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

[Jameslaw121 4494]

27 minutes ago, Captainant said:

Yeah one of the women I work with has been WAY more productive than ever, and she's actually gotten to be a good mom to her kids too. Just having the increased flexibility has made a world of difference for there to not be an expectation of being in the office at a set time every day

I should add, she now has employees living about 80 miles from where their office would be. She wouldn't be able to hire those people before because of the commute. And guess what, traffic or car trouble are no longer an excuse to miss work.

 

Also, she has one worker whose mom is getting cancer treatment in Houston (we're in Dallas). Instead of having to take a week off (and use her vacation days and such) she's able to work from her hotel room and still take care of her mom.

 

Edited June 3, 2022 by Jameslaw121

[Nice Guy Eddie 13729]

I can definitely see some jobs requiring people to be in the office. However if you're in a role that regularly requires you to communicate via phone or email with others, the job could easily transition to work from home. What's the difference as long as you have an internet connection, which isn't much of a hurdle for most.

At a previous job, within a cube farm, the next team over had a boss that measured day-to-day productivity if your butt was in your chair.  This was about 20 years ago, and he was probably in his mid 50s at the time. That was how he was brought up in the company, and he carried that over once he was promoted. And it wasn't even a question of working from home everyday. This was even if you wanted to work from home for 1 specific day with advance notice.  If there was a repairman stopping by your house, he expected your housewife to take care of it, or take a vacation day. 

I was happy that I didn't work for him.

[bolverk 30323]

2 hours ago, NoName said:

imagine announcing that you are firing 10,000 people because of your "super bad" feeling about the economy lol

...2.5 weeks ago he made the decision to buy TWTR for $44 billion. guess this super bad feeling came on rather suddenly.

Reminds me of a boss I had 20 years ago when working for a small consulting firm. One month, we'd be flying high. The next (when bonus time rolled around), he'd threaten to lay half the staff off because we were going out of business. That worked until we found a copy of his $1 million house plan on the fax machine sent from his architect a week or so after one of those threats and shitty bonuses.

[MaybeACoordinator 8350]

On 6/2/2022 at 7:22 AM, Auto Driller said:

Boomers clamoring for a return to the office worried that they won’t be able to sexually harass college grads and get forced laughs from middle management to their stupid jokes. Face it - no one cares about your vast experience. You can embrace WFH now or you can lose your best employees and then the company will move to WFH once you get forced into retirement in 3 years.

Remind those Boomers that they can still have Xmas parties and happy hours.

[crash_davis 23470]

He needs more government subsidized projects to drive top line.

I guess welfare comes in all forms, whether paying unemployment directly to people or giving money to douchebags so that they can increase their net worth, sorry I meant hire people.

[YChang 3569]

Have two friends at Tesla. One's an engineer (not software) and one is in sales. It's not an unpopular opinion that most are ready for a different CEO. 

[crash_davis 23470]

6 minutes ago, YChang said:

Have two friends at Tesla. One's an engineer (not software) and one is in sales. It's not an unpopular opinion that most are ready for a different CEO. 

you mean when he's not spending all his time walking the plants as fake inspiration, he's drunk tweeting every shit idea that comes across his mind. that doesn't inspire his employees?

[fattyflattie 4640]

50 minutes ago, bolverk said:

Reminds me of a boss I had 20 years ago when working for a small consulting firm. One month, we'd be flying high. The next (when bonus time rolled around), he'd threaten to lay half the staff off because we were going out of business. That worked until we found a copy of his $1 million house plan on the fax machine sent from his architect a week or so after one of those threats and shitty bonuses

I worked for a private but global company that would do the same thing. I don’t know the level where the financial truth was accurately laid out, but it was a lot higher than you’d expect, ie: selling the poor performance lie down the chain even in the accounting/finance cog side. Then, at bonus time, oh hey we actually did great this year. Here’s your bonus!!1!   It took me 2 cycles to figure it out, admittedly.  But in a company that size, it’s difficult to know what’s really going on on the other side of the globe.  But they did it for 5 years straight, I guess as a motivator for bonus’. 
 

Eta: Elon seems like he’s gotten a bit out over his skis, while also losing his marbles a bit (more). 

