There's another belief floated by Josh Wolfe (an investor with Lux Capital) who claimed it was a ruse to liquidate Tesla stock en masse without Tesla hodlers getting suspicious and tanking the inflated stock price.
Honestly I think other people trying to read this situation in some way that ignores a multi billion dollar incentive just sitting there is utterly naive.
I'm sure he'll be able to weasel his way out of this. He'll spend a crap ton of money to lawyers just to be able to say he doesn't have to pay for it, but he's still paying for it on a smaller scale and not in public. Anything to put up another W on the scoresheet.
From my understanding, the current choice is:
1. Does Elon get sued by Twitter to force sale, per the initial agreement, where Elon agreed to allowing Twitter to force a sale.
2. Does Elon just pay the billion separation clause and walk away.
Do you see it differently?
Ever since what "the definition of 'is' is", my whole outlook on lawyers was just obliterated.
> Ever since what "the definition of 'is' is", my whole outlook on lawyers was just obliterated.
Is that in reference to something? Got a link or an article or something?
Very much yes[0]. It was one of the defensive lines from Bill Clinton. I was still in high school during this, and it set me on a very bad path of thinking how to twist anything and everything anyone ever said. After all, if the pres can do it, then we should all be able to do it.
[0] https://slate.com/news-and-politics/1998/09/bill-clinton-and...
Is there a different version of the doc than listed above? I couldn’t find any revisions and it sure seems that there are options available to Musk.
In all other cases, Elon has committed to give them $44B in exchange for the company.
There’s quite a bit about separation, sections 7 & 8
Removing musk account, if they do thAt, might backfire spectacularly.
- Stabbed man
And that seems to be what the concern boils down to? The issue of whether he defrauded twitter is a separate thing. (Though I'm inclined to say no, because twitter came at this in a very skeptical and careful way, and normal fraud requires fooling someone into material loss.)
In other words, US law judges by intent vs actual action/damage.
One example of this is: Credit Card Fraud is prosecuted based on max possible theft vs money stolen.
US law doesn't "judge by intent". If you try to murder someone but you don't succeed, you don't get charged with murder.
To keep with the murder example, intent is what separates 3v2, in most states. Yes, a crime was committed but was the intent to cause bodily harm vs actions causing bodily harm, without intent.
If he entered into that contract with no intent to honor it...
He didn’t waive his right. He just opted not to do any before buying.
The $1B penalty for backing out of the Twitter deal is the least of Musk's concerns.
The fact that it’s trading lower means that investors don’t expect the deal to go through. And who exactly as been doing his best to very publicly bring the deal into question? Elon Musk.
Why does that matter? Musk agreed to buy Twitter for $44 billion. If he comes through, that's the value of Twitter. If he doesn't, then the value is something else. The difference between $44 billion and fair market value is just the expectation of investors that Musk really will pay. So yeah the drop really _is_ due to Musk trying to back out of the deal. If Musk weren't backing out of the deal, then then Twitter's value shouldn't drop regardless of the fact that the rest of the market has.
https://www.bloomberg.com/opinion/articles/2019-06-26/everyt...
It also does not make sense to do this kind of fraud, as Tesla stock will surely tank on the news of it being used as a collateral in an acquisition deal.
Elon Musk announcing some M&A news with the intent of effecting price changes in TWTR,TSLA securies would be pretty boring, vanilla securities fraud.
He doesn't hide he would like to have the company private. Owning more stocks moves him closer to this ideal.
Just speculating, I have no inside info on what he really wants to do with the cash.
The move would have to be perceived as financially irrational for it to be operable in terms of distracting the market from the diversification.
This is just one of the impacts of the high potency products at the local cannabis dispensary. You can't function if you wake and bake on that shit.
If he exited TSLA to the tune of the remaining $10B or $15B, staving off a 50% decline in that value then he came out way ahead.
It seems very likely to me he will find a way out of the $1B fee and end up settling for some fraction.
Of course if he just borrowed against his TSLA to facilitate this deal, as I have read he did, then his profit on the move depends on the terms of the loan.
If true, I don't think it's the case he did it intending to pull out. Seems unlikely he would have signed the billion dollar exit clause when he could have easily dragged the initial talks on a bit longer for largely the same result before 'changing his mind'.
