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Notice of termination of Twitter merger agreement

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Re: Notice of termination of Twitter merger agreement

#721

Post by prox »

seanhunter wrote: post #628
chernevik wrote: post #264

The filed letter ( https://www.sec.gov/Archives/edgar/data/1418091/000110465922... ) isn't the knockdown argument I would be expecting. Musk is saying, you haven't demonstrated your numbers are accurate. But having signed the merger agreement and waived due diligence, I think he needs to demonstrate that they are _not_ accurate. Complaining Twitter rate-limited his API access (which would be very foolish on their par…

I agree with your analysis. This has always seemed a situation driven by ego rather than rational thought and I expect ego will prevail and we will see futile legal + PR trench warfare for a while. However, my understanding of M&A law[1] is it's not enough for him to say that the numbers are missing or even wrong. He has to say that there was a material breach caused by the fact that the numbers were missing or wrong…

So basically it’s like buying a house and finding faults with it that the seller had hidden?

Re: Notice of termination of Twitter merger agreement

#722

Post by cjbgkagh »

diob wrote: post #693
cjbgkagh wrote: post #651

It’s been amusing to see the flip from people saying Musk can’t buy Twitter to Musk must buy Twitter. Buying Twitter the way Musk did right before the most telegraphed recession in modern history was colossal stupidity. I have no insight to Musks liquidity, but if Twitter is able to force him to complete the sale in the middle of a raging recession then how much of his empire would be diminished by forced liquidation…

Why would it cause job losses? Wouldn't others be able to hire due to the money transferring to them?

Theoretically yes, but that’s not how courts view it.

Re: Notice of termination of Twitter merger agreement

#723

Post by JumpCrisscross »

partloyaldemon wrote: post #691

Chancery courts will compel performance of this transaction absent a showing of an material adverse advent. Very, very high bar. The buyer is a highly sophisticated investor and the grounds that he is alleging form the basis of the breach of contract were and are public information that has not materially changed nor been alleged to have materially changed since the signing of the merger agreement. Moreover, and most…

A feature of modern finance is the blockbuster leveraged buyout signed right before the market crashes: RJR Nabisco in 1989, Hilton and Harrah's in 2006. Now Twitter, in 2022.

Re: Notice of termination of Twitter merger agreement

#724

Post by pas »

stingraycharles wrote: post #707
giansegato wrote: post #698

Earlier quoted context omitted.

How could they refuse after being compelled by a court ruling? Did they appeal / sue you back? Can't see how they could simply say... "no".

The judge ruled that the payment had to be made immediately; they could sue back, but they would have to pay first. In their words, it was a “BS ruling”, and they simply didn’t pay. I’ll tell you that I didn’t know you could just say “no”, but they did. My lawyers were at the point that they would send a (legally backed) letter to all their customers, that their payments should be redirected to some court. It would h…

wtf. which jurisdiction is this? so strange you can't take the final ruling and go to a collections agency and get your money :o

Re: Notice of termination of Twitter merger agreement

#725

Post by neilwilson »

martin8412 wrote: post #715
stingraycharles wrote: post #694

Earlier quoted context omitted.

I actually have experience with this type of stuff, some business tried to acquire mine and kept postponing, and ended up with some excuse that there wasn’t enough technical design documentation, which would be a real-breaker. It wasn’t super big money, but also not small (high 6-figures). I ended up suing them, won on all counts, and the deal had to go through. Unfortunately, this company simply refused to do that e…

Difference being, Twitter has deep pockets and are highly motivated to see this through.

Not as deep as Elon Musk.

When it comes to court battles, relative depth matters.

Re: Notice of termination of Twitter merger agreement

#726

Post by RC_ITR »

chernevik wrote: post #264

The filed letter ( https://www.sec.gov/Archives/edgar/data/1418091/000110465922... ) isn't the knockdown argument I would be expecting. Musk is saying, you haven't demonstrated your numbers are accurate. But having signed the merger agreement and waived due diligence, I think he needs to demonstrate that they are _not_ accurate. Complaining Twitter rate-limited his API access (which would be very foolish on their par…

It’s so crazy to me that the purchase price was determined by a weed joke and people are surprised that in the cold sober light of our recent correction, Musk is trying to get out of this.

His whole M.O. is degrading the power of the SEC and DoJ by pointing out they have very little enforcement power. This is just another example in his long journey of “what are they going to do if I just don’t follow the rules?”

Weird way for the richest man in history to live his life, but that’s probably just sour grapes on my part.

Re: Notice of termination of Twitter merger agreement

#727

Post by morelisp »

sjs7007 wrote: post #390
r3trohack3r wrote: post #303

I have very little context here. It seems the general sentiment in the comments is that this attempt to get out of the merger agreement will fail and that Musk will be forced to follow through with the purchase of Twitter. At the current rate Twitter is trading at, Musk will be paying roughly 50% over market value to acquire the company. So a question: if you believe Musk will still purchase Twitter at an inflated pr…

Small correction, he'll be paying 50% over market value, not 150% more.

He could be paying effectively 150% more, right now the presence of the offer is propping up the stock - we have no real idea how far Twitter might have fallen if left to its own devices.

Re: Notice of termination of Twitter merger agreement

#728

Post by rot13xor »

DelaneyM wrote: post #525
beeboop wrote: post #376

Earlier quoted context omitted.

When has there ever been a lawsuit of this sort that was anywhere near $15 billion? What do you base these numbers on?

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…

I'm curious what would happen if Twitter stock price goes above Musk's offer price of $54.20 during this legal battle.

Re: Notice of termination of Twitter merger agreement

#729

Post by spoonjim »

Twitter is a great LBO candidate but Elon Musk tried to buy it as a consumption good rather than an asset investment. Not that surprised that the deal he made in a fit of pique did not seem so good without the beer goggles and with the market having fallen 30%. I hope courts compel him to execute the transaction but I also know that he probably has a million ways of getting out of it.

Re: Notice of termination of Twitter merger agreement

#730

Post by Ekaros »

devoutsalsa wrote: post #676
DelaneyM wrote: post #45

For anyone thinking he can pay the 1B$ termination fee and walk away, it's not that simple. The 1B$ is a "reverse breakup" fee, and applies when an outside force (like SEC or financing) prevents the deal. That 1B$ has nothing to do with any choices on either side, and is unlikely to factor into this process. At this point they're clearly going to trial, and it's not unlikely that the cost to Elon will be somewhere in…

Having to spend $15B as the cost for making an impulsive decision (when you can afford it) is a first world problem.

When does a decisions stop being impulsive? Probably at point when enough lawyers are hired to write a contract...
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