Elon Musk: Officially a fraud and piece of shit. Official or unofficial war criminal?

[Francisco 2.0 32389]

Sent from my iPhone using Tapatalk Pro

[gsoda3 3254]

LOL.  No way that's a "material adverse effect".  People sue as to whether an MAE has occurred pretty frequently, and I think Delaware has only ever agreed there was an MAE in one case.

Elon's argument is it's a MAE since it drives revenue in a brand advertising model where there are no quantifiable interactions. Part of the calculus in turning around a company is how can you do it without cratering revenue?
So as much as it reeks of buyer's remorse I think he has a point. However:

- Parag should tell him to pound sand. He has no obligation to oblige Elon publicly. Elon can send in auditors and if then they find something untowards that changes things

- Elon challenging Twitter's claims of 5% should have occured before a bid was given. Saying he relied on Twitter's public statements like any other investor is accurate to how the process usually occurs but he can't withdraw that bid now based on a claim of incomplete information.

[tbone_ 14115]

blah blah blah ……. cans

Quoted because only decent post in this thread.

[tbone_ 14115]

Also, how perfect is her facial expression in that pic

Yes Boudreaux, she has a face.

[wildcat09 29349]

1 hour ago, hornmpa96 said:

If Elon wants out, it’s going to cost him the $1 billion breakup fee.

If Twitter wants him to pay it, they'll have to go through years of litigation.

[Nice Guy Eddie 13510]

12 minutes ago, wildcat09 said:

If Twitter wants him to pay it, they'll have to go through years of litigation.

For $1B, I would assume it's worth several years of litigation.

 

[hornmpa96 2618]

14 minutes ago, wildcat09 said:

If Twitter wants him to pay it, they'll have to go through years of litigation.

They will go through the litigation if necessary - they won’t walk away from the break-up fee.

[Francisco 2.0 32389]

https://www.bloomberg.com/news/articles/2022-05-17/musk-has-a-bigger-problem-than-bots-a-huge-twitter-debt-burden?srnd=premium

 

Quote

Elon Musk may be directing his buyer’s remorse at Twitter Inc.’s bot problem. But underpinning the deal is a $13 billion debt bill that’s looking like a bigger burden by the day.

The package, drummed up in a rush and signed by banks before the end of the billionaire’s beloved April 20 weed holiday, will leave the social media platform with an annual interest expense approaching $1 billion, giving the company an alarmingly small margin for error.

To sober-minded credit analysts, second thoughts about the deal are to be expected.

 

Quote

The purchase will be funded with a leveraged loan and high-yield bonds. CreditSights estimates this will dramatically increase Twitter’s annual interest expense to around $900 million, while Bloomberg Intelligence sees $750 million to $1 billion.

With numbers like those, Twitter looks poised to burn cash, boosting the pressure on Musk to transform the company by finding new sources of revenue and slashing costs. That’s even the case with Wall Street analysts estimating record earnings in 2022, though those rosy forecasts could be imperiled if predictions for a US recession -- Musk said Monday one is already under way -- come true.

 

Quote

“This is just a bad capital structure to put on a business like Twitter that has never proven to be highly profitable,” said John McClain, portfolio manager at Brandywine Global Investment Management. “It’s been a public company for quite some time and they never have seemed to really figure out how to attractively monetize the consumer.”

 

Spoiler

Musk himself is casting doubt over his own deal, saying this week that he won’t proceed unless Twitter proves bots make up fewer than 5% of its users. 

 

Debt is only one of three components of Musk’s financing. He’s found 19 other equity investors to join him in $27.25 billion of equity commitments. And he’s taken out a $6.25 billion margin loan against his Tesla shares, but he’s currently trying to replace that by bringing in preferred equity investors, which could include Apollo Global Management Inc. and Sixth Street.

Bankers pulled all-nighters and worked through the Easter and Passover holiday weekend, rushing to meet Musk’s April 20 deadline to build the financing package. What they cooked up will take Twitter far deeper into debt, boosting its interest costs from $53.5 million during the past 12 months.

That gives Musk little room for error, though he’s not on the hook for the debt. As is typical in a leveraged buyout, Twitter will be stuck repaying if anything goes wrong, while Musk and his fellow equity investors can only lose the cash they put into the deal.

“Leverage is really high and free cash flow is going to be negative out of the gate, so that certainly adds an element of risk to the deal,” Jordan Chalfin, a senior analyst at credit research firm CreditSights, said in an interview. “Twitter really needs to grow into their capital structure and drive earnings higher in order to cover both their capital expenditures and their interest expense.”

