Notice of termination of Twitter merger agreement • Hacker News Board

Re: Notice of termination of Twitter merger agreement

#631

Post by zrobotics » Sat, Jul 09, 2022, 5:00 AM UTC

FireBeyond wrote: post #558

redeeman wrote: post #422

Earlier quoted context omitted.

waiving diligence does not mean that twitter can misrepresent things though. I do not know what the true amount of bot participants are, but IF it is above 5%, that would not be something "due diligence" had to discover, twitter says <=5%, and it had better be that then.

Given that this is the numbers and methodology that Twitter has used for many years in SEC filings, Musk is implying that Twitter has been deceptive to its own investors and to the SEC for years. This isn't impossible, but it might require a little more than a page or two of vague accusations.

This is absolutely pure speculation, but perhaps that is Musk's motive for this whole charade. He is erratic enough that it certainly seems possible that he did this whole acquisition agreement with no intention of following through simply to unveil information to discredit Twitter. It certainly doesn't appear from the outside that Musk had any ideas for making money on this by materially improving Twitter as a business from anything I've read. The justifications about free speech seem to taint this deal with Musk having an ideological bent to the whole transaction, so it seems possible that he thought he could use the buyout to access damaging information (like potentially lying on SEC filings) and then back out without spending the full amount.

Honestly, waiving due-diligence is so sketchy that it has made me wonder from the start what his true endgame was. If he did want to buy the company, what did he gain by waiving his due-diligence rights?

Re: Notice of termination of Twitter merger agreement

#632

Post by lettergram » Sat, Jul 09, 2022, 5:01 AM UTC

mzs wrote: post #163

>The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery. Bret Taylor, Twitter board chair - 4:51 PM Chicago time · Jul 8, 2022 https://twitter.com/btaylor/status/1545526087089696768

The most likely scenario is a settlement at a lower price imo. Musk was never going to pay the original offer because it was / is well known Twitter has a bot problem. He surfaced the issue and is threatening to scuttle deal based on twitters throttling the API. Which is limiting the due diligence ability of Musk’s financiers to appropriately evaluate their investment.

Now the negotiations will take place and I suspect we will see something like a $10-$20B purchase agreement. Musk will have opportunity for due diligence if they sue. If they don’t sue him, then the shareholders sue Twitter (ironically probably some of the financiers).

Re: Notice of termination of Twitter merger agreement

#633

Post by jussij » Sat, Jul 09, 2022, 5:01 AM UTC

0xy wrote: post #580

DelaneyM wrote: post #525

Earlier quoted context omitted.

As in my post, assuming this reaches a "negotiated" settlement there are going to be two important values: the original purchase price (OPP), and the fair market value (FMV). If Twitter "wins", they get Elon to pay the full market value. Now, they don't actually want Elon to be involved, so if Elon pays the difference between FMV and OPP (~$24B) that's essentially the same as buying then divesting with fewer steps. I…

If Elon wins his claim that they breached contract, he will be able to go after them for damages. It's pretty clear Twitter was lying and fudging fake user numbers, the question is how much and whether that was a breach of contract.

So what damage has been done to Elon by him not buying Twitter?

Now if Elon wins might be able to claim costs, but they would be minimal by comparison to the original $44B deal.

Re: Notice of termination of Twitter merger agreement

#634

Post by jungle2jungle » Sat, Jul 09, 2022, 5:02 AM UTC

justinzollars wrote: post #551

The Hacker News community has really turned into an angry mob over the years! Wow. So much Elon Hate - he made the Electric Car, He makes Rockets. Give the dude a break. I know its hard to live up to your personal standard of Piety/Orthodoxy - but realize some people are producing things. This is an example of a recent Trend: https://twitter.com/search?q=%22Jared%20Kushner%22&src=trend... Click on the top 10 accounts…

Quick, call Elon's lawyers! You have incontrovertible proof!

Re: Notice of termination of Twitter merger agreement

#635

Post by deelowe » Sat, Jul 09, 2022, 5:03 AM UTC

tsimionescu wrote: post #614

dylan604 wrote: post #48

Earlier quoted context omitted.

I absolutely love that fact that this tweet happy individual might actually get slapped for just tossing out tweets. Not sure if $1B would make him squirm or not, but even for billionaires, $1B is an expensive twitter rant.

Note that Musk stands to spend $44B, not $1B.

He currently owes twitter 44B, but actual damages would be 44B minus the FMV, so closer to like 10-20.

