Elon Musk Buys Twitter

[Necromantic]

Musk claims the deal is on hold while he counts real users vs bots.

Apparently Twitter claimed it was under 5% bots. Musk shares my skepticism.

I agree with you. I know pseudointellectual people say "blah blah their data vs your anecdotal evidence" but bias data is bias.

[Milchshake]

A man whose online hype is powered by bots. Now has a concern about too many bots.

[Edge-]

Musk is now saying that the Twitter sale is on hold.

From Musk's Twitter post:



I don't know why that matters, if it is less than 5%, that is a good thing. But I can guarantee it isn't 5%, it is much higher with all the Russian bots, and other shit.

https://twitter.com/elonmusk/status/1525049369552048129

I think Musk is now trying to find a way out of the deal, simply because Twitter's shares are down 20% since the sale happened. Musk's deal was for $54.20 per share when he made the announcement, the current stock price is $45.08 as of this post. He will either try to get out of the deal entirely, or try to renegotiate for a lower price.

Calling it: This is gonna be his "out". He'll make up some bullshit whether the 5% number is accurate or not. I still he fully expected Twitter to blink first and never actually planned to buy the company, just troll them and the markets for a ton of attention. But especially now that Tesla is losing some value and he can't use it for anywhere near the leverage he could a month ago...he's lookin to nope out.

[Breccia]

Elon Musk's Twitter clown car

This is an OP ED that seems worth discussing.

Before dawn on Friday the 13th, Elon Musk may have murdered his Twitter takeover.

The mercurial Musk at 5:44am ET tweeted: "Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users."

He also linked to a Reuters story about that spam estimate, which was from nearly two weeks ago.

At 7:50am, Musk added: "Still committed to acquisition."

If Musk really needs details supporting that calculation, then why not privately ask the management team with which he's barely had any contact? Or the board? And then, if the numbers don't check out, walk away. Maybe he'd even have been able to get out of his $1 billion breakup fee, arguing that Twitter misrepresented user metrics.

He also could have conducted due diligence before agreeing to buy the company, which sources say is something acquirers sometimes do.

Instead, this only intensifies speculation that Musk has buyer's remorse. Not only because he arguably overpaid, but also because of the amount of paper value he's lost on Tesla stock (and possibly crypto holdings) since the Twitter deal was first announced.

There's a reason Twitter was trading around $10 per share lower than Musk's purchase price, which is way wider than typical merger arbitrage. (FYI: Musk isn't limited under a standstill agreement, so theoretically could buy discounted Twitter shares on the open market, but the poison pill remains in effect).

Axios' Felix Salmon called this situation a "clown car" during a phone conversation yesterday, harkening back to an old Mark Zuckerberg comment, after Twitter CEO Parag Agrawal canned two senior product executives and announced a hiring freeze. Again, that was yesterday.

At the time, it felt like Agarwal was auditioning for Musk. Still does, but now he has much more credibility for the "I have a business to run and revenue targets to hit" line.

It's possible, perhaps even likely, that this is Musk's way of trying to renegotiate. But if so, it's creating a ton of short-term collateral damage.

Not only to Twitter and Musk's reputations, but also to the psyches of thousands of employees whose financial futures are being put in unnecessary flux.

Remember, lots of these people have options that accelerate if the deal closes. And others could be needing to find new jobs, right as the tech industry appears to be contracting.

I'm not sure what the legal issues are, if Musk intentionally says something to drive down the stock price, then renegotiates on that lower price. The author seems to suggest that most people doing such a buyout wouldn't publicly announce ahead of time that the property they're trying to buy sucks.

Calling it: This is gonna be his "out".

If Musk wants out of this deal for any reason, it should be trivial for him to find evidence that over 5% of Twitter traffic is bot-made. It probably doesn't even have to be true, as I don't think that he's signed a contract yet. He could just say "I made a good faith offer and the investment isn't worth it".

We don't know if Musk is looking for the door, but if he is indeed having second thoughts, this is how I would expect him to back out without looking the complete fool.

