings have been made, and musks had an SEC crosshair on him for years now. they know exactly what patent brand of bullshit he's peddling and have shown themselves more than willing in the past to take action.
musk can file all the notices he wants but i suspect hes about to get ready for the billionaires version of a shotgun wedding.
Have as many kids as possible since it’s obvious he will own the solar system. He ain’t gonna be that democratic therefore. Just another dynasty but maybe the last
He doesn't run any of his firms with direct democracy, why on earth would he run his Martian kingdom as one?
He may have been honest and correct about that, but later realized that he simply does not have the time to be CEO of yet another large company.
Who in their right mind would spend billions of dollars without being allowed to "look at the books" regarding the spam account ratio?
This isn’t like buying a house…
You have to look at it from the angle of Musk being a troll and a right wing figure. He wanted to impress his right wing followers by making Twitter a more free and open place for all kinds of speech (even hate, violence, etc). Maybe he realized this was a bad idea and managing Twitter is more a job for a grown up than a troll, so he looked for a way out.
It has continually been one of the most underperforming platforms of it's size. Head of Data Science resigning doesn't bode well during a deal hinging on the accuracy of the data.
I don't think it was impetuous. I think he did this all on purpose and planned on using his usual tactics of improvisational manipulation and grandstanding to get what he wanted, whether it was Twitter at a cheap price, manipulating the Twitter stock price to make a quick buck off of his stock purchase, liquidate some of his Tesla stock, seed further discontent on Twitter, spur on rabble around bots (despite knowing full well that Tesla and himself have benefited from Twitter bots and potentially even controlled them), drone on about free speech in some sort of libertarian political play, or whatever else. And it has all failed. Now, he's just gonna let his dirty lawyers figure some way out of it all and move on to the next scam.
Then there was BTC to purchase Tesla cars, then there was Doge. The point being I think these types of things indicate Musk, like a lot of smart people can be really, really dumb sometimes. Also a bit Hanlons Razor.
Then again, it seems the main "win" he often has in mind is just getting attention, so maybe his need for attention exceeds even what I thought.
Well history is not yet written. They could be taught as negative examples
Any legal experts out there?
1. TSLA was trading at ~$1,000 share
2. He offered $54/share
Now?
1. TSLA is trading at $750/share (so if Elon musk was 100% in TSLA, he lost 25% of his wealth).
2. Twitter's comprable, Facebook, fell roughly 33% on revised revenue projections and slowing growth. TWTR roughly tracks Facebook, except for last quarter where the stock hasn't moved due to Musk's offer.
So Musk became poorer, and TWTR, which probably should be trading in the high 20s, has an offer for $54/share; meaning Musk may be paying double what it is currently worth.
I find it pretty amusing Musk has meme'd his way into a disastrous deal.
The stock market (especially tech) tanked, other investors started having cold feet, and he realized his purchase was a mistake.
It is bizarre though that Twitter leadership/board continued to engage with him on the matter – even handing him internal data to analyze – expecting a good faith resolution. Nothing Musk has done in the last few months has been in good faith. You either lawyer up and force him to stick to the agreement, or take the loss and move on. Appeasement isn't going to work.
Even discounting all other data, Tesla avoided bankruptcy in 2008 only because Musk tricked a key investor into believing that he could personally finance their investment round if the other investors didn't sign.
You'd have a hard time tracking down a single eligible CEO who could play that role in 2008, let alone get them in a position to actually be with Tesla at the time. And this is only a single example of a pivotal moment during Tesla's history that hinges on Musk.
Without Musk then, no Tesla today.
Who does that in a business negotiation?
However, Twitter's board doesn't use Twitter and doesn't actually seem to care about it at all, so they're not exactly going to claim to shareholders they can run it better than an offer that much above its current value.
[citation needed]
Who the heck doesn't negotiate?
How is no negotiation the best strategy?
At work, I was involved in a deal with a large company. The numbers are back and forth like 10 times with adds-on and discounts. It's just standard stuff.
