This article says Musk agreed to buy Twitter mostly as a joke. I think there's a far better explanation. This wasn't a joke for Musk because after agreeing to buy Twitter he proceeded to sell billions of dollars' worth of TSLA stock, supposedly to finance the purchase. Even for the richest man in the world that's not a joke.
I think a better explanation is that Musk offered to buy Twitter as a cover for selling billions of dollars' worth of TSLA.
Why does he need a cover? Because TSLA is way too overvalued. He has to know that it is overvalued. Tesla's market cap is double of Toyota, VW, Mercedes, BMW, GM, Honda, Ferrari and Volvo all combined! [1]. If you sell stock while knowing your company's stock is way too overvalued, you're fleecing unsophisticated investors. Pretending to buy Twitter provides a convenient cover.
Musk pretended that TSLA valuation is reasonable. Musk even called out Gates for shorting TSLA stock [2]. If he didn't have a cover then Musk would look like a hypocrite for selling TSLA.
In reality, both Musk and Gates sold TSLA, the only difference is that Musk sold stocks he owned, but Gates sold borrowed stocks. But Musk used buying Twitter as a cover, so he gets to pretend to be morally superior. Even though both men sold TSLA, according to Musk, Gates' sales means that he isn't serious about climate change [3].
> Is it fun for him? If he manages to walk away having spent only millions in financing fees, millions in legal fees and say $1 billion in termination fees, was it worth it? What did he get out of this? The guy really seems to like being on Twitter, and he did make himself the main character in Twitter's drama for months on end. That’s nice for him I guess. Also he made the lives of Twitter’s executives and employees pretty miserable; as a fellow Twitter addict I can kind of see the appeal of that? I always assume that “everyone who works at Twitter hates the product and its users,” and I suppose this is a case of the richest and weirdest user getting some revenge on the employees. He also gave himself an excuse to sell a bunch of Tesla stock near the highs. He maybe got an edit button too? Maybe that’s worth a billion dollars to him?
But for that to be the sole reason of the whole circus is conspiracy theory.
> Musk has buying Twitter as a cover
It's a very, very annoying/distracting cover, not to mention an expensive one.
> It's a very, very annoying/distracting cover, not to mention an expensive one.
It is hard to say how expensive it actually is… if he had sold overpriced Tesla stock without cover, could that lose be much more than - one billion termination fee?
You do admit it is a circus, and no official explanation holds its ground. Why do you belittle the real reason, whatever it is, by negatively branding it a conspiracy theory? The real reason for this by definition falls in the category of a "conspiracy theory", since it is not included in any official explanation.
That seems like an enormous amount of risk to take on just to sell stock that he actually owns and avoiding "looking like a hypocrite". It's not just plausible but somewhat likely that he'll be forced into an 11-figure settlement with Twitter to avoid the actual worst case outcome of being forced to take custody of and actually operate Twitter until he can unload it on someone else.
It's not about avoiding looking like a hypocrite, the major theory is that it's about being able to sell 8.5bi without causing the value to go down too much.
> Because TSLA is way too overvalued. He has to know that it is overvalued.
Indeed he does. He has talked about this publicly in various interviews over the years. [1]
> Musk pretended that TSLA valuation is reasonable. Musk even called out Gates for shorting TSLA stock
Musk definitely really dislikes short sellers, no doubt about that. However that is different from pretending that TSLA valuation is reasonable.
--
[1] A decent example is the 2021 Kara Swisher interview, where he states I have literally gone on record and said that our stock price is too high.https://youtu.be/O1bZg7frOmI?t=2450
Thank you for the explanations. How this is not one of the top comments is beyond me. This comment most logically explains all the drama started several months when Musk offered to buy Twitter. The stories generated several of the highest rated posts and several of the most commented posts at HN, just adding to the drama. Now it seems that it's quite a possibility that the Twitter drama is just a red herring for Musk to sell the much overpriced TSLA stocks.
Too much conspiracy theory. I think simply that Musk do not see the imminent market crash. Now he is going in tribunal to negotiate a lower price. The think will end with Musk owning Twitter in a way or another.
