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0 pointsthedufer4y ago0 comments

> Musk should just pay the break fee of $1bn, and renegotiate for $42.69 or whatever meme number he fancies. Why pay $42bn total for something when you can get it for $30bn.

That's not really how the break fee works. There's a specific performance clause that allows Twitter to force Musk to go through with the deal as long as he has the money (which, shockingly, seems to have come through). They'd only give up on that and take the break fee if the deal was truly over and they were prepared to say no to a lower offer.

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8 comments · 3 top-level

ckastner4y ago· 3 in thread

I admittedly haven't checked the full agreement, but if that is the case, then the angle over the less than 5% spammers/bots makes even more sense, if that number was indeed part of the agreement.

bryananderson4y ago

1) That number was not part of the agreement 2) What is part of the agreement is that Musk waived his right to due diligence 3) That number is part of Twitter’s usual investor disclosure, but with a caveat that it may be wrong; besides, Musk may only break the deal if any incorrect disclosure constitutes a “Material Adverse Event” which in Delaware law means he must prove it affects the value of the company by at least 40%, which this obviously does not

danielmarkbruce4y ago

If you look at the reps and warranties - section 4.6 probably gives musk an out if the 5% is materially off.

2 more replies

mensetmanusman4y ago

If bots are over 15% of Twitter it might effect value by 40% due to network amplification effects.

throwawaylinux4y ago· 2 in thread

Interesting. Is this deal public somewhere? Does it include any clauses relating to Twitter misrepresenting of their userbase?

hooande4y ago

Yes, it is public though I don't have a link. To the best of my knowledge, Twitter is accountable to the SEC if they materially misrepresented any numbers about their business. I don't think the deal has any specific language about that.

danielmarkbruce4y ago

https://www.bamsec.com/filing/119312522120461/2?cik=1418091

4.6

Flankk4y ago

I looked it up and the news seems to be reporting what you said, but it is not true. Section 9.9 of the agreement is contingent on a bunch of conditions being met, after which the deal is forced through if it is also funded. For some reason the media misreported it out of context. The break fee is paid by either Twitter or Elon, depending on who cancels the deal.

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