I assume you’re being tongue in cheek (especially given Musk being constitutionally unable to run for president), but the president of the United States doesn’t appoint judges to the Delaware Court of Chancery. And that court is amazingly efficient, effective and incredibly incorruptible.
Aww darn, Musk doesn't have 6 years of Delaware residency, because becoming Governor of Delaware is probably a lot easier than amending the US constitution to allow a non-native citizen of the US to become president.
Not too difficult to image at all - EM draws upon the contractually committed financing he presented to the Twitter board (the bulk of which is coming out of his own fortune) and does what he agreed to do: but Twitter for $44 billion. Just like the merger agreement says.
If Twitter wins the suit, EM will be in exactly the place he bargained to be in when he signed the merger agreement: the proud new owner of Twitter.
Yes, the remedy of requiring performance of contract obligations as a cure for breach rather than money damages is called “specific performance”. It has extensive history in general, and considerable history in corporate mergers and acquisitions (including, specifically, in the Delaware Court of Chancery, where this suit is.)
If I recall, suing to require contract performance also occurs at a much smaller scale if buyers or sellers try to back out of a finalized transaction for sales of a house or condo. If they then can't or won't, damages may be applied.
If it's the one billion, paying that is probably a great deal less painful than what is now the amount of money that would be lost selling much lower value Tesla stock, and buying Twitter at 54.20 compared to what Twitter is now trading at.
I'd imagine the consequences of not complying with that sort of court order would be something like being prohibited from running a business and sitting on the board of any company, then further escalating to having your finances frozen.
If he does not pay, he will be found in contempt. Likely, the Chancery court would order a daily fine sufficiently large to eventually gain compliance. For example, they might order him to pay $50M/day that he's late on closing. Whatever is required to achieve compliance can be ordered, up to and including incarceration.
EM already HAS committed financing. Now, he can probably blow up the commitment from his banks by continuing to engage in egregiously bad faith behavior, but under the merger agreement and the financing commitment papers, he’s required to draw on that committed debt. And, if the debt shows up like it is contractually obligated to do, and absent circumstances that are not present here, also use his own wealth to fund his equity commitment.
Yes, not only is there precedent but the agreement very specifically lists this as a remedy. Not only that, but Twitter claims in the lawsuit they filed it was added during negotiation rather than being some standard clause in the initial version, as well as highlights that the agreement stipulates that if they go this route then there may be no objection to the process (in other words, Musk can't argue a technicality to try and prevent a hearing on forcing specific performance).
He’s really not. This case will be tried in the most efficient corporate law court in the country. They make a particular effort to render speedy decisions.
First, the notion that Twitter would have difficulty funding extended litigation is just ridiculous. Second, Musk won’t be able to make this a long drawn out process. This court moves quickly and appeals go straight to the State Supreme Court.
If that’s true, why does anyone run a business? Deals don’t matter and you might as well hire some guys willing to break your competitors kneecaps rather than engage in due diligence when selling.
Elon getting away with walking off this deal unscathed financially is in no one’s best interested but Elon’s
There is no way this will bankrupt a multi-billion dollar company. And that there isn't someone ready to fund it to keep it running in off-chance of making billions when Musk has to do good for his word.
The trick is that if Twitter succeeds, then their legal fees become Musk's legal fees by virtue of him owning the company. They are heavily incentivized to go at this as hard and long as possible if they are to go at it at all.
Even recognizing that any one sides filings present an incomplete story, Musk’s public actions alone combined with the terms of the contract as related in the Twitter suit look pretty bad for Musk. Unless he’s got some other line of attack much stronger than the ones he has been publicly previewing, I don’t see how he prevails here.
a distinction without a difference, he doesn't own anything beyond the board seat that his equity holdings afford him. Vanguard owns more of Twitter than he does.
> Most views I've heard are that it is quite impossible to force someone to buy a company
Those views are simply ignorant; there are plenty of cases of the Delaware Court of Chancery ordering specific performance on merger deals. It is nothing even loosely similar to “quite impossible”.
Musk has been saying that on Twitter, but in Twitter's court filing they exhaustively outline that a) it isn't true and b) it isn't even a valid request from Musk under the contract. Considering how misleading and full of shit Musk has been about this whole thing at this stage I am well inclined to believe Twitter.
> Musk has been saying that on Twitter, but in Twitter's court filing they exhaustively outline that a) it isn't true and b) it isn't even a valid request from Musk under the contract.
I've read the entire complaint, and this is my take as well. Twitter bent over backwards to comply with these requests even if they were invalid.
Twitter played this brilliantly. They kept complying and playing along even with the most obvious nonsense, letting Musk run his impulsive and overconfident mouth.
The number of times he legally shot himself in the foot is just staggering. There's documentation of everything, because he happily provided it. Musk's lawyers and bankers must have been dying a thousand deaths reading his tweets and other public remarks.
If twitter was a house he was buying, I think the analogy is he waived his right to a house inspection being a cause of breaking the contract. He can still have the house inspected though.
Merger & Acquisitions and Real Estate are really separate things so trying to use them for analogies is going to break down rather fast.
If Musk was buying a house (Twitter) we're basically at the point where He's made an offer, they accepted, Musk fulfilled all contingencies (including financial), they both signed the papers transferring ownership, and then Musk decided rather than moving in and wiring them the money he'd rather not. (Analogy doesn't work so well).
Sure, if you own a house you can call anybody to come inspect it but you still need to wire the seller the money.
My point was that the contract to purchase waived inspection results (aka percentage of accounts being bots, etc.) being a cause for breach of contract. That diligence can still happen, it just can't be used to back out of the contract.
Any analogy breaks down. I thought this was a good one because in the current housing market many buyers have to waive inspections as a contingency because of bidding wars, etc. They can still get the inspections done though (and should).
Thats not quite the analogy, and the differences are important.
If twitter was a house he was buying, the analogy is he waived his right to a house inspection and highlighted that fact in numerous ways to attain either a more favorable price (since there won't be post-deal negotiation on anything he finds and decides to argue) or to make Twitter more likely to accept. Or a combination of both. And in addition to that, in your offer to buy the house you also made legally binding statements that "I have been able to inquire about anything I might be concerned with about the home, and have been given answers and opportunity to find my answers on those questions, and as a result I am fully satisfied with how that transpired".
The only possible way to then get a home inspection is that you also included a clause that the deal is contingent on a loan being used and its possible that the loan may require certain information or processes. Now, if as a side-effect of getting that loan, a home inspection is required and if that home inspection causes the _bank_ to back out of financing then that is now possibly a cause to break the contract. Even this isnt fully accurate in this case though. Because there were specific guarantees and public statements made around financing that 1) the financing is already lined up (i.e. not contingent on an inspection) and 2) even if that fell through Musk would have the available capital to close the deal.
> It demonstrates that Twitter is inflating their value and lying to their shareholders. Whats so hard to understand about that?
No it doesn't. Twitter not handing over its bot data demonstrates...that Twitter is not handing over its bot data. Does Musk have actual _evidence_ that Twitter is inflating its value and lying to its shareholders? You do understand that "Twitter not handing over its bot data" isn't evidence.
Anyway if the question of handing over "the bot data" data is irrelevant to Twitter's claims, then it doesn't matter if it's handed over. The legitimacy of those claims would then be unaffected by the bot data itself.
Lets put it this way - say I have a company that makes cars, and I tell you - a potential investor of more than a billion dollars - that I have shipped a million cars this year and you should give me money on the basis of that revenue, are you an idiot if you don't ask to see the actual receipts that show that I have actually, indeed, shipped a million cars this year?
Yes, I think you would be, and anyone who has given you money to spend on this act, should think so too .. Trust, but verify: This is a pretty basic business rule.
