Notice of termination of Twitter merger agreement
sec.gov
sec.gov
Musk is saying, you haven't demonstrated your numbers are accurate. But having signed the merger agreement and waived due diligence, I think he needs to demonstrate that they are _not_ accurate. Complaining Twitter rate-limited his API access (which would be very foolish on their part) or that their bot measurement standards are "arbitrary" doesn't seem to get there.
The letter complains that Musk asked for data allowing him to "independently verify Twitter's representations regarding the number of mDAU" -- but where does the agreement provide for that verification as a condition of the deal? Maybe Twitter didn't provide sufficient information for Musk to "independently verify" that number -- that means nothing without showing Twitter had a duty to provide that information, or that Musk had a right to his own verification. (Any lawyer agreeing to the other side's verification of such a thing probably isn't a very good lawyer.)
The last paragraph, complaining about firings and hiring freezes and departures, seems positively desperate. Who seriously cares about this stuff?
"I relied on your numbers but now they seem soft" is different than "I relied on your numbers but now they are clearly wrong".
I have enormous respect for his engineering and business skills, he's accomplished some remarkable things. But he doesn't seem so great as a dealmaker. Perhaps he's badly advised, but hey, he chose his advisors.
I would think Twitter will sue for specific performance, and they probably have a case. And Musk is liable for their full market cap, and any trial would depend on a legal team that has a hard time writing a clear letter. I think Musk is in trouble here.
So if you say "I went into this deal thinking twitter had no bots and OMFGBBQ there are bots" then twitter are going to say "look at our numerous filings on bots and why not actually go on twitter at all you can see there are bots" and therefore no material breach. He has to show somehow that the failure to provide him with complete and accurate information somehow makes the deal materially worse than he could reasonably have thought going in. And that's pretty hard to prove. I believe Delaware has been very reluctant to find material breach in these sorts of circumstances. (eg even if he was to somehow prove that the bot problem was 100x worse than twitter's public statements I'm not sure that would be sufficient to prove an actual material breach given the difference in ad revenue between "lots of bots" and "hella bots all over the place" is probably not material and he knew the revenue number going in).
My expectation is he wants to make it painful enough for them in court and on social media to drop the breakup fee but they have seen for ages that he was likely to attempt this and would be sued to hell and back by other shareholders if they drop the fee and therefore will strap themselves in for a fight.
[1] I'm definitely not a lawyer but I have been involved in a few M&A situations and have been advised on this kind of thing by pretty good lawyers a couple of times.
It has nothing to do with accuracy. Twitter is supposedly not providing the data: 'While Section 6.4 of the Merger Agreement requires Twitter to provide Mr. Musk and his advisors all data and information that Mr. Musk requests “for any reasonable business purpose related to the consummation of the transaction,” Twitter has not complied with its contractual obligations.'
> The letter complains that Musk asked for data allowing him to "independently verify Twitter's representations regarding the number of mDAU" -- but where does the agreement provide for that verification as a condition of the deal?
Section 6.11, the part of the deal where Twitter needs to provide necessary information to secure debt: 'and under Section 6.11 of the Merger Agreement, to information “reasonably requested” in connection with his efforts to secure the debt financing necessary to consummate the transaction.'
I have little doubt anyone lending that kind of money would require the buyer to independently verify the mDAU.
https://mobile.twitter.com/btaylor/status/154552608708969676...
> "The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery."
I have recently built a Twitter application with the new V2 API. They do have undocumented API rate limits[1] while the developer documentation says something else[2].
And if you see the discussions at Twitter developer forum, It takes a while for the Twitter representative to find that the issue is because of the undocumented rate limit because it's somewhere deeply integrated into their system(But still wouldn't update the official docs). Besides the Twitter rate limit covers every Twitter application used by the user incl. their official Twitter clients.
So I wouldn't be surprised if they gave Musk a privileged API token but forgot to whitelist it against their hidden, obscure rate limits; Of course this could have been noticed early on Musk's side and it's possible that they chose to attribute it to malice.
[1] https://twittercommunity.com/t/undocumented-twitter-list-rat...
[2] https://developer.twitter.com/en/docs/twitter-api/rate-limit...
His whole M.O. is degrading the power of the SEC and DoJ by pointing out they have very little enforcement power. This is just another example in his long journey of “what are they going to do if I just don’t follow the rules?”
Weird way for the richest man in history to live his life, but that’s probably just sour grapes on my part.
This one comes across as particularly specious.
So Musk is complaining that Twitter has been failing its obligation to “conduct its business in the ordinary course” by firing some people and slowing hiring.
But there's a global slowdown going on! If Twitter hadn't taken these actions, he would be complaining about the opposite: that by not cutting costs, Twitter would be failing to conduct its business in the ordinary course in the current circumstances.
There's a reason why US courts have a very high bar for M&A buyers' cold feet. They don't want to be arbitrating this kind of ridiculous arguments.
