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

[Michael Knight 12974]

On 7/8/2022 at 9:30 PM, Ag with kids said:

Interdasting...

Twitter falsified official data.

Musk made them provide actual data. 

Data shows Twitter was full of shit. 

Musk says fuck you, you lied to me.

Twitter says I'm gonna sue!!!!

Musk can no longer afford to buy Twitter

[Bookman 4637]

7 hours ago, Vegas64 said:

Curious why you asked it in that way,

 

Because it looks to be a joke?

[Vegas64 673]

25 minutes ago, Bookman said:

Because it looks to be a joke?

I guess I don’t get the joke. As I stated it seems a reasonable take. There is room for intelligent people to disagree but it’s hardly as absurd or outlandish to be characterized as a joke.

[Vegas64 673]

44 minutes ago, Chopper said:

One major difference with the Anaplan deal is that El*n isn't asking for a reduction in price. He's saying he has zero interest in a deal despite signing a contract and lining up willing lenders. We'll see what a judge decides but what damage Twitter has undergone since announcement of the deal (resignation of some top staff) is because many want no part of working for El*n and have lots of other professional choices. El*n's attorney's letter pullng out of the deal is a poorly argued joke because it states zero basis to terminate the deal. El*n will lose, the only question is how much he's going to have to pay and whether a judge will be willing to enforce the specific performance provision.

Provable damages to Twitter due to El*n's bad faith will be part of the tab he has to pay one way or the other -- either when he becomes owner of the company and inherits those problems, or by paying for outright damages.

Anyone else remember the beginning of this deal? One of the first things El*n said about how he was going to improve the company was by fixing what he claimed to be Twitter's spam accounts problem. Now those same supposed spam accounts are his extremely thin justification for terminating the deal. His own words are going to help hoist him on his own petard.

I agree with you to a T, I’m just saying that there is recent precedent of a renegotiation due to pressure and not having the stomach for a legal knife fight, even though you are technically and legally almost assuredly right, that Twitter law and Elon law knows about.
 

Most seem to think the worst case scenario for Elon at this point is a court of law makes him buy Twitter at previous agreed upon price. I’m not seeing it.

I think worst case scenario is Elon bullies his way to renegotiate a better deal under false bot pretenses because Twitter will capitulate.

I’m not saying what should or ought to happen just what I think is most likely due to practicalities of the business at hand. I’d love to see Bret Taylor take the fight to Elon tbh, just think he’s too smart and has too bright a future ahead. If he was older and waning, I could see him risking a Pyrrhic victory.

Edited July 10, 2022 by Vegas64

[TwiceHorn 31414]

11 hours ago, Brisketexan said:

Alternate take: the business goal of the current board is to maximize shareholder value. Having a sucker on the hook to pay more than the company is worth is very important to that goal.

That's what's wrong with these gotdamn hostile takeovers.  Twitter never wanted to be acquired in the first place, and I don't think anyone really thought it would be good for their business, or their customers/users, or even society in the first place.   

But then "shareholder value" takes over and drives everything to perverse conclusions.

[Bookman 4637]

6 hours ago, Vegas64 said:

I guess I don’t get the joke. As I stated it seems a reasonable take. There is room for intelligent people to disagree but it’s hardly as absurd or outlandish to be characterized as a joke.

Twitter has no leverage whatsoever? Twitter can't afford a lawsuit? Really?

Edited July 10, 2022 by Bookman

[Bookman 4637]

Maybe you're right though.

7 hours ago, Vegas64 said:

I think worst case scenario is Elon bullies his way to renegotiate a better deal under false bot pretenses because Twitter will capitulate.

 

That's the worst case scenario? There's a 0% chance that the worst thing that happens is that Elon Musk gets a better deal, regardless of the merits?

If this is the case, then I don't see how Twitter can enter into any commercial transactions. It should consider bankruptcy.

