Elon Musk Places Twitter Acquisition on Hold as Doubts Emerge Over its Userbase Data

[dragontamer5788]

Like i said, the main good reason is the TSLA stock crash, but he need to figure out a way to get out of the deal without whitdrawing himself as the penality for cancelling the deal are quite high. I think it's 1.5 billions from memory but it's around that.

$1 Billion penalty.

Except it turns out he can't just take the $1 Billion penalty. Only in certain situations is Musk allowed to take the $1 Billion penalty and leave (!!!). Meaning Twitter's Board can sue him to finish the deal / buyout at $54.20.

Matt Levine, a columnist at Bloomberg puts it like this:

Another possibility is that Musk really is laying the groundwork to walk away from his deal with Twitter. There is a popular view that Musk has the option to abandon the deal if he pays a $1 billion breakup fee. As we have discussed around here, that just isn’t true: The contract gives Twitter the right to force him to close, and put up the $27.5 billion of equity[1] that he has committed to the deal, as long as his debt financing is available. (Section 9.9(b).) The contract also gives Twitter the right to go to court to force him to try to get that debt financing. (Sections 6.10(a) and 9.9(a).) There is, so far, no reason to think the debt financing won’t be available — his banks are large and solvent and have signed reasonably unconditional commitment letters[2] — and so no reason to think he can get out of the deal.

EDIT: Copy/pasted wrong section at first

TL;DR: Musk can't just leave this deal, even with the $1 Billion fee. He's in too deep.

 

[R0H1T]

He's in too deep.

Probably should stop tweeting then, oh wait

 

[Mac the Geek]

Musk was able to quietly buy 9% of Twitter's shares. Then he announced a bid to buy a majority stake, and the price went up. Then, after a couple weeks, he decided to "express doubts" about the offer, which caused the price to drop.

Does Musk have the ability to "quietly sell" Twitter stock? Has he ever engaged in pump-and-dump actions with other properties? I realize that Musk doesn't have to report his holdings for another couple months, but is it possible he suddenly owns less than people think he does?

 

[dragontamer5788]

Musk was able to quietly buy 9% of Twitter's shares. Then he announced a bid to buy a majority stake, and the price went up. Then, after a couple weeks, he decided to "express doubts" about the offer, which caused the price to drop.

Does Musk have the ability to "quietly sell" Twitter stock? Has he ever engaged in pump-and-dump actions with other properties? I realize that Musk doesn't have to report his holdings for another couple months, but is it possible he suddenly owns less than people think he does?

Those actions were all illegal. Its just that the SEC doesn't feel like enforcing the law right now. So Elon Musk is running around breaking the law repeatedly, since no one is actually punishing him.

The 9% of Twitter share buy was on a Schedule 13G form, which has restrictions. In particular, Musk had to be a passive investor / not really affecting Twitter. IE:

“not acquired the securities with any purpose, or with the effect, of changing or influencing the control of the issuer.”

If Elon Musk were buying "normally" (including using his newfound shares to lean on the board), he would be limited to buy 5% at a time under Schedule 13D. This gives time for other shareholders to know who the major players are.

In any case, Elon Musk constantly breaks the law like this and no one ever seems to care. Actually, it riles up his fans and makes them cheer for him even harder in most cases.

 

[trsttte]

$1 Billion penalty.

Except it turns out he can't just take the $1 Billion penalty. Only in certain situations is Musk allowed to take the $1 Billion penalty and leave (!!!). Meaning Twitter's Board can sue him to finish the deal / buyout at $54.20.

Matt Levine, a columnist at Bloomberg puts it like this:



EDIT: Copy/pasted wrong section at first

TL;DR: Musk can't just leave this deal, even with the $1 Billion fee. He's in too deep.

Oh shit he's screwed then, I'd assume he would always be sued because if the deal fails twitter will tank immediately, it was one of the fears before the board accepted the buyout if he started sellings his stake the company would be screwed, now it's even worse since many people opened their eyes the to how trash of an investment twitter is.

He might find a way out with the bot misreports and stuff like that, otherwise damn!

Those actions were all illegal. Its just that the SEC doesn't feel like enforcing the law right now. So Elon Musk is running around breaking the law repeatedly, since no one is actually punishing him.

