On Friday, Elon Musk *attempted* to terminate his deal to buy Twitter. I’ve discussed the Twitter saga / arbitrage extensively (I’d refer you to my post on the TIF / LVMH parallels here and my podcast with Evan Tindell here)
“ The fact that Musk is working in such bad faith here — that he seems so unconcerned with law and the contract he signed — cuts both ways. On the one hand, it will certainly annoy a Delaware chancellor; Delaware likes to think of itself as a stable place for corporate deals, with predictable law and binding contracts, and Musk’s antics undermine that. On the other hand it might intimidate a Delaware chancellor: What if the court orders Musk to close the deal and he says no? They’re not gonna put him in Chancery jail. 6 The guy is pretty contemptuous of legal authority; he thinks he is above the law and he might be right. A showdown between Musk and a judge might undermine Delaware corporate law more than letting him weasel out of the deal would.”
While I would want the court to order specific performance as you would... Elon's Trumpian shamelessness seems so depressingly effective (with sec, courts, etc) where his stature, followers, unlimited money and lack of shame just steamroll people like these court judges who don't want to become public figures and get humiliated etc. I mean I hope not, if Delaware court can't resist this then who would but it seems so plausible they will just let him get away with the $1B as they will think "I've done my job is a lot of money " but really feel"i don't want to be harassed and humiliated and become a public figure "
I agree that the risk/reward is favorable, but my question is whether MS can pull out of the debt commitment? What happens if Musk pressures MS to pull out and then who would be responsible for part of the funding? Also, could Musk get a change of venue out of Deleware?
I respect your work, but $20B is so excessive and you are clearly very biased as a shareholder.
The share price was ~ $38 before the rumors. It's now $35 and a $27B market cap company.
So he thinks a settlement check should be for 70% of the size of the total market cap...
Also the entire market is down since the announcement so it's not like Elon is responsible for the ~10% loss since the rumors. If anything, he held the stock price up because of the potential buyout.
I don’t know. First the left screams bloody murder that’s he’s buying it now they want to force him to buy it. He was never going to buy it - he needed an excuse to sell Tesla stock. Mission accomplished. He will continue to sell.
In the meantime, the most damning thing to Twitter will be the bots AND when Elon does discovery on communications with the US Government which will no doubt show they were being directed and therefore violated the 1st amendment making everyone in the platform a plaintiff.
I don’t think it’s cut and dried at all. But - that’s the beautiful thing about the courts.
I thought this article on the legal was excellent
https://www.bloomberg.com/opinion/articles/2022-07-09/elon-s-out
Here without paywall
https://archive.ph/KpcbZ
This was insightful for me
“ The fact that Musk is working in such bad faith here — that he seems so unconcerned with law and the contract he signed — cuts both ways. On the one hand, it will certainly annoy a Delaware chancellor; Delaware likes to think of itself as a stable place for corporate deals, with predictable law and binding contracts, and Musk’s antics undermine that. On the other hand it might intimidate a Delaware chancellor: What if the court orders Musk to close the deal and he says no? They’re not gonna put him in Chancery jail. 6 The guy is pretty contemptuous of legal authority; he thinks he is above the law and he might be right. A showdown between Musk and a judge might undermine Delaware corporate law more than letting him weasel out of the deal would.”
While I would want the court to order specific performance as you would... Elon's Trumpian shamelessness seems so depressingly effective (with sec, courts, etc) where his stature, followers, unlimited money and lack of shame just steamroll people like these court judges who don't want to become public figures and get humiliated etc. I mean I hope not, if Delaware court can't resist this then who would but it seems so plausible they will just let him get away with the $1B as they will think "I've done my job is a lot of money " but really feel"i don't want to be harassed and humiliated and become a public figure "
You said the same thing $20 higher, guess the market completely disagrees
I agree that the risk/reward is favorable, but my question is whether MS can pull out of the debt commitment? What happens if Musk pressures MS to pull out and then who would be responsible for part of the funding? Also, could Musk get a change of venue out of Deleware?
I respect your work, but $20B is so excessive and you are clearly very biased as a shareholder.
The share price was ~ $38 before the rumors. It's now $35 and a $27B market cap company.
So he thinks a settlement check should be for 70% of the size of the total market cap...
Also the entire market is down since the announcement so it's not like Elon is responsible for the ~10% loss since the rumors. If anything, he held the stock price up because of the potential buyout.
No chance.
I don’t know. First the left screams bloody murder that’s he’s buying it now they want to force him to buy it. He was never going to buy it - he needed an excuse to sell Tesla stock. Mission accomplished. He will continue to sell.
In the meantime, the most damning thing to Twitter will be the bots AND when Elon does discovery on communications with the US Government which will no doubt show they were being directed and therefore violated the 1st amendment making everyone in the platform a plaintiff.
I don’t think it’s cut and dried at all. But - that’s the beautiful thing about the courts.
Very interesting thoughts - but couldn't Musk simply pay the 1 billion termination fee?