Musk's trial hasn't stopped, no matter what he told Twitter, says judge
theregister.com
theregister.com
Twitter has no reason to ask for a stay until the deal is closed. It's better to just keep pushing and motivate Musk to close asap.
>What Musk apparently wants is to pause the trial while they can work this all out: He offered to “proceed to closing of the transaction,” but only “provided that the Delaware Chancery Court enter an immediate stay of the action ... and adjourn the trial.” What Twitter wants is sort of the opposite, to keep the pressure of a trial on Musk until he shows up with the money. This feels like a solvable problem — basically, you write some sort of agreement that says like “we’re going to work together to get the closing done this week, but if we don’t we’re gonna have an extra-super-bad trial,” and you get Chancellor McCormick to bless it — but they have to work together to solve it. They have to negotiate and draft an Agreement to Stick to the Agreement. If you’re writing that agreement, you have some trust issues.
a) There is no new agreement. Litigation proceeds.
b) Musk floats an actual walk-away settlement in an amount Twitter would agree to.
"Musk declined to attend in-person Twitter deposition, citing COVID exposure risk" - https://news.yahoo.com/musk-declined-attend-person-twitter-2...
Note the link above refers to a previous scheduled date, not the one that should start today. :-)
What a BS artist this guy is
Is this the same Musk who wanted to keep his factories running and downplaying COVID? - https://www.nytimes.com/2020/05/13/business/Elon-Musk-tesla-...
Ironic that he's complaining about "fascist" COVID guidelines and wants to keep his lemmings working at all costs, but as soon as his own health is on the line, it's suddenly dangerous. (of course it's not ironic at all and just what I expect of him, but, you know...)
Two years ago he wanted his factories to continue producing cars and didn't see the virus as good enough reason to stop, now he seems it see it as enough of a reason to not appear on a disposition, after apparently having been infected twice already.
You can also constantly find pictures and videos of him being around people etc. Musk said that the interviewing attorney had contact with an infected person 4 days prior. Yet, this attorney tested negative multiple times.
So why is a disposition suddenly an issue?
Probably because he doesn't want to attend it, or rather, wants as much time as possible to prepare with his lawyers.
That's just my speculation, of course.
The more charitable read is that this is a "my dog ate my homework" excuse to not attend deposition.
He's trying to play "gotcha". Either they do care about COVID and grant his request or they've been lying the whole time about COVID.
But that's a false dichotomy. He's betting on the court not saying "You're being disingenuous about your concerns" or "Our protocols for COVID have changed due to X, Y, and Z, so there are no more exceptions".
He believes he can play semantic games to get out of doing things. Because that's worked for him in the past. But the only reason that worked for him in the past is because of money. The people he used it on had no recourse against his resources. He's running into the hard wall of reality most of us run into a long time ago. He's finally up against someone who has even more resources than he does.
Only semi-related, but a Russian once told me that in the West people lie to manipulate, but in Russia people lie to your face to insult you. Whether he was lying to my face is a question left as an exercise to the reader.
The second part of your comment sounds interesting as well. I don't know if that's true, but I noticed as well that the we westeners seem to do similar things like the ones we criticize, we just do it while claiming that it's for [freedom, democracy, safety, increased GDP, jobs, ...]. But that's how international politics works, I guess.
Musk's tweets that he thinks Twitter would be an "accelerant" for some vague idea of a super-app is just more smoke to obscure a cynical move. He has no clue of how to make one. There is good reason to think the whole idea of a "super app" is specific to some Asian markets.
Now Twitter must be counting all the losses Musk will take if Musk is forced to pay $54.20 per share. The settlement will be a few dollars less.
There is potential for collateral damage: If Musk is forced to sell a lot of $TSLA, it could be the tipping point where investors wonder what a realistic valuation is for a car maker that is about the same size as BMW, but is currently valued 3.5X the market cap of Toyota.
But this is very good for Twitter shareholders.
Forcing the deal is important for US Contract law in general. When people sign documents, they must be solid with the courts enforcing the contract. We can't just let one person give up deals after the fact.
I don't even know what the worst/best case scenarios would be here.
If he's right about Twitter, now he has essentially a toxic asset and everyone knows it. But he made a bad deal in the worst way. No one is buying it from him. And people are going to be more hesitant to deal with him in the future. Because he's obviously not doing due diligence.
If he's wrong, it's not a good look for him either and while someone may eventually buy Twitter off of him, he'll likely have trouble with other deals still. Because of the diligence issue, and his conduct through this ordeal.
Like, who is coming out of this deal happy?
TWTR shareholders are being paid $54.20 per share for a company worth probably only $30/share (maybe less, now that Elon spent months trash talking the deal)
TWTR shareholders are going to be throwing parties all around the country with a big windfall. I know a bunch of online people who also put option plays on this.