OTOH let's not underestimate what kind of scheme smart people can come up with for billions of dollars. Maybe what he didn't see wasn't the market crash but that he could not back away as easily as he tough.
> I think simply that Musk do not see the imminent market crash
It is possible of course, but unlikely. Musk doesn't seem to me as a person who might be surprised by this market crash, I heard him talking about the coming crash and how it will influence his plans before he started talking about buying twitter. My memory may be faulty but I think he mentioned it for example in December when justifying himself pushing SpaceX engineers to work harder to bring Raptor 2.
It seems more plausible for me that he tried to sell Tesla shares before the crash hit them.
This is the obvious answer for any rational observer.
Everyone seems to want to attribute it to some projected character fault in Musk, a chance to elevate their morality or intelligence higher than a famous rich guy.
Musks offer was strategically made before yearly earnings, when everyone posted bad earnings the market tanked.
You can't announce that you are purchasing a public company until after due diligence, and the sale is in its final closing process. There is no "waiver" of due diligence per se, but the initial offer says "I did enough due diligence and I intend to purchase."
Most people would do their due diligence under NDA for a while while negotiating prices before making an announcement, and before lining up funding.
There is certainly some limit to how much of his stake he could sell out of at once without spooking the market and destroying retail investor confidence, though it’s hard to say what that limit is. Without some cover story I suspect an $8.5 billion sale would be newsworthy and significantly impact the share price.
I think this makes a lot of sense. A question I have about it though - why not say it's for something else then? If the goal is to get value out of Tesla and put it elsewhere, it seems like cash for another company he's running seems reasonable enough? Perhaps that's illegal for some reason I'm naive about?
This such an elaborate conspiracy, even if true, he's set himself up legally to all but have to acquire the company after Twitter beats him in court. This seems much less plausible than Elon is an impulsive person who likes attention.
Do we really need to assign a financial motive to Elon Musk?! Musk is in it for his own entertainment. Period. And that greed changes as often as the phases of the moon. It's a good story to his following to come out financially ahead. It's also a good story to the libertarian crowd to drag the issues of bot accounts and free speech into court. And if the deal were to have gone through, I'm sure Musk would have made a great story forming an Alphabet/Berkshire-like holding company across Tesla, SpaceX, and his other amusements. And of course daily amusement of adding a Twitter edit button, an irony mode, etc.
But what will the legacy of all this mess be? It's looking a lot like Howard Hughes, except that Hughes successfully monetized his stage presence. Elon has officially thrown in the towel, and spit in the face of his wider audience in the process.
Elon Musk has probably taken a big haircut on his current stake in Twitter and is also risking being forced to buy Twitter anyway or losing 1 billion plus legal fees. That sounds like an awful lot of work to sell 8.5 billion worth of Tesla shares.
> Musk pretended that TSLA valuation is reasonable. Musk even called out Gates for shorting TSLA stock [2]. If he didn't have a cover then Musk would look like a hypocrite for selling TSLA.
This is outright false and goes directly against his multiple stated instances of saying that the Tesla stock price is overvalued. Don't make things up to suit your biases.
If you believe your company's stock is overvalued, how can you fault someone for selling the stock? Bill Gates sold TSLA stock that he borrowed. If you truly believe that TSLA is overvalued, then it makes no sense to fault someone for selling it.
Okay, so Musk didn't even pretend TSLA's price was reasonable, but surely you agree that "buying Twitter" is a good excuse for him to dump some TSLA while it's incredibly overvalued?
>Tesla's market cap is double of Toyota, VW, Mercedes, BMW, GM, Honda, Ferrari and Volvo all combined!
This phrase gets thrown around a lot with dunning-kreuger confidence so I'd like to add context that it's not unusual for a market disruptor to be worth more than the sum of its legacy competitors - you are on a tech website related to startup incubator you should know this already.
That would be the case if they had disrupted some market, but Tesla has only succeeded in creating a new niche vehicle, and cornering that market to some extent. They are still bit players in the overall car market (and they are losing market dominance even in BEVs, mostly to Chinese companies).
