Notice of termination of Twitter merger agreement • Hacker News Board

Re: Notice of termination of Twitter merger agreement

#911

Post by ryanbrunner » Sat, Jul 09, 2022, 2:25 PM 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.

> Imagine Musk buying Twitter and starting open up exec emails knowing about the bot numbers being inaccurate.

There's different levels of knowing about inaccuracies.

There's knowing that your methods of determining bots are probably not optimal and the number is most likely undercounted, but it was a good faith albeit imperfect effort.

Then there's knowing that bots are actually some other specific number and suppressing that information.

I think the former is much, much more likely than the latter and wouldn't really be a huge controversy if it leaked.

Re: Notice of termination of Twitter merger agreement

#912

Post by joshgroban » Sat, Jul 09, 2022, 2:26 PM UTC

tzs wrote: post #480

h2odragon wrote: post #148

Earlier quoted context omitted.

> Musk's misguided approach to free speech, which says anything that is not explicitly illegal is allowed, would have made Twitter an open forum for spreading lies and hate. Twitter is of course currently known as a source of Truth and Harmony. "anything not illegal is allowed" sounds decent to me; if you want stuff illegal, make it illegal. If you want unwritten laws dreamt up by anonymous elites and enforced for ra…

Have you spent much time on "anything not illegal is allowed" forums? Try to talk about popular movies are TV shows and you get things like this on such sites [1]. Want to discuss an episode of PBS Space Time such as this one [2]. Don't be surprised if this is the discussion you get [3]. What almost always happens on such forums is that the people there who aren't racists, sexists, antisemites, inane conspiracy theor…

all white men are racist, sexist and antisemitic. That's patriarchy and systemic racism. You are looking for a platform without white men.

Re: Notice of termination of Twitter merger agreement

#913

Post by ryanbrunner » Sat, Jul 09, 2022, 2:29 PM UTC

drexlspivey wrote: post #849

jsiepkes wrote: post #814

Earlier quoted context omitted.

Why wouldn't courts have the power to do that? If the court rules you have no grounds to terminate the contract then you will have to execute the contract as originally agreed upon.

Can they force all the banks that agreed to loan them money to go through with it?

How Musk gets the money in order to fulfill a contract he's entered into is immaterial unless he goes completely insolvent and still can't fulfill it, which will not be the case.

Re: Notice of termination of Twitter merger agreement

#914

Post by DoughnutHole » Sat, Jul 09, 2022, 2:38 PM UTC

brown9-2 wrote: post #904

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.

This seems like a great example of selection bias if there are blockbuster acquisitions every year.

I don't think there was any implication that the big buyouts before a crash are unusual - calling them "a feature of modern finance" seemed to be implying that they're inevitable.

Acquisitions become crazier and crazier as the market gets hotter and hotter, with ever increasing purchase prices - someone inevitably gets left holding the bag when the market comes crashing back down to earth, and it's often the greedier players who take bigger risks.

The blockbuster acquisitions that happen in the middle of the bull market also often seem insane in the moment, but if the market continues on the up after the fact then they're remembered as sound business decisions rather than as a symptom of mania.

Re: Notice of termination of Twitter merger agreement

#915

Post by throwaway_2341 » Sat, Jul 09, 2022, 2:52 PM 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…

It appears they will make around $6B in annual revenues, I think their financial performance is better than most social media platforms, save FB. In what way, Twitter is not in good shape?

Re: Notice of termination of Twitter merger agreement

#916

Post by Hendrikto » Sat, Jul 09, 2022, 2:56 PM UTC

t_mann wrote: post #876

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…

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 g…

> 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)

That is 1%, not .1%

Re: Notice of termination of Twitter merger agreement

#917

Post by HWR_14 » Sat, Jul 09, 2022, 3:03 PM UTC

drexlspivey wrote: post #849

jsiepkes wrote: post #814

Earlier quoted context omitted.

Why wouldn't courts have the power to do that? If the court rules you have no grounds to terminate the contract then you will have to execute the contract as originally agreed upon.

Can they force all the banks that agreed to loan them money to go through with it?

As long as Musk has ~40 billion of Tesla stock and can get ~20 billion additional dollars in cash (can get, not just has already), yes.

Re: Notice of termination of Twitter merger agreement

#918

Post by johng » Sat, Jul 09, 2022, 3:03 PM UTC

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…

What if they have willfully misrepresented the amount of bots on the platform and lied about it to shareholders for years. MAUs are a big part of any social networks valuation metrics.

Re: Notice of termination of Twitter merger agreement

#919

Post by DoughnutHole » Sat, Jul 09, 2022, 3:05 PM UTC

CogitoCogito wrote: post #823

xenadu02 wrote: post #648

Earlier quoted context omitted.

It will eventually settle. If they sue and win Musk's financing will have long backed out so they aren't going to end up with enough to close the deal. I suppose they could force him into bankruptcy which would end up with his ownership stakes in Tesla and SpaceX sold off. Given how much of a loose cannon he's become that would probably be better for other shareholders but who knows.

> I suppose they could force him into bankruptcy which would end up with his ownership stakes in Tesla and SpaceX sold off. I don't think they'd need to force him into bankruptcy. If a judge awards Twitter (say) $10 billion in damages, there are many avenues to seize enough of Musk's assets to pay without making him bankrupt.

Well the best case for Twitter isn't $10bn in damages, it's forcing him to go through with the the entire original $44bn deal.

Elon's net worth has already fallen by $65bn in the past few months - I'd imagine the valuation of his assets will fall quite a lot more once it becomes known he's going to have to offload $44bn worth of Tesla and/or SpaceX to finance a bad deal.

Elon won't be bankrupt in the colloquial sense of financially ruined, but if he's forced to go through with deal and is unable to finance it he will have to liquidate an enormous amount of assets - and many of his assets are already collateral for existing loans.

Re: Notice of termination of Twitter merger agreement

#920

Post by tommoor » Sat, Jul 09, 2022, 3:18 PM UTC

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.

It's also a world first problem