Twitter and Elon Musk

[nevets88]

Struggling just to keep up with the commentary. It's wild that a company that still has yet to make a profit get this kind of treatment. If I'm reading it right, current shareholders are locked in and their shares will just be straight out sold?

Quote

Musk has said he would open up the website’s algorithm, putting content moderation decisions into clear view, although some researchers have said that would be difficult. He has also pushed for simple, broadly popular changes such as adding an edit button, as well as pledging to eliminate spam bots. And he has said he wants to open up Twitter’s verification process to more users, so the authenticity of accounts can be determined more easily.

Elon Musk reaches deal to buy Twitter - The Washington Post

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The company’s board and the Tesla CEO reached an agreement on his $54.20 a share bid.

 

Elon Musk Contends Censorship, Not Abuse, Is Twitter’s Problem

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Billionaire says he doesn’t care about making money from the business but cares about freedom

 

[nevets88]

Looks like Twitter was ready to do the poison pill. And then Musk got around it. From Post piece.

Quote

The strategy, known as a shareholder rights plan, would let investors buy Twitter stock at a discounted price unavailable to Musk. The flood of new shares would potentially make it prohibitively expensive for Musk to buy the company.

Then Musk outlined his financing last week, saying he secured $46.5 billion through loans by banks, including Morgan Stanley, and his own equity.

The company’s board of directors met with Musk on Sunday, and negotiations extended into the early hours of Monday, according to another person familiar with the negotiations, who spoke on the condition of anonymity because of the sensitivity of the discussions. The two sides were focused on determining whether Musk had the financing to complete the acquisition, and did not spend much time discussing Musks’s strategy for the future of the social network, the person said.

 

[Golfer20]

Sounds like the deal is off!  Now Elon is trying to figure out how to avoid paying the 1 billion termination fee:

 

Elon Musk faces a legal nightmare and a potential $1 billion fee as he tries to walk from Twitter deal

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If Elon Musk follows through on breaking his $44 billion agreement to buy Twitter, he could be setting himself up for a big legal fight — and potentially a $1 billion breakup fee.

 

[imsys0042]

He might be trying to buy at a lower price.   Plenty of time to settle before this hits a court date.   Personally I hope he gets his ass handed to him 

[billchao]

3 hours ago, imsys0042 said:

He might be trying to buy at a lower price.

I’m not sure he can. He negotiated the price and he waived his right to due diligence so afaik his argument that he’s backing out because Twitter is full of bots is moot.

[saevel25]

9 hours ago, billchao said:

I’m not sure he can. He negotiated the price and he waived his right to due diligence so afaik his argument that he’s backing out because Twitter is full of bots is moot.

Yea, I think he is stuck on this one. 

Hey, go in there Elon and destroy the bots 🙂

[billchao]

27 minutes ago, saevel25 said:

Yea, I think he is stuck on this one.

Well he doesn’t have to buy the company, but he’s trying to get out of the termination fee.

[saevel25]

48 minutes ago, billchao said:

Well he doesn’t have to buy the company, but he’s trying to get out of the termination fee.

Actually, I read an article, because of the state that Twitter was created in, which is very business friendly, the court can force him to obey the contract and buy the company. 

[RFKFREAK]

21 minutes ago, saevel25 said:

Actually, I read an article, because of the state that Twitter was created in, which is very business friendly, the court can force him to obey the contract and buy the company. 

Delaware?

[billchao]

29 minutes ago, saevel25 said:

Actually, I read an article, because of the state that Twitter was created in, which is very business friendly, the court can force him to obey the contract and buy the company. 

I have a hard time picturing how they would enforce that, though. It would be easier to force him to pay the termination fee, and even then I’m sure he could just not pay or something.

Either way this deal is going to be mired in lawsuits for a long time.

[imsys0042]

1 hour ago, RFKFREAK said:

Delaware?

Yes.   Half the corporations in the US are "headquartered" there.   If you notice during a lot of big corp on corp trials, it ends up in Delaware.

1 hour ago, billchao said:

I have a hard time picturing how they would enforce that, though. It would be easier to force him to pay the termination fee, and even then I’m sure he could just not pay or something.

Either way this deal is going to be mired in lawsuits for a long time.

They can throw out his claims and hold him to the agreement.   At that point, it becomes a question if he tries to turn around and sell it.   I wonder what the Twitter board really wants.   They have a duty to do what is best, and that is usually accepting a good offer to purchase on behalf of the shareholders, however Musk represents such a disruption that you can make the case that him purchasing hurts the company and it's share price.

