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?
How much has he lost in his stake of Twitter as its share price decreases? Why would he use Twitter as cover when he could use much better alternatives? Why would he waive normal due diligence that is customary if it was a fancy plan to exit Twitter from the beginning?
I don't think they apply to someone who tweeted "considering to take my company private at $X a share; funding secured" when funding definitely wasn't secured.
The story where he made an(other) impulsive decision (buy Twitter!) and then realised some potential benefit as a side effect (liquidate overpriced stock without raising eyebrows) sounds plausible.
In the end, Elefino [1]. Musk gonna musk, I guess.
well then Musk's plan is "a couple sandwiches short of a pinic basket"[1], which leads me to believe it's not a master conspiracy plan and he's just winging it.
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.
Your argument is inconsistent. Why would the value go down at all, if not because he would look like a hypocrite otherwise.
Regardless, even if this were consistent, GP's argument still stands: that's an enormous asking of risk to take on. It could end up costing him more than the $8.5bn.
The argument is not incosistent, as I understand it, you just talked past each other. What the above commenter meant is that Elon was not worried about appearing a hypocrite, as a matter of shame - that is, it is not like his conscience was burdened. He worried about losing Tesla valuation, something that truly would be caused by appearing as a hypocrite to the public - so his circus was merely a calculation based on that.
Sure "hypocrite" can be understood in the two ways you describe (burdened conscience vs. consequences of appearance), but the term was used in the context of stock dropping -- the latter.
You said "It's not about avoiding looking like a hypocrite, the major theory is [...]", which is not the same as "The major theory is that it's not about avoiding looking like a hypocrite, [...]".
Well, have fun picking apart the way I structured my previous post, even though I already clarified what I meant in the reply. Hope you find someone to have an internet fight. Have a nice day.
> 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
Wasn't that tweet supposed to be cryptic? Right before he announced the stock spilt? I mean, he's surely a smart dude and a master in 140 character public manipulation. We'll never know but it's sure entertaining to watch.
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.
> This is the obvious answer for any rational observer.
"Obvious" and "rational" in one sentence seem to me suspicious every time. I'm suspicious about "obvious" itself, because of my math education, but when combined with "rational" it is just too much for me.
The answer you refer is a simpliest one: it doesn't need any special assumptions of Musk's personality and it is built on a smallest possible sample of relevant facts. May be it means that it is an obvious answer? May be. But it doesn't mean that it closer to reality than more complex opinions relying on more data points and more complex models of Musk's personality, not just an assumption of his rationality.
On the contrary, explanations like the one by the GP seem to attribute way more superhuman character to Musk than who he is: just another person, and one with a pretty peculiar personality at that. His traits could have brought him spectacular success, but could also make him prone to eccentric episodes like this, especially as the years go by. I don’t see anything petty minded in just analyzing the situation in this way.
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.
Arguably the Twitter poll and attendant media circus with Bernie Sanders about taxation was also to provide pretext for a large sale without spooking retail investor confidence.
He needed to liquidate stock to pay taxes from previous stock options he'd been given either way of the Twitter poll. I find a lot of the comments here to be pretty off-base and ill-informed to say the least.
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.
Well, Musk is not "most people", and 8.5 billion is a small percentage of Elon Musk's net worth. I'd not be surprised if 8.5 billion is perhaps the daily fluctuation in his net worth!
> 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.
He doesn't find fault with people selling the stock. He finds fault with people shorting the stock. He seems to believe shorting in general is morally wrong as it's external influences who don't understand the goal (or actively want the goal to fail) trying to make money on the failure of something.
Try and find any instance of him attacking anyone who was an investor and then sold out.
> I’m a little confounded that you suggest Elon believes shorting to be “morally wrong”. Why conflate his ego and financial stake with “morality”?
Because in the over ten years I have of watching what he says and what he does I've found him to be a forthright person who says what he thinks. He's not the type to intentionally deceive others. He's often wrong, but he's upfront with what he thinks. Also he's shown many times to not be interested in financial merits. He wants to achieve great things and be known for doing great things. He only cares about money in the sense that it lets him achieve the goals he wants to achieve.
> Plus, Elon has proven himself to be morally nefarious more than anything. With the law and social expectations and plenty more.
I've not seen that myself. I've seen him let his emotions get out of control many a time that he often regrets, but I've not seen him act in an explicitly nefarious way.
> The only thing I can find about Elon and his utterance of morality is him saying it was morally wrong to ban Donald Trump. What a joke.
He didn't say that it was morally wrong to ban Donald Trump. That was an oft-repeated synthesized quote that was also taken out of context. He doesn't particularly like Donald Trump at all.
> He's not the type to intentionally deceive others.
Have you seen him tweet that he was in a deal to take Tesla private?
Have you seen his Solar Tiles marketing stunt, where he was claiming all of the houses around him had functioning solar tiles, when instead they were pure props?
Have you seen him sell FSD with a promise that it will work in 1 year, and that it will literally pay for itself by letting your car be an autonomous taxi while you are at work?
Have you seen him claim the Tesla Cybertruck will be available for pre-orders next year?
Have you seen him claim he is backing out of this Twitter deal because of the many bots on Twitter, when he was previously claiming that he is buying Twitter to fix the bot problem?
There are instances where he might have indeed believed the ridiculous promises he was making, but he has a long history of directly lying to consumers and investors to get his way or manipulate stock (or crypto) prices.
> Have you seen him tweet that he was in a deal to take Tesla private?
Except he was. Have you seen the leaked tweets between him and the Saudis? He had verbal guarantees of funding and he trusted them at their word. That goes back to him being truthful, he doesn't have much ability to spot people lying to him and takes great offense at it when he finds out he was lied to.
> Have you seen his Solar Tiles marketing stunt, where he was claiming all of the houses around him had functioning solar tiles, when instead they were pure props?
It's not a marketing stunt. My friend works on them and Tesla sells them.
> Have you seen him sell FSD with a promise that it will work in 1 year, and that it will literally pay for itself by letting your car be an autonomous taxi while you are at work?
That's him being honest of his own thoughts on the matter. He keeps thinking that they're close to it being complete but then the improvement rate plateaus. He's commented as such in in interviews when asked about the repeated 1 year time periods. And the autonomous taxi is still the plan. That hasn't changed.
> Have you seen him claim the Tesla Cybertruck will be available for pre-orders next year?
Because events in the business changed. What their plans are at one point in time doesn't mean that what they say will happen.
> Have you seen him claim he is backing out of this Twitter deal because of the many bots on Twitter, when he was previously claiming that he is buying Twitter to fix the bot problem?
Except he wasn't saying he was buying Twitter to fix the bot problem. That was never the plan at all. A lot of you people have ridiculous recency bias where you completely forget the events of even a few months ago. I've seen several people in this thread state this assuredly when only a couple weeks ago we were all talking about him buying Twitter to create a internet public town square and how it was about not banning people for what they say (and people claiming how horrible this idea was), but now suddenly that's all gone and its about bots. Elon is more trustworthy than most of the posters on hacker news and reddit as at least he's consistent.
> There are instances where he might have indeed believed the ridiculous promises he was making, but he has a long history of directly lying to consumers and investors to get his way or manipulate stock (or crypto) prices.
He has a long history of making crazy predictions, and fulfilling some of them while others completely flop. A lot of people doubted that Tesla would reach 500,000 vehicles per year production rate, and yet they have, almost exactly when they planned to. Growing at a rate faster than any automotive company has grown in history. A lot of people doubted that SpaceX could re-use rockets and now they land rockets multiple times per month and re-fly them within only 2-3 weeks. A few weeks ago they launched 3 rockets (that were all being re-used) in the span of 36 hours.
(Oh and the whole supposed crypto pump and dump is a myth given that he's never come around and stopped supporting it. He's never manipulated stock prices/crypto for personal gain.)
People ignore all the promises he's fulfilled and focus on the promises that either haven't come true yet or the promises that were discarded for a better idea. The general public on the internet is incredibly disingenuous about Elon and it drives me to frustration all the time. It seems to be largely an internet problem as most people I know IRL are either neutral on him (don't really care) or like what he's done.
> He's not the type to intentionally deceive others. He's often wrong, but he's upfront with what he thinks.
So when he submitted official documents that he wants to be a passive investor at Twitter while already having internal talks about buying it and/or getting a board seat he ... accidentally forgot about that?
In 2016 a Tesla on autopilot mode decapitated a man because of deficiencies in its sensor stack. Rather than recalling and fixing the deficiency, Musk doubled down and refused to admit his mistake. Then, predictably, a second person got decapitated in the same exact manner. The issue still has not been fixed to this day.
Are these the decisions of a good engineer and a moral person? Or someone who would rather be right than prevent deaths?
> Rather than recalling and fixing the deficiency, Musk doubled down and refused to admit his mistake.
Except they did fix the deficiency and he never "doubled down" on the events that happened. He did remind people to pay attention while driving reminding people that it was beta software. Your recollection of events seems to be mistaken. Additionally, "Recalls" are a legacy regulatory requirement based around the era that required you to take a vehicle into a service station to have something replaced or serviced. They're not required for a software update to fix some problem.
> Then, predictably, a second person got decapitated in the same exact manner.
You're going to have to source that as I'm not aware of any second instance of the exact same thing happening.
> Are these the decisions of a good engineer and a moral person? Or someone who would rather be right than prevent deaths?
They're the decisions of a person who's working toward the long term and thinks that saving lives in aggregate is a good thing to do even if in the process very few deaths of a different type are caused. Yes they're moral. By some accounts he's saved several thousand lives already in prevented car accidents based on the lower accident rate of vehicles running on autopilot.
You could have saved yourself the trouble and done a Google search before writing all of that.
Obviously they didn’t fix the problem because it happened again. The problem wasn’t software it was hardware. Musk’s excuse was PEBCAW (problem exists between keyboard and wheel), but in reality it was his marketing and the failure of his products to live up to his own misleading hype.
And Musk did absolutely double down because he seems to have something to prove by eschewing LiDAR. The doubling down comes from the fact that the Model 3 could have corrected these issues but it didn’t. It made them worse by removing certain sensors. And again, the issue still isn’t fixed.
> They're the decisions of a person who's working toward the long term and thinks that saving lives in aggregate is a good thing to do even if in the process very few deaths of a different type are caused. Yes they're moral.
There are many such people working toward that goal, and those who are doing so earnestly aim to create a culture of safety. Musk is not one of these people. He has chosen to unleash beta quality software/machines with deficient sensor stacks onto an unsuspecting public, a public that has not agreed to his beta test. These cars are operating in stealth mode on public streets, when they should be clearly marked with flashing lights indicating that they are autonomous vehicles, as had been established as a common safety practice among autonomous car researchers for over a decade.
Musk threw out all of this and has caused literal deaths as a result. That’s on him. He ignores industry best practices for bragging rights, and he does so with no technical or engineering basis. There’s no ethical basis for it either, including your utilitarian “ends justify the means” take, because it’s quite clear at this point he will never even get to that end. He has boxed himself into a local maxima and his pride is preventing any advancement toward the safe future you imagine. Instead he’s stuck with machines that decapitated multiple people, and he can’t design one that won’t.
Musk and Tesla have been a giant step backwards for robot ethics in the industry. The whole world would be safer if he never even got the idea of autonomous cars in his brain. We were doing just fine developing safe autonomous vehicles without him. That better safer future you imagine will happen in spite of Musk, not because of him.
That's your problem. You've actually done your research and actually listened to the man and watched how he has acted over a 10 year period, giving you much better insight than people who only read click-bait headlines. It's not even worth arguing with people who don't know what they're talking about.
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?
I think he fully expected to buy Twitter and was working toward that goal which required him to sell TSLA shares. If there's some kind of side benefit that he now gets to keep that money now that the deal has fallen through, I have no problem with that personally as a TSLA shareholder as I'd prefer he spend that money on something like SpaceX. Making my stock value go down while helping SpaceX is a great thing.
>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).
Erm, it's VW due to overtake Tesla for EV sales by the end of this year.
Edit: ouch that statement might have been correct if VW hadn't sold out annual production by May and supply chain problems hamper ramp up. So it's predicted for 2024 VW BEV sales will exceed those of Tesla.
Further I have no doubt that now BMW are making electric cars that look like normal cars inside, are screwed together properly and support CarPlay, they too will overtake Tesla in this segment.
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.
Even their sales leadership is eroding (at least looking at global figures). The next biggest three combined (VW, Hyundai-Kia, Stellantis) have sold as many BEV cars as Tesla in 2021. And there are many big players on the following ranks that clearly have the money and willingness to grow
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.
Does Twitter also say in their official filings that it's their belief that bots are less than 5% or is it a concrete statement that less than 5% of accounts are bots?
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.
Going through court will lead to even more dragged out speculation and hurt Twitter more than any other party. They can't be 100% sure that they will win the case, and will also have to work to run the company on the side in a continuing state of limbo with the acquisition litigation. In the end, even if they win, and Musk must buys the company at the deal price, by the time that goes through the markets may as well have rebounded to make the acquisition price reasonable again. Buying a company isn't like buying a piece of candy and eating it to the point of no return. The amount of money Elon has on paper won't be impacted, which a lot of people are not understanding. The winners at the end of the day would be the lawyers and millions of dollars dumped into fighting a case instead of settling.
> Going through court will lead to even more dragged out speculation and hurt Twitter more than any other party. They can't be 100% sure that they will win the case,
It's hard to be 100% sure, but there is a rather high probability that they will win and if they do, even if EM only has to pay a fine, they will have an official court statement saying that their bot statement is reasonable which is significantly better than leaving it with "we settled with EM since we don't think that we can defend this statement".
> In the end, even if they win, and Musk must buys the company at the deal price, by the time that goes through the markets may as well have rebounded to make the acquisition price reasonable again.
And that's fine. After all, Twitter agreed to the sale at that price.
> The winners at the end of the day would be the lawyers and millions of dollars dumped into fighting a case instead of settling.
There would be at least three winners:
1. The lawyers, but they probably already got millions over the whole mess.
2. The legal system, since there would be some indication that even EM has to follow the rules for once.
3. The shareholders who will get significantly more money and who are actually the people the board represents.
>Going through court will lead to even more dragged out speculation and hurt Twitter more than any other party
>The winners at the end of the day would be the lawyers and millions of dollars dumped into fighting a case instead of settling.
I don't understand this popular hot take.
There's no rich egomaniac foil for EM, is there? There's just a corporate machine that he offered a piece of "candy" worth tens of billions and then tried to take back.
As many people have said, if EM just walks away and Twitter does nothing, the stock price is probably half of what it was supposed to be acquired for.
Ten billion dollars will fund a literal battalion of lawyers for a decade if necessary.
I think the concept of settling for a lower price is a bit misleading, I feel like you are implying a do-over, but really the prices have tended not to change much (maybe ~5%). Also, personally, I think he's actually trying to walk away.
One example I can think of is LVMH made an offer for Tiffany in late 2019 for like $16.2B. It appeared to be unhappy about that price a few months later for some reason, people didn't want high end jewelry or something... They settled for like 3% less, but was that worth the bitterness? That's assuming that Arnault actually did want to go through with the deal, which, there I also believe genuinely was having second thoughts.
The reason I think Musk is trying to actually walk away is that I feel the pushing the bot thing is a pretty double-edged tactic. A lot of LVMH's arguments were that Tiffany was mismanaging the business above and beyond the covid environ i.e. not necessarily that the business is flawed, but the seller stopped caring once they sold it. The bot strat is kinda riskier because it's saying, the business is actually flawed, and the seller is misrepresenting it to me.
If it gets him out great, but if not it could potentially be like buying a house and throwing a lit molotov through the kitchen window on move-in day.
One thing I omitted that I thought wasn’t particularly relevant to your analysis of the merger agreement and my criticisms thereof, was the way you elided EM’s initial accumulation of shares, the multiple violations of securities laws he quite probably committed in connection with those purchases, the several hundred million dollars he ripped off from other shareholders through those violations of securities laws, and his (belated) realization that by joining the Twitter board, he would have owed a fiduciary duties to the other shareholder (and not just his own interests). So that part of your post was at best overly credulous and in any event dismissive of bad faith right from the outset.
The rest of my post speaks for itself in response to most of your assertions.
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.
Without knowing how much background you have a simple summary would be:
A Straddle is a strategy that allows you to bet that a stock's price will change by x% by a certain date. To make money on a straddle you want the stock to go up or down by more than that percentage, the more it changes the better.
So if you believe that the matter will be resolved one way or the other by whatever date then you'd want to buy a Straddle on that date. Regardless of what happens if there is resolution by that date you'll make money.
