Mark Zuckerberg once called Twitter the clown car that fell into a gold mine. I’ve been laughing internally at that description recently, because Twitter’s deal with Elon Musk has moved them fully from a gold mine into a complete circus.
Another risk I see here is there's too many people not wanting to see Elon acquiring Twitter, so if he was to back down he may not get that much backlash.
You seem to forget the Telfon Elon managed to win the Solar city case which was open and shut to most people - I would not be at all certain Elon would lose in court - his track record suggests he does really rather well in court cases
To me, it sounds like you're a quite biased in your assessment of who would win in court (since you're long Twitter, short Elon). There is no guarantee Elon wins in court nor is it a one-sided argument.
Unless you're a practicing laywer or judge who has direct experience in making decisions in M&A deals, it really sounds like you're in a bit deep and there's quite a bit of confirmation bias in your judgement
Good article, thanks. Question--Unlike Abbott, could Musk just declare his acquiring company bankrupt and walk away, ie, what is his personal liability in all of this?
“ if this goes to court, Elon will get destroyed.”
Famous last words. From “pedo guy” to the SEC Sucking Elon’s C… Teflon Elon skates every time, laughing all the way. Taking that serial lying shyster seriously or thinking he’ll get what he deserves has never worked so far.
When was this deal supposed to close?? Was it December? I have some twtr calls mid dec 52.5 strike price and not sure if hold them to expiration or roll them, depending on dates of all of this, any advice? Regards from Spain!
1. Board acting weak through public pressure (who knows whether these people have any strength of character. My prejudice says no...)
Mitigant: Risk of being sued by shareholders (who have a good case). Largely reduces this risk to being insignificant in my view.
2. Elon somehow (never say never) blocking regulatory approval. I think this is the biggest risk, also because Democrats etc. may prefer Trump not being on Twitter.
Mitigant: Hard to find a basis? No real reason to block. I think this is a very difficult to manage risk. Elon might start raving crazy stuff to ensure that people get crazily angry enough to somehow block it - but what intersection of "allowable opinion" that doesn't destroy TSLA brand (I.e. "We are replacing the twitter bird with a swastika" wont fly) would actually be able to do this?
3. Elon drawing timeline out enough that Risk/Reward becomes stupid. General laziness in progressing DD, stopping, court-actions, lawyer-spins to ensure long and costly litigation, etc. - basically ensuring he doesn't have to finance purchase for 3-4 years, saving him for at least some time.
I've yet to see a good estimate on "drawn out" timeline of how this could progress from any M&A knowledgables.
Still think R/R is very good at these prices. Especially because its beta = 0 to rest of portfolio. Long TWTR from 40.
Another risk I see here is there's too many people not wanting to see Elon acquiring Twitter, so if he was to back down he may not get that much backlash.
Would Twitter sue? There may be/probably are lots of other damaging information that might come out. More damaging than massive amounts of bots.
You seem to forget the Telfon Elon managed to win the Solar city case which was open and shut to most people - I would not be at all certain Elon would lose in court - his track record suggests he does really rather well in court cases
To me, it sounds like you're a quite biased in your assessment of who would win in court (since you're long Twitter, short Elon). There is no guarantee Elon wins in court nor is it a one-sided argument.
Unless you're a practicing laywer or judge who has direct experience in making decisions in M&A deals, it really sounds like you're in a bit deep and there's quite a bit of confirmation bias in your judgement
What could Elon do to try to ensure there is no regulatory approval?
Good article, thanks. Question--Unlike Abbott, could Musk just declare his acquiring company bankrupt and walk away, ie, what is his personal liability in all of this?
“ if this goes to court, Elon will get destroyed.”
Famous last words. From “pedo guy” to the SEC Sucking Elon’s C… Teflon Elon skates every time, laughing all the way. Taking that serial lying shyster seriously or thinking he’ll get what he deserves has never worked so far.
When was this deal supposed to close?? Was it December? I have some twtr calls mid dec 52.5 strike price and not sure if hold them to expiration or roll them, depending on dates of all of this, any advice? Regards from Spain!
Main risks
1. Board acting weak through public pressure (who knows whether these people have any strength of character. My prejudice says no...)
Mitigant: Risk of being sued by shareholders (who have a good case). Largely reduces this risk to being insignificant in my view.
2. Elon somehow (never say never) blocking regulatory approval. I think this is the biggest risk, also because Democrats etc. may prefer Trump not being on Twitter.
Mitigant: Hard to find a basis? No real reason to block. I think this is a very difficult to manage risk. Elon might start raving crazy stuff to ensure that people get crazily angry enough to somehow block it - but what intersection of "allowable opinion" that doesn't destroy TSLA brand (I.e. "We are replacing the twitter bird with a swastika" wont fly) would actually be able to do this?
3. Elon drawing timeline out enough that Risk/Reward becomes stupid. General laziness in progressing DD, stopping, court-actions, lawyer-spins to ensure long and costly litigation, etc. - basically ensuring he doesn't have to finance purchase for 3-4 years, saving him for at least some time.
I've yet to see a good estimate on "drawn out" timeline of how this could progress from any M&A knowledgables.
Still think R/R is very good at these prices. Especially because its beta = 0 to rest of portfolio. Long TWTR from 40.