Twitter has a responsibility to demonstrate that the trust they expect in their own estimations of their own market value, is actually verifiable - and with an issue of humans/bots ratio, they should surely be willing to be as open and honest as possible about this issue.
Twitters core value, the basis of their own estimation of the value of their stock, is entirely derived from the actual # of human eyeballs they have attached to their systems.
If those eyeballs are really just blind sockets on the outside of a software-based bot, then Twitter is factually lying about how many humans it has in its system. This would be essential for any buyer to know beforehand, and I really am astonished at the efforts you are going to justify this omission on Twitters' part.
The bot to human ratio is a KEY factor to understand in correctly evaluating Twitters real value - how anyone can argue that Twitter don't have the responsibility to demonstrate the accuracy of their estimation of market value, especially in the HN environment, is beyond me.
Perhaps the Musk-hate rage is blinding you to the rationality of Musks' request. "Hey, you say you are worth this much because <blah>, please show me that <blah> is actually a truthful and accurate estimation .." - this is not at all an unreasonable request.
Twitter board executives DO have the responsibility of answering the claim that their user group is a certain percentage human.
The fact that they haven't done this easily and openly is telling, in and of itself - and I would wager that most making the claim that they don't have a responsibility of being honest about the number of users in their system, are in fact engaged themselves in deceit and dishonesty on the issue of "actual users" versus "pretend users". How else can you justify the non-response?
Twitter should be able to easily answer the question: bot to human ratio? It is fundamental to their core purpose as a business to know the answer to this question. The fact that they can't, and are instead engaging in an anti-Musk agitprop campaign, is very, very telling ...
> how anyone can argue that Twitter don't have the responsibility to demonstrate the accuracy of their estimation of market value
The problem is that the person who made the unprompted offer of $54.20 per share - thus estimating the market value at $44bn - spent weeks going on about how they thought Twitter's bot estimates were too low and that they were buying Twitter to fix this bot problem.
To then turn around and go "wah wah too many bots" is somewhat disingenuous, no?
(Also, Twitter have been using the same methods of bot estimation since 2013, afaik, and have submitted these numbers to the SEC every year. If they were plausibly wrong, someone would have flagged it before now, right? Because that would be submitting false data to the SEC and, I believe, they consider that A Bad Thing.)
Do these arguments defends against the claims made in the suit brought by Twitter? No? Well then how are they relevant? How are the bots relevant to that suit?
Of course Musk is free to counter-sue I guess and make the bots the point of contention.
He already signed the deal. Yes it would be rational to ask for all of this before committing to buying Twitter at a set price, but apparently he didn't.
You talk about "Musk-hate" but your post says you think he's an idiot.
Multiple people have already said this, but I'll ask just for the sake of it: Are you aware that Elon forewent his due diligence by simply skipping that part and going straight to signing the deal?
That means that Twitter DOES NOT have the responsibility that you claim. Sure, you may think that according to a certain moral framework they do, but in the context of this deal, which is what the thread is about and what the people you are responding to are talking about, it is irrelevant.
I might add as well as a counter to your accusations of "Musk-hate rage", that perhaps it's you who's suffering from Twitter-hate rage with a dash of Musk-fanboyism, and that it's Elon who's twisting the truth for his own gain rather than Twitter. Could that not be the case?
Lastly, it's not a "non-response". Twitter has continuously provided Musk with the data he's asked for, he just keeps asking for more. Also, even if you ridicule the idea, some data is simply _not_ appropriate nor necessary to share before a sale. Otherwise you could find out any trade secret from anyone simply by making an offer and then reneging on it.
> Lets put it this way - say I have a company that makes cars, and I tell you - a potential investor of more than a billion dollars - that I have shipped a million cars this year and you should give me money on the basis of that revenue, are you an idiot if you don't ask to see the actual receipts that show that I have actually, indeed, shipped a million cars this year?
Yes, if you agreed to, for a slightly different but more relevant example, buy a social media company where there was some doubt about the degree to which it's claimed user base was actually bots for $44 billion dollars, of which you were personally on the hook for $33 billion in cash with the rest financed, you would be an idiot if you also agreed to waive due diligence as part of that agreement without first having satisfied yourself on the real user numbers.
But you having been an idiot and signed that agreement, the fact that the agreement required the social media company to provide you information reasonably necessary to help you complete the acquisition would not give you a right to data who's only purpose would be to allow you to perform the due diligence you had waived.
As much as the bot data may arguably be relevant to the due diligence any sane investor would perform before such an acquisition—an argument you do a valiant job of presenting—it is not something that there is any reasonable argument that Twitter has an obligation to provide in this case, because Musk was so desperate to get Twitter to sign that he agreed to waive due diligence.
Even if that’s the case, and that’s a big if, it’s not enough in and of itself to let him out of the deal. He needs to prove a material adverse effect of something like 20-40% of the value of the company - then the court may let him off the hook.
Another avenue for him might be if the banks pull their funding, then the deal falls through and he may just have to eat the $1bn penalty (but that can’t have been initiated or influenced by him).
He made an impulsive decision, the market went down making him regret it, and since then he’s been trying to squirm out of the deal he signed by grasping at straws and in the process hurting the company he promised to buy. He’s in trouble, and some potential minor discrepancy in how Twitter has represented their users will not absolve him of it.
If Twitter are lying about how many bots they have and how many real humans they have, that is not some potential minor discrepancy. That is a HUGE red flag which justifies bowing out of the deal.
Would you be happy investing in a company that lies about its sales figures and doesn't provide the statistics and real evidence to back up their claims?
This irrational Musk-hate is occluding rational thought.
The legal standard is material adverse effect. It’s a very high bar. As commentators have noted, it’s unlikely any court finds for that legal standard. This is why Elons lawyers have been using pretextual reasons to walk away. He is notably not saying he is walking because of “too many bots”. He is saying that twitter is breaching an information convenant because he needs to find a pretext that will stand up in the court of law.
> That is a HUGE red flag which justifies bowing out of the deal.
Not according to law and precedent, which is what I’m telling you. Whether Elon can be allowed to renege on this deal does not hinge on whether you personally think Twitter has been telling falsehoods. Show concrete evidence of the very substantial discrepancy in Twitter’s value that would be based on these lies (again, it would have to be on the order of 20-40%), and I’ll concede that he might have a chance to win on that merit. The bar is that high, whether you like it or not.
A minor point about this new bot hysteria. Twitter is a very well-scrutinized company with many analysts covering it and a lot of big institutional ownership.
If there was some surprising element to musks bot assertions, it would be big news. In fact, there is nothing to see, and this is partly borne out by the lack of buy and sell side analysts collectively smacking their foreheads after realizing they has been completely wrong about Twitter the last 10 years.
> Twitter is a very well-scrutinized company with many analysts covering it and a lot of big institutional ownership
You missed out the most important group: advertisers.
If Twitter has been wilfully lying for years about their metrics there would be thousands of lawsuits popping up from advertisers of all sizes. It would be the death of the company by paper cut.
> If Twitter are lying about how many bots they have and how many real humans they have, that is not some potential minor discrepancy. That is a HUGE red flag which justifies bowing out of the deal.
Well, no, if you had doubts about that going in (which Musk publicly did) but then agreed to a contract waiving due diligence (which Musk did), it would not justify backing out of the deal that you...suspected they might be lying and we're not provided sufficient information to assuage your concerns. There might be an argument that you stumbling into clear proof of deception that you didn't have before signing the agreement would justify that, but Musk has never claimed such a discovery, but there is no reasonable argument I can see that Twitter was obligated to satisfy Musk’s concerns here, when he explicitly waived the usual requirement in acquisition deals that would be the basis of such an obligation.
> Would you be happy investing in a company that lies about its sales figures and doesn't provide the statistics and real evidence to back up their claims?