Re: Notice of termination of Twitter merger agreement

#636

Post by kragen » Sat, Jul 09, 2022, 5:04 AM UTC

FireBeyond wrote: post #593

kragen wrote: post #565

A thing I'm confused about here is how Twitter's stock price is still US$35.04 in after-hours trading, amounting to a market cap of US$28.13B. This valuation implies a time-discounted long-term expectation that Twitter will earn about US$1.4 billion per year, if we divide by a nominal P/E ratio of 20 years. Alternatively it represents about a 70% probability that Musk will acquire the company for the agreed-upon US$5…

> So, how are Twitter's remaining investors justifying their US$28 billion bet on Twitter? In this situation I can easily imagine Twitter being worth US$6B or maybe US$10B, but US$28B, the hell? > TSLA's market cap is US$779.67B I'd love to see plausible and realistic justifications that Tesla's market cap is worth more than every other car company in existence combined. Some vague hope that one year, Musk's annual "…

It's an interesting question, but for the purpose of this discussion, it doesn't really matter whether Tesla's market cap is so high because Tesla's investors are deluded fools or because Tesla will really have over US$40 billion a year in profits someday soon, like Apple, Saudi Aramco, ICBC, Alphabet, Berkshire Hathaway, JPMorgan Chase, Microsoft, and I think no other companies in the history of the world. (I'm looking at https://en.wikipedia.org/wiki/List_of_largest_companies_by_r....)

What matters is how much Tesla's investors would change their minds if Elon, or his lender, unloaded 5% of the company's stock on the market. How much would the stock price move? Would Elon's paper wealth evaporate, leaving him unable to follow through on the Twitter offer? Since 5% of TSLA is less than two days of market volume, I think the answer is that the price would move very little, and so he would be able to complete the acquisition.

Re: Notice of termination of Twitter merger agreement

#637

Post by JamesSwift » Sat, Jul 09, 2022, 5:04 AM UTC

tazjin wrote: post #5

minimaxir wrote: post #3

Elon waived his right to due diligence when he first made the offer to buy Twitter, so backing out of the deal by arguing a lack of due diligence is very funny.

They write > Despite public speculation on this point, Mr. Musk did not waive his right to review Twitter’s data and information simply because he chose not to seek this data and information before entering into the Merger Agreement. In fact, he negotiated access and information rights within the Merger Agreement precisely so that he could review data and information that is important to Twitter’s business before fin…

Yes its public, just as this letter is. Notice that they dont refer to any specific section of the agreement in this portion of the statement, unlike the other references they make to the agreement.

Re: Notice of termination of Twitter merger agreement

#638

Post by jungle2jungle » Sat, Jul 09, 2022, 5:04 AM UTC

LAC-Tech wrote: post #472

Probably for the best. The only way I was going back to twitter was if Musk took over, took decisive action, and it stopped being a left wing echo-chamber. But wasting more of my life on social media is not a net positive. So overall I'm glad, I can continue to ignore twitter exists except when people occasionally link a tweet (which half the time I regret clicking anyway).

So you want to give the richest man in the world more control over the flow of information?

I've always though it better to avoid massive concentrations of power, but that's just me.

Re: Notice of termination of Twitter merger agreement

#639

Post by elil17 » Sat, Jul 09, 2022, 5:05 AM UTC

electic wrote: post #32

timmytokyo wrote: post #16

Earlier quoted context omitted.

They'd have to prove it in court. Good luck with that.

It is quite easy to prove twitter is mostly full of bots. You do not even need a firehose to come to that conclusion.

But Twitter said that the number was provided on a best effort basis, so you don’t need to prove the number was wrong. rather, you need to prove that Twitter tried to lie. Unless there’s an internal email saying “I’m making up the number 5% because we know it’s higher but we don’t want to write that,” it doesn’t matter at all. If such an email existed, Twitter wouldn’t be fighting the back-out because revealing that email would mean damages for existing shareholders.

Re: Notice of termination of Twitter merger agreement

#640

Post by jungle2jungle » Sat, Jul 09, 2022, 5:05 AM UTC

godmode2019 wrote: post #254

I can tell you Twitter took the not question seriously. I have only used twitter once when my company had a notice board you needed to tweet to, over 7 years ago. After musk started talking about bots, I started getting a ungodly amount of twitter emails asking me to sign in and see watt my friends are doing ect. Over 10 a day for the last month or so. My email is literally filled with twitter emails trying to activa…

> Everyone knows twitter is majority bots, gpt influence accounts

You are writing fan-fiction, not making an argument.