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Elon Musk moves ahead with Twitter deal in 13D filing (sec.gov)
437 points by mfiguiere on Oct 4, 2022 | hide | past | favorite | 629 comments

There was some grim stuff happening in the Chancery case: multiple bits of evidence suggesting that Peiter Zatko had in fact been in touch with Musk's team, in advance of the "whistleblowing" release. The Chancery court had just come in with an order giving Twitter extended discovery rights to look for those communications.

If it did turn out that Zatko had been talking to Musk's team, that would be a very big deal, not only undercutting a big part of Musk's current case (which he was set to lose anyways) but also falsifying several statements made both to the Delaware court and also to Congress(?!).

I wonder also if the appearance, performative as it is, that Musk is choosing to buy Twitter rather than being forced to buy Twitter is helpful for financing. He's more or less obligated to purchase Twitter, but there's no rule preventing him from offsetting the expense with a syndicate of co-investors; that syndicate might be easier to put together if he can shift the narrative.

Not surprising, this is actually the least-shitty path for Musk now.

He fucked up and his other alternatives were waaay more expensive (e.g. being forced to sell more stock and lose control of TSLA, shorters have a field day, people lose confidence on TSLA even though FSD is "one month away from working", it could all go down because of this).

No one sheds 44B "to honor a deal", at least not him, lol.

Epilogue: Matt Levine was on point all the time, I'd like to hear now from all the folks who were saying that Musk was going to get away with it.

inb4 "it was all 4D chess, this is what he wanted" Yeah, sure pal ...

You would shed $44B pretty fast if the Delaware Chancellor sets an emergency conference with you where she is about to say to you, "I am going to force you to buy this pile of garbage, and a lot more embarrassing shit is going to come out because I'm not going to let you seal the proceedings. Settle so we can all save face here."

> ...I'm not going to let you seal the proceedings.

The Delaware Chancery email/twitter account that follows proceedings noted that Musk's defence team sued to unseal a great deal of the comms for some reason that, frankly, defies all understanding. So it's not as though this "leaked" or Musk lost a motion to have them sealed. They were sealed by default. Musk moved to have them unsealed over Twitter's objections.

And by 'settle' they mean carry out your end of the deal as inked, no compromises :)

I can't help but feel everyone is getting exactly what they deserve. Elon is buying a company he didn't want to buy as punishment for trolling that company and their leadership on that company's own platform. Twitter is getting new leadership and lord knows they need it [*]. And the shareholders are getting paid what they were told they'd be paid.

[*] Twitter truly is a clown car that fell into a gold mine, and as Elon says, the most entertaining outcome is the most likely. [1]

[1] https://twitter.com/elonmusk/status/1347126794172948483?lang...

A settlement could have been a $20-25 billion payout to Twitter to exit the deal, or something similar (no, that is not precluded by the contract limiting damages to $1 billion, the settlment agreement [edited] overrides the contract). Twitter's lawyers likely would have been okay with that.

The court can force performance of the contract. It can't make up a fine or damage award. Twitter, after winning performance in court, is then free to make up any price short of $44B for Musk to wiggle out of the deal.

That's true, but if he really wanted out, it was a good chance for him and Twitter to set a price to exit the deal. I would bet that Musk had offered a settlement of a $5-10 billion payout to get out of the deal, but Twitter rejected it.

The $1B is pretty much a red herring, it's only in play under a specific circumstances. There's no "pay $1B to get out of this no questions asked" clause in the contract. It doesn't limit damages.

Technically, that's exactly what it does, and $1B is the damage limit (that's one reason the court can't just make up a damages award in the plural billions to compensate Twitter). Twitter is relying on their right to specific performance, not damages.

I agree, though, the $1B is a red herring.

Thanks for clarifying!

Twitter is not "getting new leadership", or at least not leadership as that term is commonly understood. Musk will be distracted and is manifestly unqualified, not to mention uninterested.

Twitter "deserves" this? No they don't.

thats the understatement of the century but true. abdicating your responsibility for a discovery phase during an acquisition is tantamount to fraud in the United States, but when he started to drag his feet and publicly proclaim a "hold" on the twitter deal due to spam accounts, it likely started triggering investigation into securities fraud. Musk may have wound up in the frying pan, but he didnt exactly do much to turn down the heat.

The court of public opinion is a bully pulpit for the wealthy elite but only if its the public opinion you intend to sway. Elon was about to start taking swings at investors and board members, who arent generally moved by public bloviation or jingoist egocentrism. Chancery court didnt last long but im sure it was a sobering experience for such a cloistered elite, assuming the near constant looming presence of the SEC hasnt rattled his bones enough.

> abdicating your responsibility for a discovery phase during an acquisition is tantamount to fraud in the United States,

Skipping due diligence is the buyer's option. It may be irresponsible if you're using other people's money (especially money from public capital markets), but there's nothing that obligates me to closely look at an asset that I'm buying with my money or even my money and my buddies' money that they pledged.

> No one sheds 44B "to honor a deal", at least not him, lol.

No, but many were thinking any breaking up fee would be 10B+. At that point, he might as well buy and have some asset at the end.

Levine was definitely on point. And I repeated here what he and others said, if Musk wants out negotiations start at 44B.

Might appear like that at a glance. I wonder…the additional costs in terms of time, ongoing expense, etc. might make $10 billion to cut it off seem correct in some paths.

I mean... maybe? But I highly doubt 'additional costs' would bridge the $34B gap between the figures. You also have to consider the damage accepting the settlement would do to Twitter in the eyes of the markets / shareholders. It would be huge and would likely have an enormous impact on their share price. Also, if Musk did go to trial and then lost, I would hope there is some way he would then be compelled to pay Twitter's legal costs.

The breakup fee was $1 billion. Expensive, but still cheaper than actually going through with the deal.

That was a fee set for if Musk's financing fell through, it was not an opt-out that either side could choose to take.

Musk would've jumped at the chance to pay a measly billion to get out of it months ago if he'd had the opportunity.

That seems pretty easy to trigger. Just start calling around saying crazy stuff and watch the funding dry up.

The commitment for financing had already been made by banks and could not be rescinded simply because they suddenly don't like Musk anymore.

Throughout this whole saga it has been popularly believed that (1) the breakup fee represents an option for Musk to get out of the deal and that (2) the financing contingency is easy to get out of by having the banks cancel their commitments.

Both have been untrue the entire time. If they were true, then Musk would not be proceeding with the deal at the original price.

A Delaware court has previously made an acquirer buy a company when evidence showed they had sabotaged funding to get out of an agreement. So while it may be possible, it isn't easy.

That would be looked on by Delaware judges about as kindly as using a cigarette lighter to burn the only copy of a contract in front of them. He had the financing contractually agreed, that clause was in case something happened like Tesla or one of the banks providing a loan going bankrupt (actually writing that makes me think I remember that the clause was only applicable to the loans part of the financing and not even the other investors - but I'm not sure I'm right, and too lazy to go find and re-read the purchase agreement they signed).

Some people did speculate that the reason Musk started publicly disparaging Twitter was in the hope that some of his financing would try to pull their agreements thus triggering this clause, but the expert opinions I saw were that the court wouldn't accept that, especially after Twitter filed suit against him, and sure enough that strategy (if it was a strategy) didn't pay off - otherwise he wouldn't be where he is today. (Matt Levine covered this particular theory well in his Bloomberg newsletter.)

I read the highlighted bit several times. Still can't make heads of tales of it :)

Someone could probably translate it better than me [-1], but it roughly says that the investors Musk has lined up are legally obligated to provide the funding they agreed to, and explicitly states that there are no justifications for getting out of the deal except for "paragraph 6 of Exhibit E".

Exhibit E is the part of the deal Musk signed to buy Twitter that's titled "Equity commitment letter dated April 20, 2022", and #6 is the final point of the exhibit which is a generic boilerplate clause with a sub header of "Governing Law; Consent to Jurisdiction". This point basically means "unless any laws make this contract illegal, because our contract isn't allowed to supersede any laws".

Exhibit E #6 is on page 113 of the contract [0] and I'll paste the full text below but it's a boring read! [1].

Also worth noting that even within Exhibit E, paragraph 2 says that the investor's obligations to fund this deal end only in two circumstances - either when they pay their obligation as part of the deal closing, or when the deal falls apart because of something in the contract terms (ie out of their hands). Full text also below [2]

[-1] edit to add that I'm not a lawyer (nor is this comment advice), just a bit of a nerd who's had the pleasure (:|) of negotiating and sometimes writing a few more contracts than I wish I had over the past decade, including with a couple of big publicly traded US companies. (Nothing close to as big as this deal of course, but these bits of the contract are pretty typical.)

[0] https://d18rn0p25nwr6d.cloudfront.net/CIK-0001418091/7d8ab22...

