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Comment by easyThrowaway | Hacker News Reader

I'm still convinced he's just going for a "clever" way to declare bankruptcy in order to not pay full price for the Twitter acquisition.

Make it look like a business... "accident", publicly say twitter actually never had a chance to get out of debt, Sell the assets, refinance the whole thing at a fraction of the original buyout price, threw a few millions to the creditors and get away with the whole thing.

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This would have made sense if he delegated the responsibility of running it to third-parties and completely severed ties with the company. He didn't do that, which given the colossal amounts involved will get him into litigation.

And if you think he is smart, think again. He tried to "smartly" get off the deal but the other party was smarter. He is clearly not the smartest man in the room.

> He tried to "smartly" get off the deal but the other party was smarter.

Well, the other party sold their company to Elon Musk to run into the ground, so smarter isn't quite the word I'd use for them, either.

They sold their company at a very good price, much higher than its actual worth. That’s hardly a dumb business decision. They will also have a good track record on management, given how much better twitter were under their control.

> They sold their company at a very good price, much higher than its actual worth.

Yeah, I get that, but in doing so destroyed a thing that lots of people found value in. So yeah, they made more money than the thing was worth, great business decision, but I'm not willing to award "this nice thing is worth more as scrap than it is on its own right now" as being called "smart".

If someone wanted to buy your house for three times its market value and their grand plan was to turn it into lumber, would the smart move be to decline?

Probably, yeah. For starters, my family likes our house, and we're not really looking to move right now. Like, I'd end up with more money (which is good!) but an angry wife (which is not!).

Depending on the people involved, a company can be much less personal.

As a followup to my previous comment—we've lived in this house for over 13 years, and own it outright. If we had lived here only a few years, and had no real equity in the house, that would probably change the equation considerably.

They are investors and emotionally detached from the company. I don't think they care about what happens to the company after they hand it over.

He's probably way less smart than he believes himself to be. But he's already tried in the past to get out of problems by throwing a a curveball to the issue.

Boring Company / Hyperloop existed mainly to stop California from building their own high speed rail, and The Tesla Truck existed mainly to rebuild hype around the Tesla brand at the time, and it's probably never going to go into production. Both were "built to fail".

Once he realized that he couldn't get out of buying Twitter, I believe he's trying to apply the same script to make sure the loss is way smaller than 44 billion dollars.

> The Tesla Truck existed mainly to rebuild hype around the Tesla brand at the time, and it's probably never going to go into production. Both were "built to fail".

Regardless of whether "truck" here refers to the Cybertruck (https://www.tesla.com/cybertruck, for which you can place an order) or the Semi (https://www.tesla.com/semi), are you really suggesting it is just fake and there's nobody working on these vehicles?

I will throw in the new Roadster (https://www.tesla.com/roadster) for good measure too.

Yep, I was talking about the Cybertruck! thanks for the correction!

Also, I wouldn't call it fake outright. Something more along the lines of the Lamborghini Huracán Sterrato[1] or the Porsche 911 Dakar[2] - which are like... yep, they're real cars, but it's more of a limited run branding exercise than an actual vehicles range.

[1]https://www.lamborghini.com/it-en/modelli/huracan/huracan-st...

[2]https://www.porsche.com/international/models/911/911-dakar/9...

I've thought about this too and have mentioned it to friends a couple of times. Not sure if bankruptcy, but it's a way to get tax credits if it's not successful.

i dont remember who said it but isnt there a famous adage in the accounting world that its not a smart idea to get tax credits by making actual real losses. You're supposed to find ways to make book losses without actually lighting real money on fire

That's why companies pay for acquisitions or mergers primarily in stock. It keeps cash reserves available for other uses. If the acquisition flops, you can write down the value, take a hit on the income statement, and lower your tax owed for the year.

That is why sellers do not always agree to accept stock instead of cash.

When in the "billions" range, the deals are going to be light on cash. That's how Adobe can "pay" $20bn for Figma using stock.

I believe twitter was an all cash transaction.

https://www.sec.gov/Archives/edgar/data/876661/0000876661220...

> The merger between Twitter, Inc. and X Holdings II, Inc., a wholly owned subsidiary of X Holdings I, Inc., wholly owned by Elon R. Musk became effective on October 27, 2022. Each share of Twitter, Inc. Common Stock was exchanged for USD 54.20 in cash, without interest and less any applicable withholding taxes.

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