Elon Musk ends $44bn bid to buy Twitter

[Distinctly Average]

 

 

 

Summary

Elon Musk is ending his $44bn (£36bn) bid to buy Twitter, alleging multiple breaches of the merger agreement.

The announcement brings to an end a long-running saga after the world's richest person decided to buy Twitter in April.

 

 

Quotes

Quote

 

Mr Musk said he had backed out because Twitter failed to provide sufficient information on the number of spam and fake accounts. 

He faces a $1bn (£830m) break-up fee and possible lawsuit by opting out. 

In May, Musk said the deal was "temporarily on hold" as he was awaiting data on the number of fake and spam accounts on Twitter.

The billionaire businessman had asked for evidence to back the company's assertion that spam bot accounts make up less than 5% of its total users. 

In a letter, Mr Musk's lawyer said Twitter had failed or refused to provide this information.

Shares in Twitter fell by 7% in extended trading after Mr Musk's announcement.

 

My thoughts

 No surprise there really. Seems he has been trying to back out for a while. One can only guess his lawyers have enough grounds to prevent him from loosing if sued by Twitter. It will be interesting to see how this unfolds in the coming months as there will surely be a reaction as well as litigation.

 

Sources

https://www.bbc.co.uk/news/business-62102821 

[emosun]

I feel like every person on earth telling him it wasn't a good idea might have had a contributing factor in this as well

[FloRolf]

37 minutes ago, emosun said:

I feel like every person on earth telling him it wasn't a good idea might have had a contributing factor in this as well

So 7 billion people and another 44 billion reasons are necessary to convince Elon Musk. Interesting. 

[wanderingfool2]

44 minutes ago, emosun said:

I feel like every person on earth telling him it wasn't a good idea might have had a contributing factor in this as well

I'm willing to bet he saw some of the internal stuff and realized how much of a money firepit it was going to be.  If lets say the bot numbers were lies, that means twitter would become liable for lying to investors and advertisers...at which point that's a billion dollar lawsuit right there.  Added on the billions Twitter faces from the using phone numbers against the users agreed upon terms.

[TetraSky]

And no one is surprised. 44 billion was also just way too much. Could've made his own social network and fund it for a few decades with that money.

[Spotty]

1 minute ago, wanderingfool2 said:

Added on the billions Twitter faces from the using phone numbers against the users agreed upon terms.

When they provided phone numbers used for multi factor authentication to advertisers? I thought that was resolved years ago? 

[Middcore]

9 minutes ago, TetraSky said:

 Could've made his own social network and fund it for a few decades with that money.

Elon Musk isn't much on starting things himself. I'm sure if he had actually bought Twitter in a few years he'd be claiming he founded it, though.

[wanderingfool2]

2 hours ago, Spotty said:

When they provided phone numbers used for multi factor authentication to advertisers? I thought that was resolved years ago? 

There was at least a $150 million fine from this year...back in May I think, so there could still be class actions in regards to that.  They at least operated that practice within the last couple years at least.

 

2 hours ago, Middcore said:

Elon Musk isn't much on starting things himself. I'm sure if he had actually bought Twitter in a few years he'd be claiming he founded it, though.

Based on?  X.com - he pretty much founded it

Tesla - the two guys who "founded" it created the name...they didn't even have the trademark rights to it.  They pretty much just contributed the thought of the name.

SpaceX don't actually know the background on this as much, but from the quick digging I don't see anything really countering him not being the founder.

[Taf the Ghost]

Best bit is Twitter will sue to force the sale through. This is going to be high comedy, even if it's probably just a play to drop the sale price. Twitter is probably worth 20-25 Billion in a normal sale, but there's nothing normal about Twitter. We're going to get a lot of lawsuits for a while, which always at least opens up hilarious information. 

 

I like Chaos like this, it's fun.