[Captainant 27578]

59 minutes ago, TwiceHorn said:

That's what's wrong with these gotdamn hostile takeovers.  Twitter never wanted to be acquired in the first place, and I don't think anyone really thought it would be good for their business, or their customers/users, or even society in the first place.   

But then "shareholder value" takes over and drives everything to perverse conclusions.

Hey now those corporate shareholders have every RIGHT to see a fat return on their investment! Fuck continuity of business past a two quarter horizon AMIRITE???

[Chopper 17210]

As Raffi Melkonian points out the specific performance provision of the contract is a highly negotiated position. To be sure, a judge may blanch at enforcing it because of the very high dollar amount and what it may mean to the company. But Delaware Chancery Court has enforced similar provisions in the past. Twitter stock is now sinking due to El*n's fucking around and thinking he can sign a contract to purchase a public company and then walk away.

We have witnessed: El*n's bad faith in entering this deal, El*n's bad faith with the SEC overall, El*n's contradicting himself over why he wanted to buy the company in the first place, El*n's arguably violating SEC provisions in the Twitter deal itself (drawing an on-going investigation), and then going dark for a month while his lawyers search for a fig leaf to cover their attempted exit from a deal where he explicitly waived due diligence.

We'll see what equitable remedy a judge decides. But it's going to be huge. And Fuck EL*n.

 

[Reynolds Woodcock 4738]

1 hour ago, TwiceHorn said:

Twitter never wanted to be acquired in the first place, and I don't think anyone really thought it would be good for their business, or their customers/users, or even society in the first place.   

And this is the primary reason I *think* this ultimately ends in a settlement if Elon is willing to play ball (who the fuck knows). The Twitter Board never thought a Musk takeover was best for the business long term, but once financing was committed the immediate price was too good to turn down without being sued to shreds.  Do we really think they now want to steer a protracted litigation to force a deal they never wanted in the first place?

Unless Twitter was truly committing fraud or damn close to it, I think they should fight Musk as hard as they can in Delaware to see if they can push him to a reasonable settlement.  And if he just refuses to settle? Well, I'm a deal lawyer and not a litigator, but I have a feeling Slights, Laster, etc. won't be as enamored with Musk's schtick as the online white bro culture seems to be, which, together with Twitter's strong contractual standing, puts them in a solid strategic position if they can stomach a fight. 

 

[Bookman 4637]

28 minutes ago, Chopper said:

As Raffi Melkonian points out the specific performance provision of the contract is a highly negotiated position. To be sure, a judge may blanch at enforcing it because of the very high dollar amount and what it may mean to the company. But Delaware Chancery Court has enforced similar provisions in the past. Twitter stock is now sinking due to El*n's fucking around and thinking he can sign a contract to purchase a public company and then walk away.

We have witnessed: El*n's bad faith in entering this deal, El*n's bad faith with the SEC overall, El*n's contradicting himself over why he wanted to buy the company in the first place, El*n's arguably violating SEC provisions in the Twitter deal itself (drawing an on-going investigation), and then going dark for a month while his lawyers search for a fig leaf to cover their attempted exit from a deal where he explicitly waived due diligence.

We'll see what equitable remedy a judge decides. But it's going to be huge. And Fuck EL*n.

 

You appear to be overlooking the fact that apparently a lawsuit by Twitter has a 0% chance of success and Twitter can't afford to hire any lawyers.

[Chopper 17210]

1 minute ago, Bookman said:

You appear to be overlooking the fact that apparently a lawsuit by Twitter has a 0% chance of success and Twitter can't afford to hire any lawyers.

I'm certainly wary of that but I'm not taking it for granted until Bro Bible weighs in.

[Gengs1 2583]

Wouldn’t the largest shareholders who are probably filthy rich as well pay some of the legal fees or get their own lawyers to help out since they gonna get screwed if Twitter loses.

I would be sending my top guys to help if this is hurting the stock too much 

[Mach 1 1677]

37 minutes ago, Bookman said:

You appear to be overlooking the fact that apparently a lawsuit by Twitter has a 0% chance of success and Twitter can't afford to hire any lawyers.

