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Comment by chernevik | Hacker News Reader

The filed letter (https://www.sec.gov/Archives/edgar/data/1418091/000110465922...) isn't the knockdown argument I would be expecting.

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.

View on HN

I agree with your analysis. This has always seemed a situation driven by ego rather than rational thought and I expect ego will prevail and we will see futile legal + PR trench warfare for a while. However, my understanding of M&A law[1] is it's not enough for him to say that the numbers are missing or even wrong. He has to say that there was a material breach caused by the fact that the numbers were missing or wrong.

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.

The podcast Opening Arguments had two great episodes about the legal details of this deal (note the first episode doubting this deal would go through was from 2 months ago):

July 4th: https://openargs.com/oa610-elons-twitter-deal-was-a-complete...

May 12: https://openargs.com/oa595-shareholders-sue-twitter-alleged-...

Thanks for these. Everyone else seems to be theory-crafting what will and could happen, but this is a practical, more grounded take.

Thanks for these. I listened to the July 4th one. For others who may be interested, the first 20 mins are unrelated and you may want to skip ahead to the 45 minute mark or so for their conclusions.

Here is the brunt of why they think the deal won't go through: because it is difficult to prove extent of damages and because innocent third parties (the banks partnering with Musk) would be adversely affected, the courts will be disinclined to trigger the historically rare 'specific performance' to compel the merger. They believe a more likely outcome is Musk will instead be compelled to pay the $1 billion but a decade-long legal battle will ensue over it.

While it is an interesting listen, I wish they provided more substance for their conclusions especially since they're running counter to most other debate I'm seeing. Third parties aside, I fail to understand how legally the courts cannot pursue Musk's personal assets for the full amount. But I'm not a lawyer and haven't read the purchase agreement in detail.

I don't think the issue is that the courts don't have the power, it's that it would take forever to come to a conclusion in the court given the resources each side can pour into the fight, how complicated the legal details are, and how poor the legal system is at deciding these kinds of massive corporate legal issues (according to one of the podcast hosts).

Since it would take forever, it's much more likely the two sides settle or give up before they run out of legal tricks.

So basically it’s like buying a house and finding faults with it that the seller had hidden?

Very much like that...except you're also in a legal system where the courts have ruled that the only "faults" that actually are major enough to count are things like "seller said it was 3br house; it's a one room shack" or "seller neglected to mention it had burnt to the ground last year and hasn't been rebuilt".

Something like "Twitter lied, actually 15% of active users are bots, not < 5%" would never count. But "Twitter lied, 85% of active users are bots, the advertisers found out, they stopped buying ads, and now Twitter has been faking revenue numbers to cover it up" would count.

It's hard to stress enough just how far Musk is from showing a Material Adverse Event, even if his wildest suspicions about the number of bots on Twitter are true (...not that it seems likely they are, mind you).

And so it’s likely he owns Twitter at the end of this. Gonna be a field day at the courts then!

Actually no, it's more likely he'll look for the cheapest way to chicken out of this, as long as Twitter allows him to

Depending on the development of the stock market former Twitter shareholders might end up owning Tesla and / or SpaceX, at least partially. A field day in deed.

Edit: Typos.

Don't rule out another possibility.

The true magnitude of the bot problem is exposed in court. Twitter is exposed for not only lying to Musk, they're also now in trouble for lying to the SEC (for years) and by that same token, lying to investors and advertisers.

Twitter stock crashes to an unthinkable low, DWAC buys it all up.

If Twitter has nothing to hide, then why not give him the complete access he wants? Why should Musk just take Twitter's word?

Musk never intended to buy Twitter. The objective was to expose Twitter as the propaganda machine it is.

No - the seller has reported the faults for years, and is known to spend vast quantities of money every year dealing with the resulting problems.

It’s like buying a house after famously visiting it every day for several years running, seeing all the faults with your own eyes, telling everyone you were going to fix the faults, and even trying to humiliate the sellers for not having built the house to your standards in the first place.

Edit: typos

No, I don't think that simplification would apply here.

The number of bots on Twitter has always seemed like a boon of an issue to me. Twitter wants to keep it's user/engagement numbers up and bots do help them. I can 100% understand why they've taken a soft approach to it, even if I find it ethically questionable.

I'm going to go out on a limb and say that anyone who's engaged with Twitter, or knows a reasonable amount about it has known about this problem for many years. I find it hard to believe that Elon wouldn't have been well aware of this upfront.

---

The part of your simplification that I take issue with is, "[...] that the seller had hidden." IMO - everyone in town knows that house has building code issues, but, no one really knows the exact extent. Unfortunately, these same building code issues are likely keeping the building standing.

The seller has a gray-area "issue" that is on the fence between "feature" and "bug," and the buyer is using it as leverage to pull out of a deal they're on the hook for.

OK I know this is a massive tangent but I have to ...

OMFGBBQ ?

Oh My F&&&&ing God Bar-B-Q ?

A modification of a decades old meme popularized on the defunct SomethingAwful.com forums

https://www.urbandictionary.com/define.php?term=omgwtfbbq%21

Very much not defunct. I've been posting there for more than 16 years :)

> Musk is saying, you haven't demonstrated your numbers are accurate.

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.

I will be very surprised that Twitter's position was less than "you can have anything you want", precisely to avoid any complaint of non-cooperation.

I do agree that the agreement's debt financing provisions may provide Musk an out -- "I wanted to close, but I couldn't get debt b/c you wouldn't cooperate".

I'm a little surprised that Twitter agreed to any sort of financing provision, precisely because it seems to allow Musk to screw up his debt raising and then point to that as an out.

But that is not a complaint in the letter, and becomes an argument about what lenders require for debt financing. Musk will have to show that lenders cared about this, and Twitter will have discovery to find evidence they didn't.

