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Comment by NelsonMinar | Hacker News Reader

This article focusses on the procedural mess Musk has gotten Twitter in to. But it skips over something more important.

Former Twitter employees have suffered real harm. They deserve justice either via courts or arbitration to get back pay, expense reimbursements, and severance that they were promised. It's a shame that Musk has stripped the company down so much it can't respond to legal requests. It's a shame that the pre-Musk Twitter's binding arbitration means that the company now has a lot of arbitration cases to handle. The ex-employees deserve a fair and rapid hearing regardless. That, or a summary judgement if the company can't respond to the claims of the people it fired in a timely fashion.

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Additional sad part is that Musk has been pulling that stuff for a long long time. Tesla is known for having very unhealthy relationships with suppliers (that includes not paying bills), factories have management approved racism running rampant, etc.

And what happened in response to that? He became wealthiest person on earth and for years was considered second coming of Jesus in the tech circles, that only started to fade recently.

>>Tesla is known for having very unhealthy relationships with suppliers

That is pretty much all of automotive, Tesla is not an outlier. All of the big manufacturers know they have their suppliers over a barrel, and they exploit that at all times.

I don't know why any supplier ever agreed to net 30 (or more!) without something like the board members' personal finances as guarantees. Companies can just declare bankruptcy, then you're lucky if you're towards the front of the line of creditors.

So you believe every vendor that supplies a screw or push pin to Ford or GM has a personal guarantee from a Ford or GM Board Member?

Really?

Strawman argument, we aren't talking about single screws. We are talking about lots of tens or hundred of thousands of screws.

But, yes, if you want the supplier to loan you money there should be collateral. I don't know why suppliers allowed it to become industry practice.

Because Unsecured debt has been a thing forever, at every level of the economy.

I mean a huge part of the population carries around an unsecured line of credit with them every where they go, aka a credit card.

I have been in the business for decades, having bought millions of dollars worth of equipment, never once have I had any vendor ask me to get a board members person guarantee to give me a line of credit, nor do I believe have I ever heard of my company asking any of our customers do to anything of the sort.

It is very strange that you (and seemingly others given the downvotes) think it is a common practice or should be a common practice.

Your credit card is guaranteed by your personal finances and there are actual consequences for you if you default or declare bankruptcy.

It is weird to have a completely unsecured loan that is dischargeable by bankruptcy that won't cause personal loss for the owners.

You can be angry that people think it is weird, but if the best you can come up with is, "I am a big important person and it is industry practice because it is industry practice," you're not going to convince me it is good for the suppliers to have historically allowed this to come about.

>>our credit card is guaranteed by your personal finances and there are actual consequences for you if you default or declare bankruptcy.

These are the same consequences a business face if they do not pay vendors on net 30 terms...

>It is weird to have a completely unsecured loan that is dischargeable by bankruptcy that won't cause personal loss for the owners.

Having been through personal bankruptcy, its not.. In Chapter 7 Bankruptcy a person can discharge many unsecured debts while keeping their primary home, and most personal possessions, this is a common. There are several ways you can come through Chapter 7 with secured debt being protected / excluded (meaning you still owe) from the bankruptcy and all unsecured debt being discharged.

it is common myth that to be "bankrupt" means you have nothing and are homeless, because of this myth people often wait far far far too long to seek legal advice around their rights under the bankruptcy laws and often do something stupid like paying off unsecured debt with secured 2nd mortgages, or HELC making their situations FAR FAR worse

>>you're not going to convince me it is good for the suppliers to have historically allowed this to come about.

If ti was not good for the suppliers they would not do it

To be clear I am not even sure what you are on about, my orginal comment about Automotive Companies being predatory to vendors has NOTHING to do with net 30 terms, or unsecured debt in the form of accounts payable.