Is this true?
From here it seems to have gone up for $43 billion to $44 billion somehow after the initial offer:
https://en.wikipedia.org/wiki/Proposed_acquisition_of_Twitte...
I'm not sure if that is because of a modified offer, or the offer was based on some benchmark that had dropped (he already had a large portion of Twitter's shares).
Also between April 14th when he initially made an initial offer and April 25th when they accepted one, the bottom had started falling out. Facebook, in the same sector had dropped by around 10%, so by the time they accepted it was much more attractive.
Musk seems to have timed the offer and the initial separate share purchase all horribly wrong.
I'm not going to pretend to know who's right or how this will play out legally, but Twitter's lawyers did participate in the creation of the agreement and therefore the current state of affairs.
But on the topic, I think I'm getting down voted as an emotional reaction. I clearly said I don't want to pretend to know if he's legally right or not, a position which if most of us are being honest we should all be taking. But people aren't taking that position and they're reacting emotionally to words they don't want to hear. All I've said in the above comment was that Twitters lawyers did indeed contribute to the current state of affairs when they participated in the creation of the agreement in question. This is true by definition.
I mean, yeah, twitter's lawyers were definitely involved in drafting up the contract between twitter and elon, but that doesn't really have any bearing on elon regretting signing that contract which mandates his closing the deal -- sucks to be him
Isn't this itself arguing in bad faith? It's fundamentally speculative to make claims about his intentions.
Musk has been very publicly coy about his intentions for several months, so it's hard not to have an opinion at this point. Just because that opinion may be wrong doesn't mean it's offered in bad faith.
Elon got what he wanted. Everyone on his side now thinks he's a bastion of free speech, and he can forever say "If I owned Twitter, I would have...". And he gets the credit he wants without having to actually do anything.
Twitter got what they wanted. They didn't want Elon to own the company, but they also couldn't ignore the offer. So they called his bluff. They would have ended up with a world of pain if they didn't accept the offer, but nobody at Twitter wanted it to close. And now they'll be able to sue Elon and get the upper hand.
Both sides got what they wanted here. I just wish it didn't have to distract all of us so a few rich people could mutually level up.
Doesn't he kind of forfeit that bragging right if he tries to walk away from the deal though?
>"Twitter got what they wanted. They didn't want Elon to own the company, but they also couldn't ignore the offer."
What happens to their stock price after this though if this deal doesn't happen? Hasn't it basically been flat or trending down for some time before this current situation? Doesn't Twitter still have all the same problems they had before this current circus started?
Also is there a possibility that if that deal doesn't happen there becomes a bigger spotlight on Twitter's future filings in regards to their quoted percentage of "fake or spam accounts on Twitter’s platform"?
I actually don't think so, he gets it more because "liberal big tech tried to screw him and he was smart enough to walk away"
Look at this thread, you'll find enough of his fan calling this a victory because it will expose how corrupt Twitter is or whatever. Reason, common sense and the frigging obvious don't have a grip in their minds.
Absolutely yes
Trying to buy Twitter is just a symptom.
Without that he wouldn't have gotten nearly anywhere close to where he ended up.
Because for a lot of his ventures he used that image to collect way more money then the company would normally had gotten and the used the additional money to try to beat the completion enough so that the investors won't complain even through the company didn't reach to promised (and often outright absurd) goal anywhere close in time/at all.
Fun fact about Howard Hughes, he once crashed a biplane during the filming of a movie he was directing. (One of four airplane crashes he experienced)
The stunt pilots had all refused to try the maneuver he wanted to do, so he hopped into the plane, took off, and did exactly what they anticipated.
It's not clear whether he was pulled from the wreckage or found in a nearby hangar after walking away from it, but he survived and finished the movie, which made a loss despite being the top-grossing film of 1930.
Celebrities, eh?
https://en.wikipedia.org/wiki/Hell%27s_Angels_(film)
Still helps Musk.