Twitter is demanding "specific performance" (i.e. complete the transaction) which is unrealistic given those financing provisions. No court can force all the other parties to close. No financing, no transaction.

He has the financing. He secured ~1/3rd of the funds based on committed LBO debt, ~1/3rd in margin loans against TSLA, and ~1/3rd in personal equity. Since then, he's been working to minimize the his personal exposure, but he can't just pretend not to own the TSLA stock he's borrowing against and selling to close the deal.

Financing has strings. I’m sure his partners want to make sure the mDAU is accurate as well. The entire value of Twitter depends on it.

They can't want that, because it was a term Musk explicitly waived, publicly and notoriously, before he attempted to finance the deal. It was newsworthy, and well covered, that Musk secured the 13Bn of LBO debt in the first place.

What the media says (including musk) and what the term sheet says are two different things. If he mentioned mDAU could be fraudulent to anyone involved, they would be interested to hear what he had to say about it. I believe though that this is a move to reduce the risk and monies he has to pay to try to get a better deal ($30b perhaps?)

> they would be interested to hear what he had to say about it.

They can be interested all they want, doesn't mean they can back out of a deal unless they can demonstrate fraud or gross negligence on behalf of Twitter.

They can't just demonstrate "fraud" or "gross negligence". They have to demonstrate a "material adverse effect", which, as Matt Levine shorthands it, is something on the order of a 40% drop in profitability --- not the stock price, but the fundamentals of the company. Not happening.

What if 40% of the percentage of users that twitter proposes are real people are actually bots? Wouldn't that qualify as material adverse effect?

Propably not if those users can, and are, monetized.

> Wouldn't that qualify as material adverse effect?

Probably not. There has been one MAC finding in the history of MACs. It was a trifecta of fraud, management throwing in the towel the moment the merger was agreed and a massive revenue drop.

Musk’s only hope is to get his banks to pull financing. That’s going to be tough.

Would that even work, though? It’s not like he can’t afford it; his money is just tied up in TSLA. Presumably the court can force him to liquidate his shares if his lenders somehow back out.

No, I the two conditions other than a materially adverse effect that lets Musk back out are if his debt financing falls through or if the government stops it.

So the financiers do back out, then what? Twitter sues them for the full amount, and both parties end up settling for X% of the full amount?

X=100

> If he mentioned mDAU could be fraudulent to anyone involved

One problem for Musk is he's been casting doubt on the bot numbers publicly, even before the deal. One of he's stated reasons for the deal was to deal with spam bots. Twitter has also reported basically the same 5% number in it's filings for years. If it really was a sticking point for Musk he should've done his due diligence before committing to to buy Twitter.

Well twitter is a cesspool of bots, mostly international actors, so I don't see how material facts are a problem.

No, it doesn’t. The entire value of Twitter depends on their entire monetization. That comes from revenue per mDAU, not just mDAU.

Why should a disinterested, objective financier care if $1 billion dollars of revenue came with a real figure of 20% spambots rather than the estimated 5%? That just means true revenue per mDAU is something like 18% better than estimated.

If the real number is 50%, then true revenue per user is about double. If the real number is actually 99%, true revenue per user is about 20x. There would also probably be some very quick wins for improving the quality of the service.

There may be an argument for needing accurate mDAU figures - but Musk isn’t making one, the financiers didn’t ask for them, the market has NEVER had accurate figures for social media anyway, and there’s no legal standard for it.

It’s not a good thing to have more bots at the same revenue because you aren’t just buying a companies past performance but their future performance. If advertisers thought they were buying 1M real person impressions and it turned out to be half bits, next time they pay you money they would only want to pay half as much.

> If advertisers thought they were buying 1M real person impressions and it turned out to be half bits, next time they pay you money they would only want to pay half as much.

That’s if you assume that advertisers have no idea what the result of ad impressions are. (Which is an argument I’m sympathetic to, but isn’t flattering to the ad industry.) If they do have an idea of the results of ad impressions, it would mean that their ads are actually proportionally more effective than they thought, since their revenue brought in by ads has stayed the same but with fewer impressions.

I believe the agreement would require him to finance the deal directly

From the proxy agreement

> cause the Equity Investor [Musk] to fund the Equity Financing, or to enforce the Equity Investor's obligation to fund the Equity Financing directly, and to consummate the Closing.

I'm less certain of that, because the structure of the financing was worked into the deal, as I remember (or at least remember reading about).

I think Twitter is working their way towards suing for damages.

Sure you probably can't force the transaction to complete but you can sue for it and when the other parry demonstartes that they're not willing to complete a transaction they committed then you start suing for damages.

Specific performance would apply to Musk as purchaser, not hypothetical lenders that aren’t party to the agreement. If he can’t find debt, then he would presumably have to liquidate more Tesla stock to pay the full price.

He's already found the debt. His banks agreed to margin and twitter leveraged loans before the deal was even signed.

So if Twitter wins Musk has to go through with his margin loans on Tesla stock. Ehich, at the current state of things, exposes to quite some risk of loosing tge ability to back up the loans with Tesla stock if share prices drop under a certain level. Maybe he just realized that risk and that's why he wants out.

Musk doesn't have to use his Tesla margin loan, and he's already claimed he wasn't going to.

He has to get the money somehow, but he could just sell enough SpaceX if he felt like it.

I think 6.10f leaves him in trouble. No financing, yes transaction.

It would be extremely hard to prove that Elon Musk, the richest man in the world who secured financing for the largest LBO ever in a week, was unable to secure financing because of a technicality in user data which played a key role in his stated rationale for the purchase. Unfortunately for Musk (lmao) and every Twitter employee (my heart actually goes out to them, with the current job market they’re in hell right now), I don’t think there’s any way out of this deal, especially when you look at past precedent like the LVMH-Tiffany’s and Simon-Taubman deals.

I would be surprised if not all lenders / investors did not ask for such data. Especially, after the first tweets from Musk.