Hell every supplier I know would be happy with Net 60 terms..

large Auto suppler agreements have all kinds of provisions about quality, On time delivery, and various other performance metrics that the companies can use in very creative ways to claw back money already paid to the vendor, then there are the changes to production forecasting that requires suppliers to spin up or down capacity, staffing ect, only to have it then change soon after.

i could go on and on listing abusive practices that have NOTHING AT ALL to do with the very common practice of invoicing customers for goods sold

It is not good for suppliers to allow no collateral. But they are being forced into. That is what the market has naturally created for supplier. Think about this, a company produce a widget to sell to consumer. Before they can sell, they have to "invest". If the entire world that producer is the one to produce, then consumer can put up the deposit which in this case act a bit like collateral (though more of partial payment). Now, imagine ice cream producer ask you to pay up first, even if you like that brand, you probably will just walk to another seller who offer you the same thing but without the pay first. Now imagine there are many producers but only one of you. Every producers will automatically waive the deposit or collateral to get you to buy from them. This has always been the case in suppliers world. In some instance, supplier able to get collateral but in the form of insurance. That gets very complicated and I feel like it would be harder for you to relate unless you have some finance or business background.

There is no need to "convince" you of anything. This is simply how things operate in the industry. No one involved in those transactions cares what you think because your opinion means nothing.

Suppliers can't do that or else they lose the contract to supply. You should work in business especially finance side to see no such thing as suppliers' demanded collateral. At best they "bribe" the finance controller/purchasing manager to get a better preferential treatments for them (e.g. clear their invoice faster, or better payment terms from 120 days to 30 days). Collateral may exists if suppliers are limited, e.g. during the chip shortage. Even then, they don't ask for collateral but downpayment deposit or partial payment upfront. It is simply not due to their willingness to turn into industry practice. They are pretty much being pointed a gun to their head to do so. If not, lose the contract and likely business face bankruptcy (akin to death from being shot to the head).

Because another supplier will happily agree to the "riskier" terms. Competition baby.

You mean non-competition on the buyer side. Oligopoly baby!

A better term in this case is monopsony.

Net payment terms really are not part of the problem here.

Monopsony. So you make, say, seatbelt buckles? Congratulations there are like basically six companies that buy those in meaningful quantities. The power imbalance is inevitable.

Was in a local bid for a tender. Foxconn was demanding net 180 or off the program if supplier can’t stomach it.

> That is pretty much all of automotive, Tesla is not an outlier. All of the big manufacturers know they have their suppliers over a barrel, and they exploit that at all times.

So? Is it okay then? It's only common because of this type of acceptance.

> And what happened in response to that? He became wealthiest person on earth and for years was considered second coming of Jesus in the tech circles, that only started to fade recently.

No, it wasn't in response to that. I don't understand this sort of deliberate misinterpretation. It happened because the world rewards production. For example, Tesla jump-started the world's EV movement, and leads it by volume. SpaceX means the US aren't currently trying to get a Russia that it's in a proxy war with to take its astronauts to the ISS.

> It happened because the world rewards production.

The world rewards anticipated production - I find Tesla's P/E absurd.

Because it was (and to me still is) absurd.

At one point, Tesla was worth more than: Toyota, Volkwagen Group, Hyundai/Kia, General Motors, Ford, Nissan, Honda, Fiat Chrysler, Renault, Suzuki, Daimler, BMW, Mazda and Mitsubishi combined. (Plus several Chinese manufacturers: SAID, Geely, Changan, Dongfeng).

The hypothesis is Tesla becomes like Apple in cell phones vs all the other manufacturers. Apple may not have all the sales but it has most of the profits. Not saying that will happen with Tesla but it's a possibility.

Well, not exactly. It rewards current production, i.e. people buy Teslas, as well as future production, i.e. we think you can make us money based on your track record.

I should say more precisely that the world doesn't reward Tesla; it thinks it can get more out of Tesla than it gives it. Which is probably the least worst system.

Their PE is “only” 65 atm, which isn’t THAT crazy. At one point it was 1000 lol. It’s been falling since 2020 when they started being profitable.

Yes and bodies that reward growth over all else develop cancer.

Not everyone blindly rewards production at all costs.

I'm sorry, I've no idea how this relates to anything being said here.

I think it implies that Musk and or US society are cancerous. Quite a bold assertion but one that doesn't seem wrong on the face of it.

Of course it's wrong. Without specifics it's 100% wrong. With some very well-chosen parameters that percentage might drop slightly, but I can't see how.

