This article says Musk agreed to buy Twitter mostly as a joke. I think there's a far better explanation. This wasn't a joke for Musk because after agreeing to buy Twitter he proceeded to sell billions of dollars' worth of TSLA stock, supposedly to finance the purchase. Even for the richest man in the world that's not a joke.
I think a better explanation is that Musk offered to buy Twitter as a cover for selling billions of dollars' worth of TSLA.
Why does he need a cover? Because TSLA is way too overvalued. He has to know that it is overvalued. Tesla's market cap is double of Toyota, VW, Mercedes, BMW, GM, Honda, Ferrari and Volvo all combined! [1]. If you sell stock while knowing your company's stock is way too overvalued, you're fleecing unsophisticated investors. Pretending to buy Twitter provides a convenient cover.
Musk pretended that TSLA valuation is reasonable. Musk even called out Gates for shorting TSLA stock [2]. If he didn't have a cover then Musk would look like a hypocrite for selling TSLA.
In reality, both Musk and Gates sold TSLA, the only difference is that Musk sold stocks he owned, but Gates sold borrowed stocks. But Musk used buying Twitter as a cover, so he gets to pretend to be morally superior. Even though both men sold TSLA, according to Musk, Gates' sales means that he isn't serious about climate change [3].
> Is it fun for him? If he manages to walk away having spent only millions in financing fees, millions in legal fees and say $1 billion in termination fees, was it worth it? What did he get out of this? The guy really seems to like being on Twitter, and he did make himself the main character in Twitter's drama for months on end. That’s nice for him I guess. Also he made the lives of Twitter’s executives and employees pretty miserable; as a fellow Twitter addict I can kind of see the appeal of that? I always assume that “everyone who works at Twitter hates the product and its users,” and I suppose this is a case of the richest and weirdest user getting some revenge on the employees. He also gave himself an excuse to sell a bunch of Tesla stock near the highs. He maybe got an edit button too? Maybe that’s worth a billion dollars to him?
But for that to be the sole reason of the whole circus is conspiracy theory.
> Musk has buying Twitter as a cover
It's a very, very annoying/distracting cover, not to mention an expensive one.
That seems like an enormous amount of risk to take on just to sell stock that he actually owns and avoiding "looking like a hypocrite". It's not just plausible but somewhat likely that he'll be forced into an 11-figure settlement with Twitter to avoid the actual worst case outcome of being forced to take custody of and actually operate Twitter until he can unload it on someone else.
> Because TSLA is way too overvalued. He has to know that it is overvalued.
Indeed he does. He has talked about this publicly in various interviews over the years. [1]
> Musk pretended that TSLA valuation is reasonable. Musk even called out Gates for shorting TSLA stock
Musk definitely really dislikes short sellers, no doubt about that. However that is different from pretending that TSLA valuation is reasonable.
--
[1] A decent example is the 2021 Kara Swisher interview, where he states I have literally gone on record and said that our stock price is too high.https://youtu.be/O1bZg7frOmI?t=2450
Thank you for the explanations. How this is not one of the top comments is beyond me. This comment most logically explains all the drama started several months when Musk offered to buy Twitter. The stories generated several of the highest rated posts and several of the most commented posts at HN, just adding to the drama. Now it seems that it's quite a possibility that the Twitter drama is just a red herring for Musk to sell the much overpriced TSLA stocks.
Too much conspiracy theory. I think simply that Musk do not see the imminent market crash. Now he is going in tribunal to negotiate a lower price. The think will end with Musk owning Twitter in a way or another.
I think this makes a lot of sense. A question I have about it though - why not say it's for something else then? If the goal is to get value out of Tesla and put it elsewhere, it seems like cash for another company he's running seems reasonable enough? Perhaps that's illegal for some reason I'm naive about?
This such an elaborate conspiracy, even if true, he's set himself up legally to all but have to acquire the company after Twitter beats him in court. This seems much less plausible than Elon is an impulsive person who likes attention.
Do we really need to assign a financial motive to Elon Musk?! Musk is in it for his own entertainment. Period. And that greed changes as often as the phases of the moon. It's a good story to his following to come out financially ahead. It's also a good story to the libertarian crowd to drag the issues of bot accounts and free speech into court. And if the deal were to have gone through, I'm sure Musk would have made a great story forming an Alphabet/Berkshire-like holding company across Tesla, SpaceX, and his other amusements. And of course daily amusement of adding a Twitter edit button, an irony mode, etc.