[wanderingfool2]

2 hours ago, Taf the Ghost said:

Best bit is Twitter will sue to force the sale through. This is going to be high comedy, even if it's probably just a play to drop the sale price. Twitter is probably worth 20-25 Billion in a normal sale, but there's nothing normal about Twitter. We're going to get a lot of lawsuits for a while, which always at least opens up hilarious information. 

 

I like Chaos like this, it's fun.

Depends though.  There is are exit terms (which was rumored at $1 billion) in contracts.

 

They also likely don't want to air their dirty laundry either.  If they decide to go to court, Musk's lawyers would ask for discovery details such as how they measure and what is publicly released.  In that case then it would likely mean disclosing the true numbers on the spam bots, which could open the doorway for them being sued (by lets say advertisers)

 

 

[Eaglerino]

Elon's no one's friend but at least he has neat rockets. still sad there won't be a break up of twitter anytime soon

[Needfuldoer]

8 hours ago, TetraSky said:

And no one is surprised. 44 billion was also just way too much. Could've made his own social network and fund it for a few decades with that money.

Don't give him any ideas!

 

Besides, any "replacement" or "alternative" to Twitter would be dead on arrival, due to Twitter's massive lead and role as a load bearing structural member of Web 2.0. Just look at the "alternatives" that already popped up in the last five or six years, they're mostly just safe havens for the types who got chased off of Twitter for various reasons, not attracting mainstream attention.

[Kronoton]

3 hours ago, wanderingfool2 said:

 

They also likely don't want to air their dirty laundry either.  If they decide to go to court, Musk's lawyers would ask for discovery details such as how they measure and what is publicly released.  In that case then it would likely mean disclosing the true numbers on the spam bots, which could open the doorway for them being sued (by lets say advertisers)

Sure, maybe, whatever....

 

Such a court case could also rip open on when Elon bought and sold shares in conjunction with offering to buy Twitter, backing out, going back in and finally pulling out.

So I'd say "let it rip" and in a best case scenario Twitter dies, Elon gets bankrupted&jailed and Tesla gets a CEO focused on making quality products.

 

 

Nah, not gonna happen.

[Doobeedoo]

Imagine buying a cesspool for that much.

[Fasterthannothing]

Twitter will not exist in 5 years mark my words. The entire system is a dumpster fire propped up by bots. Elon got a look behind the curtain and will certainly sue Twitter for falsifying their numbers and value.

[Umberto]

wait, so Elon Musk promised something that ended up not happening? Wow, that's shocking. 

[wanderingfool2]

12 hours ago, Kronoton said:

Such a court case could also rip open on when Elon bought and sold shares in conjunction with offering to buy Twitter, backing out, going back in and finally pulling out.

So I'd say "let it rip" and in a best case scenario Twitter dies, Elon gets bankrupted&jailed and Tesla gets a CEO focused on making quality products.

Not really, those numbers are already pretty much available in the SEC filing, along with the correlation of the volume being traded during the supposed days.

 

You can get a pretty good guess on when things happened just from public records already.  Given the amount of talk about Twitter imposing a poison pill, etc, it really makes me think that Twitter likely has a lot more to hide.

 

Also, Elon knows a whole lot more about building EV's than most other CEO's.  The former CEO literally got them within spitting distance of bankruptcy by not knowing the numbers.  Talking about "quality products", and Tesla had the highest safety rating of vehicles for quite some time.  The amount they are iterating under the hood is nearly unprecedented in the industry (and apparently the new giga pressed front/back now allows them to have better tolerances on the fit and finish part of the body as well)

[HenrySalayne]

Don't be fooled, people. This has nothing to do with falsifying any numbers, this is a simple case of buyers remorse.

Between the upcoming EU legislation forcing moderation and the downward spiralling stock price, it just was a bad idea to begin with. Exactly what literally everybody said.

Elon just needed the time to fabricate a good reason.

 

 

[Kisai]

On 7/8/2022 at 3:23 PM, emosun said:

I feel like every person on earth telling him it wasn't a good idea might have had a contributing factor in this as well

I think the crypto crash had more to do with it.