There is a parallel between chasing growth at all costs biologically and financially. Both heuristics produce ugly results.

Just pointing out that rewarding growing things absent any sort of elegance or tact can result in oligarchs having too much undue influence just as cancerous growth in biology diverts too many resources toward undeserving cells that mismanage it.

We have to be aware of when things can go wrong to develop an appropriate immune response.

America jmp started it via incentives and Tesla happened to have the business model.

It didn't happen to have anything.

Musk seems to have a very tech bro way of handling things. "Don't tell me what can't be done. You're just stuck thinking inside the box."

Sometimes you are in the box, and if you don't recognize it, you smash into it. We valorize the people who break out and accomplish great things that were thought impossible, but we never get to hear about the things that actually were impossible.

More importantly, the people who did were often more lucky than smart. Over and over we see the ones who got rich and famous screw up everything they try after that.

Musk succeeded more than once, and was surely smart as well as lucky. But that's exactly the kind of situation that convinces you that you're the only smart one because nobody else did it.

The world will not stop while he figures out how to deal with the colossal ramifications of his own actions. And that will cost him even more.

> And that will cost him even more.

I kind of agree with everything, but this.

Rich people usually don't have to pay, that's how it works. That's also probably why they don't learn, in many cases.

I think you’d be surprised.

Just because you don’t hear about the payments doesn’t mean they didn’t happen. Many settlement agreements include clauses prohibiting those involved from discussing the case, or even disclosing that a settlement exists.

Ask me how I know, or better yet - don’t.

Agreed. My mom was friends with an ex-secretary of a SF real estate mogul and she's quite wealthy now herself because she sued and was paid off to go away.

The people who are paid off are usually bound by confidentiality agreements.

I think you're conflating absolute and relative 'cost'. The rich might have to pay settlements for their wrongdoing but for a multi billionaire a 1m settlement is more of a hassle for the time it wastes than the money itself. The rich rarely have to pay so much that it genuinely hurts. Any fines levied by the EEOC are likely to be an absolute slap on the wrist.

They still have to go to jail if they're criminals. Our goal shouldn't be to make people genuinely hurt in any situation.

They don't always go to jail when they should. They might have a preexisting condition like affluenza that keeps them out.

The goal of fines and punishments should be that they are painful enough to deter the action. It is a strawman to pretend we are discussing "any situation."

Contracts are important for the economy to function. Violating the terms of this many contracts should be painful, like "strip the liability protection of the company structure," painful IMO.

Show me the list of billionaires jailed that aren't in prison because of some more powerful billionaire strongman that they were foolish enough to cross.

> Our goal shouldn't be to make people genuinely hurt in any situation.

What? No. That’s the whole point of the fine. If it’s just another random expense then it’s not an effective deterrent.

If the rich guy goes to jail for two weeks because he fucked over some poor people it’s not an effective deterrent.

If the poor guy goes to jail for 20 years because he ripped off some rich people it’s just a step shy of a private police force.

> What? No. That’s the whole point of the fine. If it’s just another random expense then it’s not an effective deterrent.

Why not? The damage is compensated in absolute terms, the price is paid.

Only if you want to normalize the behavior. Giving specific behavior a fixed monetary cost means rich people aren’t bound by the law.

All fines give behaviour a fixed monetary value. Does that mean no-one is bound by law?

You missed the point. Given monetary value does not mean no-one is bound by the law. It's if the monetary value is so low that it doesn't matter for the particular individual that suddenly, the individual is not bound by law anymore.

Is it really that hard to understand?

It's easy to understand; just not easy to agree with. The law's job is to enforce penalties and rights equally, blindly even, and not to scale everything according to someone's individual circumstance.

Well your previous message suggested that it was not understood. Apparently it is, and you just disagree.

Then we seem to differ on our view of "equal rights". To me, the law defines what should not be done ("is illegal"), and how one prevents people from doing it. Now if the law defines a fine that is high enough to prevent me from doing something illegal, but seen by a super-rich like I would see 1 cent, then we are not equal: the super-rich is effectively allowed to do it (as in, "nothing prevents him from doing it, because from his point of view he doesn't have to pay anything"), and I am not (because I can't afford it).

