So "X" - nothing to see here. Elon's in control - Part XXX **Threadbans in OP**

Quin_Dub

https://www.boards.ie/discussion/comment/119078874#Comment_119078874

Musks problem is that he agreed to the deal "without due diligence".

He's stuck in a "sold as seen" situation , so he can't now back out on the basis of something that comes to light like the % of Bot accounts or whatever.

It seems clear that Musk really doesn't want to the deal at this point , certainly not at anything close to the price he agreed and he's pulling every stroke he can think of to wriggle out of it.

If he backs out , he pays the $1B break fee , don't think there's any way around that for him.

Bass Reeves

https://www.boards.ie/discussion/comment/119079090#Comment_119079090

I was always a bit dubious about this deal. Musk was going to have to raise over 40 billion. I know that technically he is worth 270 billion. It hard to see how he would raise those sort of funds to take Twitter private

Quin_Dub

https://www.boards.ie/discussion/comment/119079170#Comment_119079170

Exactly - The vast majority of his wealth is tied up in Tesla stock so actually getting his hands on 40B+ isn't straight-forward.

He has found it hard to get any major institutional investors to bite and the Tesla stock price has taken a hammering as well so this is ending up looking like an extremely expensive vanity project.

His behaviour in recent days definitely suggests that he's trying to get out of the deal either by breaking enough rules that the SEC block it or by trying to claim that the bot issue is a deal breaker , but as I said his lack of a "due diligence" escape clause hurts that angle badly.

The confidence levels in the market on the deal going through as currently framed are well below 50% at present.

There's almost no way that Musk pays full whack now if he buys it at all.

Not sure if he can legally do this but he might look to break the deal , pay the 1B penalty and then go back in with a much much lower offer in the mid 20's range.

But it's looking more and more likely that he walks away here to be honest.

https://www.boards.ie/discussion/comment/119079090#Comment_119079090

Is that for definite? If a company is publishing falsified numbers, wouldn't a buyer have some recourse?

Surely if a company is reporting something to the SEC and it turns out to be lies, a potential buyer could argue in court that the company misled them with their legal documents. How could anyone buy anything if they had to first buy the company or nearly complete the deal in order to have access to internal documents to find the truth, because their SEC filings were falsified? And then when they find out that truth, they're bound to buy it anyway?

I've seen the articles and posts about this "due diligence" thing and it sounds like tabloid nonsense. People saying he didn't do his due diligence by asking for what is already published to the US government.

If anything, this is a way to renegotiate the deal and was planned all along. We've heard in this thread about how all he his is is the most successful buyer and seller of companies in history. No engineering skills and no businessman skills. Just buying and selling. So are we meant to just sit here and assume the man doesn't have any skills when it comes to buying and selling companies?

Quin_Dub

https://www.boards.ie/discussion/comment/119079290#Comment_119079290

They didn't "falsify the numbers - The "bot" report that he is referencing came out before he announced his intention to buy.

He's have to prove that they knowingly lied as well - The fact that the methodology used to gauge the level of Bots was pretty crappy ( they only looked at 100 random accounts apparently) doesn't make it a lie , just crappy data.

This is also why buy-outs like this take 6-9 months plus to complete normally, because once you agree to the deal in principal you then send in the auditors who pull everything apart to confirm the specifics - This stage takes a LONG time.

Musk decided he didn't need any of that so now it's a whole "Caveat Emptor" kind of thing - He explicitly said that he didn't need due diligence so he's buying "as seen".

It's like buying a house , if you sign the deal and you don't have a clause in there about "Subject to engineers report" or similar then you can't back out of the deal if you discover subsidence or rising damp after the fact.

You can chose not to buy , but you aren't getting your deposit back , and in Musks case he can choose not to go through with the deal , but it will cost him the $1B break fee to do so.

Bass Reeves

https://www.boards.ie/discussion/comment/119079290#Comment_119079290

Due diligence is going in and looking at the complete books of a company. This is totally different to looking at published accounts. Published accounts are those submitted to revenue where tax avoidance measures are often hiding some of the story.

This thing on bit accounts. What is and is not a bot account. Musk may be trying to argue that all anon accounts are dual accounts. This would not be a fact. Twitter gives a best estimate of the number of multiple accounts it has. Will this be totally correct unlikely. Due diligence would have shown this to him.

However it's only a side issue. The reality is that I suspect he cannot finance the deal, he is in already for 3+ million. He will probably need 2-3 billion on top of the 44 billion for extra costs in the acquisition. He may already have borrowed for to buy the present stock he owns.

Lack of due diligence is his own problem nobody bids for a publicly quoted company that size without due diligence

Well we'll see what happens I guess. I wouldn't rush to claim the man is so stupid, he doesn't think things through. I'm sure he has legal teams as part of these things.

Quin_Dub

https://www.boards.ie/discussion/comment/119079373#Comment_119079373

He's clearly not stupid , but he is most definitely arrogant and full of hubris and that can lead to the smartest of people making very poor decisions.