But in reality his ventures collect way more money than companies of those types normally get because he hit home runs in the early internet era, then started tackling some incredibly ambitious hardware engineering problems and built companies that actually started to solve them, complete with an exciting thesis about them being all being linked to Mars colonies. That's where the "Tony Stark" reputation comes from and why people bothered following him on Twitter in the first place.
Sure, some retail investors follow him on Twitter and end up buying his stocks (or some random crypto thing he has no financial connection with but thinks is funny...) because they think he's great, but if the difference actually owning the platform makes to his ability to raise capital isn't absolute zero, it's closer to zero than $44B. And not necessarily positive, because owning Twitter doesn't make batteries cheaper or ease the technical and regulatory challenges of self driving or LEO mesh networks, but it would take up a lot of his time and resources.
I think it's simple.. he is insanely egotistical. He thinks he is some super genius. I'm not saying he's not a smart guy, but he was able to benefit from the early dot-com era mostly because of timing- he happen to be a smart guy at the right age of tech when it was much "easier". There are millions of people who are really smart and work in tech but it's not like they can just magically make an insane amount of money like early on.
He thinks because he is the richest person in the world that he has also worked the most and is the smartest. Both are extremely far from reality- but you can't convince someone of him like that.
Anyway- my point is he loves being able to just post a tweet and have however many people read it and talk about it. Similar to someone like Trump- they just love all the attention to an insane amount, and unfortunately technology makes that possible these days.
The 1B$ is a "reverse breakup" fee, and applies when an outside force (like SEC or financing) prevents the deal. That 1B$ has nothing to do with any choices on either side, and is unlikely to factor into this process.
At this point they're clearly going to trial, and it's not unlikely that the cost to Elon will be somewhere in the neighborhood of the difference between the fair current market value (~20B$?) and the purchase price (~44B$).
My guess is it'll end up being ~10-15B$.
> in the neighborhood of the difference between the fair current market value (~20B$?) and the purchase price (~44B$).
The difference is 24B$ which is implied to be the upper bound. 10-15 is in the range 0..24.
If Twitter "wins", they get Elon to pay the full market value. Now, they don't actually want Elon to be involved, so if Elon pays the difference between FMV and OPP (~$24B) that's essentially the same as buying then divesting with fewer steps.
If Elon "wins", he gets out paying nothing.
So the range is 0 to $24B.
Elon has a terrible case here, so the best negotiating tactic he has is being a disruptive asshole so TWTR just wants it done with (this is playing to his strengths). I'm also making a big assumption about the FMV, which could easily rebound a bit by EOY. With those factors pulling it down from 24, I'm expecting in the 10-15 range, and if I had to guess I'd say $12.5B.
Pick your own inputs for your own estimate, but this is the deal structure.
2) Facebook lied about video watch time for years, including in SEC filings and to advertisers (essentially fraud). Is this an appeal to the sanctity of SEC filings? I don't think Facebook is significantly more reputable than Twitter, they're both pretty shady.
Why should we just trust the company, as you imply? Companies routinely and regularly lie in SEC filings, including big tech -- and Twitter! They paid close to a billion in securities settlements for - wait for it - lying about user engagement!
Twitter admitted to lying about user engagement in 2015 and paid a hefty fine for it. [1]
Is your argument really "the company that has been proven to lie about user engagement wouldn't lie this time"? Seems flimsy.
[1] https://www.wsj.com/articles/twitter-to-pay-809-5-million-to...
2) Twitter's CEO gave a pretty good explanation of how they combat bots and how they calculate their mDAUs, Elon Musk responded with a poop emoji. I get that his personal experience on Twitter is heavily bot-infested, a significant proportion of bots on Twitter engage with his account and use his image as a user profile. Twitter doesn't claim that the bots in Musk's feed are under 5% of users, or that the number of bots overall are under 5% of users, they claim that the number of monetizable daily active users is under 5%. Given the definition of a "daily active user", reduce to "monetizable", and consider the number of users who never post anything but read tweets and click on ads and promoted tweets, and this isn't hard to believe.
