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Elon & Twitter
- Thread starter Buckminster
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Daniel in SD
(supervised)
I think Elon's tweets really provide a support level to the stock. He's giving all the non-greedy shareholders a chance to get out before he drops the bombshell and the price goes to zero.
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
Great article. When all of this Twitter mess is over and were looking back, I hope some spotlight come to those 8000 employees whos got their lives in limbo for so long. Especially with Musk telling them he will lay off a share of the workforce. And now he wants to drag the courtcase until february.. Egosentric? Stupid? He`s both.
Thanks for the clarification. So there is a chance that Elon is forced to buy yet Banks pull out at last minute so Elon is forced to sell 40B+ worth of TSLA to fund the transaction? I know it is not likely but it doesn't sound negligible either, I will give 1-5% of that happening.
Knightshade
Well-Known Member
It's an interesting situation for say the banks here... they want to do business with the richest dude in the world... and if the deal falls through they STILL get fees for the work done so far, so that's kinda good for them anyway.
Well, not 40B, he already has a big chunk of financing personally arranged via the stock he previously sold off for this, plus specific margin loans against existing assets and such.
But if say his "individual" investors, not named in the merger itself, all pulled out that's over 7 billion extra he'd personally need to come up with....
I think bank loans are roughly 12B more, but maybe less likely to be bailed on as bankers want to keep Elon happy.
Could also be everyone decided to stay in and Elon is already covered for financing, but I'd be surprised if EVERYONE involved still wants to pay $54.20 for it.
Well, not 40B, he already has a big chunk of financing personally arranged via the stock he previously sold off for this, plus specific margin loans against existing assets and such.
But if say his "individual" investors, not named in the merger itself, all pulled out that's over 7 billion extra he'd personally need to come up with....
I think bank loans are roughly 12B more, but maybe less likely to be bailed on as bankers want to keep Elon happy.
Could also be everyone decided to stay in and Elon is already covered for financing, but I'd be surprised if EVERYONE involved still wants to pay $54.20 for it.
Daniel in SD
(supervised)
Yea as you said at least some of the equity investors probably won't pay $54.20 hence pull out of the deal.
For bank loans, IIRC some of the loans are collateralize on the future cash flow of Twitter, I see a scenario where the banks say 1) Elon's claim over the bots make it harder to justify future cash flow 2) since now Elon is taking over Twitter unwillingly it further increases the risk of Twitter's future business. I see the points where they want to make Elon happy but more importantly they want to make sure the loans are getting repaid. Maybe they will settle on increasing the interest of the loan, but that probably means Elon will have to borrow less on that projected cashflow and pay more out of his own pocket.
The problem the banks have is that Elon’s track record in increasing a company’s value is second to none...so a bank has to decide between its normal short term approach or wait for possible vast riches
Daniel in SD
(supervised)
Here is the debt commitment letter from Morgan Stanley: https://www.sec.gov/Archives/edgar/data/1418091/000110465922048128/tm2213229d1_ex99-c.htm
Daniel in SD
(supervised)
AlanSubie4Life
Efficiency Obsessed Member
Knightshade
Well-Known Member
Yes- that something is an understanding of why most of what Elon is asking for isn't relevant to the issues at trial.
It'd be great if Elon finds that sooner rather than later.
AlanSubie4Life
Efficiency Obsessed Member
ZenRockGarden
Active Member
The item under dispute would seem to beTwitter's official disclosure of around 5% bots using their method of surveying 100 accounts per day and having humans look to see if the accounts are bot-or-not.
That method can easily be replicated - the only nuance being what guidelines and effort the humans put into "seeing" the bots, which unfortunately is within the wording Twitter used in saying the actual level of bots might be different - it's is simply how they measured it.
I don't see how months of discovery and terabytes of data will have any impact on the above. Depending on how you let your humans define a "bot" and how hard you have your humans look, you can probably replicate Twitters number... or not. But it won't turn into an SEC violation nor void the deal Elon signed.
He should settle and get the thing off everyone's plate.
That method can easily be replicated - the only nuance being what guidelines and effort the humans put into "seeing" the bots, which unfortunately is within the wording Twitter used in saying the actual level of bots might be different - it's is simply how they measured it.
I don't see how months of discovery and terabytes of data will have any impact on the above. Depending on how you let your humans define a "bot" and how hard you have your humans look, you can probably replicate Twitters number... or not. But it won't turn into an SEC violation nor void the deal Elon signed.
He should settle and get the thing off everyone's plate.
Daniel in SD
(supervised)
Not sure how many dimensions we're at in this chess game but this is obviously a ploy to force Elon to close the deal to find out what they're hiding.
Twitter board advises shareholders to take the money (@Bouba running out of time to buy shares and vote no. Vote is on September 13th). https://www.sec.gov/Archives/edgar/data/0001418091/000119312522202163/d283119ddefm14a.htm
"Adoption of the merger agreement by our stockholders is the only remaining approval or regulatory condition to completing the merger under the merger agreement, and is an important and required step for our stockholders to receive the merger consideration.
We are committed to closing the merger on the price and terms agreed upon with Mr. Musk. Your vote at the special meeting is critical to our ability to complete the merger. Twitter’s Board of Directors unanimously recommends that you vote “FOR” each of the proposals at the special meeting."
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AlanSubie4Life
Efficiency Obsessed Member
This makes no sense. He’s paying $44B for something that is currently worth something like $20B (or whatever - hard to tell). It would make no sense to just pay! You never know what could happen! May as well wait and drag it out just to see if you get lucky, even if you know you are screwed. Can spend a lot on legal fees before it starts to make no sense. What would you do?
Also it is much better for everyone this way, except for Twitter employees and shareholders and Twitter in general. And probably Telsa shareholders though that’s not as clear.
ZenRockGarden
Active Member
He signed and sealed a deal to pay for Twitter at that price, hurrying the deal and waiving all further due diligence. He then (weirdly) attacked the value of the thing he's already agreed to buy and has driven the market price down. Yep.
The court is very likely to rule that he must buy twitter at the agreed price. Waiting to "get lucky" and get out of a deal he signed wastes everyone's time and likely costs him more than a settlement he could reach now when it's less certain he loses
AlanSubie4Life
Efficiency Obsessed Member
Market price doesn’t really matter of course. Arguably beating it down makes sense since it destabilizes Twitter and makes them more likely to screw up and not conduct business in an ordinary manner.
I guess it was ambiguous to me what you meant by “he should settle” ( I took that to mean settle with what he agreed with) - sure if he can somehow get billions off that makes sense. That’s one way to “get lucky.”
Elon has an amazing track record of “getting lucky” in all areas of his life
so maybe he knows what he is doing.
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ZenRockGarden
Active Member
Elon has an amazing track record of “getting lucky” in all areas of his life
No one can argue with Elon's technical know-how and insight. But this is the guy who just sold a billion dollars of bitcoin he had Tesla invest in at a hundreds-of-millions loss (to name one of a dozen easy examples of him not always being business or personal smart).
I think he ate a bad burrito, stayed up late rage-tweeting and decided he could run the app better. He then rushed into trying to buy the thing, when the price didn't make sense. He is smart, so as it got more serious and as his backers asked business-value questions he got cold feet and so he's been trashing the very thing he sought to get control of, making it look like an astonishingly bad business deal to have promised to buy it at $54. That price is bad, but all he has left in the deal is to stall, which is failing.
End it - as soon as possible. It's on his personal bankroll, so TSLA doesn't have to care if settling (by which I mean paying billions to get OUT of the deal) costs him a small fortune. Just get his strong technical and science mind back on important things - like solving the issues with the 4680 pack and getting FSD to work.
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