No, and, more to the point, I wouldn't be happy buying a social media company where I was uncertain about the basis for it's claims of real users. But then, that's why I wouldn't agree to buy such a company—especially where I had doubts about those claims going in—and waive due diligence as part of the deal. That would be idiotic.
The question they need to answer is more along the lines of "Did Twitter purposefully mislead investors in their filings to the SEC to such a great extent that it greatly lowers the future potential profitability of Twitter?".
The answer to that is almost certainly going to be no.
Agreed. Even taking into account that this is one parties biased arguments on the matter, when you read the agreement, and read Musks filings in terms of SEC complaints and withdrawal, and combine that with Musks tweets (which hilariously Twitter doesn't have to go through discovery to get access to) it all adds up to a pretty straightforward argument in my opinion. Obviously anything can happen in court, but I would be extremely interested to see what the official line of defense will look like.
A 140-character-long court document ought to be enough to name the plaintiff, the defendant, and the amount of money demanded. Not sure about signatures and court registry stamps.
Twitter is arguing in their case “even though we had no reason to, we were still providing your team with everything and all data” while at the same time definitely not doing that.
They flat out admit to refusing to share how the sampling was calculated for their mDAU number for the past 5 years.
They say “it’s a super secret sauce to our success and Elon said he would start his own Twitter if this deal doesn’t happen and that is why we won’t share it but can share the entirety of Twitter data instead.”
Oof. Chop heads at Twitter and fire the lawyers.
Don’t have to be a rocket scientist to read between those lines…
Just feel bad for the normal every single day employees. If you’re not jumping ship, you are going down whichever way this lawsuit/deal closes.
> while at the same time definitely not doing that.
Their filling shows that they absolutely did do that. Every time it was requested of them.
>They flat out admit to refusing to share how the sampling was calculated for their mDAU number for the past 5 years.
They provided several meetings, invitations to meetings, and outright extended breakdowns of exactly how it all works. Musk, for whatever reason, admitted to not even reading any of the information. That's a smoking gun towards the invalidity of his claims, especially about Twitter's cooperation.
They were answering all of his requests this whole time, and just letting him run his mouth and lie unopposed on Twitter about them cooperating.
I suspect Bob Swan will have a lot to say about the situation if he gets roped in as a witness, and it does not seem like it will be good for Musk.
> Although Twitter has provided certain summary data regarding the mDAU calculations, Twitter has not provided the complete daily measures as requested.
(note this is the last sentence of a footnote buried away in their argument)
For what it's worth, I'm pretty much of the same opinion after reading their filing.
On the surface they're all growly and aggressive, but between the lines they're dancing all around the questions of mdau and bots. Whole lot of misdirection going on.
I have no idea how this will turn out, but I believe their numbers are a lot shakier than I did before I read the filing.
Id be interested to know specifically which lines you are reading between because the lines I read were very explicit statements like "we sent the methodology for mDAU calculation" and "in July he admitted that he never read the detailed breakdown on methodology we sent months ago" and "he backed out of meetings where we were supposed to explain this even more to him".
It's okay in life to not be polarized and take sides on things. Both can be shady, both can be great, and both can be mediocre.
For your own "between the lines" reading start at 90. Remember this is Twitter legal making their case. Fair to say that is probably a slanted/biased write up of the timeline until we can see a defendant response. This is probably interpreted different by everyone (especially with love/hate Elon blinders on) hence the "between the lines" commentary.
However, here is the main funny and a tiny footnote I found hidden away -- which makes sense given this is their case/argument against him, so they probably don't want to draw too much attention to this in the big fun copy:
> Although Twitter has provided certain summary data regarding the mDAU calculations, Twitter has not provided the complete daily measures as requested.
If they are willing to share anything/everything, seems like this one would be very easy to pass along, no?
The section you mention is immediately preceded with their (personal) opinion on why this was satisfactory:
> This information is derivative of the information Mr. Musk first sought in Sections 1.01-1.03 of the May 19 diligence request list. Although Twitter has
provided certain summary data regarding the mDAU calculations, Twitter has not provided the complete daily measures as requested.
In other words, they sent the monthly rollup and he wants the daily breakdown. They further argue all throughout that they feel that the data requested would not even service the stated purpose, and they want to exercise their discretion to withhold in certain ways. In addition to them explicitly saying "we still believe hes acting in an adversarial role so we are trying to close the deal but are still aware he might end up trying to start a competing product instead".
Obviously theres two sides to it, but when you sit down and read the public statements Twitter makes an _extremely_ convincing argument up-to-and-including screenshotting Musks own public tweets about the whole affair. In comparison, Musks SEC statements I would classify as "throwing shit against a wall and seeing what sticks" with very little explicit justification on why legally he is correct. The entire evidence presented by him is
> 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%.
i.e. we arent at all going to outline anything higher than 5%, just that its "wildly" higher and we are basing this on Musks "strong belief based on preliminary analysis".
I wish that we could apply credit where it's due to the rest of the SpaceX team by name for some of their amazing technical achievements (100+ landings and re use of a falcon 9 first stage) for instance, and let them bask in the glory, rather than musk as a figurehead.
On the other hand if musk keeps doing loony shit like this we now have Howard Hughes v2.0.
I am familiar with the history that SpaceX almost failed when the falcon 1 failed to work, but I can't say I have a huge amount of sympathy for musk taking an immense risk.
I'm sure he had enough money set aside even then from PayPal/x.com that even if SpaceX had gone belly up he could have bought a very nice house somewhere and lived in a very comfortable lifestyle for the rest of a human lifespan just living off the interest from $15-20 million.
I'm sure he had the engineering nous and connections to find his way back from oblivion, but (unless he exaggerated) things we near dire for him financially.
I think his original plan was to have around $40 million left over even if tesla and spacex failed, but when they both ran into difficulties in 2008-9 IIRC, I think he put the rest of his money into both companies to keep them going
Here's a few very consequential decisions that were taken under Musk: liquid methane instead of liquid hydrogen, same engines for first and second stage, full cycle combustion engine, usage of steel for Starship, and of course, reusable rockets. None of these decisions were close to being obvious. When you have hundreds of very passionate and talented engineers working for you, you'll be bombarded with lots of options. If you don't become a mini-expert yourself, you will start delegating lots of decisions, and the final result may or may not be optimal. Just look at Boeing.
Those decisions aren't minor trifles which Musk inexplicably micro-manages. They are core to the entire differentiation between SpaceX and its rivals. He's an engineer, of course he's going to be involved in such decisions. Claiming otherwise is like saying that Steve Jobs shouldn't have had any opinion on switching from MacOS Classic to NeXTStep as a base for macOS.
> If you don't become a mini-expert yourself, you will start delegating lots of decisions, and the final result may or may not be optimal. Just look at Boeing.
I'm assuming you're talking about Boeing's screw-ups with 737 MAX. If so, you've got it backwards. The 737 MAX's design issues were precisely because the leadership (i.e., non-engineering management) wouldn't delegate to the authority of the experts (i.e., the engineers) and forced their own decisions on the project. They did not become "mini-experts" themselves, sure, since they didn't actually put in the effort to understand what the consequences would be, but they did treat themselves as "mini-experts", as evidenced by their "we know better than the engineers" attitude to the concerns that were raised by engineering during the development of the MAX.
I know it's besides the point, but, has spacex published any figures showing how much it costs them to refurb these rockets? Last I checked, they had not. Which suggests they have nothing to brag about, yet.
And for years the internet didn't turn on him. Then he made some pro Republican noises and his favorability among young Democrats (i.e. most of the internet) dropped by 25 points in a month.
The behavior described in the chain of comments you're responding to. Or literally the thread you're in. Making a public ass of himself on a consistent basis. Acting like a child.
Sure, that's what it is. Not the multiple missed deadlines around FSD, Cybertruck, Hyperloop, etc. At least that "flamethrower" product placated his fanboys for a bit.