My best guess is the offer was genuine (thought impulsive) but as he's seen the price drop further, now his offer seems too much. Why pay $44bn for a sub $30bn company. Kinda simple but seem most likely than all these more complex theories.
But anyway, yes I believe it is possible to be impulsive followed by more logical decision making. This process seems fairly commonplace in the world I observe.
"If true, I don't think it's the case he did it intending to pull out. Seems unlikely he would have ...... My best guess is the offer was genuine (thought impulsive) but as he's seen the price drop further, now his offer seems.. "
Considering his impulsive behavior, which has prior occurrences. 1. Making an immature derogatory remark to one of the people trying to assist with that cave rescue. 2. His statement that he was taking tesla private that he retracted later 3. This situation..
Why do you think he's acting logically now? Why is it your best guess? Your words
1) As said, its not uncommon to act impulsively, followed by more logical decision making after. From your examples, I dont feel listing a few impulsive cases removes his ability to act logically. And the sequence I've guessed seems the most likely in my kindly eyes.
2) Because its not my second best guess, or any other.
3) See 1) & 2)
That said the risk is huge as the world can move on quickly as we saw with MySpace. And Elon s becoming increasingly a political risk factor himself in a business were peoples view on the leaders/owners really matters.
His views really don't matter. Nothing happened to Facebook and nothing will. People will just continue fighting (tweeting).
But really who knows. Maybe he realised he had too much on his plate, or any number of things.
If this really were part of some grand master plan, I think he would have left himself an easier out.
https://www.sec.gov/Archives/edgar/data/1418091/000110465922...
It’s not like he came up with the “they’re all bots” theory after committing.
Is Twitter going to spend the next few years litigating this just to force someone to buy the company that doesn't want to? Elon's team can drag this on and on.
What will happen to the value of Twitter's stock in the meantime? What will happen to the value of working at Twitter? It'll become a zombie company.
Stock price = "stock price without Elon owning it" + "Elons premium" * "likelihood of Elon losing the lawsuit and being forced to buy the company"
That likelihood should never be less than 0, so I think this legal fight would only help the twitter stock price.
I guess I am assuming that the "true price" is actually lower than what Elon offered for it.
The only option for Twitter to continue existing is to sue Musk for the amount he promised.
The karma hit at-fates-hands takes because people are irrational is collateral damage.
Have an upvote.
Parroting the statements of his legal team without adding the context around those statements is going to garner downvotes.
Agree that there will be a massive legal fight, but my guess is that it will be over how much extra Musk has to pay to get out of the deal (beyond the $1B breakup fee), than over making him perform. But who knows; only time will tell.
I'd sued and settle for a few billion instead of taking the one billion backout
He uses his wealth as a weapon against companies he doesn't like, just the mere threat he may get involved causes massive changes in the stock price and in turn causes investors to suffer financial lose.
Reminds me of Bitcoin "whales". It's a shame that this guy is the figure that will take humanity to Mars.
Not humanity. Only selected ones.
A mars trip itself is only for those going. Most people don't get a part of it unlike pizza which can be divided
We’d all agree that Europeans (non-exclusively) colonized the Americas, but not all Europeans went and not all had the opportunity.
That's my issue
Likely is putting it quite mildly - it's likely to cause a premature death in the same way that throwing yourself off the empire state building is likely to cause some injury.
That's just more BS from him. He'll just keep kicking the can, resuming the project with some spectacular stunt every time he needs it. Everything Musk does or says is just a performance to manipulate the markets.
A permanent colony seems like the sort of thing he'd get bored with, though.
Bezos has the right idea, leaning into O'Neil cylinders.
"???"
Keyword: regolith
Mars is at least 10x harder. The path to space settlement is in our own backyard.
Solving the technology problem is just the tip of the iceberg.
Agreed, but enabling folks to get there makes it possible.
Musk doesn't have to build the colony to have made it possible, and it seems to be the thing his attention is genuinely invested in.
It doesn't. Getting a few people to Mars alive does not a colony make. And even that sentence is misleading because while getting to Mars orbit is certainly challenging but that's something I can see humanity capable of overcoming with current technology. Although we never kept humans in space for 2-3 years before which is just the travel there so we don't really have any idea what will happen to them but let's pretend.