He has never demonstrated engineering skills. He has always been a business manager. But with all of the business comedy he has performed this year, I am beginning to doubt his business skills too. Perhaps it's the VPs under him who managed the business well, while Elon remained the PR front person and primary investor. Much like SpaceX.
(Interesting some of the followers were "real" in that these were people who installed a program that ostensibly would tell them who recently followed or unfollowed them, but the program would also add followers they didn't know about. I saw many comments like "I opened twitter and for some reason I'm following 100 more people! WTF?") ... but about half of the paid followers seemed like bots.
He's a smart idiot to put it kindly and a very lucky one at that despite all of his sincere and actual efforts.
I don’t
I ended up suing them, won on all counts, and the deal had to go through.
Unfortunately, this company simply refused to do that even after the judge ruled against them, and I had to renegotiate the terms set by the judge.
That was one hell of a ride.
Point being, if Musk really doesn’t want it, even if Twitter wins a lawsuit, Musk will probably find another way to postpone or renegotiate or whatever. In the meantime, Twitter is not in a good shape, and this whole thing is probably hurting them so much more than that they could possibly benefit from.
1. Buy more time until stock market (i.e. Tesla shares) recover 2. Renegotiate the price
Either one will probably mean he goes through with the deal. If he is under litigation for a year so be it, once the stock market recovers he's sacrificing a lot less of tesla to buy it.
It's a big IF though. If the US recession gets really bad and the Fed stops interest rate hikes, the market could recover very quickly. But equally if Powell wants to go the Volcker route, Elon is fucked probably, the market won't recover for years.
And in the meantime Elon's reputation I think is taking a massive hit. And I think a lot of his new political allies on the free speech side will be extremely disappointed. He might end up with no friends on either side.
So he is taking a big risk here.
So are they just negotiating at this point if Musk has a penalty number he's willing to pay?
If true, he’s got an out.
That last statement does not follow everything else before. Courts have no power to do that.
The 1B$ is a "reverse breakup" fee, and applies when an outside force (like SEC or financing) prevents the deal. That 1B$ has nothing to do with any choices on either side, and is unlikely to factor into this process.
At this point they're clearly going to trial, and it's not unlikely that the cost to Elon will be somewhere in the neighborhood of the difference between the fair current market value (~20B$?) and the purchase price (~44B$).
My guess is it'll end up being ~10-15B$.
I figure he ends up having to pay $10E+10, and everyone knows it, so he gets short-squeezed in Tesla stock, then margin called on any loans against his stock... then POOF
Why would the current market price have anything to do here? Twitter want him to be forced to buy for $44B, not a penny less.
Bret Taylor, Twitter board chair - 4:51 PM Chicago time · Jul 8, 2022
Now the negotiations will take place and I suspect we will see something like a $10-$20B purchase agreement. Musk will have opportunity for due diligence if they sue. If they don’t sue him, then the shareholders sue Twitter (ironically probably some of the financiers).
> Despite public speculation on this point, Mr. Musk did not waive his right to review Twitter’s data and information simply because he chose not to seek this data and information before entering into the Merger Agreement. In fact, he negotiated access and information rights within the Merger Agreement precisely so that he could review data and information that is important to Twitter’s business before financing and completing the transaction.
Is the merger agreement public?
…
>the reason that elon musk can't get out of the deal over the bots thing is not that he "waived due diligence." it's that he SIGNED A BINDING AGREEMENT TO BUY TWITTER, and that agreement does not have any outs for "i think there are too many bots."
- Matt Levine esq of Bloomberg
""" the reason that elon musk can't get out of the deal over the bots thing is not that he "waived due diligence." it's that he SIGNED A BINDING AGREEMENT TO BUY TWITTER, and that agreement does not have any outs for "i think there are too many bots. """
... and ...
""" yes i know that this is a small petty thing. but part of my point is that even if he had demanded extensive due diligence, and done it, and then signed the agreement, we'd be in the same place. the waiver or not of due diligence doesn't matter; what matters is we're past that. """
“My offer was based on Twitter's SEC filings being accurate,”
Willfully filing fraudulent SEC filing is a crime - and if Twitter has been engaging in criminal behavior to artificially increase their value - I would think Musk has a good case.
[0] https://twitter.com/matt_levine/status/1545151445057536001
https://twitter.com/matt_levine/status/1545151445057536001?s...
>>First, although Twitter has consistently represented in securities filings that “fewer than 5%” of its mDAU are false or spam accounts, based on the information provided by Twitter to date, it appears that Twitter is dramatically understating the proportion of spam and false accounts represented in its mDAU count. 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%.
Buying Twitter the way Musk did right before the most telegraphed recession in modern history was colossal stupidity. I have no insight to Musks liquidity, but if Twitter is able to force him to complete the sale in the middle of a raging recession then how much of his empire would be diminished by forced liquidations. And was this decision made so he could promote Shivon to CEO of Twitter? That could make it the most expensive (including the cascade of losses due to liquidation) gift to a mistress (?) in human history.