JFC despite your username you can't fucking read or are letting your Elon hate cloud your vision.

No one has said that. Elon is a goon and a bully and I hope Twitter sticks their legal fist up his ass and wins.  I think it's obvious he acted in bad faith and deserves to be sued to Bolivia.

But it's business, and I take an arms length view of what Twitter is in for vs. Musk. Musk can kick the can down the road for 5 plus years without batting an eye, he doesn't give a shit, he's a fucking loon.  But Twitter?  They're an ongoing public concern, with management, employees, investors, that have just been attacked and left on the ground bleeding (stock value).  They can't stay there for 5 years while this thing plays out, they have to come up with a plan to survive, which means growing and monetizing their business, retaining consistent management, and luring new talent.  The two latter ones will be impossible if the stock remains in the shitter, which it will be if the former has no chance of succeeding without the latter.

Twitter rightly should challenge legally, but they also have to be prepared to settle with Musk and/or find someone else to buy them.

[wildcat09 29324]

From the merger agreement: 

(d) Each of the parties hereto acknowledges that (i) the agreement contained in this Section 8.3 (wildcat note: this is the termination fee section) is an integral part of the transactions contemplated by this Agreement, (ii) the Termination Fee is not a penalty, but is liquidated damages, in a reasonable amount that will compensate Parent and its Affiliates in the circumstances in which such fee is payable for the efforts and resources expended and opportunities foregone while negotiating this Agreement and in reliance on this Agreement and on the expectation of the consummation of the transactions contemplated by this Agreement, which amount would otherwise be impossible to calculate with precision, and (iii) without the agreement contained in this Section 8.3, the parties would not enter into this Agreement, accordingly, if the Company or Parent, as the case may be, fails to timely pay any amount due pursuant to this Section 8.3 and, in order to obtain such payment, either Parent or the Company, as the case may be, commences a suit that results in a judgment against the other party for the payment of any amount set forth in this Section 8.3, such paying party shall pay the other party its costs and Expenses in connection with such suit, together with interest on such amount at the annual rate of five percent (5%) plus the prime rate as published in The Wall Street Journal in effect on the date such payment was required to be made through the date such payment was actually received, or such lesser rate as is the maximum permitted by applicable law.

Twitter isn't going to be overly concerned about not being able to keep up with Elon in protracted litigation.

[Chopper 17210]

12 minutes ago, wildcat09 said:

Twitter isn't going to be overly concerned about not being able to keep up with Elon in protracted litigation.

I agree.

For those who point out the ease by which ordinary litigation can be drawn out, this dispute will be litigated in Delaware Chancery Court as a battle between 2 parties. There's no right to a jury trial. There is a large body of law that already exists for the Court to draw its rulings from. Speed will be a priority for the Court and based on preceding litigation, it's possible it will take less than a year. Twitter can afford a legal team every bit as good if not better than what El*n will get from Skadden Arps.

 

[Blotto 23477]

Quote

Former President Donald Trump said Tesla CEO Elon Musk lied to him after telling Trump personally that he voted for him in 2016. 

Musk said during a Miami tech conference in May that he may have never voted Republican and overwhelmingly voted Democrat throughout his life.

"You know [Musk] said the other day 'Oh, I've never voted for a Republican,'" Trump said during a Saturday rally in Anchorage, Alaska. "I said 'I didn't know that.' He told me he voted for me. So he's another bullshit artist."

Trump also said he knew the Musk Twitter deal would fall through. In May, he said that Musk would not buy Twitter at such a "ridiculous price."

"Elon is not gonna buy Twitter. Where did you hear that before? From me," Trump said.

Lulz at Trump calling anyone a bullshit artist. While the level of business success achieved by Elon is orders of magnitudes greater than anything Trump ever acheived, on a personal level, they have a lot in common. Watching these two narcissist douchebags snipe at each other will be a hoot. 