Musk did go around knocking on lots of doors to get money and I am not sure if he actually managed to get enough funds; I don't think personally it is a good deal without some internal fundamental data to prove otherwise.

Of course, I am puzzled also that Twitter gave him a smidge of a way out.

> I will be very surprised that Twitter's position was less than "you can have anything you want", precisely to avoid any complaint of non-cooperation.

Be very surprised, they capped the firehouse. From the filing:

> 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.

> Twitter is supposedly not providing the data

Didn't he get access to the firehose, which is, AFAIK, -ALL- the data? (not the 50GB he tweeted about but supposedly a 2TB/day stream?)

IIRC "the firehose" is around 10%

No, you're thinking of the "decahose." The "Firehose" is the whole thing.

https://developer.twitter.com/en/docs/twitter-api/enterprise...

> The Decahose delivers a 10% random sample of the realtime Twitter Firehose through a streaming connection.

Shouldn’t it be called the Decihose, then? The name is confusing.

The firehose is all the posts.

It's not all the views. And 'daily active users' are mainly viewing, not posting.

Which makes me wonder why the argument about 'the firehose' and 'bots' matters.

Perhaps because it's not actually about the bots, it's about buyer's remorse and trying to get out of the transaction via some excuse.

But why would the analysis care about bots that are viewing? They aren't creating disinformation by viewing (maybe by "liking" though). Bots-as-followers are benign. The "bot problem" is bots being used to post disinfo at scale to cram the entire space with propaganda, that is: to quote Steve Banon "flood the zone with shit". Which is what bots and troll farms have done successfully over the past 7 years.

> But why would the analysis care about bots that are viewing?

Because the business issue is about advertising reach. Bots aren't real advertising targets.

Engagement signals are what drive ‘the algorithm’.

Bots that create fake engagement signals (fake clicks, fake media views, fake DM engagement, as well as fake replies and likes) can manipulate what content gets promoted onto real users’ feeds.

From a business point of view, the problem is that if people can manipulate and promote messages on Twitter by using fake engagement, they are not paying Twitter to promote tweets. As well, I guess, as undermining regular users’ confidence that the things that show up in ‘trending topics’ really are ‘trending’.

But bots posting propaganda - if they’re any good at it - might, weirdly be a good thing for Twitter’s numbers, because they create controversial posts that drive engagement into which Twitter can sell advertising.

Looking at the firehose tells you very little about any of that though. There could be a million bots who post lorem ipsum tweets at a rate of hundreds a second and they would all show up in the firehose, but if twitter’s algorithm means none of those tweets are ever shown to a human, does it matter?

Musk’s whole schtick with the bot numbers has just been a thorough demonstration that he has barely even thought about Twitter’s business or what a social network even is.

Musk already secured financing, and most of the recent financial engineering he was doing was in the service of minimizing his own exposure (ie, the amount of TSLA he'd need to sell to cover his end of the deal). His lenders couldn't "independently verify" the mDAU, because he waived diligence --- he was entitled to information as a contractual technicality, but he was not entitled to condition the deal based on anything contained in that information, short of a "material adverse effect", which is in practice an impossible bar to clear.

It does have something to do with accuracy, because further down the page the letter explicitly calls out the SEC filings and the 5% number and the fact that it was a rep and that there is an MAE.

The letter is throwing several pieces of shit against the wall and seeing which will stick.

> Twitter is supposedly not providing the data

Not really. Reading the letter it sounds more like Musk has started to make more specific requests, likely in the hopes of them not being able to service them. For example, he claims in the letter that he requested daily mDAU numbers for the previous 8 quarters (i.e. 2 years) and they only gave him rolled-up numbers.

I find it completely believable that they may not have a daily breakdown for 8 quarters, and so they can't provide the information requested.

Stats get increasingly expensive and useless to store, but one would think mDAU would be one tagged for high precision long retention storage.

I mean, no? Why on earth would I want Thursday the twenty thirds mDAU from a year and a half ago? If it's not bringing value, it's costing money, and it's unlikely to provide value, so why keep it?

Because sometimes it costs more money to discard some data than it does to simply keep it.

When I was in mobile gaming we stored that data for way longer.... Do you really think twitter is throwing away user activity data?

I find it very hard to believe that they don't have this information graphed on a dashboard somewhere.

Depends on whether there was UII in the underlying dataset. It's probable that Twitter kept the mDAU numbers and probably shared them, and Elon's people asked for underlying data that aggregates up to that metric, so they can scrutinize the methodology.

However, saving user identifiable information > 90d is a challenge these days - you have to anonymize it, which defeats Musk's purported goal. (And it might be illegal to share that data w/ a 3rd party.)

When your enterprise value is predicated on user activity stats, you keep your user activity stats.

Because there’s no such thing as a regular Thursday at Twitter scale. Any number of things could have happened that Thursday or around it, major world event, Thanksgiving, last day of Ramadan or whatever. And you might have a valid data question regarding these events.

Heck, not only “what happens on Twitter each day of the week” is a very valid data question, but even by the hour.

Your right twitter might just be incompetent and not keep that data, but this would be one of the most basic forms of data you need for analysis when your entire revenue model relies on that statistic.

If you've ever run analytics at even a mid-sized company (let alone large, where it's even more critical to keep this stuff), getting daily mDAU is trivial and you'd have to have a grossly irresponsible data policy to be unable to pull that.

Nobody worth their wage drops data that aggressively unless they are compelled by law.

I dont have enough experience in analytics to know what data points would be full fidelity vs rollup. I'm just stating that theres no guarantee they even have the data to service his requests, and I dont believe they were under any existing obligation to maintain it before Musk got involved.

> I have little doubt anyone lending that kind of money would require the buyer to independently verify the mDAU.

Nope. Musk's financing is not conditional on that.