But Musk has a habit of escaping justice (see ‘pedo’ case which was egregious) and I have a feeling there would be little appetite to damage his empire due to the job losses it would cause, especially in a recession.
In that case, everybody I don't like loses, which is pretty close to me winning, I think.
He's clearly eccentric in his approach to decision making: I don't think any Harvard Business School course will teach "the Musk Principles". But it's unclear to me what he initially thought he was getting out of this. In the original news, he said, "Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it." Either he was breathlessly arrogant or astonishingly careless in the first instance. And I say this as someone who has huge respect for his accomplishments in other industries.
The more it goes on it feels like “I don't like how twitter works, I’ll show them! <insert some less developed ideas of free speech on the internet>”
Later:
“Oh noes if I do what I want here the result might be bad…”
It just feels like a YOLO business deal that wasn’t thought out the more this goes on.
The best hypothesis I've heard is that he was trying to secure the raw materials that Tesla's stock price is made out of.
He sent his selfie in a tweet response to Parag’s tweet explanation.
https://www.forbes.com/sites/abrambrown/2022/05/16/twitter-b...
When you can afford the best legal team money can buy and payoff the rest of the gatekeepers, then the game is simply to transfer wealth into your own pocket in bigger chunks.
Isn't that like more than half of his MO?
Most folks who subscribe to the "Musk Principles" aren't nearly as lucky and go bust much earlier.
Perhaps he didn't expect the Nasdaq composite to drop 2000 over the next several months? That could have been careless, depending on the sort of agreement he signed. I guess he can afford a $1B penalty, but good luck finding another buyer after that. It's not as though Twitter are overflowing with ideas for profit...
https://www.cnbc.com/2022/04/26/jack-dorsey-elon-musk-is-the...
This most of all makes me think he was really into it and then fucked it all up. Or Jack was just trying to get back at the board.
by that you mean straight up lying, attempting fraud etc...
Why not both? Arrogance tends to lead to carelessness.
the real reason he's filing the sec notice is the gas has run out of the bullshit bus. nobody believes his due diligence claims, the board just sent him a resounding vote of approval to buy, and the legal pain train of that comes with anymore of this childish foot dragging sideshow is pulling into the station.
I'd be stunned if he gets to walk off with the billion dollar penalty. too many financial guarantees and backings have been made, and musks had an SEC crosshair on him for years now. they know exactly what patent brand of bullshit he's peddling and have shown themselves more than willing in the past to take action.
musk can file all the notices he wants but i suspect hes about to get ready for the billionaires version of a shotgun wedding.
Have as many kids as possible since it’s obvious he will own the solar system. He ain’t gonna be that democratic therefore. Just another dynasty but maybe the last
Answer: some sort of stock manipulation whether it be Tesla's or Twitter's
It has continually been one of the most underperforming platforms of it's size. Head of Data Science resigning doesn't bode well during a deal hinging on the accuracy of the data.
- cold feet - impetous - eccentric - breathlessly arrogant - astonishingly careless
pupils
He may have been honest and correct about that, but later realized that he simply does not have the time to be CEO of yet another large company.
Well history is not yet written. They could be taught as negative examples
Who in their right mind would spend billions of dollars without being allowed to "look at the books" regarding the spam account ratio?
I don't think it was impetuous. I think he did this all on purpose and planned on using his usual tactics of improvisational manipulation and grandstanding to get what he wanted, whether it was Twitter at a cheap price, manipulating the Twitter stock price to make a quick buck off of his stock purchase, liquidate some of his Tesla stock, seed further discontent on Twitter, spur on rabble around bots (despite knowing full well that Tesla and himself have benefited from Twitter bots and potentially even controlled them), drone on about free speech in some sort of libertarian political play, or whatever else. And it has all failed. Now, he's just gonna let his dirty lawyers figure some way out of it all and move on to the next scam.
You have to look at it from the angle of Musk being a troll and a right wing figure. He wanted to impress his right wing followers by making Twitter a more free and open place for all kinds of speech (even hate, violence, etc). Maybe he realized this was a bad idea and managing Twitter is more a job for a grown up than a troll, so he looked for a way out.
Being called Eccentric is the luxury of the rich. If he was poor one will say "irresponsible" or even "crazy".
It seems apparent to this observer that the spam accounts thing and other metrics were always super inflated and perhaps now there will be a reckoning.
I also think it is very funny how there was much gnashing of teeth and literal tears at the prospect of him owning twitter but now they might end up chasing him and try to force him to buy them, thus further alienating the woke mob and sowing chaos internally. Look how the turn tables have turn tabled.
If they are greedy enough to go to court over it the question of just how fake this company is will stay in the news for the duration of the trial and the stock will tank. If they don't they might have to, you know, actually function like a real company.
This story is far from over.
