jcranmer 12 days ago

I think Musk's counterclaims are more interesting than Twitter's response. Here's the summary of the five counterclaims:

* Twitter committed fraud by lying to the SEC about the mDAU numbers with the intent of inducing Musk to buy Twitter at an inflated price. No, really, this is the allegation (see paragraphs 202-206).

* Count 2 is that Twitter committed [Texas fraud statute] by lying when it offered its shares. It's shotgun-pled, so I don't know which specific statements are supposed to be wrong, but I'm imagining it's basically the previous count recast under a different statute.

* Count 3 says that Twitter broke the contract by failing to provide information.

* Count 4 says that Twitter broke the contract by instituting a hiring freeze. [not gonna fly, especially when Musk admitted that Twitter gave him warning of what it was doing and Musk didn't respond. Did I mention that Musk's answer admits far more than I would have expected?]

* Count 5 is pretty please declare that Twitter lying about mDAUs is a materially adverse event that is cause to break the contract.

I still can't get over the banana-pants insanity of the first count... arguing that Twitter lied about its numbers for years specifically so that someone would buy it at an inflated price?

  • zinekeller 12 days ago

    > Twitter committed fraud by lying to the SEC about the mDAU numbers with the intent of inducing Musk to buy Twitter at an inflated price.

    What is that commonly-used aphorism? "One man's trash is another man's treasure"? Like, even if this is true, Musk didn't do (and subsequently waived) due diligence.

    > No, really, this is the allegation

    No further comment on it.

    > Count 2 is that Twitter committed [Texas fraud statute] by lying when it offered its shares. It's shotgun-pled, so I don't know which specific statements are supposed to be wrong, but I'm imagining it's basically the previous count recast under a different statute.

    If it's due to Texas laws, is the appropriate jurisdiction is the Texas courts or... oh, he's trying to claim that the case should be heard in a federal court (for diversity reasons). Good luck though Musk.

    > Count 3 says that Twitter broke the contract by failing to provide information.

    What information? The contract is already in the public, but okay you want to waste court time.

    > Count 4 says that Twitter broke the contract by instituting a hiring freeze.

    Twitter could just point to its peers like Google, Meta and Microsoft.

    > Count 5 is pretty please declare that Twitter lying about mDAUs is a materially adverse event that is cause to break the contract.

    Yeah, at this point I'm convinced that Musk wants to just waste everyone's time, especially after the chancery court denied his petition to schedule the hearing next year.

    • Sebb767 12 days ago

      > What information? The contract is already in the public, but okay you want to waste court time.

      The contract stated that Twitter had to provide Musk with internal data as required to close the deal. His teams tokens were apparently rate-limited at some point and it took a while for Twitter to give him access to all data, a.k.a. 'the firehose'.

      Just for completeness sake, Twitter seemed to still try (the token thing was probably a technical error) and whether giving him access to the firehose was actually necessary could even be contested, as he arguably wanted to use the data to not close the deal.

      • DannyBee 12 days ago

        "His teams tokens were apparently rate-limited at some point and it took a while for Twitter to give him access to all data, a.k.a. 'the firehose'."

        Here's the thing though:

        None of that data was required to close the deal. Musk had no diligence rights, he explicitly gave them up, and the contract clearly says so. He doesn't get to do regular diligence through that clause, it's meant to cover the literal things necessary to close the deal (like financing info or whatever).

        So Twitter didn't have to provide anything here, and certainly not access to the firehose.

        His response is going to be smacked down pretty hard by a chancellor - it's 100% nonsense.

        • throwoutway 11 days ago

          IANAL, but I think it makesMore sense if you separate it into:

          1. due diligence as a buyer (contract) to review additional information, ask questions etc

          2. using public information to purchase as an investor (he was) for a public company regulated by SEC

          I think the claim is not that he has the right to #1 (he didn’t) but that #2 was false and has been false.

          No idea if contract laws let #2 get him off the hook though

          • cyanydeez 11 days ago

            All that matters, against musk, is that however twitter claimed to count it's users was infact, how they counted.

            Musk wanted to invent some means to count users in an effort to demonstrate fraud. But that's not fraud. Just because musk provides an alternate means to count users, doesn't demonstrate fraud.

            Full stop. Unless he proves that they didn't count the way they claim, he has not claim. Waiving he due diligence clause is what makes his claims a non issue.

            • throwoutway 11 days ago

              I was not defending Musk, just trying to explain what he might be “thinking”.

              I see you’re point though. I guess he’d have to prove they used a formula that they knew was wrong for it to be fraud?

              • blitzar 11 days ago

                > I guess he’d have to prove they used a formula that they knew was wrong for it to be fraud?

                They could know the formula was wrong - inherently every measurement is wrong to some extent which is why you see a +/- error, that is not fraud.

                For it to be fraud, they would need to measure it in the way they claim to, get a result they dont like, and report it as <5% anyway (with intent to defraud people). Which could happen in theory, but seems highly unlikely.

      • zinekeller 12 days ago

        Quite derailing a bit, but Twitter executives are also saying that it tries to protect Twitter since that Musk indicated that he will launch a rival platform. Honestly this particular part sounds like Stac v. Microsoft (https://en.wikipedia.org/wiki/Stac_v._Microsoft)

      • plouffy 12 days ago

        Twitter was contractually obliged to give him data to help him close the deal, not to help him find a way to squirrel out of the deal.

        • bXVsbGVy 11 days ago

          I suggest reading the twitter complaint. It is not long, and it is very well written. They discuss many (if no all) things musk has been saying trying to avoid the acquisition.

          If I recall correctly, Twitter says they had no obligation to provide the firehose to Musk, but they did anyway. Musk had issues with rate limit, but twitter fixed it in reasonable time.

    • coffee_beqn 12 days ago

      Also I’m pretty sure Musk himself wrote on public Twitter that he would trim the fat once he owns the company ..

    • bostonsre 12 days ago

      > Musk didn't do (and subsequently waived) due diligence.

      Wasn't him collecting all of this MAU stuff to analyze it part of the due diligence needed in order to close the deal?

      • theptip 12 days ago

        No. He signed the merger agreement without doing DD into mDAU, and didn’t write any contingencies around mDAU onto the contract.

        You do your diligence BEFORE signing the merger agreement.

        • jacquesm 12 days ago

          Exactly. This whole thing smacks of regret on an impulse buy. And as Musk should well know: regret is no cause for contract annulment. Twitter is going to be his Waterloo if he can't follow through on the deal, they're going to force him to perform which means he may have to sell a whole bunch more stock to people who know he has to buy. That isn't going to help at all.

        • bostonsre 12 days ago

          O, that seems pretty odd. I can't think of any reason for them to do that beyond trying to get out of the deal or incredible negligence on the musk side in not doing that before hand. Were they able to get that data before hand if they wanted it?

          • glenngillen 12 days ago

            It doesn’t really matter at this point, because he signed a binding agreement. He’s the one that made that move. Specifically why is just speculation now.

            But, hey, we’re all here speculating anyway! My take is:

            1) He’s a history of making impulsive decisions without thinking (or caring) about the consequences.

            2) It forced Twitter’s hand because they couldn’t act like it was it a non-genuine offer.

            3) He’s so rarely held accountable for the consequences of his decisions he knew it didn’t matter because he’s above the law.

            • kukx 12 days ago

              You have to make a series of countless good or great decisions to be that successful. His ratio of good decisions to bad ones is probably one of the best in the world. He is not above the law, he has to stand before court as every normal citizen has.

              • tikiman163 11 days ago

                If you think his ratio of good to bad business decisions is even average then you haven't been paying attention. Tesla has nearly gone bankrupt repeatedly, and it's stock price has largely risen the most after Musk was removed from controlling the company as a result of a series of tweets that were considered illegal attempts at manipulating the stock market. In point of fact, Musk still controls SpaceX and internal memos leaked earlier this year indicate that SpaceX could very well go Bankrupt within the next 18 months. The Boring Company is generally solvent and under Musk's full control, but it is far smaller, and could be in danger of law suits for effectively failing to meet contractual obligations regarding the tunnel the agreed to provide Las Vegas. The Boring Company's future doesn't look great to me, their results don't meet public expectations which could easily lead to funding drying up.

                Also, anybody who thinks accusing a rescue diver of pedophilia purely because he told them not to interfere with rescue efforts is pretty far from being a genius. Musk has been lucky his whole life, people just rarely see his failures.

                Basically, his press is full of shit. The claim that he learned to program and wrote a video game at age 10 is quite ridiculous. Seriously, there are online websites where you can play his "game". It's Space Invaders, except theirs only one alien, you can't have multiple projectiles on the screen at the same time, the alien doesn't fire at you unless they get extremely close, if the alien fires at you it locks your controls making it virtually impossible to dodge and prevents you from firing back, and when you successfully hit the alien it immediately respawns at a random location which may be in range of you, resulting in you immediately dying. My own nephew programmed significantly more impressive games at age 10, will people start following him and assume he's never made any mistakes if someone who owns an emerald mine gives him hundreds of millions of dollars to invest into new technologies and the businesses don't ultimately fail?

                • Shaanie 11 days ago

                  Is your nephew close to Musk's age? Programming a simple game in 1980 is much more impressive to me than doing the same in the 2010s.

                • kukx 11 days ago

                  You are basically making a claim that he is a bad businessman without mentioning that he is one of the richest people in the world. Why should anyone take your arguments seriously?

                  • nocoiner 11 days ago

                    He signed a binding acquisition agreement in a $44 billion dollar deal without doing any due diligence. Bigger deals have been struck on similar timeframes, but rarely has the purchaser evidenced such obvious buyer’s remorse so quickly afterward, or embarked on the venture with as little thought as he put toward it.

                    That’s a pretty weighty fact on the scale of “Musk - canny businessperson, or remarkable streak of being in the right place at the right time.”

                    • kukx 10 days ago

                      So you suggest he is a bad businessman and his success is only attributable to luck. To understand how ridiculous this claim is you first need to realize that there are infinite ways to fail and very very little ways to succeed. Good and bad decisions are not symmetric, it is not 50:50, it is more like infinite:1. But even if it was 50:50, for the thought experiment sake, if you make random decisions you quickly make a bad one, and to be successful you need to make way, way more good decisions than bad ones. Sure luck is obviously always a factor, but thinking that he created a car that he later sent to space on his own rocket is not a sign of extraordinary competence, well, to me you can as well claim that the Earth is flat.

                • bathtub365 11 days ago

                  I’m not an Elon Musk fan but it was 1981 when he was 10. There were far fewer resources for learning to program and make games in 1981 than there are today. Not to take away from what your nephew did, but there are currently hundreds of “how to make a game” tutorials available online in a variety of instantly consumable formats. There are even entire development environments focused on simplifying game development with low code workflows. In 1981 there wasn't even the concept of a widely accessible public Internet.

          • tikiman163 11 days ago

            Yes, Musk could have received that data and had time to analyze it before buying, these kind of merger contract processes have time built into them to allow prospective buyers to look into finances and other information that is not normally publicly available. Musk was so certain he wanted this that he signed additional documents waiving his right to a due diligence period, allowing him to immediately sign the merger agreement.

            This next bit is mainly speculation, but the reason Musk is actually trying to back out is partly to do with the fact that signing the merger contract caused his other companies stock prices to drop and public speculation that his existing business would suffer if he needed to focus on running Twitter. The second and more widely believed version of events is that partly due in fact to his other stock prices dropping, Musk cannot afford Twitter without having to sell more of Tesla and SpaceX than he is willing to. Musk is already down to owning only 17% of Tesla and less than 50% of SpaceX, although that's complicated as some percentage of Tesla is owned by SpaceX and vice versa along with the Boring company in such a way that Musk effectively has majority control over SpaceX whenever he wants. If he has to sell additional stock to cover the purchase of Twitter he would very likely lose the ability to control everything except possibly the Boring Company.

            What's more, the contract he signed effectively puts him in a position of buying Twitter at a substantial loss as the stock market has significantly fallen since Musk signed the deal. He would effectively be losing significant control of his two primary sources of wealth in exchange for something he has likely since discovered he cannot run the way he wants.

            In short, this was a bad move financially when Musk first announced his intentions, it was extremely foolish of him to waive due diligence, and it became financially even worse shortly after he signed the deal, partly due to the facts that people lost trust in him for waiving due diligence while making a financially inadvisable move, partly due to the fact that he's actually pretty bad at math and doesn't understand the stock market, and partly because the stock market took a nose dive right after he foolishly waived due diligence and signed such a financially ruinous deal.

            If you're thinking Musk is smarter than I'm making him out to be, please consider that Musk tried to insert himself into a cave rescue he had nothing to do with, was told not to interfere with the professionals that know what they're doing, and retaliated to being told to butt out by publicly accusing the rescue team lead of being a pedophile despite knowing nothing about the man.

            Trying to offer to help without really understanding the situation isn't necessarily a bad thing, but randomly accusing someone of being a pedophile because they were critical of you is so far beyond acceptable behavior it's amazing Musk wasn't banned from Twitter as a result (it was where he made the accusation publicly). That level of harassment violates Twitter's ToS, plain and simple.

  • nomel 12 days ago

    > I still can't get over the banana-pants insanity of the first count

    As someone who's unfamiliar with this, could you explain what's banana-pants insane about a company inflating their hard-to-discover numbers, for profit? I thought that was, unfortunately, banana-pants standard? For example, the fiction that is Twitter or Reddit's user count.

    • phailhaus 12 days ago

      It's insane because Twitter has been very careful to explain that the 5% number is not some sort of "promise".

      > Additionally, our calculation of mDAU is not based on any standardized industry methodology and is not necessarily calculated in the same manner or comparable to similarly titled measures presented by other companies. Similarly, our measures of mDAU growth and engagement may differ from estimates published by third parties or from similarly titled metrics of our competitors due to differences in methodology.

      They covered themselves very clearly, and Musk has no standing here. He knew this, and decided to waive his due diligence and buy anyways.

      [1] https://www.sec.gov/Archives/edgar/data/1418091/000141809120...

      • 8ytecoder 12 days ago

        He claimed to buy Twitter, specifically, to clean it up; to get rid of bots. That was his stated goal.

        "If our twitter bid succeeds, we will defeat the spam bots or die trying!"

        https://twitter.com/elonmusk/status/1517215066550116354

        • kennxfl 12 days ago

          Apparently Twitter subpoenaed Musk's friends and colleagues who were actively tweeting about the deal with what is believed to be an attempt to prove he encouraged his posse tweet negatively to force a lower price.

          • threeseed 12 days ago

            David Sachs, prominent VC was one of those subpoenaed and he definitely seemed a little sensitive about it:

            https://twitter.com/DavidSacks/status/1554258141876932608

            • nocoiner 11 days ago

              My heart bleeds for him. He’s achieved tremendous success in a remarkably successfully economy based on dynamism and the rule of law, and now he’s asked to do his part, under oath, to maintain that system. Doesn’t he know that part is for chimps?*

              *Tried to write “chumps,” but liked the typo better.

        • madeofpalk 12 days ago

          The weird part is that "twitter has lots of spam bots" is a completely independent claim from "5% of the users who use our website or 1st party apps are bots".

          • swores 12 days ago

            While your comment is technically true standing alone, you've also slightly misunderstood what the 5% figure is about.

            It's not "users who use our website or 1st party apps", it's "monetizable daily active users", which may be similar to the group of users you described, but most importantly Twitter can choose not to show any ads (or not to charge money for ads shown) to bot accounts.

            So even if Twitter only had 1 single non-bot user, as long as that's the only user they are "monetizing" they would be at 0% of mDAUs being bots.

            Therefore, as jcranmer commented elsewhere in this thread, the 5% is actually their estimate of their own false negative rate of detecting bots (i.e. deciding which accounts can be monetised vs not).

          • rurp 12 days ago

            Yep, which I'm sure Elon and his entire crew of bankers and lawyers understand quite well. Musk is lying and sowing confusion in order to mislead people.

      • chx 12 days ago

        > They covered themselves very clearly,

        I am shocked, just shocked that a company with six billion dollars of cash on hand is able to afford good enough lawyers who make their SEC reports ironclad against shareholder lawsuits. Who would've thought.

        • nocoiner 11 days ago

          Best part is that if Musk loses and the court enforces specific performance, he just bought a company that just paid for all those lawyers to fight him out of the company treasury!

      • the_duke 12 days ago

        IANAL, but "we use our own metric" doesn't sound like an excuse for publishing numbers to shareholders that aren't a best effort estimation based on reasonable methods.

        If the methods were reasonable is of course possible, but up for debate and at least questionable.

        • bialpio 12 days ago

          IANAL, but I'm not sure if it matters, as long as the methodology is published? "Here's the number, here's how we calculate that number, don't buy shares if you think our methodology sucks" sounds reasonable to me, especially if they don't have a different number internally that they use to drive the decisions?

      • nonethewiser 12 days ago

        That's not what the original poster implied. He implied it's crazy because of the duration and specific purpose of the supposed lie.

        • pavon 12 days ago

          Doesn't seem strange to me. If I am suing a company for false advertising I'll claim that their behavior was aimed at inducing me to purchase the product at an inflated price. Not because I think they were specifically conspiring to target those lies directly at me personally, but because I am the one that is a party to the lawsuit. If Twitter was lying to inflate the stock price in general, then they were inducing everyone to buy at an inflated price and Musk is one of those people.

      • bostonsre 12 days ago

        Twitter added a loop hole saying that their data might be incorrect. It seems disingenuous to absolve them of all sins if their data is hugely incorrect to the point where it's fraudulent just because they added that loop hole.

        • zinekeller 12 days ago

          > It seems disingenuous to absolve them of all sins if their data is hugely incorrect to the point where it's fraudulent just because they added that loop hole.

          If there's an actual industry standard then you could argue that Twitter is lying. However as everyone in the legal community knows there are two important concepts here: wilfulness and negligence. Did Twitter willfully do this or is this just because there isn't an actual standard methodology but tried to do their best-effort anyways? Is Twitter aware of problems in its methodology that can be solved but were left as-is? Conversely, did an external party intentionally misinterpreted those numbers so that that party can paint a different picture that what Twitter actually claims?

          • bostonsre 12 days ago

            Yea, makes sense. Seems like it will be hard to prove malice over incompetence and vice versa.

        • jacquesm 12 days ago

          Maybe, but that's just not how it normally works and Musks reality distortion field does probably not include the courts. You sign a terms sheet conditional on DD and only afterwards do you move to put in a binding offer. Doing it in a different order is a waste of effort, after all, what's the point of doing DD after you've already made a binding offer? You can't use it to change the deal parameters and you can't use it to break it up.

        • phailhaus 12 days ago

          There's no standard or foolproof way to find bots, otherwise we'd be able to just ban them all. It all requires judgement. Twitter's statement is acknowledging this fact and legally covering themselves from people just like Musk who might go "well I have my own calculation metric and it says there's more."

      • loceng 12 days ago

        I imagine the argument is whether the method Twitter used, and was seemingly acceptable by SEC, is ethically, morally, or logically a reasonable measure.

        E.g. Can they 100% say that there are less than 5% bot accounts, or is that 5% number being pulled out of their ass - and saying "less than 20% of accounts are bots" would hold as much water? That is therefore then a misrepresentation, fraud IMHO - and stockholders should be suing not only Twitter but also the SEC.

        • Sebb767 12 days ago

          You're missing that they never promised that there are only 5% bots. They said they estimate five percent based on their internal research, which is completely true as far as we're currently aware. Unless you can prove they intentionally faked their own internal investigation, you'll have a very hard time proving fraud.

          Also, then there is the fact that Elon apparently even didn't believe this number. So even if he proves it's faked and the court agrees that this is actually a major dealbreaker (which is already near impossible), Twitter could still argue that he was completely aware of the bot situation when he made the offer.

          • loceng 12 days ago

            So if you have a home inspector inspect a house before you buy it, and they say "yeah, it looks good" - but it turns out they didn't actually investigate in a way that arguably involves an adequate amount of integrity or in a reasonable way to determine as accurately as possible that everything is sound - then you don't think that home inspector isn't liable? And what if the professional organization who has the responsibility of regulatory oversight of that profession, what if they're been lacking and not being responsible as they are supposed to be, allowing for poor analysis as the standard - are they guilt-free too?

            • JumpCrisscross 12 days ago

              > if you have a home inspector inspect a house before you buy it, and they say "yeah, it looks good" - but it turns out they didn't actually investigate

              Home inspectors follow well-established practices. Bot estimation for Twitter has no such analog. The closest might be the seller saying they've seen rats but never looked into it. You say fine, I'm buying to clean it up anyway; waive inspection rights; commit and then discover a rat's nest.

              Unless you can show the seller knew about the problem and lied about it, you're going to get your case thrown out of court. Now add multimillion dollar teams of lawyers and bankers advising each side prior to entering into the transaction and we have an approximation of the stupidity of this case.

              • loceng 12 days ago

                "Bot estimation for Twitter has no such analog."

                And that's acceptable there isn't well-established/widely accepted practices?

                Certainly Twitter and SEC will argue that to protect themselves from scrutiny and legal issues they likely deserve.

                • _djo_ 11 days ago

                  Yes it is, because Twitter has no close analogues. There’s nothing to base an industry-wide standard on.

                  All company figures involve some level of trust that they’re based on correct processes as signed off by audit firms. For areas of material interest you’re supposed to do due diligence before signing final offers, but Musk explicitly waived that for some bizarre reason.

                  • loceng 10 days ago

                    If you can't with 100% certainty determine the number of real users you have you shouldn't be putting out any number, and second to that, you have to be open to challenges that "your"/their analysis isn't reasonable; from what it sounds like, based on what Elon had said or alluded to, the way Twitter determined bot % was they had staff manually and "randomly" select literally just 100 accounts, and based on their own observations, decided if accounts were bots or not. If that's true, the obvious problem with that, is bots are designed to mimic to blend in and look like humans - to have the same or similar behaviour patterns to not be outside an expected range of behaviours.

                    So, what might really be going on is: Twitter's able to detect that less than 5% of users are unsophisticated bots, but they're unable to determine how much of the remaining 95% are sophisticated bots that accurately enough mimic human behaviour; and so it's not possible to genuinely say "less than 5% are bots."

                    • _djo_ 10 days ago

                      You have not done enough work to understand this issue before picking a side, and it shows.

                      For one, this is not about what percentage of Twitter users are bots.

                      Nor have you accurately or fairly described Twitter’s methodology for verifying their mDAU figures.

        • vba616 12 days ago

          I think your intuition that the SEC passes judgement on reasonableness of made up metrics is...doubtful.

    • jcranmer 12 days ago

      Twitter is a public company (and has been for 9 years), and has maintained the 5% mDAU disclaimer in its required annual reports for years. I don't know off-hand how long it's been doing so, but probably at least 4 or 5 years.

      The allegation is saying not only that Twitter has been lying about that number--for years, on documents that land it in legal hot water if it's been lying--but that it was doing so specifically so that Musk would buy Twitter at an inflated price. The insane part is really that specific intent, not the lying about the numbers.

      • flerchin 12 days ago

        Well twitter would have been obscuring bots to obtain an inflated purchase price _by anyone_.

      • thr0wawayf00 12 days ago

        FWIW, academic research has questioned the 5% number for years. USC and IU put out a report 5 years ago that believed the upper bound for fake accounts was 15%[0]. This isn't a new allegation.

        0: https://www.cnbc.com/2017/03/10/nearly-48-million-twitter-ac...

        • kergonath 12 days ago

          From your source:

          > our estimates suggest that between 9% and 15% of active Twitter accounts are bots

          From Twitter: “roughly 5% of our monetizable daily users are bots”.

          Both can be true at the same time, and it does not mean that Twitter lied.