Edited June 3, 2022 by fattyflattie

[crash_davis 23470]

1 minute ago, fattyflattie said:

I worked for a private but global company that would do the same thing. I don’t know the level where the financial truth was accurately laid out, but it was a lot higher than you’d expect, ie: selling the poor performance lie down the chain even in the accounting/finance cog side. Then, at bonus time, oh hey we actually did great this year. Here’s your bonus!!1!   It took me 2 cycles to figure it out, admittedly.  But in a company that size, it’s difficult to know what’s really going on on the other side of the globe.  But they did it for 5 years straight, I guess as a motivator for bonus’. 

execs will do everything they can to get their bonuses. that's all those fuckers care about. whatever it takes to meet their numbers so they can get that check. if scaring people to cut costs to maintain margin is what's needed, then that's what they do. their outlook is qtr by qtr at best.

[Larry T. Spider 1747]

The environment may change as we are now seeing some layoffs, but these days  hinting that the company might be in trouble with just result in people leaving.

Company is in financial trouble and bonuses may not happen? Peace ✌️ 

[Storm the Field 5366]

I go into the office pretty much every day for two reasons: 

1. I live 4.5 miles from my office. It takes roughly 11-16 minutes to get from my house to office utilizing only surface streets and avoiding congested highways. 

2. I focus way better with a dedicated workspace. In college and law school I did homework, readings, studied for tests, and wrote papers almost exclusively at the campus library in a study pod. I work at work and relax at home.

My wife set up a proper home office during COVID but now goes back to the office every single day. I've started occasionally (maybe 3 times a month) hooking up my laptop to her setup. It takes some getting used to and I only really do it on days where I'm not facing any particular deadline, but It's not like I don't get anything done.

I work with plenty of guys that live way far out in the burbs (I'm talking Conroe, Woodlands, Magnolia....) that come in maybe 2 days a week at most. Have heard not a single complaint within the firm that they're not getting shit done.  If I had an hour or more drive each way through 45 or 290 traffic, you can bet your ass I'd get comfortable with WFH real damn quick. 

Edited June 3, 2022 by Storm the Field

[fattyflattie 4640]

Discussion is also prescient.  We got told this AM we are heading back to the office because too many aren’t getting their load done.  Doesn’t affect me as much as I travel a lot, but we are going to have some upset folks.  Childcare and fuel likely being the drivers. 

[Gene Parmesan 4064]

I go to the office because I like browsing surly on the bigger monitors I have there.  That to me is worth the commute.

[Js1 87181]

4 minutes ago, Gene Parmesan said:

I go to the office because I like browsing surly on the bigger monitors I have there.  That to me is worth the commute.

When we went WFH at the start of COVID, senior staff got first dibs on 2 extra wide monitors for home. I have the same setup at home as my office, minus the commute and boring coworkers 

[DefinitelyNotHollywoodColt 12301]

42 minutes ago, fattyflattie said:

Discussion is also prescient.  We got told this AM we are heading back to the office because too many aren’t getting their load done.  Doesn’t affect me as much as I travel a lot, but we are going to have some upset folks.  Childcare and fuel likely being the drivers. 

if i'm king of your company, i'm firing the bums and expanding my search radius for better talent.

[crash_davis 23470]

3 minutes ago, DefinitelyNotHollywoodColt said:

if i'm king of your company, i'm firing the bums and expanding my search radius for better talent.

firing the bums - very Jack Welch thing to do. Not necessarily a bad thing which is why he had layoffs every couple of years to fire the bottom 10%

expanding search radius means working remote - not a Jack Welch thing to do because you must make life miserable for employees. Employees are costs and should be treated as such.

[NoName 17148]

1 hour ago, crash_davis said:

you mean when he's not spending all his time walking the plants as fake inspiration, he's drunk tweeting every shit idea that comes across his mind. that doesn't inspire his employees?

IT'S JUST A PRANK BRO!

...now imagine how many more shitposting billionaires we are going to have to deal with in our lifetimes.

Edited June 3, 2022 by NoName

[Jameslaw121 4494]

18 minutes ago, DefinitelyNotHollywoodColt said:

if i'm king of your company, i'm firing the bums and expanding my search radius for better talent.

At my wife's company. They are going to institute a policy that if you don't meet quota for a certain time period, you'll have to start working at the office.

 

[crash_davis 23470]

4 minutes ago, Jameslaw121 said:

At my wife's company. They are going to institute a policy that if you don't meet quota for a certain time period, you'll have to start working at the office.

