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Comment by shuckles | Hacker News Reader

The number of bots on Twitter isn’t a condition of closing the deal, though?

IIRC, there was a term that stipulated that Twitter’s SEC reports needed to not contain material misrepresentations. So, he could nix the deal if the number of bots was different than previously disclosed.

> So, he could nix the deal if the number of bots was different than previously disclosed

Not just different but materially and verifiably different.

So the onus would be Musk to produce numbers that are significantly higher and just as accurate if not more than Twitter.

As with many financial market things, Matt Levine’s summaries are great on this. Twitter has been reporting these numbers for many, many years now. The public market has accepted them for many, many years. Elon has been complaining about the bots for maybe as long.

So nothing has changed between Musk making the binding offer and today with regards to bots. He has not suddenly been surprised about some discovery. This is not something that materially changes what he thought Twitter was worth. It’s just another game to distract people.

And also that Elon clearly no longer wants to buy Twitter,at least for the price he proposed, so this is just him trying to find a way out.

This is going to end horribly for Twitter and some sort of slapp on the wrist for Elon.

How is that clear? Has he said it?

He's said the deal was off unless he's convinced by Twitter's bot numbers [1], which isn't a condition of the deal, so, yeah basically he's said he doesn't want to buy.

[1] https://twitter.com/elonmusk/status/1526465624326782976

That's not what that Tweet says.

The tweet says he's not moving forward on the deal unless Twitter provides evidence that their monetizable user metric, which is not an estimate of bots, is accurate. Producing that evidence is not a contingency in the deal, so Elon is threatening to fail to perform, i.e. he doesn't want to buy Twitter under the negotiated terms.

He said: "My offer was based on Twitter’s SEC filings being accurate." Which is a valid statement, SEC filings are _required_ to be accurate.

And you've interpreted: "Producing that evidence is not a contingency in the deal". Which doesn't make a whole lot of sense.

He never said he didn't want to buy it under the negotiated terms, he said he wants to be able to _verify_ that what the company says is accurate.

He’s managed to get to almost cartoonish levels of disregard for the rule of law. Skilfully deploying them to his advantage when needed, but ignoring completely when they’re inconvenient. All seemingly in the knowledge that he’s now beyond any enforcement.

He absolutely cannot do that. The Material Adverse Effect standard in Delaware law is crazy hard to hit. Matt Levine has been writing about this for weeks. In fact, if you go looking, he's been writing about this for years†. 2 years ago: "[under the MAE standard, you] can walk away from the deal, unless the bad stuff is due to, essentially, anything anyone thought of in advance."

Not only have people heard of bots and user validation in advance, but Musk waived his rights to diligence after announcing on Twitter that fixing the bot problem was why he was buying Twitter. He might not just lose this case if it got to court; the Delaware courts might make an example out of him for this.

Matt Levine is to "it's not Materially Adverse" as Ken White is to "it's not RICO".

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