A Strangle is the same thing but allows you to bet directionally which way the stock will move. So if you're confident the matter will be resolved by a certain date then you can buy a strangle for that date and weight it depending on the outcome you think is most likely (say if you're 60% confident the court will for Elon to pay the agreed upon price you can weight the strangle 60% towards the upside). Like the straddle as long as there is resolution you'll get paid regardless, but here you get a bigger payout if you guess the direction correctly.
Both of these can be inverted with short straddles and short strangles.
This is what you would want to purchase in the case you're talking about. If you're confident that the Twitter matter won't be resolved for a month then you can purchase a short straddle for a month from now at whatever range you feel comfortable better the twitter stock will stay between.
A short strangle would allow you to do the same but with the boundaries weighted one way or another. So instead of just saying "it won't move more than x% either direction". It allows you to say, "a month from now it will be between $x and $y" where x and y can have a different distance from the current price.
how do you actually trade complex options like this? E-Trade or Robinhood or something? I'm sure I could get myself in a whole heap of trouble trading options, but it looks fun..
Yes. You can trade options like this using pretty much any brokerage including E-Trade and Robinhood. TD Ameritrade, Fidelity, Charles Schwab, etc.
I'd steer you away from Robinhood, not just for the sake of the meme culture that's developed around it, but because other platforms generally have better research tools and support.
With all of that said, jumping straight into options trading is a big leap to take and with active investing in general I'd encourage you to look at it not as 'investing' but as gambling.
If you're doing it for fun that's all good just don't bet more than you can afford to lose.
> On options losses are capped to the money invested.
On long options -- a purchased call, purchased short, or a combination -- then losses are capped to the money invested. On short options, losses are potentially unlimited.
Understanding the difference is obviously extremely important.
> Nevertheless, you should consider that a host of professional traders with much better equipment and connections are betting against you.
I'd rather suggest that professional and sophisticated traders are arbitraging against you. Options market makers are not usually in the business of taking a directional stance -- they don't care one way or the other about whether Musk will buy Twitter. Instead, they seek to sell you the option but buy back the risk more cheaply, beginning with dynamic hedging that is impractical for a single retail investor with limited capital.
You can sell a call and/or sell a put with the expiration and strike prices you think are appropriate. Maybe you'd buy covering calls/puts as well, forming a pair of vertical spreads (an iron condor or iron butterfly). There are different names for different basic combinations of options contracts: https://www.optionsplaybook.com/option-strategies/
I've been keeping a close eye on this market (TWTR options) and in my opinion, there were no great bargains. Especially with longer term contracts, you'd need to chip into wide bid-ask spreads, and the prices didn't offer stunning deals on either side of the trade, unless you held an extreme opinion.
Delaware may actually be relatively quick to rule on this. It’s a pretty straightforward breach of contract case, and one side has a much, much stronger position than the other.
Where it’ll get really interesting is if the court orders specific performance (as I expect them to do, if the case makes it to a verdict). Sure, EM has a legal obligation to comply and buy the company, but what if he just….. declines? He obviously doesn’t feel like rules or the legal system apply to him (sometimes for better, but increasingly consistently for worse) but I’m not sure that I see the Delaware chancery court sending men with guns to his front door to seize $44 billion.
"...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.
If the claimed rate of fake clicks is significantly wrong advertisers are unhappy. But whether it's high is irrelevant. For an advertiser, $1 per click with 0% fake or $0.50 per click with 50% fake are equivalent, except the first one requires tremendous overhead to maintain likely making the whole endeavor less efficient.
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.
But who does the click fraud ultimately hurt? It's not Googs. They get paid for the clicks. The people spending the money on Goog's platform are the ones hurt. Why would Googs want to put a stop to it?
> The people spending the money on Goog's platform are the ones hurt.
It goes deeper. The increased marketing costs due to the 'fraud tax' are passed through to customers. So it's we the people who are getting screwed by 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.
You should subscribe to Matt Levine's newsletter if you enjoy his writing. It's fantastic, plus it's free and you don't have to visit Bloomberg's site.
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.
> Twitter has said in its SEC filings that it estimates that fewer than 5% of its monetizable daily active users are “false or spam accounts”
Is this different to total percentage of false or spam accounts? The monetizable daily active users seems like a very specific subpopulation of total twitter accounts.
Yes, it is crucially different. mDAU is defined in the SEC filings which you can easily check. Basically it boils down to, there's say a billion twitter accounts. A shitload are inactive, or obviously bots, or joke accounts, or actual alts (don't double-count), or API users, or people using Tweetdeck, or doing all sorts of other things that Twitter can easily detect are not resulting in eyeballs on ads. Twitter boils down the number of "users that use Twitter clients that display ads" down to "just" 230M/day. Twitter then claims that, of those users, who are mostly just every day people logging in, maybe liking a post, scrolling a bit, seeing an ad on a real Twitter client -- of those users, when they sample them, they find that <5% of them are bots (like headless browsers and whatnot). That is obviously a completely different measurement than just overall bot accounts, or how often you will personally see bots posting, or how many of your followers are bots. Totally unrelated numbers.
Musk knows this but still knowingly confuses them to try to trick people into thinking Twitter is lying about that 5% number (since it's pretty obvious there are many bots on twitter)
Goldman Sachs & other banks are not burned in this. They collect commissions and fees from loans. They deal with increasing risk by increasing fees, collateral and interest rate. That will restrict the deals Musk can afford.
I'm pretty sure the Vatican's (by which you I assume include the entirety of the Catholic Church) art assets alone top the $10-12 billion you're valuing the entire church at, to say nothing of their property, 1 billionish loyal followers or legal status as a country.
Nah, he's done that by inheriting a bunch of rather blood-soaked wealth and then being fairly effective at predicting which companies he could buy that would then make him a lot of money.
Reality doesn't care if Musk doesn't care. For certain purchases, there's a probability that Musk will simply find that his money is no good. Not for sale to Elon Musk at any price.
Yeah, I am worried he has a mental imbalance that makes him unsuited for some decisions. If he is wise he should just focus on a few things and do it right. I admire what he has done for space travel for example, but hopefully he doesn’t have to many yes men around him that make him to do much unstable things.
Let's not forget that this is a take, not an indisputable fact. Whether ostensible or true, he has cited potentially valid reasons for both cases (he DID have investors lined up to take it private and there WAS a lack of openness to investigate Twitter). I'm not saying he did or he didn't, I just find this kind of assertion (indeed the whole tone of the article) to be a bit flippant and more of a channeling for dislike of someone then for honest unbiased speculation of what is going on.
I believe he was sincere, but found out quickly that a lot of people had strong feelings about his plans for the platform. It's possible he was in danger of losing people he really needs for his other businesses. I don't blame him for bailing out on a lose/lose situation.
... how is that an excuse? He knew that full well before he ever started thinking about buying it, much less making public statements about it. (Just like he knew about the bots)
The law on this is clear, and the remedies are also clear. Musk playing the contemptuous clown prince aside, the court isn’t going to be ‘intimidated’, and Musk can’t simply evade/ignore judgments/orders. What a weirdly amateurish article.
If the designer of Bloomberg.com is on HN... thank your for making a decent looking news site. Literally every other site I'm bombarded with sensory overload. This site just lets me read the article in sweet serenity.
I love how Matt Levine is alternately hilarious, and then dry as dust. It's like he wants everyone to suffer what lawyers go through on a daily basis, so he lures you in with some light hearted funny, and then before you know it, you're in the middle of reading some long sentence in a contract that's so convoluted you just want to pull your eyes out. Ha, good one Matt!
Elon Musk apparently has bigger issues that should have been preventing him from playing with the idea of buying twitter, and yet, he went for it, following a tweet that simply went out of control...
- Tesla plants challenges worldwide (From China to Berlin via Texas)
- Cybertruck ever postponing release date?
- SolarCity and the dissmissed promises
- Neuralink: Simply read the Wikipedia's entry [1]
- Hyperloop (or is it hyperflop)
- Boring company (more and more video demos) nothing is done...
So, with so much to get in order (and I am avoiding personal matters which don't seemed any cheerful for the man), with so much, why don't we simply get ourselves a new toy, named twitter?
Recently USA has a president that was following his impoolsive, late night tweets, by pushing his staff to form them as a new policy...
I think the other thing is in the US he now has some competition and they may just overtake the % of EV’s sold in a few years. People will have choices for EV instead of pick Tesla so he potentially used this buying twitter to sell off a bunch of stock. I wouldn’t be surprised if he finds other reasons to sell off massive amounts of stock in the next 2 years.
My guess is cybertruck will be DOA. Anyone who wants an EV Truck is likely going to order an F-150 Lightning - looks like every other F-150, F-150 is the best selling automobile in the US.
Once other auto makers ramp up production, Tesla cars will continue to be a niche luxury product with some gimmicky features.
The stock closed at $36.81 on Friday, and other social-media stocks are down significantly since April. (Snap Inc. is down about 57% since April 13; even Meta Platforms Inc. — Facebook — is down more than 20%.) Meanwhile Tesla Inc. stock, the main source of Musk’s wealth,
Or maybe that was because the overall stock market was down a lot. Meta being down 20$ is about the same as the S&P 500.
Also it is obviously untrue! Companies advertise on Twitter because it sells products!
lol Twitter ads are notoriously expensive. It's mostly big companies buying them to build awareness, not to move product.
Will any of these people eat crow if the deal closes at a lower price? Probably as much every other time they’ve said Musk was done with Twitter and then escalated towards owning it.
Lower than what? What are Levine’s claims to that effect? He states that Musk’s lawyers are likely hoping he’d have to pay only the $1B breakup fee, and Twitter is looking for the full “specific performance” $33B. There is little certainty about the outcome at this point.
The SEC filings are a matter of public record, which is part of why we call 'public' companies public in the first place: Twitter is - and Musk is as well - bound to do a lot of this out in the open because it affects the price of a listed stock.
There's been a lot of speculating around here on exactly what it would take for Musk to get out of this deal; here's the TLDR of the analysis from Levine:
> Musk cannot get out of the deal just because one of Twitter’s representations is false. He still has to close the deal unless the representation is false and it would have a “material adverse effect” on Twitter. This is a famously under-defined term but it generally needs to be a pretty catastrophic effect. If the bots are 6% of mDAUs, whatever. If the bots are 75% of mDAUs and Twitter has been knowingly misleading its advertisers, and Musk can expose that scam and advertisers flee and Twitter faces legal trouble for its fraud, then, sure, material adverse effect.
As to whether there is any evidence of a false representation (not even addressing material adverse effect due to that false representation):
> The only basis for the claim is that “preliminary analysis by Mr. Musk’s advisors of the information provided by Twitter to date causes Mr. Musk to strongly believe that the proportion of false and spam accounts included in the reported mDAU count is wildly higher than 5%.” Notice that Ringler does not say that the analysis shows that the bots are “wildly higher than 5%” of mDAUs: That would be a factual claim that, I suspect, Musk’s advisers know is false. They make only the subjective claim that Musk “strongly believes” it.
And then, perhaps the better grounds for Musk to prevail:
> The second pretext is: Twitter is not giving Musk enough information about the bot problem. This is a better pretext, for technical legal reasons, which we have also discussed previously. In the closing conditions to the merger, representations are qualified by “material adverse effect”; just finding that a representation is false would not give Musk the right to terminate the deal unless it caused an MAE. But covenants are qualified by “all material respects”: In the merger agreement, Twitter promised to do certain things between signing and closing, and it has to do those things, whether or not there would be a material adverse effect from not doing them. So if Musk can prove that Twitter hasn’t complied with its obligations, he can get out of the deal.
Do public statements before he signed the deal that imply that he was aware that Twitter has a bot problem and already suspected that the number we much higher than reported by Twitter have any effect?
It's kind of a moot point; Levine is reading tea leaves about what a judge will think hearing all of this, but the fact is that Musk waived the right to condition the acquisition on Twitter's bot statistics, pretty much in black and white.
wasn't that literally the reason he claimed he wanted to buy it for in the first place? I remember him going on about verifying every human on twitter and improving our discourse
the thing he's pretending to ditch the deal for was the thing he allegedly wanted to fix
These are figured that Twitter has been filing with the SEC for ages. How does it make sense if the purchase was agreed upon when all this was public information?
Except that he knew that it was at least 5%. So you'd actually have to figure out how much the discount already included in the value is for that 5% (which is highly subjective, but the discount is almost certainly not also 5%), and then multiply it by six-fifths (maybe, because the discount is also almost certainly not linear).
Of course, this is all a moot point, because what an actual businessman (as opposed to a con artist) would do, if they were concerned the bot stats might be inaccurate, is make sure the agreement had specific terms in it as to what would happen if it was found to be inaccurate.
> It seems like the purchase price should be of the order of 6% less in that case.
That's not what his contract says.
Either the bots are pretty close to the 5% figure Twitter says (and 6% is definitely pretty close), and Elon has to buy at the figure he specified, or they're enough higher to have a significant impact on ad revenue, and Elon doesn't have to buy at all.
Musk wasn't pretending to buy Twitter, the article is using a sort of simpleton interpretation of Musk's behavior. That's the interpretation someone would take if they dislike Musk and get overly emotional about his behavior.
Musk is x y z. Oh my god, did you see the tweet he sent out!?! I just hate Musk, blah blah blah. He's such a terrible human. This one time he called a person a really bad name. - That's the type of person that reads Musk's Twitter acquisition attempt the way the article is.
I don't care much about Musk one way or another, but this is not a complicated context and the author is plain wrong.
What happened is the market for hyper overvalued stocks has crashed. He was faced with the scenario of paying double for Twitter vs what it was really worth. Remove the Musk prop and the stock collapses. Next up, the stock is heading south of $30 / share. It might be worth taking over for $20-$25 / share at most.
Musk didn't want to pay $20 billion more for Twitter than he had to, even for him that was a bridge too far. Particularly while his own paper bubble fortune is just as at risk of implosion as the rest.
It was really, really, really dumb timing. That was Musk's actual issue.
This to me seems the most reasonable explanation and explains most of the behaviors involved on both sides. I don’t buy into “it was just a joke that went too far” theory.
Musk doesn’t want a turd.
Twitter, essentially made a deal with the devil (from their perspective). Despite being initially opposed to this deal, they now has to sue to try and make it happen, because I suspect if it doesn’t “south of $30” is going to be more like “around $20” and there are a whole bunch of folks that might get interested in a takeover at that level with far more villain potential than Musk.
Musk decided to pay $54.20/share (because weed joke) for twitter under the guise that he was going to fix the bot problem. Now he wants to back out of the deal because of the bot problem.
He wants to back out because the size of his wallet has gotten smaller because of the market, twitter’s value is significantly less than when the offer was made, and apparently Twitter is holding back on providing some data. If he proves that last part, Twitter is screwed because there is no doubt it’s going to underscore the bot problem even further and I think their stock is going to dip into the low 20s.
His reason for buying it was never the bot problem. Where are people inventing this reasoning from. His reason for buying it was to create a public square, which he stated multiple times.
He hardly mentioned the bots at all before setting out to buy Twitter.
The possibility of other takeovers doesn’t need to factor into this. If Twitter’s share price is significantly below the price they can force Musk to buy the company at, then the board has an obligation to shareholders to force the sale, and will be sued by the shareholders if they don’t.
It’s going to be interesting to see if Musk can prove they are holding back data.
I think Twitter does have a danger here. Their <5% bots was always an estimate. You can know, not know, or not want to know. That last part is the danger.
If they’re actually holding back data they contractually agreed to provide, then they aren’t living up to their side of the contract and maybe he has a way out. That doesn’t seem to be the case though. There is no “provided Elon Musk can verify that bots are less than 5% of users” clause in the contract.
Twitter gets free exposure from all the news and a boost in reputation if only 5% of users are bots. Is there room for growth? I have the impression that Twitter is for information junkies who all should already have heard of Twitter.
That seems to be the main growth problem for Twitter. It has extreme product-market fit for a certain type of information junkie, but 15 years of optimizing the product for them has made it impenetrable to other potential users.
As Matt Levine likes to complain, not even Twitter’s own board and executives seem to use or like the product. It is a hostile and unappealing environment to most people.
Considering he owns 8% of shares and can't buy more than 15%, I doubt he went through all of this to shock down stock prices or for the luls, as the author assumes.
He is rich but doesn't usually like burning money.
So now there is a widespread support for Musk buying Twitter? Okay, he may end up owning Twitter whether he likes it or not. It is so funny and ironic. Whatever the outcome I agree.
It's not so much 'support' as that it is more or less inevitable, whether he likes it or not, and that has mostly to do with the price than with anything else. Worst case he will have to sell it immediately after forcibly buying it at a lower price just to make sure the rest of his empire doesn't collapse.