 

That's funny as shit. 

It is genius motivation. Take care of things, enjoy the perks. Don't take care of shit, join the other losers at the Office of Shame.

[Jameslaw121 4494]

3 minutes ago, crash_davis said:

That's funny as shit. 

It is genius motivation. Take care of things, enjoy the perks. Don't take care of shit, join the other losers at the Office of Shame.

It's actually even more genius than that. You tell someone they have to start commuting, chances are they will just quite. Saves a ton of hassle trying to fire someone. It's a pretty big company, so there is alot of red tape my wife has to go through to actually fire someone. 

[NoName 17148]

19 minutes ago, Jameslaw121 said:

It's actually even more genius than that. You tell someone they have to start commuting, chances are they will just quite. Saves a ton of hassle trying to fire someone. It's a pretty big company, so there is alot of red tape my wife has to go through to actually fire someone. 

saves a company who employs ~100,000 a shitload of money too.

[Incredulity 11876]

2 hours ago, Storm the Field said:

I work at work and relax at home.

co-signed

I don't oppose it, but don't care to work from home at all.

[Js1 87181]

1 hour ago, Jameslaw121 said:

At my wife's company. They are going to institute a policy that if you don't meet quota for a certain time period, you'll have to start working at the office.

 

Our hybrid schedule stands as long as you’re productive and available. If you start slipping, you’re back in full time. So far, no one has been forced in full time. 

[Jameslaw121 4494]

11 minutes ago, Incredulity said:

co-signed

I don't oppose it, but don't care to work from home at all.

I'm with you. I had to work from home for like 3 months when we were remodeling our store it was fun for about 2 days.....

[MonkeyDoughnut 10803]

He does like to poke the bear

 

 

[Guest]

20-something son works for a leading tech company and I asked him this morning about the topic.  

"They're going to lose all of their engineers."  They will be screwed until it's not an "engineer's market" for hiring.

His company does a two days per week in office policy for now, and he said one of the team leads, who has a 25 year service award on his desk, has never been in during the last 2 months. In other words, it's an "optional" policy. He said they lost folks when a 3-day a week policy was implemented coming out of the pandemic, and a 5-day policy would be scorched earth.

[CooterBrown 18288]

20-something son works for a leading tech company and I asked him this morning about the topic.  
"They're going to lose all of their engineers."  They will be screwed until it's not an "engineer's market" for hiring.
His company does a two days per week in office policy for now, and he said one of the team leads, who has a 25 year service award on his desk, has never been in during the last 2 months. In other words, it's an "optional" policy. He said they lost folks when a 3-day a week policy was implemented coming out of the pandemic, and a 5-day policy would be scorched earth.

We’re an engineer heavy company. We went back to the office 2 days a week on April 1st with the plan to go 3 days a week in late summer. That month we had 10x the number of retirements and resignations as normal. When our recruiters began pitching the 2x week schedule to candidates, something like 80% declined an interview. Half of the rest cancel their interview or no show. Our board and management freaked the fuck out when they got that monthly report. Last week, they rolled out “purpose driven schedules”. My VP basically said you do not come in the office unless you have in person training, a vendor meeting, or career development activities. There must be a purpose to being in the office and just because you or a manager wants you to isn’t a reason. A complete 180 from two months ago. We will see if that slows down our bleeding.

[NoName 17148]

14 hours ago, CooterBrown said:

 Our board and management freaked the fuck out when they got that monthly report. Last week, they rolled out “purpose driven schedules”. My VP basically said you do not come in the office unless you have in person training, a vendor meeting, or career development activities. There must be a purpose to being in the office and just because you or a manager wants you to isn’t a reason.

know a couple of people who work at large companies (not in engineering) whose companies are basically doing this. there is a list of meetings that require "in person" visits to the office but outside of that it is optional.

[NoName 17148]

https://www.theverge.com/2022/6/6/23156233/elon-musk-twitter-bots-merger-agreement-termination-threat

Quote

Elon Musk says that Twitter is in “clear material breach” of their $44 billion acquisition deal and that he could “terminate” the agreement in response. In a letter sent to Twitter this morning, Musk’s legal team claims that Twitter has failed to provide him with information on the service’s spam bot problem and that he’s entitled to receive that information under the deal agreement.

reason #98237498127309817239481234 why waiving due diligence in any deal worth $44b is quite literally dumb as shit.