          • dahdum 12 days ago

            Twitter's lawsuit mentions this, stating only they know who is monetizable. IIRC Musk's lawyers deliberately push the same false equivalency in their filing.

            • sangnoir 12 days ago

              Musks lawyers aren't fans of being disbarred or other legal sanctions, so they carefully couched the language in their filing to say "Musk believes [the intentionally confusing, possibly false narrative about bots]" without providing evidence, which is weak sauce.

        • jcranmer 12 days ago

          As explained many times by many people, the 5% is not the number of bots on Twitter. It is the false negative rate of Twitter's bot detection algorithms.

        • jjoonathan 12 days ago

          5% of mDAU is a false negative rate.

          5% of users is not a claim that Twitter made.

      • loceng 12 days ago

        ... "but that it was doing so specifically so that Musk would buy Twitter at an inflated price."

        The insanity is people being perfectionistic in that it was specific intent to target him to buy it - even if it says "him" - it's absurd that people are taking that literally, and not simply to "make it seem valuable for someone to buy."

    • jjeaff 12 days ago

      Whether they inflated their numbers or not, the burden would be on Musk to prove that and it would be completely impossible to do that with a 3rd party tool. You are a monetizable user on Twitter if you just log in and read tweets. Something that no 3rd party tool could possibly track.

      • zinekeller 12 days ago

        > You are a monetizable user on Twitter if you just log in and read tweets.

        Actually, even logged-out users (until they forced everyone to log in to read timelines) are monetizable, so Musk is really trying to make something to get out.

        • eastbound 12 days ago

          I’m surprised that someone clever enough to run a business, takes that excuse to get out of a deal. He must have been tired.

          Any businessman who gets into such a position, even by mistake, would have at least taken this opportunity to require Twitter’s methodology on counting bots an expose its flaws. The claim would be something tangible like “This account is a bot and your criteria falsely counts it as a user.”

          Not “Really there are 5% bots? Everybody, look!” He looks more like an engineer who can’t stand the fact that ballpark numbers are a decent way to do business in a lot of cases.

          • evan_ 12 days ago

            Another explanation could be, he’s not actually that good at running a business

          • plorg 11 days ago

            A large portion of Twitter's complaint is describing how many times they tried to explain their methodology to him, including in written documentation that he admits he didn't read.

      • lokar 12 days ago

        No, the burden is not on Musk to prove anything. He waived all rights to due diligence. There is nothing to prove or disprove.

    • daed 12 days ago

      One point not mentioned (and I’m just paraphrasing Levine from Money Stuff here):

      It’s crazy because it would probably be BETTER if you had more bots. Then you could say that your revenue per user was higher and you could argue that you had more room for growth. So, if anything, lying and OVERestimating the bot count would help your valuation more.

      • Ferret7446 12 days ago

        Not really, because the revenue comes from ads not users. Twitter makes profit from ad buyers thinking they are reaching many users. The "revenue per user was higher" you mention is actually "cost per ad impression" and ad buyers want that to be low.

        • Sebb767 12 days ago

          Ad buyers want this to be lower, but investors would love for this to be higher. I think that's what the parent was aiming at.

    • benj111 12 days ago

      The fact that musk tweeted that he was buying Twitter to fix the bot problem.

      So the fact that he's using his reason for buying to try and get out of buying seems... Insane.

    • fooey 12 days ago

      There's a whole assumption that bots are a net negative to the platforms value besides any arguments over how many of them there are.

      As a human, it's annoying to get get a reply notification only to discover it was bot spam, but from the platform perspective that bot just created user activity and content for you for free.

      I have a theory that the most embarrassing thing to come out of this might be that Twitter doesn't really care about bots much more than issuing platitudes that they care about bots to assuage the user base.

      • ryantgtg 12 days ago

        I have like 9 twitter bots and they’re all cool and interesting. I wonder if Musk’s tool differentiates between cool and uncool bots.

        In the past I tried to write bots that do things like reply to people, but that is a violation of the TOS and twitter would immediately identify and ban the account.

        • fooey 12 days ago

          The tool he used to identify bots identified his own account as a bot, so I'm gonna go out on a limb and guess it's not very intelligent (or is hyper-intelligent)

          • hef19898 12 days ago

            At that level of intelligence I bet it can drive a car.

      • blackoil 12 days ago

        If there are too many bot activities, user may completely turn off notifications and reduce the usage.

  • mywittyname 12 days ago

    This provides a lot of insight into how that man got to the top. He clearly has no qualms about lying and bullshitting his way into and out of anything and no amount of proof to the contrary will ever get him to admit he was wrong.

    I guess this is similar to the "reality distortion field" people claim Jobs had. Except the examples given there were more of him not believing people who said something couldn't be done.

    • kergonath 12 days ago

      Jobs’ RDF was a manifestation of his charisma: he could make people think something really hard was actually easy (when dealing with engineers and designers) or the other way around (when dealing with customers).

      Jobs did bullshit, but AFAIK more on the design and marketing side than on the business side (give or take the backdated stock option thing and his first stint at Apple, when he wasn’t in control). Certainly nothing like Musk’s shenanigans.

      • cma 12 days ago

        > (give or take the backdated stock option thing and his first stint at Apple, when he wasn’t in control). Certainly nothing like Musk’s shenanigans.

        Don't forget Jobs' prime role in having companies collude together to depress wages by not recruiting each other's employees:

        https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...

        "an interconnected web of express agreements, each with the active involvement and participation of a company under the control of Steve Jobs...and/or a company that shared at least one member of Apple's board of directors."

        • kergonath 12 days ago

          > Don't forget Jobs' prime role in having companies collude together to depress wages by not recruiting each other's employees

          Yes, indeed! I forgot to mention that.

    • benj111 12 days ago

      I reach the opposite conclusion.

      He offers to buy twitter on a whim, then changes his mind after signing a contract. That doesn't really seem like a good way of getting to the top.

      • spywaregorilla 12 days ago

        People are missing the obvious story. He locked himself into a price, then the price of things crashed. It has crashed so much that he's honestly better off just walking away and losing the billion dollars... but he doesn't want to lose a billion dollars so he's gonna do whatever he can do to get out of it.

        • dahdum 12 days ago

          Oh it's definitely not about a billion dollars. He'd pay that out in an instant if he could. The contract he signed and the law itself is not on his side, he may yet slither out of his commitments, but Twitter would never settle for a mere $1B when they've lost so much more in value due to him.

          • spywaregorilla 12 days ago

            Twitter hasn't lost anything due to him? Their share price would likely be lower if not for his dumb shenanigans. The contract is pretty clear that he can walk away for $1B, which is a lot of money.

            • dahdum 12 days ago

              That's not what the contract says. The $1B breakup was only if bank financing fell through, which it did and has not. The banks are still bound by their commitment letters to provide the required financing, and it doesn't look too plausible they could back out of those contracts.

              Levine covered it well here:

              https://www.bloomberg.com/opinion/articles/2022-07-09/elon-s...

        • megablast 12 days ago

          He could lose a lot more than a billion.

          He could lose the entire amount he pledged.

          • spywaregorilla 12 days ago

            Possibly. But it seem unlikely. The deal explicitly says he can back out for a billion dollars.

            • swores 12 days ago

              No it doesn't say that, it says that if his third party funding falls through then he's on the hook for a billion dollars instead of buying the company.

              There's nothing in the contract about a billion dollars fee for any other reason of the sale not going through.

              Of course, a judge could choose to take that number as the amount to punish with, but it's not a price Musk can just choose to pay to get out of the deal.

            • jonathankoren 12 days ago

              Only if the deal fails outside reasons like regulatory action. Simply changing your mind, or claiming that you should have done due diligence after you explicitly waved it, doesn't count.

              Personally, I want the court to rule for specific performance (ie. Pay the $44 billion) He fucked up.

            • lokar 12 days ago

              Why do people keep saying this? It's so trivially easy to disprove.

            • blackoil 12 days ago

              That is not a backout clause but protection against the deal not getting necessary approval.

            • vehementi 12 days ago

              Such confidence without reading it

  • Sebb767 12 days ago

    > arguing that Twitter lied about its numbers for years specifically so that someone would buy it at an inflated price?

    On one hand, venture-funded hockeystick-startups like Twitter definitely aim for a quick exit to make cash, so it's not totally out of the blue. On the other hand, Twitter is publicly traded and therefore already had its exit.

    • mywittyname 12 days ago

      And the Twitter board was also very much publicly saying, "don't buy us."

      • Sebb767 12 days ago

        Clearly reverse psychology, confirming that this was indeed their play all along!

        • meepmorp 12 days ago

          You joke, but expect to see this very idea put forward in all seriousness as this whole thing plays out. Likely by Musk fans, etc., but still.

          • Sebb767 11 days ago

            I'm very much looking forward to my "I called it!" moment :-)

    • nerdawson 12 days ago

      There will be members of staff who’s job depends on the value of the stock and countless more with total comp tied to it.

  • lefrenchy 12 days ago

    > Twitter committed fraud by lying to the SEC about the mDAU numbers with the intent of inducing Musk to buy Twitter at an inflated price.

    LOL, their SEC filings basically say “these are our numbers but they’re highly subjective and could be way off”. Musk is either a liar or an idiot.

  • dawnerd 12 days ago

    And keep in mind: Twitter wasn’t out there soliciting a sale. Elon came along and pretty much demanded he own it. Twitter tried to stop but he persisted. Should be a pretty clear cut case imo

  • nerdawson 12 days ago

    Wouldn’t the first count apply to anyone interested in buying shares in Twitter? Artificially inflating the mDAU figure makes the investment appear more attractive and valuable than it really is.

    • piker 12 days ago

      Seems like this is the correct answer. Musk is just putting himself in that class.

  • codingdave 12 days ago

    I don't honestly believe either side cares about the merits of the legal case - this is all just a very public and showy exercise to negotiate on a new price during a settlement.

    • nemothekid 12 days ago

      >I don't honestly believe either side cares about the merits of the legal case

      TWTR is only down 1.6% YTD.

      * SNAP is down 80%

      * PINS is down 40%

      * FB is down 50%

      A good chunk of TWTR's current valuation is now being propped up by Elon's buyout offer. Elon could be looking at paying a 100-125% premium on what should be the fair market value for Twitter. Twitter's board should care deeply about getting as much value here as possible.

    • dahdum 12 days ago

      Twitter has the facts and the law on their side, so they most certainly care about the merits.

      • meepmorp 12 days ago

        When the facts are on your side, pound the facts. When the law is on your side, pound the law. When neither is on you side, pound the table.

    • madeofpalk 12 days ago

      > this is all just a very public and showy exercise to negotiate on a new price during a settlement.

      Why would Twitter want to negotiate on a new price? There's already the agreement at a high price - why would they go lower?

    • koheripbal 12 days ago

      That's the nature of almost all civil cases - they are pretexts for negotiations.

      BUT, accusing Twitter of actual federal and state crimes is going to raise the awareness of several regulatory bodies, so this is going to get hairy.

      • _djo_ 12 days ago

        No it won’t, because those are baseless allegations thrown out in order to add more noise and confusion.

        You might get some red state DA eager for some publicity to make a song and dance about it for a bit, but that’s it.

        If Musk’s team could produce actual data and evidence of criminal law breaches they’d be reporting them to authorities not adding them as minor points in a civil suit filing in Delaware.

  • leobg 12 days ago

    > arguing that Twitter lied about its numbers for years specifically so that someone would buy it at an inflated price?

    I don’t think that’s the argument. Twitter is an ad supported business. As such, the incentive is to count the “monthly active users” rather higher than lower. Specifically, there us no incentive to make an effort to exclude automated accounts from that number at all.

  • Invictus0 12 days ago

    What's so interesting about it? It's total nonsense dressed up in legalese.

  • linuxftw 12 days ago

    > I still can't get over the banana-pants insanity of the first count... arguing that Twitter lied about its numbers for years specifically so that someone would buy it at an inflated price?

    This describes the entire business model of WeWork (minus the self-dealing), why should Twitter be different?

    • kergonath 12 days ago

      Hmm tough question… Maybe because they are not the same company, are not managed by the same people, and do not have the same business model? Just a guess…

  • gfodor 12 days ago

    The point to me seems to be to set up things where this won’t go to court: if the primary claim is that Twitter misstated mDAU, the downside risk to Twitter is far greater than to Musk (I think) to have that fact finding occur. If it turns out the court agrees with Musk, then in one swoop the deal falls through, Musk is vindicated, the reputation of Twitter’s entire executive leadership and board is permanently damaged, and the market will punish the hell out of the stock due to the first and higher order impact of this on their valuation.

    The choice for Twitter boils down to what level of price cut are they willing to make to remove that possibility.

    • _djo_ 11 days ago

      Twitter seems pretty confident about revealing their process to calculate that figure: They’ve described it multiple times and been explicit in their SEC filings.

      As they should have been, as it’s a sound enough process given constraints and doesn’t need to be 100% accurate. They have nothing to worry about.

      • gfodor 11 days ago

        I've been downvoted but what you state is exactly right: they have to decide exactly how confident they are in their own process holding up in court (which isn't exactly the same thing as it being accurate) - and to whatever degree they are not confident, back it out to a price change to de-risk the outcome I mentioned.

        I agree with you that they seem confident, but the entire back and forth around mDAU originated with Musk and my belief is that choice of dispute was taken in the interest of setting things up so they won't actually go to court. The gambit of course may fail and it may go to court.

        • _djo_ 11 days ago

          They’re going to court, because Twitter holds all the cards here and have the strongest legal case, so it’s in their best interests to have this adjudicated by a Delaware court.

          Musk is trying to pretend the mDAU = number of active bots. It’s dishonest, and likely designed to hurt the company and tank its share price and therefore bully it into conceding. Given the strength of their case I don’t see that happening.

  • mayank 12 days ago

    > I still can't get over the banana-pants insanity of the first count... arguing that Twitter lied about its numbers for years specifically so that someone would buy it at an inflated price?

    Not a lawyer, so could you explain why this is banana-pants insanity? There's malicious fraud (unlikely) and then there's the more likely case of under-investing in bot-detection and expunging efforts, e.g. "in favor of other priorities", to keep DAUs and subsequently valuations high for a potential sale.

    • Invictus0 12 days ago

      Twitter's methodology for checking bot accounts is clear, consistent, and has been detailing in its SEC filings for years. Anyone that cared could have easily double checked them. Recalling from memory, all they did is take a random sampling of accounts and have a human rate the accounts as a bot or not--back when Twitter had an API it would have been even easier to do this.

      • jsnell 12 days ago

        No. Nobody outside of Twitter can repeat the analysis.

        First, only Twitter knows which users are active (the population being analyzed are the DAUs). People doing bot analysis from publicly available define activity based on the account tweeting, which will probably skew heavily toward spam bots.

        Second, the mDAU metric is the DAUs with known bots having been removed. Nobody outside of Twitter knows which active accounts were excluded by Twitter from the metric. Even if 50% of Twitter DAUs are bots, as long as Twitter detects 90% of them as bots and marks them as non-monetized, the 5% number stands.

        Third, nobody outside of Twitter can actually do a proper job of evaluating whether an account is a bot, since they have orders of magnitude more signals than a simple tweet stream / public profile information.

        Twitters methology is far better than any publicly available bot detection would be, but the flipside is that it's not a replicable methodology.

        • runako 12 days ago

          > No. Nobody outside of Twitter can repeat the analysis.

          This is true of most material statements provided by companies in every industry:

          - Revenue? Trust the company, I cannot independently verify from outside the company.

          - Retail same-store sales comparable? Have to trust the company's numbers.

          - Headcount? I have to trust their number again here.

          - Expenses? I have no way to verify this unless I work at the company, in a very senior position.

          Outside verification of data is not a concern relevant to corporate disclosures.

        • kergonath 12 days ago

          They must have some internal documentation though, and the process can be looked at during the trial, right?

          So it cannot be replicated by third parties, and Musk does not know what he’s talking about (shocker!), but it can be verified a posteriori. And I assume it will be at some point.

          • jsnell 12 days ago

            I don't think it would be verified by somebody being given access to Twitter's internal data and redoing their process. At most both sides will trot out some expert witnesses to talk about whether the process / rating guide described in the internal docs are reasonable (what Twitter does doesn't need to be perfect, just not outright fraudulent). I look forward to finding what kind of a kook Musk finds as his expert.

            Maybe Musk hopes to find something in discovery to discredit the process, e.g. evidence of the process not being followed, or of the numbers being tampered with.

            • kergonath 12 days ago

              > I don't think it would be verified by somebody being given access to Twitter's internal data and redoing their process.

              Indeed. But surely they have at least internal audits. They seem like they take this stuff seriously.

              > I look forward to finding what kind of a kook Musk finds as his expert

              Indeed! If he picks his experts like his lawyers, this could be spectacular.

              > e.g. evidence of the process not being followed, or of the numbers being tampered with

              Yeah, he sounds like he’s hoping to find a smoking gun where some Twitter higher-up admits fudging the numbers. To be fair, if that is true, then Twitter deserves to be raked over the coals, even though it would not be sufficient to get Musk out of this mess.

matt_s 12 days ago

> "To the contrary, Musk forwent all due diligence—giving Twitter twenty-four hours to accept his take-it-or-leave-it offer before he would present it directly to Twitter's stockholders," Twitter wrote.

Bot/spam account analysis is just trying to do PR spin. Musk has no legal standing to use any of that to back out of the merger.

> The five-day trial is now scheduled to begin on October 17

So we will see about 2 more months of PR campaigns from Musk and Twitter about the case.

  • convery 12 days ago

    > Musk has no legal standing to use any of that to back out of the merger.

    The claim is that Twitters SEC filings had bots at ~5%, and Musk made the investment based on that. From the leaked recordings of staff, everyone knew that the percentage was much higher.

    • jcranmer 12 days ago

      That's not what the SEC filings say. The SEC filings say that up to 5% of the number of monetizable daily active users (i.e., the number of users after eliminating bots) may be bots--or, in other words, the techniques that Twitter uses to detect bots have up to a 5% false negative rate.

      No one is saying that 5% of Twitter's users is bots, except for when Musk is trying to put those words into Twitter's beak.

      • hef19898 12 days ago

        In addition, one could make the claim that monetizeable bots cannot have a material adverse effect since they are still generating revenue and profits.

        • saalweachter 12 days ago

          I mean, the point of Twitter's statement is to try to bound the risk. They could fix their methodology, or their advertisers could sue them for charging them for bot views, and the magnitude of the risk is ~5% of their mDAU, according to Twitter.

          A company with 95% of its revenue coming from bot-clicks and a company with 5% of its revenue coming from bot-clicks might make the exact same amount of money, but one is substantially more screwed in the future.

      • martin8412 12 days ago

        They don't just say up to five percent are bots - They say that their methodology might be flawed and the actual number could be higher or lower.

      • hartator 12 days ago

        > No one is saying that 5% of Twitter's users is bots, except for when Musk is trying to put those words into Twitter's beak.

        "In its disclosures, Twitter claims to have nearly 238 million monetizable daily active users (“mDAU”) who participate on the platform, and tells its investors that this userbase metric is a bellwether for its ability to generate revenue and the “best way to measure [Twitter’s] success . . . .”

        I think they are talking about this number being significant less than 238 million.

        "They show that in early July fully one-third of visible accounts may have been false or spam accounts—resulting in a conservative floor of at least twice as many false or spam accounts as the 5% that Twitter discloses for the entire mDAU population."

        They are talking about the same after bot removal 5%.

        • vehementi 12 days ago

          That logic is nonsense, 3rd party observers have no way to know what twitter counts as a daily active user. They *could not possibly* make any such estimate.

    • phailhaus 12 days ago

      Nope, Twitter has been very clear in their filings:

      > Additionally, our calculation of mDAU is not based on any standardized industry methodology and is not necessarily calculated in the same manner or comparable to similarly titled measures presented by other companies. Similarly, our measures of mDAU growth and engagement may differ from estimates published by third parties or from similarly titled metrics of our competitors due to differences in methodology.

      Musk can't barge in and say "but MY calculations have a HIGHER number!" because Twitter already acknowledged this could be the case. Musk decided to buy anyways.

      [1] https://www.sec.gov/Archives/edgar/data/1418091/000141809120...

      • delecti 12 days ago

        > Musk can't barge in and say "but MY calculations have a HIGHER number!" because Twitter already acknowledged this could be the case

        Not to mention that some of Musk's publicly stated reasons for the purchase are to reduce the bot problem to improve Twitter's value.

    • matt_s 12 days ago

      I made a bad analogy before about this, if Twitter were a house Musk was buying, he waived the right to back out of the deal based on home inspections (bots/spam accounts). He still can analyze bots/spam as much as he wants (as he should) but from the article it has no basis in the legal contract signed.

      > The merger agreement contained no references to false or spam accounts, and Musk didn't ask Twitter for any information to verify the number of spam accounts before signing the merger deal.

    • RandomBK 12 days ago

      Twitter doesn't say that 5% of all accounts are bots. While I don't have inside knowledge of how Twitter does things, the industry standard is to:

      1. Build a classification model to determine whether an account is a bot or not.

      2. Measure the precision/recall curve of that model, and pick a threshold where the precision would be >95% (i.e. >95% of what the model labels as "humans" are really humans).

      (Higher recall leads to lower precision and vice versa. Higher recall means a higher mDAU, so it's a balancing act between a high number versus a high confidence in that number.)

      3. Let the model loose on all accounts.

      4. The number the model tags as humans is the "mDAU", though <5% of these might be false positives.

      While this model takes a lot of training data to build, verifying its continued precision/recall characteristics can be completed with very little ongoing sampling - easily handled by the "100 a day" figure Musk has claimed.

      • lostdog 12 days ago

        Twitter describes how they get the 5% number (from Matt Levine [0]).

        They randomly sample 100 accounts per day and have human raters decide if they're bots or not. This is the right way to validate that your fancy ML algorithms are working well.

        [0] https://archive.ph/GtYzO

    • colinmhayes 12 days ago

      That is a misreading of twitters filing.

jjeaff 12 days ago

I find it rather ridiculous and in bad faith that Musk is harping on the bot issue for 2 reasons.

First, it wouldn't matter anyway. He signed away any and all rights to due diligence in the agreement.

And secondly, it's completely impossible for any outside analysis to determine the number of active users on Twitter because most active Twitter users don't tweet or interact in anyway. They just read tweets and those users see ads, which makes them monetizable users.

  • SketchySeaBeast 12 days ago

    And thirdly, his boast was that he would solve the bot problem and that would make twitter better. More bots means there's more room for him to improve the company - should be a good thing.

    • bambax 12 days ago

      Yes! And in addition to that, some people have argued that the more bots the better, because, since Twitter's financials are not in dispute, the value of each actual mDAU is proportional to number of bots.

      Twitter revenue for 2021 was $5b, for, say, 200m mDAU (actual number is a little over that); each mDAU is therefore worth $20. But if half of these are bots, then each non-bot is worth twice more!

      If all mDAU are actually bots save one, that one user is worth five billion dollars per year.

      Musk should be very happy that there are bots. Not only is his defense irrelevant, for the reasons listed above, but it's also incoherent.

    • lijogdfljk 12 days ago

      Disclaimer: Just speculating with your scenario. I know nothing on this subject and my understanding of this deal is that of mild curiosity at best.

      Fair point. Though i would think bots still affect price, right? Ie lets say it's 100% fake right now, what would the value be? Lets say $0 for easy math. Buying it at $54.20 means he has to at least clean up the bots enough to make it worth, at least, $54 to regain his investment.

      So while i think your point is interesting, if bot count affects price then i feel one could argue there's a bot threshold whereby he would be over valuing it.

