Most of the time when I see someone who ostensibly not cripplingly stupid do or say something that by all accounts is, in point of fact stupid, and then later on I come to learn of a fuller picture of the whole ordeal it turns out that the stated goals and motivations were not actually the true goals and motivations. I see this in politicians pretty often.

Anyway, I figure we should all suspect that the actual goal of this charade is not simply "to acquire Twitter" and motivation is not "to protect free speech" or "solve Twitter's bot problem" or whatever.

I'm not convinced there was a goal behind all this. It smells to me most strongly of manic behavior on Musk's part.

He sold a giant chunk of Tesla shares weeks before the price cratered. It was ostensibly to raise cash to acquire Twitter. But now that he's trying to claim shenanigans and walk away, it's beginning to look more a way to evade insider trading charges.

Yup. Above a certain height, you start drinking your own kool-aid, the people in even your closest circles turn into yes-men, and the world increasingly appears to revolve around you. It's impossible to avoid the hubris that comes from this. And this effect resists even the best efforts to "stay grounded".

Eventually your answer to the "why" becomes simply: because you can.

Seems to me that he did / does want to buy Twitter (not because of free speech or whatever, but as a rich guy vanity project), but then the stock market crashed and now the price he agreed to is way too high so he's trying to weasel out of it or weasel the price down. Either way he's just being a weasel.

it’s been on its way down since November, he was well aware before making the offer.

Yes, but there was a step change in the market between when he signed the deal and now. The price looked generous when he signed (which is not irrelevant; it was an offer the board essentially couldn't refuse, once his financing came in), but it looks absurdly high now. He likely expected it to be flat-ish or down a bit as the deal progressed toward closure, but not nearly this far down.

My theory is that he wanted to threaten to buy Twitter (or actually buy it) to create political pressure on the Biden administration to stop stonewalling the Starship FAA license. There’s murmurings that the FAA is stonewalling Starship due to political reasons. The “threat” of allowing Trump back on Twitter could create leverage to force the FAA political impasse to be dealt with.

I heard this idea from a colleague in the space industry. Going to Mars is one of Musks main goals, and as crazy as it sounds I could see him doing all this Twitter craziness just to move that ball forward.

This one?

https://www.faa.gov/space/stakeholder_engagement/spacex_star...

The results of the review were pushed back by 2 weeks from the original date and it now appears to be on track for the June 13 release. It doesn't mean it's going to be positive, but your version of it is pretty damn far-fetched. Like really super contrived.

> The results of the review were pushed back by 2 weeks from the original date

This is just the most recent of a series of delays. The report was originally due by the end of 2021.

Dumbest of all, why did Musk even start this clown show of pretending to want to acquire Twitter in the first place?

Even after the drops in tech stocks, he has enough money to fund the takeover if he really wants it. Did he not even consider that possibility? Twitter having bots is not surprising to anyone even a tiny bit informed. Their public records and filings have this data. Did he not even read those?

The whole thing is just bizarre and stupid, yes.

> why did Musk even start this clown show of pretending to want to acquire Twitter in the first place?

To me it seems like griefer [0] behavior. The goal is to just duck with Twitter and derive joy from others pain.

Musk is a gamer and I’ve played a lot of games. It’s pretty common to see people who are bored or max level or whatever who just mess with other players like a cat does with a mouse. They expel more of their own energy to cause discomfort to their target. An example may be spending 10 gold pieces to make the target lose 1 gold piece.

It “doesn’t make sense” rationally until you take into account the value of the confusion, pain, negative experiences for the target as a sort of currency.

So it seems perfectly common for me to see Musk spend a few billion in fines or whatever to make life worse for Twitter.

One theory I’ve seen to explain why Musk wants to buy Twitter is to shut it down. If that’s the goal then it’s actually much cheaper not to pay $40B to acquire it and shut it down, but to do this sort of thing that seeds uncertainty so when he pulls out the stock price plummets and Twitter dies from an acceleration from it’s likely path.

[0] https://en.wikipedia.org/wiki/Griefer

That theory doesn't make any sense. He is borrowing so much money and looking for outside investors to help with funding in order to shut it down? Seriously... Not to mention he has close to 100MM followers on the platform, which he uses to market his other companies among other things.

It makes sense if he never intends to close the deal, just look like he’s closing.

Musk has lots of followers and was marketing snakeoil perfectly well before Twitter and will be fine after Twitter. I think Musk’s Twitter count is based on his activity, not the other way around. He’s not rich because of Twitter.

But it’s just a theory and there could be other reasons.

Could be that Twitter just had bad management and by cutting lots of staff and establishing a clear ToS they can plaster ads everywhere and let trump back on to drum up activity.

Who knows? It’s kind of boring to me and I try not to follow it, but it leaks into my feeds. I just noticed the behavior and it reminds me of encountering griefers in games I’ve played.

This makes a lot of sense to me. He's basically beaten the game. A lot of us, when we beat the game, go back and find all the secret bobbleheads in Fallout, maybe do an expansion that lets us build a cabin in the Skyrim game world somewhere, or play some "epilogue" story. Other people hit all the natural disaster buttons in SimCity and watch the world burn, or just go try to spend all their gold killing as many innocent gamers on the server as they can.

I think this Griefer theory explains a lot of the antisocial behavior we see out of executives and politicians who have beaten the game of life. We structure the game to make "Sociopath" the character class most likely to reach level 99 and win the game, and then we wonder why there are so many sociopaths using game-winning wealth to grief everyone else.

My worry is that "Sociopath" is the _only_ character class that can get to max level.

He still need the Boots on Mars achievement.

It raised his profile with the current conservative news media/pundits which ate it up.

Whether or not that was the purpose is speculation but being held up as a champion of free speech (as if) I’m sure did great things for his ego too.

$1B is pretty pricey for being labeled a champion of free speech for a second. He could've gone on Fox and said something controversial and gotten just as much mileage. I'm tempted to believe he actually thought he could turn Twitter around, and then realized it was a fool's errand.

It's not just $1B, he can't back out of the full $40B deal or whatever it was except for a few very special corner cases, and only in those corner cases does he pay just $1B, as far as I understand.

The problem with him re: US politics is that every job besides president is too small for his ego, but he can't be president.

This is key - I believe Musk wants to gain more favor with the right so they purchase the new Cybertruck pickup truck.

This isn't a problem he had though. When they experience 0-60 in 3.2 seconds, they will buy it.

Because all the traditional pickup buyers do is rip off 0-60s all day.

Probably the number of traditional sheep pickup buyers who will buy it will be very low. But the non traditional ones.. it won’t be demand constrained.

This was my theory. Electric cars are seen as a “left wing thing” now they won’t be.

It will be interesting to see if conservative car types decide to give electric cars a go. Keeping a close eye on a famous YouTube mechanic.

Mechanics have a vested interest in maintenance-prone ICE vehicles, so I would discount their stated opinions on this.

> Electric cars are seen as a “left wing thing” now they won’t be.

You'd have to live very far away from any so-called "conservative car types" to believe this.

Currently, the conservative base is much more prone to thinking that electric cars are going to be _forced_ on them by a cabal who want to erase fossil fuels use from the earth.

Not saying they're correct, but your theory is just as baseless as theirs is.

And maybe the pro-oil and anti-green conservatives will now hate electric cars a bit less because Elon is one of them. Benefits Tesla and benefits Musk.

You don’t have to try and spend billions of dollars to become a fan of conservatives. All you have to do is publicly push back against leftist views. That’s all it takes to be conservative in our culture. In a Political Science lens, Conservatives aren’t some homogeneous group who share the same politics. They are anyone who opposes the left. It’s a broad spectrum.

Musk is not fully trusted by either side. He says a lot of things that traditional conservatives (especially those who don’t buy into climate change) oppose.