[1] "Governing Law; Consent to Jurisdiction. This letter agreement, and all actions, causes of action, claims, cross-claims, third-party claims or proceedings of any kind (whether at law, in equity, in contract, in tort or otherwise) that may be based upon, arise out of or relate to this letter agreement, or the negotiation, execution or performance hereof (including any action, cause of action, claim, cross-claim, third-party claim or proceeding of any kind based upon, arising out of or related to any representation or warranty made in or in connection herewith) shall be governed by and construed in accordance with the laws of the State of Delaware, regardless of legal requirements that might otherwise govern under applicable principles of conflicts of laws. Each of the parties hereto hereby irrevocably and unconditionally (a) submits, for itself and its property, to the exclusive jurisdiction of the Delaware Court of Chancery (or, only if the Delaware Court of Chancery declines to accept jurisdiction over a particular matter, any federal court of the United States of America sitting in the State of Delaware), and any appellate court from any thereof, in any action, cause of action, claim, cross-claim or third-party claim or proceeding of any kind arising out of or relating to this letter agreement, or the negotiation, execution or performance hereof (including any action, cause of action, claim, cross-claim or third- party claim or proceeding of any kind based upon, arising out of or related to any representation or warranty made in or in connection herewith), or for recognition or enforcement of any judgment, and agrees that all claims in respect of any such action, cause of action, claim, cross-claim or third-party claim or proceeding of any kind shall be heard and determined in such Delaware Court of Chancery (or, only if the Delaware Court of Chancery declines to accept jurisdiction over a particular matter, any federal court of the United States of America sitting in the State of Delaware), (b) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any action, cause of action, claim, cross-claim or third-party claim or proceeding of any kind arising out of or relating to this letter agreement, or the negotiation, execution or performance hereof (including any action, cause of action, claim, cross-claim or third-party claim or proceeding of any kind based upon, arising out of or related to any representation or warranty made in or in connection herewith) in the Delaware Court of Chancery, any federal court of the United States of America sitting in the State of Delaware, or in any Delaware State court, (c) waives, to the fullest extent permitted by legal requirement, the defense of an inconvenient forum to the maintenance of such action, cause of action, claim, cross-claim or third-party claim or proceeding of any kind in any such court and (d) agrees that a final judgment in any such action, cause of action, claim, cross-claim or third-party claim or proceeding of any kind shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by legal requirement."

[2] "Termination. The Equity Investor’s obligation to fund the Aggregate Equity Commitment will terminate automatically and immediately upon the earliest to occur of (a) the consummation of the Closing (if the Closing occurs) (but only if such obligation to fund the Aggregate Equity Commitment shall have been discharged in connection therewith) and (b) a termination or expiration of the Offer in accordance with its terms. Upon the termination or expiration of this letter agreement, no party hereto shall have any further obligations or liabilities hereunder."

The banks had already signed up for financing. They didn't need another reason to pull out - because of the changes in interest rates since they signed the deal, they stand to lose hundreds of millions over the life of the loan.

They agreed a cap of 12% on the interest, if they cant get it away for less than that they will just stick it on the books and wear it, the debt may be poorly rated, but cant see Musk defaulting on it over the next few years at least.

The merger agreement stipulates that Twitter can require specific performance (that is: force musk to buy them). It's an open question whether or not the judge would have ruled that way, but Musk was consistently losing the early battles.

No way, look at the facts, if that were true Musk would've paid 1B and it ends there.

The "breakup fee" was a judge ordering him to pay 44B, plus a lot embarrassment. As @matwood pointed out, you start negotiating from that.

My personal opinion is that Levine was always off base in one important way- Musk always intended to buy Twitter, and this was merely a negotiating tactic on price. He bid at the wrong time, so he's paying a lot more than he "should", and this whole thing was an attempt to get the price down.

I don't think at any point was he actually backing out of the deal, and I certainly don't think the whole thing was an elaborate scheme to sell Tesla stock.

This is… not how your negotiate on price. What you call his “bid” was in fact his binding definitive agreement to acquire the company at an agreed upon price.

Yeah, plenty of deals get re-traded between signing and closing and purchase prices get re-cut, but the extreme bad faith by Musk after he signed the merger agreement made it functionally impossible for twitter’s board to do anything except hold him to the deal he made.

You don't sign a purchase agreement with absolutely zero wiggle room to negotiate (and agree to the sellers additional seller-friendly terms along the way) in order to lower the price. You negotiate before you sign the agreement.

This is like going into a Honda dealership, signing a bill of sale at 20% over MSRP for a Civic without looking at it, then arguing you should get a discount because the floor mats are ugly.

He fucked around, and he found out.

There's a reason everyone incorporates in Delaware. They don't have time for shenanigans.

> You don't sign a purchase agreement with absolutely zero wiggle room to negotiate

You also don’t do that for a company you don’t truly intend to purchase, especially when being guided by lawyers that only you and perhaps a dozen other people in the world can afford to engage for representation.

Whatever all this drama was…it’s way too early to make any informed judgement about motivations of the parties involved.

It’s pretty evident that Musk is falling into the same sort of spiral that autocrats do when they surround themselves with sycophants and get used to breaking the rules for fun. What signal does he have that he’s gone too far? Well… none… until Delaware Chancery requires him to pay tens of billions of dollars that he signed over on a lark.

IMO the fact that he made even one tweet ever about this whole debacle (prior to resolution) is evidence that he can’t trust his team (or his team is truly bad).

A lark is fleeting feeling. This was far from it. This wasnt an overnight whim…it was weeks in the making. If it was a lark, Musk would have backed down before anything was signed or made the offer terms completely unpalatable to Twitters board but instead he made them an offer they wanted to refuse, but couldn’t. Musk definitely wanted to buy it and was more than willing at that price.

Your opinion relies on a couple things that are pretty unlikely. One, that someone as successful as Musk wouldn’t engage counsel that he completely trusts with 20% of his net worth. Two, that he went down this road without a real commitment to buy it, despite spending a ton of money in the effort to buy it.

The market turned, the valuation changed, and Musk tried a tactic to renegotiate his position. In the end, he is going to ultimately get what he really wanted, but the value of what he wanted will take a little more time to recover.

A lark is not a fleeting feeling. It’s “a quest for amusement.” This is pretty much the only thing that explains all of the behavior. He was doing it for fun and no one stopped him in time. Partly because, as has been reported, so many in his inner circle thought he wasn’t serious about it.

He entered into an entirely reckless contract because he was riding the high of his Big Joke. Not sure what’s hard to believe about an egomaniacal self-described troll getting himself into a tricky situation. Schoolchildren do it all the time.

Who knows what the deal is with his relationship with counsel but go ahead and read some of their filings to see what a clown show it is. Some of them seem to have been written by Musk himself and making claims that don’t even resemble legal arguments.

> go ahead and read some of their filings to see what a clown show it is

I have, but I am not a lawyer. Perhaps you are and can speak intelligently to their validity. What I will say is that there is a better than average chance that exceptionally good and well paid lawyers drew them up and a better than average chance that many of the armchair legal analysts commenting here and elsewhere are not good and well paid lawyers.

Wealthy business people I know are not adverse to risk, but they are methodical and are generally careful when large amounts of their own capital is at risk. This smells more to me like a calculated negotiation tactic to try grab a lower buy price that didn’t pay off for Musk more than anything else. In then end, he got what he originally wanted and at the price he was originally willing to pay.

You can be the best lawyer of all time but if the police have a 4k close up of your guy pulling the trigger from five different angles there may be no sequence of words you can write that are gonna get him out of jail, and it's also possible anything you do write will sound absurd. That's more or less the situation here with Musk, although in contract form, not criminal.

I'm curious if there will be any attempt to recover damages from his legal representation. Maybe there was deficiency? Although I doubt any legal form is sufficiently capitalized or insured to make more than a tiny dent in the harm done to his fortune by this whole debacle. To be clear I assume he's been adequately represented but I mean he did make this offer so further buffoonery would not surprise.

Sure, but that doesn’t mean your lawyer doesn’t still try and make a case in your defense if you want one. That’s what lawyers do…

Think about it, no one really got hurt here. Musk ultimately buys Twitter for the agreed price, no shareholder loses. Musk assumes the cost for Twitter’s lawyers for the lawsuit to preserve the deal by buying Twitter and Musk paid his lawyers to defend it. It was chump change to a billionaire to take a long shot bet to maybe make the deal a little sweeter and it didn’t work. Oh well, Musk has not lost any more than he was originally willing to risk.

Think about it, no one really got hurt here.

That's not what twitter thinks and it's right in their original lawsuit:

155. Twitter has suffered and will continue to suffer irreparable harm as a result of defendants’ breaches.

But if that harm manifested itself in a lower value of Twitter it will be repaired, when Musk buys the company for the price they agreed on.

If that harm is reflected in something else (the reputation of Twitter maybe?) that is damage Musk did to his own company.

So maybe whoever co-invested with Musk got hurt a bit, but they’ll still get whatever part of Twitter they wanted, for the price they agreed on.

TFW when you start justifying a billionaire's unethical (and possibly criminal!) behaviour by saying 'well, no one was *physically* hurt!'

