What the media says (including musk) and what the term sheet says are two different things. If he mentioned mDAU could be fraudulent to anyone involved, they would be interested to hear what he had to say about it. I believe though that this is a move to reduce the risk and monies he has to pay to try to get a better deal ($30b perhaps?)

> If he mentioned mDAU could be fraudulent to anyone involved

One problem for Musk is he's been casting doubt on the bot numbers publicly, even before the deal. One of he's stated reasons for the deal was to deal with spam bots. Twitter has also reported basically the same 5% number in it's filings for years. If it really was a sticking point for Musk he should've done his due diligence before committing to to buy Twitter.

Well twitter is a cesspool of bots, mostly international actors, so I don't see how material facts are a problem.

> they would be interested to hear what he had to say about it.

They can be interested all they want, doesn't mean they can back out of a deal unless they can demonstrate fraud or gross negligence on behalf of Twitter.

So the financiers do back out, then what? Twitter sues them for the full amount, and both parties end up settling for X% of the full amount?

X=100

They can't just demonstrate "fraud" or "gross negligence". They have to demonstrate a "material adverse effect", which, as Matt Levine shorthands it, is something on the order of a 40% drop in profitability --- not the stock price, but the fundamentals of the company. Not happening.

What if 40% of the percentage of users that twitter proposes are real people are actually bots? Wouldn't that qualify as material adverse effect?

> Wouldn't that qualify as material adverse effect?

Probably not. There has been one MAC finding in the history of MACs. It was a trifecta of fraud, management throwing in the towel the moment the merger was agreed and a massive revenue drop.

Musk’s only hope is to get his banks to pull financing. That’s going to be tough.

Would that even work, though? It’s not like he can’t afford it; his money is just tied up in TSLA. Presumably the court can force him to liquidate his shares if his lenders somehow back out.

No, I the two conditions other than a materially adverse effect that lets Musk back out are if his debt financing falls through or if the government stops it.

Propably not if those users can, and are, monetized.

All I know is, he's a former M&A lawyer, unlike any commenter here.

20% is on the order of 40%

"in/on the order of" does not mean "the same order of magnitude as" by rather "approximately the same as".

Nobody would call 20% approximately the same as 40% so you are incorrect.