[Bookman 4637]

1 hour ago, Mach 1 said:

No one has said that.

If the worst-case scenario is Elon Musk wins, then how can Twitter have any chance of winning? It wouldn't even be in the range of possibilities.

If Elon Musk has "all the leverage," how can Twitter have any chance of winning? A 1% chance of winning is still some leverage.

And what have I ever said to make you think I don't like Elon Musk? I know fuck all about Elon Musk.

 

[Bookman 4637]

1 hour ago, Mach 1 said:

JFC despite your username you can't fucking read or are letting your Elon hate cloud your vision.

I don't know who you are, but I think you use words that you don't understand.

[Brisketexan 104924]

That's what's wrong with these gotdamn hostile takeovers.  Twitter never wanted to be acquired in the first place, and I don't think anyone really thought it would be good for their business, or their customers/users, or even society in the first place.   
But then "shareholder value" takes over and drives everything to perverse conclusions.

Couldn’t agree more. Dumb world, we just live in it.

[Genco 3040]

14 hours ago, Vegas64 said:

but the net net is

 

14 hours ago, Vegas64 said:

Here is the net net:

 

[Reynolds Woodcock 4738]

3 hours ago, wildcat09 said:

From the merger agreement: 

(d) Each of the parties hereto acknowledges that (i) the agreement contained in this Section 8.3 (wildcat note: this is the termination fee section) is an integral part of the transactions contemplated by this Agreement, (ii) the Termination Fee is not a penalty, but is liquidated damages, in a reasonable amount that will compensate Parent and its Affiliates in the circumstances in which such fee is payable for the efforts and resources expended and opportunities foregone while negotiating this Agreement and in reliance on this Agreement and on the expectation of the consummation of the transactions contemplated by this Agreement, which amount would otherwise be impossible to calculate with precision, and (iii) without the agreement contained in this Section 8.3, the parties would not enter into this Agreement, accordingly, if the Company or Parent, as the case may be, fails to timely pay any amount due pursuant to this Section 8.3 and, in order to obtain such payment, either Parent or the Company, as the case may be, commences a suit that results in a judgment against the other party for the payment of any amount set forth in this Section 8.3, such paying party shall pay the other party its costs and Expenses in connection with such suit, together with interest on such amount at the annual rate of five percent (5%) plus the prime rate as published in The Wall Street Journal in effect on the date such payment was required to be made through the date such payment was actually received, or such lesser rate as is the maximum permitted by applicable law.

Twitter isn't going to be overly concerned about not being able to keep up with Elon in protracted litigation.

Just to be clear, the provision you highlighted does not apply in this context. Twitter is suing (or has said it will sue) to specifically enforce buyer's obligations under the merger agreement and equity commitment letter (including closing once all of the other conditions are satisfied). They are not suing buyer to pay the reverse break fee. The reverse break fee is only payable if Twitter terminates for certain actions taken by the buyer (certain material breaches or failing to close when otherwise required). 

If Twitter gets specific performance for a closing it doesn't also get damages. Musk is just forced to buy a company that has significantly less cash because it just paid millions of dollars in litigation expenses.   If they settle and go their separate ways, maybe litigation expenses are rolled up in the settlement.  The risk to Twitter is incurring a shit ton of legal fees and then losing the suit. Now you have an impaired asset, you are out the litigation fees, and your directors are being sued by every shareholder plaintiffs' lawyer under the sun.  

What Twitter theoretically could do in the alternative is something like send him a notice that he invalidly terminated, but that he is in material breach of his covenants and thus Twitter terminates and is owed the reverse break fee. At that point, the interest and fees and expenses provisions would kick in if they won in court. But so far they haven't signaled an intent to go this route.

[chainsaw 9841]

6 hours ago, TwiceHorn said:

That's what's wrong with these gotdamn hostile takeovers.  Twitter never wanted to be acquired in the first place, and I don't think anyone really thought it would be good for their business, or their customers/users, or even society in the first place.   