      In your scenario the sweet spot would be if it was just enough bots to make $54 a fair price, but also lots of bots in total so that he could "fix the problem" and increase value.

      • jjeaff 12 days ago

        Actual bot count is irrelevant. The only thing that matters for revenue purposes would be the results that advertisers are getting by advertising on the platform and what advertisers think of the bot count.

        • snovv_crash 12 days ago

          No, it is relevant. When the curtain is pulled back and it is revealed that all of the accounts are bots, advertisers will stop spending money with Twitter.

          • kevingadd 12 days ago

            If the ads are converting all the way through the chain, they don't really have any reason to care whether it's "bots" making those purchases and service sign-ups or not.

            • snovv_crash 10 days ago

              That's a big if. Bots don't typically spend money.

  • judge2020 12 days ago

    > First, it wouldn't matter anyway. He signed away any and all rights to due diligence in the agreement.

    He waived DD but the claim is that Twitter specifically inflated numbers to make itself appealing for an acquisition/merger, which would still be grounds for breaking the contract without Musk needing to give any money to Twitter or complete the purchase.

    • pwinnski 12 days ago

      IANAL, but I've read Twitter's SEC filings, and I don't see any potential inflation. The section on bots is extremely clear and specifically states that reality may be higher or lower than their rough estimate, after explaining exactly how they make the rough estimate.

      So... "We think it's 5% using these methods, but if those methods are wrong, then the actual number could be higher or lower." How does that lead to grounds for breaking the contract?

      • judge2020 12 days ago

        The claim is that it's actually much higher, say 25%, but they're intentionally misrepresenting it as 5%; Elon only purchased it at the $54.20 share price because of the market valuing Twitter at a certain price ($45) based on those bot numbers. Musk is claiming that, if the bot numbers were correctly reported at the higher percentage, then the market would've valued twitter at a lower price and he would've offered to purchase it for less money.

        But yes, this is very unlikely to be proven since it'd also be fraud against every investor that has put money into TWTR within the past few years, opening the company up to a shareholder lawsuit even after it goes private.

        • ryandvm 12 days ago

          I suppose the next time Musk tries to buy something that costs $44 billion dollars he should do a little more homework. Waiving due diligence, though perfectly in line with his trollish vibe, is something he's going to regret for years.

          The bottom line is the guy gets off on being an irreverent, flamboyant dipshit and this time it's biting him in the ass. And I for one am here for it. After the last few years I have run out of patience with assholes with money/power thinking they can do whatever they want in broad daylight. Christ, at least have the decency to be surreptitious about it.

          • rwiggins 12 days ago

            Even if he's forced to buy Twitter, let's not forget that... he will own Twitter. I'm not sure that's a net positive for the world. Though I'm not certain it's a net negative either.

            And though it may well be expensive, it's not as if the $44 billion disappears: in fact it buys Twitter. And though he might regret it all in the end, he'll still have enormous wealth. (And Twitter.)

            So... it does feel a bit like a pyrrhic victory to me.

            • chx 12 days ago

              He doesn't have the money any more...

              • judge2020 12 days ago

                Even after today's 7% TSLA loss he's worth over 150 billion in Tesla stock alone; Twitter will be a huge chunk of his wealth but it's not more than a third of it.

                Note that the loans were secured with TSLA stock as collateral, but even if those expire he'd be able to secure funding again if he was forced to proceed with the purchase by the Delaware Court of Chancery.

                • chx 11 days ago

                  https://thenextweb.com/news/elon-musk-telsa-shares-loan-twit...

                  > Musk's equity commitment now stands at $33.5 billion

                  > May 26, 2022

                  > But in the latest filing, he’s completely removed this loan in the financing plan to acquire the social media company.

                  If he needs to sell thirty billion dollars worth of Tesla shares it is going to devalue the stock quite a bit. That's a full day volume of trading.

                  • judge2020 11 days ago

                    The market won't react harshly given it'd only happen if compelled by court order, and it still would simply be stock transferred to the banks with the banks selling it off over years to recoup their loan amount.

        • preommr 12 days ago

          > The claim is that it's actually much higher, say 25%

          Like the parent comment said, bot count was tied with methodology.

          So Musk can argue:

          1) twitter is lying about the results of their methodology - highly unlikely

          2) their methodlogy is flawed - which he should've brought up during discovery and asked to revaluate according to his requirements.

          Either way, seems like he's screwed.

      • ergocoder 11 days ago

        Just because you have a disclaimer doesn't mean you are free to state a wildly wrong number.

        I'm not saying that the numbe is wildly wrong. I'm saying the disclaimer doesn't relieve you from the responsibilities.

    • Doddler 12 days ago

      It's pretty bold of him to claim they were trying to make themselves more appealing for an aquisition or merger when nearly every action Twitter took was to try to stop Elon from buying them, only relenting when he made an offer so preposterous that they had no choice but to negotiate or risk a lawsuit from their shareholders.

      • parineum 12 days ago

        They can lie to make the company more valuable to a buyer and also not want that buyer to be Musk.

  • pauldenton 12 days ago

    "He signed away any and all rights to due diligence in the agreement." Why do more fraudsters not use contracts If people can sign away due diligence, sign up for a Diamond, get a Lemon, and have no recourse, surely scammers would be doing this instead of structuring their scam in a way that has the potential of sending them to jail

    • ncallaway 12 days ago

      I mean, that’s how a lot of immature markets without regulations work, until laws are added to say “you can’t do that for this kind of transaction”.

      That’s why many states have lemon laws for used car sales, to prevent exactly that kind of behavior in that market.

      Sales of corporations often don’t have consumer protection style regulations, because consumers don’t often buy corporations.

      The assumption is if you’re spending enough money to buy a corporation, you’re a big boy and can pay a lawyer to review your contracts.

      So, if you’re spending $54B to buy a company, you should have your lawyers closely review the terms of the contract. Every lawyer I’ve heard that reviewed the contract Musk signed is gobsmacked by its terms and would have strongly discouraged Musk from signing the contract as written, because it’s so one sided in Twitter’s favor.

      • jjeaff 12 days ago

        We also can't forget that there was time for due diligence before the contract was signed.

    • jjeaff 12 days ago

      Sure, indemnity doesn't always work, especially in the case of scammers going after your average consumer.

      But clauses like this are highly binding when dealing with high stakes deals between sophisticated parties with highly sophisticated teams of attorneys on both sides of the deal.

      And you certainly couldn't break a deal like this on a hunch that the number of daily active users might be wrong. That would be like holding up a national presidential election because the losing team believes there was fraud but has no evidence yet.

    • jacquesm 12 days ago

      The default is that you have the right to perform due diligence prior to making a binding offer. If you make a binding offer and waive the right to due diligence doing it later and using whatever you find to back out of the deal or change the price likely will not work. Musk can't claim he's a business newbie and besides that was spelled out black-on-white.

    • megablast 12 days ago

      He was allowed to do due diligence, he chose not too. People said it was dumb at the time.

    • rsynnott 11 days ago

      This absolutely happens in commercial contracts. Consumers have more statutory rights, though even for stuff that consumers might buy there are examples, notably property.

      “Caveat emptor” has been knocking around as a phrase for two millennia now for a reason.

    • AlexandrB 12 days ago

      Scammers are doing this. It's called cryptocurrency.

    • Spivak 12 days ago

      You don’t deserve the downvotes here. Agreeing to buy Twitter as-is does not absolve them if they’re found to have misrepresented what they’re selling which is what the legal angle they’re gunning for is. I don’t buy it but it at least logically follows.

      • _djo_ 11 days ago

        That’s not what Musk is claiming though, when you cut through the noise. He has zero actual evidence showing that Twitter made false misrepresentations. His entire argument really centred around the argument of “Twitter has lots of bots” which is orthogonal and immaterial to the question of mDAUs.

        Twitter could be 75% bots and its SEC filing claim could still be entirely above board if it was able to filter them out.

        Musk’s opportunity to verify that statement was during due diligence. He chose not to, and can’t legally try to perform due diligence after the fact because he has cold feet.

mcguire 12 days ago

"The merger agreement contained no references to false or spam accounts, and Musk didn't ask Twitter for any information to verify the number of spam accounts before signing the merger deal, Twitter said. "To the contrary, Musk forwent all due diligence—giving Twitter twenty-four hours to accept his take-it-or-leave-it offer before he would present it directly to Twitter's stockholders," Twitter wrote."

If that's true, it kind of makes the question moot.

  • ncallaway 12 days ago

    Not entirely moot. If Musk could demonstrate that the 5% number was actually a fraud (that is, not just wrong, but people were lying about it) and show that the true number is so different that it would cause a material adverse effect, then he’d have an argument to escape the contract even with the DD waiver.

    I don’t think he has a shot in hell at demonstrating fraud, given the various disclaimers around the quoted figure.

    And, if he’s saying the real number is 10%, he just doesn’t have close to a shot at reaching the material adverse effect bar (which lawyers have told me is a very high bar in Delaware courts).

    So, on the narrow path that he can navigate after signing away his soul and due diligence waivers, he’s still totally hosed.

    He really shouldn’t have signed that contract.

    • nolok 12 days ago

      Even if he prove fraud (which he won't), there is countless evidence of him believing the number to be higher, and that specifically being one of the main reasons he wants to buy it so he can clean it up, so material adverse effect to the deal wouldn't hold

    • lokar 12 days ago

      No, it's great that he signed the contract. It could ruin him, which would be fantastic.

    • NotTameAntelope 12 days ago

      That’s kind of like saying he has a shot at getting out of the agreement if the sun collapses.

      • ncallaway 12 days ago

        I’m just saying the issue isn’t legally moot, because there’s a legal path even after due diligence is waived.

        But, I think the facts of this case almost certainly foreclose that path.

      • ergocoder 11 days ago

        Meanwhile other people argue that, even if twitter reports a wildly wrong number, twitter still isn't at fault.

        It seems like people like to exaggerate both ways.

        • NotTameAntelope 11 days ago

          There’s no version of this where Twitter is at fault…

          • ergocoder 11 days ago

            If twitter bot number is, say, 30%, you mean twitter will not be charged by SEC?

            Yeah, I disagree.

            • ncallaway 11 days ago

              > If twitter bot number is, say, 30%

              Can you define with specificity what the “twitter bot number” is? Because Twitter doesn’t claim that 5% or fewer of accounts are bots.

              They claim that “according to their ongoing reviews and subjective numbers” less than 5% of accounts they qualify as an monetizeable user are “false or spam”.

              Twitter could be 90% bots and spam, and not be even slightly inaccurate in their statement to the SEC, if they were correctly identifying those accounts and only tracking the remaining 10% as monetizable accounts.

              Further Twitter very clearly disclaims that identifying a “false or spam” account is a subjective measure that requires them to apply “significant judgement” to determine. Because it’s subjective, it wouldn’t be sufficient to show “the bot number” (which I’m going to treat as “the percent of mDAU which are false or spam accounts”) is 30%. You’d also have to show that Twitter knew that their process and judgement were flawed to the point of deliberately being deceptive.

              Below is the specific statement Twitter put in their quarterly 10-K filings. I don’t see them catching a charge from the SEC for merely being wrong.

              > The numbers of mDAU presented in this Annual Report on Form 10-K are based on internal company data. While these numbers are based on what we believe to be reasonable estimates for the applicable period of measurement, there are inherent challenges in measuring usage and engagement across our large number of total accounts around the world. Furthermore, our metrics may be impacted by our information quality efforts, which are our overall efforts to reduce malicious activity on the service, inclusive of spam, malicious automation, and fake accounts. For example, there are a number of false or spam accounts in existence on our platform. We have performed an internal review of a sample of accounts and estimate that the average of false or spam accounts during the fourth quarter of 2021 represented fewer than 5% of our mDAU during the quarter. The false or spam accounts for a period represents the average of false or spam accounts in the samples during each monthly analysis period during the quarter. In making this determination, we applied significant judgment, so our estimation of false or spam accounts may not accurately represent the actual number of such accounts, and the actual number of false or spam accounts could be higher than we have estimated. We are continually seeking to improve our ability to estimate the total number of spam accounts and eliminate them from the calculation of our mDAU, and have made improvements in our spam detection capabilities that have resulted in the suspension of a large number of spam, malicious automation, and fake accounts. We intend to continue to make such improvements. After we determine an account is spam, malicious automation, or fake, we stop counting it in our mDAU, or other related metrics. We also treat multiple accounts held by a single person or organization as multiple mDAU because we permit people and organizations to have more than one account. Additionally, some accounts used by organizations are used by many people within the organization. As such, the calculations of our mDAU may not accurately reflect the actual number of people or organizations using our platform.

              • ergocoder 11 days ago

                > They claim that “according to their ongoing reviews and subjective numbers” less than 5% of accounts they qualify as an monetizeable user are “false or spam”.

                Yes, it's just a short version for the sake of the discussion.

                Let's just say this number is not 5%. It's 30% when evaluated by an independent third party.

                Other comments claim that this number can be 90% 80% and it wouldn't matter. Twitter would be relieved of all responsibilities because they said it was "subjective".

                This is where I disagree.

                > You’d also have to show that Twitter knew that their process and judgement were flawed to the point of deliberately being deceptive.

                This is where the discovery comes from. You'd imagine it is impossible, but it's not. It may be still hard, sure, but not impossible.

                Twitter would be requested to open up all emails/docs for discovery to both sides of lawyers.

                Twitter has 8000 employees(?). You can bet there will be at least one person pointing out in the email/doc that "hey, our approach of evaluating numbers doesn't look right, and here's why....". Then, that person has been ignored.

                Twitter would be requested to open up data for discovery for third parties to investigate.

                Coming up with a number like this will inevitably have multiple valid approaches. An independent third party can easily pick a more conservative approach (because you are supposed to err on the side of less attractive when reporting earnings). Then, pairing this with Twitter execs ignoring that one concern from employee can result in a really bad situation for execs.

                Apart from that, opening up emails like this would incriminate a lot of other unrelated stuffs like employees know about Russian bots that swayed the election results, employees know about fake news but not doing anything about it.

                • ncallaway 11 days ago

                  > Other comments claim that this number can be 90% 80% and it wouldn't matter.

                  I don't see any other comments saying the number can be 90% or 80% (other than mine, where I was pointing out the difference between before removal and after removal). Can you cite Which comments specifically are you referring to and whihc part of them you're disagreeing with? I'm just not seeing that.

                  I mean, it's fine for you to disagree with _that_, but it seems like you're disagreeing with a straw-man.

                  > You'd imagine it is impossible, but it's not

                  I wouldn't imagine it would be impossible. I think it's unlikely, but it's always possible that Twitter is perpetrating a deliberate fraud in its SEC filings. My priors on that are pretty small (1-5%?), but sure, of course it's possible.

                  If Twitter is actually perpetrating a deliberate fraud, and Elon is able to get the goods in discovery, then sure he'll likely win the case. That's a really high bar, though, and does not square with your prior argument that if a third-party analysis comes to a 30% bot number, then the SEC will bring charges.

                  That's simply not sufficient to cause the SEC to bring charges. Rather, you would need the additional evidence you think might come out in discovery.

                  My point is this: "The true bot number is 30%" and "The true bot number is 30%, and Twitter knew that and deliberately lied in its SEC filings" are two different statements. One is sufficient to bring a charge, and the other is not.

                  > You can bet there will be at least one person pointing out in the email/doc that "hey, our approach of evaluating numbers doesn't look right, and here's why....". Then, that person has been ignored.

                  Is is possible? Sure, of course. Would I put a bet on that exact scenario happening? Probably not.

                  Seems just as likely that someone sends the email that "our approach doesn't look right, and here's why...", and someone engages and responds with "I disagree, that methodology does X, and we chose to do Y because Z, but let's talk about it". Or, I could also see absolutely nothing internal on this because it's a box-ticking exercise as part of their SEC filings and nobody internal really cares.

                  > Coming up with a number like this will inevitably have multiple valid approaches.

                  The problem is that its not enough to show that someone else has a different valid approach. The need in court (and for the SEC) would be to show that Twitter's approach is not valid. It's really not enough to show that Twitter could have made different choices and got a different outcome. You need to show that Twitter's approach and outcome was unreasonable.

                  Anyway, my fundamental disagreement with your statement is that a "bot rate" of 30% automatically implies fraud and an SEC charge. I don't think it's that simple.

            • NotTameAntelope 11 days ago

              You can disagree all you want, Twitter made it clear its bot number could be wildly off. It never lied and the SEC understands that (unlike you).

              Buying into Elon Musk’s bullshit is a gigantic waste of time.

              • ergocoder 11 days ago

                > You can disagree all you want

                Everyone can disagree at any time. It's a discussion forum where diverse opinions are welcome.

                Are you gonna yell "water is wet" next?

                > Twitter made it clear its bot number could be wildly off

                An example:

                NVIDIA made it clear that they don't have full and accurate information of what their buyers use their chips for. Maybe some customers buy NVIDIA to hold and do chicken dance? who cares?

                Yet they were charged by SEC for not identifying that a large chunks of their buyers used it for crypto mining. Because this misled investors and shareholders on the company's outlook.

                The disclaimer doesn't protect the company from reporting wildly inaccurate numbers.

                • NotTameAntelope 11 days ago

                  The disclaimer absolutely protects the company from reporting a wildly “inaccurate” subjective number, which is apparently a concept you simply do not understand.

  • koheripbal 12 days ago

    No, because waiving due diligence does not mean the seller is immune to claims if they knowingly provided false data.

    • rchaud 12 days ago

      That will be almost impossible to prove. Especially as he provided an all-cash, take-it-or-leave-it offer based on publicly available financial data. He has access to lawyers and financial advisors to warn him against potential misstatemrnts on Twitter's part.

      If they signed off on it, he has no case. If they warned him against it, and he went ahead anyway, he also has no case.

      The judge will rightfully wonder how this isn't anything other than a attention-hungry blowhard trying to get out of scoring the most comical own goal in business history.

      • koheripbal 12 days ago

        What happens in cases like this is that Musk will request the court for discovery of internal Twitter documents/emails/reports/etc to backup his claim that Twitter was aware that more bots existed in their BAU number than they reported.

        Twitter will object, but ultimately some degree of discovery will be allowed (with a more narrow scope), but it will pressure Twitter to settle for a lower purchase price because god only knows what kinds of incriminating shit lawyers will find in employee emails. Internal emails is always a big big random variable which can then spawn all sorts of unrelated lawsuits from discrimination, to regulatory fines, to executives' private life drama, etc...

        Even if Twitter is innocent - it is very easy for lawyers to intentionally misconstrue a vague email or threaten so with things found in discovery.

        • gamblor956 12 days ago

          Internal emails is always a big big random variable which can then spawn all sorts of unrelated lawsuits from discrimination, to regulatory fines, to executives' private life drama, etc...

          Given the NDAs that would apply to such discovery, were such information to exist and to become public, Musk would likely be imprisoned for contempt of court.

          Not simply fined. Imprisoned. And his lawyers would likely be suspended for a few months, if not disbarred. You don't mess with the courts, because they have the power to mess right back.

          • ergocoder 11 days ago

            Have you met https://twitter.com/TechEmails ?

            Musk doesn't need to leak emails.

            The discovery by the lawyer team alone is probably scary enough.

            There is a high chance that twitter will settle for XB.

            At this point, it is just free money for twitter.

            Imagine Musk acquires twitter and exposes all internal emails (well, he owns the company) and sue execs one by one for every little thing that is wrong.

            Execs are earning 10M/year. For these people, money is not an issue. Getting into a scandal is a huge issue.

        • rchaud 12 days ago

          Yes I also think a settlement is where this is headed. But the bill be pretty high.

        • vba616 12 days ago

          Is it really possible to pursue a claim, if nothing you find in discovery can possibly be relevant to the case?

          The experts seem to think that it's virtually impossible a hypothetical misrepresentation rises to the level of a "material adverse event".

          It can't even be his motivation, since he is inherently admitting he doesn't have the evidence yet.

      • vehementi 12 days ago

        > That will be almost impossible to prove

        I mean, the trivial case is Musk's discovery reveals some smoking gun email about knowing that their methodology showed 50% mDAU were bots but the CEO overruling everyone and putting 5% on the SEC filing instead. Not close to impossible to prove if it's that stupid (not saying it is)

jjeaff 12 days ago

Imagine this whole ordeal playing out on a house that was not listed for sale.

The buyer starts harassing the homeowner to sell to them, they say no, so he buys up the mortgage lender and tries to force a sale. His antics are hurting the home's value so you relent to selling and give him an as-is sale contract, which he signs and gives you 24 hrs to respond or he will try to force a sale.

All the while, this is of course taking your attention away from your day job and costing you countless thousands in legal bills.

Then, soon after signing the contract, the housing market crashes and the buyer claims he peaked in the window and it doesn't look as nice as he imagined (even though he had previously been publicly announcing that your house was crappy on the inside and that he was going to buy it and fix it up) and so he wants to break the deal.

You sue to make the deal go through, he countersues that you misrepresented.

Who could possibly be on the side of the buyer?

  • throwawaycities 12 days ago

    It’s almost as if Musk used a smoke screen to sell $8.5B in Tesla stock before the crash while redirecting attention to Twitter so as to not raise suspicion about selling his own stock…and then instead of going through with the deal he allegedly sold his Tesla stock to complete, he wants to back-out without paying the $1B penalty.

    But that can’t be it and what really happened, Musk is buying Twitter for us and restoring our Free Speech…right?

    • xmprt 12 days ago

      From my understanding, there's literally no way to get out of the $1B penalty even if he proves everything that he claims about Twitter bots. What he's trying to get out of right now, is buying Twitter at the price he originally said.

    • yieldcrv 12 days ago

      Is he even capable of selling just because he wants to buy something?

      Insiders have to have a stock acquisition/disposition window and follow that schedule to only sell during that pre-determined schedule

      I don't really understand this theory/criticism, can you elaborate? note, its not about whether he did, its about whether its important since all insiders have windows and schedules they can and can't sell in

      in this criticism, did he sell outside of that window? and is that compliant?

      if it was within the window, then... who cares?

      • positr0n 12 days ago

        The theory is that buying twitter provided him a good "excuse" to dump a ton of TSLA. If he had just randomly sold billions of TSLA it would have spooked the markets because it would seem like Elon didn't believe in the future of the company, or at the very least didn't believe that it's current valuation is justified.

        • yieldcrv 12 days ago

          an you mean that its not really about the liquidity of the markets, its more about the perception of why the sell (of an amount that large) occurred at all, and extrapolating what that means

          okay

      • throwawaycities 11 days ago

        He sold $8.5B in stock over 3 days and within 2 days of the sales filed Form 4’s (changes in beneficial ownership) as required by the SEC.

        If you have SEC filings showing these sales were scheduled in advance show please link them.

        • yieldcrv 11 days ago

          It would be a legal issue if they weren’t scheduled

          So proving that they werent is More important than proving that they were

    • winternett 12 days ago

      It sounds like a diabolical idea, but why would someone risk that much money on something that is pretty much guaranteed to get tied up in long-term and very public litigation?

      There's no way to simply back out of a very public offer for a major social app without litigation that costs time out of your life (which is in that case more of a painful thing than losing the money). Paying capital gains (after huge deductions of course) might prove to be less by the time it's all done.

      • justapassenger 12 days ago

        Because Musk thinks he’s a god, he can distort the reality around him and do whatever he wants with no consequences.

        And TBH, he has all the reasons to think so. He’s been openly lying about so many aspects of his businesses for a long time, manipulating markets, ignoring all the rules and regulations and only thing it resulted in, was making him wealthiest man in the world.