The left ideology is the dominant force in pop culture, and those views are in vogue. He’s speaking out against some of those things and that’s getting him a lot of attention.

Let's hope if he ever has a tilt at president, his campaign lasts as long. Then again, I kind of feel like we've been here before...

President of South Africa? He wasn't born in the US, a prerequisite for being president there.

Doh! Forgot about that. In Australia foreign born citizens of Australia can stand for parliament (and hence qualify to be PM) as long as they’ve renounced any other citizenship (or right to another citizenship).

Well, he’d need to be “natural born citizen”. I think at birth he was Canadian and South African, and naturalized to the US much later.

…maybe they’ll change the law one day and he can run against Schwarzenegger.

Schwarzenegger is a governor, not a president. Elon could run against him today.

When Schwarzenegger was governor, many people said he would likely make a serious run for president if he was a natural born citizen. It was mostly used as a statement by people about what a good job they thought he was doing and how they wished he could legally run, not a real desire to amend the law.

I was simply pointing out the facts. The parent comment incorrectly implied that Elon could not run against him.

You misunderstood the parent comment. They were saying if the law changed then the US presidential election (or frontrunners if they compete in the primaries) would be Arnold vs Elon.

Meanwhile, Elon could not run against Arnold for governor of California: Elon is not a citizen of California and Arnold has been disqualified from running again since 2011 due to term limits.

California has citizenship?

All US states have citizenship. It cannot be denied to any US citizen. Basically, it determines which state you get to vote in and what state you primarily owe income taxes on. In California it's automatic if you are a US citizen who primarily lives there for 3 months with no clear indicator you plan to move on. The process is similar, but the amount of time is variable, between the states.

It can get tricky and people (or states) can argue/sue about it because it can make a big difference in taxes. Elon became a citizen of Texas before he made all the money that resulted in his 11 billion dollar federal tax bill last year and in doing so probably saved himself 5 to 7 billion dollars that otherwise would have gone to California.

You’re talking about residency, not citizenship.

https://www.fvap.gov/info/laws/voting-residence

Not a natural born US Citizen, so can't be President.

He’s ineligible

Am I the only one who thinks it's obvious he was pretending to buy Twitter to try cover his cashing out of massive amounts of tesla?

He could have done this with any number of pretenses that didn't require signing a binding legal agreement to buy Twitter.

Generally, this is far too complicated and involved to be any kind of effective scheme. He has professional managers and lawyers who could have easily come up with dozens of ways to sell tsla stock without this public legal morass.

The situation most likely is as it seems: He wanted to buy twitter for personal reasons and is in the process of doing so.

I concur with everything except this part...

*** He wanted to buy twitter for personal readons [reasons] and is in the process of doing so. ***

I suppose that he wanted to buy Twitter. Perhaps it was for personal and business reasons. I simply don't know.

Also, at this point it seems like he might have decided not to purchase Twitter.

Nonetheless, the following comment which you successfully refuted...

*** Am I the only one who thinks it's obvious he was pretending to buy Twitter to try cover his cashing out of massive amounts of tesla? ***

was ridiculous.

We don't need to call names, just present the arguments and let others judge.

Could it be that he actually wanted to buy Twitter at a discount, but mis-calculated how much TSLA stock would drop? Maybe it was attractive at 10-20% of his net worth, but the price got too high.

This is my thinking, he didn’t anticipate the market would tank as bad as it did and now the math on the deal isn’t what it was before all the multiple compression both for Tesla and Twitter. People saying he wasn’t serious about it from the start are off the mark.

Exactly. Everyone is serious at one price and a tire kicker at another price.

Due to the market drop the dollar figure is now more expensive relatively speaking. I would not be surprised if some lawsuits fly back and forth and the deal winds up going through at a valuation that is similar in relative terms to the offer when it was made but different numerically.

I have no idea why Twitter would agree to that. It seems to me the more likely outcome is that Musk will use lawsuits as a disincentive to prevent Twitter from forcing him to go through with the deal, and he will back out at the cost of a massive penalty payment.

It isn’t without precedent there were pending acquisitions during the COVID crash in 2020 that got renegotiated to a lower price.

> a valuation that is similar in relative terms to the offer when it was made but different numerically.

I have no idea what that means. You think they negotiate to 53.69/share so Musk can save some face?

Both Twitter's value and the value of the stuff that underlies Musk's wealth has dropped.

So they could agree to a new lower price and Twitter shareholders would still make the same money relative to the recent value of the stock and Musk would take a similar ding relative to his net worth.

It's like if you agree with someone's heirs to buy something after the current owners croaks but the current owner takes long enough to croak that the market for that thing changes. The typical path forward is to re-adjust so the deal is just as fair for both parties as it used to be and get on with it. But because of the dollar figures involved here the parties will sue each other instead of exchanging emails/texts like normal people looking to buy and sell stuff do.

> So they could agree to a new lower price and Twitter shareholders would still make the same money relative to the recent value of the stock

What? So let's imagine I bought 10000 shares of TWTR in 2018 for $25. And now Musk wants to revise the offer down from 54.20 down to 34.20. Why should I accept a $200k smaller return, just to be more "fair to Elon" in terms of the effect on his net worth?

Or worse, what if I bought 10000 shares close to the peak? Why should I accept a $200k larger loss on the stock?

He made a contract to pay a certain price - it's in no way a wash to shareholders if he wants to pay less. He just made a bad deal. Nobody forced him to sign a contract to acquire Twitter at that price.

I am not a financial markets expert, but many who are seem to believe at least some of TSLA's drop is due to Elon's clowning around with Twitter. So it's a self inflicted wound (which he seems to be doing a lot of these days).

Yes that is the common sense, simple, sane theory about what is going on here.

It doesn't make Elon look great, but some of the other theories…

- he wants to feed his ego because he doesn't already have enough to feed his ego

- he wants to make money because he doesn't have enough money

- he wants to grief twitter because it's such a good tool for him and he uses it every day

- he wants to get more people to preorder cars since the waiting line is only a year right now

...are just bonkers.

It's not just that TSLA drop.

If Twitter had gone through the current tech market drop, without Musk hanging over it, it could easily be down 60-70%, maybe even 80%.

Twitter is a terrible business on paper with the current board. It wouldn't have done well in this tech crash.

Musk must be pretty annoyed that if he had waiting about 30 days he could have gotten twitter for 60% less money.

Regret was never a valid reason for annulment of a contract.

It is when buying stuff on Amazon…

No, even then: You are still operating within the parameters of your contract with Amazon when you return something, the contract is not annulled, it is merely another clause in the same contract that gets triggered.

Consumer law gives you certain protection varying from place to place because it is impossible to verify what you buy online, but a bid on the stock of a public company is not an Amazon purchase and hence does not have the same kind of protections.

And in a way that is Elon's play: to claim that he put that bid in with important information being withheld by the company that would have had a material effect on the bid price. A reasonable person might take the position that Elon should have done his due diligence before making that bid.

I always love when these stunts are hitting reality, be that legal, regulation or physics. Because it always fun to watch them crumble. It just doesn't happen often enough, ignorance and endless (VC) money go a long in ignoring those limits without consequences.

Yes, that's a very good point. I once saw my little kingdom threatened by a funded start-up, fortunately they were really out of control and they didn't last long enough but in that time they burned through 30 million worth of funding and for a while it looked like we might lose the battle before they ran out of funding.

Situations like this are my main beef with VC funding, we reached a point where it is not the most innovative or the best idea / solution / business wins but the one that can burn through the most money.

WeWork failed at that, and even the slightest increase in intrest rates might doom thosr businesses. We will see so.

Good that you survived so, facing of against 30 million in funding isn't easy, regardless of how stupid that money is.