But then "shareholder value" takes over and drives everything to perverse conclusions.

If my memory is correct the way it went down was:

• Musk buys a lot (but not a controlling amount) of stock
• Musk gets on the board
• Musk starts rocking the boat immediately
• Musk teases a hostile takeover
• Twitter put out some public statements signaling an intent to resist a hostile takeover (and there was "poison pill" discourse around this time but not necessarily coming from Twitter)
• Talking heads said Musk wouldn't have enough money to do it
• Musk found some way to finance an insanely high offer
• Musk formally made an insanely high offer
• Twitter basically had their hands tied because how the hell can you say no to an offer that high without being sued into oblivion by shareholders
• Everyone predicted Musk was probably bluffing
• It turns out Musk was bluffing (probably)
• Musk pulls out because he was bluffing

In the meantime a bunch of shit goes down at Twitter because nobody wants to work for Elon and there's some effect on stonk prices.

[Vegas64 673]

2 hours ago, Bookman said:

If the worst-case scenario is Elon Musk wins, then how can Twitter have any chance of winning? It wouldn't even be in the range of possibilities.

If Elon Musk has "all the leverage," how can Twitter have any chance of winning? A 1% chance of winning is still some leverage.

And what have I ever said to make you think I don't like Elon Musk? I know fuck all about Elon Musk.

 

To clarify, my opinion was the worst case scenario most likely to happen was Musk would still have to buy Twitter (which he doesn’t want to do) but for a renegotiated price a la Anaplan.

With high profile and insanely resourced business cases you can never really know what is going to happen, which makes it entertaining theatre. Twitter of course has a chance of winning, by all accounts they have the better legal case after all. 

[Chopper 17210]

Twitter has taken Wachtell and Wilson Sonsini off the board.

 

[chainsaw 9841]

Quote

Musk also has excellent lawyers.

[Vegas64 673]

To add, for those who were saying this cut-and-dried, according to a WSJ article I just read, Twitter is preparing for it to be anything but (with the aforementioned dream team legal hire) and using words like "messy litigation" and "preparing for war".

Right now we are all speculating based on our various proclivities, be it business, M&A, law, just general hating Twitter and/or Musk, but the only thing certain is this is gonna be good. Get our popcorn ready.

Quote

 

Twitter is lawyering up as it prepares for a “messy” legal battle with the world’s richest man. According to Bloomberg, which cites anonymous sources, Twitter has hired “heavyweight” law firm Wachtell, Lipton, Rosen & Katz to stop Elon Musk from backing out of his $44 billion bid to buy the company. Musk announced late Friday that he intends to pull out of the deal over concerns about “bot” accounts on the social media platform. However, rescinding his takeover offer will not be easy. Legal experts say Twitter could sue Musk for billions in damages on top of the $1 billion breakup fee that is already in place if the acquisition falls through.

Twitter CEO Parag Agrawal told the Financial Times he is “willing to go to war” to make Musk follow through on the takeover.

 

https://www.wsj.com/articles/twitter-elon-musk-set-for-unprecedented-legal-battle-over-deal-collapse-11657404303

[wildcat09 29324]

Twitter could save themselves a ton of headache if they’d just suspend his account and charge him 5 billion to get it back.

[Chopper 17210]

With Twitter saying they're going to war and that it's going to be messy, what that means to me is that the lawsuit they file this week against El*n is going to be extremely entertaining and will likely contain side-splitting hilarity of a highly embarrassing nature to El*n.

[Vegas64 673]

14 minutes ago, Chopper said:

With Twitter saying they're going to war and that it's going to be messy, what that means to me is that the lawsuit they file this week against El*n is going to be extremely entertaining and will likely contain side-splitting hilarity of a highly embarrassing nature to El*n.

Serious question: Why do all your posts write out Elon as El*n? Am I missing a joke?