On the other side we have Elon Musk, notorious liar, claiming that he doesn't want to buy Twitter because Twitter is lying about the number of bots, despite the fact that before tech stocks crashed, he said he wanted to buy Twitter to solve the bot problem. This isn't hard. He has buyer's remorse and the bots thing is the best excuse he has to get out of a contract he signed. It's a shitty excuse and no one other than Musk fanboys have any reason to believe him, and it's not even an excuse in court.
Company that previously lied to investors about engagement and settled a massive billion-dollar lawsuit makes further unproven claims about engagement. You believe them why?
Should corporations which deliberately lie to investors be immediately trusted again, especially on the same topic they got caught lying about previously?
Your argument is an appeal to authority where no authority exists. They're liars. Not just liars in general, but liars about this exact topic. Do you trust BP's offshore drilling because the CEO now insists it's totally safe this time?
>Twitter doesn't claim that the bots in Musk's feed are under 5% of users
He never claimed this, this seems like a strawman. Did you read the complaint?
>this isn't hard to believe
Choosing to believe a company that has admitted to lying to investors is your prerogative, it doesn't make them trustworthy or correct -- and it absolutely doesn't make your argument based in any kind of reality (why should we take the liars at their word?). Why go to bat for a company with a billion in fines for misleading investors? Under what basis do you believe they've reformed and can be trusted?
I don't understand why you believe Elon can't be believed because of his history of lying while you ignore Twitter's sordid past of securities violations and lying to investors.
>Elon Musk, notorious liar
Why don't you label Twitter as notorious liars, given their billion in settlements for lying to investors?
More to the point, it's Musk's perogative, which he excercised when he signed a contract to buy the company based on their represenations while choosing not to do any due diligence to verify those representations.
I think Twitter is probably more believable here than you give them credit for, but Musk trusted them 100% for some reason.
For lies known previously to Musk's offer, he had every opportunity to decide whether to trust Twitter or not, and he chose to by waiving due diligence.
If there's an allegation of an additional lie that's material to the deal, Musk hasn't provided evidence of that here.
Did you read the filing? He provided evidence of them violating their obligations under the agreement (refusing to provide adequate access to data to independently verify claims made about user engagement). Twitter agreed to these terms. Read the original agreement to see for yourself.
>he had every opportunity to decide whether to trust Twitter or not
How does that mean fraud is okay? If Twitter lied again, it would be a clear contract violation. You can't just lie about critical company metrics to acquirers, due diligence or not. It's fraud AND a contract violation.
Given we're talking about a disreputable company with a history of lying, I'm not inclined to believe them and I don't know why you immediately believe their claims. Perhaps you can enlighten me as to why you think they deserve trust in this matter.
Thats ridiculous.
Your argument is absolutely ridiculous. They've done it before, and settled.
Seems you have absolutely no idea who you're defending, which is a company that has routinely misled investors on user engagement and paid settlements for that very fact.
"The company with a history of lying to investors about user engagement would never lie about user engagement!"
[1] https://www.wsj.com/articles/twitter-to-pay-809-5-million-to...
As a thought experiment, if 50% of Twitter's claimed MAUs were bots, it would absolutely be material.
Given Twitter has a history of lying about this exact metric, under what basis do you believe that the bot issue isn't material? Blind trust in the same company that lied about it before?
I'm trying to understand why people trust the company that was caught lying to investors about the very subject they were lying about. Where do you get this trust?
Twitter may well have been grossly lying all these years, but the time to figure that out is before you sign the deal. That's kinda the point of doing due diligence.
Specifically, the merger agreement requires "all information concerning the business ... of the Company ... for any reasonable business purpose related to the consummation of the transactions".
Seems like an arbitrary API rate limit could easily violate this clause. How are you providing "all information [...] requested" if you drip feed it?