But what will the legacy of all this mess be? It's looking a lot like Howard Hughes, except that Hughes successfully monetized his stage presence. Elon has officially thrown in the towel, and spit in the face of his wider audience in the process.
Elon Musk has probably taken a big haircut on his current stake in Twitter and is also risking being forced to buy Twitter anyway or losing 1 billion plus legal fees. That sounds like an awful lot of work to sell 8.5 billion worth of Tesla shares.
> Musk pretended that TSLA valuation is reasonable. Musk even called out Gates for shorting TSLA stock [2]. If he didn't have a cover then Musk would look like a hypocrite for selling TSLA.
This is outright false and goes directly against his multiple stated instances of saying that the Tesla stock price is overvalued. Don't make things up to suit your biases.
>Tesla's market cap is double of Toyota, VW, Mercedes, BMW, GM, Honda, Ferrari and Volvo all combined!
This phrase gets thrown around a lot with dunning-kreuger confidence so I'd like to add context that it's not unusual for a market disruptor to be worth more than the sum of its legacy competitors - you are on a tech website related to startup incubator you should know this already.
Are you sure that TSLA is overvalued? Right now they are performing pretty well, for their niche.
I mean it will be overvalued if Toyota gets its act together - if the competition can produce reliable electric cars for the mass market. I suspect that this is not quite happening due to some real technical problems. A mass market electric car would need to handle some real problems with battery depreciation/range loss. I am not sure if that is happening, right now.
I found quite a range of opinions on battery depreciation, not quite sure who is right (never owned one):
I think there's an even better explanation, and liquidating $8.5 billion of Tesla stock may just be the icing on the cake:
Elon despises the SEC and he's now has exposed that the "less than 5%" of accounts are bots, that the SEC should have verified and accepted their methods for determining that number - and it should be adequate and reasonable to give a grounded-in-reality output, and it seems like it's a total bullshit statement.
I'd be surprised if Twitter stockholders don't sue the SEC.
So much noise here and ill-informed comments fail to give a broader understanding of what's going on. Elon bought up Twitter shares early in the year for a reason, because he wanted more control over Twitter. He bought up so much Twitter shares that when it was announced via the SEC, Twitter offered a board seat under the clause that he wouldn't acquire too much % control over the company. He obliged, but then left when he realized he couldn't make the changes he desired at the company. Plus, people on the board at the time, specifically Dorsey, was nudging him to buy out the company as a whole. So he did, hastingly. That was an ill-informed decision and obviously a mistake made with respect to doing due-diligence. In hindsight, before the market crash that price may have made sense. But fast forward today with looming recession talk, it's pretty clear he realized it's overvalued (we know this from tweets about twitter deal being repriced). And so he needed an escape hatch, hence the issue with bots and the unverifiable mDAU was a great talking point. In fact, he may as well be right on the issue as Twitter doesn't want to reveal how they calculate it. What he's trying to do right now is pretty clearly force the board to give a better deal. He's not sold any stock and likely won't unless he's actually out for good. But given the amount of effort and thought he's put into it and making it clear that he should pay a lower price depending on the bot issue, I don't think there's much doubt he's not actually leaving Twitter. Whether the courts will force an acquisition at the current price however, is a looming question. My bet is they settle at a lower price.
A fun side effect of all of this: if you believe in the court's ability to force Musk to buy Twitter, you should continue to buy up stock until it reaches the price Musk agreed to pay for it.
If you don't believe he'll be forced to pay, you should sell and/or short until it's at whatever you think the right market value for a stock of Twitter ought to be.
And wherever the price is between those two is a direct function of what experts believe the probability of each outcome is. It's like a massive betting market on a legal case.
Well, minus a discount for however long you think it will take before that actually happens, taking into account such things as inflation, interest rates, and market performance (due to the opportunity costs of holding this stock until then).
"...if you believe in the court's ability to force Musk to buy Twitter, you should continue to buy up stock..."
"If you don't believe he'll be forced to pay..."
Those are two very different statements.
I absolutely believe the court can compel Elon to satisfy the contract he's gotten himself into. I don't necessarily believe the court will do so. Specific performance isn't a popular result in those courts, apparently. That being said,...
"...you should sell and/or short until it's at whatever you think the right market value for a stock of Twitter ought to be."
Yeah, no. If I thought like that, I'd have shorted Tesla long ago. I also know that "the market can remain irrational longer than you can remain solvent."