No, it definitely wasn't easy. What really helped is that we always remained financially very responsible during the whole run of that business, matching expenses to income with some room to build up a nest egg just in case. We weathered 3 major downturns including the .com bust which is one of the things I'm pretty proud of.

It definitly is something to be proud of. Shows that business success is a marathon.

So to sum up, regret is sometimes a valid reason for annulment of a contract.

Yes, but it is not applicable in case of contract to buy Twitter that Musk entered into.

No, regret is a valid reason to withdraw from a contract if that option is stipulated in the contract.

It's an execution of the contractual terms, not an annulment of the contract.

There are many places where the right to undo online purchasing contracts is not baked into the purchasing contracts, but based on the law of the land (e.g. Germany). U get the item, decide u don’t like, and undo the contract.

No.

Is the Tesla stock drop having a significant impact?

The whole tech field, including Tesla and Twitter has seen stock prices drop.

Yes Musk can leverage less money, but he also has to spend less to buy Twitter.

No they signed a contract about the price, and it's fixed at $54 a share. Which is why the current theater...

Speaking personally, for the last 3 months or so I've watched my retirement investments lose more than I made each month. I can't really pull out of the stock market unless I want to just eat a 9% inflationary loss. I suppose if I had the platform to talk one stock down to buy it while talking another up to sell it, I'd resort to games too.

Don’t worry about it. You’ll see this happen a bunch of times before you retire.

Best not even to look at the amounts until your close to retirement and need to adjust your investments.

Huh? I keep seeing people make this point, but the premise is defective. Investors clearly reacted negatively to Elon's Tesla stock sale, despite the Twitter 'excuse'. Furthermore, if Elon wanted to minimize Tesla sell pressure, his initial Twitter deal proposal wouldn't have been missing $21B of financing, which made investors think Elon would need to sell more stock in the future.

He could have justified the stock sale in plenty of other ways, including reallocating funds to his other companies, without forcing himself into a $44B deal.

He's like a kid who starts a grass fire so nobody will notice he broke a window playing baseball.

To what end?

If he sells a lot of Tesla stock it could cause a run. If he does it with a pretence he might avoid the run and preserve his stock price.

I think this theory is right.

And as much as he trash talks Warren Buffet, I think he was basically following his advice of “buy what you know.” He just got burned by amazingly bad market timing.

He obviously has insider knowledge of Tesla, a finger on the pulse of his market and saw warnings about world economic conditions. He predicted the stock was going to take a hit, probably needed some money for his other ventures and wanted to sell fewer shares at a higher price. That way he keeps more control of the company. Occam's razor says the simplest explanation is probably right.

That makes no sense - he predicted the stock market crash - and then started twitter buyout at pre-crash prices ?

What makes you think twitter shareholders would sell for less? If you made a 1B dollar investment in twitter ten years ago, what return would you look for? If you didn’t get it from the present offer what would you do? Would you lobby 5 other massive shareholders that twitter will be worth more in 6 years and there is no need to sell or would you sit on your hands and hope for the best?

TWTR stock has basically gone no where since the IPO in 2013. Look at the 10 year chart. It's in the same range as it was in late 2013, right after the IPO. (I am a Twitter stock holder.)

What stocks “do” on the stock market is not the subject. The subject is: what ROI do you expect as an investor? Not a short term speculator. But an an investor who allocated a portion of the portfolio to TWTR with a long term time horizon.

I’ve been an investor in Twitter since shortly after the IPO. It’s done shit.

That is not what Occam's razor says and is a very complicated, explanation anyway.

> What is it with the Musk hate?

Repeated promises and claims which turn out false.

He is extremely arrogant and annoying. For example used "Pedo Guy" as insult at Twitter toward someone who committed crime of disagreeing with him, proceeded to claim that this does not mean "pedophile" in court.

And claimed that this person "married" 12 year old girl (actually, she was 32 years old).

Also, Musk has bunch of annoying fans.

(that is among some legitimate reasons, many hate him BECAUSE he is successful)

> dozen other things that will save humanity

That is really overstating it, and case of annoying fanboyism.

(personally I appreciate some achievements and see his role in that - without giving 100% credit to leader, confused why people praise some projects already, but see no reason to engage in fanboyism or Musk hate)

> Why do you bring it up?

Because someone asked why some people hate him?

> It was years ago

Falsely accusing people of being pedophile and raping 12 year old is not something where saying "sorry" is sufficient to never bring it up.

> What claims “turned out false”?

Are you really unaware of numerous missed promises, deadlines etc?

I didn’t know that at the time, as Elon had a better reputation then and I presumed that as a billionaire he would have access to interesting information. The fact that he was willing to double down on the claim suggested a source to his confidence.

Its ok to not defend bad behaviour from people you otherwise admire.

Was that before or after he hired a PI to investigate said person to see if he could find any dirt to defame him further, after continuing to double down on the pedophile accusations, further calling him a child rapist, and marrying a 12 year old.

https://www.buzzfeednews.com/article/ryanmac/elon-musk-hired...

Doesn't sound like a one off lightly lobbed, 1 in 50000 fluke to me.

Throwing out grave insults because someone on the internet doesn't like your idea is a pretty good tell of the sort of character he is, even if it was 4 years ago.

Adding to the list of reasons to dislike him, there's him trying to get a lawyer who interviewed him for the SEC fired from his new unrelated job.

> What claims “turned out false”?

Here is a small subset: https://elonsbrokenpromises.com/

That site is BS though. It takes estimates and misquotes them as "promises."

When asked when "full self-driving" would be available, he said

> 3 month maybe

THAT is an estimate, but then he continued

> 6 months definitely.

THAT is a promise.

It continues like that.

Also, as CEO of Tesla, and with his Twitter account listed as an official source of information, he cannot just willy-nilly make "estimates“ completely and utterly removed from reality. This is misleading investors and customers, for which he repeatedly got in trouble.

To put it politely the best possible interpretation of what you have said is that you are very confused and have poor reading comprehension, and because of this you are mistaken.

First, that is not at all what he was asked. The question is quoted right on the site you seem to think is so great.

Second, what he said did come true. The two levels of functionality did and do differ significantly, such as with summon and lane changes.

The other quotes on the site are even weaker sauce.

> It was years ago.

Not original commenter, but, so what if it's a while ago, from appearances it's not like his character has changed that much from being a major dickhead. He dismissed Covid as nothing because it would've been bad for his factories' output (he didn't say this but let's draw conclusions). Oh that's 2 years ago, also old news?

"Suddenly" is a bit reductive, no?

https://www.reddit.com/r/technology/comments/utes3n/comment/...

I find it hard to believe that someone so rich, yet so petty will "save humanity".

> What is it with the Musk hate?

After he accused a random guy of being a pedophile because he saved a dozen kids, after he lied about making Tesla a private company, after he lied about Tesla accepting bitcoins as payment (just to speculate on BTC), it should be evident to everybody that Musk is not to be trusted. It wouldn’t surprise me if he pretended to buy Twitter to speculate on price changes with some weird derivatives.

None of what you claimed is true. Why are you doing that?

at least "accused a random guy of being a pedophile" is true, though "because he saved a dozen kids" part is not true

nevertheless, "accused a random guy of being a pedophile" is damming

Wow the one with the most money has to pay the most taxes? A wonder. Why is this the first time tho?

In the US you only pay capital gains tax on stock when you sell. So it can look like you made a big profit year after year if the stock you own goes up, and it looks like you didn’t pay any tax. But that money isn’t available to you until you sell, and that’s when the tax comes into effect. This applies to everyone, and so it can look like a tax dodge, but it’s just the way things are accounted.