The baseline is that a number of Democrats already didn't like Musk in April and somehow him becoming a Republican made 60% more of both political parties not like him.
> both parties to dislike him at the same percentage
That's not true at all. The percentage of Democrats who dislike him is much higher.
The number of Democrats who started disliking him during the Twitter acquisition is much higher.
And the percentage of Democrats who started disliking him during the Twitter acquisition (as a percentage of the party) is also much higher.
As GP said, percentage growth in the percent who dislike him in each party is not a useful thing to compare. Doubling a side business from $100/month to $200/month is not comparable to doubling from $1M/month to $2M/month.
The percentages are the same. Why would Republicans dislike Musk more now that Musk is identifying as a Republican? And why is it the liberals fault, cause that's what was being asserted.
>But now he's made the cardinal sin of being a Republican.
I don’t remember where i saw it, but the thesis that being that unimaginably rich is detrimental to complex decision making has a certain logic to it.
Compared to a normal person, you just have so much power that your inner circle is unlikely to be able to change your decision making process if you don’t want them to. No matter how bad your decision making any consequences of those decisions is almost completely abstract (going from 100bn to 1bn net worth is a lot of money, but there are still almost no limits on your purchasing ability)
It seems like a lot of people i respected early on in their software careers (dhh, pg, etc have succumbed to this specific malady.)
That's possible, though it implicitly assumes that Musk's reputation fell because his decision making has deteriorated, while the simpler explanation is that his decision is not any worse than i was he's just been placed in a position that involves increasingly bigger decisions and more scrutiny. People simply mistakenly thought that he was put in that position because he was amazingly good at making such decisions.
I don't think he has at all. Not that I knew much about him before a few years ago but his companies are doing well and actually creating interesting things which really is a breath of fresh air from the tiresome old ad-tech garbage from the overhyped surveillance-capitalism industry. From an interview I saw of him walking around his rockets talking about things he seems quite thoughtful and interesting and very open, also a breath of fresh air from the scripted and PR-managed execu-speak CEOs and billionaires of today.
He may not be a genius, may not even be a nice person at all, but surely you're not fooling yourself that other billionaires and CEOs who let their PR firms manage their image are what they appear either.
i thought this whole twitter deal thing was a way to expose how twitter is full of government ran bots? atleast in my eyes his reputation hasnt changed at all.
Obliterating his reputation? Have you not seen the changes he has forced on twitter? For example after the purchase announcement a bunch of politically correct twitter users lost a sizable number of followers and politically incorrect users gained sizable number of followers.[1] Likely having to do with the bot problem.
Seeing the headlines and social blade stats mentioned in [1] reminded me of veritasium video about facebook fraud (bots).[2] This video demonstrates just how easy it was to buy fake likes on facebook. Doing some basic research shows that buying twitter followers is pretty cheap. After doing some basic analytics the creator finds where the bot accounts are very likely from. Looking at the same engagement statistics of political figures shows some pretty interesting results.
But then things get interesting when you take Dead Internet Theory into account.[3] Elon has made it pretty clear that he views AI as a possible existential threat to humanity and if the majority of the internet is indeed fake accounts managed by a minority manipulating the masses something ought to be done and nobody is talking about it. Elon seem to be trying to fix humanities sense making apparatus.
The big question is something that Ben Thompson highlighted yesterday - if the court sides width Twitter, but Elon just refuses to pay, what happens? And Elon definitely believes he can play fast and loose with rules and laws, so it could happen.
It's going to be pretty hard for a court to enforce getting financing, and getting the merger through.
As far as I understand it this is possible. It could actually destroy the faith in the delaware courts if this happens. So Musk in a way has everyone over a barrel potentially, and everyone has something to lose.
In principle he's the same as any other citizen. If you don't do as the court tells you, you're in contempt and can even be held in prison indefinitely if need be.
It would be a very interesting test of the US state machinery, which maintains there are no all-powerful oligarchs.
I suspect with him in prison, the court could enforce the sale of his assets. I think the theoretical answer is, yes, the court can physically force cash transfer even if Musk refuses to cooperate. Prison is just a part of it (though I can't see Musk keen to explore that).
But then he's got expensive lawyers and so on, to me this is the interesting side of the thought experiment.
> but Elon just refuses to pay, what happens? ... It's going to be pretty hard for a court to enforce getting financing, and getting the merger through.
This wouldn't be hard. It's not like Musk is sitting on a big pile of dollar bills that he can keep the court from grabbing. All of Musk's assets are at banks, and banks are very happy to follow a court order.
I think people are overly focused on the legal proceedings here. Obviously the only option Twitter has when it goes to court is to say "Hey, he breached the contract, we want you to force him to comply with the contract" but they don't have to take that line when actually negotiating with Elon Musk.
It may well be that Twitter thinks that their case is strong but that the legal proceedings present risk and damage the company's ability to operate in the short term so it's more in their favour to cut a deal where they get some payout from Musk. The only really strong thing I think they'll need (other than cash) is that Musk agrees not to attempt to buy twitter again.
The reason I say that is because without the deal TWTR's fair market value is probably in the $20Bn region, and so almost any amount of money they can extract from Musk to walk away would allow him to come back and buy the company cheaper than the current deal - and that would just look absurd for twitter. Say for example they say "give us $10Bn to walk away" Musk could pay that, turn around and offer to buy the company again at $25Bn and probably succeed. So the only real way to protect themselves is to prevent him doing that.
> The only really strong thing I think they'll need (other than cash) is that Musk agrees not to attempt to buy twitter again.
I'm not sure this would really do anything for Twitter. The board isn't required to consider non-serious offers, and I can't imagine anyone taking a takeover offer from Elon seriously ever again, outside of friends and family deals.
Not to mention that Elon is now absolutely notorious for violating contracts that he has agreed to. What's to stop him from ignoring an agreement to not offer to by Twitter again?
Given Musk's history with public announcements of intentions to buy public companies, I wonder what the FTC thinks of all this, and what they are going to do after the verdict.
I really think that Musk will be very lucky to get away with just a billion dollars payment to twitter for breach of contract.
Oh, and one last thought, if anyone from twitter is reading this, you should definitely ban him.
"If you rip out a man's tongue, you did not proof him wrong. You just demonstrated to the world that you are afraid of what he might have said."
Twitter knew this with Trump - which is why they only kicked him out once he had become harmless. They know this with Musk, who most definitely is not.
Matt Levine's analysis [1,2] are (imo) good places to get a sense of the issues around this - his commentary on the legal, financial and commercial aspects is illuminating, and entertainingly so.
Based on his analysis, it does seem like Musk really has succeeded in shooting himself in the foot. There was a recent decision, again covered by Matt Levine, in the Delaware Chancery, where (from what I can understand), in a similar situation, the Chancery compelled the buyer to complete the purchase, notwithstanding their attempts to exit the agreement [3].
Musk is clearly in the wrong here (absent any lies in the twitter document, which I would find very unlikely).
Musk is acting like a spoiled child. Let's see what happens when a man with infinite resources tries to get what he wants. Has the court system enough muscle to handle this (i.e. Musk hasn't too many "bought" sympathizers in the system).
I saw it suggested elsewhere that for how stupid this all looks, it was a big scheme to give cover of liquidity for the big capital folks (Blackrock, Vanguard, etc) who are also whales in TSLA to get out of TWTR without losing their shirt in the process as the company spirals. The reports of the sale gave them time to get out, and now that they are, Elon is renegging on the deal, and taking the heat for it, but ultimately, due to the benefits to TSLA's share price indirectly, making out fairly okay (or at the very least, gaining a credit for a favor or two from some folks who it's nice to be owed a favor from), even in light of what may be a few billion dollars worth of penalty for the breakup.
