As Matt Levine explained [0] the “waiving due diligence” doesn’t really mean anything now. What does mean something is that he signed a binding agreement to buy Twitter, giving Twitter the right to compel him to close the deal, and there’s no “too many bots” exception, nor a “you were wrong (or even lied) about something you said” exception. He has to prove that it’s a “material adverse effect” which I understand is nearly impossible (he’d have to convince a Delaware judge that the company is worth at least 40% less than stated because of this, and in practice it seems these suits almost never succeed).
I absolutely love that fact that this tweet happy individual might actually get slapped for just tossing out tweets. Not sure if $1B would make him squirm or not, but even for billionaires, $1B is an expensive twitter rant.
Where are you guys getting this number from? Similar cases have settled for almost the full original amount. Like 95%+. Not half or less than half. Are you just making stuff up?
They’re saying that if everyone just did what they agreed to do:
- Musk would give Twitter shareholders $44B in cash,
- Twitter shareholders would give Musk ownership of the company.
Note that today, Twitter is worth $28B.
So the agreed deal essentially gives the shareholders $16B in profit.
So a judge might tell Musk he can’t back out and has to buy Twitter for $44B like he said he would.
Or it might let him just give the shareholders $16B and not get the company.
Typically, if you want to distribute money to each and every shareholder you pay them dividend. Must would only need to wire money to Twitter corporate account first.
idk. the fact that the price had already sunk nearly 40% from his price over this period could clearly indicate that his assumption isn't without merit.
I guess if public investors 100% believed Musk would pay, the stock should sit at $44 billion. I guess if Musk is forced to close or to pay equivalent damages, the value will jump back to that in the end.
I'd say the tech sector getting routed played a bigger part. It's not like Twitter dropping 40% (for any reason) is exceptional amonst all the other stocks that dropped 20-60% over the last year.
If the share price is lower than $54.20, it’s because the market doesn’t believe the sale will be completed. The difference between $54.20 and the current share price represents the probability of the transaction falling through.
Twitter has done nothing to impede the transaction, so any uncertainty (and thus decline in TWTR share price below $54.20) is due to the actions of the buyer, who is… Elon Musk.
Therefore, Elon is responsible for any decline in the share price since the purchase agreement was signed.
[0] https://twitter.com/matt_levine/status/1545151445057536001