The fact they'd even play cloak-and-dagger with this information suggests there's fraud again. Companies with nothing to hide don't mislead acquirers.
Not to mention that your theory of Twitter behaving fraudulently in the context of this transaction makes no sense. They've got a commitment to purchase them at vastly more than their market value, so they're highly motivated to see the deal close. What's the incentive for acting in bad faith?
Musk would need to show the latter, not only the former. And that carries rather stiff penalties. As opposed to reading the rules very precisely and only effectively lying. Which is what lawyers are for
* always remember that Bull Clinton technically didn’t lie. He in fact asked his lawyers before that hearing and was told that “no getting a BJ, according to the law, does not constitute a sexual relationship”. In didn’t end up mattering because him staying president is a _political_ decision. Unfortunately for Musk, public opinion does not matter here
Now if Elon wins might be able to claim costs, but they would be minimal by comparison to the original $44B deal.
Seems to me that the company with a history of lying about engagement shouldn't immediately be trusted about engagement figures. Would you disagree?
[1] https://www.wsj.com/articles/twitter-to-pay-809-5-million-to...
Tell me, do you trust BP's offshore drilling operations today?
In any case, I addressed your question. Twitter are proven liars on this exact metric.
Been successful at that.
Twitter isn't trying to stop him, probably because they don't use their product and may have forgotten they can just ban him.
If Twitter banned Elon's account for a minor TOC violation now, they would likely expose themselves to legal retaliation. Sucks, but it seems we both agree that there are separate rules for the ultra-wealthy.
Edit: I can't swing any stocks with my tweets; whereas Musk can. That is the difference, is who has the platform.
They had good reasons for not banning Trump until then, namely that he literally would've gotten their employees killed.
By EOY we could be in recession.
Neither of these seem very likely, especially in combination.
Deepwater settlement - $20 billion
VW Emissions settlement - $14.7 billion
Why would the current market price have anything to do here? Twitter want him to be forced to buy for $44B, not a penny less.
No it does not, SpaceX results speak for themselves, they have no competition. Same with Tesla, just check their vehicles sold charts.
Tesla's competition: every other car marker.
More generally so, I have no idea why people expect any company to own a market completely. Any market is usually big enough for one than one company to be successful.
I figure he ends up having to pay $10E+10, and everyone knows it, so he gets short-squeezed in Tesla stock, then margin called on any loans against his stock... then POOF
According to this thing I found on the internet[1], if I read it correctly, Tesla is worth $31B if it were stripped and sold.
Most of Elon's wealth is Tesla stock... far more than the actual value of the company, by a factor of more than 5. If he has any debts against his stock, those could be his downfall.
[1] - https://www.marketwatch.com/investing/stock/tsla/financials/...
I personally don’t think Tesla is worth even $100 billion. However, the markets disagree, and it is difficult to imagine a scenario where Tesla loses 80% of its value.
…but it’s not totally inconceivable.
What?
A short squeeze means you have an obligation to buy shares and not enough are available, that drives the price up like crazy.
If Tesla stock drops and his loans against Tesla stock go negative, he'll be forced to liquidate more shares to make up the difference to keep the loan afloat... this would then lower the value of the stocks even more, and the positive feedback loop could let all of the air out of his imagined wealth.
In other words - He has effectively sold shares at a price by borrowing against them... if the price falls, he'll have to do something to make up the difference... which is about the same thing as a short-squeeze for him.
Squeezed short sellers have an obligation to get a specific stock, but only have cash. There are not enough market participants willing to sell the stock, so the price rises astronomically to their disadvantage.
Elon has an obligation to get cash, but only has $TSLA stock. There are not enough market participants willing to buy the stock, so the price drops enormously to his disadvantage.
Like when I suddenly develop an interest in Columbo trivia when actually I'm supposed to be doing my accounts.
