Notice of termination of Twitter merger agreement • Hacker News Board

Re: Notice of termination of Twitter merger agreement

#871

Post by taberiand » Sat, Jul 09, 2022, 11:38 AM UTC

rocqua wrote: post #690

femiagbabiaka wrote: post #656

> I have enormous respect for his engineering and business skills, he's accomplished some remarkable things. But he doesn't seem so great as a dealmaker. Perhaps he's badly advised, but hey, he chose his advisors. There’s no evidence that he’s a good engineer or a good businessman, save if committing fraud or stealing the accomplishments of others is in the list of things that qualifies one of either. It’s beyond tim…

SpaceX is actually doing great things. Tesla was very innovative 5 years ago. These two, especially spaceX, are quite impressive.

There's a reasonable argument that these great things are despite Musk, not due to him.

Re: Notice of termination of Twitter merger agreement

#872

Post by nl » Sat, Jul 09, 2022, 11:39 AM UTC

hef19898 wrote: post #763

JumpCrisscross wrote: post #723

Earlier quoted context omitted.

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.

Porsche and VW in 2008 if memory serves well. Almost ruined Porsche. Or Schaeffler and Conti, which almost ruined Schaeffler, a private company at the time.

The Porsche/VW thing was complicated by a short squeeze, not the financial crisis.

Re: Notice of termination of Twitter merger agreement

#873

Post by dotopotoro » Sat, Jul 09, 2022, 11:42 AM UTC

gsibble wrote: post #236

bediger4000 wrote: post #178

I guess we'll never see how a free speech Twitter works. I think this is sad.

You're being downvoted. Another sad day on HN when free speech is downvoted.

Was gp sarcastic? Are you sarcarstic? (I need an app for that..)

Re: Notice of termination of Twitter merger agreement

#874

Post by buzzwords » Sat, Jul 09, 2022, 11:42 AM UTC

Is there anyway for Elon to prove there are more bots than Twitter claims? If so, would twitter then be sued by the sec?

Re: Notice of termination of Twitter merger agreement

#875

Post by paulcole » Sat, Jul 09, 2022, 11:43 AM UTC

rajnathani wrote: post #868

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…

IIRC there’s just a $1B penalty in the acquisition clause for Musk if the transaction doesn’t go through.

You don’t remember correctly.

The breakup fee is if an outside influence prevents the deal from going through. It’s not just for cases of “uh-uh i don’t wanna.”

Re: Notice of termination of Twitter merger agreement

#876

Post by t_mann » Sat, Jul 09, 2022, 11:44 AM UTC

stingraycharles wrote: post #694

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…

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…

Sounds like a very unpleasant experience, sorry to hear. But I'm not sure it's a good precedent for this case, for two reasons:

a) You were happy to settle, which sounds understandable. But when the stakes are $44bn and most actors on Twitter's side are but agents for Twitter shareholders, their chief concern will be not breaking their fiduciary duties if they accept anything less than the maximum amount they could get. It's a bit hard to imagine how the legal bills for seeing this through could stack up to even .1% of the purchase price ($440m), and that's nowhere close to the discount that Musk will be looking for (with good reason imho, btw).

b) In your case the other party might have gotten away with dodging a court order to pay (or at least made it appear like that). That's pretty much unfathomable if you are literally the richest man on earth and live in the US.

Re: Notice of termination of Twitter merger agreement

#877

Post by myko » Sat, Jul 09, 2022, 11:44 AM UTC

lifeisstillgood wrote: post #852

seanhunter wrote: post #628

Earlier quoted context omitted.

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…

OK I know this is a massive tangent but I have to ... OMFGBBQ ? Oh My F&&&&ing God Bar-B-Q ?

A modification of a decades old meme popularized on the defunct SomethingAwful.com forums

https://www.urbandictionary.com/define.php?term=omgwtfbbq%21

Re: Notice of termination of Twitter merger agreement

#878

Post by avereveard » Sat, Jul 09, 2022, 11:47 AM UTC

rvnx wrote: post #801

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…

Why would you force someone to buy something they don't want, whatever the reason is ? If they decided not to proceed to the deal it means it was a bad deal from their perspective or that it would put them in a worse situation. Essentially you are taking advantage of them by forcing them. It's like if you sell a very expensive "brown ice cream", the buyer tells you he wants to buy it, and then when the buyer has it i…

The due diligence was done already, and this being a public company adds a layer of regulation on top

Re: Notice of termination of Twitter merger agreement

#879

Post by t_mann » Sat, Jul 09, 2022, 11:55 AM UTC

ergocoder wrote: post #863

suzzer99 wrote: post #699

Earlier quoted context omitted.

Do they always have the option of settling at any point in the process? Like if Musk said "$20 billion penalty but I don't buy the company", I assume they'd say yes? (Or substitute a bigger number if not.) So are they just negotiating at this point if Musk has a penalty number he's willing to pay?

My bet is on this. They will just negotiate. Nobody wants to go through a lengthy legal process. I think the number will be at 5b. Because, at 5b, Twitter gets a 1y revenue for virtually no cost. Twitter doesn't want to sell to a buyer who doesn't actually want to buy. It's not good for anyone. Imagine Musk buying Twitter and starting open up exec emails knowing about the bot numbers being inaccurate.

Not sure. Twitter board members have a fiduciary duty towards shareholders. If they accept a lot less than they could get by simply enforcing the rules (at a comparatively negligible cost) because they don't want to look mean, I reckon there's a very high probability that they will get sued by some hedge fund.

Re: Notice of termination of Twitter merger agreement

#880

Post by kllrnohj » Sat, Jul 09, 2022, 11:55 AM UTC

ergocoder wrote: post #863

suzzer99 wrote: post #699

Earlier quoted context omitted.

Do they always have the option of settling at any point in the process? Like if Musk said "$20 billion penalty but I don't buy the company", I assume they'd say yes? (Or substitute a bigger number if not.) So are they just negotiating at this point if Musk has a penalty number he's willing to pay?

My bet is on this. They will just negotiate. Nobody wants to go through a lengthy legal process. I think the number will be at 5b. Because, at 5b, Twitter gets a 1y revenue for virtually no cost. Twitter doesn't want to sell to a buyer who doesn't actually want to buy. It's not good for anyone. Imagine Musk buying Twitter and starting open up exec emails knowing about the bot numbers being inaccurate.

At $5bn Twitter & its board open themselves up to getting sued by the shareholders who were harmed for $16bn currently.

What Twitter as a company "wants" is kinda irrelevant. They have a fiduciary responsibility to their shareholders, and telling all those shareholders they just didn't feel like getting a $54.20/share deal because they didn't like the buyer and didn't want to be bought isn't really going to fly.

So any settlement will come with a requirement for Twitter to reasonable demonstrate to share holders that they haven't been harmed. And since all signs point to Twitter having the much stronger case, it's hard to imagine them just accepting much less than either the original purchase, or a penalty fee of closer to $16bn (the current gap between the share price & the purchase price)