# Now that Elon Musk has bought Twitter - now the Pit edition (Part 1) **URL:** \ **Category:** The BBQ Pit\ **Created:** [April 25, 2022, 10:50pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442 "2022-04-25T22:50:17Z")\ **Posts on this page:** 20\ **Page:** 9
**Author:** ![bobot](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bobot/32/21622_2.png) [@bobot](https://boards.straightdope.com/u/bobot)\ **Post date:** [July 8, 2022, 9:51pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/161 "2022-07-08T21:51:31Z")
Loser Donald is not going to be happy about having his return taken from him. UNFAIR! ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [July 8, 2022, 9:52pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/162 "2022-07-08T21:52:59Z")
> [@Dr\_Paprika](#): > > Musk has ten kids. Don’t you need a big white cat and swivel chair to be a proper Bond nemesis? I had no idea he had that many kids (though Googling, one died of SIDS quite young). ---
**Author:** ![HMS\_Irruncible](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hms_irruncible/32/7394_2.png) [@HMS\_Irruncible](https://boards.straightdope.com/u/HMS_Irruncible)\ **Post date:** [July 8, 2022, 10:07pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/163 "2022-07-08T22:07:28Z")
> [@Great\_Antibob](#): > > It’ll be more than $1 billion. He would need to convince the court (and you know there’s a lawsuit coming) that Twitter committed fraud with regard to the number of bots. Even if there are 2 or 3 times as many bots as they thought, it’s a very high bar to clear to convince anybody they were being fradulent about it. Yeah, so here is the part of the [10-Q filing](https://www.sec.gov/Archives/edgar/data/1418091/000156459014003474/twtr-10q_20140630.htm) that Musk wants to hang his hat on: > [@](#): > > The numbers of active users and timeline views presented in this Quarterly Report on Form 10-Q 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 user engagement across our large user base around the world. 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 false or spam accounts represented less than 5% of our MAUs. 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. This information is thickly hedged in slippery, conditional language. Musk could have investigated to nail down any ambiguities, but he waived his right to do that. He chose to buy a pig in a poke, and there is no judge on earth (at least a non-bribed judge) who will rule that the blame rests with anyone but Musk himself. ---
**Author:** ![Great\_Antibob](https://avatars.discourse-cdn.com/v4/letter/g/e47c2d/32.png) [@Great\_Antibob](https://boards.straightdope.com/u/Great_Antibob)\ **Post date:** [July 8, 2022, 10:09pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/164 "2022-07-08T22:09:41Z")
So, time to short Tesla stock more than we already have these last two months (noting - this came out after the market closed for the week, eh?)? ---
**Author:** ![Kron](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kron/32/12444_2.png) [@Kron](https://boards.straightdope.com/u/Kron)\ **Post date:** [July 8, 2022, 10:23pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/165 "2022-07-08T22:23:01Z")
> [@HMS\_Irruncible](#): > > there is no judge on earth Have you seen the quality of some judges in the US lately? ---
**Author:** ![Martin\_Hyde](https://avatars.discourse-cdn.com/v4/letter/m/47e85d/32.png) [@Martin\_Hyde](https://boards.straightdope.com/u/Martin_Hyde)\ **Post date:** [July 8, 2022, 10:26pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/166 "2022-07-08T22:26:57Z")
Fairly predictable. My guess is this will settle for an amount \> $1bn, but actually forcing Musk to complete the deal if it succeeded would likely take a decade of expensive litigation and be a massive distraction to Twitter’s board and executives, but I do think Twitter will pursue it until Musk is willing to settle, which I suspect he will do. ---
**Author:** ![Cervaise](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cervaise/32/16693_2.png) [@Cervaise](https://boards.straightdope.com/u/Cervaise)\ **Post date:** [July 8, 2022, 10:59pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/167 "2022-07-08T22:59:01Z")
What a pathetic, laughable turdbucket this man is. ---
**Author:** ![Smapti](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/smapti/32/17938_2.png) [@Smapti](https://boards.straightdope.com/u/Smapti)\ **Post date:** [July 8, 2022, 11:40pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/168 "2022-07-08T23:40:10Z")
And yet, if hee weren’t constitutionally ineligible to run for president, a sizable number of Americans would probably vote for him. ---