[TwiceHorn 31414]

1 hour ago, Vegas64 said:

To add, for those who were saying this cut-and-dried, according to a WSJ article I just read, Twitter is preparing for it to be anything but (with the aforementioned dream team legal hire) and using words like "messy litigation" and "preparing for war".

Right now we are all speculating based on our various proclivities, be it business, M&A, law, just general hating Twitter and/or Musk, but the only thing certain is this is gonna be good. Get our popcorn ready.

https://www.wsj.com/articles/twitter-elon-musk-set-for-unprecedented-legal-battle-over-deal-collapse-11657404303

I don't know that this is any more "unprecedented" than Pennzoil, or other Getty junk, or RJR Nabisco or another dozen or so big merger cases.

Probably the hundredth time Wachtell and Skadden have squared off.  Maybe thousandth.

There will probably be a terribly amusing book about it like Barbarians At The Gate in five years or so.

Edited July 11, 2022 by TwiceHorn

[52-80 19136]

20 hours ago, TwiceHorn said:

That's what's wrong with these gotdamn hostile takeovers.  Twitter never wanted to be acquired in the first place, and I don't think anyone really thought it would be good for their business, or their customers/users, or even society in the first place.   

But then "shareholder value" takes over and drives everything to perverse conclusions.

What's perverse, instead of natural and obvious, about the primacy of the people who literally own the company? 

Who do you define as 'Twitter', that their will and those of the 'shareholders' are contrary? 

5 hours ago, Vegas64 said:

Right now we are all speculating based on our various proclivities, be it business, M&A, law, just general hating Twitter and/or Musk, but the only thing certain is this is gonna be good. Get our popcorn ready.

Elon upholding Elon's Law: the most entertaining outcome is the most likely.

Where does the equity go from here?  If the least conspiratorial/Rube Goldberg explanation is Elon genuinely wanted to buy Twitter, but got cold feet when the market dropped (my opinion), and with a still-depressed macro environment ahead (also my opinion), the most amenable solution is probably a discounted purchase.

So... long straddle?  Long vega until the news reaches fever pitch?

Twitter held up well against the indices so far.  Its competitors with asymptotic user base and advertising rev are looking nasty.

[52-80 19136]

So all those Twitter employees who quit because Elon was buying it... are they back under employment now?

[Vegas64 673]

Twitters stock and value not handling the noise and drama very well as predicted on the previous page.

 

“Twitter (TWTR) shares slumped another 7% in premarket trade on Monday to around $34, or 37% lower than the $54.20 per share price of Musk's original buyout agreement in April.

Questions remain: While things head to the courtroom, there is bound to be many settlement talks that take place in the background. Will Musk shoot to get a lower price for the deal based on a "material adverse effect"? Walk away by only paying a termination fee or damages? And how much hardball will Twitter be willing to play to uphold "specific-performance" clauses, which forces Musk to close the deal with every closing condition including financing of the transaction?”

[NoName 16348]

On 7/9/2022 at 8:32 PM, Vegas64 said:

There are actually to recent and relevant business cases that I’d point to (and I’ll link when I get home or you can Google) which node in Elon’s favor despite not having the technical and legal high ground. At the very least these are inputs in Twitters risk calculus:

- Anaplan and their takeover of a PE firm that did the same thing as Elon due to the tech sell off and forced Anaplan to renegotiate at a lower price

- Revlon and Citi where one obviously accidentally paid off a couple hundred million dollar loan instead of a much smaller interest payment and all legal beagles said they had an open and shut legal case and the judge ruled against them in a surprise and it’s tied up in appeals (and Revlon since filed for bankruptcy protection while becoming a meme stonk).

 

the only question i would have is if the waiving due diligence period changes anything? not sure if it does from a legal standpoint as the contract is the contract, right?

[Buzzrock 14891]

So if the Delaware Court of Chancery tells Elon he has to buy Twitter, and Elon says no…

Then what?