 

[chainsaw 10291]

21 minutes ago, NoName said:

https://www.theverge.com/2022/6/6/23156233/elon-musk-twitter-bots-merger-agreement-termination-threat

reason #98237498127309817239481234 why waiving due diligence in any deal worth $44b is quite literally dumb as shit.

 

 

Given what we know about Musk, that means he's the one who breached and is chickening out of the acquisition as many predicted.

[MonkeyDoughnut 10803]

27 minutes ago, chainsaw said:

 

Given what we know about Musk, that means he's the one who breached and is chickening out of the acquisition as many predicted.

He's just trying to get a better deal and or delay the deal. He's backed himself into a corner FAFO and is about to be bent over paying multiples of what Twitter is actually worth now.

[Brisketexan 106890]

You know, something that just occurred to me (no particular reason.....no particular reason at all) is that if people don't come in to the office, they won't get to smell my righteous cauliflower, avocado, and bean farts.  And that seems bad, they shouldn't be deprived of that perk.

[Celery Man 21098]

i wonder what the venn diagram is on people who need others to come in to the office and soak up all their wisdom and people who get an erection from hearing footsteps in the office bathroom while they sit there making the air thick with what has fallen out of their rotting insides

[Brisketexan 106890]

3 minutes ago, Celery Man said:

i wonder what the venn diagram is on people who need others to come in to the office and soak up all their wisdom and people who get an erection from hearing footsteps in the office bathroom while they sit there making the air thick with what has fallen out of their rotting insides

[chainsaw 10291]

9 minutes ago, longhornmatt said:

I mean, I guess he can try.  But it essentially doesn’t matter what the data says.  He’s still on the hook to buy Twitter unless he can show the real data conflicts with Twitter’s public filings AND the discrepancy has a massive material adverse effect on the value of Twitter.  That means it has to be roughly a 20% hit on the total market cap under existing Delaware case law.

Twitter should dump all the data to him, and tell him to close.  “Oh, your analysis says we’re only worth half your offer and you want to renegotiate?  Tough shit.  Get your funding lined up.”  And then sue him for breach when he inevitably breaks the confidentially agreement in his next temper tantrum about how he shouldn’t have to close. 

If that happens they will try some kind of insanity (mania) defense.

[NoName 17148]

7 minutes ago, longhornmatt said:

I mean, I guess he can try.  But it essentially doesn’t matter what the data says.  He’s still on the hook to buy Twitter unless he can show the real data conflicts with Twitter’s public filings AND the discrepancy has a massive material adverse effect on the value of Twitter.  That means it has to be roughly a 40% hit on the total market cap under existing Delaware case law.

Twitter should dump all the data to him, and tell him to close.  “Oh, your analysis says we’re only worth half your offer and you want to renegotiate?  Tough shit.  Get your funding lined up.”  And then sue him for breach when he inevitably breaks the confidentially agreement in his next temper tantrum about how he shouldn’t have to close. 

my understanding is that they have been consistent in how TWTR have been reporting the 5% bots number ("active daily users", not total users) - and since it is on SEC filings, you can be at least somewhat confident that they aren't pulling some number out of thin air and lawyers have vetted the process they are using to calculate the 5%.

at this point, the only reason he is picking this fight is to try to reduce the total cost he is paying, but there is zero reason for TWTR board to even discuss a reduction as far as i can tell...so he is going to end up either paying the $1b breakup fee or buying a company with $44b that he has been shitting all over for months - oh yeah and after what he is saying about WFH i am assuming they are going to see a shitload of talent hitting the bricks over the next 6 months.

 

[MonkeyDoughnut 10803]

20 minutes ago, NoName said:

my understanding is that they have been consistent in how TWTR have been reporting the 5% bots number ("active daily users", not total users) - and since it is on SEC filings, you can be at least somewhat confident that they aren't pulling some number out of thin air and lawyers have vetted the process they are using to calculate the 5%.

at this point, the only reason he is picking this fight is to try to reduce the total cost he is paying, but there is zero reason for TWTR board to even discuss a reduction as far as i can tell...so he is going to end up either paying the $1b breakup fee or buying a company with $44b that he has been shitting all over for months - oh yeah and after what he is saying about WFH i am assuming they are going to see a shitload of talent hitting the bricks over the next 6 months.