Twitter is at best a distraction for Musk, at worst it could be his downfall.
Twitter feeds are pretty public, albeit expensive to buy the firehose. Nonetheless, shouldn't a handful of motivated hackers be able to answer the bot question??
Well, it depends on what is in the firehose. What twitter really knows that you can't just see, is how (with what client) users are logging in and whether their ad tracker URLs are being triggered (i.e. the user really did result in an ad impression). If Musk can determine that directly or indirectly from the firehose then he could say "here's how I calculated it and it's 9%" or something, I guess.
Using entirely made up nunbers, I think the situation is something like:
* Firehose shows 800m accounts were active yesterday
* Using data from the firehose (user agents, IP addresses, behaviour analysis, etc.) you can flag 500m of those accounts as fake, spam, bots, etc., leaving 300m
* Twitter then uses their experience, intuition, business judgement, etc., to apply an additional adjustment to those numbers, reduces them by 25%, and announces a mDAU of 225m
* Musk calls foul, and says they should have used a bigger discount, because a lot of that 225m are still fake or spam accounts
* Twitter says no, they're pretty sure it's like 11m of that 225m at most
In this hypothetical, the firehose data isn't helpful, because it's just one of the inputs, and not the one that's in dispute. Musk isn't arguing about whether there were 800m (or whatever) total active accounts, or 300m seemingly real accounts, but over whether 25% was a good guess for how many fake accounts were hidden in that seemingly real accounts.
The big issue with this is as far as I am aware the fire hose will only give information about active users, which likely leaves a big number of passive users out of the calculations
The way I see it, the bot question isn't about "bots on Twitter", it's about "bots, spam, and insincere people on Twitter that annoy Elon Musk". That is, Elon does not enjoy the flood of spam that he has to interact with. His experience as a user of Twitter is poor.
My idea is that Elon Musk is just leveraging it's wealth and public visibility to gain a lot of money easily tricking the markets. Especially those market where people are more easily gullible.
I think he did it with bitcoins when it declared Tesla will accept Bitcoin payments on the same basis of ordinary payments. Just later he abruptly dismissed the whole thing because the operation was terminated. In the meantime I guess he just acquired a lot of bitcoins before the public announcement and just sold them when the price was much higher.
I think that stock market and Bitcoin market are easily gullible by wealthy people because a lot of people investing are inexperienced and are easily influenced by press communication without ground truth basis.
I don’t understand why we need to make things personal: a multibillionaire with practically unlimited resources is negotiating with a multibillion dollar corporation with practically unlimited resources.
It’s clear that the offer Elon got stuck with has an unrealistic price at this point (and Elon just want a reason to get out of the deal), just like it’s clear that Twitter’s management is incompetent in the last few years.
I just hope that there will be a lawsuit with juicy details so that I can get my popcorn, but I believe the 2 parties will settle.
Elon only got stuck with it because he explicitly waived the right to due diligence which would have protected him from all this.
He tried to act badass but came out looking like a dumbass.
Everything since is his effort to get out of this (which he will…one of the nice things about having a lot of money is that it’s very hard to lose, no matter how illegal whatever you’re doing is), but is also trying to pretend he didn’t do something really really dumb.
I see absolutely no reason to help Elon rewrite history especially when he could very well paid the penalty and walked away like he contractually agreed to, which would have ended the matter right there.
> It’s clear that the offer Elon got stuck with has an unrealistic price at this point
But that's not how it works. That's why we have contracts, and covenants, etc.: it's so that, if conditions change, one party cannot say "oops, sorry, changed my mind" and walk.
(Also, the offer "Elon got stuck with" is his own, and even bears his childish signature of a weed joke.)
Twitter management is not incompetent, Musk set his own price.
He should definitely pay a fine.
You can't walk into a situation and cause major chaos - literally executive turnover, stock going crazy, all sorts of turmoil - and then walk away on bad faith and excuses.
Also - he does not have unlimited resources. He literally cannot afford this deal right now.
He practically bought it; it's unlikely an agency or third party to intervene / object; only thing to "save" him is stating he doesn't have the monwy/funding was pulled due to lack of information. Even then, I doubt he would avoid it.
Of course they can drag each other to the bottom until one gives up. I doubt Musk will and Twitter might have existential issues if it doesn't get bought with rumors related to their user base quality.
The user base quality thing, irrespective of what the real answer is, is mostly a canard. The only way it could possibly get used is by Musk in the public commons to trash them.
Other than that, this will be a side-show court battle now, unless one party has reason to continue arguing about it in public sphere.
Contracts matter. The ability for two parties to create a contract and to have reasonably secure knowledge that the state will still in and enforce the terms of the contract, using violence if necessary, is a massive foundational element to free market capitalism.
We see in states where such an expectation is not present, that it becomes an enormous invisible drag on all business activity and degrades the civic functioning of society.
One of the crowning achievements of Western Liberalism was the concept of "rule of law" and that there would exist an impartial, powerful judiciary independent of political power that could bring massive resources to bear to enforce contracts.
You are right, and Twitter has the upper hand here.
But there are always exceptions written in the contracts and Elon would be foolish not to spend a few million to try to trigger an exception to renegotiate the contract. It just makes business sense.
Twitter management probably didn't have much choice but to accept the deal. Turning down an offer significantly above the stock price sounds like a trigger for a shareholder lawsuit.
And those appeals can be ruled upon and then the case can reach a conclusion. It's not like the lawyers can just take _any_ case with _any_ facts and keep the case from _ever_ reaching a conclusion.
The real question you should ask yourself is, if $44 billion is on the line, how long would you continue to pursue the case in the face of lawyers who are just trying to drag it out? Even if it went on for years (it's not assured Musk's lawyers could drag it out past a year), I can think of 44 billion reasons to continue with the case.
>They won’t get any more buyers while it’s happening and it’s a massive distraction.
No one is going to buy Twitter at anything close to what Musk offered.
>I’ve worked at companies like this and it brutal on employee morale. People just leave.
You know how much Twitter engineers get paid, right? Twitter offer fully remote positions; no engineer with any sense is going to work at some no-name company for ~$100k if they can get an offer from Twitter, which will be almost twice that at least.
> I’ve worked at companies like this and it brutal on employee morale. People just leave.
Who cares? If you think you're going to win, it's just Elon causing his future employees to quit. It's not going to affect your payday of $54.20. Similarly, no other buyers will make lower offers. Those are, by definition, worse than just suing.
There are no other buyers at this price or anything near it, Musk simply messed up. The deal he proposed is beyond stupid and the effect this can have on all of Musk's holdings is the thing to watch for, Twitter could well be his Waterloo. 'Is this the hill you want to die on?' is always a good question to ask yourself before you dig in and from where I'm sitting Twitter was 'optional' in Musk's arsenal, he had all of the benefits without the downsides as it was.
Maybe his ego is incompatible with not owning the things he relies on but in this case that ownership comes with a pretty hefty price tag and even people at Musk's level don't throw around tens of billions of dollars lightly (normally speaking, that is).
The price in the deal was set by professional lawyers at Goldman Sachs, so if it was beyond stupid, it was not Elon’s fault.
The deal was proposed before the recession, and at that time there were people proposing that the price is too low, because Twitter stock was over $60 at some point.
Of course in the current market Elon would pay a few billions to get out of the deal, but it’s a different deal than what it has been a few months ago.
If I have a classic car appraised and don't like the appraised value I'll pass. Goldman Sachs was working for Twitter, of course they are going to try to maximize the valuation. Musk should have done DD before agreeing on a price, it's that simple.
GS was offering a fairness opinion to the board, so they need to say, in essence, that "54.20 is a good price, because it is more than Twitter is worth by itself."
So they aim to provide a somewhat lower valuation.
> you can sue them to close the deal but the juice isn’t worth the squeeze
That really depends on the offer you accepted (A), the current value of the house (B), the cost of litigation (C), and the price you put on your time and mental energy (D). If A > B + C + D, it makes sense to force the buyer to close. And in most cases, you're relying on the buyer to close in order to be able to close on the house you're moving to so you may have no choice.
It’s like a divorce. You can either reach a settlement or spend a ton of money fighting for years.
You imagine how distracting it would be for Twitter to have this in their quarterly updates? They certainly aren’t selling the company until it’s resolved.
My prediction - lots of public tough talk, then a quiet resolution.
Twitter is worth $28b and Musk's offer was $44b - a $16bn delta. The most annual revenue that a single law firm in the US has made is about $4bn.[1]
Any amount Twitter could spend on lawyers is nothing compared to what they stand to make by winning.
If you're accounting for whatever "toll" it takes on the company's leadership and employee morale, $16bn is about 2.75 years of operating expenses. Even if you assume every employee is operating at 50% mental capacity the entire time, it still makes sense to fight as long as it's over in <= 5 years.
> It’s like a divorce. You can either reach a settlement or spend a ton of money fighting for years.
There's basically no way they could possibly spend even a tiny fraction of the overall deal's worth fighting this even if it went on for years. Not spending that money to fight this would really be stupid.
And would open up many other lawsuits from minority shareholders that would love to see this deal go through at the price that Musk offered. They're between a rock and a hard place and I think that that is the thing that pretty much guarantees that they will take it all the way to the last appeal to get it enforced. They can't afford not to.
The answer is almost certainly yes. It isn’t Twitter sitting in a court room for nothing they’re getting higher than the stock price was when the deal was announced.
Twitter is a public company. We can not ignore the effect this situation has on the investors (regardless of whether someone thinks "they deserve it", or something equally irrelevant).
Another hypothesis: Triggering a legal battle in the courts is a delaying technique to push out the acquisition until the economy rebounds (and Tesla and Twitter valuations with it), or until after the 2024 election, because Elon realized that he doesn't actually want to let Trump back onto the platform. (Perhaps because he perfers DeSantis)
Or, it's a feint to bring Twitter back to the bargaining table to lower the price outright. I'd lay odds that Musk is betting Twitter needs a buyer enough to prefer a better deal (for Musk) to a cash settlement that left them still looking for a buyer.
What about interim inflation? The US isn't used to high inflation, so inflation is often not baked into contracts. But we are possibly facing a period of high inflation.
Those 44 billion USD may be worth a lot less in 2024 or 2025.
IMHO this is the key point. Twitter has a strong case in court but courts usually take a long time. Probably at least a couple years for all the appeals to run their course. And at any time during that process Elon can decide that he actually wants Twitter and complete the transaction.
It's a huge distraction for Twitter and probably won't be worth it in the long run. I expect a settlement with Elon paying some cash as a breakup fee.
Can we also take a moment to appreciate the tongue-in-cheek writing style of this (fairly thorough, by my impression) analysis of rather dry things like SEC filings, merger covenants,...?
This is why Levine's is one of a very few newsletters I subscribe to, and I read it immediately when it arrives. He's both entertaining and educational. I know a great deal more about finance now than I did a year ago, and that's because of Matt Levine.
I met an almost billionaire once; I mentioned how a million dollars would cover me for the rest of my life and she followed with a 10 minute speech on how money is horrible and she can't sleep at night for their concern. I was moved but I confessed I'd still want that million dollars to fall out of the sky. It didn't feel like she "wanted more".
How did you meet her? Were you at a zen meditation retreat after retiring from remunerative employment?
On a semi-related note, one of the most predictive factors of stress in any primate societies is inequality, but one of the more surprising factors is that stress increases for everyone, even those at the top of the heap.
I used to ‘hang’ with a billionaire friend of the family and, maybe that might be dutch, he was incredibly frugal (drove a crappy old but not classic car, lived in a rather small house etc) and yea was obsessed with making more. He would ask me out for a coffee and ask to split the bill (or just pay his part and walk wait for me to pay my part) even though I usually just paid as I don’t like going dutch. He spent almost no money during his life. Guess that is all good for making fortunes.
There's reams of Musk's direct thoughts about this topic and many many others, coincidentally available on twitter dot com. It's not overly difficult to get a sense of who he is and how he thinks about things.
They are of the same mind as any other person with a bit of arrogance and hubris they just have more money.
Imagine some lowly millionaire putting a bid in for a piece of land / cottage he wants, and the karma that can come from that. Same thing, different scale.
Matt Levine is a lawyer. Nothing to do with understanding a billionaires mind. A solid legal understanding, especially of corporate finance, M&A, etc is what you're looking for here ...
Bloomberg says there is no evidence of this... yeah, personally I dont really see any evidence of twitter having more than 200 or 300 million real users, and only a small fraction of those will be active. "Maybe" if they werent completely blocked in China and Russia it would be possible to believe there is more.
The problem is that Twitter distinguishes 'automated account' from 'mininimum wage-farm account'. The later are not bots even though they are not genuine engagement.
Surely the problem is the believability of twitter claiming they have about 50% the number of active users as instagram (250million vs 500million).
When a cursory glance of twitter accounts shows its only a small number of American celebrities and a few global politicians that still use twitter instead of telegram.
The onus is on twitter to prove that 250million number, and Musks lawyers are saying they fell well short of doing so.
A bloomberg hit piece on Musk claiming Musk didnt show it isnt true wont save twitter, and they've been in terminal decline even before they banned Trump.
Musk holds a key piece of America’s future in space in SpaceX. I wonder if it’s only a matter of time before he starts dangling that to get what he wants in cases like this. I still am generally favorable toward Elon, but I think we’re seeing him transform into a villain
I don't know about a villain, but he definitely isn't a saviour. Was hoping he'd follow through in reforming Twitter. But it turns out, even with all his resources, he's actually pretty weak in comparison to the forces set against him.
Imagine a five-year-old with billions of dollars. He'd build electric cars (aren't they s3xy?), tunnels, trains, rockets, and flamethrowers, all while having playground spats.
To pretend he doesn't have powerful enemies is just silly. It's not some kooky conspiracy theory. The only question is if you think his enemies are justified or not.
Who are these enemies, and why do they oppose him?
I frankly don't see any "enemies." Are the SEC his "enemies?" I don't think so, he goes out of his way to bend securities law. If you go poking a bear and it takes a swipe at you - you're simply a fool, and the bear is not your enemy.
Read any recent ArsTechnica post on him that isn't part of the rocket section, and consider based purely on the use of emotive language if maybe someone has an axe to grind.
Being critical of someone does not make you their enemy. That is a super disturbing thing to suggest.
The fact that you had to eliminate part of the site to make the claim remotely plausible is something you should reflect on.
I will readily admit I think Musk is a bad CEO and a worse person who goes around saying he's saving humanity, but only willing to do it if it's sexy and cool and on his terms. Meanwhile real technologies that could really help the world go unfunded. Let's also not forget that he's suggested indentured servitude as a business model for Neuralink - we should all be able to agree that is a red flag.
Would you suggest that I am his enemy now? Would he be justified hiring private investigators to harass me? Should he direct his Twitter followers to brigade me? Is this the world you want to live in? Is this what free speech advocacy looks like?
This isn't about enemies or anything else. It's about what used to be a technical news site using emotive language to describe people. News should be impartial, but I see a significant amount of opinion-building.
Musk has always been Steve Jobs -ish. He focused on rockets and electric cars instead of shiny things that go in your desk or pocket or wrist though, and against all odds succeeded where many others have failed. Yes he's an asshole, and I'd hate to work for him, but he's also pushed humanity forward by corralling a bunch of people to all pull in the same direction.
My issue is more with Ars, where all the reporting used to be like the rocket section, but since the acquisition by Condé Nast the rest of it has turned into tech tabloid. I want newsworthy information, not what some guy did in his personal time.
This is goalpost moving. We weren't discussing the journalistic integrity of Ars Technia, we were discussing whether or not Musk's enemies are real or imagined. I didn't identify Ars as an enemy, I asked who these enemies were, and it was you who suggested it.
He is not pushing humanity forward and certainly isn't getting people to pull in the same direction. If you disagree, I would be curious to hear how Neuralink and his Twitter acquisition are related, or how his frequent scandals help to keep people to focused on the mission.
He has no real vision to be pushing humanity forward to, he has a series of smokescreens. It is plain for me to see that Musk has no strategy, and that these are a series of tactics to maintain relevance and distract from the issues he'd rather we forget about (such as the sexual harassment allegations that have recently been made public, or that FSD is not and has never been "one year away").
At best he's a distraction. But he's worse than that, he siphons energy and attention that should be directed towards actually addressing climate change and other existential challenges into a vortex that ultimately serves to empower him and feed his ego. His contribution to the success of SpaceX and Tesla is his prolific talent for charming people and attracting investment and attention. In many ways they succeed despite him, not because of him. In a world without Musk, people are still working on these problems and making the same breakthroughs, just under a different corporate entity.
It is not the unique insight of Elon Musk which makes these innovations possible. It is decades of research, mostly funded by the taxpayer, mostly taking place at universities and national labs. The engineers at SpaceX and Tesla are taking it the "last mile" to commercialization.