Landing very fragile humans on Mars, however, is a much, much formidable challenge. The heaviest object we have managed to soft land on Mars, so far, is the 1025kg Perseverance rover. The Apollo Lunar Module carried two people and was 4280kg dry weight. Of course, you don't need to ascend -- getting those people back to Earth is not even considered by anyone sane -- but still, it shows there's a problem here. And that was two people. And you need everything for them to live on the surface, including air and water and that's even more weight that you can't just slam those into surface at the ~20 000 km/h the spacecraft will approach either.
It would be just about infinitely better if he tried to show off with climate change combat projects. If you want to show off, a vast forest would be much better, much easier to achieve and so much cheaper. He could build storage for renewable energy, these are also sufficiently massive to be good for showing off. And so forth. There are easy but significant things one such as him could do. For a more formidable challenge, elevate the Brazilian people so they don't need to burn the Amazon.
We already have a terraformed planet but the climate is changing in a way which is incompatible with the way humanity currently exists. It would be prudent to change both -- while the change is inevitable it could be slowed and humanity could change too. Once we bought time, we can wait until material and other sciences make space elevators possible and then we can send robots to Mars to build a space elevator too and then we can begin to think about colonizing Mars.
You start talking about being able to build propellant depots in Earth orbit, build Aldrin cyclers, send large amounts of supplies (or even a whole station on the slow, efficient route) in advance to Mars, etc.
Recent rover landings happened at what, < 1 M/S ? which is well within the capacity of the human body.
Considering that Mars atmosphere is substantially thinner, and gravity there much weaker, landing there would be different from Earth anyways.
We are not currently employing any of the more cost efficient methods of getting things to orbit in the first place, for large scale missions of epic size, nor are we currently employing the most efficient propulsion types.
The way I see it, the biggest problem is not one actually being discussed which are the longterm effects on the human body of living on a planet without a protective atmosphere, and protective magnetic field [2]. If getting mass to space becomes less of a financial constraint due to more efficient launch mechanisms, then, shielding would much less of an issue because mass in space would be cheaper [3]
I think that much of these problems come down to the huge capital cost, and unsolved problems around low cost launches; the novel technologies that need to be developed & turned into a new space launch system, and no, i am not talking about traditional rockets.
[1] https://engineering.stanford.edu/magazine/article/safe-landi...
[2] https://www.nuclear-power.com/nuclear-engineering/radiation-...
[3] https://www.nasa.gov/feature/goddard/2019/how-nasa-protects-...
If need be, large countries that have the technology like China, Russia, US could do it. But it would still require gigantic amounts of capital allocation and effort at this stage. So no one will do it. The biggest thing that is happening right now is China and Russia signing an agreement to build a base on the moon. (yes)
The notion that the board is all of a sudden worried about what Musk might do with Twitter is about as silly as Musk thinking he can weasel his way out of a binding contract he already signed.
It's like if you sell your car to a dangerous driver: you have no financial stake in whether they go on to crash it.
Almost everyone votes their economic interest.
Some people switched to culture/values voting (ie, telling other people what to do), some people just enjoy winning and so vote for whoever they think is going to win.
Uh, yes?
The shareholders, and the board as their agents, care about the company as a means to an end: and that end is making money. They’ve already concluded the sale achieves that goal.
If Musk wants to burn the company to the ground after they cash out, they don't care.
Heck, some of them may invest in competitors after the sale banking on that to make even more money.
If you watch an amateur chess game you’ll find that most players actually have some master plan, but don’t have the skills to see the flaws, or even if the plan is perfect, they don’t have the skills to play it through either.
My sniff test for any conspiracy theory actually involves incompetence. The more competent the plan and execution need to be, the less likely it is to be a conspiracy.
On the other hand many things went wrong in the actual moon landing. There were liftoffs that failed, experiments that went nowhere, targets that were missed, and even people that died. The actual moon landing was a hard task they succeeded at while making a ton of mistakes in the process, just like humans do in the real world when we are at our best.