Yes, this is how it has been the entire time since Musk's offer. You'll see that the stock price was pegged at $54, and then when he started talking shit, the price went to some weighted average of the true FMV and Musk's offer, depending on confidence levels
> that it has knowingly been massively understating the number of bot accounts in order to trick companies into buying Twitter ads and shareholders into buying Twitter stock
Wasn’t Google Ads 80% fake clicks on some studies? It won’t be surprising Twitter Ads is actually worse. There is so zero incentive to clean it up and so many shady reasons to do it.
I am reminded of Neal Stephenson's Cryptonomicon, in which a significant plot point was a hostile buyer using due diligence as a kind of DoS attack on the protagonist's company.
> Twitter has said in its SEC filings that it estimates that fewer than 5% of its monetizable daily active users are “false or spam accounts”
Is this different to total percentage of false or spam accounts? The monetizable daily active users seems like a very specific subpopulation of total twitter accounts.
I believe he was sincere, but found out quickly that a lot of people had strong feelings about his plans for the platform. It's possible he was in danger of losing people he really needs for his other businesses. I don't blame him for bailing out on a lose/lose situation.
The law on this is clear, and the remedies are also clear. Musk playing the contemptuous clown prince aside, the court isn’t going to be ‘intimidated’, and Musk can’t simply evade/ignore judgments/orders. What a weirdly amateurish article.
If the designer of Bloomberg.com is on HN... thank your for making a decent looking news site. Literally every other site I'm bombarded with sensory overload. This site just lets me read the article in sweet serenity.
I love how Matt Levine is alternately hilarious, and then dry as dust. It's like he wants everyone to suffer what lawyers go through on a daily basis, so he lures you in with some light hearted funny, and then before you know it, you're in the middle of reading some long sentence in a contract that's so convoluted you just want to pull your eyes out. Ha, good one Matt!
Elon Musk apparently has bigger issues that should have been preventing him from playing with the idea of buying twitter, and yet, he went for it, following a tweet that simply went out of control...
- Tesla plants challenges worldwide (From China to Berlin via Texas)
- Cybertruck ever postponing release date?
- SolarCity and the dissmissed promises
- Neuralink: Simply read the Wikipedia's entry [1]
- Hyperloop (or is it hyperflop)
- Boring company (more and more video demos) nothing is done...
So, with so much to get in order (and I am avoiding personal matters which don't seemed any cheerful for the man), with so much, why don't we simply get ourselves a new toy, named twitter?
Recently USA has a president that was following his impoolsive, late night tweets, by pushing his staff to form them as a new policy...
The stock closed at $36.81 on Friday, and other social-media stocks are down significantly since April. (Snap Inc. is down about 57% since April 13; even Meta Platforms Inc. — Facebook — is down more than 20%.) Meanwhile Tesla Inc. stock, the main source of Musk’s wealth,
Or maybe that was because the overall stock market was down a lot. Meta being down 20$ is about the same as the S&P 500.
Also it is obviously untrue! Companies advertise on Twitter because it sells products!
lol Twitter ads are notoriously expensive. It's mostly big companies buying them to build awareness, not to move product.
Will any of these people eat crow if the deal closes at a lower price? Probably as much every other time they’ve said Musk was done with Twitter and then escalated towards owning it.
There's been a lot of speculating around here on exactly what it would take for Musk to get out of this deal; here's the TLDR of the analysis from Levine:
> Musk cannot get out of the deal just because one of Twitter’s representations is false. He still has to close the deal unless the representation is false and it would have a “material adverse effect” on Twitter. This is a famously under-defined term but it generally needs to be a pretty catastrophic effect. If the bots are 6% of mDAUs, whatever. If the bots are 75% of mDAUs and Twitter has been knowingly misleading its advertisers, and Musk can expose that scam and advertisers flee and Twitter faces legal trouble for its fraud, then, sure, material adverse effect.
As to whether there is any evidence of a false representation (not even addressing material adverse effect due to that false representation):
> The only basis for the claim is that “preliminary analysis by Mr. Musk’s advisors of the information provided by Twitter to date causes Mr. Musk to strongly believe that the proportion of false and spam accounts included in the reported mDAU count is wildly higher than 5%.” Notice that Ringler does not say that the analysis shows that the bots are “wildly higher than 5%” of mDAUs: That would be a factual claim that, I suspect, Musk’s advisers know is false. They make only the subjective claim that Musk “strongly believes” it.
