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).
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.