These are both critical contributions. But if Musk were not the one to hire these engineers, it would Bezos or Branson or somebody else - when the idea is ready to be commercialized, someone will be there to fund it. Being able to promote an idea and attract investment is a real and challenging skill, but it's not on the critical path to introducing these innovations to society. (It is absolutely on the critical path for creating and sustaining an individual company, however.)
You severely underestimate his impact on the success of both Tesla and SpaceX, it extends beyond just a 'getting funding and charming people' perspective. Ask Bezos about combustion instabilities in turbopumps and he isn't going to give you a 20 minute lecture on the pros and cons of gas bearings and alloy design. Toyota, the world's largest auto manufacturer, is still avoiding making an electric vehicle.
Musk is eccentric, and doesn't have all of his communication go through a PR team. Show me anybody else at a similar publicity level who isn't behind 3 layers of PR firewalls. Of course there will be scandals. You just don't see all the detestable opinions the other rich and famous people have.
In addition, he has a lot of powerful enemies. Big Oil, ULA etc have been hit hard by the work he's done to bring new tech to public consciousness. Who Killed The Electric Car etc. I'm surprised there haven't been many more of the unfalsifiable type of scandals or even court cases tying up his time.
3 years ago, everybody loved him. He was saving the planet with Tesla and bringing back American access to the ISS with SpaceX. Suddenly people care more about him not being married to the celebrity he is having children with, or that he isn't happy with a corporate deal, like somehow we're all major Twitter shareholders. It's ridiculous, and I'm pointing out how the media is shaping people's opinions on frankly irrelevant details in the greater scheme of things.
I'm not a lawyer, and I haven't read the contract Musk made with Twitter. Unless you're somehow different on both of those counts, it may behoove you to consider where your strong opinions on this matter come from, and whether they are really yours.
So Musk's enemies are Ars Technia. Then it wasn't about enemies. And now Musk's enemies are so plentiful and powerful, that I'm not even allowed an opinion, I'm just a dupe.
Musk's reputation was killed by Musk, and it was because he showed the world who he was. I realized his words were nonsense and formed an opinion based on his actions. You should consider doing the same.
As a final note, I think you should consider it a red flag in your own thinking when you can't even conceive that someone would disagree with you on this topic, and you need to invoke a conspiracy to explain my having a differing opinion. Regardless of how you feel about Musk, even if you're correct, that should jump out to you as a problem which deserves reflection.
Yes, the world has nuance. There aren't good guys and bad guys, everyone is mostly in it for themselves. It's all a big, ever-changing war for resources, all the way up from bacteria to us who think we're somehow above it all. Everyone is allowed their opinion, and nobody has to agree with it.
It isn't a conspiracy that rich people control the media - this was a big part of people's initial objection to his purchase of Twitter, wasn't it? Why would it be in any way controversial that other rich people don't like him and are trying to undercut him? Isn't this even what you're doing, on a small scale?
I absolutely understand people don't like him - I don't particularly like him easier, but I am impressed by the things he's managed to achieve. I don't need to like him as a person to recognize that he's done impressive things. And I don't think either of us are qualified to be making pre-judgements on whether the Twitter contract is Musk's Spruce Goose or not.
CORRECTION: I misspoke, I meant to say there were sexual _harassment_ allegations, NOT assault. I can't edit this comment anymore, but I'll email the HN admins to see if they'll fix it (ETA dang did). I apologize.
How did powerful enemies force him to make a public bid to buy Twitter, and then force him to back out of it? I'd like to hear the non kooky conspiracy explanation for that.
Who said anything about him being forced to do such a thing? People make bad decisions all the time, including Musk. But given human nature and frailty, people under a great deal of pressure and opposition like musk is, are likely to make worse decisions than they otherwise would.
I see in Elon a trait I also have, which is to pick up random things, get interested in them for a while, and start to do things, and then realize you're not interested in it at all and drop it. I'm thinking of tunnels, neuralink, AI, taking Tesla private, child saving cave submarine, things like that. I can easily imagine he thought one day that he wanted to get into social media, went full steam ahead, and then realized he wasn't all that interested.
It's bad, clearly, when this has negative externalities. A better Elon would stop himself from hurting people with these adventures - but, I also think it's possible that without this trait, whatever you call it, Elon wouldn't have made the progress in the areas he has. On net I think he's still done a tremendous amount.
> Musk holds a key piece of America’s future in space in SpaceX.
Let's stop glorifying the personality - when has that ever worked out well? The US will get along fine without Musk (maybe better without this cult of personality).
There is zero indication that he would do such a thing as he has no history of doing so. Elon spares no breath praising NASA any time he is asked about NASA.
The "cave diver paedophile" incident made it abundantly clear to everyone willing to see that whatever else he may be, Musk is a malicious clown. It was always only a matter of time before that had greater consequences.
Everyone has said something they don't mean out of spite. Politicians and billionaires are held to a higher standard by their fans/haters, but I really think they shouldn't be.
It wasn't just the original "pedo guy" comment. Musk also hired a private investigator to dig up dirt on his target. He tweeted more, and emailed a Buzzfeed reporter alleging his target was a child rapist. This wasn't just one moment of spite.
Yeah, whomst among us has not hired a PI to track down dirt on someone who called us dumb on Twitter then lied about our childhoods in court to avoid consequences?
Taking your version of events at face value: Musk hired a private investigator to dig up dirt on someone who merely criticized his rescue plan, received some lies from said investigator, and uncritically repeated them to his massive social media following, thus smearing the person concerned ... and this makes Musk a tireless advocate for the truth and social media sanity.
Musk cultists are the worst.
PS, if Musk can so easily be deceived into spreading false information --- even when he, so incredibly rich and smart, hired the source of the information --- why would you trust anything he says?
EDIT: "Musk cultists are the worst" was out of line. I apologise.
You would have had a really great comment if you hadn't signed off in a patronizing way. If you're trying to reach people, don't alienate them. If you just want to talk shit and don't want to reach people, please stop.
Saying "Musk cultists are the worst" was out of line. Otherwise what GP said was correct.
If it helps, I don't think you're a cultist, I'm sure you aren't a stupid person either, but you have this totally backwards. I don't presume to know how that happened, other than that it's something that happens to everyone from time to time, myself included. This is a sincere, no judgement invitation to reconsider your position and realign with reality. People who care about free speech don't respond to criticism with left-field accusations - that's a diversionary tactic. People who make serious buyout offers aren't trying to insert weed jokes in there.
Have you noticed how FSD is always one year off? And now out of left field, there's a robot coming that's one year off? Isn't it weird that, if this technology is in development, it had to be demoed by a dude in a suit? It's pretty obvious to me that FSD is way, way more than a year off, if Tesla ever achieves it at all, and that this robot is a last-minute fiction to cover up some weakness or perceived weakness of Tesla's position.
Musk's basic tactic is a gish gallop. He's just throwing out so much vaguely futurist nonsense that some of it will strike you as brilliant. But it's the illusion of brilliance. There was a time when I found it compelling, too. The world is messed up, and at first glance, he looks like the only one who's proposing solutions that are sufficiently bold to tackle the problems.
But they're hollow and meaningless. He never delivers. What he does deliver is nothing like what was promised.
"People who care about free speech don't respond to criticism with left-field accusations - that's a diversionary tactic. People who make serious buyout offers aren't trying to insert weed jokes in there."
You didn't actually backup much of anything you forward as argument points.
The gish gallop you point to is his trolling, having fun - but that doesn't mean he's not serious or genuine otherwise.
I doubt you've actually balanced out or thoroughly thought through your arguments either.
Before Tesla became the scale it did, at its beginnings, you probably would have called his intentions with Tesla "vaguely futurist nonsense" - same with SpaceX's reusable rockets - "that's absurd, no one's done it before - it's impossible!"
So I wonder if you should brainstorm and/or analyze the positives regarding Elon and his companies and then see how that balances out your conclusions.
> You didn't actually backup much of anything you forward as argument points.
I assumed that, being someone familiar with Musk, you'd be aware of his promises around FSD etc. Most of my post is interpretation of his actions, rather than claims. I can't really "substantiate" my interpretation, I am the source there. So I'm not entirely sure what you're asking me to do here; I am happy to provide more sources, I just don't really know what you're asking.
The gish gallop is not limited to trolling. Having Tesla, SpaceX, and Neuralink is part of it. Making an offer to buy Twitter is part of it - regardless of how trollish it is, signing a deal to buy a company is not "merely trolling", some rude but inconsequential behavior. It's not that the gish gallop is a thin coating of candy over a yummy chocolate core of great ideas. There's no substance there.
When I first heard about Musk I thought he was pretty cool and that he was making important things happen. But when I learned more about him, and started to scrutinize his actions, it became apparent that none of what he says means anything, and everything he does serves to enhance his power and prestige rather than building a future for humanity.
My opinion is a considered one. I don't think there's anything else I need to say on that matter.
> Don't you think someone guiding the development of companies like SpaceX, Tesla, and others, would invest more time into those - rather than say first doing a thorough background check first on a private investigator he newly hired?
If you’re going to hire private investigators to dig up dirt on people who criticize you so that you can smear them to the public, you have a responsibility to be thorough, lest you defame them. It’s not as though Musk has to hire private investigators to smear his critics. If he’s too busy to meet the basic minimum responsibilities of human decency, he could just not hire private investigators to smear his critics.
So Musk was "too busy" to tell someone "do a background check on this guy" (who was a convicted felon, so not difficult), but not too busy to repeat his claims in emails to Buzzfeed etc.
I'm not perfect, but at least I haven't tried to ruin someone by spreading lies about them to millions of Twitter followers.
How can you at all claim Musk has any shred of integrity when he double and triple downed on trying to ruin someone's career? What he did was textbook cancelling, but for some reason it's okay because it was Musk. He never came out and apologized for being wrong, hiring an investigator to violate someone's privacy or the subsequent smear campaigns he ran. He literally ran his own ideological mob at this guy, and yet you think it's the people attacking him for it that are wrong.
> Oh, thank you arbiter of truth - however can we be so good as you to never make a mistake in our life?
Ok got it. So Musk was an idiot, and made a really stupid mistake.
Since you admit that this was all a really stupid mistake, and Musk apparently committed this stupid mistake, then it is reasonable to think that Musk attempting to buy twitter was also a really stupid mistake.
Other people were claiming that it is completely impossible for Musk to do something so stupid as to try to make a mistake by buying twitter, and then attempting to back out.
But, you should agree that those people are wrong, and apparently, yes, Musk can make very stupid decisions sometimes, like in the cave diving incident.
I found this part most interesting. Public awareness of the Delaware Court of Chancery is about to skyrocket during this court battle.
The fact that Musk is working in such bad faith here — that he seems so unconcerned with law and the contract he signed — cuts both ways. On the one hand, it will certainly annoy a Delaware chancellor; Delaware likes to think of itself as a stable place for corporate deals, with predictable law and binding contracts, and Musk’s antics undermine that. On the other hand it might intimidate a Delaware chancellor: What if the court orders Musk to close the deal and he says no? They’re not gonna put him in Chancery jail. The guy is pretty contemptuous of legal authority; he thinks he is above the law and he might be right. A showdown between Musk and a judge might undermine Delaware corporate law more than letting him weasel out of the deal would.
> What if the court orders Musk to close the deal and he says no?
I can't believe people are taking this very silly statement seriously. This is utter nonsense. There are remedies for people who disobey court orders. Having assets makes you more vulnerable to a court's authority because you have something to lose.
If a court orders specific performance and he doesn't do it then he's liable and the court will take his assets to compensate.
Is Levine seriously suggesting that US courts don't have the authority to impose financial penalties, find liability, and seize assets? This is such an absurd thing to say it's hard to find a way to charitably respond.
Anytime the idea of a wealth tax is brought up, I see commenters coming out of the woodwork to say that it would be impossible to actually collect it from the wealthy. Though I will note that it seems like we are able to collect yachts and planes from Russian oligarchs now, so perhaps our techniques have advanced in the last few months.
This is a different problem and has to do with privacy. The government can't compel you to disclose everything you're doing without cause, and without due process.
Having a court ordered judgement entered against you is cause and is a result of due process. It's an entirely different scenario.
Assuming that a wealth tax was passed, wouldn't the cause here be proper reporting and collection of said tax? You can declare illegal income on your federal return and pay taxes on it. They're not (in this hypothetical I guess?) asking what you're doing, just how much it's made you.
The issue is that people can change how they own things so they don't have to disclose. The law is necessarily public and people can adjust the way they structure ownership accordingly.
We see this all the time already. For example, Medicaid won't pay for your extremely expensive end of life care if you have assets. So, people give away their assets (to a trust, to family) before applying for Medicaid to cover their nursing home. It becomes a game of cat and mouse. People will adjust where they can to avoid tax.
This also already happens with income tax. For example, executive compensation is primarily provided as capital gains rather than income because it's much more tax efficient. Everything is in the open.
The other issue here is one of cost. The IRS has to fund the cost of analyzing filings and deciding to audit. This is very different from a post-judgement scenario.
And the added problem that the assets need to be valued to tax them - for liquid assets this will be much more challenging than income. Things like CGT or income tax happen at the same time as a transaction in dollars so they are easy to value. Wealth taxes would be open to gaming using the same process you describe here.
I don't think there's really any way around this. It just lowers the maximum amount you can extract via that tax. You have to tax at a rate low enough where it's not worth the expense to get around it in the first place. Maybe this is enough to make a wealth tax altogether not worth it federally (how much does it cost to set up a trust and transfer assets? can't be a lot), I don't know. But I think that's all part of the calculus of whether or not it's reasonable to institute the tax in the first place.
The IRS has no trouble prying and finding out that you have unreported income. The idea that they can’t find out you have an unreported Picasso painting that you bought for 40 million or a beachfront mansion is silly.
Roe's finding of a fundamental right to privacy in the 14th amendment is VERY different from the rights provided by the 4th amendment, against unreasonable searches and seizures.
1. A surprising departure from the rules and norms - I assume probably illegal.
2. Part of a campaign designed to ruin Russia.
You might have misunderstood the argument the anti-taxers (pro-property?) people are bringing up. There isn't a physical problem with taking wealth away from people, that part is very easy to execute. The problem is the 2nd order effects where it will turn into an unfair confiscation and do substantial damage to the ability of the host country to invest and prosper, bringing general ruin to us all. The fact that wealth confiscation is being deployed against Russians is no surprise from that perspective and not undermining the core argument.
However, if it makes you feel better, I do agree that given that the War on Terror was pointed inwards fairly quickly I expect the techniques used in the War on Russia's Economy will also move to US home soil in the next decade and there may well be large scale wealth confiscation in the US.
>There isn't a physical problem with taking wealth away from people, that part is very easy to execute. The problem is the 2nd order effects where it will turn into an unfair confiscation and do substantial damage to the ability of the host country to invest and prosper, bringing general ruin to us all.
But this does not apply to us when we seize Russian assets? By your very logic if seizing wealth is so problematic, well we just seized a whole lot of wealth. I don't think this example actually works here.
We want to damage ourselves by sanctioning others? You said that taking others wealth makes people lose trust in you and therefore hurts yourself. So I don't see why we would do that on purpose.
I think you're confusing me with someone else. I didn't say anything about trust.
But, I suspect the other guy was referring to trusting in economic stability. I don't think there's any reason why sanctions against bad actors like Russia might undermine trust in American investments.
I dunno. I'm not a lawyer. Possibly one of the ones against piracy?
If you want to make the argument that it is literal and raw might-makes-right on the high seas, ok. But that type of barbarian world is not one I encourage and it'd be a bit stunning to find someone who wants the world to work that way.
The US wouldn't do well in a world like that either, US citizens have more assets to seize than foreigners do.
Has stealing random stuff from Russians helped? I'm not a maritime lawyer or an expert on how war in the 2020s looks, but I don't think Russia was sailing troops into the Ukraine on billionaire pleasure yachts.
There is a pretty good chance this is just making people feel bad and making it harder to normalise the situation. This is action is literally not helping, and is a breach of good norms against stealing. It means the Russian billionaires will be forced to spend more of their money in Russia and have a great reason to bear a grudge against the more Western powers.
> It means the Russian billionaires will be forced to spend more of their money in Russia and have a great reason to bear a grudge against the more Western powers.
Any Russian billionaires that don't realize that this is more of Putin's incompetence than western antagonism deserve a random punitive gesture.
In reality the majority of them will see this as a great reason to bear a grudge against Putin.
I'm still not following. How do you think this has helped the situation? What do you expect to happen differently in the future that will be to our benefit?