[Forogil]

Musk is now saying that the Twitter sale is on hold.

From Musk's Twitter post:



I don't know why that matters, if it is less than 5%, that is a good thing. But I can guarantee it isn't 5%, it is much higher with all the Russian bots, and other shit.

I'm not sure about that, but that's because I find that metric stupid.

Note that the statement wasn't 5% of users, but that false or spam accounts were fewer than 5% of its monetizable daily active users (I don't know what monetizable implies here) - which may increase the numbers.

However, to me a spam-account indicates that an account that spams a large number of posts/tweets, and thus even if spam-accounts are 4% they could generate 90% of the tweets. And one goal for both false and spam accounts is also to get others to "interact" with their message, so additionally 9% of the tweets might be users re-tweeting spam tweets (or tweeting complaints about them), which technically aren't tweets made by spammers.

I would assume Twitter knows all of this - and that's why the used that flawed metric, and that they made sure that it is correct.

[Milchshake]

If Elon Musk backs out of his Twitter purchase offer, Twitter should ban his account of spite, or until he pays them a few billion in damages.

Also because that would be funny.


*Elon Musk creates account on Truth Social*
"Hallo Mistah Trump, I needz hug, and follows."

[Milchshake]

They get a free billion from Musk if he backs out.

Yes, "part of the deal" that Musk is trying to back out of.


But I get it. Your whole deal here is purposely missing jokes.

Have a blessed Friday or Funday.

[Jastall]

I'm not sure about that, but that's because I find that metric stupid.

Note that the statement wasn't 5% of users, but that false or spam accounts were fewer than 5% of its monetizable daily active users (I don't know what monetizable implies here) - which may increase the numbers.

However, to me a spam-account indicates that an account that spams a large number of posts/tweets, and thus even if spam-accounts are 4% they could generate 90% of the tweets. And one goal for both false and spam accounts is also to get others to "interact" with their message, so additionally 9% of the tweets might be users re-tweeting spam tweets (or tweeting complaints about them), which technically aren't tweets made by spammers.

I would assume Twitter knows all of this - and that's why the used that flawed metric, and that they made sure that it is correct.

It feels like an arbitrary reason to cancel such a deal to be sure, which is why I doubt this is actually important to Musk. Either he's pressing them to lower the price somehow (knowing his outbursts hurt their stocks) and/or he's looking for an out because blowing all that hot air is starting to cost him a hell of a lot of money. I'd bet on the latter were I the betting sort.

[Forogil]

It feels like an arbitrary reason to cancel such a deal to be sure, which is why I doubt this is actually important to Musk.

Sort of, but it is not entirely random.

I assume Musk could claim that since Twitter generated false earning reports they would be breaking the agreement, and thus Musk could avoid buying Twitter - while claiming that it wasn't his fault - as the metric was reported in Earning Press Releases (e.g., 2022Q1 and 2021Q4)
https://investor.twitterinc.com/fina...s/default.aspx

However, there are a number of caveats associated with the estimate - so unless it is significantly higher than 5% I don't see that it is really a case of false reporting.

[Jastall]

Sort of, but it is not entirely random.

I assume Musk could claim that since Twitter generated false earning reports they would be breaking the agreement, and thus Musk could avoid buying Twitter - while claiming that it wasn't his fault - as the metric was reported in Earning Press Releases (e.g., 2022Q1 and 2021Q4)
https://investor.twitterinc.com/fina...s/default.aspx

However, there are a number of caveats associated with the estimate - so unless it is significantly higher than 5% I don't see that it is really a case of false reporting.

Not entirely random, but if Musk was dead set on sealing the deal at the current price he wouldn't give one iota of a fuck about one generous estimate of a fairly inconsequential metric buried in an earnings call. The guy is lord and master of hyping up shit to sell, he knows how the bread is buttered. I'm still pretty sure he latches on to this as a ready made excuse to abandon the deal without paying the billion Twitter wants... unless they lower the price, perhaps.