Fears are also growing that a recession could be on the horizon, which would make this an even worse time to load debt onto Twitter, as most of its revenue comes from advertising. “In a poor macroeconomic background, the first things that companies pull in terms of marketing budgets is advertising spending,” said Bloomberg Intelligence analyst Robert Schiffman. 

Meanwhile, selling corporate debt has gotten more difficult in recent weeks. Rising rates have hit junk bonds the hardest, and the average yield, a proxy for the cost of borrowing, has increased by more than a full percentage point since banks agreed to the Twitter deal to about 7.6%. The leveraged loan market has cooled, too.

Analysts see Twitter posting record earnings before interest, taxes, depreciation and amortization of $1.67 billion in 2022. Twitter has forecast roughly $925 million of capital expenditures. Deduct that and Twitter’s newly increased interest expense from its Ebitda, and the company would be burning through cash.

If Musk successfully grows Twitter, the debt load would become more manageable over time, and the company could hit neutral cash flow in 2023 and positive cash flow in 2024, Chalfin said. If Musk can’t make good on his promises to turn around the company, the debt load could become a problem.

Twitter does have about $6.3 billion in cash and short-term investments that could support burning cash for a few years, Bloomberg Intelligence’s Schiffman said.

 

Edited May 17, 2022 by Francisco 2.0

[Francisco 2.0 32389]

Good for them:

 

https://www.axios.com/2022/05/17/elon-musk-twitter-will-enforce-merger?utm_source=twitter&utm_medium=social&utm_campaign=editorial&utm_content=technology-musktwitterenforce

 

Quote

Twitter's board said Tuesday that it plans to "close the transaction and enforce the merger agreement" between Elon Musk and Twitter, The New York Times reports.

Driving the news: "The board and Mr. Musk agreed to a transaction at $54.20 per share," Twitter's board said in a statement to The New York Times. "We believe this agreement is in the best interest of all shareholders. We intend to close the transaction and enforce the merger agreement.”

This followed an earlier statement from Twitter that said it was “committed to completing the transaction on the agreed price and terms as promptly as practicable."

 

Quote

Twitter’s board urged shareholders in a regulatory filing Tuesday to vote in favor of the deal.

The big picture: Musk said last week that the $44 billion deal with Twitter was "temporarily on hold" until CEO Parag Agrawal publicly proves that less than 5% of users are bots or spam accounts.

"My offer was based on Twitter's SEC filings being accurate," Musk said in a tweet. "Yesterday, Twitter's CEO publicly refused to show proof of <5%. This deal cannot move forward until he does."

Yes, but: Musk currently has a contractual obligation to buy Twitter at the agreed price, Axios' Felix Salmon writes.

 

[We’reTexas 1473]

6 hours ago, gsoda3 said:

- Elon challenging Twitter's claims of 5% should have occured before a bid was given. Saying he relied on Twitter's public statements like any other investor is accurate to how the process usually occurs but he can't withdraw that bid now based on a claim of incomplete information.
 

That’s sort of interesting to think about. Had he actually done that diligence and received information about the bots that would make him want to back out, he’d arguably be in possession of material non-public information. Twitter doesn’t disclose that information and obviously wouldn’t agree to cleanse him, so he would have been locked up in his position for…a while? Who knows when that info goes stale. I have no idea if he was acting on advice at the time, but agree this sounds like buyer’s remorse. 

[Wally Fairway 5543]

So deals have termed and conditions; this one was publicly announced before any of that was hashed out. Mostly because a)Elon in a huge attention whore,  b) there was due diligence still remaining to be done and c) Elon is an attention whore

[StruggleBus 3922]

God I fucking hate lawyers 

[Blotto 23497]

TSLA down about 34% since his announcement (vs SPY - 12%, and QQQ -18%). 'bout $350B in market cap. savvy move Elon. 

Edited May 18, 2022 by Blotto

[Wally Fairway 5543]

On 5/17/2022 at 10:51 AM, gsoda3 said:

how exactly would selling tesla shares to finance a twitter takeover be turning scam money into real money?

because, maybe, it was never about actually buying Twitter but only saying he was going to buy it. Then he sells his TSLA and as of right now he is sitting on cash and when (if) this deal completely falls apart then Elon (and all of his buddies & financiers) will have cash instead of TSLA (or whatever else they sold to free up cash) and then they can do as they damn well please with the funds. Including buying $44 billion of lower priced stock; or that whole world hunger/student debt/water shortage/name your favorite crisis thing.

Then again, depending on where TWTR stock falls after there is no buyer, Elon might have to use that cash to fill the hole in his wallet from the shares he already has purchased; and it TWTR will fall even more if he dumps his on the market.