It's very possible that the court would order the merger through although the sheer size might make it prohibitive.   Here's a good article that summarizes the various ways this unfolds.

8 ways the Elon Musk-Twitter saga could end

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Here are eight possible resolutions to the Elon Musk-Twitter saga.

 

Bottom line, I think Musk has done a lot of harm to Twitter and if the deal falls through, I hope Twitter sues the hell out of him 

[iacas]

I mean… what?

Also, no politics. Keep it about the technology.

[boogielicious]

My prediction is he’s going to trash twitter. I don’t use it much, but Musk is going to do irreparable harm. 

[iacas]

6 minutes ago, boogielicious said:

My prediction is he’s going to trash twitter. I don’t use it much, but Musk is going to do irreparable harm. 

It's not like Twitter isn't without problems now.

And I'm not saying you said that, just… I like Twitter quite a bit, but there are and have been major issues with it.

[JetFan1983]

Yea I love Twitter. I think it's an invaluable resource despite its issues. I hope he doesn't wreck it. I'm quite happy with my feed these days, so as long as no culture wars crap creeps in there I'm usually very happy with what Twitter throws my way. I guess all we can do is see what happens now. I'm definitely not throwing Elon eight bucks a month though 😄

Edited November 6, 2022 by JetFan1983

[pganapathy]

Twitter was never a profitable business.  He may damage it, but the only reason to pay 44 billion is for making a profit.  He has fired half the staff and wants to change the business model from advertising revenue to subscription revenue.  Whether it will work is debatable but from a business perspective he is better than the previous owners who only spent investor money

[cdh79]

Elon claimed having to cut jobs as Twitter was losing 4 million a day...

 

What he forgot to mention was that while Twitter hadn't been profitable, and lost about 200m in 2021 (so about half a million per day - in 2020 net loss was still around 1.1b), his purchase was a leveraged buyout.

Basically while him and the investors did agree of a price of about 46 billion in total, around 12 to 13 billion of that debt was a loan that was put onto the balance sheet of Twitter, with an interest rate of about 1 billion per year (excluding principal payment from some sources I've heard). It's this loan that Twitter stands collateral to that increases the loss to about 1500 to 2200 million per year, making it between 4 to 6 million per day like he mentioned..

Without that loan, the loss would have been much less and layoffs could possibly have been avoided (at least at such a scale).

 

I have the feeling many users will leave when they have to pay (I have never used it extensively, so I would not be willing to pay), and once Twitter will be facing high fines in many countries as they won't be able to uphold legal requirements to moderate "fake news" away (he fired that whole team according to some articles I have read). With the fact that advertisers are now dropping off, causing a massive drop of revenue, I am afraid he will sink that ship. 

I hope I am wrong, but time will tell..

Edited November 6, 2022 by cdh79

[ChetlovesMer]

3 hours ago, cdh79 said:

Elon claimed having to cut jobs as Twitter was losing 4 million a day...

The talking heads on the radio made it sound like nearly all of the folks who were let go had been given as much as a year's notice. Most were let go not only to balance the books but many of them were supporting legacy software that Twitter's no longer using. Seems like many of them either could have known or possibly should have known that their job was going to be eliminated. 

Having said that, it always sucks having your job eliminated. Even if you do know its coming. 

I guess the one silver lining is that at this moment in the US we still have tons of job openings. It's one of the rare times that I can ever remember where we have more jobs available than we have people to fill them. I also am sympathetic to the fact that the job which is available may or may not be the job you want, or are qualified for, or is available where you live, etc... 

3 hours ago, cdh79 said:

I have the feeling many users will leave when they have to pay

I am of two minds on this. Part of me thinks that this is the way everything is going now a days. Charging monthly for everything seems to be the way of the future. I mean BMW is now charging you a monthly fee to use your heated seats! Everything from streaming services to car washes to groceries to utilities to the software on your Bushnell Launch Pro can be bought on a subscription basis. It's becoming the norm. So, maybe people will just be like, "Fine, what ever". Or maybe people will be like, "Enough is enough!" ... I don't know.

I do know that when Netflix (I know is a different service) changed it's pricing structure and laid off a bunch of its employees, there were tons of people who said "This is the end of Netflix." Yet, that was more than 10 years ago and it seems to be still doing okay.