I don't agree - I think there's a win for the Twitter shareholders, for example. There's also a win for precedent here, where a billionaire can't just say "j/k no I don't want it" because they've realised it's a bad idea.
> Like, who is coming out of this deal happy?
It doesn't really matter who is happy IMO. I'm not one for revenge justice, but nobody needs to be happy if one person makes a series of incredibly dumb decisions, signs multiple legally binding contracts along the way, and then changes their mind after the fact due to information that they claimed was the reason they were undertaking the deal in the first place.
The $1B is for a different scenario; he doesn't have the option to back out of the deal voluntarily.
https://www.cnbc.com/2022/05/13/elon-musk-cant-just-walk-awa...
> A reverse breakup fee paid from a buyer to a target applies when there is an outside reason a deal can’t close, such as regulatory intermediation or third-party financing concerns.
Oh, yeah I do know. Because the $55B is other people's money, and the $1B would be his money. So his choices at this point are 1) get out of the deal for approximately $0, 2) get out of the deal for approximately $1B, 3) buy Twitter for approximately $0.
Pretty clear why #2 isn't being considered.
https://www.cnbc.com/2022/05/13/elon-musk-cant-just-walk-awa...
Elon Musk can't invoke that clause. Only US government, or EU, or maybe a bank can invoke that.
No breakup fee was specified for 'the deal failed because he got cold feet'. That's one of the reasons the deal was so bizarre. He wrote it, and he wrote it in a matter that did not give him much room to maneuver.
He can’t just say “I’m out, here’s a billion dollars for your trouble.” Twitter can (and did) sue for specific performance (forcing Musk to close the sale). If the court decides to award monetary damages instead of specific performance that’s capped to $1B but it’s not a simple break up fee.
Also most of the purchase will be Musks money too. Financially he’s much better off paying $1B than buying Twitter at the contract price today.
"Specifically, this termination fee is payable by Parent to Twitter if the Merger Agreement is terminated by Twitter because (1) the conditions to Parent’s and Acquisition Sub’s obligations to consummate the Merger are satisfied and the Parent fails to consummate the Merger as required pursuant to, and in the circumstances specified in, the Merger Agreement;"
The comment conviently cut the first part of the sentence where the clause is effective if the acquisition is terminated by Twitter.
The legal commentary I've seen on this deal states that monetary damages are capped at $1B (and actual damages would obviously be much higher) so the two outcomes are basically 'Musk forced to buy Twitter' and 'Musk pays Twitter $1B' without much in between. Assuming the lawyers who took the time to read the contract know what they're talking about it would be a pretty big surprise for the Delaware Chancery to throw out the contract and award higher monetary damages.
People keep repeating this wildly untrue thing as if it is fact. The merger contract is a public document. Show us where it says he can just pay $1B and walk away if he changes his mind.
>Upon termination of the Merger Agreement under other specified limited circumstances, Parent will be required to pay Twitter a termination fee of $1.0 billion. ...
(1) the conditions to Parent’s and Acquisition Sub’s obligations to consummate the Merger are satisfied and the Parent fails to consummate the Merger as required pursuant to, and in the circumstances specified in, the Merger Agreement; or (2) Parent or Acquisition Sub’s breaches of its representations, warranties or covenants in a manner that would cause the related closing conditions to not be satisfied. Mr. Musk has provided Twitter with a limited guarantee in favor of Twitter (the “Limited Guarantee”). The Limited Guarantee guarantees, among other things, the payment of the termination fee payable by Parent to Twitter, subject to the conditions set forth in the Limited Guarantee.
I am not contract law knowledgeable, but how is 1 not a get out of it for a billion clause that you say is untrue.
"Specifically, this termination fee is payable by Parent to Twitter if the Merger Agreement is terminated by Twitter because (1) the conditions to Parent’s and Acquisition Sub’s obligations to consummate the Merger are satisfied and the Parent fails to consummate the Merger as required pursuant to, and in the circumstances specified in, the Merger Agreement;"
The "terminated by Twitter" is important. Musk does not have the right to terminate. Twitter has not terminated the acquisition.
Note that Musk's immediate loss, if the deal goes thru at $44B, is going to be way over $1B (more like $10B perhaps) compared to what the market had been valuing the company at, so I'm pretty sure he'd have jumped at the chance to back out for "only" $1B if that was an option!
The $55B isn't all other people's money. He sold a ton of Tesla stock to put up his share (about half, IIRC). That alone would draw SEC ire, manipulating the Tesla stock price under apparently false pretenses.
I suspect that this is the reason his lawyers finally got through to him: go through with the deal or be in very big trouble. He will spend a lot of his own money on it, but he does at least get a major social media corporation for that money.
Whether it's worth it, either in future earnings or in the power he gets from it... I have no idea. Probably not, seeing how poorly considered the whole thing has been so far. But then I don't see the appeal of Twitter at all, so I can't predict what will happen to it in the future.