        • winternett 12 days ago

          I'd never give bad behavior a pass, but I think moral points are superfluous to the discussion, and they only serve to show emotional bias, they don't really serve the right method of evaluating the overall situation.

          Expressing character traits and flaws puts a harmful spin on discussions. Think of the situation as if an unknown person did the very same things perhaps?

          The actual actions taken and specific words written and recorded are the only things that will be considered most by a court ultimately (if correct process is followed).

          • watwut 11 days ago

            This thread is not court and the question posed was "why would Musk do it". And the answer seems spot on - he lied and bullied for years and it tended to end for his benefit. There was no reason for him to not think it is going to end the same way.

            And it is not even primary issue with Musk, it is primary issue with general economy/justice syatem that favors lying and bullying, pri ided you have enough money.

      • throwawaycities 11 days ago

        > There's no way to simply back out of a very public offer for a major social app without litigation that costs time out of your life

        $1B is a lot of money…he has obviously determined it’s well worth it to spend a few million in legal fees to try. Even if they settle (which more than >90% of cases do) maybe he cuts that penalty in half…even if he knocks 10% of financially it’s well worth it. Even if he loses and ends up paying his legal fees and their legal fees its clear he has determined it’s well worth it.

        • _djo_ 11 days ago

          He’s not on the hook for $1 billion. That was just a break up fee if he couldn’t secure financing. He’s on the hook for the entire deal value.

    • Mo3 12 days ago

      Ding ding ding

    • conradev 12 days ago

      Musk is (was?) not selling Tesla stock. It would be very hard to sell $8.5B of stock without completely crashing its value. He was taking out a loan secured against that stock.

  • dragontamer 12 days ago

    > Who could possibly be on the side of the buyer?

    Except you can just buy up supporters by gaslighting huge masses of people on Twitter. The house in question.

    Its so ridiculous. Musk's popularity is largely *BECAUSE* of his Twitter antics. So this "buyer" is basically someone who has come to house-parties / benefited from the house in question for the last decade.

    And the people arguing against the (current owners) of the house are also the party-guests of that very same house.

    • joenot443 12 days ago

      > Musk's popularity is largely BECAUSE of his Twitter antics

      I don't really buy this. I knew loads of Musk fanboys who were crazy about him before Teslas even become available. The 50+ folks that I'm friends with have mostly never used Twitter or read a Musk tweet, but they think Teslas are cool and are reminded that StarLink brought rural Ontario better internet than our own government tried to do for decades. Obviously Musk is an ass on Twitter (and probably in person), but like a lot of neuroatypicals, their talent seemingly makes up for their abrasiveness.

      • rgbrenner 12 days ago

        note, musk created his twitter account in 2009... shortly after he became tesla's CEO. So unless you're talking about the original roadster, his twitter account existed before those people learned about tesla/musk.

        Musk has pretty much used Twitter has his primary media communication method. Going so far as to say Tesla has no marketing budget because he's such a star on twitter. He has practically zero reach elsewhere. Sure, if he publishes on another platform, people will pay attention, but he doesn't... twitter is pretty much the way he communicates with the world.

        If you dont think twitter is the reason you know Musk, then let me ask you this: who was the CEO of Fiskar? They released their EV product shortly before the model S. But you dont know the guys name do you? The product isnt why we know musk.

        • falcolas 12 days ago

          Musk was pretty well known prior to Tesla because he was one of the PayPal co-founders (technically a co-founder of X.com which merged with Confinity to form PayPal).

          • rtkwe 12 days ago

            I'll say as a person who was just coming out of HS and not in tech yet at that point I don't think I had any idea who Musk was until after he come into Tesla. I'll also say he wasn't as wild on his twitter till after Tesla and SpaceX bumped up his public profile.

          • andsoitis 12 days ago

            > Musk was pretty well known prior to Tesla because he was one of the PayPal co-founders

            Well known outside of tech? I don't think so.

      • jollybean 12 days ago

        The fanboyism is quite considerably amplified by his public statements.

        Without them, we may not get much press at all from him, he may be a bit of an unknown quantity.

        His Social Media / PR is a gigantic part of his value. It distorts reality to a much, much larger audience.

        Do you remember 'Maroon 5' the band? They had 'Really Big Hits' back in the day . Banger / Chart toppers. But it wasn't until the lead singer was on 'The Voice' did it make them a 'Household Global Name'. There were a poppy band with a tiny bit of an edge that appealed to a demographic, now, they are like 'Jeopardy and Wheel of Fortune' - multigeneratoinal giants.

        Musk has fanboys that are Dentists in Malaysia, street kids in Cairo, wannabe ballers in mid level cities in China etc. etc..

        • pooper 12 days ago

          I wouldn't call myself a fanboy but I believed he genuinely wanted to advance the electric car, no matter who ends up coming on top. This was the version of reality I saw in 2009 ish. The goal was not to make money. I thought he actually wanted to show the big carmakers that you can actually sell an electric car.

          Back then I didn't know about how good public transit is better than even the cleanest electric car because I had never experienced good public transit and well I have very limited imagination (I thought the Dropbox was a sucker that I was taking advantage of because I could get extra 50 MB or whatever by just walking up to someone in my dorm and referring them to use Dropbox, even if they had no intention to continue using Dropbox...)

          • sbf501 12 days ago

            Musk's companies have done some truly amazing things. He absolutely created enough buzz with Tesla to put EVs on the map, after they were fading. Battery tech. StarLink. SpaceX. They are all long overdue.

            Also: He's a complete hobgoblin of a human being.

            Both things can be true.

          • jollybean 12 days ago

            He still does the car for the same reasons, and it's still 'a good thing for green' he's just a bit older, a bit fatter, a bit richer (and targeted by 'socialists' a bit more often), he's a bit more irritated, and frankly, anyone who starts to let loose on Twitter is going to make waves.

            About 80% of the people that I respect, I have lost respect for because of Twitter.

            They just can't help themselves with the populism.

        • sbf501 12 days ago

          My dad is an 82 year old Musk fanboy. Why? Because Musk made fun of Elizabeth Warren. My dad likes him because Musk trolls people that my dad doesn't like. Period. Musk took Rush Limbaugh's place, along with Hannity and Carlson.

          But I think any liberal/left-ish person who grew up with super conservative parents has lived this their entire lives.

          • jollybean 12 days ago

            Your father is like most people.

            That said, Musk is nowhere near as outrageous as those talking heads.

      • wahern 12 days ago

        > I don't really buy this.

        I think you're both correct. My experience is as you described, but Musk has also developed a following among political conservatives attracted to his abrasive, thumb-nosing antics.

        • rgbrenner 12 days ago

          thats definitely a recent development. conservatives weren't big proponents of early EVs.

          • detaro 12 days ago

            Liking him for railing against government agencies and brash style doesn't necessarily mean they are EV fans.

          • kortilla 12 days ago

            Neither was Musk, which is sort of the whole point of Tesla.

          • ThunderSizzle 12 days ago

            Conservatives still aren't a proponent of EV, especially government mandates for them or to pay for them.

            That has nothing to do with Conservatives liking or disliking someone. I guess Conservatives are just better at respecting people they don't agree with on everything.

        • jollybean 12 days ago

          It's not 'conservatives' as 1/2 of them loath that stuff - and 'agitation' is traditionally an artifact of leftist populism (with traditional conservatives usually being small-c, establishment, older etc.) - it's more a bit of a businessy libertarianism, with hints of anti establishmentism that's in many ways more popular among the youth. Also, it's a hugely populist and international appeal, spreading his 'Noisy Tweets' around the globe.

          See how much more popular he is now that he makes 'controversial' statements [1]

          It's as PR trick as old as time.

          Edit: but yes, technically he has taken a public shift to the 'Current American Right' in the mysterious political situation we are in, that's fair to say. Just wanted to indicate it's a 'new and kind of specific normal'.

          [1] https://trends.google.com/trends/explore?date=all&geo=CA&q=%...

          • cycomanic 12 days ago

            I appreciate your analysis, but would like to add that I feel that "traditional conservatives" seem to have largely disappeared or become voiceless not only in the US but also in other places like e.g. the UK. I imagine in decades prior traditional conservatives would have found people like Trump or Boris Johnson obscene and distasteful.

            However, I don't see many of that old guard speak out against them. It seems with the reducing success projections due to changing demographics, many see winning as more important than values. Or at least that is my only explanation.

            • netsharc 12 days ago

              > many see winning as more important than values.

              Interesting thought. For some analogy, if a bunch of skinheads joined my local baseball team and started playing dirty against the other teams and became the champions, would I care that my team has been hijacked, or would I not care because now my team is winning?

              Obviously in the political example, the skinheads talk about "values" and people who want to be deluded just nod and repeat "values!", or they demonize the opponents by saying they'll bring in "dirty migrants", etc...

            • onos 12 days ago

              I wonder if the lack of voices you notice is at all related to the well-publicized data indicating conservatives do not feel they can express their opinions publicly without risk of punishment.

              • rsynnott 11 days ago

                I think they’re talking about people like John Major or John McCain; people with conservative views but at least a patina of decency, restraint, and respect for the rule of law. If Boris Johnson and his coterie can express their opinions publicly, Major types certainly can.

                It’s just not a winning proposition anymore; there’s not much market for “conservative who is reasonable”.

              • larkost 8 days ago

                I don't think you are getting this right. A example would be Senator Elizabeth Chaney. She has been actively shunned by conservatives because she is willing to tell the truth about the 2020 elections. So she is being publicly punished for not just opinions, but actual facts, by conservatives.

                I also disagree with the idea that conservatives are being punished for their opinions. Rather conservatives have been complaining that they are no longer allowed to punish other people for the way those people want to live their lives. A couple of examples:

                1. The "Don't say gay" bill in Florida is not about people who were teaching about sex to young kids (there have been no actual accusations of this, only badly worded things that sounded like this). It is entirely about teachers teaching that it is ok that a child in their classroom has two dads or two moms. It is trying to wind back the clock to when those families would have to be kept "in the closet", or face social shunning.

                2. In the recent case of the football coach who lost his job for leading prayers on the field after games. That one is again about the majority wanting to be able to use social power to push its religion. Despite what the majority of the Supreme Court said, he absolutely was using his position as a coach to push his religion. There was even testimony from a player who felt pressure to participate in order to get playing time.

              • mjmsmith 12 days ago

                It's a demonstrated fact that traditional conservatives are punished for expressing the opinion that Donald Trump is obscene and distasteful.

                • jollybean 12 days ago

                  I think you and onos are not quite making the same point.

                  Conservative voices are a bit suppressed in some places, like on Campus. Some don't like to accept that, but it's true. But it's a kind of Social Justice institutionalism that would be the issue there.

                  Otherwise, 'classical conservatives' who voice their opinion against Trump, are also ostracized by that far right gang, which is very true. So that's a different kind of 'fear to speak up'. Liz Cheney is getting punted out of Office for that right now.

                  But that has always existed - the centre/far elements of 'each side' definitely have wars. You can see it play out at the NYT editorial staff among the Social Justice left (younger) and the Traditional Liberal left (middle aged).

                  I don't feel that Musk can be reasonably located anywhere in there.

                  • antifa 11 days ago

                    >Conservative voices are a bit suppressed in some places, like on Campus.

                    I think it's a bit misleading though. Who would goto college and listen to somebody repeat ad nauseum their parent's conservative talking points they've already heard their entire lifes? Or listen to someone even more radically conservative than their parents?

                    Also a lot of those "suppressed" people were just openly bigoted and claiming to feel persecuted when they're not allowed to persecute people they don't like.

                    • jollybean 11 days ago

                      Well you've proved my point for me.

                      Your assumption that 'conservative' voices lack in legitimacy and are merely repetitious of their parents views, and worse, that they are trying to 'persecute' people is itself obviously bigoted, and gives us a crystal clear example of the problem.

                      Even views such as 'people ought to be treated for who they are and not their intersecting identities' is oddly 'conservative' in 2022. Or 'Trans women are different than women' - some argue is a transphobic/conservative position. etc.

                      • antifa 9 days ago

                        > Even views such as 'people ought to be treated for who they are and not their intersecting identities' is oddly 'conservative' in 2022.

                        Claiming to do this while doing the opposite is a popular "conservative" position in 2022.

                • ThunderSizzle 12 days ago

                  It's a demonstrated fact that traditional conservatives are punished for expressing anything that Leftists disagree with, which is everything because a conservative said it.

                  • Infinity315 12 days ago

                    This is mostly true of social conservatism. No one is getting canceled for saying we should reduce taxes and spend less in government.

                    • ThunderSizzle 11 days ago

                      Yes, they do. You want grandma to die? We need to spend 1 billion to Ukraine right now or else Grandma will die. You want to murder Grandma? You should lose your job over this. I can't believe you can't be a little generous and send something to the current political target of the month. You are too selfish to have a job.

                      I've seen the logic train be that bad. Cancel culture has no end.

                  • mjmsmith 11 days ago

                    It's a demonstrated fact that unhinged hyperbole isn't a demonstrated fact.

            • jollybean 12 days ago

              The 'old guard' is not populist and the least PR savvy. They are speaking out, just not making the rounds on the news.

              Note that as long as Trump had 'populist power' then Fox etc. would kind of following along supporting that. The Romneys, Cheneys, Bushes just didn't have the outlets.

              It's changed a bit as Murdoch has dumped Trump, but the current trend is definitely a bit populist as they are backing DeSantis, who is frankly probably more traditionally conservative, but playing the 'Noise Game'. Same thing in Canada with new conservative leadership.

              Note, young people are really, really pissed. Housing is completely unnafordable, they are in debt, inflation is taking off, and most of COVID wasn't a huge risk to them for 21 year olds it really was kind of 'a bad flu' it's really 40+ where the risk starts. So they are naturally going to be more emotively pissed off about all of that pain 'they endured' on behalf of others.

              In Canada, the likely new Conservative Candidate is taking a 'populist turn' and kind of supporting the 'anti mask wave' (I mean, it's not crazy up here, but still it's a movement) - but shockingly he's more popular among 18-35 year olds than the far left NDP which is traditionally where they are strong. Shockingly, the 'Establishment Liberals' are the #1 party among 45+ all the way past 75.

              This is an artifact that more clearly highlights what is going on everywhere, it's just not as clear.

              The 'geriotoocracy' in the West is a bit left on social issues, and pro 'big business' on others. The 'establishment' policies are hugely favouring stock owners, real estate owners, retirees, pensions etc. etc..

              Paradoxically literally just today I'm reading 'Russian Telegram' and they are complaining about the opposite: Putin and a massive class of Neo-Soviet jerkoffs stealing decades of hope from young Russians.

              Young people have more opportunities than ever before, and have had a cushy upbringing for sure - that said - their challenges are very real and they have a right to be angry

              I see very desperate kinds of comments on Reddit these days, sad people who feel completely voiceless.

              In that context, a bit of populism is understandable. Musk is playing into that. Trump a little bit. WallStreetBets etc..

              For some reason, it's not 'Bernie' this time around, it's a bit more 'Musky'.

              So I think that is a big part of the appeal, and specifically with Musk it's probably not fairly traditional values.

              Musk is also becoming a serious magnate, I mean, he was literally the richest guy in the world, and so the reality of people wanting to have 'higher taxes on the rich' surely grates on him, how long can he truly, culturally identify with the 'rebellious youth changing the world?'. He now has to 'get the goddam factories moving, this COVID stuff is overplayed!' and 'these greedy politicians want all my damn money, can't they see I'm changing the world?'. It's a bit of 'There Will Be Blood' going on. And he's pumping it all up on Twitter.

              I think we don't need to worry about Musk though, he just has a bit of an opinion, a bit of a big mouth, oh well.

    • iasay 12 days ago

      If his popularity is due to what he posts on twitter it would appear that a large proportion of the human race are deranged morons.

      • ctvo 12 days ago

        He can be popular due to Twitter and people can also not be deranged morons.

        Twitter is very popular with a few niche groups: Journalists and people in tech for example. The former is influenced by Elon's antics on Twitter and end up writing news stories or making documentaries [1] about him. People learn about Musk through these respectable publications. The latter group spreads the gospel of Elon's TED talks and press conferences to their friends and family. Being subject matter experts, they're more likely to be believed.

        Previously the coverage was mostly positive, but Musk's antics on Twitter have caused both the former and some of the latter to turn slightly negative from what I can tell. For example, it's now a common joke that Elon's wealth is partially due to being born wealthy. His family owned emerald mines. I didn't notice that in the popular consciousness until very recently. Phoney Starks is also making it's way into popular usage.

        1 - https://www.nytimes.com/video/NYT-Presents/100000008464087/t...

        • TapWaterBandit 12 days ago

          The emerald mine stuff is super overblown and only matters to people who don't like Musk for other reasons.

          If owning some natural resource like a mine or two was all it took to become a trailblazing entrepreneur who played a key role in Paypal/Tesla/SpaceX then Musk wouldn't be as popular as he is with many because there would be so many more like him around.

          Musk is clearly an extraordinary individual even if he sometimes acts like a dickhead and had a small boost from owning emerald mines. But like I mentioned above if owning a profitable mine of some type was all it took to be an entrepreneur at Musk's level we would be drowning in them and he wouldn't be such a big deal in the first place.

          But in the case of Twitter, Musk clearly seems to be in the wrong here legally.

          • ctvo 12 days ago

            > But like I mentioned above if owning a profitable mine of some type was all it took to be an entrepreneur at Musk's level we would be drowning in them and he wouldn't be such a big deal in the first place.

            I don't have an opinion on how big being born wealthy plays in his success. Just curious though -- how many profitable mines do you think are in operation and how many people do you think own them as a percentage of total global population?

            • TigeriusKirk 12 days ago

              What level of profit did the mine bring in? That's the real question that I've never seen an answer to.

              You can own a gold mine in the California mountains and come out of it with nothing but debt. It would sound like you're rich in the newspaper stories, though.

              • nyokodo 12 days ago

                > What level of profit did the mine bring in? That's the real question that I've never seen an answer to.

                Who has time for ascertaining the facts when there are politically derived narratives to promote.

            • TapWaterBandit 12 days ago

              Mines specifically? No idea. But come from backgrounds if wealth and privilege comparable to what Musk had from his families Emerald mines? A huge number.

              Think farms, family businesses, real estate empires, even just well known doctors or other professionals.

              Elon Musks family were comfortably upper middle class but really nothing special in terms of wealth. There would be hundreds of thousands of American families as rich alone.

          • staticassertion 12 days ago

            This assumes that everyone who has lots of money and advantages chooses to try to run companies. That's not the case at all. I grew up around ultra-wealthy people and many of them wanted to focus on the arts.

            So you have a small sample size - extremely wealthy people. Then you cut that down massively again - those people who also want to run businesses. Then a bunch of other things to narrow the pool lol. But then, finally, you cut it down to "and then the ones who succeed".

            I don't think, at that point, the numbers are going to be behind you.

          • sixQuarks 12 days ago

            Wow, even being critical of Musk can’t prevent the downvotes if you dare mention some of his accomplishments.

        • kaczordon 12 days ago

          Except that Musk has talked about how he had to work his way through college and basically didn’t benefit in any way from his dad.

          https://twitter.com/elonmusk/status/1211054942192119808?s=21...

          • _djo_ 11 days ago

            While I agree that the emerald mine stuff is overblown, I don’t buy the idea that Musk was self made and independent. He didn’t always have free capital, but he seems to have a solid network through his extended family from early on that helped him.

            That meant he had a readily available set of investors, advisors, and partners. That ranged from Greg Kouri, pivotal in forming Zip2 and X.com, to Roelof Botha. Roelof is the grandson of Pik Botha, the last apartheid South African foreign minister who had built up extensive connections amongst the US elite.

            Success is so much easier when you go to knock on doors and find them already opened for you.

          • ctvo 12 days ago

            I don't mean to represent that I think it's a fact, only that people are increasingly repeating it, which represents more negativity than I think Elon has received in the past.

            Interestingly though, it was Elon who said his family owned an emerald mine:

            https://web.archive.org/web/20140802011449/http://www.forbes...

            That was a Forbes interview in 2014.

            The relevant section:

            > JC: How do you handle fear?

            > EM: Company death – not succeeding with the company – causes me a lot more stress than physical danger. But I’ve been in physical danger before. The funny thing is I’ve not actually been that nervous. In South Africa, my father had a private plane we’d fly in incredibly dangerous weather and barely make it back. This is going to sound slightly crazy, but my father also had a share in an Emerald mine in Zambia. I was 15 and really wanted to go with him but didn’t realize how dangerous it was. I couldn’t find my passport so I ended up grabbing my brother’s – which turned out to be six months overdue! So we had this planeload of contraband and an overdue passport from another person. There were AK-47s all over the place and I’m thinking, “Man, this could really go bad.”

            Who knows what happened between when he was 15 and 17 to his family wealth that made him essentially penniless in a foreign country.

            Edit:

            https://twitter.com/elonmusk/status/1375212880790913025

            This is where Elon says he arrived in Canada with only ~2500 CAD.

            • HarryHirsch 12 days ago

              Elon says he arrived in Canada with only ~2500 CAD.

              He went to Canada and could rely on his family network.

            • bobsmooth 12 days ago

              >Who knows what happened between when he was 15 and 17 to his family wealth that made him essentially penniless in a foreign country.

              His estrangement from his father.

        • 2c2c2c 12 days ago

          anti musk sentiment mostly stems from the post-2016 leftist surge. most of the mainstream internet was technocratic before

      • dragontamer 12 days ago

        A hundred years ago, you just traveled from city-to-city with your posse of 20-guys. Those 20 guys would pretend to be an interested crowd (which draws in / astroturfs fake interest) Real people then start to join the crowd. You then show off your snake oil product working ("guest#1 from the crowd", who is of course your buddy), and then the real people will get excited, and buy your snake oil.

        Today, you just buy a bunch of likes / retweets to perform the same astroturfing on a larger scale. Bonus points if you "meme" it and "go viral". You want all those people out there to be spreading your message at no cost to you.

        A little bit of astroturfing goes a long way. People want to feel as part of a community. So a bit of fake-generated content and fake-interest helps at seeding the crowd and popularity.

        ---------

        Stage magicians still do this today for entertainment purposes, rather than illegitimately hawking fake snake oil. Its a very good bit of entertainment. It does take some practice but once you get the technique, its quite repeatable.

        Turns out that human psychology / group dynamics are in fact, predictable and consistent.

      • HeXetic 12 days ago

        With everything that's happened in the past decade, don't we know that already by know?

      • vkou 12 days ago

        It would definitely appear that our monkey brains aren't very good at reasoning through social interactions that happen through mass media.

        Whether or not this makes most of us deranged morons or not is in the eye of the beholder.

      • jollybean 12 days ago

        Most people don't pay that much attention.

        They like the 'vibe' and that's that.

        They may not specifically clue into the mapping of 'vaccine hesitation / conspiracy' to 'health outcomes', they might just view it as 'opinion' - which it is of course, but most responsible people understand the 'dots have to be connected'.

        I think it's a bit part of the reason why a place like HN won't grasp populism: we are almost by definition 'anti populist' by our very outlook.

        Even smart young people are usually busy with school, partying, social things, they don't all have time to parse all of the shifting nonsense, and those that do are more often than not trapped down rabbit holes, I think searching for 'an identity' more than they realize it.

        This is populism. We (the crowd) make decisions on rough statements, headlines, a few words here and there, prejudices, assumptions etc.. Some of use a bit smarter than others, almost none of us see our blindspots.

      • bilsbie 12 days ago

        Welcome to earth?

    • viraptor 12 days ago

      > Except you can just buy up supporters by gaslighting huge masses of people on Twitter. The house in question.

      What's the path from the masses on twitter and courts which will hear the case? Public opinion doesn't matter here. The case over the contract doesn't even have a jury if I understand correctly.