My guess is Musk never intended to buy Twitter. He needed an excuse for dumping billions of dollars' worth of TSLA at its peak (while at the same time faulting Bill Gates for shorting TSLA), and his proposal to buy Twitter provided a convenient cover.
Well, especially with that billion dollar termination fee (well, if they get it since Musk is probably gonna lawyer up now).
Twitter is of course currently known as a source of Truth and Harmony.
"anything not illegal is allowed" sounds decent to me; if you want stuff illegal, make it illegal. If you want unwritten laws dreamt up by anonymous elites and enforced for random reason, go talk to Tipper Gore and the PMRC.
Twitter is based in the US, the 1st Amendment protects hate speech such as explicit support for genocide. I don't consider a social network full of genocide promotion to be a good thing.
The exceptions to this were carved out in a court case regarding Compuserve, which was a subscription-only service. The stare decisis in this instance is on far shakier ground than Roe was.
The compuserve case led to section 230 of the CDA being created, but again that doesn't have to do with Marsh v Alabama. To have that apply, you'd need to make the argument that Twitter both is, and intends to be a public square, and well, the fact that they have posted moderation policies makes it clear that they don't.
In contrast, the historical statements of Twitter make it very clear that they intended to be the public square, e.g. "free speech wing of the free speech party." Additionally, the assertions and decisions of the state in regards to social media indicate massive influence over politics that far exceeds any city street. They say people are denied their rights of free expression because Trump blocked them on Twitter, and that Russia successfully manipulated our elections because a few Russians bought a tiny amount of Facebook ads.
Sidewalks of random streets are considered to be "the public square" in US law (broadly because random streets are usually publicly owned. You need things like gates and signs and such to revoke such an assumption). The Marsh v. Alabama ruling relied on the fact that the town didn't try to make its streets un-square like, and in fact encouraged public square-like use!
Notable here is https://en.wikipedia.org/wiki/Lloyd_Corp._v._Tanner, which in the case of a private entity that isn't literally acting like a municipality, they can kick you out!
> In contrast, the historical statements of Twitter make it very clear that they intended to be the public square, e.g. "free speech wing of the free speech party."
You will be hard pressed to take a single statement, made by a minor executive who acts outside of US jurisdiction, in 2012, as superior to the actual user agreements that Twitter has (and had at the time) in the US.
And there are numerous forums where that standard is applied; Twitter just happens not to be one of them because they like money.
Try to talk about popular movies are TV shows and you get things like this on such sites [1]. Want to discuss an episode of PBS Space Time such as this one [2]. Don't be surprised if this is the discussion you get [3].
What almost always happens on such forums is that the people there who aren't racists, sexists, antisemites, inane conspiracy theorists etc., leave, and the forum ends up being largely just such people.
[1] https://web.archive.org/web/20201225021055/https://voat.co/v...
[2] https://www.youtube.com/watch?v=RlXdsyctD50
[3] https://web.archive.org/web/20201223123156/https://voat.co/v...
Voat suffered from a flood of toxicity caused by Reddit banning toxic behaviors. From what I could tell, it was practically uninhabited before.
Reddit itself was largely "anything not illegal is allowed" at the time (in part due to lax enforcement of the few rules they had), and was largely fine. The toxic communities sequestered themselves for the most part.
Twitter would probably be much the same. The greater issue they'd have is the same Reddit had; it's hard to sell any advertising on a site where you can't guarantee ads won't show up next to racist/sexist/etc diatribes.
Any remotely reasonable approach here has the state deciding which attributes can be used for moderation decision and which can't, which also isn't feasible.
Can't you already do this on Twitter? You just need to mark it as sensitive.
> That spammers and bots can't be banned?
It would be like 4chan I assume, spam/bots are banned.
What is free speech but that.....
> would have made Twitter an open forum for spreading lies and hate.
Like it isn't now. Twitter lets pretty much anything and everything except hate against specific subgroups they've decided are "protected". It really doesn't help there choices are entirely arbitrary with no internal consistency.
