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Posted on 7/13/22 at 3:59 pm to Putty
quote:
The Complaint does allege that there was no diligence condition in the merger agreement, which seems absurd
It repeatedly hammers on that.
quote:
there was a diligence period that gave him time to vet and confirm the covenants/reps/warranties, which I have read to include (without seeing confirmation) that bots were less than 5% of user accounts.
Twitter says it still gave him opportunities to vet some of the info above what they were required to provide. Twitter also notes that the merger agreement allows Twitter to decline requests for info that could cause them significant competitive harm if the agreement is not consummated or if it violates privacy laws.
Posted on 7/13/22 at 4:12 pm to Decatur
quote:
Decatur
You do realize this is just a Complaint, right? They referred extensively to the agreement - alleging what they contend it provides. Did they attach it as an exhibit (even under seal)? If they attached it and it's not sealed (doubtful) we can look at it and determine to what extent, if any, they are full of shite. If not, it's all speculation at this point.
Posted on 7/13/22 at 4:12 pm to Putty
quote:Which TWTR admits
But there are still covenants, reps and warranties that have to be honored
quote:We had folks on the board a few days ago arguing that TWTR's SEC filings were irrelevant. Now we know they aren't.
The agreement contains various representations by Twitter, including that its SEC filings ... are complete and accurate in all material respects, fairly depict the financial condition of the company in all material respects... Any inaccuracy in these representations does not excuse closing unless it rises to the level of a Company Material Adverse Effect.
We had folks on this board arguing fraud/MAE could not vitiate the contract due to waiver of diligence. Now TWTR's legal team admits MAE obviously could do just that, exactly as was pointed out here.
Posted on 7/13/22 at 4:21 pm to Decatur
quote:Of course they say that ... and Bill said Monica only brought him pizza.
Twitter says it still gave him opportunities to vet some of the info above what they were required to provide
Musk claims evidence of at least 20% bots, and perhaps as much as 4X that amount. If he has that evidence, it indicates TWTR executed fraudulent SEC filings which would void the agreement. We'll know soon enough.
Posted on 7/13/22 at 4:26 pm to Decatur
The other thing that needs to be kept in mind is people in this thread are hammering on the 5% in the SEC filing. As if they swore on a stack of Bibles that was the number, here is the quote from the latest SEC filing on find on this:
We have performed an internal review of a sample of accounts and estimate that the average of false or spam accounts during the first quarter of 2022 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.
Does that sound like a company that guaranteed 5%. Musk had that going in. To say people are going to jail if it’s more than 5% is insane. If they can reasonably defend that number at all and I’m sure they can, they will be fine.
We have performed an internal review of a sample of accounts and estimate that the average of false or spam accounts during the first quarter of 2022 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.
Does that sound like a company that guaranteed 5%. Musk had that going in. To say people are going to jail if it’s more than 5% is insane. If they can reasonably defend that number at all and I’m sure they can, they will be fine.
Posted on 7/13/22 at 4:29 pm to LSU2ALA
quote:
Does that sound like a company that guaranteed 5%. Musk had that going in. To say people are going to jail if it’s more than 5% is insane. If they can reasonably defend that number at all and I’m sure they can, they will be fine.
It's so heavily caveated that trying to nail them for FRAUD is going to be extremely difficult...after first getting over the hurdle of producing actual evidence of FRAUD.
Posted on 7/13/22 at 4:30 pm to NC_Tigah
quote:
Musk claims evidence of at least 20% bots, and perhaps as much as 4X that amount. If he has that evidence, it indicates TWTR executed fraudulent SEC filings which would void the agreement. We'll know soon enough.
Where has Musk said he has this evidence? I’ve seen him he estimates, but he never mentions any data or evidence. The quote I saw sounded like he was spitballing and truly didn’t know. I’m genuinely curious if he has mentioned evidence as I have never seen that.
Posted on 7/13/22 at 4:31 pm to NC_Tigah
quote:
We had folks on this board arguing fraud/MAE could not vitiate the contract due to waiver of diligence.
This is a retarded distillation of that conversation. RETARDED.