      • dragontamer 12 days ago

        > Public opinion doesn't matter here.

        Public opinion doesn't matter with regards to winners/losers of the case. But public opinion matters from the perspective of Elon Musk continuing to build his brand and grow his fanbase.

        Even if Elon Musk loses the court case, he still want to turn this whole charade into a positive for himself. IE: Fail upwards, etc. etc.

    • moralestapia 12 days ago
      • Rebelgecko 12 days ago

        Your comment implies that there was a time when he was actually trying to buy the "house" in good faith. I'm not convinced that is true... It gave him a great excuse to liquidate Tesla stock without the market responding as strongly as it normally would when a CEO unloads billions of dollars of shares in a company

        • shapefrog 12 days ago

          I think it is actually worse than that, I think he was buying it in good faith.

          He believed he had "bought the dip" in stocks. He had bought 3bn worth, announced that he had bought some stock and made 1bn in a day on it - worlds smartest man everyone.

          I know, if I buy 44bn worth then at this rate I will make many many billions ...

          Once he realised he wasnt buying the dip but was actually holding the bag, deal cancelled. Best guess is he is down 10bn on where he bid so his loss-porn on this one is pretty sexy.

          • dragontamer 12 days ago

            > I think he was buying it in good faith.

            My personal theory, which more or less matches Matt Levine's theory from his Bloomberg opinion column...

            Musk wanted special features on his Twitter account. He made a stink on Twitter about it, hoping to get more features as one of its most popular users. When that wasn't working, he tried to join the Board of Directors to lean heavily onto the CEO to grant special features on his Twitter account.

            Upon realizing that the board position doesn't come with those kinds of benefits, Musk quit the board, bought 9% of Twitter, and tried to push these "special features on my account" proposal that way. Board still didn't budge.

            Elon Musk, realizing he has to buy the company to actually get what he wants, starts to buy the company. Then the stock price collapses and its turning out to be a horrible loss. So Musk then starts to throw another tantrum to get out of this one.

            ------------

            The benefits of this theory, is that this "story" proposed by Matt Levine makes every single decision of Elon Musk reasonable (albeit sociopathic, but reasonable and self-serving). From his tantrum in early March 2022 on Twitter, to his 9% buyout, to his flirting as a board member (and then quitting), to the eventual buyout.

            It also doesn't require "4d chess thinking genius". Each decision, while reasonable, isn't really that advanced or difficult to follow individually.

            Elon Musk just want special treatment on Twitter. I don't know what that "special treatment" is (maybe a bigger, bluer checkmark. Maybe guarantees on the global Twitter Timeline. Etc. etc. Something along those lines...), but special nonetheless.

            And as a billionaire, Musk has a number of strategies at his disposal that you or I wouldn't have. Musk is willing to pursue those strategies because he's so rich, and its really not a big deal to his finances.

            --------

            It just fits so neatly to what has happened, that its the most reasonable proposal of his behavior for the past 6 months so far.

          • thaumasiotes 12 days ago

            > I think he was buying it in good faith.

            > He believed he had "bought the dip" in stocks. He had bought 3bn worth, announced that he had bought some stock and made 1bn in a day on it - worlds smartest man everyone.

            > Once he realised he wasnt buying the dip but was actually holding the bag, deal cancelled.

            But these concepts don't even apply to taking a company private. Once you do that, there is no stock price. You can't meaningfully claim that your stock is up or down. And what the stock does between when you agree to buy it and when you take possession isn't relevant to... anything.

            • dragontamer 12 days ago

              Lets say you promise to buy a car in 30 days at a dealership (fully fictitious. This obviously can't really happen in real life).

              You sign a contract saying "I promise to pay $20,000 for this car and I'll be back in 30 days".

              ---------

              What happens if, within those 30 days, the car market collapses and the cars are now worth $15,000 ? Well, if you were an honest man, you'd still carry through with your $20,000 promised payment. If you were a dishonest man, you'd try to find a way around it.

              Same thing here. Twitter's stock price has no relevance after Elon Musk buys it. But we all know that the 60% drop in Tech prices means that Twitter is *probably* down 60%+ like all other tech stocks.

              • thaumasiotes 12 days ago

                This is what I'm saying:

                Once you agree to buy the company, a drop in the stock price doesn't make you any worse off. Your circumstances are exactly the same. You are worse off relative to a counterfactual scenario in which you agreed to buy the company after the stock drop instead of before. But you are no worse off after the stock drops than you were before it dropped.

                And this fact is not at all compatible with shapefrog's argument. Elon Musk didn't experience a loss. There is no bag for him to hold. He will experience a loss if he cancels the deal, but that's an unrelated scenario.

                In your scenario, the car buyer can immediately benefit from canceling the contract by buying a car (from some other vendor) and pocketing the $5,000 difference. No such option is available in the case of Twitter.

      • Volundr 12 days ago

        I don't think anyone is confused on this point.

  • santiagobasulto 12 days ago

    Except this is not a house. It’s a public company. And a lot of people own a piece of that company. And a lot of them were unhappy about how Twitter’s leadership was running things.

    I honestly don’t care, I’m not on either side. But this was not a house sale, and Musk wasn’t a crazy dude approaching a home owner. He had a lot of support from shareholders since day 1.

    • pavlov 12 days ago

      Yes. And he promised those shareholders $54.20 per share, signed the contract, and now the same shareholders are suing to get the money. They don’t care what happens to Twitter if Musk takes over since they’ll have cash instead of shares at that point and can reinvest in something more promising.

      • mrits 12 days ago

        He didn't promise shareholders anything. He signed a contract, which is almost the opposite of a promise.

        • u10 12 days ago

          It's by definition a promise

          • mrits 12 days ago

            "a written or spoken agreement, especially one concerning employment, sales, or tenancy, that is intended to be enforceable by law."

            • bdowling 12 days ago

              Almost all contracts concern promises to do something in the future (e.g., deliver goods, perform services, pay money).

              • mrits 12 days ago

                Obviously. A wedding vow is a promise to stay with someone. A prenup is a contract that you will stay with someone but have a clear exit clause. Musk signed a contract with an exit clause. The contract is a complicated document. If it was a promise it could be written on a hallmark card.

                • tomerv 11 days ago

                  > Musk signed a contract with an exit clause.

                  There are some exit clauses (like Musk not getting financing from his banks) but they don't apply here. Specifically, there's no exit clause for the bot percentage.

                  > If it was a promise it could be written on a hallmark card.

                  Are you just trying to change the meaning of the word promise? Most people would agree that if you break a promise you pay a price - it might be a social one in case of a promise between friends. Or it might be a financial price in case of a written & signed promise, a.k.a a contract.

                  • mrits 11 days ago

                    This is just pure misinformation.

                    • jjeaff 11 days ago

                      No, you just misunderstand the breakup clause in this contract. It's not an exit for any reason and pay a fee clause.

                      Musk is actually obligated to buy the company at this point. It is unlikely the courts will fully attempt to force such a large purchase. But the penalty decided could be much higher than $1B.

                      • mrits 10 days ago

                        I'm glad we finally all agree there is a breakup clause. If you want to argue that Musk will lose in court or that he promised Twitter share holders be will buy the company then I will still be here for that.

      • bobobob420 12 days ago

        Why would he buy the company after the stock crashed? He could buy the company for way cheaper publicly. Who cares what the contract says, theres different rules for billionaires than there are for the contracts I sign. No sane person would go through with it after the stock crashed, its not a financially smart move. A lot of geniuses in this thread but lack basic social and common aptitude as usual. Life is not a fantasy, its corrupt and rich people can do what they want.

        • willis936 12 days ago

          It crashed because of his antics.

          The house was appraised and you signed a contract to buy it as-is. Then you take a hammer to every window and pipe then try to use that to negotiate a lower price.

          Sorry, that is not how it works. It's clear that this is a continuation of Musk's feud with Twitter's management. His goal from the onset was to damage Twitter.

          • parineum 12 days ago

            > It crashed because of his antics.

            Is this true? My understanding is that the "crash" is inline with other tech companies losing value in the same period. IIRC (and I might not!), it only looks like Musk caused the crash if show only the Twitter price. Once you overlay it with some other stocks, it looks pretty normal.

            • vitus 12 days ago

              > Is this true? My understanding is that the "crash" is inline with other tech companies losing value in the same period.

              It spiked because of his antics and then crashed because of his antics.

              Twitter stock today ($42.52) is basically where it was at the beginning of the year ($42.66 on Jan 3), on April 1 ($39.31, right before it was disclosed that Musk was the single largest shareholder), and where it was on May 16 ($37.39, after most of the fallout of him pulling out).

              Please let me know if another tech stock's price has jumps that are aligned with those events.

              • parineum 11 days ago

                wouldn't the "damages" be the difference between today's price and the price it would be today had there been no actions by Musk?

                I'm having trouble finding a shareable link but it's clear he had an effect on the price when he made the offer and when he pulled out but, to me, TWTR appears to have gained in value compared to AMZN, GOOG and AAPL YTD.

          • zhte415 12 days ago

            To continue the terrible analogy of a home, what appraisal was done where on preparing to move in you find rising damp, nests of rats under the floorboards and the slap of paint on the roof was hiding the need for a full roof replacement?

    • powerhour 12 days ago

      Analogies are like cars, they're never perfect but that's OK.

  • wnevets 12 days ago

    > Who could possibly be on the side of the buyer?

    The buyer is rich and if I side with the buyer maybe one day I'll be rich too!

    • int_19h 9 days ago

      I think it usually works the other way around: "one day I'll be rich, so ..."

  • winternett 12 days ago

    As someone who has been on Twitter for years almost every day, both parties acted in bad faith. Twitter bots are out of control and hard to detect because of newer SMM/bot tech scheduled tweets, and bot runners have had ages to perfect their craft on Twitter, because they were allowed to run free for so long. It's been TOTAL HELL for undiscovered user accounts to break ground on Twitter for almost a decade now at least, and many authentic people have simply stopped logging in long ago. Last time I looked, Twitter's ad minimum was $50, which is far too much of a gamble for someone small who just wants to grow followers on the platform, and chances are high that they'll often only attract bot accounts as followers if they gamble that money/

    There are authentic accounts on Twitter, but it is nowhere near as vibrant as it once was, there is far too much run by scripting on the site and not enough support and fair human moderation. Elon as well likely realized the market crash, and how much it would take to bring Twitter back to prominence (which is a risk either way) and then decided to back out. Even with major functional changes there is still a wild risk that Twitter can be too "burnt out" to bring a user base back in.

    Just my opinion, but I think everyone is waiting for something totally new to replace Twitter, and it would cost a lot less than the Twitter acquisition fee to build a new app from scratch. (And no, "something new" does not mean TikTok or even Truth Social). :{

    • alexb_ 12 days ago

      What circles are you in? I basically never, ever see bots on Twitter, let alone enough to suggest that Twitter is "nowhere near as vibrant as it once was".

      • sen 12 days ago

        Yeah I’m a daily twitter user and the only bots I see at all are the cryptocurrency scam ones replying to Elon tweets.

        Other than that, I find twitter works as it always has, and I’m continually finding interesting new people to follow. If anything, I think twitter is the best it’s ever been at least for my hobbies (maker/hacker/diy type stuff).

        • winternett 12 days ago

          The IT world on Twitter may be a bit more responsible because there are too many tech savvy people reading everything... I also work in entertainment, and it's a dumpster fire daily though because competition is more fierce, and I guess credibility comes based on followers and likes rather than resumes and skill sets.

          I think it may involve what field you work in for perception of the matter, but a lot of others complain about botting in Crypto (etc) and a few other industries... I think on the inverse, there are still a lot of community issues that have affected everyone on the platform...

          Has your account grown in followers over time? Do you interact well with other users on you account?

          Many people have complained that organic growth/discovery has stalled and that interaction is low across the site for ages now to drive ad sales.

      • glenngillen 12 days ago

        Same. And in any event Twitter has never claimed the platform isn’t rife with bots, all their reporting about it has been around what % of mDAU they represent. Where m is “monetizeable”. They didn’t want to sell, Musk forced them into this negotiation on the basis of the whole bots thing. It’s staggering to me anybody is giving him even an ounce of benefit of the doubt here. From the very beginning he’s acted in bad faith and like he knows he’s unable to be held accountable for anything should he not want to be held accountable.

        • benjaminwootton 12 days ago

          I agree. He approached Twitter and waived ordinary DD. How can misrepresentation be relevant in the slightest?

      • winternett 12 days ago

        I work in the music industry.

        The clearest sign that something is suspect is constantly trending celebrity names when they have no new/real news involved.

        The other indicator is accounts that have over 10k followers on them, nut every tweet they make has only 10 or less likes on it. They cover that activity up by retweeting others/old posts that have multiple likes on them.

        I won't mention names, but just the other day I made a tweet about a news outlet reporting on a terrible homicide and the news outlet was using a celebrity's photo rather than a photo of a victim in the incident or no photo at all, and suddenly the celebrity artist's name started trending with tons of old posts retweeted and obviously simple (bot-like) posts were made tagging the artist's name to bury my comment out of view... It happened twice that day.

        I am used to the dysfunction and subtle marketing tactics used on the site, not really anything worth protesting against any more.

  • breakfastduck 12 days ago

    Except it's kinda funny because the 'homeowner' has spent 10 years developing the primordial cesspool that the buyer has evolved out of and it's kinda funny that some famous rich narcissist they've built an entire social network around empowering is now fucking them over.

  • bilsbie 12 days ago

    A publicly traded company is nothing like a house. I say no to this analogy.

  • ilikehurdles 12 days ago

    The investors funding the buyer’s antics.

  • COGlory 12 days ago

    I hate Twitter. They are turning a huge profit with massive negative externalities to society. I hope this whole ordeal costs them billions.

  • davesque 12 days ago

    You left out the part where the buyer will also destroy the city in which the house is located purely out of spite if he is forced to go through with the purchase. That is, I fully expect Musk to go full troll mode and reverse bans on all the bad actors who have been rightfully kicked off the platform if he's forced to buy Twitter. He'll claim it's for free speech when it's really just to own the libs.

    • Vespasian 12 days ago

      Very unlikely for him to deliberately destroy Twitter.

      Most of the deal is financed by banks and they have a vested interest in Twitter having at least a shot at being more valuable or profitable.

      He is but it with cash but (mostly) not his own so deliberately running the company into the ground could make him liable for damages.

    • macinjosh 12 days ago

      Just like the libs blocked every account they could to own the conservatives in the name of protecting feelings.

      • CamperBob2 12 days ago

        Their house, their rules. See 'Truth (sic) Social' for another example.

    • Banana699 12 days ago

      >He'll claim it's for free speech when it's really just to own the libs

      Those 2 goals are aligned.

  • Kye 12 days ago

    This would make a perfect episode if Knight Rider ever got another reboot.

  • eru 12 days ago

    > The buyer starts harassing the homeowner to sell to them, they say no, so he buys up the mortgage lender and tries to force a sale.

    It's more complicated. The incumbent management of Twitter are not the owners of Twitter.

    Initially, Musk bought shares of Twitter on the open market from willing sellers (previous homeowners in your analogy).

    Because of various regulations he could not just keep doing that, and instead had to go via the complicated takeover route.

    Twitter's incumbent management is a bit like the janitor in an apartment block, not the homeowner.

    (Just to be clear, I am not making any moral arguments here. And when in doubt, I defer to whatever Matt Levine says on the topic.

    I have opinions on 'hostile' takeovers, but this comment is not trying to express any opinion on whether the 'janitor' should have a right to interfere with 'homeowners' who are willing to sell.)

    • jjeaff 11 days ago

      I'd say they are more like the property managers that also hold some ownership of the property. The janitors at Twitter HQ are like the janitor that cleans a property.

      • eru 10 days ago

        > I'd say they are more like the property managers that also hold some ownership of the property.

        Are you referring to Twitter management also holding shares? Or some other aspect?

        For my argument, it's perfectly fine if some shareholders are also employees. In their role as shareholders, they would still be selling voluntarily (or not selling, as the case may be).

  • demarq 12 days ago

    I go to a mercedes shop to buy a car I can show off with, arrange a loan then get demoted and paid less. I'm "effectively" too broke to buy the mercedes. So I return the next day and claim "the lights are to curved!" Is the way I look at it.

    TLDR: The worlds richest man, insecure about his wealth decided to show off and failed due to a lack of wealth. To somehow save face he claims that his change of heart is not financially motivated.

    Lesson, no one in this world is above being insecure about their wealth or status. It just happened to the worlds richest dude.

  • 762236 12 days ago
    • jscottmiller 12 days ago

      >They repeatedly demonstrate that they are a company of bullies, with how they ban people from their service that don't conform to the left orthodoxy.

      So the manner in which they conduct their private business, which is well within the rule of law, makes them ineligible for protection from those violating securities and contract law?

      • wutbrodo 12 days ago

        > makes them ineligible for protection from those violating securities and contract law

        GP said he doesn't feel sorry for them. He said nothing about legal protections being inapplicable to Twitter. You just brazenly made this up out of whole cloth.

      • 762236 12 days ago

        I said that I don't feel sorry for Twitter. The law should apply without consideration of political ideology.

        • jonathankoren 12 days ago

          What law are you talking about? The first amendment? It doesn't apply to private actors. Not only does it not apply to nongovernmental entities, it SHOULD NOT apply to them. To do so would be government compelled speach.

          • 762236 12 days ago

            I'm referring to the law in the context of the purchase offer from Elon, as the person I'm replying to quite clearly stated "securities and contract law".

      • TechBro8615 12 days ago

        It’s not a violation of contract law to sue the other party. That lawsuit may find that the complainant did violate contract law, but the act of bringing the lawsuit is not in itself a violation.

        So at this point, pending adjudication, Twitter has not been “denied protection.” The court is the protection. The two parties are suing each other, and the court will decide the appropriate remedies for whatever each of the parties has been “denied” due to any willful breach of contract by the other.

    • bentcorner 12 days ago

      > This gets my curiosity going, so now I'm paying a lot more attention to conservatives than is normal for me (on Substack, YouTube, and Instagram).

      This is a phrase right out of this playbook. No thank you.

      https://medium.com/@DeoTasDevil/the-rhetoric-tricks-traps-an...

      • Zpalmtree 12 days ago

        I don't get how his comment relates at all to your article. Paying attention to conservatives makes him a white nationalist?

        • bentcorner 12 days ago

          Paying attention to them is fine, I think curiosity is an excellent trait. GP's comment is extremely similar to the "thanks for pushing normal people even further to the right" phrase in my linked article. GP is implying that right-wing talking points are being indirectly validated by twitter, and GP values are being changed because of that.

      • 762236 12 days ago

        It's called the Streisand effect.

        • Dylan16807 12 days ago

          Fake streisand effect. Pretending even the tiniest act of moderation is a massive campaign to hide information.

          • 762236 12 days ago

            How is it fake? I'd have never learned about, e.g., some of the gender critical viewpoints, if Twitter hadn't banned people expressing them. It wouldn't have come on my radar. But since Twitter did ban some of those people, those viewpoints came on my radar (being relayed by others via screenshots), which raised my awareness of it. That fits the definition of Streisand effect.

            • Dylan16807 12 days ago

              Because twitter wasn't trying to make those viewpoints go away or hide them from the world. They just didn't want to themselves amplify those views to hundreds or thousands or more people.

              Twitter's not trying to keep gender critical viewpoints a secret, or remove them from anywhere outside of twitter.

              • 762236 12 days ago

                They did amplify, or I wouldn't have learned about them. Twitter does seem to be trying to keep gender-critical viewpoints secret, but covertly, as they make it really easy to get banned for "hate speech" when you engage in gender-critical speech. The same for other topics that people label as misinformation, such as sharing the actual statistical results from vaccine trials. I never cared about the statistical results until people got banned for sharing them, thus Twitter indirectly amplified.

              • homonculus1 12 days ago

                That is a ridiculously tortured argument. The censor not extending his reach to outside venues doesn't make him any less a censor.

                • Dylan16807 12 days ago

                  Streisand effect is about information someone is trying to keep hidden. This kind of Twitter moderation fits neither half of that.

                  I don't want to fuss about what counts as "censorship" or not. That's not productive.

                  • homonculus1 12 days ago

                    1. Detransition accounts are information 2. Twitter bans users specifically to suppress that information, i.e. minimize its reach, i.e. hide it

                    Bald-facedly denying censorship is certainly not intellectually productive, might I suggest you simply stop doing that?

    • root_axis 12 days ago

      Even if we grant the accusations of enforcing a leftist orthodoxy, that's twitter's prerogative, you may not like left wing people but they are allowed to have a website that caters to a left wing audience.

    • markdown 12 days ago

      What are your thoughts on TruthSocial, which is also "a company of bullies, with how they ban people from their service that down't conform"?

    • muglug 12 days ago

      The fact you think that Twitter supports "left orthodoxy" just means the conservatives have successfully moved the goalposts to make you believe they're the real victims.

      Twitter is full of very prominent hard-right voices. Douglas Murray! Charles Murray! Tucker Carlson! Dave Rubin! Ben Shapiro! Edit: Bannon! Paul Joseph Watson! Jack Posobiec!

      • 762236 12 days ago

        I see lots of people getting banned for, e.g., being gender critical, or for sharing the actual stats from vaccine trials when those stats make the vaccines look bad. Twitter seems to respond to coordinated complaints against conservatives. My guess is that you can get Twitter to silence a conservative that doesn't have too many followers through these ambushes, but you can't get Twitter to silence established and well-known conservatives such as those you mentioned.

    • anothernewdude 12 days ago

      So you're an asshole and think others should have to put up with you? I doubt they do in real life, why should it be different online?

      • mmmpop 12 days ago

        What about that comment warrants your calling the GP an asshole? That's incredibly rude and if the irony of your comment having not been flagged is lost on you, then congrats, you won the stupid game.

      • 762236 12 days ago

        I don't understand this comment at all.

  • Banana699 12 days ago
    • tehwebguy 12 days ago

      > allows some opinions while banning others

      Me: Holy shit! You were censored for wanting lower taxes?

      Con: LOL no...no not those views

      Me: So....deregulation?

      Con: Haha no not those views either

      Me: Which views, exactly?

      Con: Oh, you know the ones

      https://twitter.com/ndrew_lawrence/status/105039166355267174...

      • Banana699 12 days ago
        • Dylan16807 12 days ago

          They're challenging you to be specific about the opinions.

          And you really need to explain how that proves your point about twitter. In general, if someone makes a really dumb response to you, that doesn't prove you right about anything. And if your argument is "twitter has bad comments" then a bad comment on HN doesn't prove that right.

        • tehwebguy 12 days ago

          Your other post got nuked but to explain more:

          It’s okay for some opinions to be suppressed in most places! Some opinions are almost universally considered to be bad, there are some really easy & gross examples that I think most of us can think of. Some are considered bad in a particular context.

          The ones you mentioned are great examples of reasonable policy:

          - banning covid misinformation to reduce deaths is good, look up “herman cain awards” to see some of the damage the misinfo has done

          - banning harassment in the form of misgendering / deadnaming is good

          Every rule that has ever existed for people is enforced with some degree of selectivity, if nobody reports a tweet there won’t be action. Posters and moderators are human, reported tweets are probably mostly different from one another and every human doing reviews is different.

          It’s okay if your opinion is that a website or all websites should have no moderation based on opinions or anything at all. But Twitter disagrees and I’d guess most people do too!

          • Banana699 12 days ago

            Contradicting the official narrative on Covid19 isn't automatically 'misinformation', the official narrative held that masks are useless in the first months, then insisted on it religiously the following months, when, in fact, they are indeed mostly useless in the face of latest variants. Both of those convictions were held against evidence, and intelligent and knowledgeable commenters and organizations tried to point out what was wrong in them only to be met by "debonking" and censorship.