I think they were looking into it, it's a pretty clear violation, but yeah, the irrational fans will not get it and it's the kind of shit the SEC is always letting by so they migth seem biased by going after him (because of course 2 wrongs make a right, right?)

 

[dragontamer5788]

Oh shit he's screwed then, I'd assume he would always be sued because if the deal fails twitter will tank immediately, it was one of the fears before the board accepted the buyout if he started sellings his stake the company would be screwed, now it's even worse since many people opened their eyes the to how trash of an investment twitter is.

He might find a way out with the bot misreports and stuff like that, otherwise damn!

I don't think Twitter's board will force him to buy Twitter.

I think they'll sue him to buy Twitter, push him into a plea-bargain, and then maybe get $2 or $5 Billion in cash out of him for wasting their time / harming Twitter as a company, and carry on with their life.

There's a lot of $$ between the $1 Billion escape clause (which probably won't be used), and the $44 Billion "force him to buy us" option (which... though legally binding, probably won't be used IMO anyway). The Twitter Board is likely meeting right now to discuss exactly what they want / their strategy for this whole event...

 

[Steevo]

I don't think Twitter's board will force him to buy Twitter.

I think they'll sue him to buy Twitter, push him into a plea-bargain, and then maybe get $2 or $5 Billion in cash out of him for wasting their time / harming Twitter as a company, and carry on with their life.

There's a lot of $$ between the $1 Billion escape clause (which probably won't be used), and the $44 Billion "force him to buy us" option (which... though legally binding, probably won't be used IMO anyway). The Twitter Board is likely meeting right now to discuss exactly what they want / their strategy for this whole event...

Twitter is already in breech of contract by falsifying documents to all shareholders about user data. This is merely the “oh shit we got caught” reaction to it from Twotter and those that have opposed Musk buying it since their echo chamber will be destroyed by free speech.

 

[DeathtoGnomes]

Of there is disparity in the user data that Twitter has been hiding and lying to its shareholders, customer and others about the whole of Twitter could be sued into oblivion and also they would have to pay Musk the earnest money for cooking the books.

If the Twitter deal doesn’t go down I expect there to either not be a Twitter when it’s done, or it to be a shell with a terrible reputation (not that it had a great one to begin with) where only the truly fringe stay active.

Twitter normally cant be sued, according to section 230, that does not cover suits by shareholders/investors, etc. which are allowed.

 

[dragontamer5788]

Twitter is already in breech of contract by falsifying documents to all shareholders about user data. This is merely the “oh shit we got caught” reaction to it from Twotter and those that have opposed Musk buying it since their echo chamber will be destroyed by free speech.

The Free Speech Elon Musk cares so much about that he works with CCCP in China and asks Saudi Prince Alwaleed for money to help him buy Twitter.

Yes. That Saudi Arabia. Killers of Jamal Khashoggi.

The "Free Speech" argument is just smoke-and-mirrors. All Elon Musk cares about is his own money. That money is threatened by... well... the -20% the stock market has taken, meaning his original bid for $54.20 is now mispriced. Well... should have thought of that before signing the contract. That's all this is about, Elon Musk always chases after the money.

----

EDIT: Anyway, do you really think Elon Musk, fervent user of Twitter, didn't know about the bots on Twitter? That boggles the mind, its pretty obvious that so many accounts on there are bots to me. But lets pretend for a second that Elon Musk didn't know this and truly was a complete dumbass about how the platform works.

Please quote the location in the contract (https://d18rn0p25nwr6d.cloudfront.net/CIK-0001418091/e61e4376-e2c5-4d54-8782-d63fc5e096e9.pdf) that says Elon Musk can pull out because the %bots was higher than he expected.

The contract states: “Material Adverse Effect". I'm being told that "Material Adverse Effect" is about 40% of a company's revenue. +/- 5% fake bot accounts is therefore, not a "Material Adverse Effect". So Elon Musk's ramblings here (ironically, on the Twitter platform) are completely bunk.

As this contract was for the state of Delaware, Delaware's history is important. They almost never find "material adverse effects": https://www.jonesday.com/en/insights/2018/10/delaware-chancery-court-finally-finds-an-mae

The case in this question: https://courts.delaware.gov/Opinions/Download.aspx?id=279250

Page 132:

In their influential treatise, Lou R. Kling and Eileen T. Nugent observe that most courts which have considered decreases in profits in the 40% or higher range found a material adverse effect to have occurred

So... "Material Adverse Effects" are things that cause an immediate change to the profits of the company on a scale of ~40% or higher.