 

They have been reporting consistently, but it's their filing statement:

“In making this determination, we applied significant judgment, so our estimation of false or spam accounts may not accurately represent the actual number of such accounts, and the actual number of false or spam accounts could be higher than we have estimated”

statement that he's holding on to. No one outside twitter thinks their number is anywhere near 5%, more like 10-15%

[NoName 17148]

6 minutes ago, MonkeyDoughnut said:

They have been reporting consistently, but it's their filing statement:

“In making this determination, we applied significant judgment, so our estimation of false or spam accounts may not accurately represent the actual number of such accounts, and the actual number of false or spam accounts could be higher than we have estimated”

statement that he's holding on to. No one outside twitter thinks their number is anywhere near 5%, more like 10-15%

the number of real vs fake users on a platform is absolutely something to have solid numbers on BEFORE signing a deal to buy a platform for $44 billion.

[Guest]

1 hour ago, Celery Man said:

i wonder what the venn diagram is on people who need others to come in to the office and soak up all their wisdom and people who get an erection from hearing footsteps in the office bathroom while they sit there making the air thick with what has fallen out of their rotting insides

Talking shop and wrecking shop are two vastly different activities.

[chainsaw 10291]

14 minutes ago, MonkeyDoughnut said:

They have been reporting consistently, but it's their filing statement:

“In making this determination, we applied significant judgment, so our estimation of false or spam accounts may not accurately represent the actual number of such accounts, and the actual number of false or spam accounts could be higher than we have estimated”

statement that he's holding on to. No one outside twitter thinks their number is anywhere near 5%, more like 10-15%

 

If "you know it, I know it, everyone knows it" can you really pretend not to know it, and claim to be harmed by having not known it? You're the one who came to us, with the offer after all. Surely you believed Twitter was worth that much despite whatever bot problem it might have had.

[wildcat09 29579]

2 minutes ago, chainsaw said:

 

If "you know it, I know it, everyone knows it" can you really pretend not to know it, and claim to be harmed by having not known it? You're the one who came to us, with the offer after all. Surely you believed Twitter was worth that much despite whatever bot problem it might have had.

One of the reasons he claimed to be buying Twitter in the first place was to fix the bot problem.

[Chopper 17431]

35 minutes ago, MonkeyDoughnut said:

statement that he's holding on to. No one outside twitter thinks their number is anywhere near 5%, more like 10-15%

I wonder why he waived due diligence then, and following that confirmed that he had all the necessary funding (meaning, the number of bots is of no underwriting value to any of his financial backers).

If Elawn tries to back out of the deal and TWTR's board fails to sue him for specific performance they'd likely be in violation of their oath to shareholders. Settling for even $1B would be an absurd move by TWTR.

[Nice Guy Eddie 13729]

Elon just wants out the deal and told his lawyers to find anyway to get away from his offer. 

I doubt that any court could/would force him to give $44B to TWTR shareholders but he could possibly be on the hook for a multi billion lawsuit that would take 5+ years.

Twitter should also pass a rule that there is a lifetime ban on anyone that walks away from a deal of buying Twitter. I could see Elon settling with Twitter just to avoid losing his twitter account.

[Bateshorn 9991]

On 6/5/2022 at 11:36 AM, slorch said:

20-something son works for a leading tech company and I asked him this morning about the topic.  

"They're going to lose all of their engineers."  They will be screwed until it's not an "engineer's market" for hiring.

His company does a two days per week in office policy for now, and he said one of the team leads, who has a 25 year service award on his desk, has never been in during the last 2 months. In other words, it's an "optional" policy. He said they lost folks when a 3-day a week policy was implemented coming out of the pandemic, and a 5-day policy would be scorched earth.

My non profit has a significant IT presence.  We just started back 3x a week and we’ve lost 15 people already.  

[Nice Guy Eddie 13729]

A company can do whatever they want, and if Tesla feels that employees need to be in the office, so be it. Eventually they will lose and rehire people that are ok with that policy. Or train people to replace those that left. Or perhaps outsource work to companies that have their own policies.

But with that being said/written, it's a ridiculous argument from Elon that office workers need to be at the office since factory workers are required to be at the factory. At an agricultural company, should mgmt turn off the A/C or require office workers to work outside since the farm workers are outside? Employees have different hours, environments, etc. based on the needs of that dept.