Actually, that stock appreciation value IS available to you. You can get a very low interest (sub 1%) loan using your stock as collateral. If you have enough stock (like the very wealthy), you can just keep doing this and paying off the interest with more loans.

Then, when you die, your estate can take advantage of the step up rule. Which means that instead of using the original value of the stock you bought as a basis to calculate your profits, the basis is "stepped up" to the value of your stock on the day you died. After which, your estate can sell the stock and pay no taxes and then pay off the loans you lived off of your whole life.

And that is exactly why companies with founders that own lots of shares are no longer paying out dividends and trying to make a profit. They simply put everything possible back into growing the stock price eternally. Because dividends are taxed. Stock appreciation, if you are rich enough, is not.

Pro-tip: use the money you borrow to pump the price of your stock to increase your leverage

Amazing tip, thanks!

> Wow the one with the most money has to pay the most taxes? A wonder. Why is this the first time tho?

Because he didn't have money before; he had paper wealth. Some media pretends that they're the same to keep you clicking. Now he's sold, he pays tax on it, because he gained capital.

I dislike people who don't apply the same rules they apply to others to themselves such as Musk saying you have to be in the office 40+ hours per week when that isn't physically possible for him to do given how many companies he runs.

I also dislike those who get lots of help from others to become rich and powerful then use their power to stop others from getting the same help, which he has done.

> What is it with the Musk hate?

HN users consider themselves consumers first and foremost. The investor, techno-utopian believer, fanboy of companies..they are all sides which are secondary to the consumer one . At least on HN.

Despite all the media frenzy and fanfare about mr.Musk, the American consumer received next to nothing from him in terms of quality of life. And it's not like he's a young crypto-bro still finding himself. Guy is 50, has been doing this for 30 years. When I say "doing this" I mean offloading overpriced equity onto bigger fools using lies, deception and cult of personality.

Teslas for example still account for less than 1% of total vehicles sold globally in FY21. And it has been a slow year...also mr. Musk has been at the helm of Tesla for 20 years now. Less than 1% in 20 years...it means that the consumer is getting nothing.

He converted the worldwide car industry to electric. Every single large car manufacturer was forced by Musk to abandon fossil fuel.

He sells more top tier cars than all German car makers combined, for five years already.

And that’s nothing compared to what he does for space flight and the long term survival of conscience in the universe.

You seem to be very badly informed.

> Every single large car manufacturer was forced by Musk

Dude, business ain't politics.

You have to be the person signing off the quality of life if you want people to shake your hand and pat your shoulder.

Musk is signing off quality of life for essentially nobody (1% of total vehicles sold globally in FY21) and those who are on the receiving end, they already have plenty of quality of life given that Teslas are basically luxury vehicles.

Real quality of life for everybody is Microsoft being used everywhere ranging from Bel Air to subsaharan Africa, same for Google, Facebook, Amazon. Even financial companies, you can find an HSBC or a Barclays branch in Lagos or Accra or Abuja, just as you can find them in NYC or LA for God's sake.

Another type of quality of life is Pfizer/Moderna 4$ vaccine injected in the arms of everybody in the developed world within 24 months from the emergence of a new virus, and AstraZeneca 0.10$ vaccine taking care of the developing world and especially India when they were burning bodies in the streets.

> You seem to be very badly informed.

You seem very insulated in your bubble of wealth and internet echo-chambers. Numbers don't lie. Musk companies are defacto non-existent in the real world. They provide quality of life to essentially nobody, and in fact you basiclly don't see them anywhere outside of places where huge amount of wealth is concentrated.

Narrative and headlines is the only metric in which such companies dominate.

Because it’s in the interest of people who view themselves as aspiring elites to be anti-anti-establishment. Don’t let the term hacker fool you; it’s been culturally appropriated to mask the corporate ponzi scheme that is venture capitalism.

your snark is unwarranted and incorrect... when Gates and Bezos held the title of the world's wealthiest, they did not pay the most in taxes.

Musk knows Twitter has a lot of bots and that they're used for all sorts of purposes. Pro-Tesla bots have been around for over a decade. As is usual, he likes to control the narrative to only benefit whatever it is he's going on about at the moment.

https://www.latimes.com/business/story/2022-04-12/musk-is-of...

He does not have enough money to fund the takeover. That's pretty obvious. If we would sell $42B worth of Tesla stock the stock would simply crash. There is no way for him to just get the money out of the markets, especially not right now when liquidity is already drying up.

He's going to end up having spent $1bn of his $140bn (in fees, if I understand it right) to have been a major news story for a few weeks. I could see that representing good value-for-money

I don't think Musk is exactly struggling to maintain a big media profile. This story might keep him in the headlines more but it's hardly making him look good. Rather I'd say it seriously damages his reputation as a serious player. He looks more interested in sounding off on twitter and messing around. Following this mess if he approached you with an offer to buy your business how seriously would you want to take him?

> if he approached you with an offer to buy your business how seriously would you want to take him

Not seriously, HOWEVER, I would now worry about him a lot more as a competitor or enemy as he's shown he's happy to blow what is -- to me -- an unthinkable amount of cash on whimsy and for the lulz.

He can't just choose to pay the $1bn to get out of it. It's basically a fine he'd have to pay if he is unable to complete the deal due to his financing falling through or a couple of other extremely unlikely things.

Presumably, he just wanted access to the very information he's getting access to now; and didn't care for the company otherwise.

it seems a very expensive way to buy information, he could have just offered them 10 million for the data as to how many bots they have.

Basically anyone can buy access to the firehose of tweets. Maybe he has access to more but it's not worth billions

He is just trying to find a way to lower his offer because market conditions have changed that quickly and the original offer is a bad deal at this point.

This is all a side show and negotiation tactics. Really not bizarre at all. The original offer is at least 10 billion or so too much now.

He sure was thinking one thing and is saying another.

Elon is not a natural born citizen.

Neither was arnie

He also cannot be president of the United States.

"Even though he was not born in this country, his popularity at the time caused the 61st amendment which states..."

Demolition Man was great documentary, wasn't it?

Musk was born in South Africa, he's not eligible to run for US president.

Ted cruz was born in Canada, but that didn't stop him from running.

To American parents which makes him American by jus sanguinis... What's your point?

My point is that there are other requirements, besides country of birth.

You could have explained them instead, agree?

It took less than two years for a Republican Congress to pass the 22nd amendment in 1947 from FDR's death. If the Republican's want Musk as a candidate they have time before 2024 if they immediately move to vote on the amendment and pass it to the states who will be holding legislative sessions next year.

I doubt it would happen, but I'm also not betting on it.

It wouldn't even be worth betting on because the odds of Republicans attempting to pass an amendment allowing foreign born citizens to be president is next to nil.

>On July 10, 2003, Orrin Hatch, chairman of the Senate Judiciary Committee, took action against what he calls "an anachronism that is decidedly un-American." He introduced a bill that would allow a person who has been a U.S. citizen for 20 years and a resident for 14 years to run for president.

I'm just just following history.

If you keep following that history, you will see how far the Republican party has strayed from the Republican party of 2003.

But I suppose if they were going to present a bill like that again today, the only possible circumstance I could imagine would be the same as in 2004, where a popular republican might want to run for president but isn't a natural born citizen. (this bill was introduced soon after Arnold Schwarzenegger won the governorship in CA.)

>where a popular republican might want to run for president but isn't a natural born citizen

Yo, did you miss the part where this part of the posting is talking about Elon Musk angling to be US President?

And don't tell me he's not a Republican; neither was Trump.

It's also just generally against Republican platform to suggest that the constitution is amendable and not some divine document we should chain ourselves to

That is one of the ruses being perpetuated by disinformation.

https://www.ibj.com/articles/karen-celestino-horseman-conven...