It's not the law's function to adjust the punishment to subjective view of the punished. Otherwise, you could argue that heterosexual people deserve lighter prison sentences than bi- or homosexual, because sex 2ith the same sex is much easier to obtain in prisons and therefore prison time is harsher on heterosexuals. For the record, I think this example is absurd, and I'm just using it to highlight the kind of absurdity your logic leads to.

You take an absurd example, then arbitrarily decide that my logic leads to your absurd example, and therefore conclude that my logic is absurd? That's interesting :-).

In case you care at all: I don't think my logic leads to your absurd example.

There's a reason why fines scale with income in some places. If you were charged $5 every time you got caught speeding, I bet you'd be much more likely to speed. The fine has to serve as punishment, not just restitution.

>They still have to go to jail if they're criminals.

Genuine question: do they?

They pay, but it doesn’t matter that much when you are so wealthy.

Exactly.

There is no will to make oligarchs like Musk pay in amounts that meaningfully impact their lives, and as a result they can embark upon virtually limitless folly and malfeasance.

It's really hard to weasel out of employment law violations, even for the rich.

Isn't wage theft like $30 billion/year or something ridiculous like that? Regardless of what ends up happening with this one I think most of them are getting away with it.

Some additional research here: https://www.epi.org/publication/wage-theft-2021/

Yes — significantly more than blue collar crimes like burglaries and shoplifting. And it’s not just “the system” that is invested in letting rich people get off the hook; just look at how many people on here are extremely vocal about e.g. arresting their way out of petty theft yet have no interest in the far more harmful crimes committed by rich people.

Blue collar crimes like burglaries? There is a wiki-entry of "Blue collar crimes", but the phrase doesn't make sense. It is not a crime you do becouse you are a blue collar worker, unlike say finanial fraud as a bank clerk.

> Isn't wage theft like $30 billion/year or something ridiculous like that?

It's hard to justify this. It's multiplied-up survey data. It's not real the way FTX numbers were actual real numbers worth talking about.

"Multiplied-up survey data" seems like a pretty normal way to do estimations in statistics. What is your concrete issue with this?

Surveys aren't a general thing about statistics.

I assumed you were derogatorily referencing study data. Can you be specific what kind of survey it was that you saw, and why it doesn't rise to the status of a study?

Elon Musk could foot the estimated yearly wage theft for the entire United States for 4 years and still have 50B.

>Rich people usually don't have to pay, that's how it works.

The reason why Musk is the current owner of Twitter (or X) is because he had to pay, even though he really didn't want to.

I mean, he had to pay, but he still managed to somehow get twitter to pay 50% for itself…

In this case I don't think he cares. He can just walk away from $44 billion without noticing.

I think it's more the blow to his ego.

> The world will not stop while he figures out how to deal with the colossal ramifications of his own actions. And that will cost him even more.

It seems unlikely the company will ever turn a profit. It's crumbling under the weight of its own infrastructure (some question how it even still runs!).

Rumor has it they lacked the manpower to actually keep the API running and scrapping it was a last-ditch attempt at getting rid of bots. Same bots who flocked to the platform after the layoffs started since people in charge of mitigating these were fired.

Firing abuse and content moderation teams meant there was a lot more unsavory spam on the platform and advertisers didn't want any of it near their brand. In a few week Twitter lost half of it's top 100 biggest advertisers [0] and it doesn't seem they are coming back.

At this point, I'm wondering if not paying former employees, rent and cloud bills is a way of getting the company bankrupt with litigation, so he can later claim that it wasn't his fault that it went down but "all the rent-seekers conspiring against him".

To be fair, there were a lot of non-technical or "tech-adjacent" people from third tier business schools who seemed to think Musk was a genius for firing most of his "overpaid underproductive programmers" and will desperately try to imitate his every moves (probably trying to play the same games with employee severance and cloud bills). It'll be hilarious to see them crash and burn in the coming years (see Holmes, the Jobs copycat currently serving her sentence).

[0] https://www.businessinsider.com/twitter-lost-half-top-advert...