Are you sure that TSLA is overvalued? Right now they are performing pretty well, for their niche.
I mean it will be overvalued if Toyota gets its act together - if the competition can produce reliable electric cars for the mass market. I suspect that this is not quite happening due to some real technical problems. A mass market electric car would need to handle some real problems with battery depreciation/range loss. I am not sure if that is happening, right now.
I found quite a range of opinions on battery depreciation, not quite sure who is right (never owned one):
It would be perhaps plausible for Tesla to be worth more than any other single car company.
But it is patently absurd for them to be higher than all other car companies combined. By any possible measure, they are far far smaller, and have far smaller prospects for growth, than the rest of the card industry put together.
The only place where Tesla has a lead is in sales of BEVs, where indeed they are selling more than the rest of the industry combined, except for some Chinese companies. However, BEVs are still a tiny part of the car market, and are likely to remain so for the next ten years at least.
Several of the mentioned brands already have class leading or at least competitive electric cars on the market. The Mercedes EQS might be the best electric car on the market. VW’s MEB platform (ID3, …) clearly has mass market appeal even though it still has some weaknesses. Car companies have copied most of what made Tesla unique (OTA, …) and looking at any dimension, you’ll find a competing car that is better than a Tesla. Tesla still sells a good overall package but the times where they were without competition are clearly over
I think there's an even better explanation, and liquidating $8.5 billion of Tesla stock may just be the icing on the cake:
Elon despises the SEC and he's now has exposed that the "less than 5%" of accounts are bots, that the SEC should have verified and accepted their methods for determining that number - and it should be adequate and reasonable to give a grounded-in-reality output, and it seems like it's a total bullshit statement.
I'd be surprised if Twitter stockholders don't sue the SEC.
> he's now has exposed that the "less than 5%" of accounts are bots
He did the opposite of that. The Twitter CEO's explanations are quite believable, and Musk has not presented a single tiny shred of evidence against them. He hasn't even presented any methodology he used to arrive at the belief that the 5% is wrong - and note that his lawyers were careful to call it a belief only, since they know full well that claiming it as a fact would be indefensible in court.
So much noise here and ill-informed comments fail to give a broader understanding of what's going on. Elon bought up Twitter shares early in the year for a reason, because he wanted more control over Twitter. He bought up so much Twitter shares that when it was announced via the SEC, Twitter offered a board seat under the clause that he wouldn't acquire too much % control over the company. He obliged, but then left when he realized he couldn't make the changes he desired at the company. Plus, people on the board at the time, specifically Dorsey, was nudging him to buy out the company as a whole. So he did, hastingly. That was an ill-informed decision and obviously a mistake made with respect to doing due-diligence. In hindsight, before the market crash that price may have made sense. But fast forward today with looming recession talk, it's pretty clear he realized it's overvalued (we know this from tweets about twitter deal being repriced). And so he needed an escape hatch, hence the issue with bots and the unverifiable mDAU was a great talking point. In fact, he may as well be right on the issue as Twitter doesn't want to reveal how they calculate it. What he's trying to do right now is pretty clearly force the board to give a better deal. He's not sold any stock and likely won't unless he's actually out for good. But given the amount of effort and thought he's put into it and making it clear that he should pay a lower price depending on the bot issue, I don't think there's much doubt he's not actually leaving Twitter. Whether the courts will force an acquisition at the current price however, is a looming question. My bet is they settle at a lower price.
Almost everything in this comment is wrong or misleading.
The point of an acquisition agreement isn’t to give the buyer optionality to acquire another company, it’s to ensure the buyer honors its commitment to acquire another company during the period between the time the buyer agrees to acquire it, and the time is it able to close on taking ownership.
Maybe EM developed buyer’s remorse because of the decline in equity markets, or a belated realization that the CCP will have significant leverage on how he runs twitter, or just woke up the day after signing with that feeling you get when you realize you’ve knocked up Grimes not once but twice.