"For any reasonable business purpose" is different from 'any information you think is reasonable'. I would presume (guess) that Musk kept asking for more info until he found a point where Twitter stopped responding just so he could argue this clause was broken.

Right- he waived diligence. Twitter has no obligation to prove anything to him. Twitter is obligated to give him documents if they are reasonable to request and helpful for him in financial planning. If the documents Twitter has on hand are flawed or not comprehensive, that doesn't give a pretext to leave the deal. I am sure his lawyers know this and it will all be negotiated.

If Twitter fails to provide reasonable access to data necessary to secure debt to finance the purchase, it does indeed give a pretext to leave the deal. It is part of the merger agreement. You can't tell me that a lender would not want some independent assessment of Twitter's claims before lending.

it seems he was given access to the Firehose, AKA all the data, but curiously failed to mention that in his filing (I guess it was enough, and he had no complaints?), instead complaining about rate limiting on more specific APIs (the standard Twitter API), which seem extraneous given the Firehose

also, said rate limits were lifted

The firehose is not all the data.

Twitter’s value depends heavily on human views of tweets (not part of the firehose), not on the tweets’ content (the firehose).

> You can't tell me that a lender would not want some independent assessment of Twitter's claims before lending.

The lenders have already agreed to the deal, where any such verification was waived.

That's just you making something up. Elon waived his due diligence but that doesn't have anything to do with the lender. The lender can back out unless they also have some type of clause in which they are lending it without any concern at all, which of course they don't.

The lenders agreement is with Musk, not Twitter

Even if that is the case, it is between Musk and the lender(s). None of twitter's business, not twitter's problem (directly).

If one or more of the lenders did back out it might not look good for then as a reliable partner for future deals (not just with musk) - would they take that reputational risk? Especially right now when Musk is taking any flack as someone who doesn't keep their word.

waiving diligence does not mean that twitter can misrepresent things though. I do not know what the true amount of bot participants are, but IF it is above 5%, that would not be something "due diligence" had to discover, twitter says <=5%, and it had better be that then.

Given that this is the numbers and methodology that Twitter has used for many years in SEC filings, Musk is implying that Twitter has been deceptive to its own investors and to the SEC for years. This isn't impossible, but it might require a little more than a page or two of vague accusations.

I suppose it's something that would be extensively argued in court if Twiiter decides to sue.

This is absolutely pure speculation, but perhaps that is Musk's motive for this whole charade. He is erratic enough that it certainly seems possible that he did this whole acquisition agreement with no intention of following through simply to unveil information to discredit Twitter. It certainly doesn't appear from the outside that Musk had any ideas for making money on this by materially improving Twitter as a business from anything I've read. The justifications about free speech seem to taint this deal with Musk having an ideological bent to the whole transaction, so it seems possible that he thought he could use the buyout to access damaging information (like potentially lying on SEC filings) and then back out without spending the full amount.

Honestly, waiving due-diligence is so sketchy that it has made me wonder from the start what his true endgame was. If he did want to buy the company, what did he gain by waiving his due-diligence rights?

bingo. if you want to assume bad faith why not go whole hog - Musk never intended to buy Twitter because he never believed they have what they claim to have, it's all a big scam involving inauthentic accounts and now the world knows it too

it probably couldn't technically be due diligence without the lawyers deadlocking on how to prove the authenticity of a twitter account

So, what, he spent several billion dollars on ten percent of Twitter as part of his plan to tank the company?

Which will obviously not even tank the company because clearly everyone sees what the product is and they see what the ad output is (pretty abysmal). So the big reveal is… nothing revelatory.

This theory doesn’t really make sense and is really covering for Musk’s incompetence or a deeper nefariousness: he needed a very public excuse to offload $8B of his TSLA stock without spooking the market, and he’s happy to pay a $1B+ fee to have been able to do that

It's been stated multiple times in this thread that he can't walk away just by paying $1B.

If he wanted to only offload $8B TSLA stock and not buy the company, why put that possibility way more out of reach by waiving due dilligence and accepting the special performance clause?

Are we also to assume that he has managed to assemble the most abjectly incompetent team of lawyers in the world as well?

If I want to buy a house, I can make my offer more compelling by raising the bid, by waiving inspections, or by waiving a finance contingency.

I can't imagine it NOT being above 5%. I'd bet it's over 25%. But I am hoping real numbers come out of this.

I wouldn't be surprised. A lot of outside researchers have come up with results like "at least 20%" over the years.

I bet it's 95% fake

credo quia absurdum

Twitter doesn't ever claim its bot numbers are 5%. Only Musk says Twitter says that. Twitter says its mDAU (critically important distinction and definition, check SEC filing for what it means) is under 5% bots which is a different number entirely than what you might think of as "bot count". Musk is knowingly and intentionally confusing the two to get people to think Twitter is lying about their numbers. If 50% of the accounts on twitter were bots it would not matter to what Twitter's actually saying in their SEC filings, which is that the users logging in daily using hard clients that display ads is <5% fraudulent.

this makes very little sense? in what way would a bot ever be monetizable and "view" ads?

for example, if they are using twitter via a script-controlled headless (or even non-headless) browser

That's exactly it, a bot using headless client or something would "view" the ad (trigger download of the ad, etc.) but not be a real person (no eyeballs on the ad). Hence, that instance of the ad display was fake/fraud/bot. Customers of twitter (i.e. people paying twitter to show their ads) are interested in this number. Also, investors are interested in that number. Twitter says <5% of its ad-showings are fraudulent - this lets investors say "Twitter's revenue is mostly genuine". That is why the metric is reported - it's for financial/investing purposes, not a claim about how full of bots their system is.

In concrete numbers, twitter is saying there are 1 billion twitter accounts, but most of those are bots or inactive accounts or API accounts or people posting through Tweetdeck (no ads) or joke/duplicate accounts or developer test accounts or... but 230 million of the users per day use a client that shows ads. And of that subset, less than 5% are generating those ad views fraudulently.