[Kaleredar]

I doubt musk gambled with so much money just to troll Twitter. I’m sure his initial interest was genuine and, just like the media giants of old, he has some stinted desire to run the narrative of the world and saw Twitter as being the most easily accessible and notable platform of clout… or at least distribution. But with Tesla stocks tumbling and all the blowback, he might be considering what is actually important to making him money.

I don’t use Twitter, but I recognize it as a platform people use to read and distribute news of questionable veracity. I’d rather have an anonymous group of hundreds of people with multiple viewpoints deciding what is acceptable than some singular arbiter acting on his own caprices and whims to push a singular narrative- theirs.

[Edge-]

It's wild.

The greatest genius in the world offered to overpay for twitter, is killing $100B+ (are we at hundreds?) in value for his own electric car company, seems to be further driving down the value of the social media company he's overpaying for...

Y'all, I think Elon Musk may not be the greatest genius in the world.

[Fantomen]

If he made the deal, then he can't back out now.

Imagen you buy a vintage car from a car seller, and the seller say "I can guarantee everything is original parts, beside the hubcaps" and you start to find non orginal parts all over the car. I have no special insight in what Twitter and Musk agreed on, but if Twitter did give false number they are in deep shit.

[Zan15]

Deal is 54.20, but he can walk away, but he loses the 1 billion he put down. His lemmings are coping now saying he's a genius for not actually through and buying twitter.

He actually can end up losing even more than the 1 billion. Even on top of the loss he is now occurring on what he owns


https://www.cnbc.com/2022/05/13/elon...1-billion.html


If Musk walks away from buying Twitter, the social media company can sue him for breach of contract.

A buyer can’t simply walk away from a deal by paying a fee unless certain conditions apply

NOW here is the key that kind of telegraphs what is going to happen

A reverse breakup fee paid from a buyer to a target applies when there is an outside reason a deal can’t close, such as regulatory intermediation or third-party financing concerns. A buyer can also walk if there’s fraud, assuming the discovery of incorrect information has a so-called “material adverse effect.” A market dip, like the current sell-off that has caused Twitter to lose more than $9 billion in market cap, wouldn’t count as a valid reason for Musk to cut loose — breakup fee or no breakup fee — according to a senior M&A lawyer familiar with the matter.

A market dip, like the current sell-off that has caused Twitter to lose more than $9 billion in market cap, wouldn’t count as a valid reason for Musk to cut loose — breakup fee or no breakup fee — according to a senior M&A lawyer familiar with the matter.

If Musk were to abandon a bid simply because he felt he overpaid, Twitter could sue him for billions in damages in addition to collecting the $1 billion fee, the lawyer said. This has happened before, such as when Tiffany sued French luxury goods conglomerate LVMH in 2020 for trying to back out of its agreed-upon deal. That suit settled when Tiffany agreed to lower its sale price from $16.2 billion to roughly $15.8 billion.

- - - Updated - - -

Was Musk's offer of $54.20 per share final? If it was final, then he either made a deal, or he didn't. If he made the deal, then he can't back out now. If he didn't make the deal, he is definitely trying to renegotiate by causing Twitter stock to dump.

I don't believe for a second he wants to get out, unless he just wants to pump and dump Twitter. He just wants to get a better price, pure and simple.

It was a final offer according to his own words. Did you forget that?

The material agreement was also signed, thus why there is an agreed break up fee (which doesn't include overpaying for getting out of it).

He can in fact still back out even if the deal was made, see last post.

- - - Updated - - -

Imagen you buy a vintage car from a car seller, and the seller say "I can guarantee everything is original parts, beside the hubcaps" and you start to find non orginal parts all over the car. I have no special insight in what Twitter and Musk agreed on, but if Twitter did give false number they are in deep shit.

Not really much Musk can do about this even if false numbers are found since there would be no actual damages to him being able to bail at that point with zero cost.

Twitter would however, if the numbers are massively higher, suffer even more on stock price.