And then, perhaps the better grounds for Musk to prevail:
> The second pretext is: Twitter is not giving Musk enough information about the bot problem. This is a better pretext, for technical legal reasons, which we have also discussed previously. In the closing conditions to the merger, representations are qualified by “material adverse effect”; just finding that a representation is false would not give Musk the right to terminate the deal unless it caused an MAE. But covenants are qualified by “all material respects”: In the merger agreement, Twitter promised to do certain things between signing and closing, and it has to do those things, whether or not there would be a material adverse effect from not doing them. So if Musk can prove that Twitter hasn’t complied with its obligations, he can get out of the deal.
Do public statements before he signed the deal that imply that he was aware that Twitter has a bot problem and already suspected that the number we much higher than reported by Twitter have any effect?
Musk wasn't pretending to buy Twitter, the article is using a sort of simpleton interpretation of Musk's behavior. That's the interpretation someone would take if they dislike Musk and get overly emotional about his behavior.
Musk is x y z. Oh my god, did you see the tweet he sent out!?! I just hate Musk, blah blah blah. He's such a terrible human. This one time he called a person a really bad name. - That's the type of person that reads Musk's Twitter acquisition attempt the way the article is.
I don't care much about Musk one way or another, but this is not a complicated context and the author is plain wrong.
What happened is the market for hyper overvalued stocks has crashed. He was faced with the scenario of paying double for Twitter vs what it was really worth. Remove the Musk prop and the stock collapses. Next up, the stock is heading south of $30 / share. It might be worth taking over for $20-$25 / share at most.
Musk didn't want to pay $20 billion more for Twitter than he had to, even for him that was a bridge too far. Particularly while his own paper bubble fortune is just as at risk of implosion as the rest.
It was really, really, really dumb timing. That was Musk's actual issue.
[+] [-] metadat|3 years ago|reply
[+] [-] petilon|3 years ago|reply
I think a better explanation is that Musk offered to buy Twitter as a cover for selling billions of dollars' worth of TSLA.
Look at this story: https://www.wsj.com/articles/elon-musk-sells-billions-of-dol... The headline is: "Elon Musk Sells $8.5 Billion of Tesla Shares After Deal to Buy Twitter"
Why does he need a cover? Because TSLA is way too overvalued. He has to know that it is overvalued. Tesla's market cap is double of Toyota, VW, Mercedes, BMW, GM, Honda, Ferrari and Volvo all combined! [1]. If you sell stock while knowing your company's stock is way too overvalued, you're fleecing unsophisticated investors. Pretending to buy Twitter provides a convenient cover.
Musk pretended that TSLA valuation is reasonable. Musk even called out Gates for shorting TSLA stock [2]. If he didn't have a cover then Musk would look like a hypocrite for selling TSLA.
In reality, both Musk and Gates sold TSLA, the only difference is that Musk sold stocks he owned, but Gates sold borrowed stocks. But Musk used buying Twitter as a cover, so he gets to pretend to be morally superior. Even though both men sold TSLA, according to Musk, Gates' sales means that he isn't serious about climate change [3].
[1] https://companiesmarketcap.com/automakers/largest-automakers...
[2] https://nypost.com/2022/05/31/elon-musk-calls-out-bill-gates...
[3] https://www.businessinsider.com/bill-gates-shorting-tesla-wo...
[+] [-] bambax|3 years ago|reply
> Is it fun for him? If he manages to walk away having spent only millions in financing fees, millions in legal fees and say $1 billion in termination fees, was it worth it? What did he get out of this? The guy really seems to like being on Twitter, and he did make himself the main character in Twitter's drama for months on end. That’s nice for him I guess. Also he made the lives of Twitter’s executives and employees pretty miserable; as a fellow Twitter addict I can kind of see the appeal of that? I always assume that “everyone who works at Twitter hates the product and its users,” and I suppose this is a case of the richest and weirdest user getting some revenge on the employees. He also gave himself an excuse to sell a bunch of Tesla stock near the highs. He maybe got an edit button too? Maybe that’s worth a billion dollars to him?
But for that to be the sole reason of the whole circus is conspiracy theory.
> Musk has buying Twitter as a cover
It's a very, very annoying/distracting cover, not to mention an expensive one.
[+] [-] tptacek|3 years ago|reply
[+] [-] Strom|3 years ago|reply
Indeed he does. He has talked about this publicly in various interviews over the years. [1]
> Musk pretended that TSLA valuation is reasonable. Musk even called out Gates for shorting TSLA stock
Musk definitely really dislikes short sellers, no doubt about that. However that is different from pretending that TSLA valuation is reasonable.