If twitter's been lying about that (i.e. their revenue) all along to the SEC that would be a problem for twitter, though not a big enough problem for Musk's claims in his Notice yesterday to work out in his favour.

I guess its a good thing they very specifically didn't claim its <=5%, but instead claim "5% is a guess that we made with some specific asssumptions, but we also applied human judgement to classify bots and so it possibly is higher".

But they have to knowingly misrepresent something (tough to prove) and what they misrepresent has to be material to the deal. Twitter never ever said "we guarantee bots are 5%" they just said that was their estimate and they particularly said in their 10ks that they weren't sure.

Elon said he was going to "fix the bot problem" so claiming he was mislead about this is not going to be very convincing.

How can any judgement in Twitter’s favor be enforced?

Mail a bill for $1B or more and somehow collect the debt?

Maybe the bank could choose to execute the purchase agreement but why would they since they (ironically) can’t force him physically show up and run Twitter.

I doubt SEC has any measures they can take through Tesla which would be weird.

He didn’t agree to “specific performance” expecting that to matter to him.

Twitter has already said they'll sue for specific performance: https://twitter.com/btaylor/status/1545526087089696768

My heart sank when I read your comment: why on earth would the board sue for specific performance!? But my reading of the statement in the tweet is that they plan to sue for enforcement of the agreement which I believe means paying the agreed-upon penalty for backing out of the deal. I don’t at all read that statement as a plan to seek specific performance.

The agreed-upon penalty is when both sides mutually back out of the deal. But right now Twitter's board thinks it can get a lot more out of Musk than just $1B, and my understanding is that the board is likely correct.

> closing the transaction on the price and terms agreed upon

They're definitely suing for specific performance, and I'm not sure they really have any other option at this point. It would be by far in their best financial interest if they can force closing the sale, and Musk's objections seem really thin. Doing anything less than that is complete capitulation

I can see them reaching a settlement to agree to cancel the deal with Musk if he agrees to pay a significant penalty ($5B+), or maybe agree to reduce the purchase price some, but why not sue for specific performance if you think you'll win?

Is his “financing secured”? It just seems like an incredible (and incredibly risky) long shot to me: a judge actually ordering a sale to an unwilling buyer (and Musk, of all buyers!) is a long shot and the big banks going through with funding such a big deal to an _unwilling_ owner is a long shot. But _even_if_ both of those two unlikely things happen what happens when the judge orders specific performance and Musk just... doesn’t? (Not usually a risk you have to factor in but with Musk I think this is absolutely a real possibility. Maybe even the most likely possibility.) Will they issue a warrant for his arrest? A daily fine for contempt? That would be the deal of the century for Musk.

I don’t know the right answer when you’re dealing with a megalomaniac like Musk but I really don’t think specific performance is it.

I am cautiously optimistic that whatever it is Musk is up to will eventually give rise to some cool new federal securities laws. Maybe even some new federal crimes! (Who am I kidding, a crime that only the wealthiest of the wealth would even be able to commit? Not in a million years!)

Not a lawyer, but I expect that given a verdict a judge can and will attach assets to force compliance. The court could order Musk to sell Tesla shares to raise the necessary funds, and seize the shares to do so itself even if he won't.

> A daily fine for contempt?

Probably a large one.

But if Tesla shares tank, and the other investors bail out, perhaps he just doesn't mechanically have the funds to do so.

When normal people agree to spend more than they have that normally ends up in bankruptcy and liquidating most assets other than a few exceptions. Obviously that won’t happen here because the rich have a different set of laws but on the surface he either has the assets to pay it off or would have to sell everything he had and start over

What specifically would prevent this?

De jure? Nothing, as written the law applies equally to all.

De facto? Just observe how often the rich are convicted for their crimes. Even in the rare cases that they are jailed, the severity of the sentence is usually much lower than the common man. Look at Musk himself, he already agreed to not tweet about tesla without the boards approval in an agreement with the SEC to avoid punishment, then routinely ignored it and just fought them in court until he won. Our system allows for anyone with enough money to run out the clock until they either win, the other side gives up, or the situation no longer matters and the case is dropped.

Is there are some sort of stats to observe? Genuinely curious

If you are requesting stats to observe this then I believe you either need to start looking around more in how your society runs or you are sealioning[1] me.

This is like asking for proof that the sky is blue. Perfectly acceptable in an academic context where the laws of physics are being defined at an extremely technical level. However if you’re asking a question like this in the context of every day life, it’s difficult to believe that you are asking in good faith.

[1] https://en.m.wikipedia.org/wiki/Sealioning

I'm asking in good faith, of course. You wrote "just observe how often", and "how often“ is measurable. So there must be a record. I don't observe much crimes at all in my everyday life. Likely my life is not a good sample, but it just to point out to the obvious fact that what you belive to be an obvious fact may not be an obvious fact, but a political bias instead

“How often” as used in colloquial English is not measurable because colloquial English is not a technical language and this isn’t a technical discussion.

Finding examples of the rich getting away with crimes that regular people do not get away with is a simple google search away which is why you come off as sealioning.

On the off chance that you are legitimately asking, here are a few examples

[1] https://www.forbes.com/sites/clareoconnor/2014/06/09/s-c-joh...

[2] https://en.m.wikipedia.org/wiki/Affluenza

[3] musk agreeing to stop tweeting about tesla without board certification of the tweet and then doing so anyway

>"How often” as used in colloquial English is not measurable

So what "observe how often" means then in your colloquial English?

I legitimately asked about stats. On this forum I presume you know what it is, how it's different from anecdotes. And it makes your behavior look not particularly honest.

You could have sincerely answer: "I have no data, but I have a gut geeling/impression" - that would spare you from wiggling around, and claiming that English is not to express facts.

