It would be interesting to see how estimates vary based on the starting value that is pre-populated.
Shouldibuytwitter.com – A tiny takeover arbitrage model for TWTR
91–100 of 119 posts
Re: Shouldibuytwitter.com – A tiny takeover arbitrage model for TWTR
#92I 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 shareholders' estimates of the likelihood of a settlement that is favorable to either party
Re: Shouldibuytwitter.com – A tiny takeover arbitrage model for TWTR
#93Earlier quoted context omitted.
didn't he waive due diligence, not due process? Or do those mean the same thing in this context?
They don’t mean the same thing, but the reason he’s giving for walking away (an estimate of the fraction of mDAUs that are bots) is not a valid reason under the contract. It would have to be a material statement (ie. affect the value by 25%, iirc), plus the phrasing in the filings was “In making this determination, we applied significant judgment, so our estimation of false or spam accounts may not accurately represe…
It doesn’t even make sense as a reason to be upset, because
- he was buying the company in order to solve the bot problem, and it being worse just makes that more important.
- if Twitter is overreporting their real users then their revenue per user is actually higher and they’re a better business.
Re: Shouldibuytwitter.com – A tiny takeover arbitrage model for TWTR
#94Seems like "Chance that Elon Musk forces Twitter to divulge really embarrassing info about their business prospects during trial" should be in here. If he gets away with just paying the $1B, it makes a big difference to how much Twitter is worth without him. But, even if this info exists, there is a <100% chance of it coming out in trial; Delaware court may anticipate this strategy and try to stop it.
> If he gets away with just paying the $1B
“Musks gets away with paying the ’things fell through on my end but without fault’ fee” (designed mostly for failure of financing despite Musk fulfilling his good faith commitments to make it happen) seems by far the least likely scenario, especially if the case reaches trial (it's just barely plausible as a settlement if it doesn't.)
Re: Shouldibuytwitter.com – A tiny takeover arbitrage model for TWTR
#95Good chance TWTR is going up 10-15% tomorrow (Tuesday) when the court approves Twitter's request for a fast trail. (risky of course cause the stock can drop even more if the court rejects the request but I think it's unlikely)
My guess is that the Court picks a date in between what each party has requested. I do think it'll be closer to Twitter's proposed date than Musk's.
That said, I read both filings and thought Musk made a good argument that because the "drop dead date" specifically extends in the case of a legal dispute that both parties INTENDED that there was no need to rush a hearing beyond when financing expires. Where he goes wrong, I think, is his expectation of being owed significant discovery. Either this is a fishing expedition to find a justification after-the-fact, or else his briefing didn't outline key evidence of fraud that he's saving for later. My guess is the former, but we will see.
So I think we go a bit beyond the drop-dead date, but not much more because I don't think the judge wants a drawn-out process.
Re: Shouldibuytwitter.com – A tiny takeover arbitrage model for TWTR
#96I 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…
A change in Twitter's stock price presumably wouldn't matter; what you'd need to see is a 40%+ drop in Twitter's profitability or revenue.
Re: Shouldibuytwitter.com – A tiny takeover arbitrage model for TWTR
#97Earlier quoted context omitted.
>Twitter has huge growth in front of it. Twitter has been around for 16 years. In western countries, I think everyone who was going to join, has joined by now. What growth is left? Children becoming old enough to join, people with multiple accounts?
Right? Twitter's done. But that's not the point or where it value lies.
Stepping back a bit, assuming one can grow a social media platform to XX% of the population, what makes it any more or less valuable than the next fad/platform that grows to the same XX%? If you are selling eyeball-time via ads, the two platforms have similar value. Maybe it's a little bit different with better ad targeting. But any arguments based on "our audience consists of well educated 18-35 year olds with disposable income" lose merit once growth plateaus and you realize that your audience is just the same general population that cable reached 20 years ago.
Re: Shouldibuytwitter.com – A tiny takeover arbitrage model for TWTR
#98Re: Shouldibuytwitter.com – A tiny takeover arbitrage model for TWTR
#99Seems like "Chance that Elon Musk forces Twitter to divulge really embarrassing info about their business prospects during trial" should be in here. If he gets away with just paying the $1B, it makes a big difference to how much Twitter is worth without him. But, even if this info exists, there is a <100% chance of it coming out in trial; Delaware court may anticipate this strategy and try to stop it.
No, you just consume too many memes. There is not a real chance of that happening.
Re: Shouldibuytwitter.com – A tiny takeover arbitrage model for TWTR
#100I 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