> Additionally, those APIs contained an artificial “cap” on the number of queries that Mr. Musk and his team can run regardless of the rate limit—an issue that initially prevented Mr. Musk and his advisors from completing an analysis of the data in any reasonable period of time. Mr. Musk raised this issue as soon as he became aware of it, in the first paragraph of the June 29 Letter: “we have just been informed by our data experts that Twitter has placed an artificial cap on the number of searches our experts can perform with this data, which is now preventing Mr. Musk and his team from doing their analysis.” That cap was not removed until July 6, after Mr. Musk demanded its removal for a second time.
Interesting. Technical limitation, or not, it's unlikely that their API was changed just to upset Musk's team. It's most probably a pile of wonky code with artificial limitations hardcoded by customer so it doesn't crash their database.
Asking for a friend xD
Edit: This is over the mDAU thing still? It's been explained to him very slowly that all the bots that post tweets all day are often not seeing ads, right? That the "monetizable" is a key part of that phrase?
> While Twitter has provided some information, that information has come with strings attached, use limitations or other artificial formatting features, which has rendered some of the information minimally useful to Mr. Musk and his advisors. For example, when Twitter finally provided access to the eight developer “APIs” first explicitly requested by Mr. Musk in the May 25 Letter, those APIs contained a rate limit lower than what Twitter provides to its largest enterprise customers. Twitter only offered to provide Mr. Musk with the same level of access as some of its customers after we explained that throttling the rate limit prevented Mr. Musk and his advisors from performing the analysis that he wished to conduct in any reasonable period of time.
> Additionally, those APIs contained an artificial “cap” on the number of queries that Mr. Musk and his team can run regardless of the rate limit—an issue that initially prevented Mr. Musk and his advisors from completing an analysis of the data in any reasonable period of time. Mr. Musk raised this issue as soon as he became aware of it, in the first paragraph of the June 29 Letter: “we have just been informed by our data experts that Twitter has placed an artificial cap on the number of searches our experts can perform with this data, which is now preventing Mr. Musk and his team from doing their analysis.” That cap was not removed until July 6, after Mr. Musk demanded its removal for a second time.
How? As best I understand things, he has zero wiggle room - he either buys Twitter for the agreed price or he stumps up the $1B termination fee.
And if Twitter's board did go mad and decide to negotiate a lower price, their shareholders would almost certainly block it and/or sue the board, no?
One thing for sure though is that a lot of lawyers are about to make a lot of money.
Tesla is a car company. They need to focus on making cars. They're past the startup stage. To grow into that bloated market cap, they need to make a lot more cars. Production. That dull and boring stuff Detroit and Toyota do well.
Tesla is a very complex financial operation which, sometimes, sells some cars. From Musk's point of view it's working exactly as planned.
So a question: if you believe Musk will still purchase Twitter at an inflated price, are there any good reasons for not purchasing Twitter stock? In other words, Musk has offered to give you $54.20 per share, and you can purchase those shares for $36.81 at the time of this comment. If folks are confident that this trade will go through, isn't it a quick way (relative to 8% YoY) to 1.5x your investment?
Without that he wouldn't have gotten nearly anywhere close to where he ended up.
Because for a lot of his ventures he used that image to collect way more money then the company would normally had gotten and the used the additional money to try to beat the completion enough so that the investors won't complain even through the company didn't reach to promised (and often outright absurd) goal anywhere close in time/at all.
Trying to buy Twitter is just a symptom.
I think it's simple.. he is insanely egotistical. He thinks he is some super genius. I'm not saying he's not a smart guy, but he was able to benefit from the early dot-com era mostly because of timing- he happen to be a smart guy at the right age of tech when it was much "easier". There are millions of people who are really smart and work in tech but it's not like they can just magically make an insane amount of money like early on.
He thinks because he is the richest person in the world that he has also worked the most and is the smartest. Both are extremely far from reality- but you can't convince someone of him like that.
Anyway- my point is he loves being able to just post a tweet and have however many people read it and talk about it. Similar to someone like Trump- they just love all the attention to an insane amount, and unfortunately technology makes that possible these days.
Like when I suddenly develop an interest in Columbo trivia when actually I'm supposed to be doing my accounts.
So many people have gotten very close to buying Twitter...even Disney. The surface appeal is high but once you think about it for more than ten minutes it's clearly a problematic platform with few solutions that don't drastically lower its value. If Elon ends up not closing this deal with Twitter, I suspect that Twitter will go the way of Tumblr...eventually getting bought by a second tier tech company before being mismanaged into irrelevance.
> If Elon ends up not closing this deal with Twitter, I suspect that Twitter will go the way of Tumblr...eventually getting bought by a second tier tech company before being mismanaged into irrelevance.
Has Musk demonstrated that he has a viable business plan for Twitter that would help it avoid mismanagement into irrelevance?
Illegal how?
Let me answer that: they do not want to be owned by someone who doesn't want to.
But they want the 40B more.