[crejack]

"Twitter is broken, I'm buying it to fix it!"
A few minutes later...
"Wait, Twitter is broken? I didn't agree to pay for that!"

[postman1782]

I also recall seeing Tesla share price took a hit which means he now has less imaginary money than initially.

Yeah, they have lost like $40 billion in valuation. Not surprising since most of his cars are made in China, and Twitter is basically banned in China.

- - - Updated - - -

Was Musk's offer of $54.20 per share final? If it was final, then he either made a deal, or he didn't. If he made the deal, then he can't back out now. If he didn't make the deal, he is definitely trying to renegotiate by causing Twitter stock to dump.

I don't believe for a second he wants to get out, unless he just wants to pump and dump Twitter. He just wants to get a better price, pure and simple.

He actually can back out of the deal, but he would lose $1 billion if he did.

- - - Updated - - -

Musk claims the deal is on hold while he counts real users vs bots.

Apparently Twitter claimed it was under 5% bots. Musk shares my skepticism.

I understand that 1 person on the twitterverse isn't indicative of all of the twitter users, but when Trump had an active account, back in 2018 a couple websites did investigations of bots and spam accounts for him and probably dozen other politicians. Trump's following was 61% bots or spam accounts.

No one on the list back then was below 22% for bots.

Donald Trump (President) – 61.0%
Kamala Harris (Senator) – 24.4%
Ted Cruz (Senator) – 26.0%
Susan Collins (Senator) – 24.6%
Mike Pence (Vice President) – 41.5%
Al Gore (Former Vice President) – 41.0%
Beto O’Rourke (Congressman) – 22.7%
Barack Obama (former President) – 40.9%
Mitch McConnell (Senator) – 31.3%
Jerry Brown (Governor) – 50.0%
Lindsey Graham (Senator) – 25.3%
Elizabeth Warren (Senator) – 33.7%
Hillary Clinton (former Senator) – 43.8%

https://sparktoro.com/blog/we-analyz...or-propaganda/

And I can guarantee, that if you look at other famous people from singers to actors, there isn't a single account with less than 20% following of bots and spammers.

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I doubt musk gambled with so much money just to troll Twitter. I’m sure his initial interest was genuine and, just like the media giants of old, he has some stinted desire to run the narrative of the world and saw Twitter as being the most easily accessible and notable platform of clout… or at least distribution. But with Tesla stocks tumbling and all the blowback, he might be considering what is actually important to making him money.

I don’t use Twitter, but I recognize it as a platform people use to read and distribute news of questionable veracity. I’d rather have an anonymous group of hundreds of people with multiple viewpoints deciding what is acceptable than some singular arbiter acting on his own caprices and whims to push a singular narrative- theirs.

He has done this all the time though. He proposes a deal, then reneges on the deal. Like when he asked the WHO how much it would cost for him to donate to end world hunger, they calculated it, gave him a number and then backed out.

[hellhamster]

He actually can end up losing even more than the 1 billion. Even on top of the loss he is now occurring on what he owns


https://www.cnbc.com/2022/05/13/elon...1-billion.html


If Musk walks away from buying Twitter, the social media company can sue him for breach of contract.

A buyer can’t simply walk away from a deal by paying a fee unless certain conditions apply

NOW here is the key that kind of telegraphs what is going to happen

A reverse breakup fee paid from a buyer to a target applies when there is an outside reason a deal can’t close, such as regulatory intermediation or third-party financing concerns. A buyer can also walk if there’s fraud, assuming the discovery of incorrect information has a so-called “material adverse effect.” A market dip, like the current sell-off that has caused Twitter to lose more than $9 billion in market cap, wouldn’t count as a valid reason for Musk to cut loose — breakup fee or no breakup fee — according to a senior M&A lawyer familiar with the matter.

A market dip, like the current sell-off that has caused Twitter to lose more than $9 billion in market cap, wouldn’t count as a valid reason for Musk to cut loose — breakup fee or no breakup fee — according to a senior M&A lawyer familiar with the matter.