Posted on 7/13/22 at 4:36 pm to cwill
quote:
It's so heavily caveated that trying to nail them for FRAUD is going to be extremely difficult...after first getting over the hurdle of producing actual evidence of FRAUD.
Exactly, there is no way they have anything to worry about there. I truly doubt they are fearing discovery in this case. My understanding from what I have read is that Twitter would not give personally identifying information on accounts to Musk people as Twitter said that was a privacy risk if the deal did not close. They gave other data.
Posted on 7/13/22 at 4:43 pm to LSU2ALA
quote:Absolutely not!
Does that sound like a company that guaranteed 5%.
So if an audit came up with 8% or even 10%, would it constitute MAE? Technically yes, but in light of the agreement and equivocalness of diligence, I doubt that level of error would interest a court.
A 20% bot rate? That would be a different deal. 5% vs 20% is not a marginal error. It is an error of commission.
Posted on 7/13/22 at 6:36 pm to JayDeerTay84
quote:
Ahh. Pleading ignorance.
Pleading reality. Bots are designed to mimic human behavior.
Posted on 7/13/22 at 6:45 pm to Taxing Authority
quote:
Indeed. But presumably Musk made his decision based on public declarations and affirmations TWTR made in it's SEC financial statements that were clearly incorrect after the offer was made. Perfectly reasonable to think those were correct, and to base the offer on those affirmations.
Not unlike putting a piece of property that was advertised as 5 acres. But on survey says it's 4.25. The misrepresentation is a problem because the subject purchase isn't what the offer was made on. That's not the same as "due diligence".
this needs to be stickied, so the contrarians and the sky screamers can see this and stop with their BS about musk agreeing to a no dude diligence deal
of course he did that, he knew the SEC filings were bogus and were enough to expose them
Worst case scenario is Musk gets Twitter at a reduced price, best case is they get nuked for free
Posted on 7/14/22 at 9:54 am to Decatur
The problem is the contract actually gives him the right to examine any and everything to confirm prior to closing and Twitter agrees to provide.
Those pesky contracts
Those pesky contracts
Posted on 7/14/22 at 9:58 am to Decatur
quote:
Twitter says it still gave him opportunities to vet some of the info above what they were required to provide. Twitter also notes that the merger agreement allows Twitter to decline requests for info that could cause them significant competitive harm if the agreement is not consummated or if it violates privacy laws.
From the sampling of 100 users?
Twitter stated that they couldn’t provide the data needed to confirm bots due to privacy.
Posted on 7/14/22 at 9:59 am to mmcgrath
quote:
He most certainly waived the right to go on a fishing expedition to weasel out of the deal. By not including due diligence, he was fully on the hook.
As usual, you are misinformed.
He repeatedly asked for that information, yet they continue to stall.
Posted on 7/14/22 at 10:09 am to mmcgrath
quote:
He most certainly waived the right to go on a fishing expedition to weasel out of the deal. By not including due diligence, he was fully on the hook.
Delaware law is very clear. Any material misinformation given during negotiations allows for the contract to be vitiated. That’s what it comes down to. Your poor interpretation of the contract won’t matter at all. The remedy falls outside the four corners. The law is crystal clear. Surprised you didn’t know that.
This post was edited on 7/14/22 at 10:10 am
Posted on 7/14/22 at 10:13 am to Putty
quote:
You do realize this is just a Complaint, right? They referred extensively to the agreement - alleging what they contend it provides. Did they attach it as an exhibit (even under seal)? If they attached it and it's not sealed (doubtful) we can look at it and determine to what extent, if any, they are full of shite. If not, it's all speculation at this point.
Isn't Skadden Elon's attorney in this? Their malpractice carrier has to be shitting itself right now
If they fricked up in advising him on his rights, it's literally a potential malpractice case that is worth tens of billions.
Posted on 7/14/22 at 10:16 am to Decatur
quote:
Twitter also notes that the merger agreement allows Twitter to decline requests for info that could cause them significant competitive harm if the agreement is not consummated
How would the agreement not be consummated if the offer is ironclad?
That’s a rhetorical question.
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