Wouldn't he look to be a hypocrite otherwise? [1]
[1] https://nypost.com/2022/05/31/elon-musk-calls-out-bill-gates...
The headline is: "Elon Musk Sells $8.5 Billion of Tesla Shares After Deal to Buy Twitter"
The deal to buy Twitter gave Musk an excellent cover for selling billions of dollars' worth of TSLA. He doesn't need to sell all of TSLA. He sold a massive amount. If he didn't have this cover it would have looked like he thinks TSLA is overvalued (which in fact it is).
Both Gates and Musk sold TSLA. Gates sold borrowed shares, Musk sold shares he owned. That's the only difference. Of course Musk still has tons of TSLA remaining. But that doesn't change the fact that both Gates and Musk did the same thing (sell TSLA) and yet Musk criticized Gates for it. What a hypocrite!
It's very funny how those things came to be known as code words for the *true* offenses, which we all know very well.
What a waste of perfectly good words that used to have meaning.
That's what free speech is, whether or not you agree that such a policy of unrestricted free speech is constructive or beneficial.
Also disagree that such unrestricted free speech is constructive or beneficial. Sacha Baron Cohen explains it best: https://www.youtube.com/watch?v=ymaWq5yZIYM
I am so tired of seeing this overplayed urban myth. The precedent you mention was set by Schenck v. United States in 1919, but it was partially overturned later in Brandenburg v. Ohio in 1969 [0]. Which is the part that people who bring up this myth every time conveniently forget about.
So no, you can yell "fire" in a crowded theater or whatever else you want, as long as it doesn't meet the legal standard for imminent lawless action (e.g., a riot). And the legal standard for imminent lawless action is much higher than you think it is.
0. https://en.wikipedia.org/wiki/Shouting_fire_in_a_crowded_the...
So there is no absolute free speech then. Which is the point of bringing up the "fire" example.
If you're a visitor in my house there is no free speech at all. If you say something I don't like I'll legally kick you out. Private companies such as Twitter and Facebook have the same right. Their platform, their rules.
No idea how this is relevant to your claim that "yelling fire in a crowded theater isn't allowed under free speech". It is legally allowed under free speech, it isn't a crime, despite what a lot of people claim. The theater might kick you out or ban you, but that has nothing to do with free speech.
Genuinely interested, and not just trying to argue: how would you otherwise define free speech? It sounds like you think free speech should have defined limits - which surely means it's not free speech any more?
Voltaire was right when he said "Those who can make you believe absurdities can make you commit atrocities." And social media lets authoritarians push absurdities to millions of people. President Trump using Twitter has spread conspiracy theories more than 1700 times to his 67 million followers.
Freedom of speech is not freedom of reach. Sadly There will always be racists, misogynists, anti-Semites, and child abusers. We should not be giving bigots and pedophiles a free platform to amplify their views and target their victims.
Zuckerberg says people should decide what's credible, not tech companies. When 2/3rds of millennials have not heard of Auschwitz how are they supposed to know what's true? There is such a thing as objective truth. Facts do exist.
[1] https://www.youtube.com/watch?v=ymaWq5yZIYM
https://www.popehat.com/2012/09/19/three-generations-of-a-ha...
Fire in a theatre came up in the context of squashing a protestor against the draft, from a judge who thought eugenics may have something going for it.
Just let it die. Please.
Speech is transmission.
Reach is landing at a receiver.
Substituting /dev/null in place of a human being does not satisfy speech having occurred. A concordance must be reached between the speaker and at least one other individual.
i think you are referring to twitter.com
imo this is pretty bad for twitter the company. they’ve been flat for years, they’re current valuation is less than in 2013. they’ve lost the plot a while ago and seem to have been in a managed decline, probably because they were looking for buyers.
> and good for the world
you are overestimating how many people care about twitter outside of the US.
Thank you Elon
In that case, everybody I don't like loses, which is pretty close to me winning, I think.