[NoName 16348]

1 hour ago, 52-80 said:

So all those Twitter employees who quit because Elon was buying it... are they back under employment now?

i assume most of them used that as an excuse to leave and take another job elsewhere, while telling their bosses they left b/c of Elon and not because of shitty management.

[Francisco 2.0 32379]

[Vegas64 673]

50 minutes ago, NoName said:

the only question i would have is if the waiving due diligence period changes anything? not sure if it does from a legal standpoint as the contract is the contract, right?

... n/m ...

Edited July 11, 2022 by Vegas64

[Vegas64 673]

45 minutes ago, Buzzrock said:

So if the Delaware Court of Chancery tells Elon he has to buy Twitter, and Elon says no…

Then what?

Oops meant to quote you.

NYTimes had the same question this AM:

Quote

And what if Musk simply does not do as he is told? A Delaware court will most likely be keen to force Musk to obey the letter of the law. But his reputation for flouting convention may also give it pause. “The worst case scenario for the court is that it makes an order and that he doesn’t comply, and they have to figure out what to do about it,” Morgan Ricks, a professor at Vanderbilt Law School, tells DealBook. Musk is C.E.O. of a public company. What would such a blatant defiance of corporate law mean for investors like Vanguard?

 

[Chopper 17210]

9 hours ago, Vegas64 said:

Serious question: Why do all your posts write out Elon as El*n? Am I missing a joke?

I picked it up from someone and like it as a way to express my very high level of contempt.

[52-80 19136]

53 minutes ago, Buzzrock said:

So if the Delaware Court of Chancery tells Elon he has to buy Twitter, and Elon says no…

Then what?

they'll chide him, "No take-backs!"

46 minutes ago, NoName said:

i assume most of them used that as an excuse to leave and take another job elsewhere, while telling their bosses they left b/c of Elon and not because of shitty management.

Their core workforce gets 1/3 to 1/2 of their compensation in equity.  $54 looks pretty rosy now , staring from $34...

[Blotto 23477]

52 minutes ago, Francisco 2.0 said:

Is that the bastard love child of elon and michael jackson? 

[chainsaw 9841]

10 hours ago, Vegas64 said:

Serious question: Why do all your posts write out Elon as El*n? Am I missing a joke?

I assume the joke is that people think he's G-d and if you're incredibly religious you can't actually write God's name out. Oops!

[chainsaw 9841]

32 minutes ago, Vegas64 said:

Oops meant to quote you.

NYTimes had the same question this AM:

 

Probably some kind of penalty. Like being tossed in jail, I hope.

[gsoda3 3243]

On 7/10/2022 at 6:56 AM, TwiceHorn said:

That's what's wrong with these gotdamn hostile takeovers.  Twitter never wanted to be acquired in the first place, and I don't think anyone really thought it would be good for their business, or their customers/users, or even society in the first place.   

But then "shareholder value" takes over and drives everything to perverse conclusions.

sometimes hostiles are good.  the problem with twitter is a.) they had no long term plan and b.) they've never had a long term plan.   they've been floundering for almost their entire existence and it's a horribly run company.  elon coming along was a lifeline for shareholders which is why they are so desperately trying to get the deal done.  

[Vegas64 673]

20 minutes ago, gsoda3 said:

sometimes hostiles are good.  the problem with twitter is a.) they had no long term plan and b.) they've never had a long term plan.   they've been floundering for almost their entire existence and it's a horribly run company.  elon coming along was a lifeline for shareholders which is why they are so desperately trying to get the deal done.  

Agreed here, I was going to take umbrage with TwiceHorns statement that nobody thought Elon taking over Twitter would be good for the business (a lot of pundits were saying, "welp, couldn't be worse than what Twitter has managed to waste in terms of market and opportunity up to now).

[Ag with kids 581]

2 hours ago, Buzzrock said:

So if the Delaware Court of Chancery tells Elon he has to buy Twitter, and Elon says no…

Then what?

Then they would SANCTION him.  Sanction him with their army.