I won't say I'm subscribing to this idea, but I do find it intriguing, and it does offer a rationale for what otherwise looks like it could be a fairly stupid set of decisions made by someone who at least sometimes hasn't appeared quite so dumb. By all means, pick it apart and tell me why you think it doesn't hold water...just throwing it out there as it's an interesting theory.
Its just wild to me that this multi-dimensional fraud/collusion with many dynamic aspects not under your control (i.e. Twitter and the courts) is somehow more likely (in some peoples estimations) than the _much_ simpler version of "he just changed his mind and likely plans to ignore legal consequences".
This feels like a conspiracy theory to me. It would require a lot of secret coordination and motive to pull off, versus the simpler explanation that a rich guy who likes to be an impulsive troll decided to be an even higher profile impulsive troll for a while.
Why would Elon torch his reputation just to help some fund managers? Doing it for money doesn't make sense, since he could lose a lot of it here.
Also, a huge portion of institutional investments are index funds, which don't make strategic buy/sell decisions.
You're probably right; I was overestimating the amount of funds that are actively managed (ie, would be in a position to act on this in the first place). Had the ratio of active:passive been higher, and a bit of coordination in place, it felt like being fined a billion or two could be a mere cost of doing business, but indeed, that seems unlikely given the layout of the modern asset management industry.
That said, torching his reputation...seems to be one of his hobbies. Between the whole SEC battle, the subsequent pumping up of DOGE, the getting high on Rogan's show, having children with names that can't be pronounced, and however many more anecdotes we can come up with, arguably doing weird inexplicable things that seem otherwise self destructive or at least incomprehensible IS his reputation at this point.
With a few small exceptions Vanguard runs index funds. They can’t just sell a stock because they think it’s overvalued, they must stay true to their chosen indices.
I've been pretty vocal about thinking Musk's case was flimsy at best on this. After reading through this filing [1], I have to say its even worse. A couple additions to the argument that has occurred on this site and elsewhere:
1. On page 15, Twitter highlights some pretty key clauses in the initial agreement that I didn't see picked up on previously around Material Adverse Effect (MAE) and explicit conditions that _cant_ be counted for it. Specifically they explain how even recession style market changes wont be considered MAE, and scope what might be considered MAE in their SEC filing to very specific statements that dont appear to include the bot number disclosures.
2. They give some behind-the-scenes recounting of specific clauses that were added/removed which make the entire thing much more tenuous in court for Musk. For example Page 12 Paragraph 34 ("Twitter also negotiated for itself a right to hire and fire employees at all levels, including executives, without having to seek Musk’s consent."), Page 12 Paragraph 35 ("Twitter further negotiated to narrow the circumstances under which defendants could escape the deal by claiming a 'Company Material Adverse Effect.'"), Page 12 Paragraph 36 ("Twitter negotiated for itself a robust right to demand specific performance of the agreement’s terms that encompassed the right to compel defendants to close the deal, and ensured that Musk personally was bound by that provision (among others).")
3. On Page 31, they claim they told him they sample 9000 accounts when doing their analysis and Musk then publicly tweeted they sample 100 accounts. If this is true, thats pretty damning for Musk when a court decides if hes just on a fishing expedition.
So yeah... I'm admittedly biased and obviously this is one sides language in the filing but.... I don't see a ton of support for Musks case so far.
I've said it once before, but I fully expect Musk at some point in the lawsuit to suggest that he had a psychological condition and that it excuses his behavior.
I agree, theres a real chance he tries a "but I'm bipolar" defense. And I'm only mostly joking when I say theres a chance he legally claims that "it was just a prank bro".
No, that won't happen, and what he's doing is quite rational given the tech stock meltdown.
Even if you have a very small chance of winning, taking your chances with a court might have a positive expected value since billions of dollars are at stake.
It’s quite rational to buy a company for tens of billions of dollars on the campaign of “cleaning up the bots”, troll and disparage the entire way through, publicly declare yourself Republican amidst the frenzy, and then act shocked that there are bots and withdraw from the deal for a “positive expected value” chance at a lawsuit while running a bunch of other companies amidst inflation and worries of recession. Very rational behavior for a very rational guy with billions of dollars, 100 million Twitter followers and a cult of personality.
Rationality of him trying to buy Twitter is up to debate. I'm talking about deciding what to do when you promise to buy at a high price, and tech stocks crash afterwards. Given that, what he's doing now (trying to pull out) seems rational to me.
Sure, but that conversation should have been between him and his lawyers, and between his lawyers and Twitter's lawyers. He might have actually had a chance, if he had. As is, he can't win for losing.
He’s not trying to pull out because of some great strategy on his part — he’s lied to your face and everyone’s else’s by ridiculously suggesting Twitter lied about the bots and that he’s surprised there are bots when that was the whole message in the first place: buying Twitter to rid it of bots (and free speech or whatever other lie he’s clinged to). He’s mired the whole process in controversy and has shown repeated contempt for the law and his own contractual obligations.
Let’s also not forget the core of the matter: this is a class issue through and through. One of the most wealthy and powerful people on earth — propelled by government subsidies and contracts for his companies Tesla, SpaceX, etc. — is only able to do what he’s doing, and flaunt his contempt only because he is rich and powerful. Very few people would be able to do what he’s done and run away with it: calling somebody a pedophile with no cause, essentially claiming victory over his battle with an ineffectual SEC over his misbehavior, getting into a contract with Twitter with a populist energy and dominant conservative support only to (no surprise) cancel it last second etc.
This is an issue of wealthy people evading the rules everyone else has to play by under threat of violence (lawsuits, prison, etc.)
The amount of effort his cultists put to defending him and arguing that this is some brilliant play is beyond ridiculous.
My take: Elon is a brilliant engineer and businessman who has made the mistake of thinking he can outwit the law as well. Typical overreach. And now he's about to hit the brick wall.
Certainly not typical by any means. Has there been a case in modern business history when someone shot themselves in the foot this brazenly to the tune for $40bn?
Usually it's failed hedge funds operating in the shadows that manage to lose this much in a rapid market downturn.
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[ 3.7 ms ] story [ 230 ms ] threadAlso he was not born in the US and cannot run.
Can you please explain this?
If Twitter wins the suit, EM will be in exactly the place he bargained to be in when he signed the merger agreement: the proud new owner of Twitter.
Here’s a report of a Court of Chancery case from 2019, for example: https://www.lexology.com/library/detail.aspx?g=a116d0d4-2ca0...
Can the Court of Chancery put him in jail, does it automatically fall back to the $1 billion, something else?
Elon getting away with walking off this deal unscathed financially is in no one’s best interested but Elon’s
I see Musk walking paying nothing, or else a settlement with twitter at a lower price.
No, he didn't. If he did, the company wouldn't be suing him, since he would control it.
Those views are simply ignorant; there are plenty of cases of the Delaware Court of Chancery ordering specific performance on merger deals. It is nothing even loosely similar to “quite impossible”.
[1] https://newsletterhunt.com/emails/21761
I've read the entire complaint, and this is my take as well. Twitter bent over backwards to comply with these requests even if they were invalid.
Twitter played this brilliantly. They kept complying and playing along even with the most obvious nonsense, letting Musk run his impulsive and overconfident mouth.
The number of times he legally shot himself in the foot is just staggering. There's documentation of everything, because he happily provided it. Musk's lawyers and bankers must have been dying a thousand deaths reading his tweets and other public remarks.
If Musk was buying a house (Twitter) we're basically at the point where He's made an offer, they accepted, Musk fulfilled all contingencies (including financial), they both signed the papers transferring ownership, and then Musk decided rather than moving in and wiring them the money he'd rather not. (Analogy doesn't work so well). Sure, if you own a house you can call anybody to come inspect it but you still need to wire the seller the money.
