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Comment by bryananderson | Hacker News Reader

As Matt Levine explained [0] the “waiving due diligence” doesn’t really mean anything now. What does mean something is that he signed a binding agreement to buy Twitter, giving Twitter the right to compel him to close the deal, and there’s no “too many bots” exception, nor a “you were wrong (or even lied) about something you said” exception. He has to prove that it’s a “material adverse effect” which I understand is nearly impossible (he’d have to convince a Delaware judge that the company is worth at least 40% less than stated because of this, and in practice it seems these suits almost never succeed).

[0] https://twitter.com/matt_levine/status/1545151445057536001

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I absolutely love that fact that this tweet happy individual might actually get slapped for just tossing out tweets. Not sure if $1B would make him squirm or not, but even for billionaires, $1B is an expensive twitter rant.

If he gets punished it won't be for "just tossing out tweets" it will be for negotiating and signing a legally binding contract and then breaking it.

It would be possible to enter into a contract through tweets alone. That didn't remotely happen here, though.

But he only signed that agreement because his ego wouldn't let him back away from those tweets

Note that Musk stands to spend $44B, not $1B.

He currently owes twitter 44B, but actual damages would be 44B minus the FMV, so closer to like 10-20.

Where are you guys getting this number from? Similar cases have settled for almost the full original amount. Like 95%+. Not half or less than half. Are you just making stuff up?

It's the internet. Just say it with enough conviction, and others will buy it. Continue to say it, and everyone will buy it.

Er, not just the internet now

They’re saying that if everyone just did what they agreed to do: - Musk would give Twitter shareholders $44B in cash, - Twitter shareholders would give Musk ownership of the company.

Note that today, Twitter is worth $28B. So the agreed deal essentially gives the shareholders $16B in profit.

So a judge might tell Musk he can’t back out and has to buy Twitter for $44B like he said he would. Or it might let him just give the shareholders $16B and not get the company.

When has the second instance ever happened and what's the mechanism for that? Every shareholder gets a check?

Typically, if you want to distribute money to each and every shareholder you pay them dividend. Must would only need to wire money to Twitter corporate account first.

I won't speculate on what the damages might be in a trial, but yes, he owes them $44B but they owe him the whole company after he pays.

idk. the fact that the price had already sunk nearly 40% from his price over this period could clearly indicate that his assumption isn't without merit.

Only if you don’t bother to take a look at the rest of the market.

But for Musk's machinations, said stock price would not be down 40%. He caused the stock to drop.

I'd say the tech sector getting routed played a bigger part. It's not like Twitter dropping 40% (for any reason) is exceptional amonst all the other stocks that dropped 20-60% over the last year.

I guess if public investors 100% believed Musk would pay, the stock should sit at $44 billion. I guess if Musk is forced to close or to pay equivalent damages, the value will jump back to that in the end.

Exactly. Plenty of people willing to profit off the arbitrage if he's actually going to be forced to buy twitter at the original amount.

The current price ($32) reflects be probably won't.

maybe if he can prove that his bot claims, and claims about twitter's willful fraud, are both true, and the reason everybody sold

If the share price is lower than $54.20, it’s because the market doesn’t believe the sale will be completed. The difference between $54.20 and the current share price represents the probability of the transaction falling through.

Twitter has done nothing to impede the transaction, so any uncertainty (and thus decline in TWTR share price below $54.20) is due to the actions of the buyer, who is… Elon Musk.

Therefore, Elon is responsible for any decline in the share price since the purchase agreement was signed.

Price changes due to macroeconomic circumstances are explicitly listed in the contract as not being grounds to get out of the deal.

I’m telling you, the guy really signed an ironclad contract forcing him to pay $44B to buy Twitter.

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