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Elon & Twitter
- Thread starter Buckminster
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Knightshade
Well-Known Member
It's certainly POSSIBLE there are better ways to measure. Maybe even vastly better ways.
But that is totally irrelevant to the merger agreement and the case in court
Does twitter reach their reported number the way they say they do in their SEC docs?
(Spoiler: yes, they do, as confirmed by Elons own legal team)
Therefore- the SEC filing is accurate. Where they say "We use this method to come up with a number, involving a lot of human judgement, and it might well be wrong"
The question of "Well OMG what if your method and humans were so bad it's WAY wrong" is a question you ask pre-merger before you make an offer- which Elon didn't do. He didn't ask ANYTHING before making his offer.
Or, if unable to, a question whose answer you specifically call out as relevant to the deal in the deal which Elon also didn't do.
That's the problem here. Elon has done a great job convincing people the stuff he's claiming in the lawsuit is relevant to the actual deal- and it's not. You can check because the deal is public info.
_Redshift_
Member
Isn’t that rich. The guy who defied the Alameda county order to force workers to work during the beginning of the pandemic now wants to delay the trial till the pandemic is over!
Why is he so desperate to delay this trial?
_Redshift_
Member
Sure, if he still has a viable company. Attrition will likely be double digit %s, and it isn’t easy to hire replacements at that level.
Twitter will likely be screwed for a number of years, it’s stock WILL go down during that time, and Elon will have won a Pyrrhic victory.
Yeah, but the BOTS! They are now locked up in jail.
One note on the above - stock price will be irrelevant since it will be a private company at that point and not be reporting every Q.Sure, if he still has a viable company. Attrition will likely be double digit %s, and it isn’t easy to hire replacements at that level.
Twitter will likely be screwed for a number of years, it’s stock WILL go down during that time, and Elon will have won a Pyrrhic victory.
Yeah, but the BOTS! They are now locked up in jail.
_Redshift_
Member
Just want to summarize possible outcomes of the Twitter situation and use the crowd wisdom to see if I am missing/misunderstanding anything:
b) banks/other parties backing off, deal can not be completed, effectively Elon walks away
c) banks/other parties backing off, Elon forced to use his own assets(TSLA/SpaceX holdings) to complete the deal
5.b) sounds too convenient to me for Elon to easily walk away from the deal, and 5.c) will be a disastrous case for TSLA shareholders.
Why do you think is the worst possible outcome and what is the probability of that happening?
- Elon walks away with no strings attached
- Elon walks away paying 1B breakup fee
- Elon settles with a lower acquisition price
- Elon made to pay “the damage“. The damage capped at difference between 44B and current market cap of twitter(~16B)?
- Elon made to buy twitter at $54.20 and
b) banks/other parties backing off, deal can not be completed, effectively Elon walks away
c) banks/other parties backing off, Elon forced to use his own assets(TSLA/SpaceX holdings) to complete the deal
5.b) sounds too convenient to me for Elon to easily walk away from the deal, and 5.c) will be a disastrous case for TSLA shareholders.
Why do you think is the worst possible outcome and what is the probability of that happening?
Knightshade
Well-Known Member
Option 4 is not a thing available to the court. Court damages are explicitly capped at 1B in the agreement--- so max of 1B in damages, OR ordering specific performance to close the sale, are the 2 options the court has.
It could happen via an out of court settlement but barring a big jump in stock price before then I don't see how it makes a ton of sense for Elon to agree to.
B is also incorrect- Elon is named in the merger, other randos he was hoping to get $ from are not- he's on the hook for the financing, personally, per the merger... and there's precedent where this court specifically ordered someone to close the deal even after their original financing fell through.
That said- last I read his financing from the BANKS is still in place just fine, they want the worlds richest guy as a happy customer. It's the fact he was planning to get $ from a few big private investors that might not be interested at that price anymore that would potentially require him selling some shares.
It could happen via an out of court settlement but barring a big jump in stock price before then I don't see how it makes a ton of sense for Elon to agree to.
B is also incorrect- Elon is named in the merger, other randos he was hoping to get $ from are not- he's on the hook for the financing, personally, per the merger... and there's precedent where this court specifically ordered someone to close the deal even after their original financing fell through.
That said- last I read his financing from the BANKS is still in place just fine, they want the worlds richest guy as a happy customer. It's the fact he was planning to get $ from a few big private investors that might not be interested at that price anymore that would potentially require him selling some shares.
Daniel in SD
(supervised)
The financing from the banks isn't backed by Elon though, it will be backed by Twitter. I read the banks would probably be happy to back out because the interest rate is locked in and interest rates have gone up so they won't be able to sell the debt without losing money. It seems like Elon would love for the banks to find a legal way to back out. The issue is that a legal way doesn't exist.
Unless of course all of this drama is just Elon trying to get a slightly lower price.
Are you referring to the case where they requested different finance terms which were rejected while financing under the original terms was still available?
Or the trial date means nothing will happen in the next 3 months, so why keep money parked in TWTR.
Meanwhile, TSLA had a better than expected quarter with positive guidance.
Daniel in SD
(supervised)
Down 0.25% for the day at the moment. Looking forward to your post about how Elon is definitely going to have to buy Twitter when it goes up 0.25% tomorrow. haha.
What do you think Twitter's share price would be if they didn't have have a contract with the richest man in the world to be bought at $54.20 a share?
Also, Elon is using his personal money to buy Twitter so I'm not sure what Tesla's share price has to do with it.
AlanSubie4Life
Efficiency Obsessed Member
Market probably knows Twitter won’t do a price cut out of court due to litigation risk (may as well let court order a “feel good” price cut since Twitter has the strong hand), and the chance Elon would voluntarily fork over $5B+ dollars (probably more!), or whatever is needed to truly pacify shareholders and allow Twitter to make a robust claim they are fulfilling their fiduciary duty, is incredibly slim.
I assume there are scenarios in which parts of the financing consortium will be able to back out and Elon will need to personally make up the difference.
I still see the mostly likely outcome is a sale in the $47-$50 range followed by years of litigation.
Daniel in SD
(supervised)
But as believer in the efficient market hypothesis I can say that won't effect Tesla's share price.
A little bit sad I won't be able to make fun of @Bouba tomorrow, TWTR will very likely be down due to SNAP's earnings miss.
$51.69 is my prediction (5% discount if bots are 10% instead of 5%).
It's hard to imagine any of his partners would still want in on the deal.
Here's the SEC disclosure for the $7 billion from other investors. Says they signed "equity commitment letters". I have no idea if that's binding.
AlanSubie4Life
Efficiency Obsessed Member
JRP3
Hyperactive Member
I'm a Silicon Valley M&A pro, and my advice to Elon Musk is to stop his courtroom gameplaying over Twitter
The Tesla CEO should instead pay more attention to his reputation as a reliable business partner.
www.marketwatch.com
scubastevo80
Member
Or they'll be down on their own miss, which they partially blame on Elon...
"Q2 revenue totaled $1.18 billion, a decrease of 1% year-over-year, or an increase of 2% on a constant currency basis, reflecting advertising industry headwinds associated with the macroenvironment as well as uncertainty related to the pending acquisition of Twitter by an affiliate of Elon Musk. When excluding MoPub and MoPub Acquire, year-over-year growth was 3%."
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