Just because EM wants an escape hatch, doesn’t make it so. There’s a pretty tight contract that says he needs to buy twitter, at the agreed price, using the committed financing he arranged. EM can try to retrade the price all day long, but then there’s still that pesky matter of a binding contract… to buy Twitter… at the price he agreed with the board… that doesn’t have a diligence out or an “ehhh changed my mind” termination provision.
For a variety of reasons, the board doesn’t have a tremendous number of appealing options (like none) but they have a strong contract that explicitly contains EM’s affirmative obligation to, y’know, buy Twitter. That fact has very little to do with his feeling.
> Almost everything in this comment is wrong or misleading.
Feel free to point out specific inaccuracies. I think it's pretty clear.
> Just because EM wants an escape hatch, doesn’t make it so
Yes, never suggested it's legally permissible.
> affirmative obligation
This is armchair speculation. Even if the text might seem to be clear in outsider interpretation, this is a matter solely for the courts to determine and both sides will have an opportunity to make their points across. I stand by prediction of the board ending up settling this case. It will get obviously challenged in court, but it's not "wrong" in the sense of predicting an outcome.
I’m sorry, I need to ask a clarifying question here. Is it ok for us to seek escape hatches when we sign binding agreements with others?
This is very important for me as I need to find out if I can just walk away from all the student loans, car notes, and mortgages I may have entered into, as it’s no longer convenient for me, and I would really appreciate if I could make that my counter party’s problem
The sale will happen at a lower price. Even though Elon would probably be forced to do the deal in 3-4 years.
This whole thing actually creates a golden bridge eventually for the twitter board to retreat on.
The board now has an obligation to sue, otherwise they are breaching their fiduciary duty. However, almost all shareholders will realise that a 2-3 year litigation at the end of which Elon might be forced to buy, is a long way away. Better to settle for a lower price now. Both shareholders and Elon will see this. The board just needs to demonstrate they are fighting for shareholders.
I predict in 3-4 months the board will offer a shareholder vote with a lower price, and shareholders will realise that it's way better to take that deal than wait for litigation.
A fun side effect of all of this: if you believe in the court's ability to force Musk to buy Twitter, you should continue to buy up stock until it reaches the price Musk agreed to pay for it.
If you don't believe he'll be forced to pay, you should sell and/or short until it's at whatever you think the right market value for a stock of Twitter ought to be.
And wherever the price is between those two is a direct function of what experts believe the probability of each outcome is. It's like a massive betting market on a legal case.
Well, minus a discount for however long you think it will take before that actually happens, taking into account such things as inflation, interest rates, and market performance (due to the opportunity costs of holding this stock until then).
>A fun side effect of all of this: if you believe in the court's ability to force Musk to buy Twitter, you should continue to buy up stock until it reaches the price Musk agreed to pay for it.
How do I bet on no outcome one way or another for many many years? If there's one thing I know about the US legal system it is giant corporations battling each other takes years and years to resolve.
"...if you believe in the court's ability to force Musk to buy Twitter, you should continue to buy up stock..."
"If you don't believe he'll be forced to pay..."
Those are two very different statements.
I absolutely believe the court can compel Elon to satisfy the contract he's gotten himself into. I don't necessarily believe the court will do so. Specific performance isn't a popular result in those courts, apparently. That being said,...
"...you should sell and/or short until it's at whatever you think the right market value for a stock of Twitter ought to be."
Yeah, no. If I thought like that, I'd have shorted Tesla long ago. I also know that "the market can remain irrational longer than you can remain solvent."
Yes, this is how it has been the entire time since Musk's offer. You'll see that the stock price was pegged at $54, and then when he started talking shit, the price went to some weighted average of the true FMV and Musk's offer, depending on confidence levels
> that it has knowingly been massively understating the number of bot accounts in order to trick companies into buying Twitter ads and shareholders into buying Twitter stock
Wasn’t Google Ads 80% fake clicks on some studies? It won’t be surprising Twitter Ads is actually worse. There is so zero incentive to clean it up and so many shady reasons to do it.