Their point is that no one was financially hurt. Nobody in this thread mentioned anything about people getting physically hurt, unless I’m missing something.

You don’t think anyone was hurt by the absolutely enormous amount of stress he chose to create? Or the army of lawyers that Twitter shareholders had to pay for?

I think you meant to reply to my other comment[0], since that's where I did make that argument? But as to your questions:

> You don’t think anyone was hurt by the absolutely enormous amount of stress he chose to create?

Fair point, I imagine the last couple of months have not been great for many Twitter-employees.

> Or the army of lawyers that Twitter shareholders had to pay for?

As far as I know the shareholders don't directly pay for the lawyers, that money comes from some financial reserve Twitter has. In normal circumstances massive legal costs can reduce the value of a company, but in this case the shareholders will be able to sell each share for the same $54.20 as before the lawsuit. If the company becomes less valuable because of this, that's the problem of the next owner of the company. Since Musk will end up owning Twitter, he'll end up paying for the lawyers on both sides of this suit. Or am I missing something?

[0] https://news.ycombinator.com/item?id=33092570

Under this theory of damage, there’s no such thing as theft until you die because there’s always a chance you’ll get your belongings back on your deathbed. So no biggie, right?! Time value of money is a thing. Time under stress is also a real thing, and Musk seems to relish in putting other people in it.

> Under this theory of damage, there’s no such thing as theft until you die because there’s always a chance you’ll get your belongings back on your deathbed.

Only if you take really specific statements and turn them into a general theory. But this discussion isn't about theoretical thefts and deathbeds, it's one about the reality that Musk is buying Twitter[0]. There is no "army of lawyers that Twitter shareholders had to pay for", because the current shareholders won't have to pay anything. Twitter is paying for the lawyers and Musk will and up owning Twitter. That's not some moral judgement, it's a description of the facts. Nothing I've said so far is in defense of what Musk does.

To be clear: I behavior is justifiable. He created this mess by making really dumb decisions and then trying everything to get out of this situation by not caring about anything or anyone but himself. It has been a huge waste of time and money. But as it turns out, Musk will be the one owning a company he doesn't want, and as that owner he'll be the one paying for that wasted time and for the costs made by both parties of the lawsuit. It just seems that the person that's by far the most hurt by Musks actions is Musk himself.

[0]In this entire comment I'm assuming the deal actually goes through.

There are a few other parties that could claim some sort of injury, although I don't know how much of a legal case any of them would have.

Some employees may have suffered undue emotional distress due to the excess uncertainty.

Anyone who sold TWTR while the price was depressed due to Musk's unjustified legal maneuvering certainly suffered economic injury.

Elon's creditors and co-investors may view his maneuvering as having damaged the asset, thus decreasing their expected returns.

To reiterate: I don't know if any of these people have a legal claim. And I acknowledge that Musk certainly injured himself the most. But the economic injuries suffered by these other parties are not trivial.

> Some employees may have suffered undue emotional distress due to the excess uncertainty.

That is absolutely hilarious but also sad that people in 2022 are so fragile that they would try to claim such nonsense in all seriousness.

Sorry it's hilarious that people would be emotionally distressed about their jobs potentially disappearing? Curious to know what year this new "fragility" kicked in, in your eyes.

I'll withhold judgment until my livelihood is under the thumb of a capricious billionaire who has expressed disdain for my work.

> Oh well, Musk has not lost any more than he was originally willing to risk

He risked his dignity and he lost it.

People with Musk's wealth can't lose dignity in any meaningful way, because social consequences don't apply to them. He's going to remain one of the richest, most powerful and influential people on the planet regardless of what he says or does.

You don’t purport to terminate a merger agreement (three times, no less!) if you are merely trying to re-cut the price.

Even if this had been a negotiating ploy, Musk (through his extreme bad faith, including apparent destruction of evidence) put Twitter’s board in a box where they couldn’t possibly accept a lower price without exposing themselves to substantial personal legal exposure. He already agreed to buy the company at $44 billion, after all. There was no reason for them to return to the table, and many, many reasons for them not to.

Your previous comment literally argues it is too early for anyone to make informed judgements about the motivation of the parties involved. And yet, here you are:

> The market turned, the valuation changed, and Musk tried a tactic to renegotiate his position. In the end, he is going to ultimately get what he really wanted, but the value of what he wanted will take a little more time to recover.

Is this not someone making an informed judgement about Musk's motivations?

>Is this not someone making an informed judgement about Musk’s motivations?

Not really, I’d call it more an uninformed opinion since I and pretty much everyone else on here was not privy to the inner working of Musk’s brain.

> You also don’t do that for a company you don’t truly intend to purchase

You can defend Musk all you want, but you simply cannot make the argument that he is a traditional, by-the-books, conservative business man. He's an impulsive, irrational, self-obsessed, risk-taking billionaire who flouts convention, tradition and consensus. His reckless instincts and his willingness to bend or break 'the rules' have worked incredibly well for him in the past. This time he fucked up big-time.

> ...especially when being guided by lawyers that only you and perhaps a dozen other people in the world can afford to engage for representation.

You think Musk is the kind of person who lets lawyers lead him around by the nose, that he is someone with a well-known and well-established reverence for the legal profession and the rule of law? This is absolutely not the case.

> Whatever all this drama was…it’s way too early to make any informed judgement about motivations of the parties involved.

This is hilarious because the first part of your comment is literally you presenting sharing your view Musk's motivation (eg. "He has every intention of buying Twitter because he signed a purchase agreement! People who sign purchase agreements don't not buy the companies they committed to purchasing!").

Anyway, it's definitely not too early to make an informed judgement about the Twitter conflagration. Musk did everything he could to drag this debacle into the spotlight rather than handling it more discretely. He tried to weaponize public opinion for his own aims, and he also (very publicly) made a series of misleading or patently false allegations about Twitter in order to get his way. It's too late to argue that we should approach this with a neutral perspective.

Nah, I am not defending Musk. Frankly I don’t care if he buys Twitter and burns it to the ground, loses all his cash, becomes a pauper; or spins it into something bigger and sells it for $1T; or doesn’t buy it at all and is penalized and socially destroyed on the world’s stage.

I’m literally indifferent to to the man and his musings and I think that gives me a bit of a different perspective then the binary Musk opinions here on HN. However, my opinions are as uninformed to Musk’s internal intentions as all of the armchair lawyering and MBA’ing that is going on here…I guess I am just willing to admit it.

What is a fact is at the end of the day he is buying a company that he wanted, at a price he was willing to pay, and will do with it what he wants, despite Twitter’s attempts initially to keep him from buying it and apparently half the worlds horror that he is actually going to get it.

> What is a fact is at the end of the day he is buying a company that he wanted...

I appreciate the perspective you take, I think it's refreshing.

I think a lot of this debate centers around exactly this premise - we don't know that. We don't know he wanted it, and we don't know it's a price he was willing to pay. He said that but his actions don't really align with his words.

He has a history of playing fast-and-loose with the truth, either sharing optimistic or totally unrealistic deadlines that had not a chance of being met. Crazy technical solutions like the hyperloop that had to be walked back almost completely for being nutty. And a history of publicly attacking people who cross him ("pedo guy"). While he's got a lot of achievements too, his communication style leads (speaking for myself at least) people not to put quite so much faith into what he says, - and to pay a lot more attention to what he does.

We're all just speculating.

This is purely revisionism / spin. If musk truly did want to buy Twitter but wanted to do so at a discount because the shares were overvalued, you really think this is the plan any sane person would come up with? Waiving due diligence and rapidly signing a purchase agreement that leaves you no outs and no wiggle room? Absolutely not. Musk is a narcissistic, unstable ego maniac but even for him, your retcon'd version of events is laughable.

Close. Read his text messages. He wanted to reduce headcount, both to remove "the woke" and to reduce the wage bill. "2 day a week office requirement = 20% voluntary departures"

Everything he has done since signing the deal has been about delaying so he could sell TSLA, and letting tweeps know their values don't align with his. Hence asking the court to release his texts, and going full Russia Today right before he makes this offer to complete.

> inb4 "it was all 4D chess, this is what he wanted" Yeah, sure pal ...

He would need more sleep for that. I think a lot of his bizarre behavior can be explained by (a) generally being an asshole (b) medicating to avoid sleep.

Time for Parag to send back the emoji to Musk :D

I hope he reads this and I hope he does it.

It has potential to become the most liked tweet in history.

Only thing is that Parag probably won’t… see it’s because Parag is the grown up here :D

Parag is the first one on the ejecting seat once Musk comes in, in case you have not realized.

But with a hell of a golden parachute. Parag is set up very well to become an "investor" or "thought leader" or something else in Silicon Valley.

> Epilogue: Matt Levine was on point all the time

Matt Levine is always on point. He's a brillant writer and one of the funniest, too. A true living genius.

But even he wasn't able to predict that last development.

Also: Poor Matt. Tomorrow was supposed to be a day off for him, and it probably won't... ;-)

Tomorrow may well be one of his funniest columns EVER.