            Reality is not harassment. If somebody is upset they can't control someone's else words or perception, they can go to therapy about it. This remains true even if you invent a couple of dumb words to describe the words or perceptions that upset you, like 'deadnaming' or 'misgendering'.

            There is a difference between deliberate selectivity based on ideology, clearly and nakedly what twatter does, and simple errors and human variability.

            Yes, I'm entirely free to think anything I want and disparage any website or any other group\institution of people for not agreeing with me, and being happy that dumb anti-free-speechers are dragged to court and toyed with for months. What I don't understand is how your dumb role-playing of an imagined strawman of me in your first reply says anything about me or my opinions.

    • dragontamer 12 days ago

      > Legally ? I don't know, I'm not a lawyer, and law can frequently have surprising implications in the twists and turns of the its logical structure, which - as a bonus - differ by time and exact place.

      The contract states the place of the law. Specifically: in the Delaware Chancery Court. The contract also states the time and conditions of the contract.

      Have you read the contract? Its public. Furthermore, the date of the court case has been set for October. It seems unlikely that Delaware law is going to change dramatically between then and now.

      • Banana699 12 days ago

        How does any of this change or contradict what I said?

        And doesn't the US legal system allow for escalation to the Supreme Court, which can override lower courts? So technically whatever the Delware Court is not the final say on whatever happens.

        >Trial date set to October

        This is so so awesome, I will get to see Twatter defenders rage and fume for 2 more months? ^__^

        • dragontamer 12 days ago

          > and law can frequently have surprising implications in the twists and turns of the its logical structure, which - as a bonus - differ by time and exact place.

          There's no twist or turn of the law I can possibly imagine between today, and October, in the Delaware Court of Chicanery.

          There is a reason why contract laws are written to be argued in this court. Its considered one of the most straightforward courts in the entire country, with legal expertise / judges who specialize in corporate contract law.

          --------

          But sure, I'm all ears. What kind of "surprise legal twist" do you think will happen over the next 2 months? I really don't think its too complicated of a court case. Its just fun / fascinating to watch from the perspective of internet celebrities.

          In any case: the time has been set. October 2022. The location has been set, Delaware Court of Chicanery. The arguments have been set: we know what Elon is seeking to argue, and we know what Twitter is seeking to argue. Not much else to hypothesize here, really.

          • Banana699 12 days ago

            >There's no twist or turn of the law I can possibly imagine

            If you're not a lawyer, this has 0 value. If you're not a highly paid team of several top lawyers, this has less than 0 value. Their entire profession is to spin circles around common sense or naive reasoning, so just wait and see. Law is harder than you think. Don't Dunning-Kruger your way into a highly complex domain, it never works.

            >What kind of "surprise legal twist" do you think will happen over the next 2 months

            By my own admission, I'm not a lawyer. So I don't understand why you think you or me can answer or predict this question better than those studying for decades and highly paid for months to think about it.

            • dragontamer 12 days ago

              You're performing some kind of weird Russell's teapot applied to legal arguments. https://en.wikipedia.org/wiki/Russell%27s_teapot

              * "There's a good argument for Elon Musk's side of the case out there, floating between Earth and Venus if only you'd look at it".

              * "Oh, I'm not an astronomer, you shouldn't expect me to point out this teapot to you or tell you where it is".

              Okaaaaaaaay. But that's not how discussions work in practice. I put forth the best arguments I'm aware of, and you put for the best arguments you've thought of, then we both evaluate the evidence for ourselves. That's... normally how discussions work.

              If you're not interested in the legal minutia, then you don't have to discuss them with me? I'm not saying I'm a perfectly good lawyer myself (indeed, I'm an engineer). But there's value in the struggle to understand these things, even things outside of my field.

              ----------

              The legal arguments for this case so far, are actually really simple. You don't need to be a lawyer to understand:

              1. That the Court of Delaware has been chosen.

              2. That the judge (Judge Kathaleen St. J. McCormick) has been chosen. She has set the date on October 2022. Her history of cases is public and well known.

              3. The contract in question is public, well known, and well discussed.

              All of these items are publicly available to you and me. Maybe I'll get some facts wrong, as I struggle to understand the case, but we're not exactly in rocket-science level or PH.D levels of legal theory here yet.

              You're seemingly trying to make some kind of weird... meta-Argument like this is too complicated to understand? But its actually really simple so far.

              • Banana699 11 days ago

                Acknowledging your ignorance and the limits of your capability is not Russell teapotting.

                >If you're not interested in the legal minutia

                How can I be interested in that which I don't even know ? I'm neither interested nor disinterested, I simply don't know. This doen't require a big brain to understand.

                >The legal arguments for this case so far

                Those are not arguments, what you listed are the facts of the case. Some of them are even 'future facts' that have not happened yet, but are scheduled to happen with high (but not certain) probability. All of those facts are and will be subject to the experience and argumentation of a team of lawyers who spent the last decades learning and practicing how to extract the most favorable interpretation out of any set of facts, and dismiss and trivialize those facts which can't be interpreted favorably.

                Here is a game you can play with a person you know : Tell the person to select N public cases at random from a source you are not allowed to read. For each case, the person should tell you the facts of the case but not a single argument from the trial, the facts include anything known about the case prior to the trial. See if you can guess which party will win the case. How many cases out of N you think you will get correct on average ? You will not exceed 40%.

                >All of these items are publicly available to you and me.

                The entire history of China is publicly available to anyone with an internet connection, can anyone be a foreign diplomat to China ? A vast trove of medical and biological information is publicly available to anyone, can anyone be a doctor or even an assistent to one ?

                Facts are not knowledge. Books are not knowledge. Records are not knowledge. These are "String Representations" of knowledge, crystallized and ossified remains of true knowledge, which are the mental representations inside the brains of people who studied and thought hard about the domain. You're not going to replicate those mental representations simply by reading their dead remains, you can say something, it's just not going to be very useful or truthful.

                • dragontamer 11 days ago

                  > I'm neither interested nor disinterested

                  For someone "neither interested nor disinterested", you're making a lot of posts about this subject matter.

                  Don't you think that if you're in a topic posting about the Twitter vs Elon Musk court case, that you should at very least _PRETEND_ to have interest in this case? Or what are you trying to do to me, just waste my time with these replies of yours?

                  ----------

                  I'm not saying you have to be _correct_ in your posts. All I'm asking is for you to be interested enough to seek the truth in the case before you write up a post.

                  • Banana699 10 days ago

                    >For someone "neither interested nor disinterested", you're making a lot of posts about this subject matter.

                    Your statement was "If you're not interested in the legal minutia", and I replied that I'm neither interested nor disinterested, *in the legal minutia*.

                    I'm mildly interested in the outcome of case itself, namely my preferred outcome is that of Twitter losing as much value as possible and its users lose as much of their time and peace of mind as possible. I don't particualrly care how much Musk loses or wins.

                    This still doesn't need to imply I need to be interested in legalities. You can perfectly well be interested in your health without being interested in medicine and biology, you're interested in the 'what', not the 'how'; in the ends, not the means. I'm interested in a prticular outcome for a legal case, but not interested (and not necessarily disinterested either) in the legal intricacies of a country I don't live in when I'm not a lawyer.

                    >that you should at very least _PRETEND_ to have interest in this case

                    I don't need to pretend, I *am* interested in a very narrow thing about that case, namely that of twitter losing or signficantly suffering damage at least. I don't have to be interested in every single thing about that case to participate in the discussion, I mostly care about 1 thing and stated it very clearly all of my comments.

                    >All I'm asking is for you to be interested enough to seek the truth in the case before you write up a post.

                    I did read up 1 expert talk about Musk's legal chances posted here about 2 weeks ago, and he did give Musk low chances of winning according to several reasons I found convincing, but - like a true expert - he also acknowledged that he is (1) Not Musk's legal team or any one of them (2) Not in possesion of the full facts since he is not a party of the dispute or the judge (3) That there is enough stake on the matter, billions of dollars and reputation, that the judge can significantly hesitate and not be as straightforward as her history implies.

                    So that's enough for me to still have reasonable hopes that my preferred outcome is going to happen.

                    • dragontamer 10 days ago

                      > Your statement was "If you're not interested in the legal minutia", and I replied that I'm neither interested nor disinterested, in the legal minutia.

                      This topic is legal minutia of Twitter's counter-argument to Elon Musk's legal-claims. The very topic of discussion, is Musk's bot analysis tool behind his legal claims. (Which is beginning to look a lot like bullshit).

                      > Twitter says Musk’s spam analysis used tool that called his own account a bot

                      The topic of discussion. Are you interested in this topic or not? Do you have something relevant (not necessarily correct, but at least __relevant__) to the stated topic at hand?

                      Because as far as I can tell, you're just interested in publicly declaring that you're ignoring the topic of discussion.

                      • Banana699 10 days ago

                        The topic of this entire HN discussion thread is, indeed, nominally about the legal minutia.

                        But the topic of the super comment we're both arguing in reply to is "Who could possibly be on the side of Musk", i.e. a question about the relative sympathy both sides of the legal dispute evoke. My reply to that, the one this entire sub-thread is a reply to, is that Musk evokes greater sympathy, because of how twatter abuses their power and position as a social media monopoly and how much this harms online conversations. So, in this particular scope, you're the one who is actually off-topic, my reply was about who I'm more sympathetic to.

                        >Do you have something relevant (not necessarily correct, but at least __relevant__) to the stated topic at hand

                        Do you mean the bot issue ? it's probably bullshit. Every social media cesspool is full of bots, some more, some less. There is no reason to think twatter is any better or worse on that particular front. It's probably instagram who's the filthiest bot playground.

                        I think its pretty obvious that Musk will try to milk every single point, fair or not, to improve his position in the court. Bullshit or not, it ties up important resources out of twatter's legal team and gives legitimacy to his claims (because if you spend several lawyers trying to debunk bullshit, then you at least take that bullshit seriously, which gives legitimacy to the bullshit).

                        So I don't understand what to discuss, Musk bullshitted ? no shit, he's billions-of-dollars committed to the case now, off course he's going to bullshit and do whatever it takes to win. What's interesting or novel about that ?

                        • dragontamer 10 days ago

                          So are you on Elon Musk's side on this case, and what evidence points you on Musk's side?

                          It's fine to have your own personal bias here. We all do. But at a minimum, discussing why we hold those views is beneficial for both of us.

                          If you are just anti-twitter then that's good that you are admitting that. It at least gives me something to work with from a discussion point of view. But ideally, you should be discussing why Twitters argument here is wrong and why you think they'd lose this court battle.

                          • Banana699 10 days ago

                            >So are you on Elon Musk's side on this case, and what evidence points you on Musk's side?

                            That would imply I want him to win, when in reality I just want twitter to lose. I don't particularly care what happens to Musk, I just want him to deal maximum damage to twitter, at whatever cost to him it takes.

                            >It's fine to have your own personal bias here. We all do. But at a minimum, discussing why we hold those views is beneficial for both of us.

                            I did say why I hate twitter and want them to lose this case: they are a bunch dumb anti-free-speechers who coddle certain groups and ban others arbitarily, and on top of that their terrible poisonous platform is not conducive to intelligent speech.

                            >why Twitters argument here is wrong and why you think they'd lose this court battle.

                            I don't have a particulary strong expectation that they will lose, indeed if anything their legal position is stronger than Musk, as the experts are fond of saying. My hope is that they will underestimate Musk and do something dumb that will hurt their position and force a favorable concession that will hurt them more. Even if they win, that might anger or humiliate Musk so much that he destroys twitter out of anger, this is still fine by me.

        • vba616 12 days ago

          An expert commenter on the topic (not me) wrote that there is only one potential step in the appeals process, and that is a "Supreme Court" which is in Delaware, not the famous "US Supreme Court" you may have heard of.

          First Google hit for "delaware chancery court appeal":

          "The Supreme Court is the State's appellate court which receives direct appeals from the Court of Chancery, the Superior Court, and the Family Court"

          • dragonwriter 12 days ago

            If there is an issue of federal law raised (which can emerge during the case, e.g., if there is a due process issue with the handling of the case, even if it isn't initially part of the case) state Supreme Court decisions can be appealed directly to the US Supreme Court, though (like all appeals to the Supreme Court) such appeals are heard at the discretion of the US Supreme Court, not by right.

  • tomcam 12 days ago

    It appears to me that the seller was, in your analogy, misrepresenting the condition of the house. This is my totally unscientific analysis based on my private random sample of accounts I interact with, so, not particularly robust as a decision making tool for a big sale.

    • lazide 12 days ago

      In the analogy, the contract was done with no intentional representations by the seller at all, and the buyer waived contingencies/bought as-is.

      It’s almost impossible for a seller to misrepresent anything material in that situation.

      • d110af5ccf 12 days ago

        The issue being that Twitter actually did (afaik) make various representations about bots, spam, paid actors, etc and the validity of those representations was later called into question. So the analogy as originally proposed at the top of this thread is a misrepresentation.

        • lazide 11 days ago

          None beyond their normal public filings I believe, which are highly qualified and if wrong beyond those qualifications they’d have been in hot water a long time ago. In the analogy, it would be like claiming the Public appraisals/tax records with the county were lies all of the sudden (when they aren’t) to try to get out of the deal.

          But if you have evidence to the contrary, please post.

  • biomcgary 12 days ago

    Not the best analogy. In many (most?) US states, the buyer can just walk away from purchasing a house at any time for just the earnest money, typically 1%.

    • bialpio 12 days ago

      You may need to have a reason that's called out in the deal to walk away from the deal. If you've e.g. waived inspection contingency and later find some issue w/ the house, you may be forced to close the deal anyway (there may be other contingencies like problems w/ securing financing, but I think that ship has sailed for Elon as well). Not a lawyer, but I expect there may be some way to walk away if you can prove the seller knew about the defect - that also doesn't seem applicable to Twitter deal, since IIUC Twitter gave Elon access to the data they have. We'll see how it plays in court, but I think it's a decent analogy.

  • jawns 12 days ago

    Imagine it playing out in a romance! "You cad. I never wanted to marry you, but I felt compelled to accept your proposal. But now that you are trying to back out, I am trying to force you to marry me, you idiot."

    Although in this case, contrary to what it's arguing, Twitter doesn't actually want the marriage to happen. It just wants to keep the $1B engagement ring.

    • vehementi 12 days ago

      You're not caught up with things. Twitter is suing to force the deal to go through at the original price, not to get the $1B.

      • jawns 11 days ago

        I'm aware of the latest developments, but let's work through this.

        There are basically two categories of Twitter shareholders: Those who are invested in the business's long-term success, and those who could care less about the business and want to dump the stock as soon as they can get a good price for it.

        Right now, the latter category want the sale to go through so they can divest; they don't care if Twitter burns to the ground afterward.

        But what is the outcome that people invested in Twitter's long-term success actually want? Twitter's lawyers are arguing that Musk is an incompetent businessman who made a really terrible knee-jerk decision, and in the same breath they're saying that he should be compelled to be made Twitter's new owner -- an unwilling, incompetent owner who will likely tank the business even if he doesn't make any more stupid decisions, just by virtue of how this all played out.

        These people, one would think, would prefer to get the $1B parting fee and be done with Musk, even if that means passing up on the potential for a short-term gain that an outright sale might give them.

        Similarly, in a romance, whatever short-term benefits you might get by having a wedding, they're never going to be worth the trouble if it means marrying a terrible person.

        • vehementi 9 days ago

          Granted such people exist but twitter i.e. the board acting in shareholders interest, in fact wants the deal to go through, not to get the $1B thing.

  • ErikVandeWater 12 days ago

    Well this analogy leaves out Twitter censorship, which makes Twitter unlikeable.

    • bhouston 12 days ago

      I think Twitter is in a tough spot when it comes to deciding how to handle hate speech and harassment.

      In many ways they are like Amnesty International in that no matter which human rights issue they report on, there will be a contingent that says, well everything else you says is true, but the stuff you said about me is completely wrong and you've loss all credibility.

      It is a hard spot to be in trying to be neutral in a world of actors who only want the other side criticized or censored and never themselves.

      I am glade I do not have such a role. I wouldn't be able to take the constant flak from all directions for actions or inaction.

    • 1270018080 12 days ago

      Adding to the analogy: The current owners of the home regularly remove swastikas spraypainted on their house by vandals, and some people call this a violation of free speech.

      • shapefrog 12 days ago

        Removing swastikas graffitied all over the place, political correctness gone mad.

      • ErikVandeWater 12 days ago

        You really think the only speech Twitter censors is hate speech? Terrible.

      • themaninthedark 12 days ago
        • 1270018080 12 days ago

          This further adds to my point that there's no violation of free speech taking place.

    • Kaze404 12 days ago

      Twitter, the platform where trans people are routinely called pedophiles and groomers by prominent figures and nobodies alike, has a censorship problem? I can't imagine the kind of vitriol you have to spew to get banned off Twitter that's not just tripping the automatic ban for telling someone to die (which everyone is aware of at this point).

      • Banana699 11 days ago

        Here we go with that bullshit again.

        Do you have a link of an example of what you say ? Were the people in those linked example not banned at the time? On average, how many people calling your precious "trans people" pedophiles and groomers are banned vs. how many of the trans people themselves get banned when they say things equivalent or far worse ?

        It's mindblowing to me how the most coddled and put-on-a-pedestal group in public discourse is complaining about censorship and unfair treatment. They literally ban people for not using pronouns. It's honestly laughable.

        • Kaze404 10 days ago

          I am one of those people. Last March one person went down on my profile and replied to multiple tweets calling me a groomer and a pedophile, with those exact words, and was not banned after I reported them.

          I'm not going to acknowledge the second paragraph because it's just hilariously out of touch with reality.

  • brigandish 12 days ago

    > All the while, this is of course taking your attention away from your day job

    If the Project Veritas videos are anything to go by then there's not much attention being given to the day job in the first place.

  • throwawayacc2 12 days ago

    I am, not because I think “the buyer is right” but because I hate the seller with a passion.

    Twitter has done terrible harm to society and whatever and whoever does it harm, it’s doing a good job in my book.

    • breakfastduck 12 days ago

      Quite funny than the person doing twitter 'harm' is exactly the kind of famous, pompous narcissistic asshole their entire platform has been built around enabling.

      • throwawayacc2 11 days ago

        If it helps, I think both twitter and musk are two turds. I like seeing turds suffer and harming each other. Best outcome for my personal satisfaction would be twitter gets dragged for years in the courts and loses tons of money and at the end musk is forced to pay that billion dollars or however much the break clause is. Both side can go f themselves.

  • bko 12 days ago

    > Who could possibly be on the side of the buyer?

    I don't know. It just strikes me as weird as forcing someone to buy something that they don't want to own or run. Especially after fighting it for months and even adopting a poison pill.

    Imagine if you agreed to buy a house for $1 million and the housing market crashes and the house is worth $500k. And now multiply those values by 50,000. Why wouldn't you try to get out of the deal?

    • bink 12 days ago

      > forcing someone to buy something that they don't want to own or run

      After they signed a contract to do so... and that is the entire purpose of writing up the contract.

hn_throwaway_99 12 days ago

I really can't see any other outcome besides Musk getting his ass handed to him by the Delaware Court of Chancery.

It's always important to look at incentives and motivations when trying to read the tea leaves, and if you look at Delaware's incentives, it's very clear. The whole reason everyone incorporates in Delaware is because they have centuries of handling business cases and have built out a clear set of rules and procedures. That is, businesses go to them more for stability and predictability than anything else.

Musk signed a contract. The BS reasons he is trying to use to back out of it are borderline laughable, and even he knows this, so if anything is just really trying to negotiate better terms. The Delaware Court has every incentive to hold up the established rules of contracts, especially business acquisition contracts, and I'd be pretty shocked if they ruled in favor of Musk on any of his claims.

  • SilverBirch 12 days ago

    Actually I have to take you up on this, people who run large corporations say that it's the strong legal regime they have. In reality, it's a tax shelter. The only question is "How much does Delaware care about their status as a real legal regime vs their actual purpose: a tax haven". They know it's difficult to defend "We're a tax shelter sucking revenue out of the rest of the union", so they argue "We have strong legal structures" but we all know that Coca Cola wouldn't be incorporated in Delaware if they could save a cent by being incorporated in Georgia.

    • FrobeniusTwist 12 days ago

      What tax, specifically, is Delaware a haven from? Incorporating in Delaware doesn't get you out of Federal income taxes, or state income taxes (to the extent your operations, which are probably not based in Delaware, subject you to income taxes from various states), or sales taxes, or property taxes, etc., etc.

      There are some taxes that are avoided by incorporating in Delaware, as opposed to some other jurisdiction, but they round to zero when compared with taxes imposed without regard to where you happen to be incorporated.

    • hn_throwaway_99 12 days ago

      This isn't really true, for the simple reason that where a company is incorporated has little impact on the tax a company pays. Yes, there are some business tax benefits for being incorporated in Delaware, but they're negligible for a large corporation, and for a smaller business will probably end up costing you more.

      I mean, if your headquarters are in California, you have employees in California, and you get lots of revenue from California, the California government doesn't care much where you are incorporated - they'll get their pound of flesh regardless.

    • sudosysgen 12 days ago

      I think it's both. Many states could compete with Delaware by also becoming tax havens. They can't anymore, because there is now more to it that simply being cheap.

  • palmetieri2000 12 days ago

    > That is, businesses go to them more for stability and predictability than anything else.

    You really think this is the reason and not the extraordinary removal of income taxes for companies and shares?

qq66 12 days ago

All of this is just a theatrical farce by business guys. The market went down, Elon doesn't want to pay, Twitter has a pretty good negotiating position, the parties will settle out of court for $3-5 billion.

  • jassmith87 12 days ago

    Why settle? There is a reasonable shot of forcing musk to pay a 200% premium. $3-5 billion is a steep discount. Twitter should settle for nothing short of specific performance.

  • orlp 12 days ago

    Why would Twitter settle?

    • fullshark 12 days ago

      To close the sale and end litigation

      • saalweachter 12 days ago

        So right now the Twitter market cap looks to be about $12 billion dollars lower than the standing offer.

        I'd naively assume that the price to settle starts at $12 billion dollars, and maybe goes up rather than down -- right now that $42 stock price is at least anchored by the probability of Musk being forced to buy it at $54, so if this ends without a sale, we might expect the stock price to go down.

        • nemothekid 12 days ago

          >So right now the Twitter market cap looks to be about $12 billion dollars lower than the standing offer.

          You also have to factor in almost every other social media company is down 50% YTD. If the deal falls through, the market will price TWTR like how they did to facebook which shaves off another ~$15B off their market cap.

          So TWTR actually stands to gain ~$27B in value.

        • DoesntMatter22 12 days ago

          There is a zero perfect chance that Elon settles for anything near 12 billion as that is in the ballpark of what he was going to put into it. It'd just be cheaper to buy the company if he had to settle for that much.

          • saalweachter 12 days ago

            I mean, if the options are "go through with the sale and be forced to sell enough shares of Tesla to lose control of it" or "pay $12 billion for nothing, but maintain control of Tesla"...

rchaud 12 days ago

Few accounts post as much vapid engagement-bait and as frequently as @elonmusk does, so I have sympathy for the bot analysis tool.

  • bhouston 12 days ago

    I couldn’t take it and had to block elonmusk on Twitter. It was just dumb bait tweets but everyone was constantly reacting to them. Horrid and I have better things to do with me time.

  • onelovetwo 12 days ago

    Thats not what bot means...

rossdavidh 12 days ago

It is possible that this means Musk's spam analysis tool is defective. But, there is another logical possibility...