There aren't any Republicans left, at least not in sufficient numbers to affect the course of events. There are only Trumpists. They could easily be persuaded to back such an amendment.

They may get the chance, too, if a few more state governorships end up in the GOP's hands.

So, he could have got out of the deal if twitter breached a covenant, and one covenant had to do with data provision.

By providing all the data requested, twitter just squashed that out.

He had no out on the bot claim itself, but his legal team was comfortable that the covenant breach was a colorable claim and wrote a letter. Now they need to think of a new legally plausible claim.

How is the firehouse “all the data”?

It’s just the posts. Probably the most useless part of the data if your goal is bot detection.

But people seem to fall for it.

Let's assume Twitter and Musk are in deed playing this game here, then people and whether or not the data provided by Twitter is enough to detect bots is not the point. Whether or not the SEC, and courts at some point, see the shared data as sufficient for Twitter to fulfill transparency requirements is important.

Correct, for the legal part of the purchase.

But there is also a “public opinion” part, and that’s about politics. I have the impression that Tw is trying to at least remain in control until the upcoming elections.

Only that public opinion so doesn't matter when it comes to the legal aspects of this.

And this has nothing to do with elections whatsoever, just with a but hurt trying to buy Twitter out of spite.

It’s not about the legal outcome, it’s about freedom of expression that many seem to be willing to sacrifice on the altar of ideologically fuelled hate.

There is an incredible number of tweets being put out which are exact copies of each other - indicating that it is not actual human beings "manning" those accounts.

If Musk has a way of running analysis on the data to do the following: 1. Level of duplicates. 2. Source of duplicates (who posts it first) 3. How often do they do that? 4. What is the political slant of these tweets 5. Which part of the world are the people tweeting from

All of this alone will reveal very interesting information.. my guess is that it will prove that a lot of tweets are orchestrated.

Musk’s legal claim is incredibly flimsy.

The legal battle will not be about whether it is all the data. Musk isn’t owed that. It’s about whether twitter is sufficiently responding to requests.

Even without this the claim was very likely to fail. Hard to see it surviving this.

It’s not just the posts, it has device data in it too

For me the main and obvious thing about DAU is that the majority of users are readers-only. They don’t tweet or like stuff. Firehose might help with detecting non-bot _tweeters_.

Right. There are no ads on the "compose tweet" page

Pew analysis (based on surveying humans) says "97% of tweet volume comes from the top 25% most active tweeters"[1]

So Musk is arguing about a statistic that twitter claims, which is that spambots make up less than 5% of users.

Now, if those bots are part of the most active 25%, then they make up 1/5 of the 'most active' user population. So it seems plausible that they could well be responsible for 1/5 of tweets.

Which matches exactly what Musk is claiming - that 20% of tweets are from spam bots.

Which still makes no difference to Twitter's ability to sell Advertising targeting the 95% of users who are humans, 75/95 (=79%) of which are only responsible for 3% of tweets, but... presumably... 79% of ad revenue. Because they only serve you ads when you're looking at a feed. And that's what those users are using Twitter to do.

[1] https://www.fastcompany.com/90697826/the-top-25-most-active-...

The famous pareto law - 80% of effects come from the top 20% of causes (users).

I think tweet volume is the wrong approach. If they looked at tweet impressions, it would be like 0.1% of users are responsible for 99% of tweet impressions.

I think in this case, the pareto law would need to be framed with "The top 20% of most viewed tweets are responsible for 80% of tweet impressions".

> The goal is to sway public opinion against Musk.

At this point anyone with half a brain, no make that a single functioning brain cell, knows that Musk has fucked up and is trying to welch on the deal.

Public opinion of reasonable people was already against Musk.

Do you really think Musk still wants to own Twitter for the agreed upon price?

If the bot count really is under 5% as per Twitter’s claim, yes.

But that’s unlikely, considering what could be observed over the past weeks.

First you'll have to show where Twitter made that claim.

Your phrasing here has been Musk's phrasing on this subject, which is interesting, as it's a different metric than what Twitter files publicly with the SEC.

In this context, why would public opinion matter?

Public opinion matters in all contexts, as rules and court decisions about rules are made by people, who invariantly are members of the public.

It's also dumb because in April he was already aware of the bot problem and specifically said that he was going to fix it if he succeeded in taking over twitter, so suddenly calling off the deal because of it makes no sense: https://twitter.com/elonmusk/status/1517215066550116354?ref_...

Could this be a fishing expedition for some other reason to back out?

It's been fairly obvious that he's been trying to find a way out or to renegotiate the deal after the recent pullback in tech valuations, and is grasping at the bot claims as an attempted excuse to do so.

It's been speculated. What if there's nothing to read between the lines here and he's just saying what he thinks?

What he said was he wants to renegotiate the price or leave the deal. So, it's less "reading between the lines" and more "reading what he wrote"

Are you using this Tweet as your source? Because that's not what he said.

https://twitter.com/elonmusk/status/1526465624326782976

No, I'm not basing it off that tweet. I'm basing it off (summaries of) his interview on the podcast "All-In" from mid-May.

I'd be interested in reading those summaries. Would you care to link?

You can find notes on the podcast here: https://podcastnotes.org/all-in-podcast/e69-elon-musk-on-twi...

There's always that possibility, but his history of market manipulation should incline people to distrust his stated motivations.

By history of market manipulation do you mean that his saying things moves markets or that he's actually engaging in criminal activity?

With Musk it's hard to know exactly what his plan is, but I think it's an attempt to either find a way to back out, reduce the overall price, or otherwise cause chaos as an intentional strategy.

More likely global stock markets took a dive which devalued Twitter (and Tesla) substantially making the offer over-priced.

He should have hedged then. If markets have gone up, he would've reaped the benefits and Twitter wouldn't be able to back out.

well maybe he should not have offered a price based on meme numbers then.

This is true, speaking from experience with bipolar people close to me.

No psychiatrist would diagnose someone based on public performances, and non-psychiatrists using pop-psychology to do so is very unpleasant.

This is a wider cultural trend too. The prevalence of Dunning-Kruger pop-psychology YouTube videos (again made by people with zero medical degree) nowadays "teaching" people to recognize "Narcissism", "Psychopathy", "Mania", "Manipulation" etc. is absolutely vile. Just teach people assertiveness and leave it at that.

I’m not diagnosing, I’m saying there is another possible reason. Nothing about Elon tells me he’s not bipolar.

Hypermanic

there is no such this as “hypermania”

there is mania (Bipolar I) and hypomania (“lesser mania”) (Bipolar II)

And for anyone wondering, the difference between the two is the presence of psychosis.

I think it's a character thing for Musk, he's simply the kind of person who does things like this because he can.

That is what Matt Levine has hypothesized for several weeks.

https://www.bloomberg.com/opinion/articles/2022-06-09/elon-w...

https://www.bloomberg.com/opinion/articles/2022-06-06/elon-h...

https://www.bloomberg.com/opinion/articles/2022-05-17/elon-m...

https://www.bloomberg.com/opinion/articles/2022-05-13/elon-m...

Or maybe he is trying to force them do their jobs (reduce bots/spam) even before he officially takes over

Wouldn’t it be easier to close the deal and just do that thing?

Doesn’t make sense to buy the company to do things and… not just do that.

Especially given the big pitch was that he'd clean up the bots. If there are loads of bots, that would make it easy to get a cheap win and look like a hero.

if you can get the company to do things you think are valuable before you’re making interest payments on money you borrowed to buy it, that makes a lot of sense.

wtf knows if that’s what’s going on.

If it is important wouldn’t you want to do it?

It’s not like flipping a switch, how matters, as does following up on effectiveness and so on. I would think someone planning to run the company would want to do it right…

Twitters job is to make money, so if they can monetize bots nobody has any problem with those.