Boggles

When push comes to shove, handing over 44 billion for a "website" starts to get the arséholé going, even for this clown.

https://www.boards.ie/discussion/comment/119079394#Comment_119079394

Fact is both Twitter and Musk know that it would be up to Musk to convince a judge that the valuation was based on inaccurate data. This isn't a fake Rolex and buyer beware.

Twitter will have an obligation to protect shareholder value, and will both not want to release damaging proof of bot numbers, and will not want to lose in court trying to get the one billion. They would be sued by shareholders for losing the deal, crashing the value, and reporting previously hidden damaging data.

Musk if he wants to buy it could very possibly leverage all of the above into getting the deal for cheaper. The board would have to weigh what is good or bad for the shareholders with this new information. Or he might be able to simply walk away from it and the one billion obligation uncontested. Twitter would have to legally pursue it and open themselves up to all the above.

If his idea is to damage Twitter or just get it cheaper, he is on the right track. His potential downside is losing 0.5% of his net worth if Twitter "wins", but even then, a win for Twitter is still a loss. Musk loses money if Twitter wins what would be a media spectacle of a court case laying open the entire company to the world.

Bass Reeves

https://www.boards.ie/discussion/comment/119079423#Comment_119079423

If that's his intention he is into market manipulation. That has huge risks for him. The US is one place where if the catch you at that you go to jail for a long time.

Quin_Dub

https://www.boards.ie/discussion/comment/119079423#Comment_119079423

The downside for him is that the SEC punish him for Market manipulation which is what he is doing by sharing all this information publicly.

Now , the SEC are fair toothless in terms of being able to actually hurt someone of Musks wealth , but they could absolutely refuse to approve the deal , which may actually be what Musk really wants to happen - Because the SEC fines will be less than a billion that's for sure..

Bottom line - Musk isn't going to be buying Twitter for $43B as it currently stands , he's trying to manipulate the market to negotiate a lower price , but he's likely not going to get away with it , so he'll probably just back out and take the $1B hit (he's probably already got that covered on his original Twitter investment anyway)

https://www.boards.ie/discussion/comment/119079456#Comment_119079456

Inaccurate SEC filings affecting stock price and thus sale price could also be deemed as market manipulation, no? None of it is clear cut.

This is the very highest end of corporate finance and all I'm trying to do here is show that anyone thinking "hurr durr Musk is so stupid he just walked into the biggest personal deal in history without thinking or referring to his advisors" might not be fully clued into how this works.

I've only operated a business on the tiniest scale and even then it took weeks of back and forth to hammer out the clauses that allowed either business to walk away. I really have to just roll my eyes at people who think none of that has taken place.

Twitter is the one in peril here. Musk would be fine if lost one billion. Twitter would be sued etc. for losing a deal 44x times that. They're the ones who have to be careful of what court room they walk into.

An obvious assumption would be that the price agreed was based on a share price on a particular date and any public information available at that point. That just seems like an obvious clause to include.

So if Musk thinks he can fight that initial stock price which led to his offer price, then there is leverage to renegotiate.

etc. etc.

Dyr

I've DM'ed Musky a link to this thread just to give him a heads up on where he's going wrong. Can't believe he didn't check in with the lads on here before sticking a bid in on Twitter.

Cordell

:|

I have this feeling we're about to be hit with the idea of fake users and bots on Twitter being a conspiracy theory. Like 5% maybe but if you think it's more than that, you're an idiot.

https://www.boards.ie/discussion/comment/119079629#Comment_119079629

Nope, I'd say it's pretty likely that there's a high amount of bots. However I do think this is more likely to be Musk finding an excuse to get out of the deal....

Cordell

Why would he need an excuse to get out of a deal in which he entered willingly?

https://www.boards.ie/discussion/comment/119079656#Comment_119079656

If it turns out to be a valid excuse and he walks away, that's his prerogative. Everyone said he was stupid for doing the deal and now everyone is mocking him for walking away from the same deal except worse.

Bass Reeves

https://www.boards.ie/discussion/comment/119079718#Comment_119079718

People are not mocking him for walking away. Rather they are pointing out that it was unlikely he can finance the deal. He is therefore now looking at excuses to exit it.

https://www.boards.ie/discussion/comment/119079753#Comment_119079753

My understanding is that he proved he had the financing which is why Twitter had to look at it seriously?

And honestly, we don't know what he wants. Maybe he actually hates Twitter and wanted to expose this stuff under the guise of a takeover. Maybe he got bored. Maybe he is genuinely surprised at the data and either wants out because of it or wants it cheaper. Maybe he still wants it and is simply doing this to get it cheaper.

Whatever it is, it's a bit reductive to just do what everyone is doing. The media is playing to it because anti-Musk stuff is the new hot way of getting clicks. He'll be branded an idiot for losing a billion in a failed business deal after making 200bn+ over the last few decades. People will buy into this because it makes them feel warm inside.

Or he won't lose a billion. Who knows. I still think a court case hinges on Twitter's willingness to open itself up in court. If it comes out for example that they've known their bots and fake user numbers have been higher for years, they basically can't take Musk to court.