I don't think Elon Musk, even with the world's best lawyers, is convincing a Delaware jury that this 5% bots statistic published by (random-newspaper) is a MAE of that caliber.

 

[Steevo]

The Free Speech Elon Musk cares so much about that he works with CCCP in China and asks Saudi Prince Alwaleed for money to help him buy Twitter.

Yes. That Saudi Arabia. Killers of Jamal Khashoggi.

The "Free Speech" argument is just smoke-and-mirrors. All Elon Musk cares about is his own money. That money is threatened by... well... the -20% the stock market has taken, meaning his original bid for $54.20 is now mispriced. Well... should have thought of that before signing the contract. That's all this is about, Elon Musk always chases after the money.

----

EDIT: Anyway, do you really think Elon Musk, fervent user of Twitter, didn't know about the bots on Twitter? That boggles the mind, its pretty obvious that so many accounts on there are bots to me. But lets pretend for a second that Elon Musk didn't know this and truly was a complete dumbass about how the platform works.

Please quote the location in the contract (https://d18rn0p25nwr6d.cloudfront.net/CIK-0001418091/e61e4376-e2c5-4d54-8782-d63fc5e096e9.pdf) that says Elon Musk can pull out because the %bots was higher than he expected.

The contract states: “Material Adverse Effect". I'm being told that "Material Adverse Effect" is about 40% of a company's revenue. +/- 5% fake bot accounts is therefore, not a "Material Adverse Effect". So Elon Musk's ramblings here (ironically, on the Twitter platform) are completely bunk.

As this contract was for the state of Delaware, Delaware's history is important. They almost never find "material adverse effects": https://www.jonesday.com/en/insights/2018/10/delaware-chancery-court-finally-finds-an-mae

The case in this question: https://courts.delaware.gov/Opinions/Download.aspx?id=279250

Page 132:



So... "Material Adverse Effects" are things that cause an immediate change to the profits of the company on a scale of ~40% or higher.

I don't think Elon Musk, even with the world's best lawyers, is convincing a Delaware jury that this 5% bots statistic published by (random-newspaper) is a MAE of that caliber.

Ummm

4.4, 4.5, 4.6

They had undisclosed liabilities in fraudulent user numbers and the possible repercussions from their advertisement partners.

Kind of a big thing, it would be like buying a car company that had knowledge of multiple issues with the current product and failed to disclose them.

No Undisclosed Liabilities Representations What’s Market?

www.goulstonstorrs.com

It’s common in the home market, lemon laws exist for the same reason.

Most of Twitter was owned by the Middle East where the women have fewer rights and respect than a good horse or camel, where gays are thrown off roofs. So OK as long as it bans Trump? I’m not sure I get your stance and why I should care where he gets the money and if he is willing to grant more speech.

 

[dragontamer5788]

They had undisclosed liabilities in fraudulent user numbers and the possible repercussions from their advertisement partners.

In the nicest way possible... I can only presume that you don't know what the word "liability" means.

EDIT: Probably unfair of me to just leave it off like this. But an "undisclosed liability" basically means that they're lying on their balance sheet. "Undisclosed liability" would be fraud, full stop, on their 10k or 10q forms. +/-5% twitter users being bots or whatever isn't a "liability", let alone an "undisclosed liability".

A "balance sheet" is the list of assets (aka, +money), and liabilities (aka: -money, what they literally owe to others), that is required to be filed 4-times a year (10-Q statements), plus 1x a year for a yearly review (aka: the 10K).

These words used have specific meanings. I'm no lawyer, but I do read balance sheets / follow investing news when I'm trying to figure out where to put my money to invest. So I'm sure I could be messing up some legal details here. But... you're absolutely using the word "liability" incorrectly in that sentence.

 

[Steevo]

In the nicest way possible... I can only presume that you don't know what the word "liability" means.

Twitter is Enron, No judge in their right mind is going to force Musk to pay for a misrepresented product or service.
How do you feel Twitter has been honest about their users and service given the revelations about the follower counts, shadow bans, and number of boys they have either created or allowed to exist in a effort to inflate their value?

This has as many implications for them being sued by their shareholders which in itself creates a liability they were aware could happen as it does for the sale directly.