Let me be clear here then, “how often” for me is any time the law protects the rich at an extent that the rest of the citizenry do not get.

Did you ignore the links? The Johnson and Johnson heir is anecdata yea but the affluenza defense is an actual used in the court and accepted defense. I don’t need stats in this case when I can point to a single legal precedent

When you start arguing English instead of backing up claims it’s time to admit you’re talking out your ass

Don’t agree, he made a claim on the intent of my words that does not exist. I’m not required to accept it just because you don’t like defining terms.

Additionally did you ignore the links I provided with evidence?

The links you provided weren’t evidence to your claim of systemic corruption in the United States

K bud

No it isn’t like asking for proof that the sky is blue. You are making an objectively false claim, that people toss it around all the time and/or you truly believe does not change that.

“Look how often” is a subjective English term people use to ask people to look at the situation and not an invitation to provide statistical analysis. Given that the rule of law is supposed to be applied equally I am pissed at even a single instance but here I provided you with both a link to a case where the protection due to their wealth was terrible in the magnitude of the protection and then a link to the legal defense admitted into court explicitly defining that they needed extra protection due to their wealth.

But let’s get to the heart of where I expect you to take this thread.

Is there any sort of evidence that you would accept that the rich get greater protection in our legal system? Or is it just not possible in your world view?

Money lets you put weight on the scale to tip it in your favor, but it doesn't let you fully control the outcome. Especially because in this case Musk screwed over other rich people.

I’m being a little bit flippant here and I apologize in advance if it comes off as abrasive, but I think this image shows a good example of the difference between how regular people interact with the law, how the upper class interact with the law, and how the Uber wealthy like musk interact with the law[1].

If you have what is effectively infinite money as far as the system is concerned, you can break through any barrier

[1] https://qph.fs.quoracdn.net/main-qimg-954cf5204ca388a11909bb...

> until he won

He won. He prevailed. In court. Whatever you think he did that violated the SEC's order, is not correct, at least in the eyes of the judge or the jury who heard all the evidence and decided the case.

Rich people do have the benefit of hiring excellent lawyers and affording every available opportunity to appeal. But that is not being "above the law," that is the law. At the end of the day, if Musk won even on the 10th appeal or whatever, then you can't say that he committed a crime.

The rich don’t have a different set of laws they just have better lawyers.

And what provides for the rich to acquire better lawyers that can produce a better outcome but the laws? Why is everyone not provided a state defender rather than letting the rich purchase the best talent?

Any law that carries a fixed fine and no jailtime is a law that rich people can break with abandon, yet would ruin a poor person. A $50 parking ticket is a major burden for a person making minimum wage (essentially a day of their life to recoup that); whereas for a rich person their money makes that amount for them in less time than it took me to write this post.

Or, from another perspective: “The law, in its majestic equality, forbids rich and poor alike to sleep under bridges, to beg in the streets, and to steal their bread.”

I believe I have seen exponentially growing daily fines for contempt.

Besides, you can jail people for contempt.

Worst case Musks tantrum over some tweet will tank Tesla, ruin himself and maybe even impact his other ventures. Basically he might just bring over himself what every shortseller predicted years ago would happen.

I’m not a lawyer, and I suspect this gets into old and bizarre traditions of equity.

But the damages for failure to perform may conceptually straightforward: the difference between TWTR’s market cap and the deal price * number of outstanding shares. Which is over $10bn.

But TWTR’s market cap is and will be influenced by Musk’s series of actions and announcements. Both parties would have to come up with a hypothetical number for how much TWTR is worth if Musk walks away without paying anything, and there’s no way their estimates would come close.

That’s Musk’s fault. The market cap will be calculated the way it would in any other scenario. You’ve just made up some weird rule that doesn’t exist.

Probably instead of arresting Musk they just sieze assets to cover the damages. His assets are mostly on paper anyways.

It’s not a penalty for backing out of the deal, it’s compensation if his financing falls through. Musk doesn’t have a discretionary out here.

Twitter will sue for specific performance because (a) they're entitled to it and (b) it's worth substantially more than the reverse breakup fee.

Twitter has a binding agreement to get its shareholders cash at a price that’s nearly 50% higher than todays closing price, a value that the board concluded was superior to their standalone prospects and other alternatives. Why wouldn’t they enforce the agreement and close the deal?

Because it will takes years to enforce and in the meantime Twitter will have bad headlines and huge operational challenges? At best, they are likely to get the break-up clause which would not offset the damage such legal proceedings would cause over the duration of XX months.

Running Twitter into the ground for 50 a share sounds like a great deal for shareholders. Heck, given the cesspool that Twitter is, it might even be good for society.

It would suck for Musk and his financers, but they have a simple alternative: stick to the agreement they signed. It's not like the risks of merger agreements are unknown. And the waiving of due diligence wasn't a minor, easy to miss, point either.

Musk wants to back out because of price. He cannot, and he is throwing the equivalent of a tantrum.

I do hope this doesn't end up with Musk losing control of spaceX. Some actual quality is comming out of there.

He's not going to have to buy twitter, it's that simple. He has multiple avenues of getting out of it.

Such as?

Settling for an amount between his agreed upon acquisition price and the current market value, basically paying Twitter owners billions for nothing.

Doesn’t seem like getting out of it to me

The contract does not give many avenues. It is either a 'materially adverse effect', 'breaking a covenant', or not being able to get the loans he wanted lined up.

-Materially adverse effects are not within play here. The threshold for that is really high.

-The loans are committed. Banks have signed for the loan, and they can't get out of it.

- That leaves the covenants. That is the main approach Musk is trying, but it is a stretch.

The only other avenues to get out are:

- Get Twitter to amend the contract - Ignore the contract

Threatening to try the second (which would really suck for twitter, even if it almost certainly won't work) might be a way to get twitter to do the first. But I get the sense that the board feels they have a strong position. Moreover the board is likely getting a lot of pressure from shareholders to not give in to Musk.