It may also be his most fun to write.

Go Matt! (Vacation can wait a day)

Some truly hilarious moments...

> Last night Musk tweeted that “Buying Twitter is an accelerant to creating X, the everything app,” which sounds exhausting. The app will do everything, but it will start with two functions: You can read tweets, or you can be shot on a rocket into space. Choose wisely.

And also:

> Is he going to try to raise more money? Is he going to go out to potential investors again and say “changed my mind, Twitter is great now, this’ll be fun, can I pencil you in for $1 billion?” (...) Every little bit helps, no? What does the disclosure document for that investment look like? “Yes Elon Musk has said that Twitter is a dysfunctional fraudulent conspiracy, but everything is fine now, and it’s an accelerant to creating X, the everything app.”

I’m starting to think Elon reads the newsletter, and deliberately times these things just to mess with Levine.

Indeed! From today's letter:

At the top:

> Programming note: I apparently have some very bad sins to atone for.

And then at the end of the Twitter saga:

> Anyway I’m tired of this and I have a new retirement plan. Every time this newsletter starts with “Programming note: Money Stuff will be off tomorrow,” Musk does something outrageous, and Twitter’s stock swings up or down. So I’m going to buy a bunch of Twitter straddles and then take a vacation, while Twitter is still public and that trick can still work. I’ll make a fortune.

It would not surprise me if we come to find out that some people in the know (not Twitter insiders) were stocking up on TWTR shares during the lawsuit drama. Wonder if SEC has any restrictions on non-insiders with material knowledge.

I think Hindenburg Research, normally an activist short seller, published a report that they were loading up long on Twitter shares b/c they were confident Musk would lose.

If you have material knowledge aren't you automatically an insider?

No. You're an insider when you have material knowledge and a duty to the shareholders, implied or otherwise, not to abuse it.

> An “insider” is an officer, director, 10% stockholder and anyone who possesses inside information because of his or her relationship with the Company or with an officer, director or principal stockholder of the Company. Rule 10b-5’s application goes considerably beyond just officers, directors and principal stockholders. [1]

> This rule also covers any employee who has obtained material non-public corporate information, as well as any person who has received a “tip” from an Insider of the Company concerning information about the Company that is material and nonpublic, and trades (i.e. purchase or sells) the Company’s stock or other securities" [1]

The formal Insider Trading Policy applies to any person who has the information, for the purposes of this law Insider ( as defined in the first part) is materially same.

While you are half right that they are not "Insider" the law does not differentiate any person who got the information from the "Insider", so they are still a insider from the SEC regulations PoV and law applies to them if they trade on material non-public information obtained from a "tip".


Yes, if you get your information from someone with a duty or relationship to the company, you're also an insider. But if you come by material nonpublic information on your own (for instance, from drone surveillance, or some clever analysis of public IDs in URLs, or whatnot), you are allowed to trade on it; that doesn't make you an insider trader. I'm just correcting the statement made upthread about what constitutes an insider.

> if you come by material nonpublic information on your own

Provided you got the information legally.

Of the examples you cite:

Drone surveillance -> Probably illegal depending on local laws

clever analysis of public ID -> Likely legal, although given how CFAA is extremely loose on its interpretation of unlawful access I wouldn't be shocked if a prosecutor successfully argues that it was illegal .

Have a cite for that?

Pretty sure acquiring it illegally doesn’t make you an insider, and you could still trade on it - albeit be liable for the crime you committed to get the info.

It does make it Insider trading.

A famous recent example was the hack of press releases before they were released and used to make 100+M profit. [1] .

Note the SEC pursued this case not DoJ . SEC has only civil mandate and cannot pursue cases for hacking directly under CFAA which would be a criminal offense only the DoJ can and perhaps also did concurrently

[1] https://www.sec.gov/news/pressrelease/2015-163.html

I can't find the actual complaint, but the wire there seems to say they are charging them under antifraud rules, not insider trading rules.

"The SEC’s complaint charges each of the 32 defendants with violating federal antifraud laws and related SEC antifraud rules and seeks a final judgment ordering the defendants to pay penalties, return their allegedly ill-gotten gains with prejudgment interest, and be subject to permanent injunctions from future violations of the antifraud laws."

It's a bit confusing though, because earlier in the same article they seem to imply it's for insider trading. But they don't seem to actually say that's what they are being charged with.

Man this "4D chess" expression is really something to describe Musk's strategies.

My bet is on the rest of the communications being publicized by the court. Billionaires aren't used to their private texting being public like that.

Musk might like the circus around him, but a lot of people who have been texting him probably aren't enjoying the hundreds of news articles analyzing their private conversations. He could have gotten some communications that he'll become a persona non grata in many of his circles if he doesn't stop the court procedures immediately

> he'll become a persona non grata in many of his circles if he doesn't stop the court procedures immediately

When you are the richest or one of the top 5 richest people in the world, you are always at the center of circle and people flock (or bend) to you. I suspect this was more about him and how he looked than concern for those folks texting him.

I'm sure you already know this, but the deal has already been financed. He is not buying the whole Twitter by himself, just the majority. If co-investors bail out, investment banks who signed the deal take those stocks.

If you compare the purchase price to what Twitter likely would cost without the deal–using the price change of other social media platforms and internet ad platforms as a benchmark–it seems likely that Musk is paying ~$20 billion over the current market value.

If Musk wants to offload even more stocks, he takes huge haircut. At least 50% or more. It's likely better to wait for better times and restructure Twitter.

No matter how you look at it, this is horrible deal for Musk unless he can make Twitter shine again.

I'm assuming that part of this settlement was that some of his funders told him that they wanted the embarrassment to end. This whole process has made him and all of his co-investor friends look like assholes and idiots, and I'm sure they didn't like that.

Musk burned his reputation. His handshake or verbal agreement is worth much less going forward. Without trust he can't move fast.

Someone like Warren Buffet can make a one phone call and the deal gets closed in few days because his word can be trusted.

Well it's too late, I'm convinced all of them are assholes and idiots.

Of course, I thought this even before the Twitter fiasco started. I just believe it even more strongly now.

For me it was Elon Musk calling a rescue worker a pedophile and then doubling down on the claim.


I found it surprising to read that some of Elon’s high school classmates confirmed that slang word was used to mean ‘idiot’ in their locale.

I have some family members from SA… very interesting culture to say the least!

Back in middle school the "F" word for a bundle of sticks was often used as a derogatory term directed at people you didn't like, regardless of their sexual orientation. That doesn't make it okay for me to call someone that on the public stage because as an adult you are supposed to know better and keep up with changing public opinion

Just because you did something stupid and wrong as a kid doesn't mean you should be able to get away with doing it as an adult.

A lot of people think that Elon Musk was the modern Nikola Tesla or (yes) Albert Einstein. These texts let them know that he is actually the modern PT Barnum.

Musk is modern day Howard Hughes.

Brilliant man who worked in aviation and aerospace and did many things. Eccentric person with serious mental issues.

He’s the modern day John Ernst Worrell Keely.

He is musk, there isn’t a great historical analogy because globalization has truly enabled him to rapidly impact the entire world with his antics and successes.

Having a very brief look at the world of the ultra rich through an acquaintance of a friend, Im pretty sure that "reputation" to those people means a very different thing than it does to us. The key thing to remember is that these people live a very luxurious lifestyle that they can fund without ever having to work a day in their lives, so funding stuff like that to them is pretty much entertainment.

If you watch the expert testimony from the Depp v. Heard trial, you can see a little bit about how "reputation" is measured and how much it can matter to the rich and famous. It is a lot more like how companies measure "brand equity" than how normal people think about reputation.

Depp would not be considered ultra rich. Depp has a net worth of 650 million at peak, which is tiny compared to Musk, Bezos, etc.

(I had to look this up) Musk is worth ~$240B, ~1000x more than Depp. Honestly, I'm impressed that a (and I say this with love) junkie actor could do so well.


Not only that, but Depp is notoriously irresponsible with his wealth. Before he had to liquidate some properties because of the trial, he had an excess of houses, condos, boats, cars, and all kinds of expensive to maintain personal holdings. I don't know for sure, but from what I've seen of Elon Musk, he is a lot more conservative with his wealth—even considering the Twitter deal.

$44 billion for Twitter is not being conservative with wealth.

Elon Musk is conservative with his wealth because it's mostly on paper - he would need to sell shares to get access to it. Johnny Depp's wealth was mostly in cash.

I wouldn't be surprised if Elon Musk only had about $1 billion liquid (aside from whatever goes towards paying known obligations, like the Twitter deal and tax bills), making him only 2x richer in cash terms than Johnny Depp at his peak.

I don't really know or care about the fine details of Musk (or Depp's) wealth. All I'm pointing out is that Musk seems to have a more moderate lifestyle. He doesn't live like the archetype of a rockstar or billionaire.

You must not know a lot about Musk's lifestyle either, then.

And that’s without even bringing up the coterie of concubines (defacto, not de jure). I wonder what THAT child support paperwork looks like.