[MonkeyDoughnut 10803]

43 minutes ago, Chopper said:

I wonder why he waived due diligence then, and following that confirmed that he had all the necessary funding (meaning, the number of bots is of no underwriting value to any of his financial backers).

If Elawn tries to back out of the deal and TWTR's board fails to sue him for specific performance they'd likely be in violation of their oath to shareholders. Settling for even $1B would be an absurd move by TWTR.

He waived due diligence to get them to accept his offer... he didn't count on the market tanking which basically means he'd be paying a 30%+ premium on his bid assuming he's using TSLA stock as backing. He's shown he's great at getting things done, not so much on the "business" side of things.

[chainsaw 10291]

5 minutes ago, MonkeyDoughnut said:

He waived due diligence to get them to accept his offer... he didn't count on the market tanking which basically means he'd be paying a 30%+ premium on his bid assuming he's using TSLA stock as backing. He's shown he's great at getting things done, not so much on the "business" side of things.

I wonder if the people who gave him the bridge loan or financing are dark money right wingers who want Elon to convert Twitter to Parler. That really seems to be what this is all about, and teasing a return of Trump. They are the ones likely shitting themselves and telling Elon to stall.

[Chopper 17431]

Matt Levine with Bloomberg News is a former M&A lawyer and banker. His newsletter is excellent and free. You can sign up for it here. https://www.bloomberg.com/account/newsletters/money-stuff?source=msweb

This just hit my inbox.

Spoilering bc it's long.

 

Quote

Spoiler

This again

No, come on, stop it. Six weeks ago, Elon Musk signed a merger agreement in which he made a legally binding promise to buy Twitter Inc. for $54.20 per share. A few weeks later, he decided he didn’t want to pay $54.20 per share anymore, perhaps because he had grown bored of Twitter, or perhaps because the prices of social-media stocks, and of Musk’s company Tesla Inc., had fallen, and $54.20 looked pretty expensive.

The merger agreement does not, however, allow Musk to walk away because he changed his mind. He needed some pretext for walking away. He came up with what he thought was a good one: Twitter says, in its public filings, that no more than 5% of its “monetizable daily active users” are “false or spam” accounts, and Musk has a vague sense that there are more spam bots than that. (To be fair, a lot of his followers are bots.) He floated the idea that he could walk away from the deal because Twitter was lying about the spam bots.

To a non-lawyer I suppose this looked like a good pretext, but it was not. It was not for at least three reasons:

1. Musk had not a shred — not even the tiniest bit — of evidence that Twitter’s estimates are wrong, and it seems very likely that they are right.[1]
2. Even if Twitter’s estimates are wrong, Musk could not get out of the merger agreement unless the error was likely to have a “material adverse effect” on Twitter’s business, and it absolutely would not.
3. Musk has been talking about Twitter’s bot problem forever, and in fact he originally said that he wanted to buy Twitter in order to fix the bot problem, so no one could possibly believe him when he said that he wanted to walk away from the deal because he just discovered that Twitter has a bot problem.

So there were a few days when everyone talked about how Musk was trying to back out of the agreement, and about what Twitter could do to stop him, and then that died down when everyone realized that this pretext was terrible.

I wrote at the time:

While Musk has tweeted about not going ahead with the deal, and talked about it at a private conference for his fans, it doesn’t seem like he has sent any formal notice to Twitter saying that the deal is off. (Certainly neither Musk nor Twitter have made any SEC filings about that sort of notice, which you might expect if he’d sent one.) Perhaps his lawyers are less willing to ignore the agreement than he is, or at least need a better pretext than he’s managed so far.

Well. I guess he set his lawyers — led by Mike Ringler of Skadden, Arps, Slate, Meagher & Flom LLP — to work finding a pretext that they could stomach. And they found one, and today they filed it with the US Securities and Exchange Commission, in the form of a letter to Twitter threatening to call off the deal.