**Author:** ![HMS\_Irruncible](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hms_irruncible/32/7394_2.png) [@HMS\_Irruncible](https://boards.straightdope.com/u/HMS_Irruncible)\ **Post date:** [July 8, 2022, 11:40pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/169 "2022-07-08T23:40:16Z")
> [@Great\_Antibob](#): > > So, time to short Tesla stock more than we already have these last two months (noting - this came out after the market closed for the week, eh?)? Rather the opposite, I would say. TSLA has getting punished nonstop since Musk started his shenanigans with Twitter. I take that to mean that investors thought that the TWTR deal would be bad for TSLA. If that theory is true, then we would expect that the cancellation of the TWTR deal would at least halt the downward slide of TSLA stock. But then there’s the competing theory that TSLA has been stratospherically overpriced based on nothing but hopes, dreams, and a cult-like belief in Musk’s infallibility. If Musk comes out of this looking like a clown with poor impulse control, investors may come out of their trance and put their money somewhere less speculative. Especially if the scuttlebutt about a coming recession proves true. ---
**Author:** ![Just\_Asking\_Questions](https://avatars.discourse-cdn.com/v4/letter/j/ba9def/32.png) [@Just\_Asking\_Questions](https://boards.straightdope.com/u/Just_Asking_Questions)\ **Post date:** [July 9, 2022, 1:18am UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/170 "2022-07-09T01:18:42Z")
> [@Smapti](#): > > And yet, if hee weren’t constitutionally ineligible to run for president, a sizable number of Americans would probably vote for him. Why are we beholden to a bunch of old dead white guys? Constitution-schmonstitution. We should be able to do what we like. ~~Schwartzenegger~~ Musk for president! ---
**Author:** ![ekedolphin](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ekedolphin/32/10003_2.png) [@ekedolphin](https://boards.straightdope.com/u/ekedolphin)\ **Post date:** [July 9, 2022, 1:46am UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/171 "2022-07-09T01:46:26Z")
> [@Just\_Asking\_Questions](#): > > ~~Schwartzenegger~~ Musk for president! You don’t know how to spell Schwarzenegger, so your whole argument is invalid. 😉 ---
**Author:** ![CaveMike](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cavemike/32/16379_2.png) [@CaveMike](https://boards.straightdope.com/u/CaveMike)\ **Post date:** [July 9, 2022, 5:03am UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/172 "2022-07-09T05:03:29Z")
The article I read today said that Twitter has a stronger case then Musk (as long as he has the financing), but the Twitter board is also constrained by their shareholders. If the board settles with Musk, how do they protect themselves from lawsuits by shareholders? Can they make the settlement contingent on a new shareholder vote? If I did the math correctly, the $54.20 price per share is about a $14B premium above today’s price. If the board settles for $7B, couldn’t some shareholders sue Twitter saying they should have pursued every avenue to complete the deal? And a weird question – as a shareholder could Musk himself join in such a suit? ---
**Author:** ![Riemann](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/riemann/32/3133_2.png) [@Riemann](https://boards.straightdope.com/u/Riemann)\ **Post date:** [July 9, 2022, 1:40pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/173 "2022-07-09T13:40:25Z")
> [@Great\_Antibob](#): > > So, time to short Tesla stock more than we already have these last two months (noting - this came out after the market closed for the week, eh?)? The stock traded after the news came out in extended hours trading until 8pm. It closed at $35, down 5% from the main session close. The position you take on the stock now would depend mainly on taking a view on the outcome of litigation. Musk’s offer price was $54, and if you believe the legal analysis that says Twitter have a much stronger case than Musk, there is a good prospect of recovering a substantial part of that premium to the current price in settlement from Musk. The analysis is complicated by the fact that you need to estimate where it would be trading today if the deal had never been proposed. In mid-March, before the run-up with speculation on a deal, it was trading right around the current