They are absolutely suing to compel performance at the accepted price.

It will eventually settle. If they sue and win Musk's financing will have long backed out so they aren't going to end up with enough to close the deal.

I suppose they could force him into bankruptcy which would end up with his ownership stakes in Tesla and SpaceX sold off. Given how much of a loose cannon he's become that would probably be better for other shareholders but who knows.

> I suppose they could force him into bankruptcy which would end up with his ownership stakes in Tesla and SpaceX sold off.

I wouldn't mind watching Twitter do this to him out of spite.

From what we've seen so far, I doubt the Twitter board would do that. I guess they are suing because that's what the shareholders are pushing for.

And those shareholder's wouldn't like to get a piece of Tesla and / or SpaceX in exchange for Twitter? At, what, 40 billion evaluation of Twitter? Sure as hell I would push the board of Twitter to sue for that if I were a Twitter share holder.

> I suppose they could force him into bankruptcy which would end up with his ownership stakes in Tesla and SpaceX sold off.

I don't think they'd need to force him into bankruptcy. If a judge awards Twitter (say) $10 billion in damages, there are many avenues to seize enough of Musk's assets to pay without making him bankrupt.

Well the best case for Twitter isn't $10bn in damages, it's forcing him to go through with the the entire original $44bn deal.

Elon's net worth has already fallen by $65bn in the past few months - I'd imagine the valuation of his assets will fall quite a lot more once it becomes known he's going to have to offload $44bn worth of Tesla and/or SpaceX to finance a bad deal.

Elon won't be bankrupt in the colloquial sense of financially ruined, but if he's forced to go through with deal and is unable to finance it he will have to liquidate an enormous amount of assets - and many of his assets are already collateral for existing loans.

Well, here's the tweet from Bret Taylor (chair of the board at Twitter)...

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."

> Complaining Twitter rate-limited his API access (which would be very foolish on their part)

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...

Then they could have simply communicated that fact the first time they ran into the limits and they certainly would have been lifted. This happens to me during DD all the time and it has never caused a problem or an investor/acquirer to back out of the deal.

Out of coriousity, would Musk's legal team have to proof Twitter restricted his bandwidth out of malice? And wouldn't that be hard if they never conplaibed about to Twitter?

Hence I mentioned sighting rate limit seems like they wanted something as scape goat from the start.

Besides, I don't think it's even possible to have something at Twitter scale without some immutable rate limits for security & reliability.

I mean Musk shouldn't go all

   SELECT * FROM users;

It’s so crazy to me that the purchase price was determined by a weed joke and people are surprised that in the cold sober light of our recent correction, Musk is trying to get out of this.

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.

Musk is no different from your average "small government conservative", which basically means being anti-civilization. They won the birth lottery, and the society and the government are stopping them from going from rich to filthy rich quickly.

The only thing here is that Musk happens to be fascinated with electric cars and space travel (ever since he was a teenager). We just got lucky - he could as well have gotten into opioids or coal mining, and his desire to dismantle the laws and norms would have burned even brighter.

> people are surprised that in the cold sober light of our recent correction, Musk is trying to get out of this

People are not surprised. People were expecting this. As evidenced by the discussion then and now. Also as evidenced by the contract which was drafted at the time between him and twitter.

> People are not surprised.

Markets moved on this new. Somebody was surprised.

> The last paragraph, complaining about firings and hiring freezes and departures, seems positively desperate.

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.

> I have enormous respect for his engineering

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.

Elon Musk is literally the Chief Engineer at SpaceX. His technical proficiency is validated by other senior engineers who work there, as well as senior engineers at NASA. There are also countless hours of unedited footage of him demonstrating his deep technical understanding of rocket engineering.

https://www.reddit.com/r/SpaceXLounge/comments/k1e0ta/eviden...

https://www.youtube.com/watch?v=hIPLmZK3C1Y

You seem to think he doesn't know the facts, but I suspect that he does. He just doesn't care about facts or truth. He is the sort of person who likes to win debates and get hits on people he dislikes. So trying to correct him on these points is a waste of your time. I say this from experience with him.

I've tried talking to him before. I shared about something I find so very fascinating - that approximation via abstraction is provably better than perfection in many learning situations because of its relationship with computational complexity. He asked for proof; I provided it. I won't repeat the proof here, but know that this isn't an obscure and unknown result - here is Peter Norvig in Artificial Intelligence: A Modern Approach discussing related ideas:

> Page 172. "One way to deal with this huge number is with abstraction: i.e. by treating similar hands as identical. For example, it is very important which aces and kings are in a hand, but whether hand has a 4 or a 5 is not as important, and can be abstracted away." > Page 173. "Because calculating optimal decisions in complex games is intractable, all algorithms must make some assumptions and approximations."

I earnestly engaged with random314 on this topic. He ultimately concluded that he had won the argument, taught me something, and condescended that I ought to have known better than to have talked with him. Along the way he compared me with people he found foolish, claimed I was incoherent in order to avoid addressing my points, gaslit with regard to the thread topic, accused me of jargon, and even made the absurdist point that when I said that not all numbers were computable that because some numbers were computable it followed that I didn't understand what computable numbers are.

One might suspect that he merely misunderstood the point I was making. The thing is - I have strong reason to reject the notion that he did not understand. Initially, I think he didn't. He entered into the conversation under the presumption of my idiocy because my point was counterintuitive - it tricked him into thinking I was wrong. How he handled himself afterward showed me that he knew I wasn't. When I thought deeply about his choice to make the absurdist argument with regard to computable numbers it occurred to me to be the sort of thing one would only choose to do if they understood that not all numbers were computable - understood the thrust of the proof - and wanted to deny it rather than to accept the obvious truth. It was an attempt at sophistry. By making my point with regard to not all numbers being computable seem in error, he hoped to obscure that I was correct.