We’re just watching an acquisition game involving avoiding lawsuits and liability, exactly what each player is after is a mystery but it’s all to maximize outcome and minimize liability.

It's not a mystery. All tech stocks, including Twitter and Tesla, have teamed after Elon's offer. So now he doesn't want to buy it at all, or not for this price. So he is trying to find an excuse.

Very likely he's looking for a discount.

Maybe, I think he doesn't want to buy at all. With TSLA down almost 50% since he proposed to buy it based on loans against his stocks it would be very expensive for him at any price now.

But I mean who knows, your guess is as good as mine. I think it was an impulse buy and now he has regrets.

He doesn't have loans against his Tesla stock anymore. He replaced those.

So, does he not want to buy, or not under current market conditions? :)

On what grounds would Twitter possibly offer a discount? He made an offer, filed with the SEC, and they accepted. As far as I understand he's currently contractually obligated to go through with it.

For example, to avoid protracted litigation. Last year, Tiffany aggreed to a slightly lower purchase price as well.

> Even if he could, the firehose doesn't contain the sort of PII you would need to determine whether a user be a bot.

What data would that be though ?

1) Email addresses would be valid since they are used during the verification process.

2) Location data is only available on mobile which bots obviously won't be using.

3) IP address data would be filtered through compromised hosts.

4) Interaction data is probably the key one. But this is trivially forged.

The type of bots that are most common on Twitter are those from well funded interests e.g. governments, companies or technical ones e.g. hackers.

People who know what they are doing and would be building something largely imperceptible from ordinary users.

I agree here. The firehose is 'downstream' from the client actually interacting with the API which is where all of the real tracking data would live. Giving Musk the firehose data is useless to him. Musk needs the user database, the web server logs and any historical data on any suspected bots that twitter already has collected over the years.

Twitter spam bots that offer to sell me bitcoin or start following me with a beautiful profile picture who just opened their twitter account and I don't know are pretty obviously bots to me. The former could be found using the firehose, but the latter wouldn't be detected until they tweeted something in the firehose.

If the firehose included DMs, new accounts (with all available signup and verification data), etc. then the firehose would be useful. Detecting bots using the firehose would only detect bots based on suspicious tweet content and nothing else.

Also, the firehose is a 7Mbps (compressed) stream. It takes substantial compute power to run just sentiment analysis and substantial storage to keep heuristics on that volume of data. Musk would need to spend some time and money and hire some people to just make sense of the full firehose.

Source: I worked for GNIP in 2012. GNIP used to re-sell the twitter firehose and was a twitter partner before they were acquired by twitter in 2014.

He doesn’t need MAE here, he would need to show the company broke a covenant - specifically the one saying they will provide reasonable answers / data to his inquiries. It’s a stretch, though

Yes but no. You're absolutely right on your three points, esp. the 3rd that states that proving an MAE is an extremely high bar that is basically never met.

But! There's another way out for Musk.

Merger agreements include covenants, promises that the parties make to one another about what they will do to close the deal. If one of the parties can prove that the other didn't fulfill a covenant obligation and therefore broke its promise to work towards closing in good faith, then that's a valid justification to walk away.

The merger agreement includes covenants that force Twitter to provide any and all information "reasonably" requested by Musk, in a timely manner.

So the game becomes: how to trick Twitter into not respecting its obligations? One way is to ask for information that is impossible to provide: "Give me all the tweets since the beginning of time, each tweet on a single piece of paper!"

But Twitter might object, and a judge might find, that this is done in bad faith...

The other, more subtle way is to ask for information that Twitter should be very anxious and reluctant to provide, such as, for example, personal information regarding users. Twitter may run afoul of many regulations if it does, and has reasons to believe Musk won't honor any NDA he might sign (as he has a history of disrespecting his own word). Yet on the other hand, Musk can argue that he's entitled to ask for such information.

That's the nature of the current game. I don't think there's any way this isn't settled in court.

Note: for more on this, cf. Matt Levine's newsletter from June 6th.

I have a hard time believing that twitter can't get accurate data about which accounts aren't behaving like humans. You can look at user agents to start. Heck, even basic analytics cookies capture a lot of information that is useful- like first and last time page visit, number of page views, duration of time on page. I bet twitter server logs have more granular information that they can easily tell who is a bot.

> monetizable users that are bots, i.e., users that actually get shown ads.

Am I understanding this right? I would assume no matter how many ads you show a bot, they wouldn't end up buying anything. Or is the point that that those ad sales are not a reliable source of income since the people buying them would likely decide they weren't getting a good enough return?

Most ads are shown to users viewing tweets but don't tweet themselves. So the firehouse data is useless for finding bot among monetizable users.

What do you think Musk is trying to do then? I'm crediting him with enough intelligence to know the points you're making.

His lawyers came up with a good plan. The contract says twitter must reasonably cooperate by providing data that Musk requests. All he has to do is keep requesting data until they say no, then twitter is in violation. The % of bots doesn't matter, doesn't have to be Materially Adverse. Just need to show that twitter isn't cooperating with reasonable requests.

If this becomes the case, Musk can use that as leverage to threaten to litigate if twitter doesn't accept a lower offer price.

> All he has to do is keep requesting data until they say no, then twitter is in violation.

That might be the plan, but what prevents Twitter from continuing to reasonably cooperate? You take it granted that there will be a point where twitter says no, but why?

My guess is he is trying to bluff them into changing the terms of the deal. In the current tech market, the price he is paying is suddenly not attractive at all, and will require a substantially higher stake of his Tesla shares. If he can get them to believe he will walk he might be able to renegotiate the price lower or get out altogether with paying only a $1b fee. I don’t think either of those things are likely but with $XXb on the line it’s worth a try to Musk?

> If he can get them to believe he will walk he might be able to renegotiate the price lower or get out altogether with paying only a $1b fee.

Now that he can't simply walk away and pay $1B. The contract he signed has a few extremely limited circumstances where the deal may fall through, and in those few cases, he would pay the $1B. In any other case, he has to pay the full amount.

Exactly. Twitter doesn't have to accept a lower deal. Musk is on the hook for the deal he signed.

You may be making a mistake. All evidence points to Tesla stock tanking, and him wanting out of the deal.

Musk is on the short end of this stick. The deal as I've seen is fairly air-tight. I also don't think he ever had any intention of buying Twitter, and let his lack of impulse control get the best of him. Very intelligent people do stupid things all the time.

The $1B breakup was for a narrow set of cases, outside of those he's on the hook for the whole amount. Every move now is just part of the negotiation for how much he's going to pay get out of the deal.

There's also a moral hazard here. If Musk is allowed to walk away with zero consequence, he was able to hold Twitter hostage for however many months where they could have potentially had other suitors. It writes the playbook for other large companies to do the same.

Maybe he simply smells that Twitter, like many companies, have been downplaying the problem of fake accounts for years and has enough clout to try and force the truth into the open. Maybe he wants a discount but maybe he just doesn't want to buy a company if the real number is 20% fake instead of 5%.

The fact that Twitter seem to have tried to stonewall him will just "prove" to him that he is right and he can afford to be stubborn enough to drag this out.

> Maybe he wants a discount but maybe he just doesn't want to buy a company if the real number is 20% fake instead of 5%.

That may be, but it's not part of the contract, and it's very unlikely to materially impact the future revenue of Twitter to a high enough degree that it would be a breach of the signed contract, so all he would be doing is assisting the dirty laundry of his new company in public.

Occom's Razor says he's just saying what he thinks when asked questions, which given his behavior on Twitter is entirely normal.

Does SEC feeling define what makes a Twitter user monetizable? Even knowing how much users bots is good to know. Personally, never believed he really wanted to buy Twitter

> not be met due to an erroneous estimate in a SEC filing.