Horses are expensive.

Byproduct PMU foals cost less than a purebred kitten or puppy sold by a breeder, sometimes as low as $125. With two acres for grazing, annual cost of feeding can be as low as $100-$300 a year for an adult horse.

But, I believe, you are largely correct. I don't think rich people rescue PMU horses.

Musk cashed out $9 billion of TSLA stock earlier this year. Now, it might all get sunk into TWTR, but who knows.

He seems to have plenty of cash

My understanding was that there were two big bills coming due for most of Musk's recent sales: a tax bill and the Twitter purchase.

His co-investors are the Saudi royal family, Larry Ellison, and the Murdoch family. These do not strike me as a group of people overly concerned with the opinions of ordinary folks.

If you add Peter Thiel to the list you get most of the contemporary villains in just one place.

What a great outlook for Twitter...

No one knows the details of the agreements Musk signed with potential co-investors and banks, but considering it has been 6+ months since and the reputation, value and bank balance of the underlying asset – Twitter – has fallen (partially due to Musk's own antics), not to mention drastically different overall economic conditions, I wouldn't be surprised if they all have second thoughts as well.

Second thoughts, absolutely, but also hell-or-high-water contracts that require MAEs to break, and Musk has been notably unsuccessful in making that argument (hence where we are now!). Gonna be a lot of blood on the floor when folks have to take the writedown on this.

Musk failed to prove a material adverse effect by Twitter.

But if his investors wanted to get out of their contracts, they might have legal standing (IANAL), or at least enough threat of it to be allowed out of the contract by Musk to avoid more court battles, based on the fact that he has caused MAE...

After all, there is an open court case of Twitter v Musk (separate to Musk v Twitter) in which Twitter claimed:

"Since signing the merger agreement, Musk has repeatedly disparaged Twitter and the deal, creating business risk for Twitter and downward pressure on its share price."


"Musk’s strategy is also a model of bad faith. While pretending to exercise the narrow right he has under the merger agreement to information for “consummation of the transaction,” Musk has been working furiously—albeit fruitlessly—to try to show that the company he promised to buy and not disparage has made material misrepresentations about its business to regulators and investors. He has also asserted, falsely, that consummation of the merger depends on the results of his fishing expedition and his ability to secure debt financing."

(Copied from the legal case Twitter filed - https://corpgov.law.harvard.edu/2022/07/14/twitter-vs-musk-t... )

Surely someone who committed a billion can just tell him they refuse because the platform has no users and is 99% bots

Please if you are a bored billinaire that got suckered into this, take it all the way to trial. Then in the closing arguments "its just a prank bro"

Would be very entertaining for us! But probably a bad idea for the investors considering how tightly they've agreed https://news.ycombinator.com/item?id=33089373

The commitment papers are publicly filed. True, Musk’s equity syndication terms aren’t public, but that’s basically irrelevant - Musk personally is on the hook for 100% of the required equity to the extent any of his coinvestors don’t show up at closing.

"pending receipt of the proceeds of the debt financing contemplated thereby"

Not equity. And probably at worse rates than could have been obtained in April.

Musk locked in the rates in April. The banks who offered that financing are going to take a 100MM+ hit off of the deal going through.

Locked in rates at 12%.

If they cant shift it off to the market they will just stick it in the trading book.

I mean, if they cannot shift it to the markets, it's because the markets think its not worth what they paid for it. And it's a lot of risk and capital to tie up themselves.

They may have to resell some of it at, say, 14% to get some of the risk off their books.

$7.1 billion in equity from 19 independent investors.

$20 billion cash from Musk, $6.25 billion in personal bank loans to Musk (he is hooking his Tesla stocks)

Rest is senior secured bank loans and subordinated debt loaned against Twitter stock. The cost of the debt is about $1 billion per year if I remember correctly.


> In conclusion, Elon Musk's Twitter purchase will have to be heavily financed by someone else in order for him to complete it.

> In May, according to an SEC filing, Musk's Twitter buy was most heavily subsidized by Saudi Prince Al Waleed bin Talal Al Saud

Not a great sign for activists using Twitter speaking out against the Saudi government, just based on what has happened already in the past.

I think this is a critical point.

Making Twitter profitable cannot possibly include magnifying the alt-right minority of the U.S. Driving the moderate users and progressives away with TFG and moderation changes that allow QAnon misinformation would severely damage Twitter as a company.

I also guarantee some group of savvy developers are building Twitter 2.0 and will release it if and when Musk starts destroying the company from within.

Employees will quit. Users will abandon the site.

And I still think Musk is clueless about the tech stack. It's mindbogglingly complex and he's not going to replace the hardcore tech staff with sycophants off the street.

There's a necessary equilibrium required to keep Twitter going and growing the platform. I just don't think he's going to outright gut it and turn it into a mindless "free speech" platform. The shit-posts would humiliate him.

Or he turns it into Maga Social and doesn't care about financial losses.

>If it did turn out that Zatko had been talking to Musk's team

42 days ago I commented on the Mudge whistleblower article that there is no way that news coming out at that moment was coincidence, and that the Silicon Valley powers-that-be were aligning against Twitter. Of course, I was accused of "blind hatred of Musk".

This community has some massive blindspots for it's heroes.

I was massively downvoted and flagged for expressing similar concerns, and kept getting new accounts all saying the same thing.. "Zatko's reputation speaks for itself".

It appeared at the time that there was a PR campaign of some sorts just parroting the same talking points. It was obvious it was related to the acquisition.

This community has a lot of the techbro libertarian types in it. That kind of person idolises Musk.

> If it did turn out that Zatko had been talking to Musk's team, that would be a very big deal, not only undercutting a big part of Musk's current case (which he was set to lose anyways) but also falsifying several statements made both to the Delaware court and also to Congress(?!).

I largely agree with this supposition, which makes it unfortunate that Musk (and co) can take a step like this to try to eliminate discovery that could point to perjury and a clear conspiracy for market-manipulation.

It’s a longshot, but it would be simply amazing if Musk managed to expose himself to criminal liability becaused he convinced himself in a pot-induced stupor that Zatko was going to somehow free him of his obligation.

Don’t assume that this prevents the matter from being looked at more closely though. Musk is a juicy target.

It would be truly amazing. All Musk had to do to minimize his exposure was to do exactly what he was doing - loudly and repeatedly proclaiming “won’t someone rid me of this troublesome merger agreement!” and seeing what crawls out of the woodwork. If he couldn’t help himself and went beyond that - well. Like you said, just simply amazing.

I can’t exactly blame Musk for taking the lesson from the last several years that the American social, political and legal systems are seemingly incapable of dealing with bad-faith actors who are loose with the truth and fluid in their commitment to their, uh, commitments, but it’s nice to know that Delaware Chancery is a place where bluster and obfuscation doesn’t fly. Yet, anyway.

In other words, lawyers have only STARTED to earn money on this deal? :-)

> I largely agree with this supposition, which makes it unfortunate that Musk (and co) can take a step like this to try to eliminate discovery that could point to perjury and a clear conspiracy for market-manipulation.

The court case hasn't been paused yet. There has been, to my knowledge, no documents filed with the court even requesting it be stayed (or dismissed), let alone any such requests being granted. Musk's credibility before the court is pretty thoroughly shot, so I suspect the judge isn't going to grant such a request unless Twitter agrees to it--and Twitter so far hasn't shown any inclination to agree. And why should they? They're likely to win anyways, and having a court order telling Musk to go through with the deal provides an extra guarantee that Musk will actually go through with the deal rather than changing his mind for at least a third time.

What are those "multiple bits of evidence suggesting that Peiter Zatko had in fact been in touch with Musk's team"?

Edit: Not exactly proof of contact between Zatko and Musk, but found this:


Twitter wants to keep looking in light of a mysterious email from May 6 that turned up in the files of Quinn Emanuel, a legal firm that represents Musk.

Specifically, someone reached out with an anonymous ProtonMail account on that date purporting to be a “former Exec at Twitter leading teams directly involving Trust & Safety/Content Moderation.” In the email, the sender suggests that Musk’s team get in touch on another platform (through “alternate secure means”) in order for them to provide information about Twitter.

One thing that’s odd about that letter — not the only thing, but one thing — is that it makes a demand on the Chancery Court to adjourn the trial. That is, it’s not a notice of settlement or even a request for adjournment, but some kind of weird attempt to bargain with the Chancellor, even though the issue at trial is whether Musk already reneged on this exact same offer. Not sure I understand what they’re trying to do here.

I am not following the court oroceeding, and I am not a lawyer. So honest question, if one of the issues being at trial whether or not Musk reneged already, isn't an letter stating, basically, "never mind this whole trial, I'm willongbto honor the deal now", kind of not helping?

"Not helping"... who or what?

Musk is now offering to execute the signed deal – which is the only thing Twitter asked to court to enforce. So it's absolutely helping resolve the dispute faster, without further legal costs or burdens on the court – and probably with the same end state as was most-likely earlier. And perhaps by signaling a specific clear future, damage to Twitter's position from the uncertainty & acrimony will halt & start to heal... benefiting its future owner, Musk.