Simon, I strongly suspect that the reason he doesn't seem to know pertinent facts is not because he doesn't know those facts, but rather because he finds them inconvenient and because the rhetorical appeal of fanboyism is better setup by being wrong, but in a popular way.

My response wasn't provided with the aim of changing the mind of the individual who wrote the parent comment, nor was it to challenge them to an ad-hoc debate. I responded because I thought it would be of interest to the many passive readers of the discussion.

I agree with your analysis, but I also think the numbers are bogus. Just for fun I tried buying half a million followers from some Russian guy a 7 years ago. While that number declined a bit over the years as Twitter did some trimming, I still have half of them.

(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.

That's an interesting story, but irrelevant to this.

Twitter claims that < 5% of their "monetisable daily active users" (aka mDAU) zfd bots, where mDAU is a very specifically defined term, but broadly represents "people that Twitter thinks they can count when they sell advertising". Bots don't tend to buy things, so any bots counted in mDAU is a mistake that will piss off advertisers. (Which would be bad for Twitter, hence why the number matters.)

That there are a lot of bots on Twitter is well known, and clearly true. That Twitter happily leaves most of them alone to do their own thing as long as they don't abuse the service is also well known, and quite sensible.

The question is whether Twitter is good about flagging them as bots. You could have a million bots following you, but as long as Twitter has correctly noted them as bots and not counted them as mDAU, then exactly 0 count as part of the 5% bots.

Nobody outside of Twitter knows who they are counting as part of their mDAU, which means nobody can cross check their numbers.

I’m reasonably sure that these fake user bots that were created for the “buy followers” industry aren’t picked up as bots by Twitter. There’s no reason to allow such users.

It's generally much easier to detect a bot than to detect the purpose an account was created for, so I wouldn't be so sure myself.

Also consider that there's also no reason not to allow such accounts. From a business point of view, Twitter exists to sell advertising. Accurately counting the eyeballs (aka mDAU) they have to sell to advertisers is important, but policing the site otherwise makes sense strictly to the extent that failing to do so may drive some of those eyeballs away.

Consider: No real human beings are likely to quit because of fake followers being left alone, but a few vain people might quit if their fake followers were removed. Further, an overly agressive ban wave targeting bots may well remove some bots people actually like which again, on the margin, may drive some real people away. Like any large company, Twitter will inevitably feel the pressure to play it safe, and in this context that means never banning an account that isn't clearly driving real users away - which means that very passive bots that don't do anything are unlikely to be banned.

Of course, none of that gives us any insight into how accurately (or not) Twitter is counting mDAUs.

If these users are not causing any trouble, getting rid of them seems low value -- and any attempt to clear out a large set of boots will almost certainly got a bunch of non-bot users (unless they could actually get the exact set used by these user sellers)

he's mostly a fraudster who has used a cult of personality and litigation to dominate the businesses that he's involved in. check out the litigation against him for the solar city purchase by Tesla if you're interested in just how much the man is willing to defraud shareholders to personally enrich himself and his family.

mDAU being monetizable daily active users for those who are wondering

The m seems to be key, if a bot can be mobetized that bot isn't a problem.

I think many of you guys are missing the forrest from the trees here. He tanked his Tesla shares to do this deal & to no small part due to Bill Gates. I am sure this express more of his nervousness on just how much more expensive this deal was becoming as it was costing him a lot more than the list price due to him not taking into account how his other investors in his other companies would take the news.

He's a smart idiot to put it kindly and a very lucky one at that despite all of his sincere and actual efforts.

What you are saying doesn't even make any sense. He tanked his Tesla shares and it's partly because of Bill Gates? Makes no sense.

I don't agree with the Bill gates part but you are fundamentally right.

Elon signed this deal before the biggest stock market crash for about 15 years. The deal is extremely expensive for him right now in terms of tesla shares.

He is just buying time and hoping tesla shares increase in the meantime.

He KNOWS he HAS to complete this deal legally.

That's it. It's not complicated.

Or maybe, and bear with me... the entire merger was in bad faith since day 1.

> have enormous respect for his engineering and business skills

I don’t

He's a great deal maker. But his ego, need for attention and celebrity, legitimate Twitter addiction undermines him.

During a merger, discovery is absolutely a right the purchasing side has. The target company should open its books, your assumption about them not disclosing is incorrect.

The problem for Musk is that he filed an offer letter, which is normally what you do after due-dil, and there’s nothing in that offer that gives him a way out without pulling the MAE card, which is a pretty weak reed to rely on (though his most recent filing gamely works as many angles as possible, as you’d expect from Skadden).

The buyout offer was a ridiculous move that feels like it was predicated on hurt feelings over the board debacle, but it’s not the Chancery Court’s job to protect billionaires from themselves, and Musk is generally the sort of manager that the court casts as the bad guy in the little morality plays they make of cases. Doesn’t mean they’ll compel specific performance (I’m skeptical that an equity court is going to see that as the best option, not least because it’s not clear to me Musk would have enough cash to operate the company if the sale went through under current market conditions), but I suspect that, after protracted negotiations and litigation, either the board will accept a modest haircut on the offer (again, due to market conditions), or the court will award liquidated damages ($1bn) plus possibly some additional damages if Twitter wants to argue that Musk violated the confidentiality and nondisparagement provisions of the deal. (If the former, I suspect that we’ll see a bunch of strike suits from aggrieved shareholders land in court anyway, so buckle up for a lot of litigation regardless.)

No it’s not. See e.g. https://twitter.com/matt_levine/status/1545152093501227009, https://twitter.com/MorganRicks1/status/1545404990457536512. In what meaning are you even using the term?

You guys are right, I completely missed that he waived his rights on this term. My apologies, I made an assumption (which was wrong) that Musk was acting reasonably.

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