  • shapefrog 12 days ago

    If Musk can prove that he is a bot, then he wins this lawsuit.

    • dane-pgp 12 days ago

      Imagine the gasps in the courtroom when his lawyer walks in and people notice it's actually a prototype of his Optimus android, that somehow managed to pass an online law degree.

      Presumably it would then announce that it is an expert in "bot law" and the judge would have no choice but to let it argue Musk's case.

      • shapefrog 12 days ago

        And then people look even closer and notice that its the same prototype of the Tesla android revealed to much fanfare in 2021, and now that they can see it up close and in person - they realise its actually just a person in a gimp suit, it always was.

mabbo 12 days ago

Just in case anyone isn't seeing through the bullshit of Elon Musk, let me lay this out for you:

On April 14th: Twitter stock was worth about $45. Tesla stock was worth about $985. Elon's contract said he would sell $13B worth of Tesla stock (about 13.1m stocks) as part of the plan to buy Twitter for $44B, $54.20 per share. A good deal for the Twitter shareholders even at the time. (23% higher than the market said it was worth).

On May 13th: Twitter stock is worth $40[0]. Tesla stock was worth about $769. So now Elon would have to sell 16.9m shares of Tesla, 28% more, to get a company worth 12.5% less. All signs pointed to both stocks continuing to decline along with all of tech, so the deal was getting worse and worse every day for Elon, and better and better every day for Twitter's shareholders.

Elon Musk will say or do anything he has to in order to cut his losses. There's that well-talked-about $1B get-out-of-deal fee that everyone thinks he'll be able to use. But that's actually not a valid thing- that was only if the SEC blocked the deal. He's contractually obligated to buy the company.

Elon is screwed. All the noise he is making is not going to get him out of it because the Twitter shareholders will hire lawyers just as good and expensive as his- and they are in the right.

[0]And even then $40 is only because the stock was pumped up from Elon saying he's buying it all. If not for that, it would be even lower- meaning this is an even better deal for the shareholders.

  • xiphias2 12 days ago

    Even though you are totally right, I can’t fault Elon for having a sour grape feeling and trying to renegotiate hard with all the tools he’s got. Millions of lawyer fees are nothing compared to the billions of losses he is going to have from the deal.

    • DoesntMatter22 12 days ago

      Realistically he may not take a loss in the end. If Elon does buy it and is able to get into payments and charge Businesses for their account, they could quite possibly quadruple or better their income.

AllegedAlec 12 days ago

I'm still convinced he's just gonna use it to suggest that a judge should meet him in the middle; make him buy the company, but use the allegations of large numbers of bots to reduce the price.

  • ncallaway 12 days ago

    I don’t think there’s any world where that happens.

    I think a judge would either order specific performance (e.g. do the thing the contract says, as specified in the contract), or we’re talking about damages (e.g. pay Twitter $X, but you don’t get anything in return).

    I think a purchase at a lower price would probably only come from a settlement between the parties, and… I think that’s likely. Twitter didn’t want to be purchased in the first place, and now has Musk over a barrel. I think Twitter is going to use the threat of specific performance to try and extract a damages settlement greater than the contractual $1B from Musk.

    • matwood 12 days ago

      I agree there won't be any meet in the middle. Neither Musk nor Twitter want Musk to own Twitter now though. What's happening today is negotiating the break up fee which starts at the difference between current market cap and 54B (~22B today).

      The accelerated trial date put Musk on notice. The SEC may not take enforcing the rules seriously, but Delaware has made it their business to enforce the rules that make it attractive for big corps to incorporate under. I don't think this makes it to trial where Musk will get destroyed, and bet they end up settling in the ~10B range.

      • hef19898 12 days ago

        Musk got himself in between a rock and hard place here. Either he has to buy Twitter at a higly inflated price with all kinds of efdects on his Tesla shares and, maybe, even SpaceX ownership. And he looks like a bad business man.

        Or he vets out of the deal, has to pay billions for nothing and still looks like a bad business man.

        Since all his wealth is based on Tesla, and more specifically on Tesla's public perception as tech company and not a car maker, all of which in turn is based to significant extent on yhe public's perception of Musk as a genius, this change in public perception is incredibly dangerous for Musk.

        • ryukoposting 12 days ago

          > And he looks like a bad business man.

          Musk already looked like a corporate bottomfeeder to anyone who was actually paying attention to his behavior.

          You're right, though. Obviously, other facets of this situation were going to affect Tesla, but I hadn't really thought about the effects on Musk's reputation could impact his companies' share prices. TSLA is as much a cult of personality as it is a stock.

      • metadat 12 days ago

        Why settle for only $10B? Musk's shenanigans have resulted in significant long-term damage to Twitter in the form uncertainty and distracting Twitter from focusing on operating and growing the business (because they've changed internal policies / direction, and shared a lot of information with Musk, as per the acquisition agreement).

        It's only fair for mullosk to be on the hook for the full purchase or at the very least the full differential.

        We'll see what happens in about two months.

        • rchaud 12 days ago

          $10b cash will go a long way to remedying that damage. They might even not ban Musk's account as a show of goodwill. Let him continue to bloviate impotently about the evils of censorious social media.

        • matwood 9 days ago

          There's value in ending it sooner than 2 mos. for the reasons you bring up. I'm sure the court is also encouraging them to settle. While the court has forced transactions to complete before, I'm not so sure they want to be forcing a 54B transaction to go through. 10B would be ~$13/share that Twitter could 1-time dividend if they chose.

    • bambax 12 days ago

      > I think Twitter is going to use the threat of specific performance to try and extract a damages settlement greater than the contractual $1B from Musk.

      Yeah that's what makes the most sense. Musk doesn't want to buy Twitter anymore, forcing him to buy it is not a very good solution. It's possible to do, and certainly enforceable, but not a desirable outcome for anyone.

      But, having him pay $10 or even $15 billions as a price to renege on his word, on the contrary, is an excellent outcome.

      • simplicio 12 days ago

        Presumably if the fine is bigger then the delta between the current share price and what Musk offered, he'd be better off buying the company and then trying to turn around and sell it then paying the fine.

        Similarly, if the fine is smaller, Twitter share-holders would be better off just forcing him to buy and forgoing the fine.

        So a settlement number seems kinda hard to agree on, unless they have differing opinions on what the company is currently worth.

        • ncallaway 12 days ago

          > Presumably if the fine is bigger then the delta between the current share price and what Musk offered,

          Not necessarily. There's a world where Musk really can't get the financing together, and stumping up the $44B in cash is too much of a hurdle to be worth-while.

          Imagine, you could either pay $1,000 as a fine, or spend $10,000 on a car that you're pretty sure you could sell for $9,200. Obviously, in absolute terms you're better off buying and selling the car. But if you only have $5,000, it might not be worth the hassle to raise the other $5,000 to be able to buy then sell the car. Not to mention the risk that once you get the car, and go to sell it, there's a chance it only sells for $8,800.

        • ryukoposting 12 days ago

          If I were a Twitter share-holder, I'd be fine with getting a slice of a $10B settlement, keeping my stake in a successful social media & analytics company, banning Musk's account, and watching him squirm. I don't know if it'd be a perfect financial move, but it would feel good.

        • bambax 12 days ago

          True. However there is a distinct possibility that Musk could run Twitter into the ground out of spite, if he's made to buy it. So there's a negative externality to force him to buy.

          A fine close to the spread, but still a bit lower, accounts for that.

      • iLoveOncall 9 days ago

        But is there a world where Musk would rather pay $15B and not get anything in return rather than pay $50B and get Twitter in return?

        Short term he would fork out a lot more money, but long term he has a company that can grow...

      • DoesntMatter22 12 days ago

        There was a good article the other day, I'll see if I can find it, that breaks down why legally Musk can't really be asked for specific performance since he's an individual.

        It comes down to anti slavery laws

        so probably not enforceable, though he could be fined.

        https://www.barrons.com/articles/twitter-elon-musk-thirteent...

        • ncallaway 12 days ago

          Musk isn’t buying Twitter as an individual. He’s buying it as a thin shell company in a reverse merger agreement.

          • DoesntMatter22 12 days ago

            If the agreement is with the company, and not him as an individual, then he could just shut the company itself down, as it probably has zero assets.

            • ncallaway 11 days ago

              Well, the agreement has Musk making personal financial guarantees.

              So, it’s like the thin shell company has agreed to the deal, and Elon Musk has personally guaranteed the financing.

              Which means the only specific performance the judge would be mandating from Elon Musk personally would be financial payments. The actual purchasing and paperwork would be done by the shell corporation. The only thing Elon Musk would be ordered to do in his personal capacity would be to write a large check (which, seems to be well within the remit of a judge’s authority over a person without raising 13a concerns).

              Like, I agree that ordering specific performance for painting someone’s house is a bit odd and might raise those questions. But, Elon Musk’s only requirement as an individual under this contract is to write a check.

              To be honest, I’m pretty skeptical of the analysis of the article you cited. The article says: “ Unfortunately for Twitter, it isn’t Elon Musk Inc. but Elon Musk the individual who offered to buy the company” which is wrong.

              It literally is Elon Musk Inc. which is offering to buy twitter (technically X Holdings I, Inc.). See the merger agreement here: https://www.sec.gov/Archives/edgar/data/1418091/000119312522...

              Since that point underlies the entire analysis, it seems… very suspect to me to get that exactly wrong.

  • EdiX 12 days ago

    The funny thing is that stalling is probably enough to pay less. He's partially financing the operation by selling tesla stocks, if the market goes back up and takes tesla stock price up with it then buying twitter will cost less money.

    My opinion is this is just a stalling tactic, he thinks the market will recover by next year and this is a pretext to wait until then.

  • koheripbal 12 days ago

    Both are probably true. There are likely more bots than Twitter admits, and Musk will likely agree to buy Twitter for a lower price (in fact, I believe he outright said that).

polishdude20 12 days ago

How much of this show and dance is really about covering up something else that Musk did? Is it possible this is done to overshadow other newsworthy stories that would be even more detrimental to his reputation?

  • hackerlight 12 days ago

    Simplest explanation is that he wanted to buy it and then got cold feet after the market crashed.

  • lostdog 12 days ago

    There must be a million cheaper ways of drawing attention away. Here, let's come up with a couple:

    Musk announces that in order to help repopulate the world he's looking for 10 female "paid volunteers" to come stay in a compound during 2023.

    Musk begins a run for Senate in Wyoming.

    Or even more simply: Keep talking about purchasing Twitter, but don't actually write up an offer!

  • bhouston 12 days ago

    It will be an incredibly expensive show and dance. Not sure it is really worth it.

tikiman163 11 days ago

I hope this seriously bites Musk in the ass. I hope he's forced to buy it, and then it's such a pain in the ass for him that he immediately tries to turn around and sell only to discover no single entity or investment group wants to privately own Twitter. I hope he makes another dumbass tweet that results in another legal action removing him as the president/ceo/whatever and then decides to just take Twitter public again so he can divest himself.

I hope Twitter users don't have to deal with too much chaos as a result, but if it half bankrupts an idiot who openly accused a rescue diver of being a pedophile, despite knowing nothing about the man, and merely because he told Musk not to interfere with rescue operations, then let Twitter deal with a little chaos.

pcmoney 12 days ago

Musk seems like a smart guy who got overconfident and out of his area of expertise and made a series of incredibly stupid decisions. Pretty much every legal and financial professional without a vested Musk related interest seems to think similarly. Matt Levine has been lights out on this topic. Everyone knows his bot claims are just FUD to try and weasel out of writing a check he no longer has the guts to cash with current valuations.

Prediction: They settle for a couple billion OR Musk buys them at a slight discount to the currently agreed price. Maybe $49.69 because he is a clown?

Twitter replies to counter claims: https://s22.q4cdn.com/826641620/files/doc_news/2022/08/Twitt...

  • nathanvanfleet 12 days ago

    Do you mean he only recently got overconfident? Just a reminder that he already got fined $40 million for his "going private at 420" joke.

    • colinmhayes 12 days ago

      The private at 420 thing was absolutely worth $40 million. It helped elevate Tesla to the meme stock stratosphere even more than they already were. His Twitter antics turned a 200 billion dollar company into a trillion dollar one.

      • Bubble_Pop_22 12 days ago

        > It helped elevate Tesla to the meme stock stratosphere even more than they already were. His Twitter antics turned a 200 billion dollar company into a trillion dollar one

        Zoom out! Everybody loved GagnamStyle and Baby Shark too, but they are not getting on radio and people would be indifferent to the disappearence of the artist who made those songs.

        MarketCap is a flawed measure for tons of reasons (in my opinion FCF is king) but if you want to use such flawed measure then time spent in the S&P500 would be a meaningful way to go about it.

        Tesla has been in the SP500 for how long? 1.5 years?

        If JPMorgan went bankrupt tomorrow you'd see people literally in the streets crying (for a whole bunch of reasons both at the macro and micro level) much like when Michael Jackson died. If Tesla went bankrupt tomorrow it would be like if PSY of GagnamStyle fame died, a bunch of hardcore devote followers would mourn but the world would move on pretty quickly.

        • colinmhayes 12 days ago

          Well musk has already sold a bunch of Tesla shares and made a lot of money off the tweet. Way more than $40 million

      • pcmoney 12 days ago

        Sounds like twtr is worth $800B then? ;)

    • jakelazaroff 12 days ago

      Just to put this in perspective: if your net worth is $100,000, this is the equivalent of being fined $14.

      (Based on Elon's net worth of $278 billion, according to Google)

      • kergonath 12 days ago

        Still not a great example of a supposedly superior intellect.

    • irthomasthomas 12 days ago

      And that court case is scheduled the week after this one. Musk has 3 major trials in October.

  • Ekaros 12 days ago

    I have understood the same. This is Delaware, meaning they aren't going to give special treatment if they want to keep companies there. Deal is a deal. And Musk will pay, now how much might vary, but it will not be 1 billion cheap.

  • pcmoney 12 days ago

    By the downvotes it Looks like musk fan boys cant handle their lord and savior being called out for making a series of dumb decisions.

  • chowells 12 days ago

    Where was there ever evidence Musk is a smart guy? His only skills appear to be self-aggrandizement and being born rich. Musk is proof that our economic system rewards being already rich, not creating value.

    He did not found Paypal, Tesla, SpaceX, or anything else that's been successful with his name attached. He did not contribute any tech to those efforts. At best he's contributed publicity, but it's only ever with a flavor of celebrating how great he is.

    He's an example of an utter failure of capitalism. I suppose it shouldn't surprise me that he's celebrated for it. Everyone wants to fail like him. But most people skipped the step where they're born rich, and it's just too hard to recover from that miss.

    • Vespasian 12 days ago

      Even most people being born richer than him and why happen to have a better relationship with the family wealth don't become billionaires not to speak of the richest person on the planet.

      So he definitely has some skills in leading businesses through hard times and making them succeed in the end (I've no idea how or what he does so).

      Founding a company doesn't matter as much as making it grow and succeed.

      Ray Kroc didn't found McDonald's (he didn't even join early) but he turned it into the massive company it is today, so it doesn't really matters who once initially signed the incorporation form.

    • pcmoney 12 days ago

      I think that’s a little much. Definitely was estranged from his dad and it seems for good reason. No evidence his alleged childhood wealth funded his adult businesses.

      Founding doesnt matter as much as making them as viable as they are today. Seems to have a knack for something, either PR, hiring others, repeatedly betting the farm, slamming his head into a wall etc. whatever it is its on average working.

      His companies create thousands of jobs and pay billions in taxes, capitalism seems to be doing its thing very well. (Yay global reduction in poverty!)

      Friends who have worked with him say he is very sharp and extremely relentless and hard working. I don’t think he’s a pure confidence man. I do wonder if he has had a bit of a mental break in the past 5yrs or so.

jsharf 12 days ago

To be fair, that's a realistic mistake that twitter users might make too. Musk has one of the most faked accounts on the site, with lots of bots running Musk impersonation crypto scams. IMO this says more about the problems with twitter than about an inaccuracy in Musk's script.

jliptzin 11 days ago

Why is twitter so desperate to sell to Musk? Are they really out of ideas? If they just want to squeeze out an extra $11.50 / share I can think of tons of ways to do it, they don't have to just copy Facebook's monetization model. They could let people buy followers; they could add an onlyfans clone to the service; charge a monthly fee for premium features; charge a premium to be the first to know about trending topics - could be useful for news orgs, hedge funds, governments, etc; do what cameo does, let users pay popular accounts to make customized videos and take a cut of revenue. This is just off the top of my head, if you're just trying to squeeze money out of the rock and don't really care about long term brand impact I feel like they can get a lot more than $11.50 / share.

  • jackvalentine 11 days ago

    What makes you think the features you suggested are worth $11.50 a share? Some of them I think would tank the share price like buying followers so they’d have to be worth even more. There are 765 million twitter shares.

    • jliptzin 6 days ago

      I don’t know for sure what will work, but they don’t seem to be trying anything other than forcing Elon to buy them out as hard as they can

usgroup 12 days ago

Would their be any benefit to Musk going through this ordeal meanwhile fully intending to buy Twitter all along?

  • pinko 12 days ago

    Yes, he could end up negotiating a lower price. Even a tiny discount might make it all worthwhile.

    • ncallaway 12 days ago

      It will be hard to negotiate a lower price while a lawsuit about specific performance is still open.

      Since Twitter has a real (not guaranteed, but not terribly unlikely) of having a court force Musk to buy Twitter at the original price, I don’t think they’d seriously consider selling at a massive discount. I could see a small haircut to the price in a settlement, so maybe that’s the angle.

      But… with the threat of specific performance looming, I just don’t see Twitter moving the needle on their price much.

      • kshacker 12 days ago

        Real chance does not mean 100% chance. As long as there is a threat (and fear) of losing, negotiations can happen.

        • ncallaway 12 days ago

          Oh, I wouldn’t say specific performance is close to 100%.

          I have no real basis for this, but if I had to put a number on it I’d say it’s a 40% chance (if you let me put a range I’d say between 20-80%, so I don’t have really any confidence in my guess).

          But if they don’t get specific performance (which gets them a good sale price, but loses them Twitter), they are very likely to get damages (maybe capped at $1B, maybe not capped at that), which gets them a decent amount of liquid assets while they don’t lose Twitter.

          So, I agree, there’s room to negotiate in the uncertainty of the ruling but not getting specific performance doesn’t really mean Twitter loses. The alternative to specific performance could still be a big cash payout with no loss of assets.

          So, I think the fear of losing for Twitter is very small. And specific performance is I think a bigger threat towards Musk than its a desirable outcome for Twitter.

  • Ekaros 12 days ago

    I suppose he could save some billions.

    • usgroup 12 days ago

      It seems to me that any reduction in price would also cause a reduction in value, no? I.e pay less because it’s worth less?

      • Ekaros 12 days ago

        Yes, but if he is taking it private that doesn't change anything.

        I have no idea what is his plan to make money with Twitter, but that is why I'm not multi-billionaire.

  • h2odragon 12 days ago

    I think it may be: "Don't throw me in that briar patch."

    The more vocal Twitter users were quite dismayed by the prospect of Musk owning their favorite forum. There was talk of getting the Government to block a deal somehow because "one person can't be allowed to own the public square."

    Now they're as likely to be overjoyed if a court "forces" him to conclude the deal, even with a slightly smaller price than originally advertised. Whatever principles were served by the initial objection are less important than Dunking on Elon now that he's become pariah.

AtNightWeCode 12 days ago

It is impossible for neutral companies to get mDAU data for Twitter. Twitter needs to provide proof. You can’t use Twitter professionally without using bots btw.

There is a food market at the ground level of Twitter HQ with an awesome beer selection. More valuable than most Twitter accounts. :)

qwertox 12 days ago

I have 30 Twitter accounts, but only one is used. It's only used to be able to occasionally search for news on Twitter.

I wonder if those other 29 accounts are actually removed from the active accounts count when trying to sell their numbers.

  • vel0city 12 days ago

    I mean your answer is pretty self evident. If you don't use it, it's not active daily, and so it's not a monetizeable daily active user, now is it?

seydor 12 days ago

I wish this whole saga ended, and Musk buys reddit instead.

This current saga is pure entertainment, which will end up in some kind of settlement and will leave the lawyers a lot richer.

  • mherdeg 12 days ago

    I'm amazed by how reddit has turned itself around from "the place where the commenter zeitgeist involves wishing physical violence on the CEO" to "the place I append to all my searches with a site: prefix to find meaningful Web discussion and product reviews".

    There was a surprising and unpredictable community turnaround from about 2015-2021; don't know if it will last, but it's surprising how much better it is now.

    • hyperhopper 12 days ago

      I don't think it ever changed: Reddit was always good for things like that, easily for over a decade now.

      Its just that the userbase has broadened, and is no longer early-internet enthusiasts, and also censorship is far higher now

    • koheripbal 12 days ago

      I use it for product reviews, but don't ever use it for meaningful discussions. The average age of Reddit users has dropped significantly since the mobile app launched.

      For tech solutions, Stackexchange is the place to go.

    • seydor 12 days ago

      It's also the place where the same group of moderators moderates all politics subreddits for 15 years without challenge. And international subreddits can be often worse. Moderators run the show now, and they ve become extremely vicious

      What you 're observing is not some magical reddit improvement. It's because forums have become unmonetizable, and reddit has consolidated all of them in one place. There is nowhere else to go for comment-like discussions (HN, but it's limited). Their success and moat lies in their legacy userbase. It's not because of their performance

  • Spivak 12 days ago

    Musk buying Reddit would turn it into corporate 4chan even faster than is already happening.

  • koheripbal 12 days ago

    The number of bots on Reddit is likely much higher than on Twitter.

amelius 12 days ago

Where does he find the time to run Tesla and SpaceX? I'm starting to conclude that he's fake and the man was created by investors to serve their purpose.

yalogin 12 days ago

To be fair Musk’s Twitter does read like a bot full of illogical, nonsensical tweets. So yeah any well written algorithm could classify it as a bot :)

jqgatsby 12 days ago

plot twist: the spam analysis tool is correct, and Elon is actually a robot, ala Stephen Byerley in Asimov's "Evidence".

  • notahacker 12 days ago

    I quite like the plot twist where Elon isn't actually a robot, but he becomes fully convinced he is. He's already expressed sympathies with arguments we're all living in a simulation, right?

  • spansoa 12 days ago

    His Tweets are all done with an iPhone, as Twitter allows you to see what client a tweet was made from. The only way bot behavior could be done on a smartphone, is if the phone is an iOS virtual machine, and the tweets are programmatically generated using some algo.

    • egypturnash 12 days ago

      You're neglecting the simple solution of a hot dog moved around by a few actuators. Musk could totally be replaced by one of these.

      Or some other stylus that you can use on a touchscreen with your hands in non-conductive gloves. But a hot dog is funnier.

    • martin8412 12 days ago

      Not if the bot has a physical form and is able to interact with a physical iPhone.

patrickdavey 12 days ago

If I bought Twitter shares today ($42) would Musk be forced to also buy my shares at $52 if the sale was forced through?

  • sethaurus 12 days ago

    Yes — and this possibility has been factored by the market into that $42 price. It's among the reasons why the stock isn't trading significantly lower.

leobg 12 days ago

TL;DR:

> Specifically, Musk used "an Internet application called the 'Botometer'—which applies different standards than Twitter does and which earlier this year designated Musk himself as highly likely to be a bot," Twitter said.

Note the “Earlier this year”. Article continues:

> This morning, Botometer gave Musk's account a rating of 1.2 out of 5, indicating that Musk is more "human-like" than bot-like as of today.