Quin_Dub

https://www.boards.ie/discussion/comment/119079629#Comment_119079629

I think 5% was always likely to be far too low.

The company that did the analysis for the Biden account reckon that the actual number is somewhere around 20% overall , but obviously high profile accounts are going to attract significantly more bots etc. than regular people.

It should also be pointed out that not all bots are inherently bad - Lots of companies have bots that track people talking about their company so they can pick up on complaints etc. and the initial response might be a bot saying "Sorry you had a bad experience , send us a DM and we can help" or whatever.

I'd say the vast majority of "bad" bots are following or replying to the very large high profile accounts as that's where the opportunities to generate Ad revenue from clicks etc. are at their highest.

If you have 500 followers they are probably all real , if you have 5M followers then a decent chunk of them are bots.

It might not be 20% overall but I'd certainly think that it's a lot closer to 20% than it is to 5%

Penn

https://www.boards.ie/discussion/comment/119079800#Comment_119079800

He has the finances to buy Twitter, however a lot of that relates to selling or leveraging existing stock in Tesla and his other companies, and that alone affected the share prices of same. I think I also read that it could trigger existing loans and would mean having to pay some of those off earlier.

I think he's been pulling in as many other investors into the Twitter deal as he can to reduce the amount it would cost him or reduce the impact on his existing stock/loans, while also trying to lower the value of Twitter shares in order to renegotiate the price, however trying to find a way to get out of the Twitter deal and even sacrificing 1bn to do so might end up being the lesser of two evils. I'm sure he'd still try to claim some sort of moral victory in "exposing" Twitter or some such.

It will be interesting to see what happens here. If the Twitter board goes with this idea that he has given away due diligence to get the deal done, but by then not sharing the data, theoretically scuppers the deal, are they open to being sued by the shareholders? Is keeping that data private in the best interests of the shareholders? Is Musk intentionally putting them into this spot because he knows he can force their hand, regardless of the due diligence thing?

timmyntc

https://www.boards.ie/discussion/comment/119079832#Comment_119079832

Would be very interesting to know the average amount of tweets each bots is responsible for - are they just accounts set up to mine data or do they post themselves?

Last year a study came out showing that 25% of users produce 97% of all tweets, so its not like twitter opinions were ever representative of the population anywhere. But if any of that 25% of users are actually bots it means that bots could be responsible for a sizeable amount of twitter trends. Not good news for advertisers anyways

https://www.socialmediatoday.com/news/new-study-shows-that-25-of-twitter-users-produce-97-of-all-tweets/610146/

https://www.boards.ie/discussion/comment/119080035#Comment_119080035

Indeed. Some of the most prolific Brexit posters on Twitter sound like bots. It's not just about how many there are.

Penn

https://www.boards.ie/discussion/comment/119080023#Comment_119080023

Again, just from what I've read the number of bots they report is based on small samples done internally, but they note in their filings that it's just a sample and the results may not be accurate. Unless it could be proven that they're wilfully misleading or changing the results (which is something Musk would have to prove), it's not going to be enough to change the deal. He also didn't request any non-public data on it while negotiating the deal which means he also can't use it to now pull out of the deal.

For its part, Twitter has said in its regulatory filings that it applied "significant judgment" in coming up with the estimate and has cautioned that its disclosure may not accurately represent the actual number of spam accounts.

It is these disclaimers that give Twitter protection against potential lawsuits, be they from Musk over the deal or shareholders over the accuracy of the company's regulatory statements, four securities law experts interviewed by Reuters said.

Even if Twitter's estimate is off, a plaintiff would have to show that the San Francisco-based company was seeking to willfully mislead investors -- a tall order to prove in court. The Securities and Exchange Commission (SEC), the U.S. regulator which oversees the disclosures of publicly listed companies, would have a hard time doing so for the same reasons, the experts said.

"It would be difficult to establish the basis for either an SEC enforcement case or a shareholders action, unless it could be shown that Twitter deliberately or recklessly disregarded information that would show that its spam estimates were misleading," said law firm Moses & Singer partner Howard Fischer.

Musk can't force their hand on any of it. He's already agreed to the deal. They may renegotiate the price to avoid prolonging the deal, but Twitter could also sue him to force the deal through and seek a settlement from him. The fact that Musk badmouthing the company publicly which is affecting the share price (which Musk would use to renegotiate the deal) likely breaches non-disparagement clauses in the deal too, which could leave him liable to SEC fines/judgements as well as being sued by Twitter shareholders.

https://www.boards.ie/discussion/comment/119080117#Comment_119080117

Right, but holding Musk accoutable won't particularly help the Twitter shareholders if the deal falls through.

Bass Reeves

https://www.boards.ie/discussion/comment/119080191#Comment_119080191

This deal is dead in the water I think. It's immaterial to Twitter shareholders. I think he would need a bargain basement price to buy Twitter. He would probably need a mid thirties billion price which is 20%+ off present bid