I may go down in history like Bill Gates’ interrogation in 1998, which is still taught in every law school as “what not to do” unless you want to upset the judges.

So “what not to do, Elon Musk style”: Be unclear about intentions, have second thoughts, trying to play 4D chess with apparently no advisor than absolute amateurs to tame him or PR department to sway the public opinion your way, then keep being erratic with the judge.

I don't find that too odd, because I believe the plaintiff, Twitter Inc, can more-or-less get a stay on request, especially if it's likely to make any further burdens on the court become moot. So wording it this way is just being clear about what Musk wants Twitter to cause to happen.

Further, Twitter's complaint only asks the court to compel performance under the original agreement - it doesn't ask for extra damages from Musk's flip-flops. If Musk is offering exactly that performance, there's nothing for the court the compel, unless & until things change again. (If that happens, the stayed action can resume – and the judge would be even more disposed against Musk et al.)

I'm not sure that Twitter could really sensibly demand damages if the sale went through.

If Twitter is still sold at the original fixed price, then Musk is left holding the asset he himself damaged and would have to essentially pay damages to himself.

The shareholders will still get the same payout regardless of the alleged damage to the company, unless they decided to sell before the sale, but I am not a lawyer so I don't know if they'd be able to sue successfully.

Of course, I don't believe Musk is the sole owner, so his co-buyers might have a case.

I think Twitter Inc agrees with you, as they've made no request for damages.

Shareholder lawsuits are weird; maybe someone who owns Twitter Inc stock could claim Musk's actions caused them to sell early, or otherwise suffer losses (margin calls?) due to his actions temporarily pushing the stock value below the deal price, even if the deal concludes. But I've not seen hints of any such stretches.

I feel that statistically speaking there would be at least one shareholder (perhaps an employee) with a stop loss order that could've been triggered after Musk's shenanigans. Someone in this position had a material loss.

Must be a bitter pill to swallow given how the markets have performed since his bid, which was already at a premium. Huge win for investors.

At the price being paid it's one of the dumbest acquisitions, by price, by any entity (individual or corporation) in the past 30 years that I've been watching markets closely.

Twitter would be lucky to be trading at $20 / share minus the supporting bid. Musk overpaid by a minimum of $15 billion because he doesn't properly control his impulse problems. There were numerous ways he could have proceeded more slowly in pursuing a purchase, without so tightly locking himself into that grotesque price tag.

Let's put his stupidity into perspective: $15 billion was his total net worth five years ago. It was half his net worth a bit over two years ago.

Next up, Tesla's stock is going to sink considerably from where it's at. It'll just amplify the pain of this over-pay.

> Next up, Tesla's stock is going to sink considerably from where it's at.

Dragging the rest of the stock market with it.

It’s like that domino meme, where the tiny brick is “19 year old writes bot tracking Musks private plane” and the huge brick being “stock market crashes”

I think that's not the right lens to view it through. To me, this is more like a turbo charged version of Bezos buying the Washington Post. Twitter might be totally insignificant in terms of eyeballs/dollars compared to TikTok, but it is extremely important in cultural terms. It's not just about money but about influence. Also, Twitter was horrendously mismanaged for many years, probably because none of the key execs or board had enough skin in the game. Elon can probably terminate or "manage out" 80%+ of the employees without harming the underlying business meaningfully, so you can't really just look at historical financials here.

Bezos paid $250M for the WaPo. Much more like a hobby purchase than Musk blowing such a huge fraction of his net worth on a company that's unlikely ever to be profitable.

> Elon can probably terminate or “manage out” 80%+ of the employees without harming the underlying business meaningfully

People keep saying insane stuff like this as if the site just runs itself. That is absolutely not the case.

Even if this were true, do you really think it takes 7,500 employees?! Because apparently thats how many employees they have over there.

Right, Snap, somehow similar and also unprofitable social media company is down 67% since April 14 when Musk disclosed his offer. Twitter stock would likely experience similar kind of drop in this period.

Tesla spends $0 dollars on marketing (not really, but still).

Twitter is Teslas marketing department, and probably the marketing department for other Musk firms.

Musk gets to make sure this very valuable entity remains valuable.

Lots of press outlast are being turned into sponsored non-profits.

Seems Musk wants a similar model for this non-profiting for-profit.

> Twitter is Teslas marketing department, and probably the marketing department for other Musk firms.

40B+ to scaffold a marketing department?

Well, the market cap of Tesla is currently over $700B, so spending 6% of your market cap on marketing isn't that crazy.

But in this case I don't think Musk is playing checkers, when everybody else is playing chess.. I think he was just doin drugs, and tweetin twetes.

6% of market cap is huge. That's not 6% of revenue. Imagine Apple spending $140B on a marketing department.

> Well, the market cap of Tesla is currently over $700B, so spending 6% of your market cap on marketing isn't that crazy.

Until you account for how grotesquely overvalued TSLA is, anyway

Blue check all the hodlers

I agree this is a smart move (or rather, salvaging an impulsive decision) if Musk uses Twitter to increase the value of SpaceX and Tesla by an amount greater than the premium between Twitter’s enterprise value and his purchase price.

Hard to believe that people still see this as a smart move. Musk has been acting really erratically the last couple of years and was due to fall flat on his face. He's now done that in possibly the worst way. I'm really not sure what happened to the guy, if you read any of the material that was published in the course of the lawsuit, he just seems to act totally unprofessional. I find it really hard to understand how someone like that has achieved what he has. His decision making just seems impulsive most of the time.

> I find it really hard to understand how someone like that has achieved what he has.

I think it's just strong evidence that a lot of rich people got lucky once and managed to leverage that into getting richer because so much of life becomes Easy Mode at that point. Immediately not being subject to the "Boots" theory, but at scale, makes a huge difference.

I think there's a strong argument that Musk actually made a few smart decisions - right time, right place for electric cars. But reading some of the documents that have come out of this make it seems like he hit his limits a long time ago and is now floundering along uselessly.

To me it's just another strong argument that we shouldn't tolerate billionaires and they should be taxed out of existence until they're merely "extremely incredibly wealthy" and not nation-states unto themselves.

Honestly once you have so much money that you can no longer spend it all, any extra immediately goes into making you even richer. You eventually are able to sustain your luxurious life just from interest and investment returns, potentially requiring 0 work from you. There's no reason we should be accepting this when people are starving and homeless.

All of these rich folks in those papers seem that way. Super impulsive and a touch of FOMO.

On the plus side, it gave Elon Musk a chance to sell some Tesla earlier in the year.

Won't be a bitter pill if he can offload most of the expenditure by selling it to Saudi Arabia, which would probably love to own such an influential chunk of the "public square."

Potential buyer is offering what they think is current market price. Something like like $15-$20 per share than $52 per share. Musk would sell with huge loss.

There's effectively zero chance that CFIUS[1] would allow the KSA to purchase Twitter.

[1]: https://home.treasury.gov/policy-issues/international/the-co...

They already are a major shareholder. And I presume they can (or could in the future) have stakes in other Musk companies. That might predispose a private Musk Twitter to offer access (for example, provide access to private customer information on dissidents, something Saudi Arabia is very interested in [1]) in ways that a public Twitter might not.

[1] https://amp.theguardian.com/us-news/2022/aug/09/twitter-saud...

Being a major shareholder is different than having a controlling stake, which is implied by your comment that Musk "can offload most of the expenditure by selling it to Saudi Arabia."

What if he sells an API to Saudi and Russia and beyond to essentially hide criticism?

Censorship as a service...

As I understand it, MBS and Co. prefer to drown out the criticism rather than censor it, so they already have that API, and a crusade against bots would put it at risk. Granted, it's possible that Elon isn't committed to shutting down bots so much as shutting down non-friendly bots.

You appear to understand wrong: “Ex-Twitter employee found guilty of spying on Saudi dissidents.” Happened in 2018, verdict this year. https://amp.theguardian.com/us-news/2022/aug/09/twitter-saud...

This doesn't contradict what I wrote.

Prince Alwaleed bin Talal is a major shareholder. He will probably keep his shares.

> If it did turn out that Zatko had been talking to Musk's team, that would be a very big deal, not only undercutting a big part of Musk's current case (which he was set to lose anyways) but also falsifying several statements made both to the Delaware court and also to Congress(?!).

But I was assured that Mudge is a hero of impeccable personal integrity, that he is beyond reproach, that only an ignorant brain-dead moron with no knowledge of greybeard hacking could even think that he might be anything less than a paladin of righteousness!

Seriously, though, that doesn't even begin to touch the Bad Shit coming out of discovery. For a guy claiming to be a centrist, he's co-ordinating with a pro-AfD/Putin German press baron, and for a "free speech champion" it's pretty odd that "the redacted senders and recipients lay the groundwork for a "war" and "battle" after Musk takes over Twitter — a "coordinated pressure campaign" that will lead to deplatforming of political enemies." (https://twitter.com/oneunderscore__/status/15773449644046008...).