If Musk were to abandon a bid simply because he felt he overpaid, Twitter could sue him for billions in damages in addition to collecting the $1 billion fee, the lawyer said. This has happened before, such as when Tiffany sued French luxury goods conglomerate LVMH in 2020 for trying to back out of its agreed-upon deal. That suit settled when Tiffany agreed to lower its sale price from $16.2 billion to roughly $15.8 billion.

- - - Updated - - -



It was a final offer according to his own words. Did you forget that?

The material agreement was also signed, thus why there is an agreed break up fee (which doesn't include overpaying for getting out of it).

He can in fact still back out even if the deal was made, see last post.

Yeah, but did he actually sign? Or did he just call Dorsey on the phone with "yeah bro, I'll totally buy your company, market price. Hell forget about that, how does $54.20 sound?" I mean, do we know if he put his signature anywhere?

Either that, or he thinks paying the $1 billion now will save him more money later if he can tank the Twitter stock to get a better price.

[Rasulis]

Yeah, but did he actually sign? Or did he just call Dorsey on the phone with "yeah bro, I'll totally buy your company, market price. Hell forget about that, how does $54.20 sound?" I mean, do we know if he put his signature anywhere?

Either that, or he thinks paying the $1 billion now will save him more money later if he can tank the Twitter stock to get a better price.

The deal is with the Twitter's board. Not with Jack Dorsey. Dorsey's holding in Twitter was only $850M before the deal. So pretty tiny.

Yes. Musk signed the agreement to purchase Twitter.

Twitter, Inc. (NYSE: TWTR) today announced that it has entered into a definitive agreement to be acquired by an entity wholly owned by Elon Musk, for $54.20 per share in cash in a transaction valued at approximately $44 billion. Upon completion of the transaction, Twitter will become a privately held company.

Under the terms of the agreement, Twitter stockholders will receive $54.20 in cash for each share of Twitter common stock that they own upon closing of the proposed transaction. The purchase price represents a 38% premium to Twitter's closing stock price on April 1, 2022, which was the last trading day before Mr. Musk disclosed his approximately 9% stake in Twitter.

You don't do a $44B buy out on a handshake.

[Draco-Onis]

I doubt musk gambled with so much money just to troll Twitter.

I think that was his initial goal but when the market and investors treated him as a joke his ego couldn't take it. At the moment he is most likely looking into ways to get out of it nothing about the initial offer showed seriousness even threw a pot reference in the bid.

[Zan15]

Yeah, but did he actually sign? Or did he just call Dorsey on the phone with "yeah bro, I'll totally buy your company, market price. Hell forget about that, how does $54.20 sound?" I mean, do we know if he put his signature anywhere?

Either that, or he thinks paying the $1 billion now will save him more money later if he can tank the Twitter stock to get a better price.

are you being this ignorant on purpose?

With how much you know about markets, economics and finance from your post, this seems very odd that you would not know this simple thing.

If he backs out 1 billion is the min he will lose.

His investment in the company will also tank hard.

He will most likely be sued by twitter for even more than the automatic payment of 1 billion.

He will face stockholder lawsuits.

Nice lawyer fees.

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I doubt musk gambled with so much money just to troll Twitter. I’m sure his initial interest was genuine and, just like the media giants of old, he has some stinted desire to run the narrative of the world and saw Twitter as being the most easily accessible and notable platform of clout… or at least distribution. But with Tesla stocks tumbling and all the blowback, he might be considering what is actually important to making him money.

I don’t use Twitter, but I recognize it as a platform people use to read and distribute news of questionable veracity. I’d rather have an anonymous group of hundreds of people with multiple viewpoints deciding what is acceptable than some singular arbiter acting on his own caprices and whims to push a singular narrative- theirs.

to him it's not really a lot of money.

What you have to realize is that even if he loses 30-50 billion on this mess his life doesn't change. He would still be #1 or 2 richest.


Well not before Tesla dropped from 1200 to 700 that is. And the value of his private companies are also taking a huge hit according to the market.