That person wanted to own Twitter, though, and very much so. To that effect, that person made and absolutely ludicrous offer (e.g., merger without due digligence), just to end up owning Twitter as soon as possible.
The fact that a few weeks later, the same person changed their mind about Twitter, is absolutely their own fault. They agreed to terms.
- Bret Taylor (https://twitter.com/btaylor/status/1545526087089696768)
Elon is on the record talking about the 'bot problem' over the years (on Twitter!). He's about to get a very expensive lesson that agreements can't be breached even if you have more money than sense to spend on litigation and you can't just say stuff willy-nilly, because it can come back to bite you sometimes.
My guess is Musk never intended to buy Twitter. He needed an excuse for dumping billions of dollars' worth of TSLA at its peak (while at the same time faulting Bill Gates for shorting TSLA), and his proposal to buy Twitter provided a convenient cover.
Twitter is of course currently known as a source of Truth and Harmony.
"anything not illegal is allowed" sounds decent to me; if you want stuff illegal, make it illegal. If you want unwritten laws dreamt up by anonymous elites and enforced for random reason, go talk to Tipper Gore and the PMRC.
What is free speech but that.....
> would have made Twitter an open forum for spreading lies and hate.
Like it isn't now. Twitter lets pretty much anything and everything except hate against specific subgroups they've decided are "protected". It really doesn't help there choices are entirely arbitrary with no internal consistency.
Genuinely interested, and not just trying to argue: how would you otherwise define free speech? It sounds like you think free speech should have defined limits - which surely means it's not free speech any more?
That's what free speech is, whether or not you agree that such a policy of unrestricted free speech is constructive or beneficial.
It's very funny how those things came to be known as code words for the *true* offenses, which we all know very well.
What a waste of perfectly good words that used to have meaning.
i think you are referring to twitter.com
imo this is pretty bad for twitter the company. they’ve been flat for years, they’re current valuation is less than in 2013. they’ve lost the plot a while ago and seem to have been in a managed decline, probably because they were looking for buyers.
> and good for the world
you are overestimating how many people care about twitter outside of the US.
Well, especially with that billion dollar termination fee (well, if they get it since Musk is probably gonna lawyer up now).
Absolutely chilling thought, eh?
Musk can be a "genius" when it comes to electric cars and space exploration while at the same time being total wrong about almost everything else.
This isn't correct. People keep saying this, but it's not true. $1B is the penalty if Musk can't get financing. He has financing. He has no escape clause now, and this is a transparent and frankly pathetically weak attempt to get out of the deal. If he gets out at all, it will be at a much higher price than $1B.
> It seems kind of obvious to me he’s angling to get a nice discount and close, since he has almost all the leverage
He really doesn't. He signed a binding agreement to purchase Twitter at $54.20/share and none of the excuses he put in this termination notice hold water. The Twitter board has every right and incentive to sue him for specific performance and that's exactly what they're doing. They are in the legal right and have a great chance of winning.
[0] - page 5 https://www.sec.gov/Archives/edgar/data/1418091/000110465922...
Bet he (and his friends, if he has any) made a mint off this farce.
Not that I have any faith it will happen.
Twitter could even build a business model around that - They can manage hosting and the sales of Twitter services as a SaaS on your own domain name like Office 365, Google Workspace.
Or someone could snatch this market right now with their own first-mover advantage (I can see Mastodon gGmbH positioned to do so). I'd do it myself if I had the time and energy.
1. TSLA was trading at ~$1,000 share
2. He offered $54/share
Now?
1. TSLA is trading at $750/share (so if Elon musk was 100% in TSLA, he lost 25% of his wealth).
2. Twitter's comprable, Facebook, fell roughly 33% on revised revenue projections and slowing growth. TWTR roughly tracks Facebook, except for last quarter where the stock hasn't moved due to Musk's offer.
So Musk became poorer, and TWTR, which probably should be trading in the high 20s, has an offer for $54/share; meaning Musk may be paying double what it is currently worth.
I find it pretty amusing Musk has meme'd his way into a disastrous deal.
Since that's where we're going to end up, it would be much simpler for him to just cleanly buy Twitter, for whatever purpose he intends.
If Musk’s team does a deeper dive than Twitter is willing to invest in and determines that the number of bots is material, it calls into question the entire financial model of Twitter. Customers will demand refunds and earnings will have to be restated going back years. It’s going to be a nuclear financial bomb.
So of course Twitter is going to sandbag. They can’t afford to release that data because they know it’s going to be material. Musk knows this and Twitter knows this.
I think Twitter is actually fucked now because their number of accounts will come into question and maybe even the SEC might squeeze them. But Twitter will probably look tough but try to close this chapter as quickly as possible and hope that no one digs deeper into the fake accounts.
This doesn't make sense. "Material" is a term of art defined with regard to the current deal, there's no such thing as determining "the number of bots is material" in a general sense such that customers (I presume you mean advertisers) would automatically be allowed to sue.