--
[1] A decent example is the 2021 Kara Swisher interview, where he states I have literally gone on record and said that our stock price is too high. https://youtu.be/O1bZg7frOmI?t=2450
[+] [-] teleforce|3 years ago|reply
[+] [-] Rapzid|3 years ago|reply
Maybe he sold more shares than he needed while he was at it; like you'd withdraw a bit more cash than you really need at the ATM.
Then the market down turn sobered him up.
Simple.
[+] [-] fbn79|3 years ago|reply
[+] [-] qudat|3 years ago|reply
Why waive due diligence then? What’s that saying don’t assume malice when it can be explained by ignorance.
[+] [-] davidguetta|3 years ago|reply
Excuse me what ? He alwways said it was overvalued. I dont think anyone would have bat an eye if he had sold for no reason
[+] [-] JaceLightning|3 years ago|reply
[+] [-] treis|3 years ago|reply
[+] [-] akelly|3 years ago|reply
[+] [-] Tepix|3 years ago|reply
He did? I thought he said more than once that he believes the stock price to be too high.
[+] [-] pseudoramble|3 years ago|reply
[+] [-] datatrashfire|3 years ago|reply
[+] [-] grecy|3 years ago|reply
[+] [-] choppaface|3 years ago|reply
But what will the legacy of all this mess be? It's looking a lot like Howard Hughes, except that Hughes successfully monetized his stage presence. Elon has officially thrown in the towel, and spit in the face of his wider audience in the process.
[+] [-] rmk|3 years ago|reply
[+] [-] mlindner|3 years ago|reply
This is outright false and goes directly against his multiple stated instances of saying that the Tesla stock price is overvalued. Don't make things up to suit your biases.
[+] [-] neither_color|3 years ago|reply
This phrase gets thrown around a lot with dunning-kreuger confidence so I'd like to add context that it's not unusual for a market disruptor to be worth more than the sum of its legacy competitors - you are on a tech website related to startup incubator you should know this already.
[+] [-] MichaelMoser123|3 years ago|reply
I mean it will be overvalued if Toyota gets its act together - if the competition can produce reliable electric cars for the mass market. I suspect that this is not quite happening due to some real technical problems. A mass market electric car would need to handle some real problems with battery depreciation/range loss. I am not sure if that is happening, right now.
I found quite a range of opinions on battery depreciation, not quite sure who is right (never owned one):
https://www.carwow.co.uk/blog/do-electric-cars-depreciate#gr...
https://www.cars.com/articles/your-guide-to-ev-batteries-pre...
https://www.motorbiscuit.com/how-long-will-an-ev-battery-las...
[+] [-] loceng|3 years ago|reply
Elon despises the SEC and he's now has exposed that the "less than 5%" of accounts are bots, that the SEC should have verified and accepted their methods for determining that number - and it should be adequate and reasonable to give a grounded-in-reality output, and it seems like it's a total bullshit statement.
I'd be surprised if Twitter stockholders don't sue the SEC.
[+] [-] extheat|3 years ago|reply
[+] [-] mabbo|3 years ago|reply
If you don't believe he'll be forced to pay, you should sell and/or short until it's at whatever you think the right market value for a stock of Twitter ought to be.
And wherever the price is between those two is a direct function of what experts believe the probability of each outcome is. It's like a massive betting market on a legal case.
[+] [-] saurik|3 years ago|reply
[+] [-] mcguire|3 years ago|reply
"If you don't believe he'll be forced to pay..."
Those are two very different statements.
I absolutely believe the court can compel Elon to satisfy the contract he's gotten himself into. I don't necessarily believe the court will do so. Specific performance isn't a popular result in those courts, apparently. That being said,...
"...you should sell and/or short until it's at whatever you think the right market value for a stock of Twitter ought to be."
Yeah, no. If I thought like that, I'd have shorted Tesla long ago. I also know that "the market can remain irrational longer than you can remain solvent."
[+] [-] sangnoir|3 years ago|reply
I wouldn't call the hordes on Robinhood "experts": they are the marks that Elon plays like a fiddle on Twitter.
[+] [-] vehementi|3 years ago|reply
[+] [-] hartator|3 years ago|reply
Wasn’t Google Ads 80% fake clicks on some studies? It won’t be surprising Twitter Ads is actually worse. There is so zero incentive to clean it up and so many shady reasons to do it.
[+] [-] AceJohnny2|3 years ago|reply
[+] [-] dang|3 years ago|reply
Notice of termination of Twitter merger agreement - https://news.ycombinator.com/item?id=32027341 - July 2022 (1361 comments)
[+] [-] victor106|3 years ago|reply
The rich play by different rules and the law lets them.