That might actually hurt Musk's argument, because Google is incredibly lucrative despite the belief that ad clicks are overwhelmingly fake. The rule of thumb Levine (an attorney) gave a few posts ago for MAE's in Delaware courts is "sufficient to cause a 40% drop in profitability". Not stock price, not mDAU numbers, but income statements.
Tesla bots are some of the most active on Twitter, or at least some of the most efficient in achieving their goal of manipulating Tesla interest, sentiment, and ultimately stock price. Musk knows this. I wouldn't be surprised if he knows who controls these bots.
It depends on your perspective. As far as I'm concerned the whole target advertising industry is a blight on society. The more click fraud undermines it, the better.
On then other hand, bot accounts help get bozos elected, encourage mass shootings, etc.
Come to think of it, I don't think it depends on your perspective. Bot accounts are a much bigger issue than click fraud.
I am reminded of Neal Stephenson's Cryptonomicon, in which a significant plot point was a hostile buyer using due diligence as a kind of DoS attack on the protagonist's company.
I disagree. As a non-lawyer, non-financier, I found the deep & well-thought-out explanation fascinating. This is one of the best articles I've read this year.
He most likely will have to pay a ridiculous fine (or, more likely, settlement). Of course, the ridiculousness of it will be that it doesn't consider his incredible means, and therefore he'll never miss it and it will have absolutely no impact on his behavior.
Normally I would agree with you, but you have to consider that he’s up against people who are also extremely rich. The legal system might actually need to maintain legitimacy through the proceedings and not just crumple under Elon’s never-ending tantrum.
Readit News
I think a better explanation is that Musk offered to buy Twitter as a cover for selling billions of dollars' worth of TSLA.
Look at this story: https://www.wsj.com/articles/elon-musk-sells-billions-of-dol... The headline is: "Elon Musk Sells $8.5 Billion of Tesla Shares After Deal to Buy Twitter"
Why does he need a cover? Because TSLA is way too overvalued. He has to know that it is overvalued. Tesla's market cap is double of Toyota, VW, Mercedes, BMW, GM, Honda, Ferrari and Volvo all combined! [1]. If you sell stock while knowing your company's stock is way too overvalued, you're fleecing unsophisticated investors. Pretending to buy Twitter provides a convenient cover.
Musk pretended that TSLA valuation is reasonable. Musk even called out Gates for shorting TSLA stock [2]. If he didn't have a cover then Musk would look like a hypocrite for selling TSLA.
In reality, both Musk and Gates sold TSLA, the only difference is that Musk sold stocks he owned, but Gates sold borrowed stocks. But Musk used buying Twitter as a cover, so he gets to pretend to be morally superior. Even though both men sold TSLA, according to Musk, Gates' sales means that he isn't serious about climate change [3].
[1] https://companiesmarketcap.com/automakers/largest-automakers...
[2] https://nypost.com/2022/05/31/elon-musk-calls-out-bill-gates...
[3] https://www.businessinsider.com/bill-gates-shorting-tesla-wo...
> Is it fun for him? If he manages to walk away having spent only millions in financing fees, millions in legal fees and say $1 billion in termination fees, was it worth it? What did he get out of this? The guy really seems to like being on Twitter, and he did make himself the main character in Twitter's drama for months on end. That’s nice for him I guess. Also he made the lives of Twitter’s executives and employees pretty miserable; as a fellow Twitter addict I can kind of see the appeal of that? I always assume that “everyone who works at Twitter hates the product and its users,” and I suppose this is a case of the richest and weirdest user getting some revenge on the employees. He also gave himself an excuse to sell a bunch of Tesla stock near the highs. He maybe got an edit button too? Maybe that’s worth a billion dollars to him?
But for that to be the sole reason of the whole circus is conspiracy theory.
> Musk has buying Twitter as a cover
It's a very, very annoying/distracting cover, not to mention an expensive one.
It is hard to say how expensive it actually is… if he had sold overpriced Tesla stock without cover, could that lose be much more than - one billion termination fee?