Oh wait!  They don't have an army.  So I guess that means they need to STFU.  That's what I'd do if I didn't have an army.

😉

[chainsaw 9841]

9 minutes ago, Ag with kids said:

Then they would SANCTION him.  Sanction him with their army.

Oh wait!  They don't have an army.  So I guess that means they need to STFU.  That's what I'd do if I didn't have an army.

😉

I assume they could seize his assets if they need to.

[Vegas64 673]

For those who don't get Matt Levine's Bloomberg newsletter (you should), he lays it out very smartly today:

If this dispute ends up in court, there are three things that the court can do:

1. Agree with Musk, and let him terminate the deal without paying anything.
2. Agree with Twitter that Musk is bound by his contract, and then make him pay $1 billion, the maximum available damages, for breaching the contract.
3. Agree with Twitter that Musk is bound by his contract, and then order specific performance, making him pay $44 billion to actually buy Twitter.

I will ignore the first possibility, not only because I think it is unlikely but also because it is functionally the same as the second. On the scale of Twitter’s market capitalization, or of Musk’s wealth, letting Musk walk away for $0 is not meaningfully different from letting him walk away for $1 billion. In either case, Musk is fine, and Twitter is not. 

So the possible outcomes of litigation are extremely binary: He pays $44 billion and buys Twitter, or he pays zero-to-$1-billion and does not. And there is nothing in between. A court can’t say “man, this is really bad, but I am not going to force you to buy Twitter because that seems cruel to everyone, so I will make you pay $10 billion of damages to compensate Twitter and send a message.” Nope! It’s $44 billion or $1 billion.

Also, though, the possible outcomes of litigation are extremely terrible. Letting the world’s richest person get out of a deal for a nominal fee because he got bored with it undermines the rule of law and the predictability of Delaware merger agreements. But forcing an unwilling buyer to own a big public company — with thousands of employees and an outsized influence on politics and culture — seems bad for the buyer, the employees, the users and the world. Nobody wants either of these outcomes. But they are the only available outcomes in court.

Now: They are not the only possible outcomes in the world. They are the only possible outcomes in court. If Twitter and Musk go to court and fight to the death and a court enters a final judgment, it will be for one of those things, $1 billion or $44 billion. But because the outcomes are so drastically different, and so binary, and so bad, and because no one is entirely sure which one it will be, the two sides have a lot of incentive to try to settle for something in between.

There are two possible sorts of settlement:

1. Musk buys Twitter for less, or
2. Musk walks away for more.

Musk and Twitter could agree that he will close the deal, but will pay less than $54.20 per share. I don’t know what the number is. More than the $25ish per share that I have been assuming Twitter is worth without Musk. More, probably, than the $36.81 closing price of Twitter on Friday, before Musk tried to get out of the deal. These sorts of renegotiations happen sometimes and usually result in pretty modest price cuts, but it is hard at this point to imagine Musk agreeing to pay, like, $52.69. He will want a big price cut ($35?) and Twitter will want a small one ($52?) and it might be hard to reach agreement.

Anyway, these outcomes are bad — everything is bad — but they are better than the binary outcomes in court, and I suppose it would be good if one of them happened. If Musk wrote Twitter a check that was much bigger than $1 billion, then Twitter’s shareholders would be, not made whole, but at least mollified. And he might be a little chastened, and might stop going around pretending to buy public companies just to cause chaos. And Twitter would remain Twitter, which, you know, could be better, but could also be worse.

Of course there are obstacles here. Elon Musk is rich, weird and stubborn, and might not settle even when it’s in his best interests. Twitter’s directors are in an awkward spot: They are under a ton of scrutiny, they have a good legal case, and they will probably be sued by disgruntled shareholders if they settle for anything less than specific performance at $54.20 per share, even if doing so is in shareholders’ best interests. Nothing about this deal has been especially rational so far, and there is no reason to assume that it will settle rationally now. But it would be nice.