Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Elon’s Out

bloomberg.com

Post reply on HN
Print view View original

681–690 of 767 posts

Re: Elon’s Out

#681

Post by Majromax »

CaptainZapp wrote: post #661
sterlind wrote: post #633

Earlier quoted context omitted.

how do you actually trade complex options like this? E-Trade or Robinhood or something? I'm sure I could get myself in a whole heap of trouble trading options, but it looks fun..

Actually less trouble than short selling, where the loss, in theory, is unlimited. On options losses are capped to the money invested. Nevertheless, you should consider that a host of professional traders with much better equipment and connections are betting against you.

> On options losses are capped to the money invested.

On long options -- a purchased call, purchased short, or a combination -- then losses are capped to the money invested. On short options, losses are potentially unlimited.

Understanding the difference is obviously extremely important.

> Nevertheless, you should consider that a host of professional traders with much better equipment and connections are betting against you.

I'd rather suggest that professional and sophisticated traders are arbitraging against you. Options market makers are not usually in the business of taking a directional stance -- they don't care one way or the other about whether Musk will buy Twitter. Instead, they seek to sell you the option but buy back the risk more cheaply, beginning with dynamic hedging that is impractical for a single retail investor with limited capital.

Re: Elon’s Out

#682

Post by matthewdgreen »

ratww wrote: post #677
ckastner wrote: post #673

Earlier quoted context omitted.

Your argument is inconsistent. Why would the value go down at all, if not because he would look like a hypocrite otherwise. Regardless, even if this were consistent, GP's argument still stands: that's an enormous asking of risk to take on. It could end up costing him more than the $8.5bn.

I’m not making any argument, I’m just repeating the most popular theory right now.

It is the most popular theory among a specific collection of people: those disinclined to accept that Musk is impulsive and out of control.

Re: Elon’s Out

#683

Post by danaris »

extheat wrote: post #601
threeseed wrote: post #583

Earlier quoted context omitted.

I think it's the fact you think that Twitter has been misleading in how it communicates MAU and bot percentage to the markets. There is no basis to this. And even if there was it's such a grey area that they have plenty of legal wiggle room. So it's really to comprehend how Musk has any sort of bargaining position over this issue.

Going through court will lead to even more dragged out speculation and hurt Twitter more than any other party. They can't be 100% sure that they will win the case, and will also have to work to run the company on the side in a continuing state of limbo with the acquisition litigation. In the end, even if they win , and Musk must buys the company at the deal price, by the time that goes through the markets may as well…

The point isn't to help Twitter, the company.

The point is to help Twitter's shareholders.

Specifically, to help them to the massive premium over the current stock price Elon is legally obligated to pay.

Re: Elon’s Out

#684

Post by kreetx »

bmitc wrote: post #60
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.

Tesla bots are some of the most active on Twitter, or at least some of the most efficient in achieving their goal of manipulating Tesla interest, sentiment, and ultimately stock price. Musk knows this. I wouldn't be surprised if he knows who controls these bots.

Can you point to more information on this?

Re: Elon’s Out

#685

Post by danaris »

anonu wrote: post #54
nabla9 wrote: post #2

This is a second time Musk has offered to buy a public company in bad faith. His reputation as a sufficiently reliable counterparty is gone.

Musk doesn't care about that one iota. He has more money than god. And he's done that by being fairly effective as the head of two big companies.

Nah, he's done that by inheriting a bunch of rather blood-soaked wealth and then being fairly effective at predicting which companies he could buy that would then make him a lot of money.

Re: Elon’s Out

#687

Post by ModernMech »

mlindner wrote: post #556
selfportrait wrote: post #520

Earlier quoted context omitted.

I’m a little confounded that you suggest Elon believes shorting to be “morally wrong”. Why conflate his ego and financial stake with “morality”? Plus, Elon has proven himself to be morally nefarious more than anything. With the law and social expectations and plenty more. The only thing I can find about Elon and his utterance of morality is him saying it was morally wrong to ban Donald Trump. What a joke.

> I’m a little confounded that you suggest Elon believes shorting to be “morally wrong”. Why conflate his ego and financial stake with “morality”? Because in the over ten years I have of watching what he says and what he does I've found him to be a forthright person who says what he thinks. He's not the type to intentionally deceive others. He's often wrong, but he's upfront with what he thinks. Also he's shown many…

In 2016 a Tesla on autopilot mode decapitated a man because of deficiencies in its sensor stack. Rather than recalling and fixing the deficiency, Musk doubled down and refused to admit his mistake. Then, predictably, a second person got decapitated in the same exact manner. The issue still has not been fixed to this day.

Are these the decisions of a good engineer and a moral person? Or someone who would rather be right than prevent deaths?

Re: Elon’s Out

#688

Post by orestarod »

bambax wrote: post #75
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…

This is alluded to at the end of the article: > Is it fun for him? If he manages to walk away having spent only millions in financing fees, millions in legal fees and say $1 billion in termination fees, was it worth it? What did he get out of this? The guy really seems to like being on Twitter, and he did make himself the main character in Twitter's drama for months on end. That’s nice for him I guess. Also he made t…

You do admit it is a circus, and no official explanation holds its ground. Why do you belittle the real reason, whatever it is, by negatively branding it a conspiracy theory? The real reason for this by definition falls in the category of a "conspiracy theory", since it is not included in any official explanation.

Re: Elon’s Out

#689

Post by orestarod »

ckastner wrote: post #673
ratww wrote: post #604

Earlier quoted context omitted.

It's not about avoiding looking like a hypocrite, the major theory is that it's about being able to sell 8.5bi without causing the value to go down too much.

Your argument is inconsistent. Why would the value go down at all, if not because he would look like a hypocrite otherwise. Regardless, even if this were consistent, GP's argument still stands: that's an enormous asking of risk to take on. It could end up costing him more than the $8.5bn.

The argument is not incosistent, as I understand it, you just talked past each other. What the above commenter meant is that Elon was not worried about appearing a hypocrite, as a matter of shame - that is, it is not like his conscience was burdened. He worried about losing Tesla valuation, something that truly would be caused by appearing as a hypocrite to the public - so his circus was merely a calculation based on that.

Re: Elon’s Out

#690

Post by danaris »

Turing_Machine wrote: post #127
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…

> If the bots are 6% of mDAUs, whatever. It seems like the purchase price should be of the order of 6% less in that case. 6% of $44 billion is not a trivial amount of money.

> It seems like the purchase price should be of the order of 6% less in that case.

That's not what his contract says.

Either the bots are pretty close to the 5% figure Twitter says (and 6% is definitely pretty close), and Elon has to buy at the figure he specified, or they're enough higher to have a significant impact on ad revenue, and Elon doesn't have to buy at all.

Post reply on HN