Sure, if Musk finds Twitter has historically lied that would be significant. But Twitter doesn't have a single "bot number". In specific circumstances they make specific calculations using defined procedures. For example, the number Musk is whining about uses active - not all - users as the denominator, so of course it's going to be lower than the "real" number of bots.
Surprisingly to me, so far Musk hasn't provided an argument beyond this same sort of word salad. Maybe he's playing n-dimensional chess, but if Twitter sues him he'll presumably have to make his real secret arguments in open court. We'll see then.
Twitter has already given Musk access to the "firehose of data". [1]
Musk bragged about buying Twitter because of the bots. Nobody is going to believe that he suddenly cares now that there are too many, not after he waived due diligence and set the buying price as a 420 joke.
Which is precisely the problem with signing a "I'm buying you for $44B" and then claiming you had no idea they had so many bots to back out of it.
Tesla's peak market cap is ~$1.5T. It's still sitting at just under ~$800B. Tesla sold just under 1M cars last year putting one metric at (currently) $800,000 per car sold in a year.
How does any of that make sense? Just watch as traditional auto manufacturers ramp up EV production. The Ford F150 Lightning is in my mind a bellwether. From what I've seen it's been incredibly well-received and that's only the beginning. Compare that to the often ridiculed and clearly beleaguered Cybertruck.
I really wonder if Elon's attempted acquisition of Twitter is just a symptom of him becoming increasingly unhinged (eg his screeds against the "far left"). I really wonder if this hwole thing wasn't motivated by the perceived injustice (according to him) of Trump being banned in particular and the idea that conservatives are somehow being silenced.
But maybe this is 5 dimensional Chess. One can argue this hass done a lot of damage to Twitter and Elon may be on the hook for more than the $1B breakout fee (which he will of course try and weasel out of). This may actually drag on for years.
Personally I'd be happy just disappeared into a lab in a remote location where he can build rockets without distraction. I can but hope.
I honestly think the skyrocketing valuation
“ Bret Taylor, chairman of Twitter’s board of directors, tweeted Friday afternoon that the board plans to pursue legal action to enforce the deal at the price and terms originally agreed upon.
We are confident we will prevail in the Delaware Court of Chancery,” Mr. Taylor tweeted. Parag Agrawal, Twitter’s chief executive, retweeted the message.“
https://www.wsj.com/articles/musk-says-he-is-terminating-twi...
One of musks main things he wanted to do with Twitter was to fight those spam/bot accounts.
He thinks getting rid of them is good for Twitter. If there are more bots than estimated Twitter will get even better than anticipated. If there are less bots than estimated this means the user base is more healthy than assume / one problem you don’t have to solve.
Each scenario is neither clearly good nor bad for a potential buyer.
It's hillarious (and pretty stupid) they capped his use of the firehose.
https://www.youtube.com/watch?v=K_WgCGOWae4
We must watch the stuff you make.
You have let us eat the cake.
While your accountants tell you, "Yes, yes, yes!"
You make expensive ugliness, how do you do it? Let me guess...
If I want to run a thousand bots spouting fake news, isn't that my freedom of speech in action?
If I were Twitter I’d take my chances in court to sue him for everything I’m owed, the full 45B or something really close to it. At least they’re due the breakup fee. Maybe they can 10x that for breach of contract.
If this does go to court and the outcome is that the agreement is thrown out or something like that it will severely undermine the legally-binding nature of contracts and have all sorts of ramifications.
Perfectly legal process only accessible to the very rich in which to further consolidate their position of being the very rich. Nobody else on this planet could pull this off as they dont have a cult following. Cult's dont have to be religious, unless money is a religion?
Is anyone surprised?
Suppose the filing is true - all of it. Let’s start the conversation with that and see what people think and what happens next to Twitter.
The stock market (especially tech) tanked, other investors started having cold feet, and he realized his purchase was a mistake.
It is bizarre though that Twitter leadership/board continued to engage with him on the matter – even handing him internal data to analyze – expecting a good faith resolution. Nothing Musk has done in the last few months has been in good faith. You either lawyer up and force him to stick to the agreement, or take the loss and move on. Appeasement isn't going to work.
Isn't this itself arguing in bad faith? It's fundamentally speculative to make claims about his intentions.
Twitter stinks.
You can smell the <insert_elon_poop_emoji> in their ad program a mile away and it’s finally free game to call out.
I remember buying Facebook ads once and I got more likes than God and not a single one of them seemed like they were “real”. Maybe they were “mDAU real” or whatever…
These company’s are liars and have been ripping people, small and big business off for years.
Google ads, search ads, Twitter, Facebook, Snap, TT, Reddit, Yelp, etc… it’s all stretched fake engagement. We all know it and have known it for years — if you’ll admit it or not.