If the rest of us did the same we would have to pay ridiculous fines and/or spent time behind bars.
[+] [-] jmpeax|3 years ago|reply
Is this different to total percentage of false or spam accounts? The monetizable daily active users seems like a very specific subpopulation of total twitter accounts.
[+] [-] nabla9|3 years ago|reply
His reputation as a sufficiently reliable counterparty is gone.
[+] [-] wolverine876|3 years ago|reply
[+] [-] anonu|3 years ago|reply
[+] [-] labrador|3 years ago|reply
[+] [-] stakkur|3 years ago|reply
[+] [-] tiberriver256|3 years ago|reply
[+] [-] pyronite|3 years ago|reply
[+] [-] mathgenius|3 years ago|reply
[+] [-] tzury|3 years ago|reply
Recently USA has a president that was following his impoolsive, late night tweets, by pushing his staff to form them as a new policy...
[1] https://en.wikipedia.org/wiki/Neuralink
[+] [-] paulpauper|3 years ago|reply
Or maybe that was because the overall stock market was down a lot. Meta being down 20$ is about the same as the S&P 500.
Also it is obviously untrue! Companies advertise on Twitter because it sells products!
lol Twitter ads are notoriously expensive. It's mostly big companies buying them to build awareness, not to move product.
[+] [-] gfodor|3 years ago|reply
[+] [-] SV_BubbleTime|3 years ago|reply
You don’t know Musk, or the backend, or anything at all besides what the media tells you and that isn’t 1/10th the whole story.
I get why people wanna talk about it, just not be absolute “well I know this for a fact” smugness that most of the comments here have.
The reality is NONE of you actually KNOW anything and won’t until history determines the victor and you learn some more of that side.
[+] [-] theptip|3 years ago|reply
> Musk cannot get out of the deal just because one of Twitter’s representations is false. He still has to close the deal unless the representation is false and it would have a “material adverse effect” on Twitter. This is a famously under-defined term but it generally needs to be a pretty catastrophic effect. If the bots are 6% of mDAUs, whatever. If the bots are 75% of mDAUs and Twitter has been knowingly misleading its advertisers, and Musk can expose that scam and advertisers flee and Twitter faces legal trouble for its fraud, then, sure, material adverse effect.
As to whether there is any evidence of a false representation (not even addressing material adverse effect due to that false representation):
> The only basis for the claim is that “preliminary analysis by Mr. Musk’s advisors of the information provided by Twitter to date causes Mr. Musk to strongly believe that the proportion of false and spam accounts included in the reported mDAU count is wildly higher than 5%.” Notice that Ringler does not say that the analysis shows that the bots are “wildly higher than 5%” of mDAUs: That would be a factual claim that, I suspect, Musk’s advisers know is false. They make only the subjective claim that Musk “strongly believes” it.
And then, perhaps the better grounds for Musk to prevail:
> The second pretext is: Twitter is not giving Musk enough information about the bot problem. This is a better pretext, for technical legal reasons, which we have also discussed previously. In the closing conditions to the merger, representations are qualified by “material adverse effect”; just finding that a representation is false would not give Musk the right to terminate the deal unless it caused an MAE. But covenants are qualified by “all material respects”: In the merger agreement, Twitter promised to do certain things between signing and closing, and it has to do those things, whether or not there would be a material adverse effect from not doing them. So if Musk can prove that Twitter hasn’t complied with its obligations, he can get out of the deal.
[+] [-] russdill|3 years ago|reply
[+] [-] Turing_Machine|3 years ago|reply
It seems like the purchase price should be of the order of 6% less in that case.
6% of $44 billion is not a trivial amount of money.
[+] [-] adventured|3 years ago|reply
Musk is x y z. Oh my god, did you see the tweet he sent out!?! I just hate Musk, blah blah blah. He's such a terrible human. This one time he called a person a really bad name. - That's the type of person that reads Musk's Twitter acquisition attempt the way the article is.
I don't care much about Musk one way or another, but this is not a complicated context and the author is plain wrong.
What happened is the market for hyper overvalued stocks has crashed. He was faced with the scenario of paying double for Twitter vs what it was really worth. Remove the Musk prop and the stock collapses. Next up, the stock is heading south of $30 / share. It might be worth taking over for $20-$25 / share at most.
Musk didn't want to pay $20 billion more for Twitter than he had to, even for him that was a bridge too far. Particularly while his own paper bubble fortune is just as at risk of implosion as the rest.
It was really, really, really dumb timing. That was Musk's actual issue.