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Comment by weeblewobble | Hacker News Reader

Tangential, but I found Ev's recent Tweet about the Twitter/Elon mess totally perplexing:

"I'm sure there are legal/fiduciary reasons you have to say that [you are going to sue Elon to force the acquisition], Bret. But if I was still on the board, I'd be asking if we can just let this whole ugly episode blow over. Hopefully that's the plan and this is ceremony."

https://twitter.com/ev/status/1545588839363727361?s=20&t=4g7...

Why would Twitter want to just let this all blow over? Elon did a ton of damage to the company and they have a good cause of action.

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I don't fully agree with arguments that Silicon Valley is full of America's current meritocratic elite scratching each other's backs. But I do think that tweet speaks to that argument.

The board's responsibility to shareholders and other stakeholders in Twitter doesn't seem to enter his awareness — just everyone getting along, where everyone means a select crowd of entrepreneurs and investors.

The stock made a huge jump when he announced he purchased a large stake on April 4, and now it's back to $34 which is ~5% above its mid-March low point. Most other tech stocks are down in that time frame, e.g. FB is down 13%.

Doesn't seem like Musk did any obvious damage.

That's because the possibility of an acquisition is still being priced in. If Twitter announced tomorrow that they were letting Musk off the hook it would take a much greater dive.

If true isn't that alone a pretty strong signal?

That would mean a shrinking possibility of an already bungled acquisition going through is better than the status quo. Seems like Musk has kind of done Twitter a favor by shaking things up. Regardless of the acquisition, it has become clear that the market thinks there is a lot of potential here that's being wasted.

The market isn't pricing whether Elon will improve Twitter. The market is pricing in the fact that if the acquisition goes through, each stock you hold gets converted into 52.40$, regardless of what happens to Twitter after it's acquired.

The market just thinks there's a chance he'll be forced into paying more than the company is worth. It needn't have anything to do with the company's potential.

If I made a credible $100B offer for the Campbell Soup company and waived due diligence, the stock price would shoot up, but it's not because they're wasting their potential.

The only thing it's a signal of is that $54.20 is much higher than the "true" stock price.

> That would mean a shrinking possibility of an already bungled acquisition going through is better than the status quo

It is objectively better for investors because they get $54.20 a share instead of the current ~$34. It isn't a signal for anything else. Shareholders don't care what happens to Twitter as a company after that, because they have already sold their shares.

Twitter will be worth about $5bn by 2026. It's a nonsense platform with no intrinsic value.

There's been some employee attrition and negative effects on company morale. I also think the brand-reputation damage of this episode will take time to show itself.

most recent Matt Levine column outlined a scenario where Elon Musk sells back his 9 percent stake in Twitter back to Twitter at a discount, and everyone agrees to back off.

> Why would Twitter want to just let this all blow over? Elon did a ton of damage to the company and they have a good cause of action.

I don't think Twitter has much of a choice here. Suing Musk seems like a pretty big risk given his defense, and it doesn't even guarantee a payoff for the company. On top of that, the fallout from such a high-profile court case wouldn't be very good PR (arguably so even if Twitter wins), so the shareholders are probably in for a net loss if they fight it out in court. Plus, Elon could full-well just settle the $1B offer cancellation fee out of spite and Twitter wouldn't see a dime.

Elon definitely made a stupid and rash decision, but frankly, Twitter is an even dumber company. A bunch of bagholders trying to legally compel a multi-billionaire to buy them out doesn't make a very strong court case. I don't see this ending well for Twitter unless Elon really fumbles his defense.

> fallout from such a high-profile court case wouldn't be very good PR

In what sense? Will advertisers or users flee because of a court case? If anything, it keeps Twitter in the news. Their CEO could make any announcement today and have it reverberate across America as he could never have done before.

> A bunch of bagholders trying to legally compel a multi-billionaire to buy them out doesn't make a very strong court case.

What case law would suggest this being a bad idea? Musk voluntarily made himself the 2nd-biggest TWTR bagholder next to Vanguard.

> Elon could full-well just settle the $1B offer cancellation fee out of spite and Twitter wouldn't see a dime.

This is not true. He can't just decide to pay $1B to get rid of it all.

My impression is that Musk's defense is pretty weak. This is mostly based on Matt Levine's columns so I could be wrong, but it doesn't seem like much to me. He's a known BS artist with a strong incentive to get out of this deal so I don't give a lot of weight to claims he makes without evidence.

There is precedent for Delaware courts to force the merger to go through, Tyson vs IBP. Twitter vs Musk is going to be a test of that precedent and whether judicial system still works as intended.

Twitter hurt themselves by not being able to hand over crucial details like how big the percentage of bot accounts is on the platform. No matter what is being said, as long as Twitter can't hand over these stats, all they say is worthless. About as worthless as the Twitter platform itself.

Elon hurt himself by waiving his right to any due diligence. Any time he tweets he sees a ton of spam accounts replying to him. Why didn't he ask for this information before agreeing to the initial terms?

It doesn't matter from Twitters point of view who is right or wrong. They need to close this fiasco it's tanking their stock price.

Because he wanted to use the due diligence (discovery of the number of spam bots) as leverage to negotiate the price down.

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