 

Like, even if you consider the possibility that Elon wanted to buy twitter just to change it's moderation policy, like, "Elon, this is not your backyard, please stop digging ditches"

 

Elon would have been better off starting a competitor to twitter and take all the cryptobros with him.

[mr moose]

19 hours ago, wanderingfool2 said:

Depends though.  There is are exit terms (which was rumored at $1 billion) in contracts.

 

They also likely don't want to air their dirty laundry either.  If they decide to go to court, Musk's lawyers would ask for discovery details such as how they measure and what is publicly released.  In that case then it would likely mean disclosing the true numbers on the spam bots, which could open the doorway for them being sued (by lets say advertisers)

 

 

I was going to say something like this, twitter is a dumpster fire of political propaganda and social maleficence, and I strongly suspect they know the damage that will ensue from it all being evidenced.   

[ebprince the computer nerd]

knew it

 

jokes aside, i didnt think elon could run a social media company

[BuckGup]

I'm surprised people thought he was going to buy it at all. It was clear from the start he had different intentions and wasn't actually going to buy it. I'm not sure if it was for a mudslinging attempt to show how Twitter is still essentially all bots and doesn't make money. Or if it was to get some private info Twitter provided during the "acquisition". Or perhaps it was a pump and dump as Elon is know for this type of behavior. 

 

Elon Musk is a brilliant mind but he's autistic so it's a give and take of the good and the bad lmao

[StDragon]

On 7/9/2022 at 6:33 PM, Kisai said:

I think the crypto crash had more to do with it.

 

Like, even if you consider the possibility that Elon wanted to buy twitter just to change it's moderation policy, like, "Elon, this is not your backyard, please stop digging ditches"

 

Elon would have been better off starting a competitor to twitter and take all the cryptobros with him.

Elon is a sly fox, he knows what he's doing.

 

For example, most people (including myself) knew what an absolute flaming dumpster fire that Twitter is. He had to bid that much money to gain control and expose the rot from the inside for what it is. There was nothing redeeming about that sewer pit that is known as an echo chamber.

What I do find Ironic is another certain someone casted major shade on Elon to promote their own social media platform. Little does that certain someone realize that Elon is paving the way for it by taking down Twitter.

[dalekphalm]

I don't buy Musk's reasoning here.

 

They're officially backing out because they say Twitter failed to provide the necessary information - not that the information given was not to their liking.

 

But that doesn't really track. Twitter gave Musk direct access to the "Firehose API" which is a direct real-time link to Twitter, basically giving him direct access to the data feed. They couldn't really give him anything more than they already did.

 

Personally I think he just got cold feet, or he never intended on the sale going through.

 

Whether you think Twitter is a hell hole or not, on the face of things, Musk appears to be the "bad" party in this exchange.

 

Twitter is going to try to force the sale to complete. If they cannot do that, they'll sue for the $1bn plus damages - Musk is likely going to be on the hook for a lot.

[wanderingfool2]

17 minutes ago, dalekphalm said:

But that doesn't really track. Twitter gave Musk direct access to the "Firehose API" which is a direct real-time link to Twitter, basically giving him direct access to the data feed. They couldn't really give him anything more than they already did.

Well I mean they only gave him access apparently Wed...after apparently months of asking.  Also it doesn't actually include everything needed.  e.g. it doesn't show IP addresses...so if you have 1 IP address posting to multiple accounts it's difficult to determine if that truly is multiple accounts or a single account.

 

A consideration that I haven't really seen discussed is that he might also realize how much of an effort it will actually be to purchase the company.  So even if the vote goes through for the purchase, you have lawsuits that could hold the takeover up to 5 years (if they don't get the correct amount of votes)...I think it was 2/3 majority needed (excluding his shares).  There is also a bunch of other talks as well about delaying the takeover.  I doubt he would have thought it would take potentially years to actually do a takeover (and during that time the company itself would flounder and fail because of that).