Maybe I've missed out on some life experiences, but I've never seen petty theft help defuse a tense situation. It is not going to be beneficial to achieving a sane outcome.
> In reality the majority of them will see this as a great reason to bear a grudge against Putin.
This is wishful thinking. All of the thievery was done by NATO - there is a very high chance that they will identify NATO as the threat to them.
And if they do blame Putin (which I think is unlikely, groups tend to close ranks when threatened) how is that supposed to help? What are the billionaires supposed to do that the Ukraine military or US State Department can't do? Billionaires aren't that big compared to a government military.
Why would you expect your day to day interactions to act as framework for how members of a warring nation displacing millions and killing innocents under the guise of "nazi hunting" should react to things?
Putin may have them under his thumb, but that doesn't mean they should be left to their comfort rather than forced to face the direct consequences of Putin's actions.
1. You're linking the Washington Post. Do you want me to go find an article on RT that says the Oligarchs are united against the US? That is a long article claiming to know things that they can't and don't know and is political propaganda to help push this terrifying US proxy war.
2. What do you expect to happen here? How do you think these thefts have helped the situation? Even if you want to argue that these people now hate Putin, they are powerless. The west just stripped them of all their assets.
There's an entire profession who's job it is to go full scale threat modeling on assets held directly or indirectly by the extremely rich. Seems likely they either didn't account for war sanctions or thought the impacted assets would not be worth putting behind 10 proxy legal owners for the unlikely case of such sanctions. Yachts and planes seem like they'd be particularly hard to turn into assets owned by a local proxy entity, since they move around so much.
Yachts and planes are physical objects and represent a tiny, tiny fraction of a billionaire's wealth.
Wealth is actual ownership interest in valuable companies, which can be moved offshore or the person can renounce citizenship and relocate to a country with friendlier tax laws in the extreme case.
Might still be worth it if there were a significant wealth tax and you did it in advance of an IPO or other event that greatly increased your net worth.
A wealth tax would also have the effect that people expecting to generate lots of wealth would just move somewhere else to do so, or not come to the US in the first place.
Wait, is that what you always see as the argument against it?
Whenever I've seen it brought up it's always that it would require a constitutional amendment (specifically in the US). The federal government isn't allowed to do taxes that way under the current system (Article 1 Clause 2 Section 3).
Hell, the feds weren't even allowed to do a straight income tax until the 16th amendment.
Yes, I mostly see people saying that laws don't matter because billionaires are beyond law at this point. Who knows, perhaps that's astroturfing by troll teams employed by billionaires to try and discourage the masses. As you said, they've already got plenty of lawyers to work on it from the constitutional end - including 6 of the lawyers on the Supreme Court.
It’s easier to collect from foreign billionaires who don’t have the connections. Igor will probably not fund your re-election campaign, but Musk might.
Russian oligarch yacht seizures are a better argument for them than for you. They're worth tens of billions of dollars, and all the US can get is a nine figure boat.
So, 10% of their net worth by leveraging what was thought to be illegal and unexpected seizures? Most of which was done by the EU. Sounds like a ringing endorsement of how the US would implement a tax that the wealthy can prepare for and happens within the rule of law.
Levine has addressed this in past columns. Of course the courts have such authority, but individual people have to enforce the court's decisions, and sometimes those people are reluctant to take on Musk.
Musk is a special case because he has done things like threatening to ruin the careers of SEC lawyers who have come after him, and he has the power to make that happen.
Is this illegal? Probably. Does Musk get away with it? Yes.
You're talking about Musk pressuring Cooley to fire a lawyer who previously worked against him at the SEC. But the result was that Cooley told Musk no. Hardly a success story for Musk.
There's no shortage of law firms willing to go up against billionaires. Hell, there's no shortage of firms willing to go up against criminal enterprises like drug cartels.
The idea that Musk is somehow more threatening than the types that the US court system regularly puts under their thumb is simply laughable.
So what? This is business as usual for law firms. They will lose clients every time they take a case due to conflicts of interest and so on, even if everyone has a happy outcome.
What Musk did was petty and questionable, but it didn't fundamentally change anything for Cooley.
It's unlikely Musk expected Cooley to cave to his ridiculous demand. It's very likely the intended target for this action was every person who deals with Musk's future illegal actions.
"“What are they going to do if there is a judgment and he says, ‘Well, I’m still not going to buy it’?” said Zohar Goshen, professor of transactional law at Columbia Law School. “They don’t really have tools to force him to go through with it. You don’t put people in jail because they don’t buy something.”"
1) The court would issue a judgement for Twitter, against Musk, for $44b.
2) Musk would either voluntarily pay it by selling his own assets, or he would refuse. If he refuses, then:
3) Twitter would go about seizing and selling Musk's assets, until they have raised funds to cover the $44b judgement.
Twitter could levy whatever brokerage or account Musk uses to hold his shares. Somewhere there is an account which records the shares. Twitter would serve the entity managing the account with a levy, and order the shares be liquidated.
1) Sure, but this wouldn't give him any protection. On the contrary, there would be a ton of extra liability and exposure if he were to refuse to process a levy.
Shares don't need to be held in a brokerage. There's always a process to identify and seize the property in question.
2) There's no such thing. TSLA is a US public company, traded on US exchanges. It's simply not possible for shares of the company to exist outside of US jurisdiction.
Just having a share certificate doesn’t make it s bearer form. The corporation would have to set up this ahead of time. I don’t know the status of Tesla shares that he owns but it would be very weird if they aren’t registered securities. It would also raise a ton of questions if they started issuing bearer shares after a court injunction.
Order the legal entities which possess the shares to transfer ownership of them. Actually keeping track of stocks is complicated but ultimately a boring bureaucracy.
The one used by most is DTCC, it’s basically owned by the banks who use it, not something that could be bought.
The legal entity which maintains the list of teslas owners is ultimately tesla, but that duty will be likely given to dtcc.
A stock is ultimately just an entry on a list maintained by the company, most offload the managing of the list to DTCC and usually the pointer isn’t to you but to your broker dealer.
There is no sense of being able to hide ownership overseas, we’re talking about an American company keeping a list that points to someone, that list can’t be offshored.
A little more nuanced take: the transfer agent maintains a list of shareholders at the company's behest, the DTCC is one step further down the chain, operating as a clearinghouse between brokers and banks. The list of shareholders is managed by the company or it's bookkeeper, the "transfer agent". Insiders and people who own paper certificates are on the list kept by the transfer agent, directly owning their shares on the company's books, alongside Cede & Co (a partner of the DTCC), who owns the bulk of all publicly traded shares. Cede & Co, and it's partner, the DTCC, then maintain a list of which shares beneficially belong to each of the DTCC members (brokerages, banks). The brokerages and banks in turn maintain lists of which clients beneficially own the brokerage's shares.
Yeah for every explanation there’s another more complicated one, it’s a pretty crazy mess. A long chain of abstractions and not every one uses the same stack.
Note that the last time I checked, DTCC had over one quadrillion dollars of assets under management. They operate at a financial scale unlike any other entity on the planet.
For them, $44b is the crumb left behind after you've eaten the small potatoes.
Totally agree with not being able to hide owner ship (especially when are a director, major shareholder, and ceo) but I think DTCC is really only in the mix when you buy/sell shares via an exchange, and their focus is the settlement between brokers and exchanges. The registrar and transfer agent is who maintains the list of share holders (Computershare is the resgistrar and transfer agent for Tesla).
He (or an entity he owns and controls) owns the shares, and and another company (computershare in the case of Tesla) maintains a list of all the shareholders (registrar and transfer agent). No one else “owns” them
He may just own the shares directly with the company (we’ve largely done away with paper share certificates). Or he may have transferred them to his broker (Morgan Stanley?) (who in turn might custody them with a custodian BNY Mellon?) who holds them on his behalf. If he then transferred those shares to say DBS in Singapore MS/BNY is going to inform computershare “fyi we just sent all those Elon musk shares to DBS in Singapore” and DBS is going to say (FYI we know have custody of all those Elon musk shares)..,and when you go looking for those shares all you have to do is go to computershare with a court order and say where are Elon’s shares, and they’ll be like, oh over at DBS in Singapore… and for all I know the registrar can probably just send a note to DBS in Singapore and be like (ahh we got a court order to transfer these shares to some other guys so we did, subtract $44b from his account)
All of this is a long winded way of saying that “shares” are just entries on a ledger maintained by the company or someone else on their behalf, which makes seizing them, typically pretty easy…
Who cares, why would Tesla be beholden for the actions of its largest shareholder? Musk is acting in a capacity completely outside of Tesla. To think that Tesla is somehow connected is disinformation.
Yes, and they need to get paid in order to do something. Nobody really thinks that Elon Musk did something greatly terrible to Twitter by not buying it, this means Twitter will always get more crap from chasing Elon than not chasing him. It just happens to be that the payout will be big enough for them not care about the flak.
BUT, if Elon fights back hard, Twitter will have to stop.
Contempt of court is independent of the original cases criminal vs civil distinction.
You can have criminal contempt in a civil case and criminal contempt in a civil case. The rules vary by state but in PA it’s civil contempt is used to force people to comply where criminal is punishment for disobedience.
Are you under the impression that judges presiding over civil cases cannot exercise their inherent power (in some jurisdictions) to jail those in (severe) contempt of court?
There is no ability to not comply. Seizure of assets is handled with financial institutions complying, and with the police backing up court seizures for physical assets.
No one is going to assault a cop, or have their bank shut down due to non compliance.
Where I am, what often happens is the damaged party has papers showing debt owed. It then becomes a colllection issue, sometimes, in some jurisdictions court takes an active role, in others, you have to do the work yourself.
Eg, you have to find their bank, hire a sheriff(the seizure kind), and go get what is now "your stuff".
If there was then a lot of America would become slaves by not paying their debts. There may be contempt here though if Elon does something to really piss off the courts.
Perhaps it's just a general sense of disillusionment, but I've come to see that "court orders X" and "X happens" are entirely orthogonal. I will be personally surprised if Musk pays a single cent.
Depends I guess on how 007 you think the world operates (reference to James Bond) - X will happen, but maybe 2-10 years after various counter-suits.
Case studies are what has happened e.g. with Microsoft, other large businesses - long legal battles are fought, nothing happens while things are in limbo.
When the rubber finally hits the road, things happen fairly quickly, but until then it does look a bit like "nothing happens".
This is of course, a problem, perhaps one that needs innovating around.
What has happened to Microsoft? They still have a default browser pre-installed, Office wasn’t spun-off to another company… and I don’t remember the Java stuff anymore but I think nothing happened either, even though it’s a lot less relevant now.
> Is Levine seriously suggesting that US courts don't have the authority to impose financial penalties, find liability, and seize assets
No. He’s suggesting that Musk’s wealth and power will make the people who work in US courts reluctant to impose financial penalties, find liability, and seize assets.
Not to mention his bizarre hold on the public imagination. He's the worlds most simped compulsive liar. I think authorities may also be afraid of looking like Nazi jackboots on the neck of this innocent guy who would be in federal prison serving long sentences if he was just some obscure hedge fund dude, known only to other hedge fund dudes, like Bernie Madhoff.
I can't believe people are looking at this from such a silly angle. It's obvious that no court can order you to buy something. That goes against the personal freedom we have in this country, and if a court tried it, it would be an easy appeal. But that misses the point, because nobody is going to order Elon to buy Twitter. What MIGHT happen is, a court declares "Congratulations! You already bought Twitter! It has nothing to do with us, we just interpreted the contract. Again, congrats on your purchase, don't go getting buyer's remorse now winky face"
What are you trying to assert is false about this viewpoint? Specific performance is actually a kind of legal remedy and it can in fact be ordered by a court. It might be one of the last tools in a judge's toolbox, but I don't think it's anywhere near a "silly angle" after a quick googling of "specific performance".
That was a stupid order that would never survive scrutiny under prior-restraint doctrine. Specific performance is something different, though... I can't think of any constitutional problems that might block enforcement of that.
If he had the cash to buy it, they could force him to. But if he lined up financing and those people bail, what then? Would the court make him liquidate all his Tesla stock, without regard to how that would injure other Tesla shareholders? Having assets does make one more vulnerable to court judgments, but savvy birch people will set themselves up to remain in the driver’s seat when possible.
Note that in TFA, the continuation of this very silly statement is footnoted [6], which literally starts with "I made this joke before...", so none of us ought to be taking it seriously.
The footnote only applies to the "Chancery jail" bit, not the suggestion that the court may not want to risk a public showdown: "A showdown between Musk and a judge might undermine Delaware corporate law more than letting him weasel out of the deal would." - this sentence is after that footnote.
Well, throwaway09223, you certainly sound like as much an authority as a former Wachtell and Goldman Sachs associate. Strong arguments like "this is utter nonsense" and "this is so absurd [that I can't actually argue against it]" are sure to sway the educated crowd on HN.
If you would like to go see ways in which the government fails to penalize powerful entities, look no further than the financial crisis fines. What you were told were 10 figure fines ended up becoming a few million dollars in consumer relief headaches
> This is such an absurd thing [for Matt Levine, a former 3rd Circuit clerk, Yale Law grad, and Wachtell M&A attorney] to say it's hard to find a way to charitably respond.
If your interpretation of the post suggests that a highly qualified attorney is getting the basics of US law absurdly incorrect, you might want to reconsider whether you're understanding the intended meaning.
(Here, Levine is making a specific claim about the remedies that the Delaware chancellory court typically employs, not about the authority of US courts)
This is an appeal to authority that is not valid: there are plainly a lot of lawyers out there who's legal opinion leaves a lot of daylight against the actual law. Rudy Giuliani took a long time to get disbarred.
> This is an appeal to authority that is not valid
I'm open to that criticism; I'm typically pretty skeptical of appeals to authority myself.
But to be clear: the appeal to authority I'm making isn't "legal opinion of a lawyer" (I agree that's very weak) but rather "opinion on corporate law by a Wachtell attorney who practiced corporate law" (Wachtell is probably the best corporate law firm in the world, and clearly in the top handful)
It doesn't matter if they're affected. A judgement is going to be for a dollar amount. A court will rule that Musk must pay twitter X billion dollars. Twitter can then pursue Musk, taking basically anything he owns in terms of business.
They could contact the broker holding his shares and restrain them, order them sold, and collect the proceeds.
They could seize and sell at auction the real property of any of his businesses. SpaceX rockets? Office chairs? Servers? Anything.
All of this enforcement costs money. Twitter would account for the money spent seizing assets and charge those expenses to Musk as well.
Assets seized in this way (including stock) are often sold for much less than they're ideally worth. It's Musk's problem. Twitter would be empowered to seize seize seize until they've raised enough cash to cover the judgement plus expenses.
> They could seize and sell at auction the real property of any of his businesses. SpaceX rockets? Office chairs? Servers? Anything.
They could not, because he does not own those businesses outright. Doing so would violate the other owners rights. They can seize his shares in SpaceX, but not SpaceX property.
I’m having it hard taking you seriously given you making such a basic mistake of thinking they could seize spacex property directly. What industry do you work in?
Oh give me a break. Property of a privately owned company can be directly seized.
I have not done an analysis on exactly which of Musk's private companies are jointly owned, and how the ownership is structured. It's a comment on hn for crying out loud.
SpaceX is well known to have a bunch of investors. Put a little effort in before explicitly calling out that the government could seize rockets. It’s as silly as saying they could start just taking Model 3s from the Tesla factory to get their money back.
I think you're misunderstanding. It's absolutely possible to seize rockets, or model 3s, etc. That part isn't silly at all.
The only question is regarding which entity is liable. If a judgement were entered against SpaceX, for example, then absolutely rockets and real property owned by SpaceX can be directly seized.
Without looking, I'm certain there are at least a few companies owned by Musk which could have their assets taken directly.
We’re talking about Elon, not spacex. I don’t get how you’re confusing the two so easily. You claimed they can seize spacex property for Elon debt, which is 100% unadulterated bullshit.
If they take all of Musk's shares in SpaceX and acquire a voting majority, they can then use those shares to vote to sell off the company's assets at the next board meeting.
They could simply keep selling Elon's Tesla stock it until they had the money to cover the court order.
Why should the court or Twitter care if they end up converting 10x more of Elon's stock to cash?
I guess some day traders would get rich (and people that had to sell for the day or so when the stock tanked would take a bath), but that's the biggest problem I can come up with.
No, they still own the stock, the government hasn’t taken anything from them. The stock might be worth less money the same way a house might be worth less money if a city government decided to stop repairing the road in front of it, or if the city relaxed zoning laws, but the price of assets in the market isn’t a responsibility of the government, and it generally does not incur liability when it causes them to change.