The fact that he's started tweeting pro-Putin talking points might be because of the political company that he keeps, perhaps it's because the source for Telsa and SpaceX's aluminium is Russia, but it's interesting that he's suddenly decided that he does want Twitter, after all, now that Ukrainian forces are making serious inroads toward the territory seized by Russia in 2014.

> multiple bits of evidence suggesting that Peiter Zatko had in fact been in touch with Musk's team, in advance of the "whistleblowing" release.

What evidence is that?


> Plaintiff argues that its broader proposal is necessary to investigate an unusual May 6 email produced from the files of Quinn Emanuel. The email was sent from an anonymous account hosted by protonmail.com (a popular encrypted email provider) to Quinn Emanuel attorney Alex Spiro and purports to be from “a former Exec at Twitter leading teams directly involving Trust & Safety/Content Moderation.” The author offers Musk information on Twitter and suggests communicating “via alternate secure means.”

That's only a single piece of evidence that someone claiming to be a former Twitter exec reached out. Better than nothing, though; thanks for sharing it.

Oh no where is that emoji? Time for Parag to send it back to Elon :D

He got slammed in discovery, lost a lot of his pre-trial motions, and started losing a ton of his net worth by appearing like a buffoon. He was about to go into an emergency conference at the Delaware Chancery court, and I assume that he was being told "you are going to lose" by his lawyers if not the Chancellor herself.

There was some indication that Mudge may have been in contact with him. He lost a lot of discovery motions about bots. His own experts told him that he had no case about Twitter bots. This case has been a loser from the beginning, and I think he thought he could get a better price by doing this. He likely didn't want anything else to come out.

The Twitter board did a great job not bowing to the pressure.

What I absolutely love about this country is that even the world's richest person has no power over even small courts.

What? Why would you say that? Much more plausible is the view that if you have high dollar lawyers on both sides crafting an airtight contract, and a jurisdiction that is heavily incentivized to stick to the letter of the law, then you can count on proper enforcement ... in contract cases. I would not apply this lesson to literally any other area of the legal system.

In many countries the judge would be bought off or threatened. There would be people "falling off windows".

And if that could be done in the US, the rich would absolutely do it. US legal structures, despite its flaws, is one of the better ones in the world.

The idea that the rich don't influence the courts in America is absurd. The reason why Musk couldn't just "do what he wanted" is because the other side of the table was also the wealthy elites. When it comes to elites vs elites, things start to get played by the book.

If Musk were allowed to make a mockery of the Delaware court, it would have shaken the bedrock for the trillions of dollars that corporate America rests under.

The rich can often basically just buy their way out so there's no need for anyone to fall out of any window.

Well, in some other countries he'd just buy the judge with a couple of mil and be done with it.

The Delaware Court of Chancery is not exactly a small court. Almost every high-budget matter of corporate law goes through this court, and they regularly deal with cases involving billions of dollars. Given how important corporate law and corporations are, it may be the most powerful trial court in the country.

The entity on the other side of the case also wasn't exactly a poor slob.

That would result in a gang war

even the world's richest person has no power over even basic common sense.

It's interesting to consider how Musk's behavior might change if his net worth was more liquid. I'd expect him to buy up a platoon of lawyers, send them off to battle in his stead, and go join Larry Ellison on his island for mojitos at sundown.

He already hired the best lawyers available.

What do you mean by his behavior changing if his net worth were more liquid? Are you suggesting he couldn't afford expensive lawyers because he couldn't get enough cash?

He has had no issue paying lawyers. The fundamental problem is that the case is dumb and without merit and he was always going to lose it. Expensive lawyers can't fix that, at least not against a counterparty who also has expensive lawyers.

Once you're spending $10 million on a case, you can find the best lawyers, and it's hard to get much additional meaningful work from just hiring more lawyers.

He was losing because he had a bad case, not because he had bad lawyers. The law was not on his side, and neither were the facts.

And it is not like Twitter doesn't have good and enough lawyers either. So the outcome between those is pretty much neutral. Which only leaves the facts and laws, which are on their side...

Musk made the share sales months ago, you can find them on Bloomberg. Lawyers need to be in constant communication with their clients, but Musk's bizarre behavior this case is largely just because he's Musk. Look at his attempt to take Tesla private in 2018, look at the insane shit he tweets. He's a very smart leader who has accomplished incredible things (he may not be responsible for every line of code but leadership can be a lot more important, look at Microsoft under Steve Ballmer and Satya Nadella), but he also has serious issues

Even an army of the smartest lawyers cannot protect the dumbest client

> and go join Larry Ellison on his island for mojitos at sundown.

Of all his behaviour and stupidity here, I have never for a second believed he will just kick back and live the billionaire life. He’s a workaholic, and he loves Tesla, starship and more too much. Say what you will about his character and decision making, you can’t deny the guy works extremely hard and is devoted to making stuff better

he sure is dedicated, but I wouldn't say he makes stuff better

You think reusable rockets are not making stuff better overall for the space program?

Nah, they think Musk is a net negative to SpaceX. Which sounds likely to me.

Wait until we all travel around Mars in self driving Tesla's.

Presumably all with stage 3 cancer from the radiation on our way to a mandatory shift to pay off our several million dollar fare over the next 300 years of multigenerational indentured servitude.

I think you are overestimating how much money it would need to send a platoon of lawyers. It would relatively cheap thing for Elon.

Oh man, I’m usually not one for drama, but I really want this deal to go through. I don’t use twitter and as such don’t really care if it implodes, but from what I’ve heard twitter has been a cesspool of negativity for a while now and on a slow but steady downtrend in general.

I’m sure Musk will try anything to recoup his investment, so it’ll either go out with a bang, or he somehow manages to pull a rabbit out of his hat and actually turn twitter around. Though I don’t think that’s very likely.

Either way it’ll be a fun pastime to follow the unfolding of it.

Stock up on the popcorn because once he lets the nutters loose on twitter to say anything and everything they want without limit other than a direct personal threat to someone or directly advocating terrorist actions, it's gonna be a real shit hole. That is if he wants to watch his $44 billion go up in smoke, no sane person will stay there amongst the nuts and Q's

I'm sure this kind of thing feels emotionally satisfying to say, but if you think about it for a moment, it doesn't make any sense. It's like saying that RSS is a shit hole, that no one will want to use a feed reader "amongst the nuts and Q's".

But with RSS, I only see stuff from the people I subscribe to. There can be a billion of nut jobs and one reasonable person in the whole world of RSS, but if I only subscribe to the reasonable person's feed, all the other stuff doesn't affect me at all. With Twitter, I see random stuff suggested by the algorithm and I see comments in tweets from the people I follow. I also see quote tweets and replies made by the people I follow.

One is an open protocol, the other a closed ecosystem.

So that example doesn't really hold up.

This comment honestly reads like you reached for the first difference between twitter and RSS you could think of. "No comparison to be made." Really? A lot of people use twitter and RSS for the same purpose, but there's "no comparison to be made"?

I didn't think this really needed explaining, but here goes anyway.

As a user in a closed ecosystem like Twitter, you have no control over what content will be served to you (the same goes for any filtering tools said ecosystem offers it's users). The state of a closed ecosystem today, does not guarantee that there won't be future state changes (and users have no control over those).

With a protocol like RSS you have full control over the content being served up to you. If a source you previously agreed with and enjoyed, starts souring for you then it is as simple as unsubscribing. It will not be pushed on you.

So as said before, the example doesn't really hold.

What concretely is your concern here?

Twitter might some day remove the block button? They might some day push certain people on you, without recourse? Therefore, they have to ban these people now?

There is no concern here, as I do not use Twitter.

Rather it was an attempt at an simple example to explain to you the differences in control that a user of an open protocol has, versus the control a user in a closed ecosystem like Twitter has.

Think it didn't land.

The value of your RSS feed comes from the websites you have the feeds from. The value of twitter comes from the tweets on twitter. The more terrible tweets and tweeters, either terrible in their quality or terrible in their offensiveness to the reader, the lower the value. The more terrible tweeters, the more they will inject themselves in to the dialogues that were previously considered non terrible by the reader. At a low enough value, when people are wading through the racist crackpot right wing sludge, they will stop using it.

You're forgetting the value of following people you like on Twitter. As such, you are browsing your own curated feed, without the need to see much sludge. BTW sludge and toxicity can be found in quantities across the political spectrum, in case you're implying otherwise.

What happens is that the nutters follow and reply to popular threads (see epidemiology Twitter during the pandemic, for example). If there are more of them, Twitter loses value.

Twitter has started to let you control who can reply, but that removes some serendipity, so if everyone worth following does that, Twitter loses value.

People want to control what other people are being exposed to. They don't care that it's entirely opt-in who you follow.

They say the only want to ban Q, Alex Jones, and conspiracy types but then you look at sites like Reddit who have adopted this moderation heavy approach and it's slowly becoming one giant mono-culture where the set of bannable wrongthink only ever grows larger. It's highly selectively enforced and usually does little to stop people from actually having opinions they don't like.