Their pretext is sort of the lawyer version of Musk’s pretext. The problem, say the lawyers, is not that Twitter has too many spam bots. The problem is that, when Musk asks for information about the spam bots, Twitter doesn’t give him the information he wants. From their letter:

Twitter has, in fact, refused to provide the information that Mr. Musk has repeatedly requested since May 9, 2022 to facilitate his evaluation of spam and fake accounts on the company’s platform. Twitter’s latest offer to simply provide additional details regarding the company’s own testing methodologies, whether through written materials or verbal explanations, is tantamount to refusing Mr. Musk’s data requests. Twitter’s effort to characterize it otherwise is merely an attempt to obfuscate and confuse the issue. Mr. Musk has made it clear that he does not believe the company’s lax testing methodologies are adequate so he must conduct his own analysis. The data he has requested is necessary to do so.

There is a technical bit of mergers-and-acquisitions lawyering here that might be worth explaining. In the merger agreement, Twitter makes representations, statements about its business that it promises are true. Arguably one of them is something to the effect of “not much more than 5% of our monetizable daily active users are spam bots.”[2] Musk thinks, or says he thinks, that this representation is not true. But even if he’s right, he can’t get out of the deal, unless it is untrue and would have a “material adverse effect” on Twitter’s business. If in fact 90% of Twitter’s users are bots, it knows that, and it has been lying to advertisers for years, then, uh, sure, maybe. But in any plausible case, there will not be an MAE, so he still has to close the deal and pay $54.20 per share. Merger agreements are written this way so that buyers can’t change their minds and come up with some trivial pretext — some tiny error in the representations — to get out of the deal.

But in the merger agreement, there are also covenants, promises that Musk and Twitter make to each other about what they will do going forward, between the signing of the merger agreement and the closing. If Twitter breaches a representation, Musk still has to close unless the breach causes a material adverse effect.[3] But if Twitter breaches a covenant, Musk can walk away: He doesn’t have to close unless Twitter “shall have performed or complied, in all material respects, with its obligations required under this Agreement.”[4] There is no MAE requirement: You just have to comply with the covenants.

And one of the covenants is that Twitter “shall ... furnish promptly to [Musk] all information concerning the business, properties and personnel of [Twitter] as may reasonably be requested in writing, in each case, for any reasonable business purpose related to the consummation of the transactions contemplated by this Agreement.”[5] Another one is that Twitter will “provide any reasonable cooperation reasonably requested” in connection with Musk’s debt financing.[6]

Musk, as a non-lawyer, came up with a pretext that is like “Twitter told me something untrue about its bot problem, so I can walk away.” That sounds like it might work, but doesn’t work. But Musk’s lawyers have a better pretext. It’s something like “keep asking them for more information about their bot problem; eventually you’ll ask questions they won’t answer, and then you can walk away.”

So they write:

Under various terms of the merger agreement, Twitter is required to provide data and information that Mr. Musk requests in connection with the consummation of the transaction. … Mr. Musk is entitled to seek, and Twitter is obligated to provide, information and data for, inter alia, “any reasonable business purpose related to the consummation of the transaction” (Section 6.4). Twitter must also provide reasonable cooperation in connection with Mr. Musk’s efforts to secure the debt financing necessary to consummate the transaction, including by providing information “reasonably requested” by Mr. Musk (Section 6.11). ...

As Twitter’s prospective owner, Mr. Musk is clearly entitled to the requested data to enable him to prepare for transitioning Twitter’s business to his ownership and to facilitate his transaction financing. To do both, he must have a complete and accurate understanding of the very core of Twitter’s business model—its active user base. 

And then they threaten that Musk will walk away if he doesn’t get the information he wants:

Based on Twitter’s behavior to date, and the company’s latest correspondence in particular, Mr. Musk believes the company is actively resisting and thwarting his information rights (and the company’s corresponding obligations) under the merger agreement. This is a clear material breach of Twitter’s obligations under the merger agreement and Mr. Musk reserves all rights resulting therefrom, including his right not to consummate the transaction and his right to terminate the merger agreement.

The letter does not say what information Musk wants — it references previous letters, dated May 25 and May 31, asking for the information, but those have not been made public — but it makes it clear that Musk is not looking for information about how Twitter came to its conclusion that fewer than 5% of monetizable daily active users are bots. He is not looking to understand or test Twitter’s methodology. Instead, he wants to “conduct his own analysis,” which I would think would require raw data about Twitter’s users. Last month Twitter Chief Executive Officer Parag Agrawal tweeted a thread about how Twitter does this analysis, noting that Twitter “uses both public and private data (eg, IP address, phone number, geolocation, client/browser signatures, what the account does when it’s active…) to make a determination.” Presumably if Musk wants to “conduct his own analysis,” he will want the same sorts of identifiable private data that Twitter uses.