I've seen this mentioned elsewhere also, but I really need help here. From my understanding, Twitter's entire business model, and existing revenue stream, is people paying them to show content/ads to other humans. If some unknown percent of users are not human, doesn't that have a pretty extreme, direct, influence on the possible revenue?

If someone wants to buy Twitter, I assume their first question would not be, what percent of users that you're currently showing ads to are bots. Rather, it would be what percent of users are real, so I can show ads to all of them. Which bring up the question, why isn't Twitter showing ads to some users?

Material adverse effects have to be rather large; for instance, the company is actually worth 50% less than it was represented as. Even if the bot count is significantly higher (say, 20%) that wouldn't have an easily provable massive effect on revenue. Twitter still makes what it makes, and it still would be roughly the same in terms of profitability.

Keep in mind that the onus is on Elon to prove to a court that the higher bot count has a large, material impact (on the order of 50% of Twitter's revenue). It's not something that is a matter of opinion, but rather based on his ability to argue his position to the court, for which he needs strong evidence.

Via Levine, more on the insanely high standard Delaware sets for MAEs (the rule of thumb Levine gives is "a 40% decrease in long-term profitability"):

https://www.jonesday.com/en/insights/2018/10/delaware-chance...

This is about Delaware finding that an MAE occurred, for the first time ever, like literally ever, in 2018.

What we have here is a case where Twitter's performance isn't even faltering (it's stock price is, but its 2022 revenues are actually up). There's not a chance in hell for the MAE argument.

Thanks, I appreciate it! I didn't realize the bar was so high. With the bar being so high, does it create an incentive to intentionally overstate value, before a sale/acquisition? I would assume that everyone would safely coast around +30%.

> The radical left is very predictable. They don't fool anyone anymore though.

What a strange and unnecessary point.

The % of bot users is not critical to revenue, no.

Advertising buyers determine how much ad views are worth to them in their own way. This demand essentially sets the price since there is no marginal cost of providing advertising views.

For example, suppose that you show 1,000 ads and get 2 people buying something from your store. It doesn't really matter whether 1,000 people saw your ad, or 500 humans and 500 bots saw it. The important statistic is what revenue you got from it.

> Twitter's entire business model, and existing revenue stream, is people paying them to show content/ads to other humans.

That's the biggest part of twitters business, but they do have additional revenue streams. However, the other revenue streams are also highly dependent on their status as "a place where people say things and people look at things"

My Twitter feed has the occasional ad. Fairly unobtrusive, but they are indeed there.

I think Elon also made a mistake by calling these things bots. Most spam on Twitter is a combination of auto account creation or takeover, and then some human in a third world country using that account to scam people. I don’t think Twitter would call that a bot, but I bet Elon would.

I do think Twitter in its current form is essentially unusable due to the amount of scams. I see thousands on a weekly basis. Every feature, from tweets, replies, lists, etc. is a cesspool of scamming. I block 100s of users per week and yet I still get added to “Free ETH drop” lists daily.

"After we determine an account is spam, malicious automation, or fake, we stop counting it in our mDAU"

The mDAU exclusion includes such accounts already. I think people (and Elon) use the term bot rather colloquially, so I don't think it's an important distinction anyway.

Important distinction there between the monetizeable users who are bots vs all bots, and certainly key to advertising revenue.

The more key metric for the integrity of the platform, it's ability to be a trustworthy indicator of real people's sentiments, vs firehoses of disinformation into a cesspool of lies and fake interactions, is not the percentage of bots (monetizable or not), but the percentage of bot vs real person posts.

1) It is dumb they can’t provide data for him to calculate a comparable figure.

2) Then they should provide data he can use to verify their figure. It is dumb they won’t provide it and are providing noise instead.

3) He’s not trying to get out of the deal, he’s calling them out on their figure. It’s dumb they aren’t giving him the data he can use to verify their figure and he wants to expose them prior to the deal to show how effective he will be when(if) he “cleans” it up.

He contractually waived the right to call them out on their figure. What Twitter is doing is performative; they're living up to the letter of their covenants in the deal. They don't have to prove anything to Musk. He's on the hook.

He didn’t waive the right to troll them, and that’s what he’s doing. As I said this wasn’t to get out of the deal but to troll them in the court of public opinion.

A very expensive troll for Musk, hopefully.

Not too sure about that one. If a firm deliberately misrepresents anything to a potential buyer/investor we would rightly call that as fraud.

He declined his right to do any due diligence so they couldn't misrepresent anything since they didn't provide anything. Also they didn't want him to buy and did their best to get him to not do that.

> they didn't want him to buy and did their best to get him to not do that.

They didn't want to be the target of a pump and dump. And they didn't want a bunch of distracting rumors from a takeover bid with no financing. As soon as Elon put financing together they said "yes" pretty quickly.

The board doesn't want to sell to Elon at any price, but the shareholders told them their opinion was not very important as Elon's price was higher than anyone thought the company was worth at the time. Now there is no question that price was way too high.

This is false. He declined his right to do any further due diligence based on what facts that presented in the SEC filings. If those facts turn out to be untrue, shareholders can sue Twitter.

Right, he declined to do more due diligence after having done none. Looking at SEC filings is not doing due diligence. It is also not statements Twitter made as part of the deal.

Shareholders can only sue Twitter if those facts are materially false. This is an incredibly high bar that is almost never met.

*inaccurate

;)

The number of bots on Twitter isn’t a condition of closing the deal, though?

IIRC, there was a term that stipulated that Twitter’s SEC reports needed to not contain material misrepresentations. So, he could nix the deal if the number of bots was different than previously disclosed.

> So, he could nix the deal if the number of bots was different than previously disclosed

Not just different but materially and verifiably different.

So the onus would be Musk to produce numbers that are significantly higher and just as accurate if not more than Twitter.

As with many financial market things, Matt Levine’s summaries are great on this. Twitter has been reporting these numbers for many, many years now. The public market has accepted them for many, many years. Elon has been complaining about the bots for maybe as long.

So nothing has changed between Musk making the binding offer and today with regards to bots. He has not suddenly been surprised about some discovery. This is not something that materially changes what he thought Twitter was worth. It’s just another game to distract people.

And also that Elon clearly no longer wants to buy Twitter,at least for the price he proposed, so this is just him trying to find a way out.

This is going to end horribly for Twitter and some sort of slapp on the wrist for Elon.

He’s managed to get to almost cartoonish levels of disregard for the rule of law. Skilfully deploying them to his advantage when needed, but ignoring completely when they’re inconvenient. All seemingly in the knowledge that he’s now beyond any enforcement.

How is that clear? Has he said it?

He's said the deal was off unless he's convinced by Twitter's bot numbers [1], which isn't a condition of the deal, so, yeah basically he's said he doesn't want to buy.

[1] https://twitter.com/elonmusk/status/1526465624326782976

That's not what that Tweet says.

The tweet says he's not moving forward on the deal unless Twitter provides evidence that their monetizable user metric, which is not an estimate of bots, is accurate. Producing that evidence is not a contingency in the deal, so Elon is threatening to fail to perform, i.e. he doesn't want to buy Twitter under the negotiated terms.

He said: "My offer was based on Twitter’s SEC filings being accurate." Which is a valid statement, SEC filings are _required_ to be accurate.

And you've interpreted: "Producing that evidence is not a contingency in the deal". Which doesn't make a whole lot of sense.

He never said he didn't want to buy it under the negotiated terms, he said he wants to be able to _verify_ that what the company says is accurate.

He absolutely cannot do that. The Material Adverse Effect standard in Delaware law is crazy hard to hit. Matt Levine has been writing about this for weeks. In fact, if you go looking, he's been writing about this for years†. 2 years ago: "[under the MAE standard, you] can walk away from the deal, unless the bad stuff is due to, essentially, anything anyone thought of in advance."