I find it remarkable that Twitter can't turn a profit. The core concept behind Twitter is a standard first project for any new framework.

Obviously the real Twitter is as far removed from that as a Falcon 9 is from a model rocket. And I'm sure the real expenses of Twitter are all about managing the nine billion pies its got its fingers in, especially the massive hassles of moderation and placing advertisements.

Still... it feels like it just shouldn't be anywhere near that expensive to fulfill the core, very simple purpose of Twitter.

> And I'm sure the real expenses of Twitter are all about managing the nine billion pies its got its fingers in, especially the massive hassles of moderation and placing advertisements.

Exactly.

> Still... it feels like it just shouldn't be anywhere near that expensive to fulfill the core, very simple purpose of Twitter.

Fully interactive, user-generated content, number 4 website in the world by traffic... [0]

At this scale people have issues like physical availability for inter-dc data transfer and site-reliability [1]. You are probably directly dealing with (several, since not a single one will be able to fulfill one whole order)OEMs to design server racks to your specifications. [2]

[0] https://en.wikipedia.org/wiki/List_of_most_visited_websites

[1] https://blog.twitter.com/engineering/en_us/topics/infrastruc...

[2] https://www.opencompute.org/documents/ocp-yosemite-v3-platfo...

Their AWS deal in 2020 probably isn’t helping, nor the GCP deal in 2018. I shudder to think what their hosting costs must be. Apparently GCP is 200M/yr alone.

> very tech bro way

aka psychopath.

Psychopath, yes, but remember that I'm really talking about a lot of the people right here on this message board. It's not some movie villain. I'm connecting his behavior to what I see here, every day. We notice him because he's got tons of money behind it, and a lot of people think that's just great.

It's not so much a warning to them, as to people who see them as psychopaths. Those psychopaths are all around us and can harm us. They'll also harm themselves, but we do not gain in the process.

> And that will cost him even more.

We'll see. From my perspective, this is a case where Musk acted with extremely well-publicized malice towards his employees, and towards the very company he bought, to the point that it may not even be able to pay the severance those employees are due. Musk has been talking about bankruptcy; a maneuver that could be used to void those debts.

Should that happen, I want this case to pierce the corporate veil; for those payments (plus legal fees and damages) to come directly out of his pockets. But piercing the corporate veil seems like a bit of a long shot from what I've read of it.

Curiously, twitter corp (california) does not exist, it was merged into X corp (nevada). California is apparently quite liberal with respect to piercing the corporate veil, Nevada is not: another maneuver to protect his pockets.*

Make no mistake, Musk is smart. He's just not the "engineer an electric car and a rocket all by himself" smart that people got so worked up about. He's smart like Trump is smart: he looks out for #1 and knows exactly how to use his wealth to maximize his opportunity to keep playing the game.

* Edit: it gets even juicier from there. He's apparently trying to keep the shareholders of X Holdings secret, going so far as to redact his own name from the list! https://www.techdirt.com/2023/06/12/twitter-reveals-that-x-h...

California is apparently quite liberal with respect to piercing the corporate veil, Nevada is not

That is irrelevant, as the case would be held in a California court and subject to California laws.

If companies could avoid laws by just incorporating elsewhere, every multinational would be incorporated in Somalia.

I think Charlie Munger (Berkshire Hathaway cochairman) describes Musk the best saying that Musk is a person with a 150 IQ thinking he's a 170 IQ which makes him both very bold and dangerous.

150 is quite generous if you ask me.

I'd say 115-120.

I'm no Elon fanboy, but it's hilarious how much normies cope that Elon is just relatively average intelligence. Find one video of someone intelligent and credible who's actually interacted with him who shares that take.

Do you consider yourself not a normie but someone with genius-level intelligence?

I think the answer to your question is implied by the attitude of calling people "normies".

Do you think 'normie' has some negative connotation? It's just internet slang for a normal person.

No I'm pretty normie. My point is the significant players don't share this low opinion of Elon. Only normies, but not all normies. A lot of normies worship him too obviously.