I think a more appropriate example would be if the government did some work around the house and in the process damaged the house, thereby lowering the value. The thing being damaged is shareholder confidence, which I thought (but IANAL) taps into different securities-related laws.
If the government damages physical property it is frequently liable for the cost of repairs, but to the extent that a share of Twitter stock represents something that can be damaged, that thing is Twitter itself. If through illegal meddling of some sort the government impaired Twitter’s ability to do business (say, for example, by flagrant targeted refusal to grant work visas), then the company or shareholders could have a cause to sue the government. The government is under no obligation to avoid impacting Twitter’s share price, especially as a side effect of some unrelated fully legitimate exercise of government power like auctioning off seized assets.
Elon and Twitter have a contract. Elon wants out; Twitter doesn't want to let him out; the contract only has limited conditions to allow Elon out. The court is simply deciding which of two options is the case:
1. Elon's reasons are valid; he gets out of the contract for a $1B payment.
2. Elon's reasons are not valid; he has to satisfy the contract and pay $54.20/share for Twitter.
If the judge decides in favor of #2, it is Elon's responsibility to come up with the money. (If he doesn't do so willingly, someone court-appointed will step in and do it for him.) If that tanks Tesla, that has nothing to do with the court.
Now, Tesla shareholders can sue Elon for getting the company into this pile of stank....
If someone's car is seized by the government, it doesn't cause the value of everyone else's cars to drop by 50%, and if it did, I think people would sue the the government.
It's not like the shares are destroyed or immediately sold. If anything, they are prevented from being sold under pain of contempt, so could increase prices by limiting the supply.
You just continue seizing assets until the accumulated cash value realized from the sale of the assets matches the value of the financial judgement against the guilty party.
The drop in share prices as you do this is not your concern.
The Twitter board would have a tough time explaining why they didn’t enforce the rock solid agreement allowing the shareholders to sell their shares for an extreme premium.
But tech workers don't need unions, right. Must be fun for twitter employees to completely powerless spectators with no seat at the negotiating table while the lunatic has a chance at becoming their new King and turning their labour in to an election-swinging doomsday machine at the end of human civilisation.
He absolutely has the ability. He's demonstrated that publicly, with his verified presentation of having raised the $44 billion a few weeks ago (through a combination of financial instruments).
I don't think so, I mean, you are not just going to place a single market order for $44bn of stock, you are going to have liquidity problems because there is not that much buy-side volume in the market, so the price must fall drastically to attract new buyers. Also I assume musk has legal obligations not to do stuff like that to begin with, as an executive with fiduciary responsibilities to shareholders. If Musk can tank Tesla, Exxon execs can dismantle Exxon to save the environment. But there's also the fact that a lot of his Tesla shares are already leveraged on loans. The most likely course would be for him to take out loans on the remaining unleveraged stock, but he doesn't have enough of that at the rates the banks are offering.
Anyway, I'm no expert on Musk, and I have almost zero interest in Tesla, or Twitter, or any of this clown show. So maybe my ballpark guesstimations of all the relevant numbers are way off. So take it all with a huge pinch of salt. I am just some uninformed spectator watching two lizards fight in the dust and speculating who will win or whatever :)
To the extent that Elon Musk might represent a corner case w.r.t. the legal system even more than you’re average billionaire it would most likely be because of the national security tie-ins around SpaceX.
This is pure speculation on my part, but I don’t think it’s insane.
It appears that that's the remedy for failing to get funds, not for cold feet; there's a performance clause for the latter, so Levine suggests "Musk’s goal here is presumably to walk away from Twitter and pay only $1 billion in damages." - that Musk is negotiating by making a stink to even be able to pay instead of going through with the deal he signed.
Your repeating opinion of someone with extreme biases for clickbait. This fantasy of forcing musk to buy the company doesn’t exist in any contract. Your asking the court to make up a new contract and enforce it.
That’s not how the court works, except in extreme circumstances which don’t apply to this twitter acquisition attempt.
Also, Musk asserts that upto 50% of twitter users are bots, which is totally believable. So the chances Musk will have to pay anything is actually remote, since twitter would have to produce evidence that would reveal trade secrets.
Here’s my prediction: Musk will pay nothing because Twitter has allowed itself to be infiltrated with bots and revealing this will be far more damaging than losing out on a billion. Musk will walk away.
Ok let’s say he has a bunch of stock as well as paintings, cars, etc. how do you divvy that up? Cut the painting in half and give it to Twitter? The rich are very wise at hiding money in assets that cannot be evenly divided nor distributed. That’s why the vast majority of taxes in the US comes from the middle class, they usually sit on piles of cash and have salaries from which to levy fines to.
Most of the middle class in America has a salary, or at least a paycheck, but distressing little cash saved.
But they do pay the taxes that pay the bills.
This is one of those things that could genuinely cause problem for the entire US (corporate) legal system. There’s a genuine danger that the result of this case will be “some people are too powerful to be regulated by the US system, and this is now obvious”.
If this court doesn't have real power against clever C-suite types, maybe it's better that we find that out. In terms of compensation and personal money management, Musk isn't doing anything that other wealthy execs haven't done. (For example, Steve Jobs famously took a $1.00 per year salary for a long time.) Either there's an enforcement mechanism that works or there isn't.
Steve Jobs also famously illegally parked in disabled parking spots and paid the fine because he didn’t care. And he famously leased a new car every 6 months because he didn’t want to put license plates on his car.
And tangential to that kind of behavior, Apple recently was paying a weekly 5 million Euro fine in the Netherlands rather than comply with an order from regulators.
Jail. The consequence needed here is jail. Put these clowns in jail with junkies and wife beaters and gang bangers. While we’re at it, treat them the same as their local pd treats the most vulnerable in their community. They deserve no better than the most vulnerable and marginalized.
Jail for parking multiple times in disabled places or for buying a car every 6 months? Hard no from me. Both of those things are not the same as beating people.
If he Wants the space that bad he should buy it. The city should make the fine proportional to the sum of wealth and income over 100,000,000 to deter shenanigans. Repeat offenses should be points on license. DMV should adjust their policies to prevent this for the rich only abuse through fines that reflect the above metric. Try thinking through a problem and not just jerking your knee.
I think its clear that there is a set of people well are willing to violate certain laws because the consequences of such are trivial. That scales up with wealth because most misdemeanors result in a fixed monetary fine - which is less impactful for someone with wealth.
When the consequences of a law violation are trivial, it’s no longer serving as a deterrent. So I think we need to find a way to deter everyone, kind of on a sliding scale or something?
Likewise, there needs to be real consequences for corporations which take advantage of paying fines as a cost of doing business. One violation can be a mistake, but it sure as heck better give you a solid reason to never do it again.
> There’s a genuine danger that the result of this case will be “some people are too powerful to be regulated by the US system, and this is now obvious”.
This should have been obvious by now. Cash rules everything around me.
I’m in a white and homogenous area of the us. Cash does indeed rule every thing around me. There’s not a problem that can’t be solved with cash. Kill a few kids drunk driving or shooting recklessly? Cash in the right pockets and the evidence will be inadmissible and the case goes kaput. Want some more privacy? Your neighbors might suddenly find the neighborhood inhospitable with cash in the right hands. Want your kid to start for a team or graduate? There’s palms out. Very few people are principled enough in this economy to refuse a bribe. If you want to remain principled I suggest you think through your price before you’re asked if $1,000, some blow, and a cheap lap dance is enough and you end doing more for free when you’re extorted.
There’s a tendency for sheltered and privileged people to be aloof to the corruption all around them.
I'm not sure how much the first line really matters, as I grew up in a rather diverse top 25 city, but yeah, experience was about the same.
In high school, everyone knew exactly who to call if you got a DUI. 10k was the going price to get a certain lawyer who gets the case in front of a certain judge and however that worked, the charge was dropped to a moving violation. Kinda sick how the system works.
Justice in America isn't a right, it's a product you buy. Public versions should be non-existent or inferior. This is so that the best people get access to the best version of the product that money can buy. By definition in America, the best people are rich people. God rewarded them with money after all. Therefore they are closer to god and thus superior. Why be rich if you can't spend money buying things like justice, health care, education, and clean water?
The first line only matters to racist whites that assume only BIPOC are corrupt when data shows white wealthy people commit far more crime and more substantial crimes at that.
Not the parent, not just cash, but capitalism literally means capital is (political) power. Just because you don't bribe police officers with cash that doesn't mean your political system isn't corrupt. In the West we just find it more comfortable to talk about lobbying and public-private partnerships instead of calling it what it is.
That is a great point and I'm not disputing it at all.
We all know monarchy is tyranny, but in that category there is quite a difference between a cult ruler with a bag of shrunken heads who is getting his orders from God vs. a stable, well managed, system in which the institutions basically function, including to some extent for the poor, and yet in which which the ruling class still basically dominate and exploit everything and everyone in order to enrich themselves and maintain their power.
The latter is a social malady, the former is completely chaotic. I think people are concerned that the US is resembling the latter less and less, and resembling the former more and more.
US law obviously works in favor of billionaires. I doubt even Musk would want to expose it further, and the other parties involved in this deal surely don't.
They will set their lawyers at it and come to a settlement. The super rich know better than to be at each others throats, that sort of behavior is for the poor...
Except that some of the ultra-rich have major personality disorders which cause severe cognitive distortions and erratic and impulsive behaviour. Their power and influence tends to allow their cognitive distortions to spread in to the general population, which eases the cognitive dissonance that would be a problem for normal people. But anyway, these people cannot be compelled in to psychiatric treatment, and who could convince them? Who do they listen to? We're talking about a category of people who are notoriously difficult to get to enter treatment, even when they are not princes and emperors, but average Joes.
I mean, if a street sweeper thinks he is King, you might convince or compel him to get treated when he comes in to contact with the system. But when the King thinks he is King... that is a much more difficult problem to deal with.. usually the kingdom joins in with his madness so as to keep him happy.
History says that these people likely reside in impenetrable bubbles. The idea that he is so special as to avoid the court system sounds a bit like “let them eat cake” as there is no bread.
I have no insight into this but it looks that it will happen eventually. ( the degradation of the US gov authorities on the conduction of large financial arrangements)
>According to the U.S. Securities and Exchange Commission (SEC), Stewart avoided a loss of $45,673 by selling all 3,928 shares of her ImClone Systems stock on December 27, 2001, after receiving material, nonpublic information from Peter Bacanovic, her broker at Merrill Lynch. The day following her sale, the stock value fell 16%.[49]
Martha Stewart went to jail for 5 months for a meager case of insider trading. Musk manipulated Tesla stock in front of, literally, the whole world and got a slap in the wrist (i.e. a fine that comes to about 0.1% of its net worth). A citizen would to go jail forever for a similar thing.
> Martha Stewart went to jail for 5 months for a meager case of insider trading.
I believe she went to prison for lying to investigators. The insider trading they couldn’t make stick. So in the end, maybe the cases aren’t so different?
Facts. She also just paid a fine for the insider trading. Her criminal case was due to conspiracy, obstruction of justice and lying to federal investigators.
Smoking weed makes you lose your security clearance, Musk did it on camera and still has his because of "reasons". That is one example of the rules that apply to most others not applying to him.
you're missing the point of the rule. the issue with smoking weed isn't really about having impaired judgement, it's that weed is still illegal at the federal level. there are all kinds of low-level crimes that can put your clearance at risk. which kinda makes sense... they want the kind of person who strictly follows the rules for cleared positions.
I agree it's a dumb rule, but that seems orthogonal to whether Musk should have to follow an established rule. Repealing the rule would be best, but while it's in place equal enforcement is much better than enforcment for everyone except petty billionaires.
> still has his [security clearance] because of "reasons".
Does he? I don't remember any resolution to that, but I thought they "temporarily" suspended it pending an investigation and then never completed the investigation.
> ...I thought they "temporarily" suspended it pending an investigation and then never completed the investigation.
that's the theme of this entire thread : rich person has a slap on the wrist announced publicly but then the punishment is never successfully fulfilled.
I'm saying the opposite. I thought they suspended his clearance pending an investigation and then the investigation never ended. Just like if you're in jail pending your trial and the trial date keeps getting pushed back. Sure, you haven't been found guilty, but you're stuck in jail so does that matter?
I might be wrong that they suspended his clearance or that the investigation wasn't done, but that would be a different point tag. What you're making.
Agreed, this situation is uncomfortably similar to a number Trump crises. Much of our legal system is based on norms and good faith, which a sufficiently motivated and powerful psychopath can pervert to their advantage.
I have no idea what will happen here. Musk is clearly in the wrong both legally and ethically, but I suspect he will weasel out of resbonsibility for the damage he's caused. That alone will be bad enough, but the much larger risk is that it opens the floodgates for slightly less powerful scumbags to flout the law.
US law and democracy are shakier than I've seen in my lifetime, and Musk is actively taking a sledgehammer to a piece of that foundation for his own greed and whim.
It's wild to me that people think that Elon might actually face legal consequences for this.
The Delaware court isn't some magical place run by elves. It's a court in the US. You know what's a lot cheaper than $34 billion dollars, or heck even $1 billion dollars? $200k for 3-4 judges.
The Supreme Court just changed the law of the land based on a right-wing political campaign. You think a billionare, let alone the richest billionare is going to be subject to any serious consequences? It's absurd to even entertain this.
> The Supreme Court just changed the law of the land based on a right-wing political campaign. You think a billionare, let alone the richest billionare is going to be subject to any serious consequences? It's absurd to even entertain this.
You know who has the authority to overturn that decision? Our democratically elected legislature.
Are you referring to the legislature where one house is deliberately unrepresentative of the people, and where the other house has been gerrymandered into unrepresentative oblivion, and whose bills are signed by an executive position who has preposterously lost the popular vote in two out of the last six election cycles?
Yeah, the one completely controlled by the party that says it's pro-choice.
> executive position who has preposterously lost the popular vote
What does the popular vote have to do with the presidency? Neither party strategizes to win the popular vote because the popular vote is meaningless. Therefore, the outcome if the popular vote has no value in determining who would win a popular vote should that be the metric by which the president is elected.
I wouldn't be so sure a hypothetical federal law enshrining a Roe-ish right to abortion would itself survive the inevitable challenge to its own constitutionality.
Yes, the supreme court decided that the rights of women were up for democratic election. That's fucking great when you have an anti-women's rights party.
I think it's more about the people who murdered Epstein getting away without consequences or even an investigation than the fact that a rich guy, eventually, after repeatedly sexually abusing and trafficking children for years, finally was facing serious legal risks which he might've evaded.
It would mitigate the problem if institutions could be strengthened by design to be less sensitive to corruption or special treatment.
There are lots of successful examples - constitutions, voting, term limits, separate judiciary, non-political commuters, etc
The big problem I see in the design of egalitarian systems, is explicitly addressing the need for continuous response to new forms of centralization. I don’t know of any significant systems that were designed with any explicit statement of prioritizing that (vs. just general support for fixes, amendments, etc.)
For instance, the centralization of US political power into only two parties, where (temporary) single party rule of three branches is actually a practical possibility should have triggered some major reforms before it spun out of control.
A simple requirement that no coordinated individual or organization have sway over more than 25% of political seats, and political organizations at the federal and state levels must be separated, would do wonders for decentralization and better representation.
But the constitution is silent on any guidance or requirement on addressing new power centralization problems.
It is the hard root problem of power, but not systemizing progress on it is to accept inevitable dystopia
> But the constitution is silent on any guidance or requirement on addressing new power centralization problems.
The federal constitution says that voting is left up to the states, so arguably the centralization problem is ~50 different experiments which have all gone wrong in the exact same way.
You could say that the federal constitution should have put some guidance in place to stop exactly this correlated failure, but ironically that would introduce more centralization as there would be one rule forced on all the individual states.
Whether that's a good idea or not I think depends on how good the rule is in practice. Unfortunately the rule you suggest highlights just how difficult it is to write a good one. For example, how do you define "coordinated organization"?
If both major parties split into 50 different organizations that all happened to endorse the same candidate for president (but for nominally different state-specific reasons), should the SCOTUS have the power to ban those political organizations (and perhaps ban one and not the other)?
Fortunately we can look to other countries that have managed to avoid political duopoly by using voting systems which don't penalize people for voting for new parties. Even better, some US states have already implemented such a system[0], and, going back to your point about constitutions, the people of Maine managed to introduce RCV not because of a constitutional requirement, but despite a narrow (state) constitutional prohibition.[1]
> Fortunately we can look to other countries that have managed to avoid political duopoly by using voting systems which don't penalize people for voting for new parties. Even better, some US states have already implemented such a system[0], and, going back to your point about constitutions, the people of Maine managed to introduce RCV not because of a constitutional requirement, but despite a narrow (state) constitutional prohibition.[1]
I think you are right, voting systems are the best place to start.
