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Comment by pclmulqdq | Hacker News Reader

I'm ready for the fireworks. Odds are he will be forced to go through with it, but he will negotiate a lower price.

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?

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His team apparently had a tough time verifying the data due to API rate limits.

> 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.

They had firehose access - there was no limiting

A lot of these rate limits would have been designed off the rubble of the Cambridge Analytica scandals, and would've been designed to prevent a lot of analysis.

I still find it dubious that they couldn't long poll sufficient samples. I'd love to see the raw feedback of Musk's "Data Experts" versus whatever awful telephone game it became through several layers of Executives and Lawyers. I wonder if Musk just has a nepotistic data team next to him.

the contract says they can't make any demands that have materially adverse effect on the company

if he was hitting up against rate limits, it's easy for Twitter to call his requests adverse

How would it be adverse? Are you suggesting his data scientists are querying the API so much that they are DDoSing Twitter?

They gave higher rate limits to existing enterprise customers.

Pretty hard to argue that is was "adverse" in that case.

he had access to the Firehose, which streams all the data, so his complaints about the other API ring false (which they removed the limits on anyways, according to elon -- but again, the API was a subset of the Firehose access he already had)

it seems more likely that he was upset that he had access to all of Twitter's data via the Firehose, but being impulsive and incompetent in the field of bot detection (having had zero experience), he has absolutely no way to produce a trustworthy report on bots which contradicts Twitter's report

so, he's just complaining about limits he used to have on an API he doesn't need to avoid producing a report he can't produce that requires expertise he doesn't have

APIs aren't the only way to deliver data

> 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

So... they asked for an API, were provided with it, wanted an API with higher caps, and were provided with it. Their problem is that Twitter didn't properly anticipate the need?

> but he will negotiate a lower price

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?

I do not think that he can pay the termination fee. I.e. the termination fee itself has rules. Otherwise, he would have payed it (the fee is equal to the daily move of his TESLA shares).

Pretty much. I think it's more likely he's trying to set things up to make the claim that Twitter wasn't co-operative and forthcoming with the information and then try to reduce the break fee in court.

Agree. And likewise it seems Twitter is going to court to collect the breakup fee rather than complete the deal.

They'd be nuts to do so.

Twitter’s Chairman disagrees:

https://twitter.com/btaylor/status/1545526087089696768

A 1B termination fee is relatively small given that Twitter's market cap is down 10B since the beginning of April.

Which is why Twitter has the right to force execution, not just claim the break-up fee.

Exactly, this is the point that seems to be missed over and over again: you can't back out of a deal that you've inked because you regret it.

he stumps up the $1B termination fee

I don't think that's even an option -- that $1B breakup fee was just if the deal was not allowed to go through due to reasons outside of his control (like if it was blocked due to regulatory reasons). Otherwise, I think he's legally obligated to go through with it -- and Twitter's board has fiduciary responsibility to hold him to it.

No because he bid above twitter current stock valuation so he can still go down and people might not be happy but they will not be able to sue anyone.

if he goes down, that represents a material loss to shareholders compared to the price he is contractually obligated to pay

so, all the same, I think the shareholders will just take his original offer and elon can reflect on his impulsivity (a joke; he won't)

He has tons of wiggle room. Mostly in this will takes years to resolve, Twitter will be forced to disclose nearly every internal document that will 100% have some email or chat of employees stating, if only as hyperbole, that the bot rate they report to the public is bullshit.

That will get him nowhere in the trial, because incorrect information is only a valid reason to break off the deal if it uncovers a material adverse effect, and it is virtually impossible to get Delaware courts to find an MAE. Matt Levine's shorthand for Delaware MAE is "40% decrease in profitability". Not stock price; a 40% decrease in the fundamentals. It's not happening.

Stipulate for the sake of argument that courts will accept the bot argument -- don't you think discovery would be problematic for Elon?

https://www.latimes.com/business/story/2022-04-12/musk-is-of...

If this goes to the courts then the only two options are he gets to back out entirely or he pays the originally agreed price. There's a chance of a settlement where Twitter agrees to sell for significantly less than that, but (1) there's zero incentive for them to do so and (2) they will definitely not get shareholder approval for that.

One thing for sure though is that a lot of lawyers are about to make a lot of money.

> a lot of lawyers are about to make a lot of money.

The one thing written in this thread that I am 100% confident is true.

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