Let me guess, you are referring to people who work in the space industry? A very small industry where there's a very good chance you'll be forced to work with SpaceX, and if you piss of the petulant manchild you'll be blacklisted and effectively kill your own career.

Listen to Musk talk about something you know in great detail, and you'll realize he's a moron grifter.

Feel free to link to something that exemplifies this.

95 would be more realistic

> We valorize the people who break out and accomplish great things that were thought impossible

Even then a lot of things aren't literally impossible and no one thinks they're literally impossible, it's just to make it happen requires a billion dollars. Unless you've got a billion dollars such things are practically impossible.

The spectrum of possible things is highly dependent on how much money you've got available. Even big companies don't necessarily have a billion dollars to spend on some new endeavor.

I find it disingenuous to throw around the word "impossible". Impossible is building cars out of ground up unicorn horns or magic dragon egg shells. Building marketable electric cars was never impossible. It just required money up front with a long horizon to build a business rather than return profits right away.

Valorization in these cases is merely survivorship bias.

Totally a survivor ship bias in the techbro circle

Musk is also reportedly (as per Puck) refusing to pay JAMS (it's about $3.5mm in filing fees alone for 2K two-party arbitrations, and he's going to spend many multiples of that on attorney fees), so if he makes arbitration impossible through nonpayment then those employees are also going to have to take him to court to either enforce arbitration or allow removal to the court system. Just a clusterfuck on every conceivable level.

Watching nonpayment in the courts could be entertaining. One of the offices is scheduled for eviction: https://www.techradar.com/news/twitter-is-being-evicted-from... ; not clear if they still have operations there though.

Can someone in Boulder walk over, knock, and report back? 3401 Bluff St, Boulder, CO is the address. Maybe take some photos, ask some questions, don't break any laws of course (trespassing and whatnot).

> Can someone in Boulder walk over, knock, and report back? 3401 Bluff St, Boulder, CO is the address. Maybe take some photos, ask some questions, don't break any laws of course (trespassing and whatnot).

Maybe, but I need some BTC to get there on my day off, I can drop by around lunch time and see what the rank and file have to say.

See, who said BTC has no use-case: it continues to fund independent journalism!

Whether you guys are willing to use it is another matter entirely, but it does stuff like this all the time that you are simply not privy to.

I'm calling your bluff, HN: I'll follow up with BTC address if this materializes and will report by end of day with what I found if you make it happen.

Let me know if you'd take Venmo or Zelle instead. I am curious, but not enough to buy bitcoin curious. Probably curious enough to put the gig on Craigslist though.

EDIT: Per Venmo's terms and conditions when you attempt to buy BTC: "Cryptocurrencies cannot be used to send money or pay for goods and services on Venmo."

Office has been closed since December per ground truth sourced locally.

So will those employees be fired for not working from the office when there is no office?

California changed the law a few years back where if the party that requires arbitration (in almost all cases, the company) doesn't pay their portion, it's an automatic default on their part.

It's a strategy but not a good one.

> It's a shame that Musk has stripped the company down so much it can't respond to legal requests.

I don't see any evidence of this here. The "Twitter Lawyers" being referenced here work for Morgan Lewis, a big law firm. The issue is not the inability to respond to the requests, but the duplication of efforts.

If Twitter is found in the wrong what recourse do former employees have if Musk refuses to pay? The court system would allow bailiffs to be sent to Twitter premises in order to start seizing property. Would arbitration afford the plaintiffs that same right?

yes.. after you get an arbitration award, you can file in court to get an enforcement order.

Once arbitration is over, if there was egregious misconduct during arbitration, you can have a court throw it out. It has to be pretty bad -- like bribery of the arbitrator... otherwise, the court will just sign off on the enforcement order.

I fear what's more likely is Musk drives the company fully in to bankruptcy and tries to escape paying what the fired employees are owed.

Perhaps as creditors they should get some pieces of the company when it goes bankrupt.

Break people and move fast ...

Disrupt the economy by not paying your bills.

Suffered real harm? From what? Losing their job?

Idk what actual claim they have

loss of income seems like harm to me?

> Idk what actual claim they have

Good thing TFA clearly states that Musk is stiffing them on their severance...

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