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Comment by zimpenfish | Hacker News Reader

> 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?

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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.

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).

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.

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

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...

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