Not only have people heard of bots and user validation in advance, but Musk waived his rights to diligence after announcing on Twitter that fixing the bot problem was why he was buying Twitter. He might not just lose this case if it got to court; the Delaware courts might make an example out of him for this.

Matt Levine is to "it's not Materially Adverse" as Ken White is to "it's not RICO".

This is not dumb.

I'm 100% on Elon's side here. He should be allowed to kick the tires. I've been in an organization which went through something similar twice, in both cases, based on material misrepresentations.

In the first case, two organizations who should have known better invested tens of millions of dollars, with one effectively defrauding the other. In another case, a $3.5B organization bought an $800M organization, and the combined entity was worth less than $800M within a year.

Serious, when spending tens or hundreds of millions, do your due diligence. People and organizations lie all the time.

I'd be against Elon if he backed out of the transaction based on a material change. Failure to provide data? He's being perfectly reasonable.

Elon waived his right to due diligence. I can’t speak to his motivations for waiving his rights to due diligence.

This is wrong and if it's the same idea floating around Twitter based on page 17 of the 13D, it's definitely wrong. People are misinterpreting a reference to no longer being subject to seller's due diligence because financing has been secured, i.e. the buyer is qualified.

Never mind then.

Waiving due diligence is a crazy dumb decision. The one lesson in my career is always do due diligence, whether you're making a $40B transaction, or negotiating stock options with a startup. People cheat. A lot.

I agree. I don’t know what his motivations were or are. This whole thing about not accounts is even more ridiculous when you consider that Musk was tweeting about not accounts in January. Elon Musk knee bots were a problem before he made an aggressive acquisition maneuver, and knowingly waived his rights.

But people keep telling me this guy is a genius. I guess I’m not smart to understand his level of thinking.

>But people keep telling me this guy is a genius.

That's just hero worship, like with Jobs; there's zero evidence to believe he's Einstein or Feynman or Knuth (which I would say are legit "geniuses").

He's a smart guy with a South African emerald fortune.

I tend to look at track records. Jobs started Apple, Pixar, and came back to fix Apple 2.0.

That's three unicorn-grade successes. Within those, he had similar streams of successes, like OS-X and the iPhone.

That's genius.

Two footnotes:

- I'm not sure genius is a good reason to worship someone or treat them as a hero; it's to me, it's more about what you do with that genius. For example, Hitler was a genius speaker, and Stalin was a genius administrator. Many geniuses I've met are not-nice people.

- Jobs had one major failure: NeXT. NeXT was still pretty brilliant, even if it didn't do well in the market.

It's entirely rational. He's on the hook for $1B. He is highly incentivized to obfuscate, lobby and otherwise delay making that payment any way he can. It's not about being right, at this point.

Musk is not on the hook for $1B, Musk is on the hook for $44B. Delaware has significant precedent for forcing consummation of business deals in cases like these when the acquirer has the means, which Musk clearly does.

https://www.axios.com/2022/05/14/the-musk-twitter-endgame

But Elon also has a not given a fuck in the past and gotten away with it. My guess is he will get away with it again, but then are we really living in a society with equal laws for everyone?

Texas isn't going to protect him (because they can't), so unless he wants to flee the country, he doesn't have many options.

That eould be great, Musk trying to "Ghosn" out of it.

Ghosn: Carlos Ghosn, former CEO of Nissan-Renault, held on Japan for some white collar crime and illegally smuggled out of Japan, with the help of a former Green Beret and his son, to Libanon, Ghosn home country. Since then he is no longer CEO and wanted internationally by Japan.

Right, he wants out of the deal on the terms but I don’t think it’s the $1B he’s worried about. It’s the embarrassment of either having to pay the break up fee or overpaying so much at $54.20.

His ego is at stake, he’s called many things but not often a fool.

I have a hard time seeing this as being anything other than a fun how-can-I-fuck-with-people-today kind of game for him.

I mean, yeah, sure on the surface it's economically rational and all, but really--you're already nominally in charge of at least 3 different large companies, yet this is how you choose to spend your time and energy? Nickel-and-diming Twitter for lulz?

edit: and before someone points out what a big difference a few dollars in the share price would make towards the acquisition price: if he really believes that Twitter has so much untapped potential (economic or otherwise), then a few dollars either way shouldn't matter much. But by going to such lengths to slightly reduce the cost and jeopardize the deal, he shows that he doesn't think it has much potential and/or he's just screwing around.

Twitter is incredibly important to him, without it he’d never have been able to craft his Tesla or SpaceX narratives and garner so much retail support. Buying Twitter guarantees him a (bully) pulpit and raises his profile ever higher. His antics could easily get him banned in the future, with devastating results.

I've heard this said many times but it doesn't align with my own observations of Tesla and SpaceX's success. Is there any evidence that Tesla vehicle sales and SpaceX launch services are driven by Musk's personality?

SpaceX's success is easy to explain: they could do the same task as competitors for a substantially lower price.

As for Tesla's market success, I think that's predominantly driven by the product itself. They won countless car of the year awards. Customer satisfaction levels at near-unprecedented levels. Record-breaking 0-60 times provide an angle for gushing media coverage. And a decade of having no competitors in the market subset of desirable EVs. I've personally never heard anyone mention Elon when describing why they're interested in—or purchased—a Tesla vehcile.

Tesla's success in the market for cars is not driven by buyers' love for Elon (much), but I'm not sure that's the case for Tesla's vastly disproportionate success in the stock market.

IMO, a significant contributor to Tesla’s market success was that they were willing to sell cars at low margins. That’s what got them a decade of having no competitors in the market subset of desirable EVs.

They also intuited/gambled/stumbled upon (pick your verb depending on what you think of it) that “electric and fast” was enough to compete against non-EV cars with much better finish.

They're talking about retail support for the stock price, not Tesla's operational performance in the real world. People aren't buying Tesla cars because of Musks antics but they are (or were) buying Tesla shares on that basis.

Using Twitter may be important to him, but buying it? Looks to me like the jury is still very much out on that.

This whole dog and pony show is showing us what we knew all along - these tech valuations were batshit insane and now we can finally see that these money losing companies are not worth the stock certificates they're printed on

> these money losing companies Which companies would that be ? Neither Tesla nor Twitter are losing money.

If he really had an ego he would think “I am so good I can pay 54.20 for this company worth 30.00 and still spin it back into a public company worth $100. I am unstoppable. This is how I think about his ego. It is also why I think he just pays the $54.20 and doesn’t bat an eye. He is just haggling right now if he can. Nothing serious.

Turning twitter into a public company worth $100/share would be below par for Elon's performance with all his previous companies so far. He'll probably turn it into a company worth much more if he actually acquires it. Even just unbanning Trump from the platform would drastically shoot up the share price. Twitter leadership has been screwing itself as a company for some time.

It's the $44B he's worried about. That's how much he owes Twitter's shareholders unless he can find some way of either declaring the contract entirely void, or at least triggering one of the clauses that would allow him to get away only paying the $1B.

Both options are very unlikely, but this will drag on.

I call him a fool all the time

Is the $1B penalty for backing out greater, or less than the difference in capitalization before/after the recent stock downturn. Perhaps he could save money by backing out, paying the $1B, and then making a new offer to shareholders.

There is no backing out penalty of $1B, as there is no option of backing out. That penalty is only for extreme cases that cause the deal to fall through, such as a discovery of massive fraud or the financing falling through entirely (say, Tesla going bankrupt tomorrow). I those cases, Mush would stop owing $44B and onyl owe $1B instead to Twitter's shareholders.

Unless and until such a thing happens, he owes them ~$44B.

he would make a joke of himself, more than he is already