Deleted Comment
Indeed he does. He has talked about this publicly in various interviews over the years. [1]
> Musk pretended that TSLA valuation is reasonable. Musk even called out Gates for shorting TSLA stock
Musk definitely really dislikes short sellers, no doubt about that. However that is different from pretending that TSLA valuation is reasonable.
--
[1] A decent example is the 2021 Kara Swisher interview, where he states I have literally gone on record and said that our stock price is too high. https://youtu.be/O1bZg7frOmI?t=2450
Uhm... Exactly this is mentioned in the article:
> He also gave himself an excuse to sell a bunch of Tesla stock near the highs.
So Levine already mentioned this.
Bezos has also sold off a massive chunk of assets?
There's nothing odd at all about shorting the market during this time.
Maybe he sold more shares than he needed while he was at it; like you'd withdraw a bit more cash than you really need at the ATM.
Then the market down turn sobered him up.
Simple.
It is possible of course, but unlikely. Musk doesn't seem to me as a person who might be surprised by this market crash, I heard him talking about the coming crash and how it will influence his plans before he started talking about buying twitter. My memory may be faulty but I think he mentioned it for example in December when justifying himself pushing SpaceX engineers to work harder to bring Raptor 2.
It seems more plausible for me that he tried to sell Tesla shares before the crash hit them.
Everyone seems to want to attribute it to some projected character fault in Musk, a chance to elevate their morality or intelligence higher than a famous rich guy.
Musks offer was strategically made before yearly earnings, when everyone posted bad earnings the market tanked.
Why waive due diligence then? What’s that saying don’t assume malice when it can be explained by ignorance.
Most people would do their due diligence under NDA for a while while negotiating prices before making an announcement, and before lining up funding.
Deleted Comment
Excuse me what ? He alwways said it was overvalued. I dont think anyone would have bat an eye if he had sold for no reason
He did? I thought he said more than once that he believes the stock price to be too high.
But what will the legacy of all this mess be? It's looking a lot like Howard Hughes, except that Hughes successfully monetized his stage presence. Elon has officially thrown in the towel, and spit in the face of his wider audience in the process.
IDK. Most people work their entire life not even getting to 1 million.
This is outright false and goes directly against his multiple stated instances of saying that the Tesla stock price is overvalued. Don't make things up to suit your biases.
This phrase gets thrown around a lot with dunning-kreuger confidence so I'd like to add context that it's not unusual for a market disruptor to be worth more than the sum of its legacy competitors - you are on a tech website related to startup incubator you should know this already.
I mean it will be overvalued if Toyota gets its act together - if the competition can produce reliable electric cars for the mass market. I suspect that this is not quite happening due to some real technical problems. A mass market electric car would need to handle some real problems with battery depreciation/range loss. I am not sure if that is happening, right now.
I found quite a range of opinions on battery depreciation, not quite sure who is right (never owned one):
https://www.carwow.co.uk/blog/do-electric-cars-depreciate#gr...
https://www.cars.com/articles/your-guide-to-ev-batteries-pre...
https://www.motorbiscuit.com/how-long-will-an-ev-battery-las...
But it is patently absurd for them to be higher than all other car companies combined. By any possible measure, they are far far smaller, and have far smaller prospects for growth, than the rest of the card industry put together.
The only place where Tesla has a lead is in sales of BEVs, where indeed they are selling more than the rest of the industry combined, except for some Chinese companies. However, BEVs are still a tiny part of the car market, and are likely to remain so for the next ten years at least.
Elon despises the SEC and he's now has exposed that the "less than 5%" of accounts are bots, that the SEC should have verified and accepted their methods for determining that number - and it should be adequate and reasonable to give a grounded-in-reality output, and it seems like it's a total bullshit statement.
I'd be surprised if Twitter stockholders don't sue the SEC.
He did the opposite of that. The Twitter CEO's explanations are quite believable, and Musk has not presented a single tiny shred of evidence against them. He hasn't even presented any methodology he used to arrive at the belief that the 5% is wrong - and note that his lawyers were careful to call it a belief only, since they know full well that claiming it as a fact would be indefensible in court.