A lot of likes from accounts selling some kind of sex work, some really blatant spam, a lot of small time self promotion from wannabe influencers. Much of this was probably “real people” but also “spam”. There is a spectrum of what is and is not “real” usage vs spam, but if I were advertising for real, I wouldn’t want to target the Twitter account representing a furry onlyfans creator. Of those there were several in the few hours and ~$100 I left the tweet up.
In other words a significant part of the engagement in my promoted tweet was low quality Twitter accounts engaging with my tweet in order to get more attention for themselves.
[0] https://www.bloomberg.com/opinion/authors/ARbTQlRLRjE/matthe...
[1] https://twitter.com/matt_levine/status/1545519476707319808?s...
However related to Twitter, looking what's happening since his first tweet, this was the plan all along. Come up with an excuse to get out of the deal. Just he was trying to cash in all the marketing he can like always.
I don't think its going to work the way he thinks in this case, its atleast going to cost him $1b
It was really hard to see how he would apply his usual tricks, and I always figured he was going to wiggle out.
I mean AWS didn't get the big pentagon contract, under the previous US president. Mr. Besos was very upset about this. Now Musk is much more exposed to that kind of thing, as SpaceX is a major Nasa contractor.
There must be some politics here, if you consider the amount of tax money being involved. Now the politics of Mr. Musk doesn't quite align with that of the president, and we saw some spats between them in the past. I would argue that this would have a potential for escalation and would have much more weight than the bot issue on twitter.
'Biden wishes Elon Musk "lots of luck" on moon trip' - could be read as a kind of veiled threat. https://www.youtube.com/watch?v=igSyBMYus5A
MSNBC says that Musk and Biden are in a kind of fight now https://www.youtube.com/watch?v=Fgj2jfmPfRE
Besides all his, he has no regard, empathy for his employees - the real people who made him, who he is. What an irony!
After musk started talking about bots, I started getting a ungodly amount of twitter emails asking me to sign in and see watt my friends are doing ect. Over 10 a day for the last month or so.
My email is literally filled with twitter emails trying to activate my inactive account to temporary inflate their numbers.
Musk didn't have buyers remorse, we entered a huge market crash in the middle of the deal, so twitter was not worth nearly as much. Likely worth around $15 USD per share.
Everyone knows twitter is majority bots, gpt influence accounts. Musk was using that angle because they would never admit to it publicly as it would likely have stock or legal issues.
He likely still wants to but twitter at the current market value, not yesterdays current value.
Big if true
You are writing fan-fiction, not making an argument.
On the serious side, I can’t believe someone would gamble with half of his net worth. But this is Musk!
It can in certain be a spam account though.
Any legal experts out there?
Elon got what he wanted. Everyone on his side now thinks he's a bastion of free speech, and he can forever say "If I owned Twitter, I would have...". And he gets the credit he wants without having to actually do anything.
Twitter got what they wanted. They didn't want Elon to own the company, but they also couldn't ignore the offer. So they called his bluff. They would have ended up with a world of pain if they didn't accept the offer, but nobody at Twitter wanted it to close. And now they'll be able to sue Elon and get the upper hand.
Both sides got what they wanted here. I just wish it didn't have to distract all of us so a few rich people could mutually level up.
Anyone who took it seriously...I'd like to sell them a bridge.
How that goes is anyone's guess.
Edit: that’s an actual question. If you downvote, at least comment why I’m wrong.
Twitter is a somewhat stagnant social networking service; it hasn't been experiencing the meteoric growth of things like Instagram or TikTok. Its yearly revenues are US$5.1B, but instead of earning US$1.4B per year, it's losing US$220M per year, so it's spending US$5.3B per year (on 229 million "mDAUs" ("monetizable daily active users"), so that's US$23 per user per year). I think most of its 7500 employees are high-paid tech employees, who cost maybe US$300k per year each—including benefits, remember, having an employee typically costs about twice their salary. That works out to US$2.25B per year of employee-having costs, leaving about US$3.0B for everything else.
Large profit margins are common at social networking services; Meta makes US$39.37 billion of net income on US$117.929 billion of revenue, a 33% profit margin.
So, what's Twitter's path to earning US$1.4 billion per year? Either it could increase its revenues by at least US$1.6 billion, for example by growing its user base by 40%, without increasing its expenses much; or it could decrease its expenses by at least US$1.6 billion, for example by laying off most of its employees, without reducing its revenues much.
A dramatic expansion of Twitter's business in the next few years doesn't seem likely to me; is that what investors are betting on? Looking at https://en.wikipedia.org/w/index.php?title=Twitter&oldid=793... they had 319 million active users in 02016, so the crudest approximation suggests that their yearly growth rate is -6.5% per year. At that rate, growing their user base by the requisite 40% will take them another negative five years. (More charitably, maybe they are in fact growing, but mDAUs are a small enough subset of what they were reporting as "active users" in 02016 that it more than makes up the difference—but their yearly growth rate still isn't likely much more than +6.5%.) Alternatively they could get better at squeezing money out of their existing users. Or maybe they could buy another Vine and this time not shut it down so that a Chinese clone becomes the hottest new social networking app. But that would require them to have money to fund the acquisition, and where is that going to come from? Or are the founders of the hot new startup going to accept Twitter stock?