The legal brief continues:

> The Botometer thus does not even purport to apply Twitter's definition of a false or spam account. In fact, some bots (like those that report earthquakes as they happen or updates on the weather) are often helpful and permissible under Twitter’s platform manipulation and spam policy, to which Twitter respectfully refers the Court.

The latter, in my estimate, is irrelevant to the question here. Because the metric in question is “monetizable daily active “. If one person runs, besides their personal profile, 10 bots, it doesn’t matter if those bots are all “permissible“ according to Twitter‘s terms of service. These accounts still constitute, from the point of an advertiser as well as from the point of investors, just one monetizable daily active user, and not eleven.

kabes 12 days ago

As someone unfamiliar with the US juridical system: when can we expect an outcome in court?

Or put otherwise: if we assume Musk is stalling in the hope that tesla shares go back up. How long can he keep this going?

spaceman_2020 12 days ago

I just find it a little hilarious that Twitter is even attempting to counter the bots claim.

You have to spend 5 minutes reading the replies to tweets by prominent politicians to know that its filled with bots

  • ALittleLight 12 days ago

    Yeah, but that just shows there are a lot of bots. There are a lot of twitter users too. 5% of a lot (of Twitter users) as bots equals a lot of bots. So, that's consistent.

    What about all the tweets that aren't famous politicians? What about the orders of magnitude more people who just read, and maybe like, tweets?

    I don't think "I see a lot of bots" is an argument that the 5% number is wrong.

  • Vespasian 12 days ago

    None of my tweets ever got a bot reply.

    Now that is most likely because they are all about very local topics or things related to my specific field of work.

    They are also not very popular (a handful of retweets) and mostly cater to people I know in real life.

    I know at least 10 people who regularly use Twitter through the app (aka being shown ads) but never ever tweeted a single thing.

    They would be counted as real users by Twitter but 1000 bots who never viewed an ad wouldn't. That is all that Twitter claims in their SEC fillings.

    That there are roughly 200 million active daily users who are being shown ads and that of those 200 million (very roughly) 5% are bots but "who knows it's a guess", says Twitter.

    If there were an additional 50 Billion bots who never saw an ad, Twitters statement would still be true.

hackerlight 12 days ago

If he isn't forced to buy it, then he was given a free multi billion dollar call option, paid for by Twitter shareholders. That's effectively theft.

stainablesteel 12 days ago

a lot of people have said a lot of things about this

if I was going to buy something for billions of dollars, you'd better believe multi-year long negotiations, court cases, and backing off as a tactic would be an obvious strategy

i'll buy into either side's spam once something actually happens, premature judgement -> sensationalism in this case

suggala 11 days ago

My guess is Elon is just trying to slow down the takeover until he figure out the money source.

Eriks 12 days ago

Maybe that's because he is acting as a troll sometimes. Troll, bot. What's the difference.

cambaceres 12 days ago

What happens if Musk loses? Will he be forced to buy the company, or just to pay a huge fine?

  • Vespasian 12 days ago

    Twitter is sueing for specific performance (aka pay up the full price) and argues that Elon's funding by banks is still comitted and must be used to buy Twitter at 54.40 a share.

    IANAL but this court already did enforce similar contracts in the past.

    Of course the parties can also settle out of court at any time under any terms.

yalogin 12 days ago

Musk has done irreparable damage to his name and brand. The decline from genius and eccentric to straight up fraudster and borderline unstable is just amazing actually. I now don’t know what to think of him as he still has amazing businesses and they haven’t even peaked yet. I may still buy stock in them but won’t work for him ever.

  • DoesntMatter22 12 days ago

    People knew Elon was crazy for a long time and it hasn't hurt their demand. If a few people don't want to work for them it's not gonna hurt them much as they are the #1 or #2 company that engineers want to work for.

    • nharada 12 days ago

      > they are the #1 or #2 company that engineers want to work for

      for real?

k8si 12 days ago

Incredibly irritating how much of everyone's time Musk has wasted on this

walrus01 12 days ago

In the end, the real winners here are the lawyers and their billable hours.

coffeeblack 12 days ago

I don’t think that I trust Twitter on this.

Let’s wait for the courts to look at the topic.

tezza 12 days ago

This must be the best point for Elon Musk to tear off his human face to reveal the impassive robot metal underneath

givemeethekeys 12 days ago

If it turns out that it is a bot though, it'd support Elon Musk's argument that we need to be afraid of AI.

make3 12 days ago

read sperm analysis, was very confused. wouldn't have been surprising with all the sketchy stories we're hearing about him and his family, even if some are false

mike_hearn 12 days ago

Urgh, Botometer. I guessed it would be that as soon as I saw the headline.

I used to work on fighting bots. Botometer has a long and storied history of making totally false claims about Twitter accounts. In the past it identified something like 50% of US Congress as bots. It has unfortunate credibility because it's a machine learning model produced by academic "research", but no credibility is deserved. The academics who created it are, in my view, guilty of gross intellectual misconduct.

Botometer has had an absurdly high FP rate for years and Twitter are right to call Musk out for using it, though presumably Musk was just as conned as everyone else who has used this tool. Really the Botometer papers should all be retracted, as should any papers that relied on it, and then the researchers who created it should be fired. Unfortunately this would require retracting huge chunks of academic social bot research - Botometer is just that prevalent.

A thorough debunking of the model can be found here by Gallwitz and Kreil:

https://arxiv.org/pdf/2207.11474.pdf

"In this paper, we point out a fundamental theoretical flaw in the widely-used study design for estimating the prevalence of social bots. Furthermore, we empirically investigate the validity of peer-reviewed Botometer-based studies by closely and systematically inspecting hundreds of accounts that had been counted as social bots. We were unable to find a single social bot. Instead, we found mostly accounts undoubtedly operated by human users, the vast majority of them using Twitter in an inconspicuous and unremarkable fashion without the slightest traces of automation. We conclude that studies claiming to investigate the prevalence, properties, or influence of social bots based on Botometer have, in reality, just investigated false positives and artifacts of this approach."

It took them years to get this paper published, and when they first announced their work the Botometer guys simply called them "academic trolls" and ignored the problems they reported (except for hard-coding their examples to be correct!).

If a full paper is too much, I've written a couple of essays about the problems of social bot research. This one summarizes an earlier/longer version of the GK paper above:

https://blog.plan99.net/fake-science-part-ii-bots-that-are-n...

and that earlier paper cites another essay I wrote back in 2017 about a non-Botometer based Twitter bot paper:

https://blog.plan99.net/did-russian-bots-impact-brexit-ad66f...

Given these issues it's not hugely surprising that Musk believes incorrect things about Twitter bots. The field of Twitter bot research is massive with over 10,000 papers. The original Botometer paper has been cited over 800 times. He is far from alone - many politicians and journalists have all fallen for these claims too. Twitter should probably have pushed back far more strongly, far earlier, but the general convention of never criticizing academics regardless of how dishonest they become defanged them and they never went further than a rather mildly worded blog post. Now the chickens have come home to roost. Misinformation spread by "misinformation researchers" is creating real world legal consequences.

dhdsznbszd 12 days ago

story: critics didnt want elon to buy twitter; elon says he no longer wants to buy twitter; now critics want him to buy twitter

plot twist: elon probably still wants to buy twitter now everyone wants him too as well

hk1337 12 days ago

So, it worked?

motbus3 12 days ago

plot twist. it was always a bot.

mro_name 12 days ago

sensible guess, isn't it?

bell-cot 12 days ago

"I don’t want to belong to any club that would accept me as one of its members." - Groucho Marx

"I don't want to buy any..." - Elan Musk

rmbyrro 12 days ago

Already preparing some popcorn. This will be fun to watch.

hunterb123 12 days ago
  • jjeaff 12 days ago

    I have seen no credible evidence that Twitter is wrong about their numbers. Nor do I even see any possible way an outsider could figure that number out.

    • hunterb123 12 days ago

      Have you seen credible evidence that they are right about their numbers?

      Without Twitter providing more context and showing their work, the number can't be trusted, thus it isn't credible.

      If you claim you have such a low number of bots (5%), you better prove it, otherwise I'll assume the worst and go with 20%.

      Anyone that goes on Twitter knows it's above 5%. All 3rd party estimations are well above 5%. Prove it Twitter. Prove it.

      • simiones 12 days ago

        > If you claim you have such a low number of bots (5%)

        Twitter has never made any such claim. It's incredible how hard it is for some people to actually read the extremely explicit process they lay out in their SEC filing.

        Twitter has users. A subset of those users are "monetizable daily active users" - that is, users who log in to Twitter from platforms which are capable of showing them ads, or otherwise making money. A subset of users who would normally be counted as mDAUs may be discovered today to be spam bots, may be suspended for other reasons, or may otherwise turn out not to be monetizable - so they are excluded from future mDAUs. A subet of those users have been counted as mDAUs in the past: this is the subset that is estimated to be 5%.

        There are plenty of bots on Twitter that are not mDAUs. Some are actually fully legitimate, like the earthquake or weather reporting bots: they are valid Twitter accounts who are bots and who are not counted as mDAUs.

      • toast0 12 days ago

        It would be hard for them to be wrong about their numbers, given how subjective they are.

        Their methodology is pick 100 users from the mDAU every day, then have a human decide botornot.

        If you wanted to show those numbers were wrong, you might ask to see those specific users and come up with your own botornot score. Or if you thought those weren't inaccurate, but maybe not a representative sample, you might ask for 10,000 users counted as mDAU on a specific day (or each day) and botornot them and see if that matches the 100 sample. If you didn't trust twitter's sampling, you could ask for the full list of users and sample it yourself before botornot.

        But instead, it seems like they were trying to count botornot for the full population without considering if they were in mDAU or not, which makes it a flawed comparison. The counterclaim says mDAU isn't the appropriate measure for some of the alternate revenue plans Musk was considering, and that's probably true, but it's not relevant to twitter's current business and if their numbers were accurate to the degree they were measured.

      • pcmoney 12 days ago

        They literally never claimed this was accurate and even said their methodology could be wrong. Nothing in the contract says anything about bots. They don’t have to prove anything at all.

        • hunterb123 12 days ago

          > They literally never claimed this was accurate

          > and even said their methodology could be wrong

          Yeah that's my point, their supplied number is unusable for investors, advertisers, etc.

          Combine that with the bot experiences on Twitter, the 3rd party estimates of 10-20% if looks way off.

          I don't see why NOW anyone would trust 5%. Diligence has NOW been done and that "methodology could be wrong" looks likely.

          -- EDIT (post limit) --

          > But that's the whole point - Musk waived his right to do due diligence, so he is pointing at this statement being wrong (and not unusable) as his way out.

          @suresk, that's not a thing, but it is a talking point, but I'm not debating that. I'm saying NOW that the diligence is done and we know it's probably not accurate. See my first post.

          • Analemma_ 12 days ago

            People keep trying to explain to you why you're wrong and you keep on ignoring them and persisting with your original false statement.

            The 5% number claimed by Twitter is not the percentage of all accounts that are bots. That has never been the claim. Twitter separates its accounts into "mDAU"s and "other", and they are claiming 5% of the mDAUs are bots. You cannot falsify this claim with "bot experiences on Twitter", because all the bots you're seeing could be correctly classified as "other". Indeed, nobody outside Twitter can falsify this claim because it's a statement about Twitter's internal classification. The only thing that can falsify Twitter's claim is their own internal data, so that's why discovery is being done.

            • hunterb123 12 days ago

              I'm not talking about all bots. I'm talking about mDAU bots. You guys are trying to argue against a point I'm not making.

              3rd party estimations range from 10-20% for mDAU bots, Twitter's is 5%.

              Others were defending it by saying "well the number doesn't have to be accurate legally" or "well Musk should have known it's not really accurate".

              My counter is that weasel legal wording and logic doesn't give much confidence in Twitter's number at all for FUTURE buyers, advertisers, investors, etc.

              They should show their work and prove their number or investors / advertisers / buyers should lower their valuations to reflect somewhere in the middle.

              But Twitter hasn't really ever been about the money so the status quo will stay the same.

              - edit -

              @blitzar: https://sparktoro.com/blog/sparktoro-followerwonk-joint-twit... you can see their methodology here.

              Despite two different mDAU classifications, both of the datasets from SparkToro and Followerwonk were about 20% mDAU bots.

              • aw1621107 12 days ago

                > 3rd party estimations range from 10-20% for mDAU bots

                Could you provide some sources for these estimates? In particular, I'm curious about the methodology and data sources those third-party sources use.

                • hunterb123 12 days ago

                  https://sparktoro.com/blog/sparktoro-followerwonk-joint-twit...

                  Their methodology is very detailed. Maybe Twitter can post theirs to give more confidence in their 5%.

                  They used multiple datasets and posted the calculated mDAU for each.

                  • aw1621107 12 days ago

                    Ah, this one. It was discussed on HN back in May [0].

                    The main problem is that they aren't performing an analysis of mDAUs, as you imply. Their datasets are:

                    1. Followerwonk Random Sample – "Marc wrote code to randomly select public accounts from Followerwonk’s active database, and passed them to SparkToro for analysis. Casey on our team further scrubbed this list and ran 44,058 public, active accounts through our Fake Followers spam analysis process"

                    2. Aggregated Average of the Fake Followers Tool - "Over the last 3.5 years of operation, SparkToro’s Fake Followers tool has been run on 501,532 unique accounts, and analyzed thousands of followers for each of those, totaling more than 1 billion profiles (though these are not necessarily unique, and we don’t keep track of which profiles were analyzed as part of that process). ... We’ve included it for comparison, and to show that an analysis that includes simply random Twitter accounts (vs. those that have been recently active) may not be as accurate."

                    3. All Followers of @ElonMusk on Twitter

                    4. Active Followers of @ElonMusk on Twitter

                    5. Random Sample of 100 Users Following the @Twitter account

                    The last three datasets are obviously not relevant for getting a good estimate of mDAU authenticity. The second dataset may include inactive/duplicate accounts, and it's not clear how random the account selection is. The first dataset (as well as the second, to some extent) suffers from only including public, active accounts, which very much is not the same population Twitter is working with:

                    > We define mDAU as people, organizations, or other accounts who logged in or were otherwise authenticated and accessed Twitter on any given day through twitter.com, Twitter applications that are able to show ads, or paid Twitter products, including subscriptions.

                    In particular, note that Twitter has no requirement that mDAUs have public activity.

                    In addition, the article contains this bit at the bottom, which further reinforces that these numbers aren't comparable:

                    > We are not disputing Twitter’s claim. There’s no way to know what criteria Twitter uses to identify a “monetizable daily active user” (mDAU) nor how they classify “fake/spam” accounts. We believe our methodology (detailed above) to be the best system available to public researchers. But, internally, Twitter likely has unknowable processes that we cannot replicate with only their public data.

                    [0]: https://news.ycombinator.com/item?id=31397137

              • blitzar 12 days ago

                > 3rd party estimations range from 10-20% for mDAU bots, Twitter's is 5%.

                And ... 3rd partys are differentiating a twitter account from a mDAU how? Hint: they are not.

          • suresk 12 days ago

            But that's the whole point - Musk waived his right to do due diligence, so he is pointing at this statement being wrong (and not unusable) as his way out.

  • pwinnski 12 days ago

    Given the language twitter surrounded that number with, they probably could. They called out that it was uncertain, described how they estimated it in detail, and stated that reality could be higher or lower.

    Given all of that, they could have said the number was .01% or 90%, and neither would have been misrepresentation.

    • hunterb123 12 days ago

      Exactly, so what's the point of Twitter's number or using it for valuation?

      Now knowing it's surrounded by loose language because the number is so loose, assume the worst prediction, which is 15-20% from 3rd parties.

      • pwinnski 9 days ago

        There isn't, and it wasn't used for valuation. The number appears nowhere in the purchase document which assigned the valuation; nor does any reference to it. It could be 20%, or 50%, and it wouldn't have any bearing whatsoever on the purchase agreement.

        Musk agreed that the number of bots not currently being caught was probably higher than 5%, which was a big part of his stated reasons for buying Twitter. Then the market took a turn, and now up is down, Musk is pretending this number matters.

        It doesn't.

  • yieldcrv 12 days ago

    > Can we start a tip jar every time someone says the "he signed away his due diligence" talking point?

    I would love to see how Delaware Chancery Court treats this concept. So going in front of a judge is the best way to find out!

    I routinely accept contracts and agreements with parts I know I'm going to ignore or violate just because I understand the jurisdiction. It's more efficient than negotiating and actually having lawyers making revisions for months at great cost.

    I'm not familiar with this nuance of Delaware but its not outside of the realm of possibility that there is an argument that can help Elon.

_justinfunk 12 days ago

Twitter is making two claims that seem to contradict each other:

1) The 5% number is right 2) Musk's number is wrong because bot counting tools are flawed because bot counting is very difficult.

So... if it's very difficult... perhaps your 5% number is wrong?

hartator 12 days ago

"Twitter also ties mDAU goals to executive compensation. In 2020 Twitter based its executives’ cash bonus pool on revenue, operating income, and adjusted EBITDA. After Twitter missed those targets in 2020, and only 32% of the cash bonus pool was funded, Twitter determined that mDAU (a highly manipulable number) should be considered in determining whether executives received these bonuses. Following that change, in 2021, 100% of this executive bonus pool was funded. And since Twitter’s adoption of mDAU over MAU, it has reported ten straight quarters of “growth” despite stagnant financial results"

There is also this claim. Not sure why we should Twitter executives benefit of the doubt when they literally tweak metrics to get more money for themselves.

  • nojito 12 days ago

    None of that matters when he waived due diligence.

    Again all of that information is public knowledge through twitter's SEC filings.

    • hartator 12 days ago

      > None of that matters when he waived due diligence.

      Musk didn't though:

      “Despite public speculation on this point, Mr. Musk did not waive his right to review Twitter’s data and information simply because he chose not to seek this data and information before entering into the Merger Agreement. In fact, he negotiated access and information rights within the Merger Agreement precisely so that he could review data and information that is important to Twitter’s business before financing and completing the transaction.”

      > Again all of that information is public knowledge through twitter's SEC filings.

      Can you point to the paragraph where Musk waive due diligence?

      • simiones 12 days ago

        > Can you point to the paragraph where Musk waive due diligence?

        Here it is mentioned in his own legal filing [0]:

        > 60. Believing that due diligence processes can be costly and inefficient, the Musk Parties instead focused on bargaining for contractual representations that the information they relied upon in deciding to acquire Twitter is accurate.

        Also, by definition, due diligence is something that happens before signing a contract.

        [0] https://cdn.arstechnica.net/wp-content/uploads/2022/08/musk-...

      • brandonagr2 12 days ago

        Twitter replied seeming to say the clause was to provide information only for the purpose of consummating the deal, information that would cause the deal to fall apart by outing their fraud wouldn't be covered by the clause as something they have to hand over.

bobobob420 12 days ago

Twitter is dying this battle and their ceo is truly pathetic. From spending his day trying to reply to Elons tweets to prove himself to now spending time trying to force a billionaire to play out a contract to spend 45 billion when he does not want to. Imagine all the employees who have to watch their CEO cuck himself publicly while they work hard. They should focus on their own internal problems like banning the President of Anerica while allowing religious terrorists (iran leaders and taliban) to tweet on their platform. They show a consistency in not making smart moves. They have one of the most visited websites in the world that is imo one of the most engaging and popular social platforms ever and struggle to capitalize on it. People have to write their stories in series of tweets that have to be read upside down still.

siliconc0w 12 days ago

Musk has a chance if he can show that Twitter knowingly mislead the public about the bot %. It sounds like their methodology was indeed pretty weak, arguably deliberately so, and they had people on staff that should've known this would produce poor estimates with a large margin on error.

  • kentm 12 days ago

    Their stated methodology isn't weak though. It's pretty good actually,

    • siliconc0w 12 days ago

      Was it? TBH I'm a little confused by the downvotes - going by the 100 sample size number @ a 95% confidence level this is a 10 point margin of error. This seems like basic statistics but maybe I'm missing something. I think it's fair to assume that they had people who were taught basic statistics doing these calculations. If these people then say they think the number of bots is 5% without mentioning the margin of error due to their methodology that seems deceptive. I'm not a lawyer but if I was on a jury I could see being persuaded by that.

      • kentm 12 days ago

        > This seems like basic statistics but maybe I'm missing something.

        Yep, the thing you're missing is that it was 100 samples per week, over a quarter, so 900 samples per calculation. I don't remember the margin of error cited but I think it was about .5%. Its not your fault though, because this is a misunderstanding that Musk actively encouraged in his tweets.

        Musk has actually shown quite a few times that he either doesn't know what he's talking about here or is trying to mislead the public. For example, he also confuses total bot count and the number of bots in mDAU, which are different things.

logicalmonster 12 days ago

Twitter makes what seems like a good "gotcha" point here, but knowing a little bit about how social media bots work, I'd like to try and give my 2 cents about why Musk's profile is probably not a great one for this type of analysis.

1) Many people who create a brand new Twitter account just end up following a few celebrities and then either not tweeting much or forgetting about the account after a short time after deciding that Twitter is not for them. It's likely that somebody well-known like Musk has a ton of actual human followers who would likely be labelled as bots because they're users with basically blank profiles that would be seen as bot-like.

2) When programming any reasonably sophisticated bot that doesn't just blurt out spam as fast as possible until its banned, the programmer would design it to blend in, to avoid detection by any defense mechanisms that Twitter would have. It would likely be seeded with an array of well-known Twitter profiles to follow at random to appear like a normal person with normal interests. Any particularly well-known Twitter account would be loaded with bots just through bot authors starting out by seeding it with a list of accounts they're familiar with.

3) Due to his life and wealth, Musk probably also exhibits characteristics that makes him seem more bot-like: such as probably tweeting in random bursts at odd hours in many different geographical locations.

4) Given his status as an international figure that also has a role in geopolitics and even military action, it's not impossible that there are state actors with big resources who create bots that follow Musks account for anything from trying to influence him with responses and through polls, or to try and make him look bad by "exposing" his bot activity at a later date when they need to influence public sentiment against him.

  • evan_ 12 days ago

    The people who sign up for Twitter, dork around for a little while, and then leave and never return are not counted among the monetizable daily active users.

    • logicalmonster 12 days ago

      Botometer's test claims to use over 1000 individual features in its analysis and it is unknown (to me, please clarify if you know) if they use Twitter's exact definition of monetizable daily active users in their system.

      • evan_ 12 days ago

        What botometer does or does not do is completely irrelevant to twitter’s mDAU calculation.

        No matter how many thousands of individual features botometer has, it cannot (and will never be able to) tell whether Twitter has served ads to that user today.

        • logicalmonster 12 days ago

          > What botometer does or does not do is completely irrelevant to twitter’s mDAU calculation.

          Agreed, but this article was about the tool Musk used and that's what my comment was directed towards.

          > No matter how many thousands of individual features botometer has, it cannot (and will never be able to) tell whether Twitter has served ads to that user today.

          That seems likely, but I don't think that really means much given that Twitter's interest lays in serving as many ads as they can get away with.

  • simiones 12 days ago

    All good points, and all proving that the methods used by Musk are unreliable for saying who is or isn't a bot - thus proving Twitter's point.

    • logicalmonster 12 days ago

      If I brought up good points, you should note that they apply more heavily to Musk than most other humans, which means that Twitter's response doesn't necessarily prove anything.

      It's not the testing tool that's necessarily bad. Botometer claims to look at over 1,000 features, which is pretty impressive. The problem might be applying that tool on Musk's profile for the specific reasons that I brought up. Musk is an outlier in many ways and isn't necessarily a good sample for an individual test as he'd tend to draw more bots than an average users' profile.