That seems pretty different from, "If your entire plan is to back out of a contract, add a clause to the contract that lets you back out of it."
The conspiracy theory that Musk is using this twitter scheme to manipulate the markets in his favor does not fail any sniff tests that I’m aware of.
Of course, there are simpler examples, like John Titor, or Pierre de Fermat’s last theorem proof that he would have done all in his head.
The amount of competence required to prepare a controlled demolition of a 110 storey trade center which is occupied 24/7 and full of cameras without anyone noticing and associating this prep work with the much publicised plane crashes that happened afterwards would be staggering, even before considering the insanity of such a scheme.
At the risk of opening a can of worms, the best evidence against the considerably more plausible "lab-leak" COVID theory is that manufacturing an alternative chain of evidence that convinces most unconnected foreign experts of an alternative theory (which still points at Wuhan and Chinese market regulations) when they have plenty of reason to find fault with it requires a lot of competence, as well as totally the opposite approach to China's usual way of suppressing stories.
The fact that his supposed plan here has some flaws is not _further_ evidence that it was planned from the beginning, that's absurd.
It seems much more likely that buying Twitter was just an impulsive decision for him that he is now regretting and looking for a way out of.
I agree with you that many supposed conspiracies require too much competence in order to pull off, and can usually be dismissed as impossible to achieve in practice. But it doesn't follow that, as a consequence, any action that would be incompetent as part of a conspiracy should be considered evidence that a conspiracy exists.
You only need to be competent enough to realize how markets can be manipulated to initiate a conspiracy, however successfully executing one requires a whole new master level of skill set. Off course the people with such skill set exist (as evidenced by the numerous market manipulation schemes successfully executed in today’s business world) and if Musk was smart he would hire such an expert to scheme it for him.
What we might be witnessing here is a business person that is smart enough to realize that market can be manipulated, and see a position to where they can execute such a manipulation, but not competent enough to execute a non-trivial plan without flaws. And worse not smart enough to hire a person with the correct skill set to do it for him.
That’s a great point. Thank you :)
What actually happened isn't relevant. What is relevant is whether he may have thought it would work better. Tricky to prove.
This is all publicly available. Due to leverage, he faced ruin if Tesla fell below X (whatever X is) if he funded it all himself. So he opened his side of the deal up to other people, and allowed other large shareholders to come inside his tent - which reduced his exposure. Then the market dropped 15%.
Matt Levine has an excellent series of newsletters covering it.
There's no way he didn't foresee this.
It would be shocking if he is lacking in self-awareness to that extent.
'Ol Musky missing self-awareness? Surely, you jest Mr. Spock!
Just remember the launch of Tesla auto-pilot, where he was promising full self driving within a year or two, so good that you would let your car work as a taxi while you don't need it and it would become a passive stream of income so great you would see your investment back in around a year! He actually said "our goal is to make Ilit financially irresponsible to buy any other car". This is not a man who "manages hype".
https://twitter.com/wolfejosh/status/19430106783023104
He's called Tesla a "fraud" and that it would collapse many, many times while it's just kept going up and up and up over the last decade. For example:
Is it Josh's fault that the market has listened to Musk when he's said, every year since 2016, that FSD is "coming, this year, for real"?
Couldn't he just have said "SpaceX needs more cash" or something like that?
Regardless, the fall in share price likely drove the outcome.
It blows my mind how much (non Tesla) car companies spend just on advertising.
People here don't know what claims in entirety were made by either party, and thus, it's impossible to speculate. This is what courts are for and Elon, and his team, are not idiots.
All we know are the facts, he agreed to buy twitter and now he is trying to walk away from the deal.
There could be multiple reasons for that, including what he is saying on face value or a dozen other scenarios.
He could still be wanting to buy twitter and use this as a bargaining tool to lower the price.
You can say he was right, once we know the full facts which will be once this plays out and since it doesn't really affect any of us, speculating right now is simply taking part in silly gossip.
Like, you can sign up for free. What's gonna prevent fake accounts in that case?
In my mind this is an insane conspiracy theory that fails occam razor, he was high and said we wanted to buy Twitter. People made fun of him so he dug in to prove all those stupid people. There is no complex deal needed here.
Not that complicated really.