 

[dragontamer5788]

How do you feel Twitter has been honest about their users and service given the revelations about the follower counts, shadow bans, and number of boys they have either created or allowed to exist in a effort to inflate their value?

Those aren't "liabilities", nor are they "material adverse effects". There's not much else to say about your discussion point, unfortunately.

 

[eidairaman1]

Hi,
Yeah bots 5% doing 66% of twitters activity

Like buying followers

Same can be said of FB as well, so many fake accounts on there and the mods turn a blind eye to them.

 

[Bomby569]

he just gets rich of this little schemes, this was nothing but another pump and dump of his

 

[mechtech]

ummmmmm

lol

 

[Punkenjoy]

For anyone that use frequently, The fact that the "Undisclosed" number of bot on twitter is ONLY 5% sound wrong. I would have bet something more like 20-30%

Stop defending Musk, he made an impulsive move to look cool and now he is trying to get out of it. Twitter was not profitable before and that is not this 5% that is going to change anything.

And if he thought about doing money with twitter, well, it's not that 5% that would have changed a motivated investor. They would have required way more than that to turn profits with Twitter on a consistent basis.

It's really more that few weeks ago, it was 1/6 of his fortune and now it's closer to 1/3.

 

[Steevo]

My post was deleted for being political.

I wish more people were OK with their ideas and thoughts being discussed and challenged with opposing ideas and thoughts so the masses could see we aren’t very different, we all want the same basic needs met.

 

[OC-Ghost]

Was wondering if he actually was gonna overpay for twitter

 

[the54thvoid]

My post was deleted for being political.

I wish more people were OK with their ideas and thoughts being discussed and challenged with opposing ideas and thoughts so the masses could see we aren’t very different, we all want the same basic needs met.

Yes, it was. TPU has a no politics rule. Not so much because it's a taboo subject, or that folk shouldn't be allowed to talk but for the reasons it isn't conducive to a meaningful community in a tech forum. Same goes for religion. We respectfully ask that members stay on topic but also that they not post off-topic political remarks. You have posted these things before, and you know it's against forum guidelines. I've not given points but if you want to continue to post in this forum, please stick to the rules.

Thank you.

 

[ShiBDiB]

Yeah, for $44 billion, I'd build bigger datacenters/CDNs than what Twitter owns for 1/4th the money, spend no less than $10 billion on global marketing, and start my own platform.

Him backing out is a great way to kill twitter. "Even Elon won't buy it because of XYZ?? His replacement app must be the way to go"

 

[Dr. Dro]

Yes, it was. TPU has a no politics rule. Not so much because it's a taboo subject, or that folk shouldn't be allowed to talk but for the reasons it isn't conducive to a meaningful community in a tech forum. Same goes for religion. We respectfully ask that members stay on topic but also that they not post off-topic political remarks. You have posted these things before, and you know it's against forum guidelines. I've not given points but if you want to continue to post in this forum, please stick to the rules.

Thank you.

I see mine went alongside Steevo's post (I presume because I replied to his removed post), so sincere apologies if I crossed a line.

Thanks for keeping the place clean, mate.

Him backing out is a great way to kill twitter. "Even Elon won't buy it because of XYZ?? His replacement app must be the way to go"

My earlier post in this thread approached how I believe Twitter is an important asset for Musk, because it's an essential tool for his identity and how his reach is absolutely massive there. Over a million interactions because he said he was drinking chocolate milk

 

[Why_Me]

https://twitter.com/i/web/status/1525080945274998785

Moderator edit: Although this post is an image only, it is relevant to the thread - just in case anybody thinks it's reportable. It's not.

 

[dragontamer5788]

I'm guessing those later tweets are from his lawyers telling Musk that he has to go through with the deal.

 

[Steevo]

Yes, it was. TPU has a no politics rule. Not so much because it's a taboo subject, or that folk shouldn't be allowed to talk but for the reasons it isn't conducive to a meaningful community in a tech forum. Same goes for religion. We respectfully ask that members stay on topic but also that they not post off-topic political remarks. You have posted these things before, and you know it's against forum guidelines. I've not given points but if you want to continue to post in this forum, please stick to the rules.

Thank you.

I respect the rules and those who enforce them for the good of the forum.

We all need to remember we are here to help each other and the community comes first. My bad for being too political.