Any analogy breaks down. I thought this was a good one because in the current housing market many buyers have to waive inspections as a contingency because of bidding wars, etc. They can still get the inspections done though (and should).
If twitter was a house he was buying, the analogy is he waived his right to a house inspection and highlighted that fact in numerous ways to attain either a more favorable price (since there won't be post-deal negotiation on anything he finds and decides to argue) or to make Twitter more likely to accept. Or a combination of both. And in addition to that, in your offer to buy the house you also made legally binding statements that "I have been able to inquire about anything I might be concerned with about the home, and have been given answers and opportunity to find my answers on those questions, and as a result I am fully satisfied with how that transpired".
The only possible way to then get a home inspection is that you also included a clause that the deal is contingent on a loan being used and its possible that the loan may require certain information or processes. Now, if as a side-effect of getting that loan, a home inspection is required and if that home inspection causes the _bank_ to back out of financing then that is now possibly a cause to break the contract. Even this isnt fully accurate in this case though. Because there were specific guarantees and public statements made around financing that 1) the financing is already lined up (i.e. not contingent on an inspection) and 2) even if that fell through Musk would have the available capital to close the deal.
Even if that was true (and none of Twitter’s legal claims require the bot data to prove), so what?
No it doesn't. Twitter not handing over its bot data demonstrates...that Twitter is not handing over its bot data. Does Musk have actual _evidence_ that Twitter is inflating its value and lying to its shareholders? You do understand that "Twitter not handing over its bot data" isn't evidence.
Anyway if the question of handing over "the bot data" data is irrelevant to Twitter's claims, then it doesn't matter if it's handed over. The legitimacy of those claims would then be unaffected by the bot data itself.
Yes, I think you would be, and anyone who has given you money to spend on this act, should think so too .. Trust, but verify: This is a pretty basic business rule.
Twitter has a responsibility to demonstrate that the trust they expect in their own estimations of their own market value, is actually verifiable - and with an issue of humans/bots ratio, they should surely be willing to be as open and honest as possible about this issue.
Twitters core value, the basis of their own estimation of the value of their stock, is entirely derived from the actual # of human eyeballs they have attached to their systems.
If those eyeballs are really just blind sockets on the outside of a software-based bot, then Twitter is factually lying about how many humans it has in its system. This would be essential for any buyer to know beforehand, and I really am astonished at the efforts you are going to justify this omission on Twitters' part.
The bot to human ratio is a KEY factor to understand in correctly evaluating Twitters real value - how anyone can argue that Twitter don't have the responsibility to demonstrate the accuracy of their estimation of market value, especially in the HN environment, is beyond me.
Perhaps the Musk-hate rage is blinding you to the rationality of Musks' request. "Hey, you say you are worth this much because <blah>, please show me that <blah> is actually a truthful and accurate estimation .." - this is not at all an unreasonable request.
Twitter board executives DO have the responsibility of answering the claim that their user group is a certain percentage human.
The fact that they haven't done this easily and openly is telling, in and of itself - and I would wager that most making the claim that they don't have a responsibility of being honest about the number of users in their system, are in fact engaged themselves in deceit and dishonesty on the issue of "actual users" versus "pretend users". How else can you justify the non-response?
Twitter should be able to easily answer the question: bot to human ratio? It is fundamental to their core purpose as a business to know the answer to this question. The fact that they can't, and are instead engaging in an anti-Musk agitprop campaign, is very, very telling ...
The problem is that the person who made the unprompted offer of $54.20 per share - thus estimating the market value at $44bn - spent weeks going on about how they thought Twitter's bot estimates were too low and that they were buying Twitter to fix this bot problem.
To then turn around and go "wah wah too many bots" is somewhat disingenuous, no?
(Also, Twitter have been using the same methods of bot estimation since 2013, afaik, and have submitted these numbers to the SEC every year. If they were plausibly wrong, someone would have flagged it before now, right? Because that would be submitting false data to the SEC and, I believe, they consider that A Bad Thing.)
Of course Musk is free to counter-sue I guess and make the bots the point of contention.
You talk about "Musk-hate" but your post says you think he's an idiot.
Probably. Did Musk sign an agreement explicitly waving his right to see the receipts? Yes.
That means that Twitter DOES NOT have the responsibility that you claim. Sure, you may think that according to a certain moral framework they do, but in the context of this deal, which is what the thread is about and what the people you are responding to are talking about, it is irrelevant.
I might add as well as a counter to your accusations of "Musk-hate rage", that perhaps it's you who's suffering from Twitter-hate rage with a dash of Musk-fanboyism, and that it's Elon who's twisting the truth for his own gain rather than Twitter. Could that not be the case?
Lastly, it's not a "non-response". Twitter has continuously provided Musk with the data he's asked for, he just keeps asking for more. Also, even if you ridicule the idea, some data is simply _not_ appropriate nor necessary to share before a sale. Otherwise you could find out any trade secret from anyone simply by making an offer and then reneging on it.
Yes, if you agreed to, for a slightly different but more relevant example, buy a social media company where there was some doubt about the degree to which it's claimed user base was actually bots for $44 billion dollars, of which you were personally on the hook for $33 billion in cash with the rest financed, you would be an idiot if you also agreed to waive due diligence as part of that agreement without first having satisfied yourself on the real user numbers.
But you having been an idiot and signed that agreement, the fact that the agreement required the social media company to provide you information reasonably necessary to help you complete the acquisition would not give you a right to data who's only purpose would be to allow you to perform the due diligence you had waived.
As much as the bot data may arguably be relevant to the due diligence any sane investor would perform before such an acquisition—an argument you do a valiant job of presenting—it is not something that there is any reasonable argument that Twitter has an obligation to provide in this case, because Musk was so desperate to get Twitter to sign that he agreed to waive due diligence.
Another avenue for him might be if the banks pull their funding, then the deal falls through and he may just have to eat the $1bn penalty (but that can’t have been initiated or influenced by him).
He made an impulsive decision, the market went down making him regret it, and since then he’s been trying to squirm out of the deal he signed by grasping at straws and in the process hurting the company he promised to buy. He’s in trouble, and some potential minor discrepancy in how Twitter has represented their users will not absolve him of it.
Would you be happy investing in a company that lies about its sales figures and doesn't provide the statistics and real evidence to back up their claims?
This irrational Musk-hate is occluding rational thought.
Not according to law and precedent, which is what I’m telling you. Whether Elon can be allowed to renege on this deal does not hinge on whether you personally think Twitter has been telling falsehoods. Show concrete evidence of the very substantial discrepancy in Twitter’s value that would be based on these lies (again, it would have to be on the order of 20-40%), and I’ll concede that he might have a chance to win on that merit. The bar is that high, whether you like it or not.
If there was some surprising element to musks bot assertions, it would be big news. In fact, there is nothing to see, and this is partly borne out by the lack of buy and sell side analysts collectively smacking their foreheads after realizing they has been completely wrong about Twitter the last 10 years.
You missed out the most important group: advertisers.
If Twitter has been wilfully lying for years about their metrics there would be thousands of lawsuits popping up from advertisers of all sizes. It would be the death of the company by paper cut.
Well, no, if you had doubts about that going in (which Musk publicly did) but then agreed to a contract waiving due diligence (which Musk did), it would not justify backing out of the deal that you...suspected they might be lying and we're not provided sufficient information to assuage your concerns. There might be an argument that you stumbling into clear proof of deception that you didn't have before signing the agreement would justify that, but Musk has never claimed such a discovery, but there is no reasonable argument I can see that Twitter was obligated to satisfy Musk’s concerns here, when he explicitly waived the usual requirement in acquisition deals that would be the basis of such an obligation.
> Would you be happy investing in a company that lies about its sales figures and doesn't provide the statistics and real evidence to back up their claims?