Sucks for them, but crappy acquisitions are a fact of life for online communities. Much like when Tumblr changed owners a few years back and the community was devastated.
Twitter was NOT looking for a buyer before any of this happened.
Edit: There's also something to be said about Truth Social censoring users, and it being a platform owned by someone who's highly likely to try to be president a second time. See what I mean about how everyone weaponizes social media for their own gains?
Next time, Elon tweets about buying something, wait for the market to go up, short the stock and make money when Elon eventually backs off?
Internet: Elon is manipulating the beef markets!
> Basically, Twitter is taking Musk to court to make him go through with his legally-binding offer from April. Musk today is proposing that if Twitter drops the suit, he will ... go through with his offer from April.
https://daringfireball.net/linked/2022/10/04/bloomberg-musk-...
What do you supposed the legal teams are doing right now? Presumably there is some effort to make musk sign an even more iron clad deal before agreeing to a stay. Something like, "no condition that existed prior to October 5, 2022, material or not, shall be grounds for terminating the merger agreement." Perhaps they want him to remove the financing contingency given that if financing falls through Elon bears the majority of the blame for that.
I guess from Twitter's perspective it's fine if things go to a trial since they are going to win anyway. And every day that passes increases the torque on Elon and X holdings. They have him over a barrel so why not demand concessions to ensure that no more shenanigans occur?
Why would anyone trust a piece of paper with Musk's signature on it after the months of tantrum he just pulled over this acquisition?
The deal is already ironclad as it is. That didn't stop the tantrum. The only thing that's holding leeway over Musk right now is this court case.
Why leave any room for Musk to delay or change his mind. Fool me once ...
Twitter doesn't want one, and would oppose a request for one. The judge in the case has been openly skeptical of Musk's delaying tactics and indicated the other day she thinks Musk let Signal conversations delete during discovery (https://www.theverge.com/2022/10/5/23389568/musk-twitter-sig...).
He's out of good will here.
"But your honor, I can't produce those documents because they were on a conveyor belt into a furnace" isn't a valid legal defense.
Upon receipt of a preservation order, those Signal conversations should've been preserved. Give an intern the task of screenshotting them all. The same rules apply if, say, you delete email after 30 days; you have to pause that process once you've been required to retain evidence.
> on the terms and subject to the conditions set forth therein and pending receipt of the proceeds of the debt financing contemplated thereby
So if the financing terms cannot be met, the deal is off. Perhaps some terms are about revenue, users, value of the collateral (TSLA perhaps?). Heck, maybe Elon found one of his Billy friends to short TSLA termporarily, which would cause the collateral to be not enough.
Tricks I tell you
Either that, or Morgan Stanley (Bank in charge of $13 billion) needs to start talking about bots and mDAU
Given how well that went for Elon, I don't think Morgan Stanley will do that. It's better for them to take the billions they lost on this deal already and just write it off. (Maybe $1 or $2 billion loss so far given how much credit markets have moved between April and today)
Reasons could be - TSLA is volatile. The stock would fall if EM doesn't own enough share anymore, because of the risk of him leaving as CEO. Market conditions. "For reasons of their own"
In the end, we will only know if, or when, Twitter and Musk struck a deal or, ultimately, the courts issue a ruling whatever that will be.
Interesting*
Something has to be done to convince the average user that Twitter is not their friend, is not a reliable source of information, and is not a good place to share your intimate thoughts because they're sitting out on a public forum for everyone to see.
Maybe Musk turning it into his private hell playground will do the trick finally.
I know the free speech absolutists like Elon find that idea unpalatable, but I think the Wild West era of social media needs to come to a close.
Also, Twitter is more than just politics .. Lots of hobbies share information with others in their group
National or international topics are, I think, best approached via analysis. Most people aren't expert enough to take advantage of primary-source data there, and things at that scale rarely impact one's day-to-day life (national / international things that impact one's day-to-day come in via the emergency broadcast system or, in the case of something like COVID, local and state health ordnances). Far more impactful is who is getting elected to your school board or who is responsible for the condition of your local streets. If I want to understand, say, the war in Afghanistan better, I'm going to try and grab some analysis from some journalists and authors with a track record of being right.
Twitter is the opposite of all of that. One-shot, short-snippet bursts of mostly secondary-source information (and the occasional primary). Shallow analysis. Amateur discourse. No track records. And thanks to what has been discovered during this Musk purchase plan, we have come to learn: probably way more bots than Twitter estimates anyway.
It's a hole where discourse and rational thought goes to die.
No one would think Twitter is worth that much if there wasn't a pending acquisition at that price.
It will do neither of those things. It's only even getting near 54 because of the impending deal. People buying now know that when the deal closes, the shares will be worth 54, so if they can buy for less than that, then buy, buy, buy. Once the deal closes, it's profit-taking time, so sell, sell, sell--and the stock price plummets.