More plausible is a skeleton-crew Twitter with a 20% smaller userbase and US$4.2 billion of yearly revenue spending only US$2.8 billion—depending on what its actual expenses are. But getting from here to there would be very traumatic and poses a substantial risk of total collapse, either because Twitter loses the institutional knowledge of how to keep the site running when it lays off most of its staff, or because their cuts send them into a death spiral where revenues decline even more than expenses.
It's against this background that, somehow, Musk's trolling with this merger termination has only dropped Twitter's market cap by 4.8% today.
So, how are Twitter's remaining investors justifying their US$28 billion bet on Twitter? In this situation I can easily imagine Twitter being worth US$6B or maybe US$10B, but US$28B, the hell?
Are they figuring that there's a 35% chance that a Delaware court will order specific performance of the Twitter acquisition (and that someone will lend Musk the money to go through with it, despite his best efforts to convince everyone that Twitter is a massive fraud?) and a 50% chance that, failing that, Twitter will successfully make the transition to a skeleton-crew shadow of its former self that nevertheless knocks out Facebook-like earnings every year?
Do they think Twitter's management team will miraculously figure out how to leverage their evident ability to get a moronic clown elected President of the USA into actual profits?
Do they think another acquirer willing to pay a premium over today's price will materialize, perhaps motivated by the prospect of political influence rather than selling colored water to the Twits, if that's what Twitter users are called?
Here's the most plausible hypothesis I've seen. TSLA's market cap is US$779.67B (https://www.google.com/finance/quote/TSLA:NASDAQ?window=5Y), so the US$44B purchase price would be about 5.6% of TSLA's outstanding stock, about 58 million shares. The trading volume is 31 million shares per day, so Musk could presumably liquidate 58 million shares over the course of a few weeks without totally tanking the stock, and so could any potential lender who gave him a cash loan secured by that stock. Musk's net worth was reported as over US$300 billion in November (https://en.wikipedia.org/wiki/Elon_Musk#Wealth), three-quarters of which is Tesla stock and stock-price-related instruments such as purchase warrants. Tesla has fallen 38% since then, so he must still have at least US$180 billion worth of TSLA.
So, the Twitter investors are betting that there's an excellent chance that the court will in fact order specific performance and the deal will go through despite Musk's most eloquent protests of fraud on the part of Twitter's current management team.
Ms. Gadde:
sounds like William Gaddis, one of whose novels involves fictitious lawsuits
There’s no evidence that he’s a good engineer or a good businessman, save if committing fraud or stealing the accomplishments of others is in the list of things that qualifies one of either. It’s beyond time to start taking his actions present and historical seriously instead of feeding into his cult of ego.
- Elon is stupid, haha he will lose money.
- Elon is evil, he's trying to pull a fast one on this corporation!
- Elon waived his rights, he shouldn't have agreed to their fake numbers!
- Twitter is allowed to claim whatever % of spam bots they want for the deal.
- Twitter's censorship is actually a good thing, here's why...
The only way I was going back to twitter was if Musk took over, took decisive action, and it stopped being a left wing echo-chamber.
But wasting more of my life on social media is not a net positive.
So overall I'm glad, I can continue to ignore twitter exists except when people occasionally link a tweet (which half the time I regret clicking anyway).
Rumble, Brave, Truth Social, Subscribe Star
Locals and Bitchute gave it a shot (and aren't dead yet). And an Elon owned Twitter might have been interesting, but at this point that's who the players are.
Hopefully they are bad enough we could get real legislation that if you want protection from user generated content you can't just ban whatever you feel like.
The deal is obviously not worth it if a sizable chunk of user are fake.
His first action would be to get rid of fake account and doing so decrease the value of Twitter for him and everyone that join him.
It’s better if the value decrease now to reflect reality, then buy at a far price and improve from that point.
I think the deal might go own at a much lower price. The lying is going to get out, the value of Twitter will then have to be evaluate at the current economic level.
Thank you Elon
Either you want the deal consummated or you don't. Stop being such hypocrites.
The 6.4 provision is pretty standard, and often the reason for deal to fall through, in that enough of the requested information was not provided. You really don't know what was asked, what was ignored, and what garbage data was sent back. You think Twitter is all innocent? Pfffftt. Don't be evil, oops, i mean naive.
He doesn't have to prove fraud, or malice, or that it wasn't worth it....all he has to show is that requests were ignored, rebuffed even though they are reasonable, and responded to with bad data. That's not really a hard case to win.
This is an example of a recent Trend:
https://twitter.com/search?q=%22Jared%20Kushner%22&src=trend...
Click on the top 10 accounts. None are real people. Likely CCP Army, or Russian trolls, bots of some type - but certainly not users who should be counted as mDAUs.