It's based on an ideology that treats people like sheep who can be fooled by selectively showing them information and guide them towards holding the same opinions as they do. And they want unaccountable tech companies to be the ones with this power.

>It's based on an ideology that treats people like sheep who can be fooled by selectively showing them information and guide them towards holding the same opinions as they do.

Well, marketing empirically proves this to be true...

> other than a direct personal threat to someon

twitter limiting direct personal threats would be a welcome change.

Millions of nutters are already loose on there.

This is about not wanting the "other nutters" on there along with "our nutters". Which will make things worse in some ways, so keeping it confined to one set of nutters is not without its merit.

The difference is violence advocating nutters. It’s a whole nother ball game.

Twitter is already home to violence-advocating nutters. If you don't realize this, you are deep in a (dis)information bubble.

It's already a woke echo chamber. Anything he can do to change that will make it less of a shithole.

I like Twitter for all it's spaceflight related stuff from NASA and ESA, DLR and others, where live streams can only occur in form of text and photo updates. I couldn't think of a replacement platform for this use case. Or current news events for which the press is to slow to publish, or where they quote Twitter as the source, like today's "Fuck you" message, which is something which might make it into some history books. Sometimes some IT related posts are interesting, from people who are at the source or generally have a very good understanding of the topic.

I never scroll my "feed" or whatever they call it.

It'd be nice if we all went back to RSS readers, methinks.

I would posit that 98% of the public didn't use RSS tho, and I think that's a conservative number.

If you count podcasts it would be a lot less than that. It's not too much of a stretch to imagine under the right conditions a (micro)blogging equivalent of Apple Podcasts could take off.

You mean Tiktok / Youtube shorts?

Maybe get some first hand information on something before wishing to blow it up because someone told you it's bad? Never understood people taking joy and having fun watching others work get ripped apart.

Huh? Just because I don't use twitter doesn't mean that it's a foreign website to me. It's basically impossible to completely avoid interacting with it. Tweets are embedded everywhere, twitter threads get screenshotted and shared on reddit or in youtube videos and every now and again there's an interesting submission on hn that links directly to twitter.

I really don't need to use it regularly to know that it's filled with endless "hot takes" designed to aggravate instead of inviting meaningful discussion. The way twitter works actively promotes negativity, which is precisely why I don't use it. Also, I didn't never use it, I left the platform because of the above mentioned reasons.

I'm aware that twitter provides plenty of value for plenty of people and that it is very possible to curate your twitter experience in a way that avoids most of the negativity. But if twitter blows up there will be alternatives where the same people can derive the same value from.

And in the meantime I will absolutely enjoy a billionaire megalomaniac getting fleeced because he couldn't control is impulses.

I mean, if you just browse website picking out hot-takes and negativity from twitter, maybe it's not twitter that is the drain, but the websites that you visit that amplify those people.

I use twitter a lot to stay up to date on tech and follower developers. Your feed is what you make it, and if you curate it to only follow decent people you don't have to read all of the arguments and politics that happen on other parts of the site.

Society has been worse off since it got popular, it's a sewer spewing garbage at us in small chunks. I for one wish it implodes and cannot wait for that day. I don't care who built it, who owns it or how much it is worth on paper. It needs to go. And tiktok too, its the twitter for video. Cannot understand how any rational person can defend either one. Probably because attention span got destroyed so cannot remember life without it.

Everyone moans about centralization and screams "The internet is dead / the internet is 5 companies".... well if it implodes, maybe people will start writing proper blogs/arguments/documentation again and not try to make everything digestible in 15 seconds by the dumbest persons.

I wish that twitter will ban all politics/politicians off of it and push science topics instead. Ever since politicians hopped onto twitter, it's been a nightmare to be exposed to their thinking patterns and lies.

I don't/won' get joy from these platforms disappearing...it would be relief.

So, “I agree to do what I already agreed to do as long as you stop suing me for it”?

I have no inside info but I think this is because he is getting wrecked by discovery. More and more about him is being leaked from that and he doesn't like it. He'd rather lose billions.

> He'd rather lose billions.

Its an AND not an OR. He either proceeds with purchase and loses billions, or proceeds with discovery/trial, has personal info exposed, and is then forced to proceed with purchase and lose billions. He's tried to stall proceedings so far, but has reached a legal dead end.

I’m scared what scorched earth musk in charge of a zeitgeist weapon like twitter will do.

There are two cohorts who dramatically overestimate Twitter's influence and importance - tech people and journalists. Twitter really is not very important. At my non tech workplace of 800 people, I'd be surprised if 50 were active on Twitter.

“Most people aren’t on twitter” is not a valid argument against twitter’s influence. Compare with “most people aren’t CEOs”, “most people aren’t politicians,” etc.

Some people have a lot more influence than others, and the influential people are disproportionately on twitter.

> tech people and journalists

Also politicians.

That is the whole problem though, isn't it? A few hundred random people on Twitter are often more than enough to manufacture a wave of articles across multiple news websites and newspapers.

Twitter isn't important, the problem is that influential entities think that Twitter is important (and representative).

>Twitter isn't important, the problem is that influential entities think that Twitter is important (and representative).

Which makes it important..

Correct, as long as the illusion stays up.

We can build another if it comes down to it.

See: Facebook's declining usage, and the rise of TikTok.

Social networks are all quite replaceable, there are no exceptions.

Twitter won in its micro blogging space (there were numerous competitors for a brief time, way back), however it has never been a stellar product. It can and will be replaced if Musk turns it into a disaster.

I think the jury is still out on whether TikTok is an improvement over Facebook.

Who said anything about improvement?

Well the TSLAQ community is certainly assuming they're gone.

It will be funny of the Blue Checkmarks have to form their own social media platform - or in incredibly irony - end up in one of the "right wing" platforms as a refuge of free speech.


Yeah, it sounds like a TTRPG doesn't it?

"Does applying scorched earth musk to my zeitgeist weapon always succeed, or do I need to roll another D20 for that?"

The Musk brand damage could exceed a "paltry" $44B when his dirty laundry becomes public, especially given he'll only need to put in less than 50% of his own money.

Regarding the information leakage, does this signal that Mr. Musk treats people poorly in his private dealings?

It's all damage mitigation at this point.

Do you have examples of the stuff getting leaked? I've not seen anything (though I tend to stay away from celebrity gossip).

This article is interesting for surfacing the impulsive, non-strategic, and sucking-up communiques from those in Musk’s orbit: https://www.theatlantic.com/technology/archive/2022/09/elon-...

Note that the above article has at least one outright lie and is overall misleading. Just go read the actual communications on page 85 of the report[1], it'll be quicker and less inaccurate than reading the article.

[1] https://s3.documentcloud.org/documents/23108357/redacted-ver...

There is lots of articles out there. Try this one:


From your link:

>"Within days of the announcement that the Twitter board had accepted Musk’s $44 billion offer, Benioff, who is currently worth more than $6 billion, sent Musk a cryptic text about his own vision for the platform, writing on April 27, “Happy to talk about it if this is interesting: Twitter conversational OS—the townsquare for your digital life.”

Wow. This is like something right out of an episode of Mike Judge's "Silicon Valley." These people might be extremely wealthy but jeez they are basically buffoons. I'm guessing Beinoff only shares his "A" material with Musk and he obviously felt that "Twitter conversational OS" was worth sharing. You couldn't get any more Gavin Belson than either "conversational OS" or "the townsquare for your digital life.”

This... wasn't leaked, was it? It was released legitimately, as I understand it.

Many thanks.

Spot on...the first thing I thought was 'really...he started listening to his lawyers?'.

Yeah, isn't this effectively a complete win for Twitter concerning the lawsuits?

If you're Musk or an apologist, how do you spin this in a way that doesn't say "Yeah, they were completely right and I had no basis for my claim"?

Probably something like "I no longer have time to fool around with trivial things like Twitter. Ignore it ever happened, since I'm now using my vast intellect teaching world leaders how to end their wars".

He's already ruled out shoehorning in Dogecoin due to scalability concerns, so there is nothing else left apart from more shitposting.

He was set to be deposed this week. I'm guessing his advisors finally got through to him that he's fucked and dragging out the trial will only further publicly humiliate himself and potentially open him to even more consequences. Musk finally has to face reality, for once.

Yup, take a $44b tesla share price and/or reputation hit, or pay $44b and at least have an asset to show for it.

Actually, scratch the reputation bit. That's already toast.

Kudos to Twitter.


More like kudos to Musk's lawyers for creating several months' worth of billable hours out of trying to poke holes in a "I agree to buy it sight unseen, no refunds" contract.

What was the penalty if he lost the suit?

Would they force him to buy Twitter? Pay a fine?

Probably "specific performance", which is pretty much enforcing the contract that he already signed. So that would come down to forcing him to buy Twitter, yes.

Conveniently, much of Musk's assets are stored in another Delaware company called Tesla

Yeah, that provision seems suss as hell

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