Edited May 18, 2022 by Wally Fairway

[Fudge Nuggets 19190]

21 hours ago, gsoda3 said:

Saying he relied on Twitter's public statements like any other investor is accurate to how the process usually occurs

I'm no lord of high finance, but I seriously doubt takeovers are based on public statements and other info available to we common folk.

[Francisco 2.0 32389]

Shamelessly stolen from the Ars Technica comments section:

https://arstechnica.com/tech-policy/2022/05/twitter-board-tells-elon-musk-we-will-not-alter-the-deal/?comments=1

 

I… hurt my stock today
To sabotage my deal
Focus on the price
the only thing that's real

The NDA tears a hole
the old familiar sting
Try to tweet it all away
but the media remembers everything

What have I become
my scam-filled friend
every promise I make goes away
in the end

and you could preorder it all
my empire of scams
I will let you down
I will make you hurt

[gsoda3 3254]

18 minutes ago, Wally Fairway said:

because, maybe, it was never about actually buying Twitter but only saying he was going to buy it. Then he sells his TSLA and as of right now he is sitting on cash and when (if) this deal completely falls apart then Elon (and all of his buddies & financiers) will have cash instead of TSLA (or whatever else they sold to free up cash) and then they can do as they damn well please with the funds. Including buying $44 billion of lower priced stock; or that whole world hunger/student debt/water shortage/name your favorite crisis thing.

Then again, depending on where TWTR stock falls after there is no buyer, Elon might have to use that cash to fill the hole in his wallet from the shares he already has purchased; and it TWTR will fall even more if he dumps his on the market.

no.  if he was looking to sell TSLA he would've just sold it.  discretely.  he wouldn't have announced a potential takeover of another company using TSLA shares as collateral or the cash from shares as a means of financing.  everyone and their mom front-ran him on selling TSLA. 

8 minutes ago, Fudge Nuggets said:

I'm no lord of high finance, but I seriously doubt takeovers are based on public statements and other info available to we common folk.

 

you'd be surprised then.  sometimes, if the two parties are amenable, the target will open their books to the acquirer.  otherwise, as in this case, it's based on public information and whatever private due diligence the acquirer performs.  

[Fudge Nuggets 19190]

And how many deals of this size or similar are done with no due diligence?  Other than Mr. Attention Whore here, I can't think of any other examples.

[Hefeweizen 5311]

15 hours ago, StruggleBus said:

God I fucking hate lawyers 

Haha except when you need them.  He’s going to spend a lot of his fake Tesla money on lawyers and wind up settling on paying Twitter half the walk away fee.  Everyone wins.

[Bateshorn 9927]

15 minutes ago, gsoda3 said:

no.  if he was looking to sell TSLA he would've just sold it.  discretely.  he wouldn't have announced a potential takeover of another company using TSLA shares as collateral or the cash from shares as a means of financing.  everyone and their mom front-ran him on selling TSLA. 

 

you'd be surprised then.  sometimes, if the two parties are amenable, the target will open their books to the acquirer.  otherwise, as in this case, it's based on public information and whatever private due diligence the acquirer performs.  

Yeah. Eve Williams, who was by far Twitter's largest shareholder when it went public, has been methodically selling his stake in Twitter for the last 9 years. Quietly and regularly, up or down, to divest his ownership.  You don't have to do anything fancy to do it, just not dump them all at once.

Edited May 18, 2022 by Bateshorn

[gsoda3 3254]

18 minutes ago, Fudge Nuggets said:

And how many deals of this size or similar are done with no due diligence?  Other than Mr. Attention Whore here, I can't think of any other examples.

if you're serious about a takeover you perform due diligence.  if you're a tweet jockey riding the emotional waves of a 280 character limit you're more prone to writing checks even the richest man in the world can't cash.  from the beginning i didn't think he was serious about a takeover.  he claims he's been thinking about this since last november but to date he hasn't spoken to any serious steps traditionally taken in an m&a effort that would lead me to believe he plans on following through.  

 

[StruggleBus 3922]

28 minutes ago, Hefeweizen said:

Haha except when you need them.  He’s going to spend a lot of his fake Tesla money on lawyers and wind up settling on paying Twitter half the walk away fee.  Everyone wins.

We should get rid of lawyers and bring back dueling 

[Grade of D as in David 13253]

Can we make the lawyers duel themselves first?

[Wally Fairway 5543]

20 minutes ago, Grade of D as in David said:

Can we make the lawyers duel themselves first?

That sounds like a cool reality show, or maybe PPV event.

[Storm the Field 5294]

Trump-esque heel turn well underway. He'll be tweeting about fake news, stolen elections and calling for arrests by Memorial Day.

 

[aggie08 21496]

I don't care what side of the political spectrum you're on.....what a fucking douchebag.

