Elon’s Out • Hacker News Board

Re: Elon’s Out

#151

Post by heartbreak » Sat, Jul 09, 2022, 9:50 PM UTC

throwaway09223 wrote: post #140

alphabetting wrote: post #4

I found this part most interesting. Public awareness of the Delaware Court of Chancery is about to skyrocket during this court battle. The fact that Musk is working in such bad faith here — that he seems so unconcerned with law and the contract he signed — cuts both ways. On the one hand, it will certainly annoy a Delaware chancellor; Delaware likes to think of itself as a stable place for corporate deals, with predi…

> What if the court orders Musk to close the deal and he says no? I can't believe people are taking this very silly statement seriously. This is utter nonsense. There are remedies for people who disobey court orders. Having assets makes you more vulnerable to a court's authority because you have something to lose. If a court orders specific performance and he doesn't do it then he's liable and the court will take his…

Levine’s take is based on how Musk’s previous encounters with court orders have gone.

Re: Elon’s Out

#152

Post by tptacek » Sat, Jul 09, 2022, 9:50 PM UTC

petilon wrote: post #71

This article says Musk agreed to buy Twitter mostly as a joke. I think there's a far better explanation. This wasn't a joke for Musk because after agreeing to buy Twitter he proceeded to sell billions of dollars' worth of TSLA stock, supposedly to finance the purchase. Even for the richest man in the world that's not a joke. I think a better explanation is that Musk offered to buy Twitter as a cover for selling billi…

That seems like an enormous amount of risk to take on just to sell stock that he actually owns and avoiding "looking like a hypocrite". It's not just plausible but somewhat likely that he'll be forced into an 11-figure settlement with Twitter to avoid the actual worst case outcome of being forced to take custody of and actually operate Twitter until he can unload it on someone else.

Re: Elon’s Out

#153

Post by adventured » Sat, Jul 09, 2022, 9:51 PM UTC

Musk wasn't pretending to buy Twitter, the article is using a sort of simpleton interpretation of Musk's behavior. That's the interpretation someone would take if they dislike Musk and get overly emotional about his behavior.

Musk is x y z. Oh my god, did you see the tweet he sent out!?! I just hate Musk, blah blah blah. He's such a terrible human. This one time he called a person a really bad name. - That's the type of person that reads Musk's Twitter acquisition attempt the way the article is.

I don't care much about Musk one way or another, but this is not a complicated context and the author is plain wrong.

What happened is the market for hyper overvalued stocks has crashed. He was faced with the scenario of paying double for Twitter vs what it was really worth. Remove the Musk prop and the stock collapses. Next up, the stock is heading south of $30 / share. It might be worth taking over for $20-$25 / share at most.

Musk didn't want to pay $20 billion more for Twitter than he had to, even for him that was a bridge too far. Particularly while his own paper bubble fortune is just as at risk of implosion as the rest.

It was really, really, really dumb timing. That was Musk's actual issue.

Re: Elon’s Out

#154

Post by tptacek » Sat, Jul 09, 2022, 9:51 PM UTC

russdill wrote: post #68

theptip wrote: post #29

There's been a lot of speculating around here on exactly what it would take for Musk to get out of this deal; here's the TLDR of the analysis from Levine: > Musk cannot get out of the deal just because one of Twitter’s representations is false. He still has to close the deal unless the representation is false and it would have a “material adverse effect” on Twitter. This is a famously under-defined term but it genera…

Do public statements before he signed the deal that imply that he was aware that Twitter has a bot problem and already suspected that the number we much higher than reported by Twitter have any effect?

It's kind of a moot point; Levine is reading tea leaves about what a judge will think hearing all of this, but the fact is that Musk waived the right to condition the acquisition on Twitter's bot statistics, pretty much in black and white.

Re: Elon’s Out

#155

Post by leetcrew » Sat, Jul 09, 2022, 9:52 PM UTC

towaway15463 wrote: post #137

JaimeThompson wrote: post #78

Earlier quoted context omitted.

Smoking weed makes you lose your security clearance, Musk did it on camera and still has his because of "reasons". That is one example of the rules that apply to most others not applying to him.

Probably also an example of a rule that should be retired. Either that or they should remove clearance if you enjoy whisky.

you're missing the point of the rule. the issue with smoking weed isn't really about having impaired judgement, it's that weed is still illegal at the federal level. there are all kinds of low-level crimes that can put your clearance at risk. which kinda makes sense... they want the kind of person who strictly follows the rules for cleared positions.

Re: Elon’s Out

#156

Post by calmoo » Sat, Jul 09, 2022, 9:53 PM UTC

t_mann wrote: post #74

Can we also take a moment to appreciate the tongue-in-cheek writing style of this (fairly thorough, by my impression) analysis of rather dry things like SEC filings, merger covenants,...?

Matt Levine is fantastic, highly recommend subscribing to his newsletter.

Re: Elon’s Out

#157

Post by edgyquant » Sat, Jul 09, 2022, 9:53 PM UTC

Nevermark wrote: post #109

BobbyJo wrote: post #55

Earlier quoted context omitted.

In very direct, real terms, assets are power. They represent resources to do things. The problem here isn't that wealth is power, it will always be power. The issue is that a single person has been allowed to accumulate too much.

It would mitigate the problem if institutions could be strengthened by design to be less sensitive to corruption or special treatment. There are lots of successful examples - constitutions, voting, term limits, separate judiciary, non-political commuters, etc The big problem I see in the design of egalitarian systems, is explicitly addressing the need for continuous response to new forms of centralization. I don’t kn…

>A simple requirement that no coordinated individual or organization have sway over more than 25% of political seats, and political organizations at the federal and state levels must be separated, would do wonders for decentralization and better representation.

and would be undemocratic

Re: Elon’s Out

#158

Post by tptacek » Sat, Jul 09, 2022, 9:53 PM UTC

hartator wrote: post #38

> that it has knowingly been massively understating the number of bot accounts in order to trick companies into buying Twitter ads and shareholders into buying Twitter stock Wasn’t Google Ads 80% fake clicks on some studies? It won’t be surprising Twitter Ads is actually worse. There is so zero incentive to clean it up and so many shady reasons to do it.

That might actually hurt Musk's argument, because Google is incredibly lucrative despite the belief that ad clicks are overwhelmingly fake. The rule of thumb Levine (an attorney) gave a few posts ago for MAE's in Delaware courts is "sufficient to cause a 40% drop in profitability". Not stock price, not mDAU numbers, but income statements.

Re: Elon’s Out

#159

Post by almost_usual » Sat, Jul 09, 2022, 9:55 PM UTC

georgeburdell wrote: post #132

Musk holds a key piece of America’s future in space in SpaceX. I wonder if it’s only a matter of time before he starts dangling that to get what he wants in cases like this. I still am generally favorable toward Elon, but I think we’re seeing him transform into a villain

I see a similar trajectory as OJ Simpson..

Re: Elon’s Out

#160

Post by georgia_peach » Sat, Jul 09, 2022, 9:55 PM UTC

This is politics masquerading as legal analysis. Twitter, by its own admission, lied about their user count for years. Elon will either go without penalty, or take a slap on the wrist. Levine spends a lot of time shilling on bots because he knows that's a weak spot for the Elon haterz club.

https://nairametrics.com/2022/04/28/twitter-says-it-inflated...

edit: Not an Elon fan BTW. Just don't appreciate this Levine's axe-grinding masquerading as impartial legal analysis.