No, and, more to the point, I wouldn't be happy buying a social media company where I was uncertain about the basis for it's claims of real users. But then, that's why I wouldn't agree to buy such a company—especially where I had doubts about those claims going in—and waive due diligence as part of the deal. That would be idiotic.
There is no evidence of any bot problem let alone a massive one.
Even if there was, Musk publicly claimed he would fix it.
I bet if we had a HN discussion we would not have a definitive answer. Going to start an AskHN to see.
The question they need to answer is more along the lines of "Did Twitter purposefully mislead investors in their filings to the SEC to such a great extent that it greatly lowers the future potential profitability of Twitter?".
The answer to that is almost certainly going to be no.
Musk stated that twitter has lots of bots and that is why he was not buying twitter.
It's a nice read. On the surface it looks like Musk is toast.
Twitter has been fudging for years.
Elon being disingenuous about the entire deal.
Twitter is arguing in their case “even though we had no reason to, we were still providing your team with everything and all data” while at the same time definitely not doing that.
They flat out admit to refusing to share how the sampling was calculated for their mDAU number for the past 5 years.
They say “it’s a super secret sauce to our success and Elon said he would start his own Twitter if this deal doesn’t happen and that is why we won’t share it but can share the entirety of Twitter data instead.”
Oof. Chop heads at Twitter and fire the lawyers.
Don’t have to be a rocket scientist to read between those lines…
Just feel bad for the normal every single day employees. If you’re not jumping ship, you are going down whichever way this lawsuit/deal closes.
Their filling shows that they absolutely did do that. Every time it was requested of them.
>They flat out admit to refusing to share how the sampling was calculated for their mDAU number for the past 5 years.
They provided several meetings, invitations to meetings, and outright extended breakdowns of exactly how it all works. Musk, for whatever reason, admitted to not even reading any of the information. That's a smoking gun towards the invalidity of his claims, especially about Twitter's cooperation.
They were answering all of his requests this whole time, and just letting him run his mouth and lie unopposed on Twitter about them cooperating.
I suspect Bob Swan will have a lot to say about the situation if he gets roped in as a witness, and it does not seem like it will be good for Musk.
(note this is the last sentence of a footnote buried away in their argument)
On the surface they're all growly and aggressive, but between the lines they're dancing all around the questions of mdau and bots. Whole lot of misdirection going on.
I have no idea how this will turn out, but I believe their numbers are a lot shakier than I did before I read the filing.
So yes, please let me know which lines exactly.
For your own "between the lines" reading start at 90. Remember this is Twitter legal making their case. Fair to say that is probably a slanted/biased write up of the timeline until we can see a defendant response. This is probably interpreted different by everyone (especially with love/hate Elon blinders on) hence the "between the lines" commentary.
However, here is the main funny and a tiny footnote I found hidden away -- which makes sense given this is their case/argument against him, so they probably don't want to draw too much attention to this in the big fun copy:
> Although Twitter has provided certain summary data regarding the mDAU calculations, Twitter has not provided the complete daily measures as requested.
If they are willing to share anything/everything, seems like this one would be very easy to pass along, no?
> This information is derivative of the information Mr. Musk first sought in Sections 1.01-1.03 of the May 19 diligence request list. Although Twitter has provided certain summary data regarding the mDAU calculations, Twitter has not provided the complete daily measures as requested.
In other words, they sent the monthly rollup and he wants the daily breakdown. They further argue all throughout that they feel that the data requested would not even service the stated purpose, and they want to exercise their discretion to withhold in certain ways. In addition to them explicitly saying "we still believe hes acting in an adversarial role so we are trying to close the deal but are still aware he might end up trying to start a competing product instead".
Obviously theres two sides to it, but when you sit down and read the public statements Twitter makes an _extremely_ convincing argument up-to-and-including screenshotting Musks own public tweets about the whole affair. In comparison, Musks SEC statements I would classify as "throwing shit against a wall and seeing what sticks" with very little explicit justification on why legally he is correct. The entire evidence presented by him is
> 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%.
i.e. we arent at all going to outline anything higher than 5%, just that its "wildly" higher and we are basing this on Musks "strong belief based on preliminary analysis".
Evidence for this. Advertisers wouldn't be too pleased obviously.
I really wish he could just come out and say "sorry guys, I haven't slept in 6 years", coma the fuck out and come back as a sanish man.
On the other hand if musk keeps doing loony shit like this we now have Howard Hughes v2.0.
One more rocket-boom and SpaceX and Elon's pocketbook were done for.
I'm sure he had enough money set aside even then from PayPal/x.com that even if SpaceX had gone belly up he could have bought a very nice house somewhere and lived in a very comfortable lifestyle for the rest of a human lifespan just living off the interest from $15-20 million.
https://youtu.be/AeeeEDSekG8?t=3663
[EDIT: in this interview he talks about the fact he had “no money” and had to borrow money for rent around that time]
Here's a few very consequential decisions that were taken under Musk: liquid methane instead of liquid hydrogen, same engines for first and second stage, full cycle combustion engine, usage of steel for Starship, and of course, reusable rockets. None of these decisions were close to being obvious. When you have hundreds of very passionate and talented engineers working for you, you'll be bombarded with lots of options. If you don't become a mini-expert yourself, you will start delegating lots of decisions, and the final result may or may not be optimal. Just look at Boeing.
And yes, most firms are command economies, after all. As CEO...
I'm assuming you're talking about Boeing's screw-ups with 737 MAX. If so, you've got it backwards. The 737 MAX's design issues were precisely because the leadership (i.e., non-engineering management) wouldn't delegate to the authority of the experts (i.e., the engineers) and forced their own decisions on the project. They did not become "mini-experts" themselves, sure, since they didn't actually put in the effort to understand what the consequences would be, but they did treat themselves as "mini-experts", as evidenced by their "we know better than the engineers" attitude to the concerns that were raised by engineering during the development of the MAX.
The timing of his announcement was suspicious: https://m.youtube.com/watch?v=CH55WpJxF1s
And he’s gotten some flak from a high profile Republican as well: https://m.youtube.com/watch?v=7kT_80NaS6A
https://morningconsult.com/2022/06/23/elon-musk-favorability...
What else happened between April and June to make his unfavorable rating go from 37% to 59% among Democrats?
April: -5 Net favorability amongst Democrats
June: -37 Net favorability amongst Democrats
https://morningconsult.com/2022/06/23/elon-musk-favorability...
April to June:
59% more Democrats find Musk unfavorable
61% more Republicans find Musk unfavorable
But why is this even an argument? Is anyone still unaware that a lot of Democrats hate Republicans?
So why would being a Republican cause both parties to dislike him at the same percentage?
That's not true at all. The percentage of Democrats who dislike him is much higher.
The number of Democrats who started disliking him during the Twitter acquisition is much higher.
And the percentage of Democrats who started disliking him during the Twitter acquisition (as a percentage of the party) is also much higher.
As GP said, percentage growth in the percent who dislike him in each party is not a useful thing to compare. Doubling a side business from $100/month to $200/month is not comparable to doubling from $1M/month to $2M/month.
>But now he's made the cardinal sin of being a Republican.
That's easy to answer: hostile media coverage and negativity on social media.
What do you think is driving the change from April to June if not his Twitter acquisition and identifying as a Republican?
https://youtube.com/playlist?list=PL-eVf9RWeoWEfSK9mjKe4E67I...
He may not be a genius, may not even be a nice person at all, but surely you're not fooling yourself that other billionaires and CEOs who let their PR firms manage their image are what they appear either.
i thought this whole twitter deal thing was a way to expose how twitter is full of government ran bots? atleast in my eyes his reputation hasnt changed at all.