[Immaculate Vibes 114]

15 minutes ago, royiv said:

Interesting strategy from a man who has his wealth tied up in a company that sells a lot of cars to libtards. It will be interesting to see if he continues to double down and if it begins to impact sales.

Doesn’t he depend on a lot of government subsidies? Pretty smart to align with the party likely to run the table in November and potentially 2024. That’s all this is. 

[Foosters 17850]

Edit: wrong board

Edited May 18, 2022 by Foosters

[F250 28766]

36 minutes ago, aggie08 said:

I don't care what side of the political spectrum you're on.....what a fucking douchebag.

[F250 28766]

23 minutes ago, Immaculate Vibes said:

Doesn’t he depend on a lot of government subsidies? Pretty smart to align with the party likely to run the table in November and potentially 2024. That’s all this is. 

That can easily be done behind the scenes. Musk has some Rocko in him and clearly loves attention whether it's good or bad.

 

[Homercles 10205]

[wildcat09 29349]

Translation: he's about to be sued by the SEC.

[Royalfan5 2354]

At this point, he's pretty much the Ron While bit about having the right to remain silent but no the ability to. 

[ChuckNorrisActionJeans 2663]

likeability scale trending toward Pharma-bro Martin Shkrelli

[royiv 9285]

33 minutes ago, wildcat09 said:

Translation: he's about to be sued by the SEC.

At some point, it seems like a shareholder class action could also be headed his way.

[wildcat09 29349]

1 minute ago, royiv said:

At some point, it seems like a shareholder class action could also be headed his way.

There's already a couple of shareholder suits that have been filed. One is related to his delay in reporting his acquisition of over 5% of Twitter's stock and another was recently filed by a shareholder (the Orlando Police Pension Fund, funnily enough) to try to stop the merger.

[royiv 9285]

Just now, wildcat09 said:

There's already a couple of shareholder suits that have been filed. One is related to his delay in reporting his acquisition of over 5% of Twitter's stock and another was recently filed by a shareholder (the Orlando Police Pension Fund, funnily enough) to try to stop the merger.

I'm aware of those. I was referring to TSLA. If he keeps self imploding, it could start having a negative impact on TSLA. Fortunately for him, the broader market is down right now, so it's hard to discern between normal market moves and the stock being manipulated by his actions. 

[Bateshorn 9927]

Gotdamn, he sure does tweet like a strung out dude who needs to put down the straw and go crash for awhile. 
 

[Cheeseweasel 26438]

4 minutes ago, Bateshorn said:

Gotdamn, he sure does tweet like a strung out dude who needs to put down the straw and go crash for awhile. 
 

They don't call it "Fuck you" money for nothing.

[F250 28766]

 

[royiv 9285]

Bezos has got to love watching this.

[staboner 4969]

musk is damn interesting as he weirdly connects various facets of the culture wars. i try to usually stay out of it but happened to stumble across his twats today. just sounds like a whiny baby. 

that'll be $9.95

[We’reTexas 1473]

33 minutes ago, longhornmatt said:

 

I so want to see all the CYA emails Skadden Arps has been sending Elon at every stage as he just tells them to fuck off and signs whatever is put in front of him.

I chortled at the passive aggression in the proxy from Skadden and WSGR making it clear they had to negotiate definitive docs in like 16 hours for this bullshit. 

[Captainant 27647]

4 hours ago, wildcat09 said:

Translation: he's about to be sued by the SEC.

Funny story, 5th circuit just issued a ruling that found the SEC (and administrative law generally) to be unconstitutional

[StruggleBus 3922]

Elon needs to stop pissing off San Francisco liberals that love the smell of their own farts. F250 owners aren’t going to start buying Teslas. 

[Homercles 10205]

5 minutes ago, StruggleBus said:

Elon needs to stop pissing off San Francisco liberals that love the smell of their own farts. F250 owners aren’t going to start buying Teslas. 

Yeah that’s it…that’s why F250 owners don’t buy Tesla’s.  Dumbass. 

[StruggleBus 3922]

4 minutes ago, Homercles said:

Yeah that’s it…that’s why F250 owners don’t buy Tesla’s.  Dumbass. 

The fuck are you talking about?

[ATexanAbroad 627]

amazing how liberals go from, musk tech energy clean planet savior to oh no he vote moderate he baddddd man meow, fucking pussies

[Anastasis 23469]

5 hours ago, staboner said:

musk is damn interesting as he weirdly connects various facets of the culture wars.

 

Gonna be fun watching him go unhinged and dropping more than a few uncomfortable truth bombs along the way. 

[Anastasis 23469]

6 hours ago, ChuckNorrisActionJeans said:

likeability scale trending toward Pharma-bro Martin Shkrelli

This is a very stupid comparison, but not particularly unsurprising.