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Elon Musk Wants to Terminate $44 Billion Twitter Acquisition [Updated]
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I don't see any waiver of due diligence rights. Mr. Musk is, in that section, acknowledging that no one has made any other representations or warranties to him - and, at any rate, that he is not relying on any such representations or warranties - other than those made by Twitter in Article IV. Those are fairly standard acknowledgments.
In Article IV of the agreement Twitter makes considerable representations, including in effect that the information provided in its SEC filings is accurate. In other words, that's information that Mr. Musk can rely on with regard to the merger agreement. Mr. Musk certainly didn't waive his right to withdraw from the agreement if it is discovered that Twitter committed fraud in inducing the agreement or if Twitter breaches the agreement. He also didn't waive his right to request and receive certain information about Twitter's business operations. Indeed, elsewhere in the agreement that right is explicitly acknowledged.
It’s a business transaction nothing more. I sent him a proposal for the new Twitter sans left or right. He wants to pay less. Then cut the staff at Twitter.
I lose more than any of you here if he truly backs out. That’s business though…
I'd argue otherwise: it says that by deciding to go along with this purchase, Elon had taken the diligence onto himself in independent review and analysis and based on what Twitter said as outlined... the SEC filing is very clear that Musk has already had the chance to ask for clarifying information before signature and that Musk was happy with the information he had. It's so weird that people think this is being pulled from thin air... the fact that they are "fairly standard acknowledgments" is what makes the clause so powerful and known.
As I said, he had the right to information about Twitter insights after signing — but that was neither unlimited access nor could be used as leverage to disrupt the company... which he both believed by pivoting his requests time and time again, while seemingly using it against them. Twitter did supply him with raw access to live data, but they did not supply him with the entirety of their private and critical business information (they gave him and the public inside to a lot). I've seen nothing in the SEC filing to indicate they were on such a hook to his every whim of information for the success of the deal... while you say it's explicitly acknowledged, I'd appreciate if you could just prove what was acknowledged by pulling the wording out.
Honestly, the whole bot-or-not situation is simply a side-show: Musk is alleging that Twitter lied on their SEC statements about their revenue generation model in order to leave the deal. There's not much more than that.
Without a doubt I believe his initial breach of the agreement means that Twitter has edge here, and they do too and are confident in their filing — thus we are now in a legal situation where Twitter is alleging he purposely effected their business to influence the result (among other things).
Would make one wonder.
Either way, he'll automatically be on the hook for $1 billion, plus expenses, and whatever a lawsuit can get out of him. Worst case, he pays Twitter the money plus a premium, and walks away. I think he *thought* owning Twitter would be great, but after opening his mouth, started to have second thoughts.
I kept thinking that if I bought Twitter, I'd have to work very hard to restrain myself from killing it outright. Another use would be to declare war on Facebook and submarine them somehow, and then kill it. Social media is pouring nitro methane on the increasingly smoldering embers of this society and the world in general, and FB management knows it!
Zuck needs to grow up. This isn't him taunting the ugly girls and tweaking the nose of the 'jocks'. This is inciting hatred, violence, depression, isolation, anger, resentment...
But, was it Musk's plan all along? I think he should have thought out the ramifications of the purchase more before he opened his mouth. He's a lightning rod, and owning Twitter would be a disaster. No matter what he did, it would likely turn out bad for him, and society.
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Certainly his right to receive information isn't unlimited. I'm sure Twitter will argue that it provided the information it was required to provide, based on the terms of the agreement. (As for where this is provided for, it is in section 6.4.) If I had to bet, I'd bet that Twitter did provide what it was required to provide and that Mr. Musk is wrong about Twitter having breached the agreement by not providing additional requested information. But that's mostly just a hunch, I (and most people) don't have any way of knowing with reasonable certainty at this point.
My initial response was to the idea that it didn't matter whether Twitter provided false or misleading information, because Mr. Musk somehow waived his due diligence rights. I don't think that's the case. He didn't, as far as I can tell, waive the right to continue independently reviewing various aspects of Twitter's business and he didn't waive the right to back out of the deal if it was determined that Twitter provided false or misleading information. That's what I inquired about: Where in the agreement did he do those things?
That said, as I suggested previously I suspect Twitter has the edge here as well. But if Mr. Musk can demonstrate that Twitter provided false or misleading information (e.g. in its SEC filings) or that Twitter breached the agreement (e.g. by not providing required information), then he probably can get out of the deal.
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The reason I am fairly certain that 5.11 is the diligence waiving is from the absence of language elsewhere which explicitly gives him post-filing diligence or limits his liability due to any post-deal discoveries — such a provision is generally included to increase the speed of a deal by stating those who are involved have already done the work and have the answers they needed to proceed.
I don't believe it's solely an acknowledgment "that no one has made any other representations or warranties to him" — I think it goes as far as saying that Elon (and Twitter) has taken it upon himself to gather, analyze, and be happy with what has been provided to him at this point to continue (unless, of course, fraud).
That's what I mean about this misrepresentation by Elon's counsel to focus on his right to information, not diligence: I don't recall seeing any other language in the filing or reporting which means he could use access to metrics in post to sink the deal simply because he doesn't like what he sees, as that would require both sides to agree at this point. But of course, I am just bystander so it'll be fun to watch at least.
