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Notice of termination of Twitter merger agreement

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Re: Notice of termination of Twitter merger agreement

#951

Post by afterburner »

bdefore wrote: post #929
afterburner wrote: post #689

Earlier quoted context omitted.

The podcast Opening Arguments had two great episodes about the legal details of this deal (note the first episode doubting this deal would go through was from 2 months ago): July 4th: https://openargs.com/oa610-elons-twitter-deal-was-a-complete... May 12: https://openargs.com/oa595-shareholders-sue-twitter-alleged-...

Thanks for these. I listened to the July 4th one. For others who may be interested, the first 20 mins are unrelated and you may want to skip ahead to the 45 minute mark or so for their conclusions. Here is the brunt of why they think the deal won't go through: because it is difficult to prove extent of damages and because innocent third parties (the banks partnering with Musk) would be adversely affected, the courts…

I don't think the issue is that the courts don't have the power, it's that it would take forever to come to a conclusion in the court given the resources each side can pour into the fight, how complicated the legal details are, and how poor the legal system is at deciding these kinds of massive corporate legal issues (according to one of the podcast hosts).

Since it would take forever, it's much more likely the two sides settle or give up before they run out of legal tricks.

Re: Notice of termination of Twitter merger agreement

#952

Post by [deleted] »

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…

[deleted]

Re: Notice of termination of Twitter merger agreement

#953

Post by imranhou »

atlasunshrugged wrote: post #60
timsneath wrote: post #17

It seems apparent to this observer that he developed cold feet pretty fast after an impetuous decision, and has been looking for any reason to back out of it since then. The spam accounts angle seems like a convenient scapegoat, rather than a real surprise to him. He's clearly eccentric in his approach to decision making: I don't think any Harvard Business School course will teach "the Musk Principles". But it's uncl…

There's another belief floated by Josh Wolfe (an investor with Lux Capital) who claimed it was a ruse to liquidate Tesla stock en masse without Tesla hodlers getting suspicious and tanking the inflated stock price. https://twitter.com/wolfejosh/status/1545387947578597376

I doubt that is the case, because of such a flimsy reason chosen to back out of the twitter deal, if the plan was all along to create a ruse deal, I think the exit would have been better planned

Re: Notice of termination of Twitter merger agreement

#954

Post by MandieD »

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.

I like to post that picture of a python that tried to eat an alligator when Schaeffler's ill-timed purchase of Conti comes up. Always good for a laugh.

Schaeffler survived, but barely, and had Kurzarbeit not been a thing, it probably would have been a lot uglier. Kurzarbeit is a lot of why Germany came out of 2008/2009 in reasonably good shape. Better for pretty much everyone in an industry to be working 80% of the time in their current positions and getting 90% of their pay than for 20% of them to be out of work and struggling to make ends meet on unemployment - better for the workers, and better for their employers, who can turn around much more quickly when things get better.

Re: Notice of termination of Twitter merger agreement

#955

Post by jessaustin »

mlyle wrote: post #455
jessaustin wrote: post #80

Earlier quoted context omitted.

Either he was breathlessly arrogant or astonishingly careless in the first instance. Perhaps he didn't expect the Nasdaq composite to drop 2000 over the next several months? That could have been careless, depending on the sort of agreement he signed. I guess he can afford a $1B penalty, but good luck finding another buyer after that. It's not as though Twitter are overflowing with ideas for profit...

> I guess he can afford a $1B penalty, The $1B is if there's some outside reason why the deal cannot get done, e.g. because of regulatory concerns. It's not a "pay a $1B break-up fee at your discretion to get out of the deal" clause. > Accordingly, the parties hereto acknowledge and agree that the parties hereto shall be entitled to an injunction, specific performance and other equitable relief to prevent breaches of…

It's all Greek to me. It seems we're always warned that the Law can't be reduced to a simple formula. Scott Galloway seemed to indicate in his gleeful "Elon pulls out" emergency podcast episode that one valid reason to go to the $1B penalty could have been that Musk couldn't get the right financing together. Would it be so hard for him to get some I-banker on the stand to tell that tale? Why would any of the big banks care about the feelings of Twitter execs?

Re: Notice of termination of Twitter merger agreement

#956

Post by JumpCrisscross »

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.

> if there are blockbuster acquisitions every year

There aren’t. They cluster to varying degrees depending on the thresholds one chooses. But the likelihoods are far from uniform.

Re: Notice of termination of Twitter merger agreement

#957

Post by ergocoder »

ryanbrunner wrote: post #911
ergocoder wrote: post #863

Earlier quoted context omitted.

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 suppre…

Apart from that, out of 5000 employees, you can bet there is one employee disagreeing in email and that employee's opinion is discarded.

There is at least one person disagreeing on any topic.

It is a risky situation all around.

I reckon that good faith is not enough.

Re: Notice of termination of Twitter merger agreement

#958

Post by icedchai »

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…

You may be correct, but if you think Musk will actually buy Twitter at 54.20 now, I have a bridge to sell you. He can pay enough lawyers to hold up this transaction for years. "Time kills all deals", as they say.

Re: Notice of termination of Twitter merger agreement

#959

Post by ergocoder »

t_mann wrote: post #879
ergocoder wrote: post #863

Earlier quoted context omitted.

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.

People keep throwing this word around... yet the board accepted the first offer from Elon with no negotiation. Nobody is suing twitter board for this.

Who does that? Even new grad negotiates their offer...

Re: Notice of termination of Twitter merger agreement

#960

Post by freemint »

mikewarot wrote: post #680
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…

So my hunch that this could lead to him going broke isn't completely off base? I figure he ends up having to pay $10E+10, and everyone knows it, so he gets short-squeezed in Tesla stock, then margin called on any loans against his stock... then POOF

You can't short squeeze a seller. Sorry you just can't.
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