That and prohibitions on justices and congressfolk from weighing in on matters they have a personal or political interest in, such as receiving political funds or assistance.
Imagine if donating to a politician whose influence you want will make it more likely they cannot help you. That leaves donations reflecting people's assessment of who will better run the country in a more general sense. Those donations look more like "free speech" than the rampant influence purchasing that overwhelms the system today.
> The federal constitution says that voting is left up to the states, so arguably the centralization problem is ~50 different experiments which have all gone wrong in the exact same way
If the constitution forbid parties from operating across state lines, or operating in more than 20 states, or holding more than 20% of seats in either Federal legislative body, … there would never be single party rule at the Federal level which is where it would matter most.
> If both major parties split into 50 different organizations that all happened to endorse the same candidate for president (but for nominally different state-specific reasons), should the SCOTUS have the power to ban those political organizations (and perhaps ban one and not the other)?
While collusion (meaning surreptitious coordination, in this case) between 50 state level parties would certainly be possible, it would be substantially more difficult than coordinating 50 state offices of a single political party as it is today.
Today, all senate campaigns are basically running for one shared constituency: big money from anywhere in the US, and political support from the same party, across the US.
The tight link that should exist between a politicians power base and the politicians electorate has been broken, for state level elections of Federal positions.
Nobody "designs" institutions. They are fought for by factions within the societies. The idea that some benevolent hand will come up with a better design is simply an absurd non sequitur. If there is going to be a significant change to the system, one which alters the political landscape, it is going to have to be fought for. And it will have to overcome bitter resistance from all those who benefit from the current order. To suppose otherwise is to engage in a pure flight of fancy.
I don't think the onus is on any one of us to come up with fixes to a problem this large. The government employs hundreds of incredibly smart people whose job it is to fix these types of issues. I, and I think most other people as well, would even be fine with small corrections here and there that tested what worked.
A fundamental problem, that we are all burdened to solve, is how do we get from an ideological government to a scientific one. Until we do that, we're all just plugging holes in a sinking ship.
>A simple requirement that no coordinated individual or organization have sway over more than 25% of political seats, and political organizations at the federal and state levels must be separated, would do wonders for decentralization and better representation.
Musk owns about 25% of Tesla, mostly after investing about $50M in Tesla's early funding rounds.
His wealth today comes largely because Tesla (under his leadership as CEO) has become a company that investors now believe is incredibly valuable, and they've driven up the stock price. At what point in this process did Musk "accumulate" this ownership of Tesla, and exactly what do you propose should have happened to stop him?
It has become so valuable, more valuable than the rest of the auto industry combined at one point despite much lower revenue and sales numbers, because of loose monetary policy by the Federal Reserve creating artificially inflated asset prices. The Federal Reserve is directly responsible for Musk’s disproportionate wealth as Tesla stock zoomed past ridiculous levels.
Tesla has been successful in many of its lines of business and succeeded when many thought they couldn’t, that is undebatable. The failure of our system is that its stock price is completely out of line with the reality that reflects that success.
Because car companies are boring, and in an era of cheap money the meme wins. “Sexy” automakers also got insane multiples, look at where Lucid and Rivian were trading. But the capital is diverted to whatever asset people think will keep going up, not the one that will create value in the form of profits. This is also why GameStop, AMC, DogeCoin, Shiba Inu, NFTs, Pokémon cards, etc. were trading so high, the meme is the only thing that matters.
Elon Musk knows this and is a master at harnessing this power, which is why he’s shamelessly pumped DogeCoin and Shiba. He continually pushes his company to be the most popular brands by promising impossible futuristic products that cannot exist, but build excitement. Countless examples of these, but a few are Full Self Driving, a flying Roadster, the Tesla semi, solving transportation issues with tunnels, the Tesla bot, $25k model 3, solar roof that costs less than a normal roof, robotaxi, etc etc etc. It’s all calculated.
Why is what other people do with their money a problem for you?
I think NFTs are stupid, but I don't think they're "a problem".
People spend lots of money on stuff I find stupid. I would never buy a Gucci handbag, they have about as much value as an NFT. But if someone else wants to, it doesn't hurt me, so, so what?
Because it added fragility to the economy, just like people over paying for mortgage backed securities in 2008. If it was a few foolish individuals that would be different, but reckless speculation has been actively encouraged by the Fed across the whole economy, NFTs are just one example.
Because Tesla is in major indexes like the NASDAQ composite, and S&P 500, as well as many major/popular funds/ETFs. Additionally, many funds are weighted by market cap (so more expensive companies get even more disproportionate investment). And the majority of stock investment activity happens through these investment vehicles today.
Generally, anyone who puts money into a 401k, will likely have some of it going to Tesla and disproportionately over other auto companies - simply because how funds are typically weighted.
You say that like it’s natural that Tesla’s success makes billions flow to the one person at the top. Musk obviously isn’t making cars and managing the entire company by himself and doesn’t deserve to be richer than literal countries for making the right bet at some point in his life.
What should have happened is wider distribution of profits among Tesla employees, who are the ones actually doing the work. It’s fine if the CEO is considered an extremely valuable employee and gets a larger share, within limits. Pretty sure he could live a great life with a few million dollars, which would both limit his undeserved power and benefit everyone doing the work.
Musk has sold billions in stock at this point, so this whole "it's stock that's increased in value independent of Musk" line of thinking is a bad misdirection.
Yes, but how much? Most of the rich pay taxes, but how much "should" they pay? Should someone worth 100M pay higher income taxes than someone worth 1M if they make the same income in a given year? Should there be a "limit" on the amount of wealth one can transfer in a given year as which point taxes hit 100%?
Tax schemes and how they affect wealth, inequality, consumption, etc. is an interesting line of thought, and a necessary one, if you accept that the current one has allowed some individuals to get so rich that the rule of law breaks down in their presence.
It’ll entirely be long term gains, so I wouldn’t say huge as a percentage. I would also venture all kinds of other things are being written off to reduce the tax burdens. Typically people like Musk don’t sell stock but use it as collateral to take out low interest loans, which avoids taxes.
I continue to be super concerned about this. I do not understand how the U.S. government does not view these billionaires as serious ideological threats to democracy, the court system, national security, etc. Makes one realize just how bought out Congress is.
Once a person has wealth over, say, $500 million, then there should be a 100% tax.
Meh the government doesn't need more money to conduct frivolous and corrupt spending with.
However it might be interesting to explore an option that required people who own a stake in a company that has grown beyond a certain size to be required to siphon off some of those shares to employees over time in a way where it was not conducted on the open market and would not affect share price.
I also question whether corporate entities should be allowed to own shares and what the benefits are of that. Should private investment firms be allowed to accumulate massive stakes in public companies?
I don't think we should avoid something just because there are more problems. We should fix those other problems as well. The primary issue is that there is a single extremist party, not unlike those found in the Middle East, that is hell bent on undermining America for want of power. By systematically undermining education, public health and services, infrastructure, treating government projects as jobs programs, etc., they are creating a worse America and a sort of political Stockholm syndrome among their constituents. But there is indeed corruption across the board in America.
Local governments are starved for money, and almost all of their funding comes from local property taxes, that is, normal people. So, these mega-rich are allowed to get unboundedly wealthy, while normal people have to pay to keep society running as a minimal level. The mega-rich's money, as well as corporations', needs to flow back through the system. It does no good to let it concentrate so heavily and ultimately do nothing while it sits there.
Is it ironic I don't even know which party you are referring to because it accurately describes both in my opinion?
But I disagree in that I think we absolutely should avoid it because a larger federal government has been heavily correlated with less local funding (so much so that the SALT deduction was once a thing). It's given rise to globalization and large multi-national conglomerates. It creates a situation where power & money is too concentrated.
I'm not sure it's ironic as much as it is either not paying attention or not being honest with the situation. One party being extreme does not make the other party the good party. It just means that one party is extreme, which is a fact. The Democrats are not a paragon of a political party. They are as inefficient, middle of the road moderate, corrupt, etc. as any political party. But the Republicans, or at least a powerful subset of them, have become an extremist group. And they are well-funded by conservative and libertarian ideologues who care about nothing other than power and money and can use their wealth to avoid any downsides in their quest.
Once you start looking into the ideologies of people like the Koch brothers, Robert Mercer and his family, Peter Thiel, Richard and Elizabeth Uihlein, Sheldon Adelson, Ronald Cameron, Steve Wynn, and others, you start seeing very weird and strange beliefs that are incompatible with a functional society. The primary thread is that these people do not care about others. Just look at the Koch brothers' political donations and the businesses they run. Is it then any surprise why the Republicans might not care so much about climate change and policies to mitigate it?
We have one extremist political party, and then the other, somewhat incompetent, party spends all their energy fighting back against the extremism of the other.
I just do not agree that one party is more extreme than the other, sorry. I also don't believe you are being honest with yourself over the situation either. It's clear you have dug your heels into a particular set of beliefs and have no interest in discussing real solutions (instead just want to play the blame game). Frankly it is just not interesting discussion.
That can be your opinion, but I think it stands in disagreement with several events and facts of the Republican party. There are oodles of articles and books addressing the growing extremism of the Republican party, so I don't think it's even a controversial opinion. By just saying "oh, they're just another political party with different beliefs" is enabling their extremism. Any rational discussion with a Republican, at least those that I know, which includes family members, can often not be had. I understand that there are actual conservative political beliefs, but from what I can tell, they are not the ones driving the power dynamic of the Republican party. The discussions I have had quickly turn weird because it quickly becomes a case of religion, sexism, racism, or something else deep down affecting their political beliefs, which mainly consist of wanting everyone else to be like them and to do what they want (how they want).
A certain Republican sect literally tried to overturn the presidential election, threatening to hang the vice president, killed a capital cop, ransacked the capital, and only one Republican had the guts to vote against the president. Then that same party will decry people marching for human rights and supports violence against those groups. The Republicans are the same party that supposedly stand for small government but are hell bent on telling people what they can do with their own bodies and forcing religion to be taught in public schools. Republicans' reaction to mass shootings is more guns, while they are the ones that block any investigation into why these are happening or preventing people that should not be buying guns from buying guns. I happened to drive across the country during COVID. You could tell the Republican states from the amount of masks being warn. The Republicans blocked a third supreme court nomination by a two-term president in Obama that was 10 months ahead of the presidential election, meanwhile they rushed a third supreme court appointee by a one-term president just two months before an election, throwing out every reason they used to block Obama's nomination. These are all extreme positions that don't have analogs in the Democratic party.
> have no interest in discussing real solutions
Mind pointing that out? In fact, I've elaborated quite a decent amount. I'm not sure what you've brought to the discussion other than just stating disagreement and making bad faith statements. You are free to contribute or elaborate on what you mean by the Republican party not being extreme.
The solutions I believe that could help things are: increasing tax on the wealthy, limiting the amount of political donations including to interest groups and think tanks (i.e., get private money out of politics and government), abiding by separation of church and state, and increasing primary and secondary education.
You are pissing in the wind. This place is essentially r/conservative and most of these people are totally fine with how things are progressing. I think the US is completely fucked and no rich people I know care, at all
Yeah, this place is so conservative that you can't even say that Republicans are extremists who are intentionally undermining the country and that everyone who supports them is suffering from a rare mental disorder without people calmly disagreeing. /s
- a legitimately won election was almost overturned by a violent mob incited by Trump at the time
Have the Democrats ever incited a mob to violently overturn an election?
The fact that people like Trump, Greene, Boebert and others with extremist and narcissistic values can rise to power / influence points to major systemic failures, which eventually destroys democracy if not stopped.
How do you avoid those destructive people rise to power?
Or do something useful and somewhat efficient with the money. Eg: good, reliable public school, roads, network infrastructures, renewable energy sources.
I’m a US tax payer since less than a decade. My experience is that I pay a significant portion of my incomes to taxes that only marginally benefit me or folks around me.
Recent uptick of direct distribution is nice.
But a leadership in the stewarding of the land would be tasteful and send the right message IMO.
It’s fascinating to see the Western European countries I’m familiar with being blinded by the economic might of the US but not realizing how little the average citizen benefit from it.
According to the Laffer curve it should probably be 70% or so to maximize government income, but yes.
If you tax them 100% they'll just stop working or bail to another country, and then you collect zero tax revenue from them. At 70% most of them will just suck it up and pay.
(I realize France is a counterpoint here, but I'd argue it was a half-assed attempt, and they have neighboring French-speaking tax havens that have no real U.S. equivalent.)
The Laffer curve is a fact-free zone except for at it's two end points.
The reality is that nobody knows for sure what the curve of revenue vs. tax rate looks like other than at those two end points, which makes the entire concept completely useless.
The most amusing thing about the Laffer curve folk is they mention it, and a breath later will talk about cutting taxes so they can drag the government to a tub and drown it in the bathwater: they don't even pretend to believe that we're at the point on the curve where cutting taxes will increase revenue.
It’s fascinating. Not only that is fact free, but it’s based on an assumption that the purpose of the government is to collect maximum tax value from the citizens. Is it thought?
It's not based on this assumption at all. In fact, the Laffer curve is named after an economist who did his best to provide "intellectual heft" to politicians who wanted to reduce taxation as far as possible (and maybe a little further than that), later summarized by one of them as "shrink[ing] the government to the point where we can drown it in the bathtub".
>Once a person has wealth over, say, $500 million, then there should be a 100% tax.
Your inability to conceive of a useful purpose for such a quantity of money does not justify prohibiting its existence.
>I do not understand how the U.S. government does not view these billionaires as serious ideological threats to democracy, the court system, national security, etc
Cooperation. A government that can't handle the idea of powerful citizens has all the tools it needs to make almost all those people (hard to banish all the Christian missionaries, and martyring them is the surest way to grow more) leave or fall in line, but I don't think many people look at Venezuela or North Korea as ideal places to govern in terms of democracy, the court system, national security, etc.
> Your inability to conceive of a useful purpose for such a quantity of money does not justify prohibiting its existence.
What inability and where was it demonstrated? Are you referring to a useful purpose if it was taxed or a useful purpose for individuals to have such wealth? If the latter, then I propose that an individual containing such wealth is less useful than it being returned.
Those things and countries you mentioned have nothing to do with this discussion.
It's so many layers of delightfully nested irony. Give more money to the federal government so they give more big tax credits for Tesla purchases, but Tesla can't exist any more in this fantasy world where nothing outside of the federal government can grow beyond $500 million in scope.
As someone who grew up in a communist country with literally zero rich prople - it’s not about wealth, it’s about power and influence. We’ve had just as many, if not way more, people above law as in capitalist countries.
> Maybe this is a good reason a single human being shouldn't be so fucking rich.
if you look at this as a problem with the rich, you're not being creative enough.
Speaking as if we're assuming Musk gets away with this, this is a justice enforcement problem -- when all the mega-rich are gone the justice system that displays this level of corruption will just skim the highest payers available to them; they won't just give up these corrupt practices because there isn't a local billionaire to tap.
But that's not how it works when you simply owe money (usually, modulo things like probation violations and child support, but lets ignore that for now). We don't have debtors prisons). They can seize his money though, garnish his wages (lol in this specific case though), etc.
He should see jailtime for the market manipulation. We'll see what happens. This isn't even a thing the SEC is known to be pursuing presently, so don't hold your breath.
This is the thing. I feel like the Delaware Chancery Court is going to compel specific performance and the incentives for all other parties here are tilted deeply towards compliance.
On a practical level, every large financial institution with dollar assets (I mean this literally) has a far greater vested interest in maintaining a productive relationship with the Chancery than they do with Musk.
On a political level, could easily see the Delaware governor getting a kick out of sending the state police to arrest Musk for contempt, impound his assets.
Assuming that is the appropriate penalty (I know nothing about Chancery law), why exactly can’t they just issue a warrant for his arrest and put him in jail? He doesn’t have a private militia or anything like that
I was thinking this was a case of white privilege that we consider the conduct of Musk as “rich people just wanna have fun” and not a criminal conspiracy. But the more I think the more I realize the privilege is not that , the privilege is that a white successful immigrant is loved by so many people in this country , a brown or black successful immigrant is not loved in the same way in this country. And that my friends is indeed a privilege.
"There is not a whisper of evidence for this claim, no hint that there might be evidence, no acknowledgement that a reasonable reader of this letter might want to see evidence."
This is completely wrong, right? The evidence might not be terrific but it's definitely more than a whisper.
The $1B is it he walks away and Twitter is ok with it. Another clause allows Twitter to force the deal to close so long as they are operating in good faith.
The purchase price of 54.20 per share would net a lot more than a billion given the current share price.
It seems like a common misunderstanding because the reporting around this is so bad.