Edit: I realize I should be clear, because we are essentially talking to the same thing. 5.11's diligence waiving definitely doesn't stand if Twitter has put out false/fraud statements which Elon/shareholders/public have based their actions on — it's I just don't think Twitter has misled and Elon doesn't have proof. I also just find it pretty bold of Elon to suggest they've been lying for 8 years, somehow he's a formula away from proving it wrong, and the reason he knows (and no one else does) is because is in the buying seat. At any point before this, anyone — including him — could have initiated an SEC investigation with evidence outside of this attempted buy fiasco.
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Agree: discourse is critical. And becoming a lost art. I’m hopeful we can get there, again, at some point. The current alternative is maddening.
What I find so interesting it’s not overly complicated. It’s black and white, right and wrong. there is truth and false, honest and dishonest, black and white.
((Oh man. Apologies - I just deleted this sentence as it appears I inadvertently posted mid thought. Ha.))
Sorry. I just chose Honda Civic as an example of a really popular and affordable auto that once it goes EV (a timeline I honestly have no clue about), it’s game over for Tesla. 😉
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I support Musk in his cancelling the deal, so he can focus on population growth.
lol at thinking he planned this. At best for him he has to pay a one billion dollar penalty. What a stable genius.
Important note: Your side (whatever side that is of whatever argument you like), has zealots and liars, too. You must view your side with the same skepticism, and very few people do that.
For example, I have seen the lie repeated in this thread multiple times that Musk agreed to buy Twitter without seeing the records of fake accounts. He agreed to buy it "sight unseen," "without due diligence" and so on. This is not true, and referenced in this same thread.
Musk's complaint, and mine, is that Twitter was more than happy to facilitate some outright lies while suppressing some truths (or, in some cases, possible truths).
I do not agree with everything Musk says or does. I don't actually own any of his products (I do want a flamethrower, though 😈 ). But that doesn't mean everything coming from the right is a lie. It might not be a comfortable truth, but that doesn't make it a lie.
Who do you think he is? Britney Griner or some director level position at Apple? Give me a break. Do you think congress doesn’t manipulate stock price on the daily? These people don’t go to prison. Some lackey will be the one to pay the price, not Elon.
I support Musk trying to hold his breath underwater for 5 straight minutes. It'll benefit the world greatly.
Dossier - fact or fiction?
Laptop - fact or fiction?
Both VERY influential and consequential in the political sphere. If you don't see the bias or hypocrisy, you aren't being objective.
The big advantage Tesla has over everyone else is the charging infrastructure. I have a Chevy Bolt EV, and finding a charger that works, isn't being used, and then getting it going is a pain, compared to Tesla where you just plug in, the charger reads your car, and your account is charged. With all other cars, you need accounts with EVgo, Electrify America, and a bunch others. Then you get the charger, and your password has expired, or it's broken. Rarely do they ever put out the current they are supposed to.
Must was genius but building the Tesla supercharger network, and putting them useful places along the highways.
He agreed to a binding purchase agreement where newly discovered information about the company would have little to no effect on the offer price or obligation for him to complete the deal. It also allowed for Twitter to withhold any information they thought would reflect negatively on the company should the sale not complete. In effect, the opportunity for hm to do a proper due diligence on Twitter and use that information to adjust the offer (or walk away) was before the purchase agreement.
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lol are any of us actual lawyers? There isn’t a side here just journalists from all stripes reading the contract for what it is. I trust them than people on this forum.
If I had to put money on it, the likeliness of things happening are:
1. Elon pays a fine. Probably more than $1bn as he’ll have lawsuits from twitter and its shareholders.
2. Elon agrees to buy twitter for a slightly discounted price. Twitter takes it on the chin to make this go away.
3. Elon actually wins. and pays nothing.
Even if he wins the lawsuit against damages for twitter, he most certainly will NOT win the lawsuit against the shareholders. The agreement clearly has language against disparaging the company which Elon has repeatedly done. You can literally see twitter price changes whenever Elon says anything about the deal. Those are all easily provable.
If I had to put money on it, the likeliness of things happening are:
1. Elon pays a fine. Probably more than $1bn as he’ll have lawsuits from twitter and its shareholders.
2. Elon agrees to buy twitter for a slightly discounted price. Twitter takes it on the chin to make this go away.
3. Elon actually wins. and pays nothing.
Even if he wins the lawsuit against damages for twitter, he most certainly will NOT win the lawsuit against the shareholders. The agreement clearly has language against disparaging the company which Elon has repeatedly done. You can literally see twitter price changes whenever Elon says anything about the deal. Those are all easily provable.
I’ve never bought a company before, but I have bought a house. You don’t just make up stuff you want to inspect or need more info on after you signed the agreement. You would have to materially prove that the information rpovided to you was a lie
Studies have shown time and time again that this is untrue. What happens is, right wing voices violate Twitter's ToS, and get themselves suspended or banned. It's as simple as that.
I suspect Elon was finding a tricky way to divest even more Tesla without causing a panic. Saw multiple options in a Twitter purchase, likely suspecting that Twitter had made some material misstatements in their SEC filings, and took a calculated gamble.
Twitter seems a pretty sloppy company sitting on a pile of unrealized potential. With the board they have, the management they had, and their hubris, it wouldn’t surprise me in the least if there is fraudulent misrepresentations in their filings.
Twitter seems a pretty sloppy company sitting on a pile of unrealized potential. With the board they have, the management they had, and their hubris, it wouldn’t surprise me in the least if there is fraudulent misrepresentations in their filings.