I guess but he also has to have been advised that TWTR management would not drop the lawsuit even if he expressed intent to consummate the deal, so why write it that way? f he truly changed his mind why not outline a plan with various milestones to complete the raising of capital and closing of the deal while the litigation is delayed or halted rather than say “I’ll buy it for the original price if you stop asking the courts to make me buy it at the original price”
Buying at $52 seems insane.
This is not a thing that happens.
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Yeah, a shit ton of downside for a 3.8 percent return. Who the fuck are these people buying at $52?
I can just about guarantee that Musk’s lawyers sent an updated closing checklist and timeline at the same time this letter was sent. The simplest explanation for why they want the case stayed is that Musk doesn’t want to get deposed, so it’s better to give up now rather than later.
Number 2 would almost certainly be illegal.
Number 1 - as long as he’s paying the bills, they don’t care. They might push back in terms of making some crazy arguments, but unless Musk is forcing them to do unethical things they won’t fire him.
The chance this asshole woke up yesterday and just decided “ok I’ll pay $44 billion for a company that has never been profitable” is zero. So it’s just a delay tactic to avoid being deposed and buy more time or it’s not his money.
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Do you think it will work, or will he still get deposed?
The court is going to tell Musk to fuck off (unless he does something like escrow then money and Twitter agreed).
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So, to me, it is amazing the stock jumped 22% on this news since it doesn’t really change anything with regard to the ongoing litigation and Musk’s “offer” is a nothing burger if the litigation is going to continue and the court will tell him to fuck off, which was going to happen anyway
It’s not a nothing burger. It’s a sign Musk expects to lose. There are likely good reason Musk doesn’t want to be deposed - good chance it would expose that his reasons for terminating the deal were all bs.
This is what we all thought the first time this asshole woke up and just decided “ok I’ll pay $44 billion for a company that has never been profitable”! Fool me once, etc.
Hard to say, but I think there’s a pretty good chance Twitter goes along with it. They’re risking delaying the deal, but they’re increasing certainty of closing. STB is not telling them they have a 100% chance to win at trial, and they’re probably saying that if they spurn an offer to resolve the case without court involvement, the judge will be annoyed at them. Whereas if they play along with Musk for a month and he’s acting in bad faith, the judge is even madder at him, and chances of winning go up. Seems reasonable that they end up with a concrete schedule of milestones and stay the case contingent on hitting those marks.
If you strip away Musk Derangement Syndrome, “litigants settle on the eve of trial” is an extremely common and normal occurrence. “Litigants settle right before the CEO is scheduled for deposition” is up there too. This whole thing is just an unusually weird M&A deal, not some world historical struggle.
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I think Twitter is going to demand more than just Musk’s assurances that the deal is back on. They know they are in a great position due to the upcoming trial so I think they would be foolish to just say - yup let’s go back to the original deal with no more.
I could see them maybe agreeing to like a two week stay to iron out details, but don’t see how they agree to just indefinitely adjourn the trial.
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One of the conditions people are speculating Twitter will insert into any agreement to stay/adjourn the trial is the payment of interest past the date when it “should” have closed (not sure exactly when).
I’d like Twitter to at least make sure that the keys to Twitter aren’t handed over to Musk before the midterms, including any run-offs that may decide control of a chamber of Congress.
I don’t see any reason for Twitter to agree to anything. The guy has a very long track record of lying, not honoring agreements, etc. Put up the $44 billion or we’ll see you tomorrow for your deposition asshole.
By my calculations the annual debt service will be at least $1.4 billion. This company has basically no chance of generating that much cash.
The debt is essentially unsellable right now. The underwriting bankers are getting their resumes ready. If forced to sell the underwriting banks are going to lose $3 to $5 billion easy or be completely on the hook for the $12 billion, at least initially, and as pointed out the cash flows of the business dont really work (and work less now that rates are like 3.5 points higher on the floating)
In the last downturn I was somewhat close to a similar situation. Basically an LBO that was DOA before it even funded. I heard the sponsor was essentially pushing the banks to call a MAC (Material Adverse Change) and not fund the debt. So essentially then the sponsor and banks would have been in cahoots where the banks refused to fund and called a MAC and the sponsor would then sue the banks, but the banks were fine with the lawsuit because they would eventually settle the lawsuit for less than they’d actually lose on funding the deal.
It didnt end up happening because of the spectre of tortious interference claims against the banks from the seller (the LBO was eventually a zero for the equtiy as an aside), but I do wonder if Elon is cooking up something similar, especially given his explicit reference to the funding of the debt.
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