> Musk and Twitter agreed to a so-called reverse termination fee of $1 billion when the two sides reached a deal last month. Still, the breakup fee isn’t an option payment that allows Musk to bail without consequence.
> 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.
He is obligated to close the deal and Twitter can force him to do so. If some external force stops the deal from happening - or if he can show that Twitter egregiously violated the agreement - he can get away with not buying Twitter, but he still has to pay them $1B.
The point is that paying the ‘fine’ doesn’t give him the right to walk away for ‘no reason’. If he does he may end paying damages for much more than $1bn.
I find it amazing that not one of the top comments gives Elon ANY consideration that maybe, just maybe, he has a legitimate case against Twitter. We don’t know what he’s found, what he was told, what he was promised, what changed on Twitter’s side. Some very top level people bailed or were fired shortly after Elon’s acquisition proposal was announced.
It sure appears that Elons is just balking, but what is far more likely is that he has uncovered some deep Twitter bullshit and he plans to unveil it in court. Forced to air the dirty laundry by the court, he avoids defamation suits.
Elon is extremely intelligent. Not perfect, not omniscient, maybe he screwed up? Or maybe he has a lot more info than any of us internet loons at the moment?
> It sure appears that Elons is just balking, but what is far more likely is that he has uncovered some deep Twitter bullshit and he plans to unveil it in court. Forced to air the dirty laundry by the court, he avoids defamation suits.
I have no idea how you can claim that that is far more likely. You think it is more likely that Elon is going to expose the numbers Twitter reports to the SEC as off by an order of magnitude than Elon just not wanting to follow through with this deal?
EVEN IF the numbers reported were off by a factor of 10, this would also have to cause advertisers to pull out! The revelations you claim Elon might make have to have material effect on the value of Twitter for them to make a difference in this impending court case. Yeah, it’s possible, I guess? But it’s definitely not more likely!
Think about it this way: what could Elon possibly reveal that would make advertisers pull out? They advertise on Twitter and make money already! Why stop now??
From the actual SEC filing: As further described below, Mr. Musk is terminating the Merger Agreement because Twitter is in material breach of multiple provisions of that Agreement, appears to have made false and misleading representations upon which Mr. Musk relied when entering into the Merger Agreement, and is likely to suffer a Company Material Adverse Effect (as that term is defined in the Merger Agreement).
I’d say that’s a pretty strong accusation that probably has something to back it up. Maybe it’s a lie, but I sure wouldn’t bet on it.
My businesses have spent millions on advertising across all channels, from newspapers, magazines, billboards to social media, AdWords and influencers. I strongly believe all ad dollars yield far less than platforms want us to believe. After all, they are selling us on their platform. Much of my revenue that gets attributed to some platform would have otherwise occurred without that specific ad spend. However, I’d rather be wrong and waste some ad spend versus be wrong, lose a million in revenue.
Personally, having spent money with Twitter, I suspect Twitter has no real evidence that their value proposition to customers is worth anything close to what they claim (i.e. making fraudulent claims), but that Twitter has lots of data on the unpublicized falsities of their platform (bots, click farms, otherwise fake accounts).
>I suspect Twitter has no real evidence that their value proposition to customers is worth anything close to what they claim
What?? The value of their service is what their customers are willing to pay, which they've done so to the tune of BILLIONS per year. They would not continue to do so if they didn't get the value Twitter charges for their service.
Customers care about return on investment, and if spending $1 on the platform bring in more value than that, then they'll continue to spend on that platform. It really is that simple. Ad platforms have tools to help customers make the most of their spend, but ultimately ROI will dictate how much they'll spend on it.
I'm also a small-time Adwords user, and while I'm sure there's some click fraud going on, what I care about is getting more value per dollar than I spend.
Maybe, instead of the "Elon is a genius playing 4D chess" speculation, we can simply look at his actions and conclude than no reasonable person would seriously go about buying Twitter the way he did.
Given this and previous behaviour it seems pretty reasonable to assume that Musk was doing it for the lolz and to get attention as "the savior of free speech".
It's useful to note that after he signed the contract the market decided he wasn't serious about it. That's the closest we have to an objective judgement on Musk's intentions.
His character flaws aside, you don't become worth 275 billion dollars by throwing 45 billion away for the lulz. I think it's a safe bet that a man who has an entire top notch law firm working exclusively for him knows a thing or two more about what he's doing than we do. Even if it is a mistake, even if he's trying to back out of something and being disingenuous, it's still almost certain that our online speculation colored by our character sentiment is not what is actually going on here.
The calculation is simple, it’s what we know from his track record, that he has made numerous calculated, high risk moves over several decades and has generally prevailed in a substantial manner. It’s just in vogue right now to assume “Elon is a pompous fool,” full bore myopia. The same guy that has ramped up several massively successful companies.
I don’t have a dog in the hunt, I genuinely don’t care of the outcome, I don’t think Twitter is worth buying, I don’t care if Elon loses several billion or whatever. I just wouldn’t bet against him on something like this where he has much more information than any of us. That’s a pretty simple calculation.
Let's not forget we're talking about a raging narcissist who said in 2018 that he may be bipolar (which, imo, checks out). Sometimes it feels like we're awkwardly dancing around this when discussing his "antics" -- but I think it's more likely that people forget those details and simply focus on his celebrity.
I think a lot of people don't understand what bipolar is. They hear it and think he is a moody guy whose actions are reasonable. They don't understand that manic episodes are characterized by unreasonable, illogical, destructive behavior. A grandiose vision of being Twitter's and free speech's savior, which turns out to be very poorly thought out, fits with that.
Have you actually read the latest SEC filing? “Waiving due diligence” does not waive breach of contract. Opening paragraphed snipped below. Maybe it’s a lie, or maybe there is more to the story.
>>As further described below, Mr. Musk is terminating the Merger Agreement because Twitter is in material breach of multiple provisions of that Agreement, appears to have made false and misleading representations upon which Mr. Musk relied when entering into the Merger Agreement, and is likely to suffer a Company Material Adverse Effect (as that term is defined in the Merger Agreement).
Again, from the latest filing, these are pretty damning:
>> In addition, during the June 30, 2022 call, Twitter’s representatives indicated for the first time that the workflow and processes for detecting spam and false accounts in the mDAU population is different and separate from the workflow and processes for identifying and suspending accounts in violation of Twitter’s policies. On that call, Twitter indicated that it would not be willing to provide information regarding the methodologies employed to identify and suspend such accounts.
Furthermore:
>> Despite public speculation on this point, Mr. Musk did not waive his right to review Twitter’s data and information simply because he chose not to seek this data and information before entering into the Merger Agreement. In fact, he negotiated access and information rights within the Merger Agreement precisely so that he could review data and information that is important to Twitter’s business before financing and completing the transaction.
For Musk to get out of it he has to find a materially adverse effect (MAE), which is incredibly difficult and almost never happens. As Matt Levine explains in the article, it basically has to mean that Twitter is a complete fraud and has been covering up a fraud for a long time (think Enron), which is very unlikely given that users obviously use it, and advertisers obviously advertise on it quite happily.
I'm tired of people parroting this line. It is factually incorrect. This line has been started by the author of the article we are discussing, and picked up by people who like the way it sounds, but if you'd read the article the author also clearly states (significantly less dramatically) that he has an out if Twitter lied because that would be breach of contract. He goes on to say there's no evidence that Twitter lied, which may be true, but it's a fact. If twitter lied about their numbers it is a breach of contract, MAE be damned.
If he had a case, he would have said that he had a case in this letter.
Everything I've seen about Musk suggests that he is not particularly smart, but he is audacious. The hyperloop, the claims about autonomous driving, the boring company nonsense, and all sorts of other Tesla-related claims have all come out to be massive disappointments.
If 64,000 people bet on a coin flipping heads 16 times in a row, one of them is going to make it. That one is Elon Musk.
> but all he needs to have defense standing might be a single one of the millions of accounts Twitter has claimed is an active monetizable user to be shown to be a bot
There’s some good discussion in the article (whose author has a law degree) about why that’s not the case.
This is an absurd article. The idea that Musk was just "pretending" to want to buy Twitter, and went through the process of tendering a purchase offer for show, defies any kind of common sense.
BIG_COMPANY will often start to buy MEDIUM_COMPANY and then find that the other company has looming problems, has been faking user numbers/reviews/accounts etc, and the deal falls through.
I cannot legally name names but this happens all the time.
Did anyone think he would actually be allowed to buy it? Twitter, as a weapon for propaganda and a tool for information collection, is too important and powerful to just let someone like Musk do what he wants with it.
Nobody is trying to stop Elon Musk from buying Twitter except for Elon Musk himself.
Twitter, the banks lending him money, and the other investors Elon lined up are all trying to make the transaction go forward.
So the answer is clearly that yes, Elon musk is "allowed" to buy Twitter if he actually wants to. He may even have to buy it based on the agreement he signed even if he no longer wants to.
Court can't force Elon to buy Twitter. Worst case scenario is Musk pays Twitter $1 Billion "pull out" fee which is in the contract and the article mentions. More likely Musk is able to reasonably prove in court that Twitter isn't reporting bots/spam accounts correctly, he gets out of the contract, only pays millions in court cost, data scientist, and lawyer fees.
> One of his hobbies is that he sometimes likes to pretend that he will acquire public companies...He seems to find this fun....When Musk pretended in 2018 that he was going to take Tesla Inc. private, he had to pay the US Securities and Exchange Commission a $20 million fine and stop being the chairman of Tesla’s board.
One past example doesn't make a hobby, and I wonder if SEC interference had any impact small or large on the privatization failing. Not to add to the defense to Musk, but deals fall through all the time when scrutiny is applied to them, whether exterior or interior.
The "SEC interference", as you called it, came long after he had his Nelson moment in that case. (A more accurate name for it might be "SEC slap-on-the-wrist", because it was both completely ineffective and entirely deserved.)
> Would he line up billions of dollars of financing and sign a binding merger agreement with a specific-performance clause and a $1 billion breakup fee as a joke? I mean! Nobody else would! But he might!
What a silly thing to say. Of course he would; I'd also risk $20 (~1/200th of my assets, like $1b is for Musk) on a joke, especially if I knew I'd almost certainly never lose that much.
This is politics masquerading as legal analysis. Twitter, by its own admission, lied about their user count for years. Elon will either go without penalty, or take a slap on the wrist. Levine spends a lot of time shilling on bots because he knows that's a weak spot for the Elon haterz club.
> The social media company, Twitter, has admitted to overstating the figure of the platform’s users by 1.9 million in the last three years. The company disclosed this in its Q1 2022 financial report released today. The revelation comes days after the board of the company accepted a $44 billion offer by Elon Musk to take over Twitter.
> Twitter says an “error” introduced in Q1 2019, resulted in the overstatement of its monetizable daily active usage or users (mDAU). According to the company, this went on undiscovered for three years.
Three years, and they figured this out mere days after being strong-armed into accepting the Musk offer they wanted to evade? I have a bridge to sell to anyone who believes Twitter didn't already know.
2% of a key revenue figure for a company with a $28B market cap is one hell of a correction. I don't think Levine actually believes Twitter has a snowball's chance in hell of getting specific performance. Can you point to a section in this opinion piece where he states no financial interest in this drama? I think that is conspicuous by its absence.
It's likely this was disclosed to Musk before he entered into the definitive agreement, so it is mooted. (If this was a reason, you'd think they'd have argued it in the termination letter).
And even if so, I don't think 2% of a user count is a "material adverse change" by the merger agreement.
Those are all sound legalisms, which would be big wins for Twitter if they were serious about taking this into a courtroom, but they aren't. That would air out several closets they'd rather keep shut.
There's a $19B difference between Twitter's market cap and the agreed deal proceeds.
Twitter has to pursue receiving that-- either in consummation of the deal or adequate recompense. If their board doesn't, they'll be sued into oblivion by their own shareholders. It's do-or-die.
That doesn't mean, though, if they were offered a couple billion less for Twitter and were sure that Musk would then close... that they might not blink, rather than wobble $19B+ on a court case.
The problem is, a $2B discount on Twitter doesn't improve Musk's financial condition much or make the deal materially less stupid for him.
There has been enough uncertainty--on both the Musk and Twitter ends--for the banks to have several legitimate reasons to "blow up his financing."
Per Levine:
But it’s messy, and you can sort of see a path to “Musk says the deal is off, so his banks walk away, so his financing isn’t available, so he doesn’t have to close the deal and can get away with just paying $1 billion.”
And the "Musk says the deal is off" part doesn't even have to enter into it. The banks could come, independently, to a last-minute change of opinion on his collateral--whatever that was for this deal.
When it comes to "sued into oblivion by their own shareholders", who exactly are they? ETFs & mutual funds, of which Twitter is only a fraction of a sliver of their portfolio? CIA/DOD "dark money", stirring up foreigners (& domestics!) against "rogue" regimes (i.e. "arab spring")? Large shareholders (like Saudi, or hedgies), who were the ones giving the board up-to-the-minute instruction on how to (mis)handle the Musk offer in the first place?
Twitter has been a propaganda asset for a long time. The large stake-holders surely understand that they have far more to lose in discovery & cross-examination than Elon's offer. I am talking Snowden-tier revelations here.
> There has been enough uncertainty--on both the Musk and Twitter ends--for the banks to have several legitimate reasons to "blow up his financing."
If Musk can't close because he's blown up his financing... you think this lets him get off clean? He's attempting to walk away before any such eventuality has occurred and Twitter shareholders are incurring costs.
> The banks could come, independently, to a last-minute change of opinion on his collateral--whatever that was for this deal.
If that happened, that's something he should have argued in his letter and something there would be evidence of before Musk tried to walk away.
> When it comes to "sued into oblivion by their own shareholders", who exactly are they?
High powered law firm representing a few chosen shareholders that gets a class designated of all Twitter holders that don't opt out.... just like substantially all shareholder lawsuits of public companies.
Asking this question this way makes me wonder if you have any background knowledge here at all.
Yes. I understand how class action works. If Twitter were a normal company, that's what one would (correctly) expect to happen. But it isn't. I think Twitter would take on a class action before airing its dirty laundry.
> My words were "slap on the wrist." I think only having to pay $1B instead of $46.5B meets the criteria.
The real wobble is about $19B-- the difference between Twitter's market value and the acquisition offer. I think it is likely Elon pays well in excess of $1B, but maybe captures a little bit of that $19B for himself.
> That's Levine's analysis of, "if the banks don’t put up their $13 billion then he doesn’t have to put up his $33.5 billion".
Yah, and getting the banks to walk and then trying to walk from the deal would be a way to try and pay only $1B. The problem is, he's walked before the banks.
I see the author's scepticism of the bots argument, but I don't think it's one that should be dismissed so easily. I don't know anything, but isn't the value of these big tech properties largely in the number of actual human daily active users?
When Facebook acquired whatsapp, I remember reading that it wasn't the tech per se that facebook really wanted. It was the daily active users. Whatsapp had (still has? dunno) a pretty big userbase. That was the where a lot of the value lay for facebook, or so I understand.
So, if daily active users are important to the value of the property, do we believe twitter's SEC filing estimates of <5% bots? Musk doesn't, or hasn't been convinced by what he has seen.
That really does seem like a legit reason to abort the deal. Twitter is representing <5% bots. Musk thinks that's a wildly optimistic estimate & is prepared to call bullshit. Seems fair to me.
A more cynical view might be that Musk is simply looking to lower the price. Exposure of Twitter's bot problems in a court might not be very good for the share price. Just having Musk pull out (9 kids, he never pulls out) probably dips the share price. So, isn't it all good leverage to bring the price down?
We’re to believe that before buying 11% of the company, before making a bid to buy all of it, Elon or his advisers never considered the possibility of bots but all of a sudden in the due diligence it occurred to them?
The timing makes no sense for bots to be a legit explanation. Elon is just a troll.
1.) Twitter would need to be egregiously wrong. If Musk found that 7% of mDAU were bots, he would likely still be forced to purchase
2.) I feel like the inverse; that Twitter, it’s board, manager and employees were all in on a massive conspiracy to understate the bot problem for almost a decade. The number they presented wasn’t something they just gave musk, it was a number that they have been reporting to the SEC and investors for several years. It would be a massive fraud for Twitter to have committed.
In my opinion the whole thing is a massive distraction so Elon could pull out. The amount of people who only read (but never post) likely dwarfs the number of bots elon suspects there is (if the 90-9-1 rule is anything to go by). The mDAU number is a different, much larger, number than actual tweeters
The first line is what he is trying to do right now. The answer seems to be "maybe", it's going to court because there's a chance that he can but Twitter also thinks there's a chance he cannot.
The second, maybe. I doubt that Twitter would be interested.
