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Shouldibuytwitter.com – A tiny takeover arbitrage model for TWTR

shouldibuytwitter.com

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Re: Shouldibuytwitter.com – A tiny takeover arbitrage model for TWTR

#101

Post by gnicholas »

roflyear wrote: post #100
gnicholas wrote: post #92

I can imagine the following happens at trial: 1: Musk's team provides evidence that 18% of users are bots 2: TWTR's stock drops the next day 3: Musk argues that the drop in the stock value demonstrates just how material his team's revelation/accusation is, suggesting that the misstatement was material 4: TWTR argues that the stock dropped not because of any material misstatement, but simply because it changes shareho…

None of what you said has anything to do with MAE

What is your take on what would constitute an MAE? I haven't followed the transaction as carefully as some, but I have seen some coverage of it, including from fellow lawyers. I've not heard anyone claim that news regarding the number of bots has nothing to do with MAE.

Re: Shouldibuytwitter.com – A tiny takeover arbitrage model for TWTR

#102

Post by mhh__ »

orlp wrote: post #6
yqsk wrote: post #2

Inspired by Matt Levine's awesome reporting on the Elon/Twitter purchase fiasco. Just a little app to model the arbitrage (gamble) opportunity.

> Just a little app to model the arbitrage (gamble) opportunity. This isn't arbitrage at all. That is taking advantage of a price difference of an asset between two markets by buying and reselling it (nearly) simultaneously. If you are holding the asset longer than strictly necessary it isn't (only) arbitrage. Your intended action is just timing the market: buying stocks based on the belief they will soon rise in pri…

Arbitrage is practically just a cooler way of saying making clever money the nerdier the trader is.

Re: Shouldibuytwitter.com – A tiny takeover arbitrage model for TWTR

#103

Post by seanhunter »

gnicholas wrote: post #92

I can imagine the following happens at trial: 1: Musk's team provides evidence that 18% of users are bots 2: TWTR's stock drops the next day 3: Musk argues that the drop in the stock value demonstrates just how material his team's revelation/accusation is, suggesting that the misstatement was material 4: TWTR argues that the stock dropped not because of any material misstatement, but simply because it changes shareho…

Have you read the merger agreement that Elon signed? Bot’s aren’t even mentioned. For anything about bots to be relevant to the deal Musk’s team don’t have to show that their were more bots but that Twitter’s statements about how they measure bots were incorrect and that the difference caused by those incorrect statements caused a materially adverse change. Since Twitter’s statements about bots are very specific and caveated (they label a small random sample, and estimate how many bots there are in the overall population using the number of bots they see in the sample, they use “significant judgement” and the number could be higher than what they say) it’s really hard to see Elon prevailing on this question.

Matt Levine has a customarily excellent analysis here https://www.bloomberg.com/opinion/articles/2022-07-18/elon-w...

Re: Shouldibuytwitter.com – A tiny takeover arbitrage model for TWTR

#104

Post by gnicholas »

seanhunter wrote: post #103
gnicholas wrote: post #92

I can imagine the following happens at trial: 1: Musk's team provides evidence that 18% of users are bots 2: TWTR's stock drops the next day 3: Musk argues that the drop in the stock value demonstrates just how material his team's revelation/accusation is, suggesting that the misstatement was material 4: TWTR argues that the stock dropped not because of any material misstatement, but simply because it changes shareho…

Have you read the merger agreement that Elon signed? Bot’s aren’t even mentioned. For anything about bots to be relevant to the deal Musk’s team don’t have to show that their were more bots but that Twitter’s statements about how they measure bots were incorrect and that the difference caused by those incorrect statements caused a materially adverse change. Since Twitter’s statements about bots are very specific and…

It seems like he overlooks the possibility that the bot issue would turn up evidence that Twitter's executives knew that it wasn't quite following the described protocols.

But more generally, my point was that Musk could allege something that could create an MAE, and then the stock would drop and they'd end up arguing about whether the drop was due to the evidence, or due to the evidence's impact on people's belief that the deal would go through.

Re: Shouldibuytwitter.com – A tiny takeover arbitrage model for TWTR

#106

Post by wjnc »

martincmartin wrote: post #89
shadowpho wrote: post #79

Earlier quoted context omitted.

It's filed in delaware courts which are famously fast. Expectation is 3-5 mo

But then Elon might ignore the ruling, and it's not clear what happens, or long it takes.

Aren’t US judges given a large leeway in forcing rulings? (This might be overly influenced by Law and Order TV.)

Re: Shouldibuytwitter.com – A tiny takeover arbitrage model for TWTR

#107

Post by RosanaAnaDana »

Sebb767 wrote: post #58
RosanaAnaDana wrote: post #46

Earlier quoted context omitted.

You know its funny that you mention this through a political lens because the entire time I've been watching this narrative play out, this is the exact reason that I think Elon made his play. The value in twitter would be in delivering it to the 2024 R assumed candidate. If you can't hold the office, control the office. I've speculated that the J6 committee might actually be the origin of Elons cold feet. Maybe he se…

But is there a 46 billion USD value in getting Trump (I'm assuming you're referencing him) back on Twitter? He lost his last candidacy while still having a Twitter and Facebook account, I don't think just restoring his account will be enough to tip the scales in his favor.

I mean that's the question right?

46B to control the POTUS? Or at least be his golden child?

Also 3 months ago I would have given the election to the prior. Things are more mixed now. But if Musk delivers him Twitter? All bets are off.

Re: Shouldibuytwitter.com – A tiny takeover arbitrage model for TWTR

#109

Post by fzzzy »

gnicholas wrote: post #104
seanhunter wrote: post #103

Earlier quoted context omitted.

Have you read the merger agreement that Elon signed? Bot’s aren’t even mentioned. For anything about bots to be relevant to the deal Musk’s team don’t have to show that their were more bots but that Twitter’s statements about how they measure bots were incorrect and that the difference caused by those incorrect statements caused a materially adverse change. Since Twitter’s statements about bots are very specific and…

It seems like he overlooks the possibility that the bot issue would turn up evidence that Twitter's executives knew that it wasn't quite following the described protocols. But more generally, my point was that Musk could allege something that could create an MAE, and then the stock would drop and they'd end up arguing about whether the drop was due to the evidence, or due to the evidence's impact on people's belief t…

tptacek's point is that a MAE has nothing to do with the stock price, only revenue or profitability.
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