Seeing the headlines and social blade stats mentioned in [1] reminded me of veritasium video about facebook fraud (bots).[2] This video demonstrates just how easy it was to buy fake likes on facebook. Doing some basic research shows that buying twitter followers is pretty cheap. After doing some basic analytics the creator finds where the bot accounts are very likely from. Looking at the same engagement statistics of political figures shows some pretty interesting results.
But then things get interesting when you take Dead Internet Theory into account.[3] Elon has made it pretty clear that he views AI as a possible existential threat to humanity and if the majority of the internet is indeed fake accounts managed by a minority manipulating the masses something ought to be done and nobody is talking about it. Elon seem to be trying to fix humanities sense making apparatus.
1. https://www.thestar.com.my/tech/tech-news/2022/04/27/progres...
2. https://www.youtube.com/watch?v=oVfHeWTKjag
3. https://news.ycombinator.com/item?id=28813746
Remarkable that this is what you are taking away from this fiasco.
Twitter settles and buys Musk's shares for $0 worth ~$2.6b at current price.
But it would stop Musk strategically dumping the stock and so could be worth much higher to Twitter.
It's going to be pretty hard for a court to enforce getting financing, and getting the merger through.
As far as I understand it this is possible. It could actually destroy the faith in the delaware courts if this happens. So Musk in a way has everyone over a barrel potentially, and everyone has something to lose.
It would be a very interesting test of the US state machinery, which maintains there are no all-powerful oligarchs.
Is he kept in prison until he sells $44bn worth of tesla shares and pays cash for the deal?
It's a pretty interesting thought experiment.
But then he's got expensive lawyers and so on, to me this is the interesting side of the thought experiment.
This wouldn't be hard. It's not like Musk is sitting on a big pile of dollar bills that he can keep the court from grabbing. All of Musk's assets are at banks, and banks are very happy to follow a court order.
It may well be that Twitter thinks that their case is strong but that the legal proceedings present risk and damage the company's ability to operate in the short term so it's more in their favour to cut a deal where they get some payout from Musk. The only really strong thing I think they'll need (other than cash) is that Musk agrees not to attempt to buy twitter again.
The reason I say that is because without the deal TWTR's fair market value is probably in the $20Bn region, and so almost any amount of money they can extract from Musk to walk away would allow him to come back and buy the company cheaper than the current deal - and that would just look absurd for twitter. Say for example they say "give us $10Bn to walk away" Musk could pay that, turn around and offer to buy the company again at $25Bn and probably succeed. So the only real way to protect themselves is to prevent him doing that.
That would require the board and shareholders to approve it.
Why would they when he's demonstrated an inability to be a safe pair of hands.
I'm not sure this would really do anything for Twitter. The board isn't required to consider non-serious offers, and I can't imagine anyone taking a takeover offer from Elon seriously ever again, outside of friends and family deals.
Not to mention that Elon is now absolutely notorious for violating contracts that he has agreed to. What's to stop him from ignoring an agreement to not offer to by Twitter again?
I really think that Musk will be very lucky to get away with just a billion dollars payment to twitter for breach of contract.
Oh, and one last thought, if anyone from twitter is reading this, you should definitely ban him.
pathetic, you have a block button, use that if he bothers you so much
"If you rip out a man's tongue, you did not proof him wrong. You just demonstrated to the world that you are afraid of what he might have said."
Twitter knew this with Trump - which is why they only kicked him out once he had become harmless. They know this with Musk, who most definitely is not.
Based on his analysis, it does seem like Musk really has succeeded in shooting himself in the foot. There was a recent decision, again covered by Matt Levine, in the Delaware Chancery, where (from what I can understand), in a similar situation, the Chancery compelled the buyer to complete the purchase, notwithstanding their attempts to exit the agreement [3].
[1] https://www.bloomberg.com/opinion/articles/2022-07-09/elon-s...
[2] https://www.bloomberg.com/opinion/articles/2022-07-11/the-pr...
[3] https://www.bloomberg.com/opinion/articles/2022-07-12/i-was-...
https://www.bloomberg.com/news/articles/2022-07-13/twitter-s...
I won't say I'm subscribing to this idea, but I do find it intriguing, and it does offer a rationale for what otherwise looks like it could be a fairly stupid set of decisions made by someone who at least sometimes hasn't appeared quite so dumb. By all means, pick it apart and tell me why you think it doesn't hold water...just throwing it out there as it's an interesting theory.
It seems to stem from the same instinct that often leads people down the path to conspiracy theories - that reality can't be this stupid.
If I've learned anything in my approaching 4 decades of time on earth, it's that reality can in fact be that stupid.
Why would Elon torch his reputation just to help some fund managers? Doing it for money doesn't make sense, since he could lose a lot of it here.
Also, a huge portion of institutional investments are index funds, which don't make strategic buy/sell decisions.
That said, torching his reputation...seems to be one of his hobbies. Between the whole SEC battle, the subsequent pumping up of DOGE, the getting high on Rogan's show, having children with names that can't be pronounced, and however many more anecdotes we can come up with, arguably doing weird inexplicable things that seem otherwise self destructive or at least incomprehensible IS his reputation at this point.
I've been pretty vocal about thinking Musk's case was flimsy at best on this. After reading through this filing [1], I have to say its even worse. A couple additions to the argument that has occurred on this site and elsewhere:
1. On page 15, Twitter highlights some pretty key clauses in the initial agreement that I didn't see picked up on previously around Material Adverse Effect (MAE) and explicit conditions that _cant_ be counted for it. Specifically they explain how even recession style market changes wont be considered MAE, and scope what might be considered MAE in their SEC filing to very specific statements that dont appear to include the bot number disclosures.
2. They give some behind-the-scenes recounting of specific clauses that were added/removed which make the entire thing much more tenuous in court for Musk. For example Page 12 Paragraph 34 ("Twitter also negotiated for itself a right to hire and fire employees at all levels, including executives, without having to seek Musk’s consent."), Page 12 Paragraph 35 ("Twitter further negotiated to narrow the circumstances under which defendants could escape the deal by claiming a 'Company Material Adverse Effect.'"), Page 12 Paragraph 36 ("Twitter negotiated for itself a robust right to demand specific performance of the agreement’s terms that encompassed the right to compel defendants to close the deal, and ensured that Musk personally was bound by that provision (among others).")
3. On Page 31, they claim they told him they sample 9000 accounts when doing their analysis and Musk then publicly tweeted they sample 100 accounts. If this is true, thats pretty damning for Musk when a court decides if hes just on a fishing expedition.
So yeah... I'm admittedly biased and obviously this is one sides language in the filing but.... I don't see a ton of support for Musks case so far.
[1] - https://s3.documentcloud.org/documents/22084456/final-verifi...
> "Twitter is saying bipolar disorder isn't an excuse for my behavior. Twitter hates bipolar people and those with disabilities."
If the CEO is so mentally unstable that he will randomly buy billion dollar companies then he has no business running those companies.
But it is not, and Musk has a weird cult of personality around him.
Even if you have a very small chance of winning, taking your chances with a court might have a positive expected value since billions of dollars are at stake.
Let’s also not forget the core of the matter: this is a class issue through and through. One of the most wealthy and powerful people on earth — propelled by government subsidies and contracts for his companies Tesla, SpaceX, etc. — is only able to do what he’s doing, and flaunt his contempt only because he is rich and powerful. Very few people would be able to do what he’s done and run away with it: calling somebody a pedophile with no cause, essentially claiming victory over his battle with an ineffectual SEC over his misbehavior, getting into a contract with Twitter with a populist energy and dominant conservative support only to (no surprise) cancel it last second etc.
This is an issue of wealthy people evading the rules everyone else has to play by under threat of violence (lawsuits, prison, etc.)
The amount of effort his cultists put to defending him and arguing that this is some brilliant play is beyond ridiculous.
Usually it's failed hedge funds operating in the shadows that manage to lose this much in a rapid market downturn.