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Elon & Twitter
- Thread starter Buckminster
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So, if the majority of Twitter shareholders vote No, then the whole court case is thrown out and Elon walks away with nothing to pay, right ?
That might be his best chance at this point to convince enough shareholders to vote no.
That might be his best chance at this point to convince enough shareholders to vote no.
You do know that Elon owns 9+% of the shares, right ?
So we know for a fact that some of the shareholders will vote no (including the one quoted at the top of this page, just to help Elon).
The question is: what percentage of Twitter shares are owned by Elon's circle of friends who is willing to vote in his favor ?
AlanSubie4Life
Efficiency Obsessed Member
Yep, just have to convince Vanguard, Morgan Stanley, Blackrock, and State Street, who collectively own 30% of Twitter, to take enormous hits on their mutual funds and ETFs (they do have fiduciary obligations here (a few funds are giving voting rights back to shareholders apparently, but doubt it has much relevance here…)…). Anything is possible I suppose!
One of the threads linked above (there’s a couple of hours of contract law lecture if you want to listen) claims that in order to justify current market pricing, Twitter would have be nearly worthless without Elon’s offer on the table. Obviously must be something wrong with those exact assumptions, but definitely a huge drop in value if the deal is not approved.
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Nice move...
Notice the difference between the question I answered and your objection ? (hint: see the highlights)
Nobody said he needs 100% of votes.
Why would any shareholder vote no ? Obviously Elon is a shareholder, so there is already 9% no votes guaranteed.
If you can only list 30% of institutional holders who must vote yes, that means there is still 70% who might vote no. Only 50%+1 needed for the sale to fail.
AlanSubie4Life
Efficiency Obsessed Member
Not doing any moving. I wasn’t answering why any shareholder would vote against the deal. Obviously some will! I was responding to your original thought that maybe this was Elon’s best hope. Just pointing out the first few stockholders. You can do research and figure out the rest. I understand that more than 50% of shareholders must vote yes.
What do you think Twitter would be worth without Elon’s offer?
I think Elon’s best hope is a settlement. That’s why he is still in this fight, I think (aside from just running out the clock and hoping). Not sure what that would look like though. It’s definitely possible but I don’t think that likely. Elon’s original offer was just so good…
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Sure I said any, but that’s not really the point since the original idea that enough of Twitter’s current holders would vote against the deal to scuttle it.
I’m not sure that Elon is allowed to vote no since he is the one who made the offer. Typically these votes would be in the yes category as part of the offer.
AlanSubie4Life
Efficiency Obsessed Member
Elon makes filing under seal. Probably making allegations about bot counts and does not want to break NDA (just a guess from Prof Talley).
AlanSubie4Life
Efficiency Obsessed Member
I listened to the first lecture linked above and screen captured Prof Talley’s summary (actually incomplete capture). He has a spreadsheet that would be relatively easy to reproduce (note there were some glitches in it so it’s not clear whether there is arbitrage opportunity or not…have to make sure the formulas are right! His initial spreadsheet said Twitter was worth $25 or so, but subsequent revisions apparently made it a lot less - not sure if there are any remaining errors).
Anyway here is his assessment of probabilities (obviously this assessment is critical to the implied value of Twitter). Note that he covers the possibility of expectation damages - Elon can be forced to make Twitter whole without owning Twitter, but it is not extremely likely in his view (1.8%). This would be a payment from Elon to make the market price of Twitter stock, unencumbered by any merger agreement, equal to $54.20. (This would be a lot of money, probably at least $15-20B which is a lot, even for Musk! The $1B damage limit in the contract would not apply in this scenario of intentional breach (since that is excluded by the contract it sounds like).)
Again, the link to the original source is above in a Twitter thread. Here too:Video Conferencing, Web Conferencing, Webinars, Screen Sharing
All of the below chart and above commentary neglects any possibility of settlement, which is covered in the second video. (Here:Video Conferencing, Web Conferencing, Webinars, Screen Sharing)
Anyway here is his assessment of probabilities (obviously this assessment is critical to the implied value of Twitter). Note that he covers the possibility of expectation damages - Elon can be forced to make Twitter whole without owning Twitter, but it is not extremely likely in his view (1.8%). This would be a payment from Elon to make the market price of Twitter stock, unencumbered by any merger agreement, equal to $54.20. (This would be a lot of money, probably at least $15-20B which is a lot, even for Musk! The $1B damage limit in the contract would not apply in this scenario of intentional breach (since that is excluded by the contract it sounds like).)
Again, the link to the original source is above in a Twitter thread. Here too:Video Conferencing, Web Conferencing, Webinars, Screen Sharing
All of the below chart and above commentary neglects any possibility of settlement, which is covered in the second video. (Here:Video Conferencing, Web Conferencing, Webinars, Screen Sharing)
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AlanSubie4Life
Efficiency Obsessed Member
The second video is more involved, for sure. It seems that there is a pretty decent chance for a negotiated settlement (repricing type, I would guess, since it would allow Elon to spuriously claim he got a price break for “exposing the bots”).
Those scenarios tend to land between $46 and $50 a share , but it depends on the assumptions. It’ll probably end in .69 to suggest that it was mutually agreeable.
Doesn’t sound like the risk of a breach-of-fiduciary-duty lawsuit is too high in that event.
Those scenarios tend to land between $46 and $50 a share , but it depends on the assumptions. It’ll probably end in .69 to suggest that it was mutually agreeable.
Doesn’t sound like the risk of a breach-of-fiduciary-duty lawsuit is too high in that event.
AlanSubie4Life
Efficiency Obsessed Member
FWIW, apparently these votes are “guaranteed” yes (by contract). He’s contractually required to not interfere with the merger deal, apparently.
And so far he has not tried to break the contract terms (since there are penalties for that!). He’s just accused Twitter of violating the terms of the contract (so, deal is busted). So he’ll presumably vote yes. Though it is anyone’s guess what he would actually do of course.
ZenRockGarden
Active Member
Elon already sold Tesla stock for his portion of the purchase deal (at a good price a while back).
ZenRockGarden
Active Member
Do you have any actual specifics on this?
I ask because the purchase of Twitter is a private sale to Elon - not involving Tesla in any way other than Elon having already sold some of his personal stock to finance the deal. Introducing special terms into Tesla corporate stock split policy would be... unexpected and possibly against the terms of the Twitter deal.
AlanSubie4Life
Efficiency Obsessed Member
It’s basically a joke but there were unsubstantiated rumors to that end bouncing around in crazy corners of the internet.
I think it is most definitely against the terms of the deal. Though it sounds like SpaceX and Tesla stock could be involved in the end (small relatively unlikely possibility, see chart above).
AlanSubie4Life
Efficiency Obsessed Member
AlanSubie4Life
Efficiency Obsessed Member
Different chart. The odds are in the eye of the beholder, though I would tend to lend credence to the estimates of those who are experts in Delaware law & contract law.
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