level $35. Since then, if it mirrored the decline in the [S&P capped tech index](https://www.spglobal.com/spdji/en/indices/equity/dow-jones-us-technology-capped-index/#data) it would be trading at $30. Maybe discount it a little further because of the discombobulation caused to the company’s business by the whole failed takeover saga, let’s say it’s worth $28 net of any settlement from Musk. So $28 underlying value of the business, $54 offer by Musk, current price $35. That implies recovering $7 per share (about $5 billion, or 27%) of the offer premium from Musk in settlement. Or looking at it another way, a $7/($54-$28) = 27% probability that the board can successfully litigate to force completion of the deal at $54. > [@CaveMike](#): > > If the board settles for $7B, couldn’t some shareholders sue Twitter saying they should have pursued every avenue to complete the deal? I mean, I think you’ve answered your own question there. The board has a fiduciary duty to the shareholders to maximize value. They certainly will not just roll over and accept a token settlement from Musk. But it’s not in the company’s long term interest to get bogged down in a multi-year legal battle to try to force completion if Musk no longer wants the company. There’s going to be some number between $3 billion and $15 billion where it makes sense for both sides to settle. ---
**Author:** ![JohnT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnt/32/15048_2.png) [@JohnT](https://boards.straightdope.com/u/JohnT)\ **Post date:** [July 9, 2022, 1:53pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/174 "2022-07-09T13:53:10Z")
Good analysis, @Riemann. Thanks for sharing. ---
**Author:** ![Riemann](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/riemann/32/3133_2.png) [@Riemann](https://boards.straightdope.com/u/Riemann)\ **Post date:** [July 9, 2022, 2:01pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/175 "2022-07-09T14:01:53Z")
> [@JohnT](#): > > Good analysis Just as a disclaimer, there’s huge uncertainty in placing the underlying value of the business at $28. It has traded in from $23 to $77 in the past two years. So I’m not advocating taking any position on the stock. Just trying to illustrate the _type_ of analysis that risk arbitrage speculators will be doing to value the stock given the pending litigation. ---
**Author:** ![Just\_Asking\_Questions](https://avatars.discourse-cdn.com/v4/letter/j/ba9def/32.png) [@Just\_Asking\_Questions](https://boards.straightdope.com/u/Just_Asking_Questions)\ **Post date:** [July 9, 2022, 3:33pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/176 "2022-07-09T15:33:30Z")
> [@ekedolphin](#): > > You don’t know how to spell Schwarzenegger, Mea cuppa. 🙂 ---
**Author:** ![Mallard](https://avatars.discourse-cdn.com/v4/letter/m/b9bd4f/32.png) [@Mallard](https://boards.straightdope.com/u/Mallard)\ **Post date:** [July 9, 2022, 5:30pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/177 "2022-07-09T17:30:22Z")
So did Musk find that allowing his buddy Trump back onto twitter wasn’t such a great idea? ---
**Author:** ![JohnT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnt/32/15048_2.png) [@JohnT](https://boards.straightdope.com/u/JohnT)\ **Post date:** [July 9, 2022, 7:23pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/178 "2022-07-09T19:23:54Z")
> [@Riemann](#): > > Just as a disclaimer, there’s huge uncertainty in placing the underlying value of the business at $28. :frantically calls his man of business: ---
**Author:** ![Czarcasm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/czarcasm/32/4050_2.png) [@Czarcasm](https://boards.straightdope.com/u/Czarcasm)\ **Post date:** [July 9, 2022, 7:40pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/179 "2022-07-09T19:40:21Z")
I heard he is going to buy Trump’s platform and call it “Quitter”. 😁 ---
**Author:** ![BippityBoppityBoo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bippityboppityboo/32/5745_2.png) [@BippityBoppityBoo](https://boards.straightdope.com/u/BippityBoppityBoo)\ **Post date:** [July 9, 2022, 7:51pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/180 "2022-07-09T19:51:31Z")
> [@Czarcasm](#): > > heard he is going to buy Trump’s platform and call it “Quitter”. 😁 He should drop -Qu- and add -Sh- when he does. I seriously doubt he has enough of a sense of humor or irony though. [Previous page](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442.md?page=8) [Next page](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442.md?page=10)