The point of an acquisition agreement isn’t to give the buyer optionality to acquire another company, it’s to ensure the buyer honors its commitment to acquire another company during the period between the time the buyer agrees to acquire it, and the time is it able to close on taking ownership.
Maybe EM developed buyer’s remorse because of the decline in equity markets, or a belated realization that the CCP will have significant leverage on how he runs twitter, or just woke up the day after signing with that feeling you get when you realize you’ve knocked up Grimes not once but twice.
Just because EM wants an escape hatch, doesn’t make it so. There’s a pretty tight contract that says he needs to buy twitter, at the agreed price, using the committed financing he arranged. EM can try to retrade the price all day long, but then there’s still that pesky matter of a binding contract… to buy Twitter… at the price he agreed with the board… that doesn’t have a diligence out or an “ehhh changed my mind” termination provision.
For a variety of reasons, the board doesn’t have a tremendous number of appealing options (like none) but they have a strong contract that explicitly contains EM’s affirmative obligation to, y’know, buy Twitter. That fact has very little to do with his feeling.
Feel free to point out specific inaccuracies. I think it's pretty clear.
> Just because EM wants an escape hatch, doesn’t make it so
Yes, never suggested it's legally permissible.
> affirmative obligation
This is armchair speculation. Even if the text might seem to be clear in outsider interpretation, this is a matter solely for the courts to determine and both sides will have an opportunity to make their points across. I stand by prediction of the board ending up settling this case. It will get obviously challenged in court, but it's not "wrong" in the sense of predicting an outcome.
This is very important for me as I need to find out if I can just walk away from all the student loans, car notes, and mortgages I may have entered into, as it’s no longer convenient for me, and I would really appreciate if I could make that my counter party’s problem
This whole thing actually creates a golden bridge eventually for the twitter board to retreat on.
The board now has an obligation to sue, otherwise they are breaching their fiduciary duty. However, almost all shareholders will realise that a 2-3 year litigation at the end of which Elon might be forced to buy, is a long way away. Better to settle for a lower price now. Both shareholders and Elon will see this. The board just needs to demonstrate they are fighting for shareholders.
I predict in 3-4 months the board will offer a shareholder vote with a lower price, and shareholders will realise that it's way better to take that deal than wait for litigation.
If you don't believe he'll be forced to pay, you should sell and/or short until it's at whatever you think the right market value for a stock of Twitter ought to be.
And wherever the price is between those two is a direct function of what experts believe the probability of each outcome is. It's like a massive betting market on a legal case.
How do I bet on no outcome one way or another for many many years? If there's one thing I know about the US legal system it is giant corporations battling each other takes years and years to resolve.
"If you don't believe he'll be forced to pay..."
Those are two very different statements.
I absolutely believe the court can compel Elon to satisfy the contract he's gotten himself into. I don't necessarily believe the court will do so. Specific performance isn't a popular result in those courts, apparently. That being said,...
"...you should sell and/or short until it's at whatever you think the right market value for a stock of Twitter ought to be."
Yeah, no. If I thought like that, I'd have shorted Tesla long ago. I also know that "the market can remain irrational longer than you can remain solvent."
I wouldn't call the hordes on Robinhood "experts": they are the marks that Elon plays like a fiddle on Twitter.
Wasn’t Google Ads 80% fake clicks on some studies? It won’t be surprising Twitter Ads is actually worse. There is so zero incentive to clean it up and so many shady reasons to do it.
They're still charging advertisers for those clicks.
On then other hand, bot accounts help get bozos elected, encourage mass shootings, etc.
Come to think of it, I don't think it depends on your perspective. Bot accounts are a much bigger issue than click fraud.
Notice of termination of Twitter merger agreement - https://news.ycombinator.com/item?id=32027341 - July 2022 (1361 comments)
The rich play by different rules and the law lets them.
If the rest of us did the same we would have to pay ridiculous fines and/or spent time behind bars.