Again, I don’t know exactly what he’s asking for, but in general I can understand why Twitter would be nervous about sharing user data with Musk. For one thing, there are all sorts of regulatory and risk reasons to be nervous about sharing user data with someone who, for now at least, does not work at Twitter. For another thing, Musk has been publicly trolling Twitter about the bot problem, and about everything else, for weeks now, and there’s no reason to think he would be particularly responsible with this information. His lawyers write:

Mr. Musk will of course comply with the restrictions provided under Section 6.4, including by ensuring that anyone reviewing the data is bound by a non-disclosure agreement, and Mr. Musk will not retain or otherwise use any competitively sensitive information if the transaction is not consummated.

But this is not much comfort, because Musk has constantly ignored the restrictions of the merger agreement, including by tweeting disparaging things about Twitter. He himself has boasted publicly that he violated a non-disclosure agreement with Twitter by tweeting about Twitter’s bot methodology![7] If you give him sensitive user data he is just absolutely going to tweet about it, and trusting his promises not to would be dumb. And if he does break his promises, what can Twitter do? Sue him to call off the deal? Twitter doesn’t want to call off the deal. Musk does!

Still, this pretext is better than Musk’s pretext, for at least three reasons:

1. As closing conditions for the merger, representations are qualified by MAE, but covenants by “in all material respects.” If Twitter does not comply with its covenants, Musk can walk away, so this makes for a good threat.
2. The representations are limited to what the merger agreement actually says, but this covenant — the one about furnishing information — is limited only by (1) Musk’s (and his lawyers’) imagination and (2) the somewhat fuzzy standard of “any reasonable business purpose related to the consummation of the transactions.”[8] So Musk can ask Twitter, like, “give me the cell phone numbers of every one of your monetizable daily active users so I can call them and see if they’re bots,” and Twitter will have to decide if that is reasonable, if it violates any laws, etc. If they say no, Musk can disagree, and it might end up in court, with Musk having the ability to walk away if he wins. If they say yes, Musk can just keep asking for more things. “Tell us what all of your users were thinking about last Thursday,” why not.
3. Because Musk really has been talking about solving the bot problem, and because this request can be characterized as helping him do that, it doesn’t sound as much like a lie as his pretext does. “As Twitter’s prospective owner, Mr. Musk is clearly entitled to the requested data to enable him to prepare for transitioning Twitter’s business to his ownership,” says the letter: If he’s going to clean up the bots, he needs information about the bots, and he is allowed to ask for it now.

I mean, to be clear, it isn’t a good pretext. It is, for instance, very hard to imagine that Musk’s banks are clamoring for detailed information about spam accounts to line up their financing; Twitter has raised debt financing in the past with its existing bot disclosure. Nor is it clear what Musk’s “reasonable business purpose related to the consummation of the transactions” is. And because it is so clearly part of Musk’s broader trolling operation, it is hard to imagine him winning if this ends up in court: If he refuses to close because Twitter won’t humor his bot-fishing expedition, it seems unlikely that a Delaware court will side with him. But it does raise the risk for Twitter, which gives him a bit more leverage to try to renegotiate the price. It is all going to get so much dumber.

In other Twitter M&A news, on Friday the deal cleared US antitrust review with no problems. One possibility is that Musk will keep sending nasty letters and tweets about bots, and the people — including the ones working for him — whose job it is to get the deal done will keep working to get the deal done, and one day Musk will be mid-sentence typing a nasty tweet about Twitter and find out that he owns it.

 

 

[chainsaw 10291]

5 minutes ago, Chopper said:

Matt Levine with Bloomberg News is a former M&A lawyer and banker. His newsletter is excellent and free. You can sign up for it here. https://www.bloomberg.com/account/newsletters/money-stuff?source=msweb

This just hit my inbox.

Spoilering bc it's long.

 

 

 

If Musk were to publicize something he's not allowed to publicize under the agreement, what would Twitter be able to do about it legally?

[Chopper 17431]

12 minutes ago, chainsaw said:

 

If Musk were to publicize something he's not allowed to publicize under the agreement, what would Twitter be able to do about it legally?

Two things come to mind. Sue for damages. Add it to the pile of potential evidence for his acting in bad faith when they sue him for specific performance and breach of contract.